By Erica Wenham, Friday 10 May 2013.
As a result, I have decided to compile my own list of Political, Economical, Social, Technological, Environmental and Legal factors (PESTEL Analysis) that I believe affect myself, other students and potentially even agencies and other businesses in the market today for today's blog post. This model is outlined below. If you think I should add anything else which I might have missed, please recommend your comments below.
Political
- Student Loan Costs
- Government Decisions
Political factors can have a direct impact on the way business operates. Decisions made by government affect the operations of units within the university to a varying degree. Political refers to the big and small ‘p’ political forces and influences that may affect the performance of, or the options open to the unit concerned. The political arena has a huge influence upon the regulation of public and private sector businesses, and the spending power of consumers and other businesses, both within the education sector and outside. Political
factors include government regulations and legal issues and define both formal and informal rules under which universities and other units must operate. Depending on its role and function within the university a unit may need to consider issues such as:
- How stable is the internal/external political environment?
- Will government policy influence laws that regulate third level education?
- What is the government's policy on the education?
- Is the government involved in trading agreements such as the Bologna Agreement?
- The impact of employment laws
- The impact of environmental regulations
- Trade restrictions and tariffs
- Political stability (internally and externally)
- Decision-making structures
Each of these will be looked at more in-depth throughout today's PESTEL analysis blog post.
- Industry Changes
As the UK political (and economical) climate is constantly changing, it is key for universities, colleges and schools to take notice of this and be aware of any business issues that may arise which could ultimately affect them as an organisation. A few examples are;
- Changes to the skills required to be a teacher/tutor/lecturer
- Changes to the grade boundaries needed to be accepted at a particular university
- Changes to the curriculum
- Requirement for students to be self-managing and self-financed
- Pay Per Click Advertising
According to
Brassington & Pettitt , (2009,p.485) the term ‘Pay Per Click’ (PPC) “is a
way of advertising or marketing your product or business” best explained as
“the advertiser pays only on performance by paying for each click made on the
advertisement. Meaning is there are no clicks, and then there is no fee. The system can also
be known as CPC (cost per click) and less commonly, pay per action.
The latter being where a
visitor might complete an action from the ad, ticking a box to receive a
newsletter, for example – and the publisher receives a (higher) fee only is the
action is completed. This concept can be extended to paying a commission if the
user actually makes a purchase after clicking on the ad”. The cost of PPC varies
widely and is largely dependent on the keywords being ‘purchased’. Click
through’s are known to range from a few pennies to hundreds of pounds per
click.
Overall, the advertiser pays only on
performance by paying for each click made on the ad. That is, no clicks, no
fee. The system is also known as CPC (cost per click) and less commonly, pay
per action. Another possible action is for when a visitor might complete for
example some form of action from the ad, ticking a box to receive a newsletter.
- Affiliate Marketing
According to Chaffey (2008), affiliate marketing is “the
ultimate form of marketing communications since its pay-per-performance – it’s
a commission-based arrangement where the merchant only pays when they make the
sale or get a lead”. The model below summarises the affiliate marketing
process;
Many of the benefits of affiliate marketing are closely
related to search engine marketing since affiliates are often expert at
deploying SEO or PPC to gain visibility in the natural search results. The main
advantages of affiliate marketing are;
- Retailers websites can gain more visibility in the paid and natural listing of the “SERPs” (increase of “share of search”);
- Different affiliates can be used to target different audiences, product categories and related phrases;
- Affiliates may be able to identify gaps in marketing strategies. For example, they may be quicker at advertising new products, or may use key-phrase variants that haven’t been considered previously;
- Affiliate marketing can reach customers on generic phrases (e.g. “women’s clothing”) at a relatively low cost if the affiliates secure better positions in natural listings;
- ASOS, New Look and Topshop can increase the reach of their brands or campaigns since affiliate ads and links featuring their name will be displayed on third-party websites;
- Awareness can be easily generated for the brand or its new products which aren’t currently already well-known;
- The use of affiliates can reduce the risk caused by temporary or more fundamental problems with SEM management;
- Pay per performance – the costs of acquisition can be controlled well.
However, there are potential disadvantages to affiliate
marketing programmes such as;
- Incremental profit/sales may be limited
- Affiliates may exploit the retailers’ brand names – This is particularly the case where affiliates exploit brand names by variations of it (for example “ASOS”, “ASOS Marketplace” etc.) or by gaining a presence in natural listings. Here, there is already awareness. It is important for organisation’s to prevent this from happening and many affiliate programmes exclude brand bidding although affiliates can have roles in displacing competitors from listings for brand terms;
- Brand reputation may be damaged – Advertisements may be displayed on websites inconsistent with the original brand image. Alternatively, creative may be out-of-date which could be illegal;
- Programme management fees & time – If using an affiliate network to manage campaigns, they may take up to 30% of each agreed affiliate commission as additional “network overridge”. Affiliate marketing is found on forming and maintaining good relationships. This cannot be done through an agency alone – marketers within a company need to speak to their top affiliates.
