MN-M519 Digital Business Assessment Answer

Executive Summary

Digital marketing is using digital channels to promote products or services to consumers. It has become a crucial component of modern marketing strategies due to consumers' increasing use of the internet and mobile devices. The COVID-19 pandemic has impacted the global economy and has boosted the requirement for e-commerce and online presence for businesses as a measure of sustainability. The presented report will discuss the impact of a pandemic on the economy and businesses and the business idea for a 'digital marketing agency'. It will discuss the business and business model and presents a wireframe to demonstrate the final design of the online website. It will discuss the primary considerations in web design to ensure that the website meets the needs and expectations of the target audience and business.

Introduction

The covid-19 pandemic has impacted the global economy with widespread and sudden disruptions in economic activities. It has impacted almost every industry, from production and retailing to travel and tourism. For instance, the pandemic resulted in disruptions in business operations, and the result led to the closure of many businesses. It further impacted job loss across various sectors (Brodeur et al., 2021). The lockdown measures in multiple countries forced the organizations to shut their operations and resulted in increased unemployment. The impact, such as business closures and job losses, is inconsistent for businesses, industries and countries. It depends on their capabilities to serve the stakeholders, such as customers and employees, in odd and temporary situations (Debata et al., 2020).

Figure 1: Global economic impact of Covid-19

(Source: Erken et al., 2020)

The second major impact on business was in the form of supply chain disruptions. Due to the lockdown and lower production of raw materials for industries, there was a shortage of goods and services. The production process in many industries was almost shut for months, and it hiked inflation and price. Third, there were reduced economic activities because businesses and vendors were forced to follow lockdown and social distancing as measures. It has directly impacted industrial production, consumer spending and investment. For instance, airlines were almost shut, whereas restaurants were allowed only for contactless home delivery and partial fulfilment of the space (Altig et al., 2020). The economic activities changed with the countries' peak and lower times of covid-19 situation. Governments worldwide have reacted to the pandemic by implementing various policies, such as stimulus packages, changes to monetary policy, and tax breaks. The financial effects of the epidemic have been lowered thanks to these actions (Maital and Barzani, 2020). The pandemic has hit some economic sectors more severely than others. While some sectors, like technology and e-commerce, have grown, the travel, tourism, and hospitality industries have been particularly impacted.

Figure 2:Covid-19 impact on employment

(Source: Eurostat, 2020)

Even though the epidemic has badly impacted many businesses, e-commerce companies have seen a rise in demand as more people shop online. For instance, it has increased the demand for businesses. Lockdowns and other social isolation measures have caused customers to change their shopping patterns, significantly increasing demand for e-commerce companies. Similarly, e-commerce companies now more than ever provide customers the convenience of buying from home. Customers can avoid congested stores and lower their risk of contracting the virus by shopping online (Ozili and Arun, 2023). Contactless delivery, a crucial safety precaution during the epidemic, is now possible for e-commerce companies. As a result, the danger of infection is decreased. Customers can receive their products without having to interact with delivery employees. Since online retailers frequently have lower overhead expenses than traditional brick-and-mortar retailers, they have been able to provide competitive pricing during the pandemic. This has been crucial for customers having financial difficulties due to the pandemic (Susmitha, 2021). Since e-commerce companies frequently have greater flexibility than traditional retailers, they can easily adjust to shifting market circumstances. Due to the unpredictable and swift changes in consumer behaviour throughout the pandemic, flexibility has proven crucial.

According to National Trade Administration, there is a significant hike in total global retail sales after 2019-20. Covid-19 has boosted the steady growth rate of 8% in retail e-commerce sales. Spain and Japan-like countries have experienced a significant boost in e-commerce retails. Most industries received a 19% increase in their e-commerce revenue compared to the pre and post-pandemic period (ITA, 2022). There is a growth of around 26% in food and personal care products. It is also identified that there is a significant increase in outbound sales in the post-pandemic period, and the organizations have used the potential of the e-commerce model to reach a wider set of customers (Jílková and Králová, 2021). Therefore, the impact of covid-19 on the economy was temporary, but it has helped organizations to learn adaptability for sustaining and growing. The purchasing model, consumer behaviour and business structures were largely impacted and reshaped to meet new requirements.

