Strategic Thinking in Digital Marketing
Strategic thinking entails long-term planning. This entails devising techniques and conjuring concepts that can adapt to changing circumstances.
PHASE 2 – Situation Review
3. MARKETING AUDIT
If you want to know how your company’s commercial performance has been impacted by both external and internal variables,
you should conduct a marketing audit (McDonald & Wilson, 2016, p.59).
It evaluates the goals, methods, procedures, actions, and propositions that make up the entire marketing strategy (O’Neill, 2020)
in order to determine its strengths and weaknesses.
“The goal is to show what the marketing objectives of a corporation should be” (McDonald & Wilson, 2011).
A marketing audit can be broken down into three levels: internal, external,
and competition analysis.
The first step is to get a sense of how big the market is.
There are three primary segments in the UK home and garden market,
which totals $25.5 billion: garden and outdoor living products,
home improvement and homewares (MarketLine, 2020).
A total of 52.4% of the UK’s home and garden market is represented by D&R’s homewares business (MarketLine, 2020).
Figure 2 shows that ‘homewares’ has an average monthly search traffic of up to 100,000 searches. D&R’s potential monthly online market size is 100,000, as indicated by this figure.
3.1 Segmentation
Market segmentation can be defined as “the practise of breaking a market into discrete groups of purchasers that have different demands,
features, or behaviours that necessitate separate products or marketing strategies” (Kotler & Armstrong, 2011, p.73).
Numerous businesses employ market segmentation to better serve their customers,
taking into account factors such as location, demographics, consumer behavior, benefit expectations,
and other intangibles like personality traits (Floh et al. 2014).
Segmenting the market into different geographic units such as nations, regions, or cities
is the goal of geographic segmentation (Kotler et. al., 2020, p.200).
As the business has a significant following in London but only has a store in Leeds,
geographic segmentation is necessary to distinguish marketing efforts for customers within and
outside of the store’s physical footprint areas.
It is possible for D&R to learn more about their target audience through the use of digital tools.
If we look at figure 3, we see that lighting has been the most sought-after D&R product category in Britain over the past year.
Figure 4 depicts lighting as a significant London-based product sector.
There are 3,372 keywords that D&R ranks for,
according to Search metrics (2020), however only 455 of them are on the first page.
As can be seen in Figure 5, the site’s most popular keywords are all linked to lighting.
Customer segmentation based on their actions, attitudes, and responses to a product is known as “behavioral segmentation” (Kotler et al, 2020, p.203).
A greater understanding of the attitudes and motivations of each audience type is gained through behavioral segmentation,
allowing D&R to create marketing communications that resonate with each demographic.
This suggests that D&R can take advantage of the London market for their lighting goods.
Using geographic, behavioral, and product category insights, we were able to zero in on a target market of Londoners looking for one-of-a-kind lighting solutions.9
3.2 Internal Analysis
What is an internal analysis? It’s a “independent and periodic study of a company’s marketing
“that is “complete, methodical, and independent” (Clark, 2010).
It identifies internal strengths and weaknesses and aligns them in a way that allows for proactive planning (Cram, 1995).
There has been careful consideration given to D&R’s current digital marketing strategy
in order to ensure that the company is maximizing its digital marketing potential.
As the name suggests, multi-channel marketing involves making use of multiple mediums to reach
customers at various stages of the purchasing process (Chaffey & Chadwick, 2019).
In their study, Weinberg et al. (2007, p387) state that “multichannel marketing programmed are
crucial for organizations because they can improve profitability,
the customer experience and customer happiness”.
Consumers in B2C context now anticipate a multichannel strategy,
he says, supporting this even further (Weinberg et. al, 2007).
Figure 6 depicts a D&R digital channel overview with industry benchmarks overlay.
Figure 6 (SimilarWeb, 2020)
In comparison to the industry average of 50%, organic search accounts for 30% of D&R’s traffic.
Increasing a website’s visibility in natural search engine results is the goal of Search Engine Optimization (SEO) (Moz, n.d).
High volume, non-paying, interested (‘quality’) web traffic is the goal (Moz, n.d).
This is a critical concern for this segment, as conversion takes place online.
Figure 7 demonstrates the evolution of organic search visibility over time, showing a reduction in visibility in the first half of 2020.
Figure 8 shows D&R’s ranks for all terms rated between the first and fifth pages of search results.
Driving traffic necessitates having all relevant keywords appear on page one of search results.
It is equally crucial to guarantee that the user has a great on-site experience in addition to high volume, high quality traffic.
Google takes the website’s technical performance into account when deciding a website’s position in search results.