A few examples of how Affiliate Marketing can be implemented in an effective, strategic and successful manner via YouTube, specifically in the Online Fashion Retail Sector are shown in the images and analysis below.
An example of an
affiliate with Topshop is shown in the YouTube screenshot of "Topshop Haul & £500 Giveaway" above here. Affiliate
Marketing is common to be closely tied in with Viral Marketing (YouTube). The
video-content website currently obtains many fashion/beauty “vloggers”
(video-bloggers) which get paid substantial earnings for their video views and
“likes”. Here, a popular fashion vlogger under the name “Zoella” was employed as an affiliate for Topshop. The video
content included a marketing reference to the free personal shopping service
Topshop offers in their main flagship stores. It is assumed that Zoella was paid or offered Topshop products in return for
giving a positive review on the service. She currently obtains over 800,000
subscribers to her channel, mainly 16-24 aged females (similar to Topshop’s
target market). As a result, by implementing Zoella as an affiliate, Topshop are able to reach their target
audience whilst promoting their personal shopping service. A £500 voucher
giveaway was also put into place if viewers entered the competition via the
Topshop website which created a lot of online traffic. During the overall
video, Zoe showed her viewers the items she had bought (or were given for free)
from Topshop; this aimed to attract viewers to the items in-store and
potentially purchase themselves in the future, thus increasing sales revenue
and customer base.
Another example of an affiliate in the fashion sector
(regarding ASOS) is shown in the above screenshot for an ASOS Haul. As explained previously, Affiliate Marketing is
closely tied in with Viral Marketing (YouTube). The video-content website
currently obtains many fashion/beauty “vloggers” (video-bloggers) which get paid substantial earnings
for their video views and “likes”. Here, a popular fashion vlogger under the name “ThePersianBabe” (real name;
Barbara) was employed as an affiliate for ASOS. The 7 minute-long video
included clear marketing reference to ASOS’ mid-season sale (August 2012). She
clearly states the ASOS business-team gave her £100 to spend as she wished.
Barbara then proceeded to create a video, showing her viewers the great finds
she had purchased. Similarly to Zoella, Barbara’s main viewers are 18-25 females (again, a
substantial aspect of ASOS’ target market). As a result, by implementing
Barbara as an affiliate, ASOS are able to reach their target audience whilst
promoting their sale and clothing/accessories items to her 130,000+
subscribers. During the overall video, Barbara showed her viewers the items she
had bought with the given £100. This mainly aimed to attract viewers to the
ASOS sale and what items were discounted; thus potentially increasing sales
revenue and customer base.
What does “Haul” mean? A haul is where a vlogger
shows its viewers what they have purchased from a particular store. Almost like
“showing off” what you bought at the weekend to your friends
- Poor Economic Climate
"All businesses are affected by economical factors nationally and globally. Whether an economy is in a boom, recession or recovery will also affect consumer confidence and behaviour. The dramatic impact of reduced funds upon universities across the UK is already very apparent. This will impact upon the nature of the competition faced by the organisations and particular units within the university, upon service provision, and upon the financial resources available within these educational units. Economic factors affect the purchasing power of potential customers, and the state of the internal/external economy in the short and long-term. As a result, the key aspects universities must consider are economic growth, inflation/interest rates, budget allocation, long-term prospects for the economy and the impact upon funding of third level education etc." (Source: http://www.ucc.ie/en/qpu/guidelines/sar/documentfile-57349-en.pdf)
- Student Loan Costs
Social
Social factors will include the demographic changes, trends in the way people live, work and think and cultural aspects of the macro environment. These factors affect customer needs and the size of potential markets.
- Email Marketing Strategies
According
to Safko (2011), research states that UK teenagers favour social networking
sites to connect with friends, supports a common view that email as a marketing
tool is now ‘unfashionable’, however email marketing is far from obsolete. Why?
For the simple reason that is works. According
to research carried out by Vertis Communications (2007), 21 per cent of adults
have responded to email marketing in the
month prior to the survey, admitting to having responded by ‘clicking through’
to the senders website. Email
is most widely used as a marketing tool for customer conversion and retention,
this is done by the current or potential consumer giving the website or company
permission to contact them via this service. Effective email marketers adopt a strategic approach to
email and develop a contact or touch strategy that plans the frequency and
content of email communications.
Key Advantages of Email Marketing:
- Relatively low in cost: The physical aspect of email marketing is substantially lower in cost than its rival direct marketing.