Business Idea

Business Description

On-top is a start-up dedicated to providing digital marketing services to customers. The organization has specialization in creating innovative and effective marketing strategies to assist businesses of all sizes in achieving their online visibility and reaching a wider set of target audiences. The world of digital marketing is continuously evolving, so the organization must commit to staying up to date with the latest trends and techniques. The organization has a small team of ten professionals. Still, they are skilled in various digital marketing domains, including pay-per-click advertising, search engine optimization, email marketing, content marketing and social media marketing.

Goals and Objectives

The business aims to help other businesses to increase their online visibility and reach a wider target audience using multiple digital marketing channels. The business utilizes a variety of tools and techniques as per the business requirement and environment so that the organization can easily reach the audience and meet the requirements. Under the primary goal, it has mainly three objectives:

• Generate more leads, sales and revenue by managing a growing online presence.
• Prepare and deliver a customized strategy tailored to meet the unique goals and needs of the client.
• Help businesses build customer loyalty, improve brand reputation, and establish themselves as industry leaders.

Mission

On-top's mission is to help businesses of all sizes increase their online presence, generate more leads and drive sales through creative and innovative digital marketing strategies. It has a mission to make digital marketing services more reachable to customers regardless of their locations, as the business provides remote services from beginning to end.

Vision

On-top has the vision to reach at least one-thousand business customers by the end of the year while eliminating the need for transit to the office to support environment-friendly business operations. There is a vision to enable the clients and staff to work remotely while working in a team to cater for their unique needs and goal (Burns, 2016). There is a vision that the client businesses are taking advantage of data-driven decisions based on insights and analytics to optimize their campaigns and achieve measurable results with excellence and efficiency.

Products and Services

There are no physical products to deliver to the doorstep. Still, the organization summarises the knowledge and insights in books useful for individuals and businesses that want to manage their online presence systematically. It has mainly two products:

• Ten case studies on social media marketing: It is an exclusive book that includes concepts and practical use cases of the companies to demonstrate how they have used the power of social media marketing to boost their sales.
• Market-box: It is a magazine published once in six months. It is a product provided free of cost to existing customers for the next two years, but non-customers can request the magazine from an online website. The magazine contains case studies and recommendations on marketing practices considering contemporary business environments of various industries.

Asides from these two secondary products, several services are a major source of revenue and customer base:

Digital marketing: In this category of services, the start-up provides services such as search engine optimization, digital marketing strategy, conversion rate optimization, Google analytics services and link-building services.

Social media marketing covers mainly three kinds of services: social media management, advertising and brand management. This category of services does not focus on a wider online presence but improves presence on social media platforms (Ryan, 2016).

Reputation management: in this category, the organization helps the businesses to manage their reputation in various business functions using software and techniques. It is a part of the consulting services to prepare a good reputation management strategy per the business needs.

Web design: The start-up has a small customer base, and sometimes, they request changes to their website while addressing their digital marketing requirements. In such cases, the business assists the customers in marketing video production, email marketing and compliance integration.

Branding

As indicated earlier, the business name is 'On-top'; therefore, its logo offers a feeling of being excellent over others. The business uses a logo with an upward arrow, indicating a journey from zero to hero. The branding is done mainly online and using Facebook and Instagram channels.

Business model

The business model contains the following eight major components that are useful in strategic planning and helps to select the most suitable approach for the business operations:

Value proposition: digital marketing services are becoming an important aspect of the business because, after the pandemic, many organizations use an online presence, and their brick-and-mortar business model is passive. Therefore, digital marketing services are gains for the customers to achieve product searching, online presence management and strategic growth planning (Carter and Carter, 2020). It creates value over physical transportation to officers for consultancy and poor visibility into the process of their requirements.

Revenue model: Revenue is planned to generate using two approaches. First, there are one-time fees for various types of services and products. Second, there are recurring fees if an organization wants to manage its online presence and marketing over some time. In such cases, annual charges are imposed to keep the business sustainable. In certain cases, the agency has revenue from affiliate marketing and sales, especially when selling hosting and domains to businesses (Pride and Ferrell, 2019).

Market opportunity: it is identified that the country has significant growth in online businesses. Such businesses and personal blogs are looking for their improved reach to customers. It means there is a significant opportunity in the digital marketing services and consultancy market. The market is expected to increase to 20% in the next three years.

