Download online marketing strategy development for uab "noriu noriu noriu"

UAB “NORIU NORIU NORIU” ONLINE MARKETING STRATEGY DEVELOPMENT FOR
ST. PETERSBURG MARKET
A Thesis
Presented to the Faculty
of International Business and Communication programme at ISM University of Management and
Economics
in Partial Fulfillment of the Requirements for the Degree of
Bachelor of International Business
by
Tomas Vyšniauskas
Advised by
Doc. dr. Lineta Ramonienė
December 2014
Vilnius
ONLINE MARKETING STRATEGY DEVELOPMENT
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Abstract
Vyšniauskas, T., UAB “NoriuNoriuNoriu” online marketing development for St.
Petersburg market. Final Bachelor Thesis. International business and communication. Vilnius,
ISM University of Management and Economics, 2014.
The main goal of this bachelor thesis was to explore possible ways of organizing online
marketing activities and to develop the online marketing strategy for UAB “NoriuNoriuNoriu” in
the St. Petersburg region market for the year 2015, by researching the domestic tourism market
in the target region. A combination of secondary data analysis and quantitative survey consisting
of 27 questions was used to make informed decisions. According to Lee (2013), in the current
age marketers can get quickly distracted by the vast availability of communication channels. To
avoid that, successful marketing professionals should not focus on mastering all possible
methods – instead, they should “remain aware of the trends while utilizing the tools that logically
fit into their firm‟s online ecosystem”. The insight provided by the results of empirical research
helped to develop the online marketing strategy by choosing the most appropriate marketing
methods and by sorting out methods with lower expected effectiveness.
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Table of Contents
Abstract ............................................................................................................................... 2
List of Tables ....................................................................................................................... 5
List of Figures ..................................................................................................................... 6
Practical Relevance of Bachelor Thesis .......................................................................... 8
Structure of Bachelor Thesis ........................................................................................... 8
Situation analysis .............................................................................................................. 10
Business and company identification............................................................................ 10
General information about UAB “NoriuNoriuNoriu”. ............................................. 10
Financial overview. ....................................................................................................11
Organizational structure ................................................................................................ 12
Current Online Marketing Strategy .............................................................................. 13
Macro environment analysis ......................................................................................... 16
Customer analysis and segmentation ............................................................................ 19
Competitor analysis ...................................................................................................... 24
Competitors‟ ability to serve customer needs. .......................................................... 26
Positioning maps. ...................................................................................................... 27
SWOT analysis ............................................................................................................. 29
Theoretical background ................................................................................................ 30
Empirical Research ........................................................................................................... 37
Methodology of Empirical Research ............................................................................ 37
Sample selection ........................................................................................................... 38
Justification of Research Instrument ............................................................................. 39
Empirical Research Process .......................................................................................... 40
Limitations of Empirical Research ............................................................................... 42
Time. ......................................................................................................................... 42
Financial and geopolitical reasons. ........................................................................... 42
Irrelevance................................................................................................................. 42
Results of Empirical Research ...................................................................................... 42
Social and demographic information . ...................................................................... 43
Frequency of staying in hotels for leisure purposes.................................................. 45
Attitude towards buying a holiday package. ............................................................. 47
Usage of social networks. ......................................................................................... 48
Ways people get to know about holiday offers. ........................................................ 49
Habits of potential customers.................................................................................... 50
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Attitudes towards online marketing channels. .......................................................... 52
Statistically significant differences among different income groups. ....................... 54
Statistically significant differences among different age groups. ............................. 56
Relevancy of different online marketing channels among different groups of
respondents. .......................................................................................................................... 57
Conclusions of Empirical Research Findings ............................................................... 64
Managerial Solutions ........................................................................................................ 66
Banner ads ..................................................................................................................... 66
Renting banner space in other websites. ................................................................... 66
Participating in banner networks. ............................................................................. 67
Email marketing ............................................................................................................ 67
Opt-in list building. ................................................................................................... 67
Renting a list. ............................................................................................................ 68
Joint ventures. ........................................................................................................... 68
Content marketing ......................................................................................................... 68
Search engine optimization ........................................................................................... 69
Paid search marketing ................................................................................................... 69
Directory marketing ...................................................................................................... 70
