Digital Marketing Plan for the Storm Magic Mirror
Tables of Content
1 Executive Summary 2
2 Introduction 2
2.1 The definition of Digital Marketing 3
2.2 The Introduction to the Storm Magic Mirror 3
3 Business Environment Audit 4
3.1 SWOT Analysis 4
3.2 Porter’s Generic Strategy 5
3.3 STP model 6
4. The Objectives of the Digital Marketing Plan 9
5. Digital Marketing Plan 9
5.1 Method-1: Influencer Marketing 9
5.2 Method-2: Online behavioral advertising 10
5.3 Method 3: In-game advertising 10
5.4 Timeline and More Details of the Plan 11
5.5 The budget of the Plan 13
6 Evaluation of the result of the plan 13
6.1 Overall Site Traffic 14
6.2 Competitive Analysis 14
6.3 Return on Investment (ROI) 14
7 Conclusion 15
8 References List 17
As the development of Internet and globalization, a company which only focuses on marketing with traditional media will cause more cost than that take much attention on digital marketing. Digital marketing becomes more and more important for a company to promote its products or services so as to gain the market share and increase the brand preference. The Storm Magic Mirror is a high tech product, and it will mostly rely on digital marketing to improve its business performance. In this report, it will firstly review the internal and external business environment of The Storm Magic Mirror in China market; secondly according to the analysis of business environment, it will advise a digital marketing plan; finally it will discuss how to measure the success of the plan. The limitation of this report is only focus on China market. As the development of globalization, a company should consider how to entre global markets so as to enlarge the market scale. So the future research will try to figure out how to make a digital marketing plan aiming to global markets.
The development of Internet and globalization already changed the competitive environment. Meanwhile, a company which only focuses on marketing with traditional media will cause more cost than that take much attention on digital marketing (Morris, 2014). Digital marketing is a hypernym for the directed, interactive and measurable marketing of services and products that can reach potential customers and turn them into consumers and then maintain them by using digital technologies. In the era of Internet, a company should take more attention on digital marketing so as to save the marketing cost but to communicate more effectively (Nielsen, 2013). In this report, it will try to recommend a digital marketing plan for a Virtual Reality product - the Storm Magic Mirror, which is the hardware product released formally by the Storm that is the video software company in China. Firstly it will review the definition of digital marketing and the introduce the Storm Magic Mirror; secondly it will come with the business environment audit so as to provide a huge supporting for the digital marketing plan; subsequently it will come with the digital marketing plan for the Storm Magic Mirror; finally it will also identify how to measure the success of the digital marketing plan.
Promoting brands, building preference and finally boosting sales by using all kinds of digital marketing techniques is the key goal of digital marketing. Digital marketing is objectified by various choices of marketing strategies of product, service and brand, which chiefly uses the Internet as the key media for promotion, in addition to mobile and traditional radio and TV (Karjaluoto and Ulkuniemi, 2015).
Digital marketing activities include search engine optimization (SEO), search engine marketing (SEM), content automation, content marketing, campaign marketing, influence marketing, social media optimization, social media marketing, e-commerce marketing, e-mail direct marketing, games, optical disks, e–books and display advertising, and any other type of digital media which have not been mentioned above. Digital marketing activities can also occur in non-Internet channels that offer digital media, like callback, on-hold mobile ring tones and mobile phones.
The Storm Magic Mirror is one product in the industry of Virtual Reality. The virtual reality technology has sprouted in the 1960s. Although after the long time of 50 years of the technology exploration, the previous the virtual reality equipment used for the public entertainment is also in the stage of the high price and the minority of the population (Mojing.cn, 2015). The reason is that on the one side, the single display screen that is the expensive hardware requires to be equipped. On the other side, the virtual reality equipment of the kind of the public entertainment is mainly used for playing the games while the number of the alternative virtual reality games is not enough.
The Storm Magic Mirror is the hardware product released formally by the Storm Company that is the video software company in China. As the spectacle of the virtual reality, the Storm Magic Mirror should be used with the coordination of the exclusive magic mirror application developed by the Storm. The effect of the IMAX is achieve on the mobile phone so that the viewing effect of the cinema can be achieved by the common film. The products of the first generation have been launched on September 1, 2014.The products of the third generation of the Storm Magic Mirror have been launched in June, 2015.