Competitive environment: From the first perspective, the market seems saturated because of individual professionals and leading businesses in this industry. However, many agencies cannot cater to the customized requirements of businesses with differences in size and capabilities. A smaller number of competitors are providing the same type of services because most are offering fixed-price and product-specific marketing services. It is a key point that attracts customers to the agency and reduces turnover. Similarly, big companies demand high-cost for various services, and they are out of reach from small to medium-sized businesses (Boone et al., 2019). However, cost-efficiency with individual professionals is a major threat to attracting customers and communicating the benefit of working with the agency.

Competitive advantage: the agency has a competitive advantage because of free magazine subscriptions and lower costs on recurring marketing campaigns. Further, referral bonuses and discounts on purchasing two or more services help them reduce the overall cost of their marketing strategies.

Market strategy: the core market strategy is to provide combo services with minimal margin while highlighting the key businesses for that the agency worked. First impression includes marketing using email, social media and content marketing (Baker, 2017). The market strategy includes a sales funnel process and works on awareness and integration of the customers by offering customer-specific services. The target audience is local businesses in the city, and they can be targeted using social media and branding using emails.

Organizational development: The business is planned to follow a hierarchical structure. Ten staff are working on one or more kinds of services from their remote locations. Only three staff members are available at the office to assist the customers and collect in-depth requirements. There is hierarchical reporting and communication so that each task is managed like a project to assist the clients effectively (Baker, 2017).

Management team: The leaders have experience and education in the digital marketing domain and actively buy into various projects and new trends and techniques to guide the team. The management team can also bring investors if the business grows exponentially.

Table 1: Business canvas model

Proof of concept/ user experience

Survey is prepared and shared using email and each participant has submitted the completed form within a time of 3 days. Here is sample submission:

Figure 4: Form submitted in Excel

Figure 5: Data analysis

Design

Background Research Considerations for the Design

It has been researched that around 72% of online users use mobile devices and browsers. It indicates the popularity of responsive web design. It is also identified that a clean flow and layout are required to keep the users focused and engaged. The design should have easy-to-understand and simple wording while the content is appealing to draw the visitors' interest. During web design, it is also useful to consider the user persona because it helps to understand the intended users and what is expected from the website (dos Santos et al., 2017). It helps to identify that the website needs an easy-to-follow navigation bar while offering content for services, business detail and answers to frequent questions. There is also a need to integrate chat and contact forms so that the visitors can drop their details or contact easily to the business representatives.

Asides from these, it is considered that the website reflects the branding. It means it has the same colour and consistency in presentation to reflect professionalism and quality of work. It is important to win the trust of the customers. There is the effective use of text and images to present the ideas while ensuring that the website loads easily on most devices and internet connections (Beaird et al., 2020). A suitable colour theme and beautiful crafting make the website outstanding and help the visitors easily recognize the brand through it.

eCommerce Design

The presented design is a wireframe for the new website. It focuses on the navigation bar, home page design and services. It highlights the colour theme, font style, image presentation and other aspects of the website. 

Finance

Purposed Budget

Several elements, including the company's size, services, location, and resources, can affect the starting capital needed to launch an online digital marketing agency. Launching a traditional brick-and-mortar business can be more expensive than beginning an online digital marketing agency. Consider the following probable expenses:

Website design and development: The agency might need to invest in website design and development to establish an online presence. Doing this may cost a few hundred to a few thousand dollars.

Software and tools: To manage your digital marketing initiatives, you may need to invest in various software and tools. Depending on the supplier and the level of service, these tools can range in price (Strydom, 2015).

Staffing: The agency might need to hire people to handle different elements of the business, like marketing, content development, and customer care, depending on the size of the agency.

Advertising and promotion: The agency may need to spend money on advertising and promotion initiatives, such as social network ads, email marketing, or pay-per-click (PPC) advertising, to market the business and attract new clients. Depending on the size of the campaigns, this can vary greatly.