Classified ads marketing ............................................................................................... 70
Social network marketing ............................................................................................. 70
Groups. ...................................................................................................................... 70
Advertisement. .......................................................................................................... 71
Posts. ......................................................................................................................... 71
Partnership marketing ................................................................................................... 72
Viral marketing ............................................................................................................. 72
Budget allocation .......................................................................................................... 72
References ......................................................................................................................... 80
List of appendices ............................................................................................................. 83
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List of Tables
Table 1. Financial Performance of UAB “Noriu Noriu Noriu” .....................................................11
Table 2. PESTEL Analysis for the Russian Market ...................................................................... 17
Table 3. Market Segmentation ...................................................................................................... 20
Table 4. Benefits Sought – Pre-booking ....................................................................................... 21
Table 5. Benefits Sought – After-booking .................................................................................... 23
Table 6. Competitor Analysis ........................................................................................................ 25
Table 7. Analysis of Competitors in the Ability to Fulfill Major Consumer Benefits .................. 26
Table 8. SWOT Analysis ............................................................................................................... 29
Table 9. Categories of questions. .................................................................................................. 39
Table 10. Differences in answers among different income groups. .............................................. 54
Table 11. Differences in answers among different age groups. .................................................... 56
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List of Figures
Figure 1. Organizational structure of UAB “Noriu Noriu Noriu” ................................................ 13
Figure 2. Positioning map: best hotels / user-friendly online platform. ....................................... 28
Figure 3. Positioning map: lowest prices / money back guarantee. .............................................. 28
Figure 4. Classification of online marketing channels.................................................................. 35
Figure 5. Classification of research aspects. ................................................................................. 36
Figure 6. Respondents by age. ...................................................................................................... 43
Figure 7. Respondents by income. ................................................................................................ 44
Figure 8. Respondents by gender. ................................................................................................. 45
Figure 9. Hotel stays per year (in Russia). .................................................................................... 46
Figure 10. Hotel stays per year (abroad). ...................................................................................... 47
Figure 11. Attitudes towards buying a holiday package instead of self-organized holidays. ....... 48
Figure 12. Proportion of online leisure time spent on social networks. ....................................... 49
Figure 13. Ways respondents get to know about holiday offers. .................................................. 50
Figure 14. Habits of potential customers related to ordering online............................................. 52
Figure 15. Attitudes of potential customers related to ordering domestic holiday packages. ...... 53
Figure 16. Preference of buying a holiday package (instead of self-organized holidays) –
comparison by age groups. ........................................................................................................... 58
Figure 17. Preference of buying a holiday package (instead of self-organized holidays) –
comparison by income groups. ..................................................................................................... 59
Figure 18. Preference of buying a holiday package (instead of self-organized holidays) –
comparison by frequency of stays in Russian domestic hotels. .................................................... 60
Figure 19. Preference of buying a holiday package (instead of self-organized holidays) –
comparison by frequency of stays in hotels abroad. ..................................................................... 61
Figure 20. Overall attitudes towards online marketing channels – comparison of different age
groups. ........................................................................................................................................... 62
Figure 21. Attitude towards buying a domestic holiday package after seeing an advertisement on
social networks – comparison by frequency of social network usage. ......................................... 63
Figure 22. Allocation of online marketing budget. ....................................................................... 73
Figure 23. Banner advertisement budget. ..................................................................................... 74
Figure 24. Email marketing budget. ............................................................................................. 75
Figure 25. Paid search marketing budget. ..................................................................................... 75
Figure 26. Social network marketing budget. ............................................................................... 76
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INTRODUCTION
Online marketing can be described as a collection of tools and methodologies used for the
promotion of products and services via internet channels with a purpose to deliver growth,
reduce expenses and gain competitive advantage for companies. The most acknowledged
advantages of online marketing are flexibility, convenience, availability of analytical data and
targeting (Techopedia, 2014).
Various forms of online marketing are getting increasingly popular among business
entities and organizations; however, even about ten years ago, the impact of marketing through
internet channels was deeply underestimated (Valos, Ewing & Powell, 2010). Some researchers
claim that the impact of traditional (offline) advertising will diminish in the future, because the
nature of it can be described as „involuntary and obtrusive‟ (Rust & Varki, 1996). On the other
hand, it was suggested that online marketing will become increasingly effective, because it can
be customized and personalized for the needs of individual customer, which results in higher
involvement (Valos et al., 2010).
Due to the promising nature of online marketing, the website “NoriuNoriuNoriu.lt” is the
main channel of sales for the company of the same name – UAB “NoriuNoriuNoriu”. This
company works as an intermediary between hotels and potential guests. It specializes in building
short-term holiday packages (usually consisting of hotel stays in resort towns with additional
health and recreation services) and selling them in domestic tourism markets.
