Assignment 4 - Digital Strategy Foundations
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MKT 9793 DIGITAL MARKETING STRATEGY
Baruch College, Zicklin School of Business
Department of Marketing & International Business
Adjunct Professor Linda Gharib
Name:_ ___
Assignment 4 – Digital Marketing Strategy Foundations 2 & 3
Lecture: Digital Marketing Strategy Foundations 2
Lecture: Digital Marketing Strategy Foundations 3
5 factors of direct-to-consumer brand success
To Survive in a Customer-Centric World, CPG Must Look to DTC
1.
Choose 2 of 5 of Porter’s forces that you think are the most important for Nike as it builds its digital marketing strategy.
Firstly, Nike should consider Competitive Rivalry which is a strong force for them.
The sportswear industry is heavily competitive with aggressive market competitors such as Adidas, Under Armour, and Puma. Aside from these large companies, there are also medium and small-sized brands like Lululemon and Alo trying to expand their business in the sportswear industry which means it is important for Nike to develop its unique digital marketing strategies to outperform in this saturated market. Another force that the company should think of is the Bargaining Power of Buyers. Although it is a moderate force for Nike, low switching costs allow consumers to easily choose products from Nike’s competitors. Therefore, the company should focus on building consumer loyalty by offering more value for its products and services. 1
MKT 9793 DIGITAL MARKETING STRATEGY
Baruch College, Zicklin School of Business
Department of Marketing & International Business
Adjunct Professor Linda Gharib
2.
What industries do you think have the highest barriers to entry and why?
I believe the airline industry has the highest barriers to entry with its high startup and operating costs that discourage potential competitors. In addition, it requires complicated infrastructure such as air terminals and storage facilities that constraint new entries who are not able to compete with market incumbents’ large economies of scale. This is why the airline industry is mostly an oligopoly, for example, four main domestic carriers – American Airlines, Delta Airlines, Southwest Airlines, and United Airlines – control the US airline industry. 3.
What role do more stringent regulations play in the competitive environment? Please provide examples.
Stringent regulations play an essential role in the Barriers to Entry force. The pharmaceutical market is another example that has high barriers to entry and one of the reasons is government regulatory requirements. For instance, Food and Drug Administration (FDA) approval is mandatory to launch new drugs in the US and it is not only difficult to achieve but also takes a long time to go through the application process. 4.
What are the pros and cons from advertising on a comparison site? Assuming your product is not the lowest priced.
One of the potential advantages of comparative advertising is that the brand can
increase its awareness among consumers. Although the product doesn’t have the lowest price, it can still compare product functions and overall value with well-
known competitors which will make viewers pay more attention. It could ultimately help increase transactions to our website and boost sales by motivating competitors’ consumers to consider switching to us. On the other hand, there are also disadvantages of advertising on a comparison site, and the most critical thing is that it can backfire. If the comparison advertising operates poorly, the brand will not just lose its attention but gain a negative reputation. Therefore, it is important to carefully calculate the approach to a comparison site by establishing the right marketing strategies and claims.
5.
What are some of the challenges of direct to consumer companies looking to disrupt well-established brands? One of the main challenges for direct-to-consumer companies is difficulties in increasing brand awareness in a heavily competitive market. Although the digital era brings modern technology that allows companies to easily access consumers, it 2
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