We often assume that only medium sized firms and large corporations have complex organizational structures. This however, is true but it should not limit startups to visually understand their environments. Visual maps help stakeholders communicate effectively and aid strategic decision making. This article aims to reflect on the importance of visually mapping the digital marketing environments in the context of luxury startups and examines its components. Last week we examined the importance of integrating traditional marketing with digital marketing in manufacturing firms.
The digital marketing environment is broken down into two major parts: the macro-environment (outer part) and the micro-environment (inner section). The micro-environment sits close to the organization and links with customers, suppliers, competitors and intermediaries.
For a jewelry startup which specializes in crystals, gemstones and styles made with recycled gold, the micro-environment may consist of the suppliers who provide the raw materials to make the products, the customers who buy from them, and the businesses that they compete with on product segment price and even volumes.
Intermediaries could be services like freight forwarders, quality control agencies and even the marketing agency which helps with brand identity development and provides marketing services. Digital media and social media platforms can also be seen as intermediaries as well as any technology providers who help the organization to make a sale to their customers like CRM tools, website building platforms and inventory management systems. The micro-environment is essentially a combination of resources, technical capabilities, culture of the brand and the brand identity itself.
The customer component of the microenvironment takes into consideration demographic factors, psychological factors, behavioral observations and the needs of the customer. For jewelry startups this may involve understanding and identifying their customers’ age segments, gender distribution and even the residual income that they may need to purchase products from the brand. Psychological considerations include factors like the interests of the customers, their potential lifestyles and their existing perceptions of similar jewelry brands.
Part of the customer component of the digital marketing environment are drivers that support or deter consumer’s decision making from informing organizations about customer needs and preferences. For example, consumers within a specific age range may prefer shorter necklaces rather than longer ones, they may shop predominantly online while consumers in other age ranges may prefer to first try the product on instore.
The macro-environment comprises external factors which interact with an organization. Components of the macro-environment include market trends, the competitive environment, technological factors, the law and regulatory factors as well as local and international economic influences. It may be necessary for a jewelry startup to keep up to date with the latest jewelry styles that interest consumers, as well as marketing trains that cut through the noise on digital mediums. Understanding how other jewelry brands are performing both online and in stores as well as what aspirational brands are achieving forms part of understanding the competitors in the microenvironment.
For a jewelry brand, part of the macro-environment would be the rules and regulations they need to follow to produce jewelry, to maintain a standard of quality across the industry and even raw material trade guidelines. Local factors may include the availability of jewelry producers within a specific geographic area, the cultural perceptions of specific jewelry styles and even customs regulations behind importation of specific foreign raw materials. International factors may include the price of gold which is set by an international board, currency fluctuations and availability of certain raw materials.
There are many benefits to visually mapping and understanding an organization’s digital marketing environment. These visual maps provide a comprehensive view of the many factors and influences which impact a business’s digital marketing activities. Such a visual map may also help decision makers within the organization understand their operational landscape and allows them to make proactive strategic changes. It may empower managers to pitch ideas on adopting specific technologies in the effort to maximize the return on marketing investment.
Understanding the competitive environment may help organizations strength and the differentiation of their offerings and would also help them position themselves more advantageously in the market that they operate in. Most importantly, understanding a firm’s digital marketing environment allows managers and executives to respond quickly to changes in any of the components, allowing the organization to adapt faster and still operate efficiently.
In essence, the digital marketing environment map of an organization is a means to reduce risk from operational inefficiencies, strategic misjudgments and rapid changes in both the external and internal business environment. It gives everyone stakeholders an opportunity to understand each other, and collaborate effectively through thoughtful resource allocation. It is imperative for organizations to understand their digital marketing environment as it ultimately leads to a stronger market presence and sustained business success.
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