- Direct response encourages immediate action: Email marketing encourages and enables the receiver to ‘click through’ to the senders website where they can view the original intention of the email, whether that be a discount code or new products. This increases the probability of the receiver to act upon the email immediately.
- Ease of personalisation: It is easier and cheaper for the marketer to personalise an email rather than the medium of physical print mail. This gives the receiver an indication that the company do not see them as a number, however a valued individual.
Key Disadvantages:
- Deliverability: The difficulty of getting email messages delivered through different internet service providers (ISPs) and company firewalls. This increases the risk factor of possibly missing out a large target audience.
- Renderability: The difficulty of displaying the creative works as intended within the in-box of different email reading systems. For example, if an email is predominantly imaged based and is not displayed by default in the receivers email reader, this will decrease the response rate.
MailChimp
MailChimp is free for lists of up to 2,000
subscribers.
According
to MailChimp, (2013) more than 3 million people use MailChimp to create, send, and
track email newsletters. MailChimp
cater to all types of businesses, whether there user is a ‘one-man-band’ or an
international brand, MailChimp
has features and integrations that will suit all email-marketing needs.
MailChimp
offers the user tailored bespoke solutions, for example, allowing the company
to incorporate their brand's look and feel into their design of their email marketing
campaigns. Additional features allows the user to send their subscribers product updates, event invitations
and announcements - and that is just to name a few. Analysing
data can be a drag to some marketers, however their reports are simple and
pleasing to the eye, displaying relevant information that will allow the user
to efficiently evaluate the subscribers responding actions.
Constant Contact
More than half a million
customers worldwide trust Constant Contact to help them drive success.
Constant Contact, (2013) launched into the market in
1998, Constant Contact
has provided email
marketing services to the needs of small organizations, providing them with an easy and
affordable way to create and build successful, lasting customer relationships. The Constant Contact aim is to provide to all types of small businesses
and organizations to
help them create successful campaigns resulting in finding new customers, driving repeat business and
generating referrals. Unlike the free service of Mail Chimp, Constant
Contact’s is a paying email marketing service, however the option of exploring
the software is available for free on a 30 day trial basis.
- Social Media
Please see my previous in-depth post on Social Media by clicking here and how to measure and manage social media marketing strategies (via Klout) below. Firstly, according to Klout, (2013) “Social media has allowed anyone to drive action to those around them, democratizing influence. Klout measures this influence across several social networks and shows users how they impact the people connected to them.”
The Klout
Score:
The Klout Score is a number between one
and 100 and is a
representation of the users overall ‘social media influence’. Klout, (2013) explains that “…the ‘science’ behind the Score
examines more than 400 variables on multiple social networks beyond the number of the users followers and friends. It looks
at who is engaging with the
users content and
who the user it sharing it with.”
- Threat of Other Students/Graduates & Effective Job/Internship Applications
- Staff
- The risk of highly valued, key staff moving on to more up-and-coming establishments
- Staff were not given enough training or access to effectively change their habits and how they expected information to be made available
- Demographic Changes
- Local population changes (increasing/ decreasing numbers)
- Demographic changes may affect likely pupil rolls or the nature of pupils needs e.g. pupils with English as a second language etc.
- Integration with local community
- Integration of students with special needs
Technological
- The Digital Takeover
The growth of digital technologies (including internet
usage, social media platforms, blogging, viral video/sound content, SEO
features, analytics and more) has increasingly grown over recent years, more so
than any other type of marketing strategies. As a result, companies can implement effective marketing
campaigns and advertisements, thus achieving
potential business goals and reaching a higher target audience. As explained previously, with digital marketing having
such a powerful impact on the retail
industry in particular, the strategy has changed drastically over the past 10
years. It’s essentially impossible for
marketers to imagine a world without the internet, email, social media and
other digital marketing tools. But how exactly has the power of digital
transformed over the past decade?
- Every business is now ideally expected to publish digital marketing content over multiple channels, ranging from blogs, emails, website articles, games, photos, videos and mobile apps.
- There is a lot of user-generated content (UGC) about brands floating about on the Internet. This includes product advice, reviews, ratings and comments on social networking websites. Companies are literally warring to get good mentions.
- The accountability of a brand has increased. The experience of even one customer can act like a social megaphone, which may influence others. Digital marketing professionals need to be ever vigilant while responding to customer needs, creating dialogues and cementing bonds.
- It has become more easy to segment and target advertising. The cost of digital marketing advertisements is also lesser than traditional advertising. The ability to modify ads according to targeting parameters has optimised the efficiency of advertising spend.
- Digital marketing campaigns are driven by accurate data about consumer activity, which is highly traceable. One of the main reasons why companies are pumping funds into online marketing is because they do not have to make guesses about what works and what doesn’t.
