marketing theories – pestel analysis

Component Specification
Digital Marketing Project
Level 5
5N1364
DIGITAL MARKETING PROJECT FOR COMPLETION BY OPTIMUM STUDENTS
The following provides an outline of a comprehensive digital marketing plan that students of
Optimum would complete for a real life case study organisation (be it their own business or
that of a customer) as they progress through the training programme.
The project builds on the learnings and experience of students from their
Portfolio/Collection of Work mini projects that they will complete during this programme to
populate Activity Plan section (section 7).
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1. ORGANISATION VISION, MISSION & VALUES
This section should the case study’s vision, mission and values.
Mission – Content
A written declaration of an organization's core purpose and focus that
normally remains unchanged over time.
Properly crafted mission statements
(1) serve as filters to separate what is important from what is not,
(2) clearly state which markets will be served and how, and
(3) communicate a sense of intended direction to the entire organization.
A mission is different from a vision in that the former is the cause and
the latter is the effect; a mission is something to
be accomplished whereas a vision is something to be pursued for that
accomplishment.
Also called company mission, corporate mission, or corporate purpose.
Read more: http://www.businessdictionary.com/definition/missionstatement.html#ixzz3gRF68MwY
Vision Statement – Content
An aspirational description of what an organization would like
to achieve or accomplish in the mid-term or long-term future.
It is intended to serves as a clear guide for choosing current and future
courses of action. See also mission statement.
Read more: http://www.businessdictionary.com/definition/visionstatement.html#ixzz
MISSION STATEMENT
From Wikipedia, the free encyclopedia
A mission statement is a statement of the purpose of
a company, organization or person; its reason for existing; a written declaration of an
organization's core purpose and focus that normally remains unchanged over time.
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The mission statement should guide the actions of the organization, spell out its
overall goal, provide a path, and guide decision-making. It provides "the framework
or context within which the company's strategies are formulated." It is like a goal for
what the company wants to do for the world.[2]
According to Bart Christopher,[3][4] the commercial mission statement consists of
three essential components:
1. Key market: Who is your target client or customer (generalize if needed)?
2. Contribution: What product or service do you provide to that client?
3. Distinction: What makes your product or service unique, so that the client
would choose you?
Ryanair -Mission
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled
passenger airline through continued improvements and expanded offerings of its low-fares
service. Ryanair aims to offer low fares that generate increased passenger traffic while
maintaining a continuous focus on cost-containment and operating efficiencies.
AerLingus- Mission
Aer Lingus has positioned itself as a 'value carrier' on the basis that the pure low
cost and low fares model is not sustainable while a full service model would not be
viable in serving our key markets. The fundamental elements of this revised strategic
approach included better matching of capacity to demand (involving reduction of
long-haul capacity and reductions in capacity on over-served short-haul routes), a
renewed focus on generating revenue per seat rather than simple maximisation of
load factor as well as more emphasis on partnerships and connectivity to deliver on
our primary mission of connecting Ireland with the world.
See article in the guidance articles
2. MARKETING VISION & MISSION
The above section establishes where the case study organisation is going which provides a
framework for the digital marketing campaign’s purpose. The digital marketing campaign
should support the organisation’s vision and mission.
Digital Marketing Mission for Name- Content
Digital Marketing Vision for Name- Content
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3. SITUATION ANALYSIS
All digital marketing planning should be driven from the analysis of the case study’s current
situation and mission. The following sections are suggestions on what to include to inform
the analysis which will become the foundation of the digital marketing plan. It’s important to
review relevant aspects of the external environment of the case study organisation to
highlight where your digital marketing campaign needs to focus in order to improve their
competitive situation.
External Environmental Analysis
One of the most useful tools for conducting an external environmental analysis is the PESTEL
framework.
Pestel Analysis
Factor
What’s
Happening
Social
e.g.
E.g. Less profit on e.g.
Consumers
actual
product. Long
want value for Greater opportunity to
money and are up sell services
negotiating
more
Impact
Term
Options
Moving
Forward
e.g. Develop
the
augmented
product;
value
add
services
&
finance
options
Technological
Economic
Environment
Political
Legal
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Ethical
MARKETING THEORIES – PESTEL ANALYSIS
Welcome to our Marketing Theories series. In this post we will be looking at
the PESTEL Analysis in a bit more detail.
