Big Skinny Online Marketing Development

Brobdingnagian closemouthed Online Marketing Development forged nigh Case compendiumExecutive SummaryIn 2010, spoilt penny-pinching CEO Kiril Alexandrov was facial expression to transcend from retail scattering and print publicizing to the conception of online merchandising to achieve maximum bugger offth. The retail gross sales pitch was an easy one, as Alexandrov focused on the value of the handbag and the impulsiveness of consumers (Benjamin Kominers, 2012). Unfortunately, translating this type of sales pitch was much harder to do in the world of cyberspace. crowing Skinny centered their online merchandise efforts around queer Ads, keyword searches, genial media and relationships with online distributors and dense DISCOUNTED internet sites much(prenominal) as amazon and Groupon respectively. The expansion caused much hardship, as bounteous Skinny received negatively charged feedback on the review website yelping that stemmed from their Groupon experiment. T hey withal faced a glitch in their online promotion that allowed 4,000 mickle to order melt wallets from their online store. oversize Skinny needs to refocus their online marketing strategy by getting rid of display Ads, refining keyword searches and severing ties with deep DISCOUNTED sites. Big Skinny can create value for their fruit and command their orders better by being more(prenominal) selective with who distributes their product and by advanceing the price steady. A more seasonal approach surrounding keyword searches can create forward-looking revenue from those who be looking to make quick and impulsive corrupts. Lastly, by being responsible for who distributes their products, Big Skinny can aban have on their product in prompt and mea legitimately manner, which will resolve the majority of guest complaints against Big Skinny.occupation StatementDespite successful in-person sales campaigns, Big Skinny struggled to find an effective online marketing platform that would grow and connect them to their consumer base. Big Skinny withal ran into glitches with their current online marketing campaigns that brought unwanted negative attention and resentment towards the company.Data AnalysisWhen Big Skinny transcended into the world of online marketing, it had to develop a counseling to attract visitors to the website plot attempting to convince these visitors to buy wallets. Since well-nigh of their wallets were being sold at trade shows or retail stores that centered on a straight-forward approach regarding impulse and value, the translation of this strategy to the internet turn up to be a tall task.Big Skinny looked at various means of advertising such(prenominal) as display ads, algorithmic search, sponsored search, A/B Testing and social media. Display ads offered a two-frame liveness however, the click-through rate of general display ads in 2009 was only .1% (Bejamin Kominers, 2012). Algorithmic searches use algorithms that the search locomotive engine deems most relevant to the users query. The websites that most resemble the query appear the highest on the search engines list. Sponsored searches use keywords that the advertisers specify that they want to target. These argon mostly sold on a per-click foundation garment however the company loses money if the clicks arnt converted into sales. A/B testing is a marketing technique that shows different advertisements to different users to compare the response rates between the two. Lastly, social media utilizes websites such as Facebook and Twitter to try and create an interactive relationship with consumers.AlternativesBig Skinny could eliminate their means of online dispersal and PAID ONLINEmarketing, only utilizing social media and their website to allot advertising and business transactions.Big Skinny could be more selective in their selection of online distribution, while tailoring their paid sponsored searches to generate interest and sales.Big Skinny coul d scrap their online marketing plans, with the exception of social media, and reallot their advertising money strictly on deep DISCOUNTED sites like Groupon and Living Social.Big Skinny could focus their efforts on expanding in more brick and mortar retail stores by target marketing towards different demographics. They could use traditional media such as TV and radiocommunication to drive these efforts.Key Decision CriteriaIncrease guest satisfaction and corporate imageIncrease sales and market shareImprove (or at least maintain) clamsabilityEase or speed of nidationBe consistent with corporate mission or strategy at heart our present resources or capabilitiesWithin acceptable risk parametersMinimize environmental impactMaintain and build employee morale and prideAlternatives Analysis1. By limiting their online marketing to free social media sites such as Twitter or Facebook, Big Skinny can greatly reduce their marketing costs. With display advertisements only getting clicked thr ough .1% of the date the money is essentially thrown outdoor(a). Investing in A/B testing requires the hiring of a invariable person and huge overhead. Getting rid of online distributors allows Big Skinny to eliminate the 7-15% commission they pay to virago and eBay while being able to manage their order load. Social Media is more than enough because 71% of social media participants say they are more likely to purchase from a brand they follow online. 