In order to provide a huge support for the digital marketing plan for the Storm Magic Mirror, it is essential to firstly figure out the internal and external business environment. In this section, it will utilize 3 methods: SWOT analysis, Porter’s Generic Strategy and STP model (Segmentation, Targeting and Positioning).
Strategic planning requires an overall understanding of the external and internal environment. SWOT analysis refers to the analysis of four aspects including strengths and weaknesses inside a company as well as opportunities and threats outside it (Panagiotou, 2003).
Valuable information can be gained from SWOT analysis for a company to understand its resources and abilities to cope with the market competition. Therefore, SWOT analysis helps company management to make strategic planning. The SWOT analysis for the Storm Magic Mirror is showed in below diagram.
Figure 1: SWOT analysis for the Storm Magic Mirror
From the analysis, it could help the management to understand more about the business environment. Therefore, when making the digital marketing plan, it could try the best to promote the advantages so as to grab the external opportunities; meanwhile it should also avoid to discuss about the weaknesses of the products so as to response to the external threats.
A company's advantages or strengths largely determine its position in the industry. As it was suggested by Michael Porter, cost advantages and differentiation are the major two aspects of a company's strengths. There are three generic strategies from these advantages whether they are used in a narrow or broad scope, including focus, differentiation and cost leadership. Below figure is the illustration for Porter’s Generic Strategy (Eldring, 2009).
Figure 2: Porter’s Generic Strategy (Eldring, 2009).
The target market of Storm Company is wide, which include the people from kinds of industries. The common character of the target customers is that they all have the demand for video entertainment. So the Storm Magic Mirror is also targeting such customers. Meanwhile, the price of the Strom Magic Mirror is very low. The Storm Magic Mirror is the entry-level equipment, which is used with the coordination of the mobile phone. The selling price of Version 4 is only RMB 199, equals to USD 30.1 (Virtual Reality Deals, 2015). By contrast, the competitor Oculus is pricing its product Oculus Rift at USD 499. It could see that the price of the Storm Magic Mirror is much lower. To summarize, the Storm Magic Mirror adopts the strategy of Cost Leadership according to Porter’s Generic Strategy.
Low operation cost with required quality is needed in the generic strategy of cost leadership. Companies often adopt two methods in pricing including gaining more profit by products at average price in the industry or capturing the market by selling at below average price. A company will suffer losses when it keeps certain profitability in the price war. In other times with the maturity of the industry and price reduction, companies can gain profits in a long term if they can keep the cost low. To earn the broad market is the aim of the cost leadership strategy.
A number of internal advantages are required for successful implementation of cost leadership strategy. The first one is that the Storm Magic Mirror able to gain adequate funding as the initial investment in the production of products. Such funding often involves with large amount of investment and is the threshold of an industry that is a difficult issue for some companies. Secondly, the Storm Magic Mirror has enough skills in efficient product design. For instance, it can save time in production line by designing necessary product parts. Thirdly, professional knowledge and expertise in engineering is also necessary in the process of manufacturing.
Therefore, in the digital marketing plan, it could try to promote the advantage of low price so as to attract the target customers in China market.
STP model includes the process of market segmentation, targeting and positioning.
Market Segmentation
Market segmentation means that a big coessential market is recognized and then classified into different segment markets based on the analogous features in demands. The purpose of market segmentation is to meet the exact needs of clients in each segment market through specific market strategies (Weinstein, 2001).
Psychographic segmentation is adopted by the Storm Magic Mirror to divide the China market. The activities, interests, and opinions of consumers are researched to recognize their different lifestyles so that psychographic segmentation can be formed. Below figure is the psychographic segmentation of the Storm Magic Mirror.
Figure 3: Psychographic segmentation of the Storm Magic Mirror
Psychographic segmentation can help the Storm Magic Mirror to know the main entertainments of their customers and understand these external factors influencing them the most. People's long term and stable lifestyle and activities can be recognized by psychographics that reflects their demand, so psychographics is crucial in market segmentation. Significant influence can be made on people through mass media. Moreover, the Storm Magic Mirror fitting people's lifestyles plays an important role in their decision of purchasing.