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor
the macro-environmental (external marketing environment) factors that have an
impact on an organisation. The result of which is used to identify threats and
weaknesses which is used in a SWOT analysis.
PESTEL stands for:
 P – Political
 E – Economic
 S – Social
 T – Technological
 E – Environmental
 L – Legal
Lets look at each of these macro-environmental factors in turn.
All the external environmental factors (PESTEL factors)
Political Factors
These are all about how and to what degree a government intervenes in the
economy. This can include – government policy, political stability or instability in
overseas markets, foreign trade policy, tax policy, labour law, environmental law,
trade restrictions and so on.
It is clear from the list above that political factors often have an impact on
organisations and how they do business. Organisations need to be able to respond
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to the current and anticipated future legislation, and adjust their marketing policy
accordingly.
Economic Factors
Economic factors have a significant impact on how an organisation does business
and also how profitable they are. Factors include – economic growth, interest rates,
exchange rates, inflation, disposable income of consumers and businesses and so
on.
These factors can be further broken down into macro-economical and microeconomical factors. Macro-economical factors deal with the management of
demand in any given economy. Governments use interest rate control, taxation
policy and government expenditure as their main mechanisms they use for this.
Micro-economic factors are all about the way people spend their incomes. This has a
large impact on B2C organisations in particular.
Social Factors
Also known as socio-cultural factors, are the areas that involve the shared belief and
attitudes of the population. These factors include – population growth, age
distribution, health consciousness, career attitudes and so on. These factors are of
particular interest as they have a direct effect on how marketers understand
customers and what drives them.
Technological Factors
We all know how fast the technological landscape changes and how this impacts the
way we market our products. Technological factors affect marketing and the
management thereof in three distinct ways:
 New ways of producing goods and services
 New ways of distributing goods and services
 New ways of communicating with target markets
Environmental Factors
These factors have only really come to the forefront in the last fifteen years or so.
They have become important due to the increasing scarcity of raw materials, polution
targets, doing business as an ethical and sustainable company, carbon footprint
targets set by governments (this is a good example were one factor could be classes
as political and environmental at the same time). These are just some of the issues
marketers are facing within this factor. More and more consumers are demanding
that the products they buy are sourced ethically, and if possible from a sustainable
source.
Legal Factors
Legal factors include - health and safety, equal opportunities, advertising standards,
consumer rights and laws, product labelling and product safety. It is clear that
companies need to know what is and what is not legal in order to trade successfully.
If an organisation trades globally this becomes a very tricky area to get right as each
country has its own set of rules and regulations.
After you have completed a PESTEL analysis you should be able to use this to help
you identify the strengths and weaknesses for a SWOT analysis.
http://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestelanalysis
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Porters Five Forces
You may also choose to use Porters 5 forces to outline your external environments:
FORCE
WHAT’S HAPPENING?
PRESSURE
IMPACT
Competitive rivalry
e.g. new competitor
e.g. high
e.g.
less
market share
Bargaining power of
customers
Bargaining power of
suppliers
Threat of new entrants
Threat of
products
substitute
PORTER’S FIVE FORCES
http://www.mindtools.com/pages/article/newTMC_08.htm
Assessing the Balance of Power in a Business Situation
Assess the balance of power in a business situation, with James Manktelow and Amy
Carlson.
The Porter's Five Forces tool is a simple but powerful tool for understanding where
power lies in a business situation. This is useful, because it helps you understand
both the strength of your current competitive position, and the strength of a position
you're considering moving into.
With a clear understanding of where power lies, you can take fair advantage of a
situation of strength, improve a situation of weakness, and avoid taking wrong steps.
This makes it an important part of your planning toolkit.
Conventionally, the tool is used to identify whether new products, services or
businesses have the potential to be profitable. However it can be very illuminating
when used to understand the balance of power in other situations.
Understanding the Tool
Five Forces Analysis assumes that there are five important forces that determine
competitive power in a business situation. These are:
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1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is
driven by the number of suppliers of each key input, the uniqueness of their product or
service, their strength and control over you, the cost of switching from one to another, and
so on. The fewer the supplier choices you have, and the more you need suppliers' help, the
more powerful your suppliers are.