91% of topical anesthetic searchers say they use Facebook to find local businesses online (Bennett, 2013). The cons of this are that they are missing out on a lot of potential customers by eliminating Amazon and eBay. While ONLINE PAID marketing can be expensive, at that place is still benefit to sponsored searches. Some of the cost per conversions are profitable and by completely eliminating these searches would be throwing away potential opportunities.2. The pros of Big Skinny being more selective with their online distributors allows for a happy customer base. in that location soak up been several negative reviews on the bark site regarding slow delivery and non-existent customer service. By eliminating deep discounting sites such as Groupon, Big Skinny can manage their order load and keep customers happy. Big Skinny would also keep the revenue from the top paid sponsored searches rather than eliminating them all together. The negatives of this are that Big Skinny could miss out on a lot of revenue by non using Groupon or Living Social. They could also miss out on the repeat customers that are generated by these sites as well as missing out on the people who want to try their product without having to pay full price.3. Instead of eliminating sites like Groupon and Living Social, Big Skinny could embrace the huge influx of customers that it brings. According to the customer satisfaction and analytics company ForeSee, 91% of customers have already or plan to conduct business with the merchant since buyi ng the deal (Bedigian, 2013). This strategy generates a large influx of customers in a short magazine while attempting to generate residual income by repeat customers. The cons of this are that companys often lose money during the initial Groupon. The product is discounted by 50% or more and indeed Groupon takes a 50% commission on the sale price, which leaves the dispen feelr receiving only 25% of the original parcel outing price of the item (which in some cases is less than the cost of the item). Forbes has found that 1/3rd of businesses have lost money on a Groupon deal and there is no guarantee that the customers ever increase to pay full price from the merchant again (Gleeson, 2012).4. The pros of using a more traditional advertising medium such as TV or radio would bring brand recognition for Big Skinny. Big Skinny has always had success selling in retail stores because they market their products based on value and impulse. By putting the product in more retail stores, the re is a greater chance people will put it in their hands and buy on impulse. Instead of targeting on the dot one big audience, Big Skinny should advertise by target market such as Big Skinny Sport or Big Skinny Women. By doing this they could partner with big retail chains to get into more stores and generate more revenue the old fashioned way. The average time an American spends watching TV is 5 hours compared to just 1 hour browsing the internet, which leads for greater exposure. The cons of doing this are that TV advertising is much more expensive than online marketing (Nielsen, 1997). Another con is Tivo allows people to disk their favorite shows and then fast-forward past the commercials. The last con is that TV advertising seems to be a function of the past, as the amount spent on TV advertising was only up 4.5% in 2011 as compared to 21.7% via online marketing (Gleeson, 2012).RecommendationsBased on the data, it is best for Big Skinny to be more selective of their online di stribution, while tailoring their paid sponsored searches to generate interest and sales. In regards to online distribution, Big Skinny should keep eBay and Amazon, however, should drop deep-discount sites such as Groupon or Living Social. To offer a Groupon deal, Big Skinny is guaranteed to be taking a loss. To be eligible to offer a Groupon, Big Skinny must discount the price of their wallet by at least 50%. This turns a $20 wallet into a $10 wallet. Groupon takes a commission of 50% on the sale price, which leaves Big Skinny walking away with only $5 for every wallet sold (Bice, 2012). Essentially, they are taking a loss with every wallet they sell on Groupon. The goal of a Groupon is to try and get repeat customers however, the people that use Groupon are arrangement-hunters. They wint return to Big Skinny, but rather, they will return to Groupon again looking for another bargain deal. By using Groupon, Big Skinny also decreases the value of their brand (Gibbard, 2011). wher efore would a customer pay full price for a $40 wallet when they just bought it on Groupon for $15 or $20 just a short time ago? In addition to dropping Groupon, Big Skinny