Demand Media Marketing Strategy Analysis & Solution

Marketing & Sales Case Study Analysis and Solution

At Fern Fort University, we use Harvard Business Review (HBR) marketing principles and framework to analyze Demand Media case study. Demand Media is a Harvard Business Review case study written by John Deighton, Leora Kornfeldfor the students of Sales & Marketing. The case study also include other relevant topics and learning material on – Customers, Internet, Sales

Strategic Marketing Analysis of Demand Media case study written by John Deighton, Leora Kornfeld will comprise following sections –

Demand Media Case Description
Marketing Definition
Market Potential Analysis of Demand Media
Market Share Potential Analysis
Segmentation and Segment Attractiveness Analysis
Competition and Competitiveness Analysis of Demand Media
Customer Value Analysis of Demand Media case study

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Demand Media Marketing Case Description

Sales & Marketing Case Study | Authors :: John Deighton, Leora Kornfeld

Google search had helped Demand Media grow to be a $1.9 billion online publisher. Then, social media and smartphone apps began to change the way people navigated the Internet. How should Demand Media respond? The business ran on a radically new model in which a stable of 10,000 freelance contributors supplied content, the Internet's search engines brought it 75 million readers each month, and advertising generated revenue. It took the guesswork out of content production, with algorithms that indicated which topics were being searched and created content accordingly. Demand treated its 5,000 online articles published per day as an investment, not a cost, a reversal of the traditional media model. In addition to being able to infer consumers' interests with its algorithm, the company had a formula for estimating the lifetime value of each piece of content. As the business models of print and broadcast media declined, Demand had figured out how to leverage digital and social media tools to bring down the costs of creating content and to find an audience. In spring 2011, executives at the five-year-old company were pleased with the company's billion dollar IPO, the biggest Internet IPO since Google's, but changes in consumer behavior on the Internet were obliging a review of the model.

Customers, Internet, Sales

Marketing Definition

According to American Marketing Association – Marketing is a set of activities that a firm undertakes for creating, communicating, delivering, & exchanging offerings that have value for customers, clients, partners, and society at large.

Kotler explains - Marketing is a process by which organizations can create value for its potential and current customers and build strong customer relationships in order to capture value in return.

Market Potential Analysis of Demand Media

Market potential analysis comprises evaluating the overall market size of the related product that the firm is planning to launch. This will involve defining – Why the target market segment needs the product and how it will provide a solution to full its consumers’ needs. Market potential of Demand Media products various on factors such as –

Maturity of the market. In mature markets the profitability is often stable but the market potential is less as most of the players have already taken market share based on the segment they are serving. New players have to go for market share strategies in marketing.
Technological competence of the existing players and culture of innovation and development in the industry.
Untapped market sizes and barriers to both enter the market and serving the customers. Often companies can easily see the unfulfilled needs in the markets but they are difficult to serve as there are costly barriers.
Define the core need that your product is serving and list out all the direct and indirect competitors in the market place. This will help not only in positioning of the product but also in defining or creating a segment better.
Uncovering the current and untapped market sizes and barriers to serving the larger market. Analyze the areas that you need to sort out while launching the products to wider market and what are the challenges the firm will face in market place.
Estimate the current stage in product life cycle and its implications for marketing decisions for the product.

Market Share Potential Analysis

Understanding the buyer behavior model for Demand Mediaindustry.
Identifying the market share drivers relevant to Demand Media market.
Segment Attractiveness Analysis – Our analysis will work out which are the most attractive segments and which are the one the firm should go ahead and target. We point out in great detail which segments will be most lucrative for the company to enter.
Understanding the different needs and relative value of your offering by segment.
Developing segment priorities and positioning the product based on the product need fit developed by the firm.

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Competition & Competitive Position Analysis

Uncovering customer-based competitive positions for key rivals and firm’s offering. This will not only help in assessing the strengths and weaknesses of the competitors but also help in defining and positioning of the product.
Developing a positioning and launching strategy. It will require not only distribution channel analysis but also promotion mix for the product.
Strategic Marketing Planning — the process of developing and maintaining a strategic fit between the organization’s objectives and capabilities and the ever evolving marketing opportunities for its products.

Demand Media - Customer Value Analysis

Capturing customer value is essential to marketing efforts as it results in higher return in the form of both current & future sales, greater market share, and higher profits. By creating superior customer value, the organization can create highly satisfied customers who stay loyal and buy more. This, in turn, means greater long-run returns for the firm.

The crucial role of customer perceived value in acquiring and retaining profitable customers. Product differentiation is often based on building on a value niche that a firm believes that is very important to the customer. This niche contributes to perceived value. If the perceived value is high then customer stay loyal to the product if not then she can switch to the competitor’s product.
Graphically displaying value differences for deeper understanding and better internal communication. This helps is building a narrative that a customer can identify with. The better the insight more are the chances of connecting with the potential customers.
Identifying and selecting actionable value creation options. This can help in increasing the customer lifetime value. Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.