2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down.
Again, this is driven by the number of buyers, the importance of each individual buyer to
your business, the cost to them of switching from your products and services to those of
someone else, and so on. If you deal with few, powerful buyers, then they are often able
to dictate terms to you.
3. Competitive Rivalry: What is important here is the number and capability of your
competitors. If you have many competitors, and they offer equally attractive products and
services, then you'll most likely have little power in the situation, because suppliers and
buyers will go elsewhere if they don't get a good deal from you. On the other hand, if noone else can do what you do, then you can often have tremendous strength.
4. Threat of Substitution: This is affected by the ability of your customers to find a
different way of doing what you do – for example, if you supply a unique software
product that automates an important process, people may substitute by doing the process
manually or by outsourcing it. If substitution is easy and substitution is viable, then this
weakens your power.
5. Threat of New Entry: Power is also affected by the ability of people to enter your
market. If it costs little in time or money to enter your market and compete effectively, if
there are few economies of scale in place, or if you have little protection for your key
technologies, then new competitors can quickly enter your market and weaken your
position. If you have strong and durable barriers to entry, then you can preserve a
favorable position and take fair advantage of it.
6.
Reprinted by permission of Harvard Business Review. From "How Competitive Forces
Shape Strategy" by Michael E. Porter, March 1979. Copyright © 1979 by the Harvard
Business School Publishing Corporation; all rights reserved.
These forces can be neatly brought together in a diagram like the one in figure 1
below:
Figure 1 – Porter's Five Forces
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Using the Tool
To use the tool to understand your situation, look at each of these forces one-by-one
and write your observations on our free worksheet.
Brainstorm the relevant factors for your market or situation, and then check
against the factors listed for the force in the diagram above.
Then, mark the key factors on the diagram, and summarize the size and scale of the
force on the diagram. An easy way of doing this is to use, for example, a single "+"
sign for a force moderately in your favor, or "--" for a force strongly against you (you
can see this in the example below).
Then look at the situation you find using this analysis and think through how it
affects you. Bear in mind that few situations are perfect; however looking at things in
this way helps you think through what you could change to increase your power with
respect to each force. What’s more, if you find yourself in a structurally weak
position, this tool helps you think about what you can do to move into a stronger one.
This tool was created by Harvard Business School professor, Michael Porter, to analyze the
attractiveness and likely-profitability of an industry. Since publication, it has become one of
the most important business strategy tools. The classic article which introduces it is "How
Competitive Forces Shape Strategy" in Harvard Business Review 57, March – April 1979,
pages 86-93.
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Example
Martin Johnson is deciding whether to switch career and become a farmer – he's
always loved the countryside, and wants to switch to a career where he's his own
boss. He creates the following Five Forces Analysis as he thinks the situation
through:
Figure 2 – Porter's Five Forces Example: Buying a Farm
This worries him:

The threat of new entry is quite high: if anyone looks as if they're making a sustained
profit, new competitors can come into the industry easily, reducing profits.
 Competitive rivalry is extremely high: if someone raises prices, they'll be quickly
undercut. Intense competition puts strong downward pressure on prices.
 Buyer Power is strong, again implying strong downward pressure on prices.
 There is some threat of substitution.
Unless he is able to find some way of changing this situation, this looks like a very
tough industry to survive in. Maybe he'll need to specialize in a sector of the market
that's protected from some of these forces, or find a related business that's in a
stronger position.
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Key Points
Porter's Five Forces Analysis is an important tool for assessing the potential for profitability
in an industry. With a little adaptation, it is also useful as a way of assessing the balance of
power in more general situations.
It works by looking at the strength of five important forces that affect competition:

Supplier Power: The power of suppliers to drive up the prices of your inputs.
 Buyer Power: The power of your customers to drive down your prices.
 Competitive Rivalry: The strength of competition in the industry.
 The Threat of Substitution: The extent to which different products and services can be
used in place of your own.
 The Threat of New Entry: The ease with which new competitors can enter the market if
they see that you are making good profits (and then drive your prices down).
