Strategy Formulation

As internet marketing has a lot of elements of marketing strategy, you can base your digital marketing strategy on most of these principles. The first 4 decisions are concerned in how to deliver value to the customer on the internet platform. Which products and which market to focus are also being formulated in these stages.

Ansoff Matrix

Decision 1: Market Penetration and product development strategies.

The internet platform offers companies the unique opportunity to better compete with its competitors.

  • If its strategy is Market penetration: This means that a company wants to sell more of its existing product in the same market; it can use the internet 1) to gain more market share by making their websites more efficient such as converting visitors to sales 2) improve customer loyalty and 3) improve it customer value by offering competitive online prices or discounts.

Nike plus

  • Market development. The benefit of the internet gives organization the opportunity to enter new markets with existing products due to its low cost such as low advertising costs as well as capturing bigger segments of clients. Some examples are RS Components a supplier of a range of MRO (maintenance, repair and operations) items, found a new online market when they launcher their site, with 10% of their web-based sales to individual consumers rather than traditional business customers. It also uses the website to offer additional facilities for customers placing large orders online. The UK retailer Argos found the opposite was true with 10% of website sales being from businesses when their traditional market was consumer-based. EasyJet also has a section of its website to serve business customers.
  • If its strategy is to develop it products or in other words bring new products in existing markets; the internet offers them 1) the possibility to add new values such as self-customized products 2) develop digital products such as Spotify 3)change payment models such as subscriptions and 4) increasing product range.


Spotify has subscriptions where  one can listen offline to music by downloading the playlist. It also offers them the opportunity to listen online with wi-fi as well as giving information about the artists and recommendations. You can choose to pay have a monthly subscription or buy the gift cards.

Make your own Nike

Make your own nike. Adding value to existing products by making the product more personal.

  • A firm can decide to enter a completely new market and offering new products. This is called diversification. Airline companies use this a lot now where they offer next to airline ticket also the possibility to rent cars or rent hotel rooms. Some of these come in combinations.



Decision 2: Business and Revenue Models Strategies

Companies need to constantly evaluate their business models as well as revenue models in order to stay competitive and to be able to survive in this new digital age. The internet has made it easier for consumers to have the opportunity to explore different competitors and compare products. Therefore it is crucial to review the business model from time to time.  A business model is a summary of how a company is going to generate its revenues, stating its products, target groups and value added services.

It is fair to say that in most cases business models are usually adjusted. The model how a company earns its revenues can in the past be very effective but in the present be contagious. In addition, the internet has open an opportunity to gain additional revenues through for example through advertising or e-commerce. Companies can be radical with their revenue models or far less reaching. Both of them has proved to be worthwhile such as selling advertising space or gain commission.

Different types of ads

Advertisements is a very useful source of revenues nowadays for internet marketeers. There are different types of ads such as Display, Search, Text, Paid content, Email and much more.

Decision 5: Social Media Strategy

Social media is one the most powerful marketing tools currently. If used correctly you can build a relationship with the potential customers of the company. To benefit from the social media there should be a clear strategy involved that takes into account what you’re trying to achieve, and to identify you’re customers.

Understanding your goals

By understanding your goals, it is about what you want to reach with social media, because social media can be used for more purposes. It could be that you want to have increase your sales, or increase the website usage.


For the goals you have set, you at least need objectives of what you want to reach which your goals you have set. For example, if you want to increase brand awareness, your objective might be how much times your company is mentioned on social media.


A successful social media strategy is all about targeting the right people with the right message. You have to understand your customers about what they want to see from you on social media and what they expect from you. You have to find out the right customer and how to reach them. For example on Instagram it means you have to use the right hashtags to find the right target group,


When you have your competitors on social media, you can look with what works for them, and what does not work for them and from that point you can differentiate yourself from the competitors to have a better strategy. You can use your competitors as a benchmark.


The message should be original and creative enough for your potential customers and it should be different then your competitors. The message should be understandable for the potential customers, they should understand it and agree about it.


The channel you use is important because some social media platforms are meant for something else, for example LinkedIn is more business to business, and for job search, while Instagram is about sharing photo’s with a message behind it.

 Decision 6: Multichannel distribution strategy

Direct Distribution

This type of distribution is mainly online and the company offers his products through a website.The customers have no physical touch with the products, therefore there has to be an other value added to the product. Mainly customers buy online because it offers convenience, and there is always an online ´help´ option. They can buy the products online at anytime, even at midnight hours. Therefore there is an added value created with the online distribution system, and it might be more efficient for the customers.

Indirect Distribution

With this type of distribution more people can have access to influence the customer, also it adds value by giving the customer an experience to the product, a sales force can come in action if you know that the customer will be highly profitable, if he will re-purchase the product. It could be less efficient than direct distribution, however there is an added value to it, which can compromise the efficiency. It creates more loyalty with the customer, than with a direct distribution system.

There are various ways of indirect distribution channels:

  • Salesforce
  • Retailers
  • Wholesalers to Retailers to Customers

Decision 7: Multichannel Communication strategy

For a communication strategy there must be one single voice through every communication channel to customers to have one unified voice. An unified voice creates an overall better customer experience.

If there is a communication between the business and customer you should be able to track your customers to finally understand them better and knowing what it takes to attract them. By tracking customer profiles you can analyze their lifestyles. So you can have a more personalized approach to the customers. If you can know how to engage the customers with a message of knowing their customer preferences. The customer should get a message that is interesting. Every customer should be on the same page, so businesses can create a stronger customer engagement.


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