Market targeting can help the Storm Magic Mirror concentrate their information, make their product distinguishing and find out the way to reach people who is likely to buy their product or service. According to the figure of the psychographic segmentation of the Storm Magic Mirror, the Storm Magic Mirror should choose mainly focus on the markets of A1 and A2; while it should also take attention on B1 and B2. By contrast, the competitor Oculus focuses on B3 and C3; while ARCHOS focus on A1 and B1.
In a word, when making the digital marketing plan, it should focus to communicate with the customers who are interesting in watching video and playing games; meanwhile they are on the low and middle-income level.
Positioning
The core of positioning is to place the product into consumers' mind that is suggested by Ries and Trout (2000). It is necessary for companies to adopt positioning because people are overwhelmed by numberless advertising information nowadays and in USA advertising costs on each consumer are hundreds dollars each year. Among the huge quantity of advertisements, only those fitting customers' lifestyles and needs can leave some impression in them.
The ideas from consumers or potential ones can be shown in diagrams by means of perceptual mapping. By comparing with the competitors, these diagrams can show the positions of a company, a brand, a production line or a product (Levy, 2012). Below figure is the Perception Map for the Storm Magic Mirror and its competitors.
Figure 4: Perception Map for the Storm Magic Mirror and its competitors (Wiki.ezvid.com, 2015)
The key in digital marketing plan is to convey straight and simple message with connection to the position of the Storm Magic Mirror. Namely, the digital marketing plan should try to strengthen the products’ advantages including low price and only focusing 2 functions: video and game.
The purpose of the digital marketing plan is improving the brand awareness and brand preference so as to increase the sales volume for Storm Magic Mirror. According to the above environment analysis, the purpose could be divided onto the following 2 objectives:
1) Trying to promote the advantages of Storm Magic Mirror including low price, only focusing on 2 functions: video and game
2) Focusd on communicate with the target customers: the people who are interesting in watching video and playing games; meanwhile they are on the low and middle-income level.
After analyzing the business environment and marketing objectives of the Storm Magic Mirror, in this section it will come with the digital marketing plan. The plan mainly includes 3 methods: influencer marketing, online behavioral advertisement and in gaming advertising. Firstly it will focus on introducing the 3 methods; subsequently it will come with the timeline and more details of the plan.
Focusing on the specific important individuals (or types of the individual) rather than the target market as a whole, the influencer marketing is the form of the marketing that has emerged from the various recent studies and the practices (Kirby, 2012). The individuals who have the influence over the potential buyers can be recognized by the influencer marketing. Moreover, the marketing activities around the influencers could be oriented by the influencer marketing. Social Media is the most important tool for influencer marketing.
The fellow customers are informed by the purchasing decisions of the customers because the world has shifted to the social media. In China, people would like to visit each other in social media such as We-Chat, Weibo, Douban, and other platforms instead of visiting in the companies.
As the practice of collecting the information from the web browsers, the Online Behavioral Advertising (OBA) can be used to display the online advertisements that are relevant to the user of the particular computer. The OBA is believed by a variety of the advertisers that the better experience of the online advertising of the customers can be provided by the OBA (Hua, Tang & Zhong, 2015).
The OBA may place the cookie on the browser of the computer of the customers when the customers visit the site. The cookie will collect the information about the visits if the customers use the browser to visit the websites connected with the OBA business. For instance, if one person is searching VR products in Baidu.com (the leader in Chinese searching engine), the cookies would collect the information and then show the advertisements of the Storm Magic Mirror to him or her. The Storm Magic Mirror could choose to place advertisement in the Top 3 Chinese searching engines: Baidu, Sohu and Sina.