needs to manage their online distribution better because of customer satisfaction issues.On the review site Yelp, Big Skinnys wallets are only receiving a rating of 2.5 out of 5 stars. A lot of the reviews include gripes about not receiving their order for 3-4 weeks or non-existent customer service (most of the negative reviews are from users who bought a Big Skinny wallet on Groupon). If the online distributor doesnt ship your product in a timely manner, your company risks a tarnished reputation. Whether Big Skinny didnt have enough investment firm to fulfill orders or whether Groupon didnt ship the products in a timely manner, Big Skinny is taking the fall and abuse from customers. When people do research for a product they are going to see Big Skinnys products with poor ratings. These poor ratings can scare p otential customers away. Big Skinny should only use Amazon, eBay and their website to sell their wallets. This allows them to manage their inventory, not get behind on orders and make sure their product gets shipped in a timely manner. Big Skinny has excellent Amazon ratings and should continue to grow their product through the sterling reputation of Amazon. They should sell the product for a higher price on their website so that people are encouraged to buy through Amazon. This is a win-win for Big Skinny because if people buy through Amazon then Big Skinny doesnt have to waste time and effort fulfilling and shipping orders. If they choose to buy direct than Big Skinny receives a larger profit on their wallets.Lastly, Big Skinny needs to tailor their sponsored keyword searches. They need to eliminate the term leather wallet. They dont manufacture a true leather wallet and the cost per conversion for this keyword is a sky-high $20.26. Big Skinny should also bid less for the term th innest wallet. The cost per conversion for thinnest wallet also has a high cost, which is $10.53. After replacing leather wallet and lowering the bid for thinnest wallet, Big Skinny should add keywords centered on holidays. Wallets are popular gifts on occasions such as set abouts Day and Christmas. Big Skinny should add season keywords such as Fathers Day Wallet, Wallet for Dad, Best Wallet for Gift and Wallet for Christmas. This will bring seasonal shoppers into the scuffle who are looking to spend quickly and impulsively.Action and Implementation PlanCEO Kiril Alexandrov will be responsible for delegating the following tasks. The handler of Marketing will pull any promotions or forthcoming plans with deep discounted sites such as Groupon or Living Social. The Director of Marketing in combination with the Director of Product Management will reach out to all of those who left negative reviews on Yelp to satisfy the customer complaints and retract the negative ratings. The Direc tor of Sales will carefully select the online distribution channels which Big Skinny will sell through. Big Skinny will only sell through Amazon, eBay and any online outlets of the retail stores that they are currently featured in. The Director of Sales will also raise the prices of wallets on the Big Skinny Website by 10-15% to create value for the product and promote customers to purchase through the select online distribution. Doing this saves Big Skinny the time it would take to fulfill and pack orders, however, if a customer decides to purchase direct, then Big Skinny recoups the 10-15% it would pay Amazon or eBay to sell and fulfill the order. This new price point will be conveyed in a message from the Director of Sales to Big Skinnys distribution channel.ReferencesBedigian, L. (2013). Does Groupon Help Businesses Thrive or Bury Them Alive?. In NASDAQ. Retrieved June 12, 2013, from http//www.nasdaq.com/ term/does-groupon-help-businesses-thrive-or-bury-them-alive-cm243672Bennet t, S. (2013). 6 Amazing Social Media Statistics For Brands and Businesses. In Media Bistro. Retrieved June 12, 2013, from http//www.mediabistro.com/alltwitter/social- media-facts_b40978Bice, B. (2012). Groupon Isnt a Good Deal for Businesses. In CNBC. Retrieved June 12, 2013, from http//www.cnbc.com/id/49092709Donnelly, T. (2011). How Groupon terminate Boost Your Companys Exposure. Inc. Magazine. Retrieved June 14, 2013, from http//www.inc.com/guides/201101/how-groupon- works-for-small-businesses.htmlEdelman, Benjamin, and Scott Duke Kominers. Online Marketing at Big Skinny. Harvard Business School Case 911-033, February 2012. (Revised from original February 2011 version)Gibbard, J. (2011). Considering Offering a Groupon? Read This First. In Social Media Today. Retrieved June 12, 2013, from http//socialmediatoday.com/jgibbard/337550/considering-offering-groupon-read-firstGleeson, B. (2012). TV Advertising VS Digital Marketing. Forbes. Retrieved June 12, 2013, from http//www.forbes. com/sites/brentgleeson/2012/11/20/tv-advertising-vs-digital- marketingNielsen, J. (1997). Why Advertising Doesnt Work on the Web. In Nielsen Norman Group. Retrieved June 13, 2013, from http//www.nngroup.com/articles/why-advertising- doesnt-work-on-the-web