Here are the major components of the cost for the online digital marketing agency:

• Register the business: it can cost from $12 to a large amount. The business is assumed to be registering a name and logo and acquiring a trademark on some marketing content, so it may cost around $400 initially.
• Business plan: A business plan must be prepared and enhanced. It can be prepared with a team of two employees and can take up to thirty days. Assuming that individual resource has a salary such as $40 per hour, it can cost up to $2,560.
• Software and tools: The agency may need several software systems to manage relationships with customers and advertisers. It can cost up to $45,000, considering the cost of common cloud-based systems and services. It includes project management tools and access to other services.
• Human resource: There are a total of 10 employees who have expertise in various domains. Considering their average salary is $40 per hour, and they are working five days a week, there is a need for around $64,000 for the first month.
• Miscellaneous cost: it is assumed that there is a need for around $30,000 to arrange the office, purchase electronic and non-electronic assets and establish operations.

Therefore, the overall budget is around $142,000.

Funding sources

The local bank will fund the project while putting around $100,000 from personal savings. The business is assumed to cover the cost in the next six months.

Conclusion

The presented report discussed that covid-19 had impacted the business positively and negatively. It has been discussed that businesses prefer to use online marketing and presence so that they can get in touch with customers. It also enabled businesses to explore new markets and possibilities in business. For instance, online presence helped them to save costs on the brick-and-mortar models. Later, the report discussed the business idea of opening a digital marketing agency. It has discussed the business and business model using the business canvas tool. It has presented how the agency can design a website to engage the customers and encourage them to interact with business representatives to make their first order. The design considerations for an e-commerce website are discussed and determined which should be prioritized to meet the business requirements.

References

Altig, D., Baker, S., Barrero, J.M., Bloom, N., Bunn, P., Chen, S., Davis, S.J., Leather, J., Meyer, B., Mihaylov, E. and Mizen, P., 2020. Economic uncertainty before and during the COVID-19 pandemic. Journal of Public Economics, 191, p.104274.

Baker, M.J., 2017. Marketing strategy and management. Bloomsbury Publishing.

Beaird, J., Walker, A. and George, J., 2020. The principles of beautiful web design. Sitepoint.

Boone, L.E., Kurtz, D.L. and Berston, S., 2019. Contemporary business. John Wiley & Sons.

Brodeur, A., Gray, D., Islam, A. and Bhuiyan, S., 2021. A literature review of the economics of COVID‐19. Journal of Economic Surveys, 35(4), pp.1007-1044.

Burns, P., 2016. Entrepreneurship and small business: start-up, growth and maturity. Bloomsbury Publishing.

Carter, M. and Carter, C., 2020. The creative business model canvas. Social Enterprise Journal, 16(2), pp.141-158.

Debata, B., Patnaik, P. and Mishra, A., 2020. COVID‐19 pandemic! It's impact on people, economy, and environment. Journal of Public Affairs, 20(4), p.e2372.

dos Santos, V.F., Sabino, L.R., Morais, G.M. and Gonçalves, C.A., 2017. E-commerce: A short history follow-up on possible trends. International Journal of Business Administration.

Erken, H., Hayat, R., and Kan, J., 2020. Coronavirus: The Economic Impact Of COVID-19 On India. Retrieved from: https://economics.rabobank.com/publications/2020/march/coronavirus-economic-impact-covid-19-on-india/. Accessed On: 07 May 2023.

EuroStat, 2020. COVID-19 impact on employment income. Retrieved from: https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20201210-2. Accessed On: 07 May 2023.     

ITA, 2022. Impact of COVID Pandemic on eCommerce. Retrieved from: https://www.trade.gov/impact-covid-pandemic-ecommerce. Accessed On: 2 April 2023.

Jílková, P. and Králová, P., 2021. Digital consumer behaviour and ecommerce trends during the COVID-19 crisis. International Advances in Economic Research, 27(1), pp.83-85.

Maital, S. and Barzani, E., 2020. The global economic impact of COVID-19: A summary of research. Samuel Neaman Institute for National Policy Research, 2020, pp.1-12.

Ozili, P.K. and Arun, T., 2023. Spillover of COVID-19: impact on the Global Economy. In Managing Inflation and Supply Chain Disruptions in the Global Economy (pp. 41-61). IGI Global.

Pride, W.M. and Ferrell, O.C., 2019. Marketing. Cengage Learning.

Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

Strydom, J., 2015. Principles of Business Management. Oxford University Press Southern Africa.

Susmitha, M.K., 2021. Impact of COVID-19 on E-Commerce. Journal of Interdisciplinary Cycle Research, 12(9), pp.1161-1165.

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