The In-game advertising (IGA) means the advertising in the video games and the computer. The IGA is different form the advergaming indicating the game specially made to advertise the product. The IGA can be combined with the game either through the commercial during the pause created when the game loads or through the display in the background, such as the in-game billboard. Featured obviously within the cutscenes, the IGA can be highly combined highly integrated within the game so that the advertised product is necessary to complete the part of the game. The benefit that the customers are less likely to multitask with other media while playing the game is one of the benefits of the IGA over the traditional advertisements. Nevertheless, some attentions are still divided between the controls, the advertisement and the gameplay (Siemens, Smith and Fisher, 2015).
The use of the dynamic IGA has been increased by the increasing Internet bandwidth and connectivity so that the advertisements can be updated when the game is launched by the advertisement vendor or the game manufacturer, delivered distantly by the advertisement vendor or the game manufacturer and targeted based on the geography or the time by the advertisement vendor or the game manufacturer. Because the most in-game advertisements do not connect with the website outside the game, the customization of the web banners with the function of the traditional posters and the billboards is combined by the method. The delivery service that captures the viewing data, such as the viewing perspective, the type of the advertisement and the screen time and tracks the advertisements in real time is permitted by the Dynamic IGAs. The current advertisement can be more attractive to the players by the information or the copy problems can be corrected by the information. Besides, the future advertisement campaigns can be improved by the information.
The reason that the IGA is permitted to be part of the time-sensitive advertisement campaign by the dynamic advertising campaigns lies in that the dynamic advertising campaigns do not require to be planned years or months before the game is completed. The dynamic advertisements characterized in the developer determined in-game location could be purchased after that the game is released to the general public.
The below figure is the timeline for the digital marketing plan for the Storm Magic Mirror.
Figure 5: Timeline for the digital marketing plan for the Storm Magic Mirror
The plan will start from Feb 2016 and end in Apr 2016.
Firstly in terms of influencer marketing, it will contain 3 parts. The first part is Weibo lucky draw to win the products. Weibo is the second largest social media in China; and it got 212 million users by May 2015 (Chin, 2014). The activity mechanism is that the customers who take a photo with the product of the Storm Magic Mirror would get a chance to get the reward of 1 Version-4 product. The company will invest 1,500 mirrors to activate the customers to share the photo with their friends in Weibo. The second part is to hire 10 key opinion leaders (KOLs) from different industries and let them to influence their fans in We-Chat. We-Chat had 65 million users by Sep 2015, and it is the largest social media in China (Chin, 2014). It is essential that the KOLs must be the target customers of the Storm Magic Mirror. The third part is to launch a grand reward to motivate the customers and build the buzz. The grand reward is to watch the video on Storm website for free for 1 year. It will totally reward 100 customers who buy the products and share the photos in social media.
Secondly in terms of online behavioral advertising, as referred, the Storm Magic Mirror will invest in Top 3 Chinese Searching Engines: Baidu, Sohu and Sina (Zhongxuan, 2014). It will start from Feb 10 and end on Apr 15.
Finally in terms of In-game Advertising, it will contain 2 parts. The first part is to invest the came called LoL. It will start from Feb 7 and end on Mar 7. LoL got the largest players in China: by the end of 2015, the quantity of players was 30.2 million, and it equaled to 1.6% of Chinese population. The second part is to invest the game called DNF, which had 3.4 million (Jingyan.baidu.com, 2014).
The below table is the budget of the digital marketing plan for the Storm Magic Mirror.
Table 1: the budget of the digital marketing plan for the Storm Magic Mirror
It could see that the total budget for Influencer Marketing is RMB 460,000.0, for Online behavioral Advertising is RMB 150,000.0, and for In-game Advertising is 198,000.0. The total budget for the digital marketing plan for the Storm Magic Mirror is RMB 808,000.0.
The analytic data and the measurable metrics are available and possible in real-time in the digital marketing era. The requirement for evaluating the data that is the evidence is important for the success. The significance has been increased by the requirement of evaluating the digital marketing success efficiently and possibly more than ever before in the rapidly and constantly changing business landscape (Royle and Laing, 2014). The digital marketing instrument that is available has some ways of evaluating the success so that the business owners can obtain through the various metrics. In below content, it will identify 3 key measures to effectively evaluate the result of the digital plan for the Storm Magical Mirror.