Before launching any kind of strategy, it is important to make informed and firm
decisions, therefore, the goal of this bachelor thesis is to research the domestic tourism market in
St. Petersburg region and develop the online marketing strategy for UAB "NoriuNoriuNoriu" in
this market for the year 2015.
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Problem question is defined as “How to market to customers for UAB
"NoriuNoriuNoriu" in the St. Petersburg domestic tourism market through online channels?”
Objectives of the thesis:

To analyze the current situation of UAB "NoriuNoriuNoriu" in Lithuania and assess
the Russian market with emphasis on St. Petersburg region.

To collect information and analyze the potential customer preferences on different
online marketing channels and techniques in the target market by using a quantitative
research method in the empirical research section.

Based on the empirical reserch, to develop the online marketing strategy for UAB
"NoriuNoriuNoriu" in the target market for the year 2015.
Practical Relevance of Bachelor Thesis
As mentioned earlier, the company is operating as an intermediary between hotels and
potential guests, and the majority of its sales come from their website, allowing for customers to
book their holidays conveniently. Therefore, having an online marketing strategy is crucial for
successful operations and growth of the company. However, in order to expand to foreign
market, building a distinctive strategy is a must because of different consumer attributes,
behavior and preferences – therefore, this is the key factor of relevancy for this bachelor thesis.
Thoughtful research of the target market and collection of primary data enables the
company to make informed decisions based on relevant insight and to avoid costly failures.
Structure of Bachelor Thesis
This thesis is divided into three parts: situation analysis, empirical research and
managerial solutions. The first part – situation analysis – consists of company‟s description,
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macro analysis of the target market, customer analysis, competitor analysis and SWOT. The
second part – empirical research – analyzes the data obtained from online survey given to
potential customers in the target market. The third part – managerial solutions – suggests the
final online marketing strategy for UAB “NoriuNoriuNoriu” for the first year of operation in its
target market.
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Situation analysis
Business and company identification
General information about UAB “NoriuNoriuNoriu”. The company, established in
2011 by a young woman with entrepreneurial mind, specializes in creating short-term hotel
retreat packages and selling them online in the local (Lithuanian) market. Although tourism
market is extremely dynamic and volatile (Cooper et al., 2008), the company justifies its
successful leadership on a single principle – listening to what their customers say. Interestingly,
even the idea for company‟s name came from clients, who often scream “Noriu noriu noriu!”
(translation: “I want, I want, I want!”) after seeing a good holiday deal.
It is important to mention that this company differentiates itself from other intermediary
businesses by working only with the best hotels in the market and by assuring top quality with
lowest prices.
Currently, the company focuses on selling hotel stays in Lithuanian resort towns:
Druskininkai, Palanga, Šventoji, Birštonas, Trakai, Nida with other locations taking up only a
minor fraction of sales. The majority of the packages sold (78%) includes up to 4 night
accommodation. The five most popular services sought by clients include sauna, swimming pool,
SPA treatment, water amusement park and bicycle rent.
Comparing company‟s market share to other competitors is a complicated task, because
the availability of sales data from other competing private companies is limited. However, it was
possible to estimate market position comparing the total number of nights spent in hotels by
domestic tourists in Lithuania and the total number of nights sold by the company. After
completing appropriate calculations, the result was estimated at 1.1% (Company‟s internal data;
Statistics Lithuania, 2013). While the number may appear trivial, it is important to remember that
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the company works in a very specific market niche (serving customers who seek fully prepared
holiday packages), therefore its position in this particular niche may be considerably higher
(although exact values are not available).
Company‟s growth has been rapid and it was justified by real achievements – it is known
that for some hotels in certain periods “NoriuNoriuNoriu” online platform had become the #1
sales channel in terms of performance. In addition to that, the company received an important
formal recognition by being accepted into The Association of Hotels and Restaurants of
Lithuania (LVRA).
In 2014 the company started to prepare for entry into foreign markets. The first steps
have already been taken in Latvia – the company partnered with Latvian hotels and started
marketing activities within the country. In addition, market entries are planned for Belarus and
Russia. Finally, the company has undisclosed plans for entering other new markets.