By thinking about how each force affects you, and by identifying the strength and direction of
each force, you can quickly assess the strength of your position and your ability to make a
sustained profit in the industry.
You can then look at how you can affect each of the forces to move the balance of power
more in your favor.
Market Overview
Summarise the market situation of your case study – this will set your focus for the next few
sections:
E.g. They are in a competitive, fast moving market with a number of strong competitors
offering similar products and services to them. The demand for XX is on the increase,
however better resources are expected for free….etc.
Current Target Markets
Who are the high level markets of your case study? You may choose to write a summary of
each, or simply list them here. This section will ensure that you’re clear on who you’re case
study organisation is communicating with/needs to communicate with.
Example
Academics
- Universities
Professionals
- Professional Bodies
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Current Personas
Persona analysis is a great way to make current/potential customers as realistic as possible
in order to better inform decisions you need to make about recommended digital marketing
strategies. Personas are fictional characters created to represent the different user types
that might use a site, brand, or product in a similar way.
Persona 1
Persona 2
Persona 3
Socio-economic
group
Gender
Buying behaviour
How they access
the web
(smartphone,
laptop etc)
Customer Touch Points
Who/what engages with your case study’s clients? Evaluate this to check for gaps and
improvements.
Touch Point
Department
Website
Marketing
Does it meet their
expectation/need?
- Could be clearer on what
we do
- Easy to find information
Competitive
Edge
- Video Centric
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- Good call to action
www.surveymonkey.com543 × 520Search by image
Competition
Understanding the competition of your case study and what they’re good at will help you
develop a digital marketing plan which will add more value than your rivals.
Now
Who are they?
Brand
Marketing Mix
Name
Details about
their brand
Product
Founded in
Price
Potential competitive
advantage on us
What do they offer
which is better than
you?
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Placement
Promotion
General SWOT Analysis
SWOT Analysis is a great way of highlighting what you’re case study is good at and what you
need to invest time and resources into.
Strengths
-
E.g. Strong and clear website
Weaknesses
-
E.g. Weak organic presence
Opportunities
-
E.g. Build a strong Digital Marketing brand
Threats
-
E.g. Large number of free resources already available
SWOT ANALYSIS
From Wikipedia, the free encyclopedia
A SWOT analysis (alternatively SWOT matrix) is a structured planning method
used to evaluate the strengths, weaknesses, opportunities and threats involved
in a project or in a business venture. A SWOT analysis can be carried out for a
product, place, industry or person. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that are favorable
and unfavorable to achieve that objective. Some authors credit SWOT to Albert
Humphrey, who led a convention at the Stanford Research Institute (now SRI
International) in the 1960s and 1970s using data from Fortune 500
companies.[1][2] However, Humphrey himself does not claim the creation of SWOT,
and the origins remain obscure. The degree to which the internal environment of the
firm matches with the external environment is expressed by the concept of strategic
fit.

Strengths: characteristics of the business or project that give it an
advantage over others.
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


Weaknesses: characteristics that place the business or project at a
disadvantage relative to others.
Opportunities: elements that the project could exploit to its advantage.
Threats: elements in the environment that could cause trouble for the
business or project.
Identification of SWOTs is important because they can inform later steps in
planning to achieve the objective.
First, the decision makers should consider whether the objective is attainable,
given the SWOTs. If the objective is not attainable a different objective must be
selected and the process repeated.
Users of SWOT analysis need to ask and answer questions that generate
meaningful information for each category (strengths, weaknesses, opportunities,
and threats) to make the analysis useful and find their competitive advantage.
Assumptions
Any non-factual information about your environments go in here; these should ideally turn
into facts over time.