The consumer can be given the perception on the effectiveness of the started special digital marketing technique by the significant changes that how the traffic flows to the site of the consumer. The number of the hits of the website of the consumer gets or the page views should be focused on or relied on when the site traffic is evaluate. Besides, the number of the unique visitors of the website per week or per month should be focused on or relied on (Leeflang, Verhoef and Freundt, 2014). The opportunities of getting the potential customers are greater when the unique visitors of the website of the consumer receives.
Executing useful and complete competitive analysis is a kind of hard and skillful art, for it is difficult to portray and predict competitors because of their nature. Luckily, tools for tracing and analyzing competitors fundamentally and effectively exist, such as Compete and Competitious. Gathering a competitor’s spreadsheet that shows crucial features of target consumers is important for it provides a company with chances to be distinguishing.
The consideration about the future time-line of a industry is another important essential, but many companies do not take it into account in their plan. For having the ability of responding to competitors’ motion timely and powerfully, a supposed worst-case prediction of their future actions should be built in advance, which can help a company identifies what they should do now to be ready if a great industry shift occurs in two years (Tiago and Veríssimo, 2014).
The website traffic which is finally converted into the new paying consumers can properly evaluate the Return on Investment (ROI). The visitor can be helped by the metric to recognize the areas which should be given more space for the improvement and the area in the digital marketing campaign which is driving the sales and the revenue.
Digital marketing becomes more and more important for a company to promote its products or services so as to gain the market share and increase the brand preference. As the development of Internet and globalization, a company which only focuses on marketing with traditional media will cause more cost than that take much attention on digital marketing. In this report, it tried to figure out an effective digital marketing plan for the product – the Storm Magic Mirror. The Storm Magic Mirror is a Virtural Reality product, which focus on Chinese Market.
In this report, on one hand, it reviewed the internal and external business environment of the Storm Magic Mirror in China market. Firstly, it utilized the method of SWOT to figure out the strengths of the company: the price of it product is low; it familiars with China market. Therefore the Storm Magic Mirror could leverage those advantages to grab the external opportunities: the growing market demand for Virtual Reality products and the little competition in Chinese market. Meanwhile in the digital marketing plan, the Storm Magic Mirror should avoid to mention about its weaknesses so as to response to the external threats. Secondly, it utilized the method of Porter’s Generic Strategy to figure out that the Storm Magic Mirror should adopt the cost leadership strategy. It means that in the digital marketing plan, it should fully promote the advantage of low price so as to gain the market share. Finally, it utilized STP model to figure out the products’ target market and positioning. It should focus to communicate with the customers who are interesting in watching video and playing games; meanwhile they are on the low and middle-income level. The key in digital marketing plan was to convey straight and simple message with connection to the position of the Storm Magic Mirror. Namely, the digital marketing plan should try to strengthen the products’ advantages including low price and only focusing 2 functions: video and game.
On the other hand, according to the analysis of business environment, it advised a digital marketing plan including Influencer marketing, online behavioral advertising and In-game advertising. Firstly in terms of influencer marketing, it contains 3 parts: Weibo lucky draw to win the products, We-Chat KOLs to drive the brand awareness and Grand award to burst the buzz in Weibo and We-Chat. Secondly in terms of Online behavioral advertising, the Storm Magic Mirror will invest the Top 3 Chinese searching engines including Baidu, Sohu and Sina. Finally in terms of In-game advertising, it contains two parts: the first part is to invest the came called LoL. It will start from Feb 7 and end on Mar 7. LoL got the largest players in China: by the end of 2015, the quantity of players was 30.2 million, and it equaled to 1.6% of Chinese population. The second part is to invest the game called DNF, which had 3.4 million.
The digital marketing plan for the Storm Magic Mirror will start from Feb 7, 2016 and end on Apr 15, 2016. The total budget is RMB 808,000.0. Furthermore, it identified 3 key measures to effectively evaluate the result of the plan: Overall site traffic, Competitive analysis and Return on investment.
With the specific business analysis and effective digital marketing plan, the Storm Magic is probably to get the success to improve its brand awareness and brand preference so as to increase the sales volume in the future years.
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