Financial overview. Main source of profit for the company is the commission for selling
holiday packages. The price of such packages varies from 99 LTL (28.7 EUR) for a simple one
night‟s accommodation for two people in Trakai (Lithuanian historical capital town) to 3240 LTL
(939 EUR) for 11 days all-inclusive stay in Birstonai health resort for two people. From the
financial point of view, the company has been growing fast since its establishment in 2011. Its
growth can be explained by innovation, positive market conditions and constant improvement in
day-to-day operations.
Table 1. Financial Performance of UAB “Noriu Noriu Noriu”
Year
Annual Turnover
LTL
EUR
2011*
120 000
34 780
2012
650 000
188 400
Annual Growth
N/A
440 %
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2013
1 755 000
508 700
170 %
2014**
5 500 000
1 594 000
213 %
2015**
9 900 000
2 869 000
80 %
2016**
18 810 000
5 452 100
90 %
Source. Company‟s internal information.
* - data since May 2011 (establishment date).
** - forecasted financial performance.
In 2014 the company has already reached a firm standing point in the Lithuanian market.
Ambitious expectations about future‟s financial performance are based on the plans for
international growth. However, it is expected that percentage values for annual growth in 2015
and 2016 will be lower than in 2014, because the company has already passed its incubation
period.
Organizational structure
UAB “NoriuNoriuNoriu” has 4 owners. Officially, the organizational form is
hierarchical. However, since the number of permanent employees is only 6 (excluding 3 people
doing internships), the actual working culture is rather flat. All employees are empowered and
have a right to express and implement their own ideas. Working this way is beneficial for the
company because it is currently in the high-pace organic growth stage.
There are four departments in the company: Customer Support, IT, Marketing and
Commerce, with 1-3 people working in each department. The CEO is currently responsible for
sustainable growth and financial performance of the company.
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Figure 1. Organizational structure of UAB “Noriu Noriu Noriu”
Current Online Marketing Strategy
At this moment the company operates only in Lithuanian market, therefore the overview
of current online marketing strategy in this market is provided below.
Banner ads. It is a profitable method for UAB “NoriuNoriuNoriu”. Banner ad campaigns
are bought in advertising networks such as AdClick or Google AdWords display network. Also,
the company rents banner space in local high-traffic websites, such as www.delfi.lt
Email marketing. This technique is one of the most important for the company. A big
database of email subscribers has been collected since the company was established. Usually,
emails about new offers for short-term holidays or discounted offers are sent to subscribers at
least several times a week. It is a very effective method for building relationships with customers
and increasing retention rates.
Content marketing. The most successful example of UAB “NoriuNoriuNoriu” content
marketing is their free electronic book about interesting places in Lithuania. It can be
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downloaded from NoriuNoriuNoriu.lt and other partner websites – however, in order to get the
book, visitors have to provide their contact details and subscribe to the newsletter.
Search engine optimization. There are two types of search engine optimization: on-site
and off-site. UAB “NoriuNoriuNoriu” has done both types of optimization. For the on-site
method, the structure of website was improved according to the best currently available
practices, the content (texts) was improved to optimize keyword density and relevancy for the
search engine, additional sections (e.g. privacy policy, terms & conditions) were created as
required by the search engines. For the off-site method, the company focused on collecting
backlinks (anchor links pointing to the company„s website from other internet sources having a
certain level of authority).
Paid search marketing. This method is used, however, only from internal company‟s
resources (no outsourcing). Ads are created using the statistical data and insights provided by the
search engines. UAB “NoriuNoriuNoriu” ads can be classified into 4 keyword groups: brand
names of hotels, brand name “NoriuNoriuNoriu”, titles of recreational / health services and the
names of the cities.
Directory marketing. Information about company‟s website has been entered in all
major internet directories. No direct effect on sales has been observed, however, there is a
positive indirect effect from being listed in directories – backlinks, which boost company‟s
appearance in search engines.
Classified ads marketing. Ads have been published in several major Lithuanian
classified ads websites. The company provides photos, descriptions and purchase links of holiday
packages in the ads.
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Social network marketing. There are three ways in which social network marketing is
implemented by the company: by organizing contests in their specialized Facebook group “Trips
from 1 LTL (0.29 EUR)”, by posting special offers and by writing interesting content about the
most attractive places in Lithuania and the whole world.
Partnership marketing. There are more than 20 websites about traveling and holiday
which are UAB “NoriuNoriuNoriu” partners. Usually, partners put banner ads in their websites
and they are compensated for each purchase made by their referred visitors during the time span
of 1 year.