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4. ORGANISATION & MARKETING OBJECTIVES
Now that you’re clear on the current situation of your case study organisation, you’re in a
position to clearly outline your objectives. It’s recommended that you use the SMART
framework when setting your objectives, so that each one is:
-
Specific
Measurable
Achievable
Realistic
Time bound
Objectives for your case study organisation over the next 12 months
Objective
1. Double the size of the
business to £x
turnover
2. Objective 2
Strategy
1. Provide the best range of
products to key market
segments
2. Strategy for objective 2
1. Increase number of
new business Sales by
X%
2. Objective 2 relating to
organisational
objective 2
1. Provide the best range of
products to key market
segments
2. Strategy for marketing
objective 2
Marketing Mix
Product
1. Objective
1. Strategy 1 for objective 1
Place
1. Objective
1. Strategy 1 for objective 1
Price
1. Objective
1. Strategy 1 for objective 1
Promotion
1. Objective
1. Strategy 1 for objective 1
Organisational
(Next 12 months)
Marketing
(Next 12 months)
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5. STRATEGY
What is your recommended digital marketing strategy going to be based on the analysis of
the case study’s situation and their goals? How are you going to achieve your objectives for
this case study organisation? It can be useful to take each objective and outline what you
will do at a high level to achieve it within the term. Objectives might include the following:





Increase Brand Engagement
Increase Conversion/Loyalty
Increase ‘Sticky’ traffic to your website
Increase Conversion/Loyalty
Increased Sales
6. TACTICS
The finer details of your recommended strategy should go in here – this could include
breaking down each strategic line above, for example raising brand awareness through
online campaigns.
Resources
Detailing the resources you require to deliver your plan will help you identify what is
practical within a budget. You can detail each resource here and the role they will play in
delivering your plan.
Title
Digital Marketing
Manager
Occupant
Name of occupant
or Vacancy
Responsibilities
Planning/Strategy/Tactical/Implementation
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Budget
Once you have compiled the tactical elements of your recommended plan you can put
together the budget you require to deliver it.
Annual costs
Google adwords (PPC)
Annum
Quarter
Month
Sub Total
Once Off Costs
Software
- Adobe Creative Suite
- Demo Builder
Sub Total
Grand Total
€
€
7. ACTIVITY PLAN
This is where you can really break your recommended plan down into clear actions. If you’re
experienced in project management you may choose to create a full project plan, which
could include Gantt charts, network charts etc. – however there are other options such as
the ones shown below.
Marketing Mix
The marketing mix is a key set of tools for you to use as part of your plan – you can detail the
specific actions for each element of the marketing mix here.
Objective
Product
Strategy
Strategy 1 from
objectives section
above
Actions
Main actions to complete
Placement
Price
Promotion
CAMPAIGNS
Write the detail of each campaign you plan to run, these campaigns are specifically
generated in support of the Strategy you have recommended in Section 5 and subject to the
available budget identified in the Section 6 above.
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Use your learnings and experience from your Portfolio/Collection of Work mini projects
that you completed during this programme to populate this section.
The campaign should be a combination of paid online advertising and social media activity.
Campaign
Generate 50 new
customers
Line of
business
New
Strategy
Goals
- 600 leads required (380 in 2010)
Target
- All target markets
Key messages
- Affordable products
Placement
- Social Media
Evaluate
- No of leads
Etc
SOCIAL MEDIA
Write up the details of your recommended social media activities here.
Tool
LinkedIn
Target
-Today’s audiences (as well
as tomorrow’s)
-Professionals
-Targeted marketing by
location, sector, job title,
groups
Actions
-Set up company profile
Facebook
-Tomorrow’s audiences (as
well as today’s)
-More casual
-Targeted marketing by
location, likes and interests
-Set up welcome page
Twitter
-Engaged users/prospects
-Link with company blog
YouTube
-Engaged users/prospects
-Set up video channel
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Email Marketing
Write up the details of your email marketing activities here.
Many other factors need to be considered and reviewed such as:
-
Tone of messages and content
Promotions/incentives offered
Call to actions
Content of “From” and "Subject" lines
Length of email
Campaign themes
Timing and frequency of your emails
8. CONTROL AND EVALUATION
It’s important that you outline how you will track and evaluate your recommended plan,
objectives and strategies. This will be particularly important for justifying marketing budget
to the case study organisation.
As always there are many ways you can do this using online tools but here is a simple table
as an example:
Evaluate
1. Keywords
2. Brand Awareness
Measure
Tools
1. Rank well on top Google Adwords
keywords
1. Number of Likes on Count
the client’s Facebook
page
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