Google’s Core Web Vitals score for https://www.dowsingandreynolds.com is just 55/100,
indicating that the desktop version of the site needs work.11
3.3 Competitor Analysis
Organizations can better understand the microenvironment in which they operate with the help of competitor analysis.
5 forces of competitive strategy by Porter (1980)
First, there is competition, and second, there is buyer power.
Suppliers’ ability to influence the price negotiation process.
The number of newcomers has increased.
Alternate products or services in order to save money
As he put it, “the industry’s ultimate profit potential depends on the cumulative strength of the forces” (Porter, 1980, p.3).
Porter’s 5 forces competition analysis aims to “identify the competitive intensity and attractiveness
of a market” and so “carry analytical value for strategy creation” (Bard, 2008 p.50) (Anton, 2015 p.22).
According to Grundy (2006), the Porter framework has a number of flaws,
including a lack of focus on individual product-market sectors and a tendency to oversimplify industry value chains.
He asserted that extra value may be reaped by refining the model,
for example, by applying the study section by segment across a company.
Some firms in the homewares sector have little differentiation between them,
which increases competitiveness in the market (MarketLine, 2020).
IKEA, Dunelm, and John Lewis have economies of scale advantages over D&R since consumers are drawn to low pricing in this market (MarketLine, 2020).
However, Porter’s 5 forces pose the greatest danger to D&R because of the potential entry of new players into the market.
There are few hurdles to entry in the homeware business, making it attractive to newcomers (MarketLine, 2020).
In Figure 10 of Sistrex (2020), The Lighting Company is identified as D&R’s most dangerous SERP competition.
3.4 External Analysis
By doing an external environment study using the PESTLE model,
you may uncover critical elements that directly and indirectly impact your business’s overall profitability (Perara, 2017).
PESTLE is a framework for analyzing an organization’s market position, identifying threats,
and devising solutions that take into account all of these aspects (Perara, 2017).
The non-food retail business was severely impacted by the COVID-19 worldwide pandemic,
which was a major environmental element, with store-based players paying a particularly heavy toll (Mintel, 2020).
Online shops have a more significant influence, although it is still modest (Mintel, 2020).
41 percent of consumers say they’ve increased the quantity of online buying as a consequence
of this natural change in consumer behavior, which has a socio-cultural component (Mintel, 2020).
Online home shopping is expected to reach £23.4 billion in 2023, an increase of about 50% in the sector (Mintel, 2018).
Despite the fact that these data were collected prior to the coronavirus pandemic,
Mintel (2020) believes that COVID-19 would boost online retail sales even more.
D&R has a chance to boost its online company because of the expected rise in home buying online (Mintel, 2018)
and the lack of confidence about when retail will reopen due to continuous national lockdown restrictions.
Increasing online traffic is essential for D&R to leverage their ecommerce offerings and meet shifting buyer behavior.
When D&R uses proactive SEO techniques like improving organic exposure and page one rankings,
they can keep pace with the changing industry and expand their company.
4. SWOT Analysis
compared to rivals and important external opportunities and threats,” is what a SWOT analysis is all about (Bradford et al. 2012, p.62).
It is a four-step modification of the classic SWOT analysis (Bradford, 2020).
In Appendix A, you’ll find further information on each of these processes.
STAR SWOT has been used to the sector of focus in Figure 12 to define the marketing audit’s conclusion
and to identify the most critical obstacles to be addressed in the strategic marketing strategy.
As a result of our research, we know that D&R has high-quality and distinctive items,
which are critical brand traits for our target market.
There are several criteria that impact customers’ choice of merchant when they purchase for the house online,
including 15 strong ecommerce (particularly – free standard shipping and simple return procedures) (Mintel, 2018).
D&R has a great chance to develop its company in London,
where online shopping for the house is expected to rise (Mintel, 2018) and lighting is a major product category.
For ecommerce businesses, SEO is critical since “search traffic is among the best quality traffic.
when a search user has shown a particular interest via their query and when this matches a product or service,
conversion rates are exceptionally high” (Enge et. al. 2015, p.107).
According to the SWOT analysis, D&R must increase their search visibility and page 1 ranks in
order to keep up with the evolving shopping habits of their customers.
If there is not enough traffic to the site, even high-quality items and successful ecommerce are of little use.
Finally, the SWOT analysis found that new entrants pose a danger.
The level of competition will rise dramatically as the industry expands and more people browse for their homes online.
If D&R want to overcome this, they must focus on increasing their brand recognition,
capitalizing on their strengths and brand characteristics.
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