- The growth of powerful devices like smartphones and tablets, together with wireless broadband access, is expected to lead to an increase in demand for local content, spawning new tools to support new user behaviour.
- The lines between the digital marketing department and other departments are blurring. People at all levels of an organisation are in the position to interact with customers through blogs, social networking sites and so on.
- The Mobile/Tablet Revolution
“Now is the time, if you haven’t
already, for marketers to start experimenting with mobile and social to find
what works best for their organisations. They must remember however, that
whatever they do to experiment should be a relevant, positive user experience,
because if they can’t provider that, then it’s better to provide no experience
at all” (mobile-ecommerce, 2013)
Mobile has become an integral part of the marketing
process in recent years and organisations can no longer ignore the powerful
tool that mobile marketing has become. There are a variety of technologies
within mobile that have seen the industry expand and made it easier for brands
to communicate with customers and build long-term, effective relationships. A
few examples include; smartphones, tablet devices, live e-mail downloads,
Bluetooth technology etc. With its overwhelming success amongst many audiences,
the benefits of mobile marketing are phenomenal and it’s a great way for brands
to share useful information no matter where they are. By reaching out to the
target market, clothing retailers in the UK market today (for example) can use this to their
advantage to help drive sales and grow consumer figures. Mobile marketing is
the fastest growing technology within the industry and our three chosen
retailers effectively take this on board
for their digital/mobile marketing strategies and app downloads (this
will be discussed further within this section). Safko (2012) reinforce this “as
a company that wants to connect with customers and prospects, why wouldn’t you
be participating in the most widely used technology on the planet”?
In recent years, tablet usage has been on the rise with
over 20% of consumers owning one.
Although tablets still count as part of mobile advertising, there is some
difference in smartphone marketing and tablet marketing. Both of devices “offer unique and specific
customer experiences. They offer experiences that can be used to build brand,
optimise the way products are presented and sold – as well as enhancing the
goods and services that you market”. Smartphones are
more on-the-go devices which are virtually fused to our every day existence.
You can pretty much do everything on your smartphone nowadays from contacting
friends, to email accounts to online shopping. Marketers alter their websites
to fit mobile formats. Exclusive brand apps can also be
downloaded to mobiles. On the other hand, Tablets provide a much
larger size and more effective interactivity, immediately presenting great
marketing opportunities for retailers. As tablets are regarded more as a
“leisure device” rather than “on-the-go”, research shows that the average
purchaser on a tablet is much higher than one with a smartphone.
10 Types of Mobile Advertising (Source: harpsocial.com):
- SMS: (short message service): Also known as ‘texting’: Advertisers can send relevant marketing messages in form of texts
- MMS: (multi-media message service): Marketing messages that utilize multiple, rich media elements such as images, video and audio
- Mobile Applications: The ads can be hosted inside the application design and logic. The applications comprise of managed platforms, virtual machines, applications and widgets
- Bluetooth Wireless Proximity Based Marketing: It works like local TV advertising on cable or network channels where a customer in a particular location will be served custom ads for that area. You will receive an ad or a message based on the location your wireless device is picking up
- Location-Based Marketing: Delivers multi-media directly to the user of a mobile device dependent upon their location via GPS technology
- QR Codes (quick-response barcodes): Allows customers to quickly learn more about a business, by visiting a mobile version of their business page on a mobile phone that is enabled to scan the bar code
- Pay Per Call Mobile (also called click-to-call): Pay per call is advertising that generates a billable event only when the reader of the ad does something—in this case, makes a phone call. A mobile ad can contain a phone number that the customer can select and call instantly from their cell phone
- Voice Marketing: Voice broadcasting calls numbers from a computer managed list and plays a pre-recorded message to the customer
- Mobile Banner Ads: Like standard banner ads for desktop web pages but smaller to fit on mobile screens and run on the mobile content network
- New Technologies
"New approaches to doing new and old things, and tackling new and old problems do not necessarily involve technical factors, however, technological factors are vital for competitive advantage, and are a major driver of change and efficiency. Technological; factors can for example lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. New technology is changing the way business operates. The Internet is having a profound impact on the strategy of organisations. . Academics and administrative staff can now access UCC 24 hours a day comfortably from their homes. Expectations in relation to response times, for example, have altered dramatically. This technological revolution means a faster exchange of information beneficial for businesses as they can react quickly to changes within their operating environment." (Source: http://www.ucc.ie/en/qpu/guidelines/sar/documentfile-57349-en.pdf)
New technologies can also affect universities and other educational organisations (such as schools, colleges etc.) around the UK in regards to out of date computer hardware/software, number of equipment required for all students, paper-based books vs. recent e-readers, management of IT systems and security costs and more.
Environmental
- Waste Disposal
- Travel Implications
Legal
- Legislation
- Funding
No comments:
Post a Comment