Viral marketing. Visitors coming to the website directly (by typing a URL in their
browser) are attributed as referred by viral marketing. For UAB “NoriuNoriuNoriu”, viral traffic
usually comes from the contests which they organize and from recommendations received from
friends (word-of-mouth).
In overall, email and content marketing methods have proven to be the most important
and profitable for the company in Lithuanian marketing. Social networks and viral marketing
take second position in terms of importance for the company, however, it is difficult to estimate
return on the latter. Banner ads, paid search and partnership marketing can be evaluated as
carrying average importance and profitability. In the end, search engine optimization, presence
on online directories and classified ads websites bring little profitability, although these are
considered as essential methods when seeking an increase of exposure.
The internal analysis of the company showed that although the tourism market is
extremely dynamic and volatile, the company made its way to a firm position in Lithuanian
domestic tourism market, making most of its sales in resort towns of Lithuania. With rapidly
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increasing turnover, it is the time for the company to start entering foreign markets – this is the
reason analysis of macro environment is needed.
Macro environment analysis
UAB “Noriu Noriu Noriu” has ambitious international expansion strategy and one of
their countries of target is Russian Federation.
On the positive side, according to Euromonitor (2013), 9.95 billion rubles (195 million
euro) was spent on domestic tourism development and promotion in 2012, 1.6 billion rubles (31
million euro) more than the previous year. As a result, the number of domestic trips in Russia
increased by 3% during 2012. Also, expenditures made by domestic tourists increased by 4.3%
in 2012, totaling to 625 billion rubles (12 billion euro). The values for consumer income and
expenditure increased by 11% and 13% respectively in 2012.
On the other hand, it is important to note that Russian market is not homogenous – Gini
index of Russia is the second highest value in Europe – 41.8% (meaning that income inequality
is very high) and people with highest disposable income mostly live in the regions of Moscow
and St. Petersburg (Euromonitor, 2012). Moreover, Moscow and St. Petersburg are the most
popular cities to visit in Russia, while it was recorded that the tourist flow in St. Petersburg
increased at 20% in 2012 (3.3 million of domestic trips). But it is a rather positive factor for
UAB “NoriuNoriuNoriu”, since they will be targeting St. Petersburg region at first.
Also, a facilitating factor for UAB “NoriuNoriuNoriu” entry into St. Petersburg market is
that the nations of Lithuanians and Russians are not culturally and geographically distant. It is
not hard to find employees who can talk in the local language of their target market - even 63%
of citizens in Lithuania speak Russian (Statistics Lithuania, 2011). In addition to that, people of
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Lithuania and Russia share common history (Soviet Union) and there are good travel
connections between St. Petersburg and Vilnius, which is a necessity because physical inspection
of partner hotels is one of the top priorities for the company.
One of the negative points is that outbound departures from Russia are growing faster
than domestic tourism because people think that quality in local hotels is poor and the price is
high – tourists consider that they can experience a better price/quality ratio in foreign resorts
(Euromonitor, 2013).
Also, the unpredictability of Russian Government actions poses serious threats – for
example, following the economic blockade in 1990, Russia has never stopped putting various
economic sanctions on Lithuania due to political reasons.
Finally, Russia stands 127th out of 177 countries in the Corruption Perceptions Index
(Transparency International, 2013), which makes Lithuanian businesses harder to make contracts
with partners in Russia.
PESTEL analysis for the Russian market. 6 major macro factors (political, economic,
social, technological, environmental and legal) are analyzed in the table below. Identification of
these factors is crucial for the successful expansion of UAB “NoriuNoriuNoriu”.
Table 2. PESTEL Analysis for the Russian Market
Factor
Evaluation
Political
During the period of Putin regime (2000-2008 and 2012-present), Russia has
faced political instability (Marketline, 2013). Although Russia has maintained
good relations with China and Belarus, they failed to keep balance with Western
countries and are currently facing the strongest-ever sanctions since the
beginning of Ukraine crisis (Stratfor Geopolitical Diary, 2014).
Economic
The data about Russian economy shows that recovery from the last economic
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crisis in 2008 has been slow. GDP growth rate in 2012 was recorded at 3.59%.
(Marketline, 2013). In addition to that, rising tensions with Ukraine and other
opposing nations have a negative impact on economic growth forecasts
(Euromonitor, 2014).
St. Petersburg is the fifth wealthiest Russia‟s region (out of 80) in terms of GDP
per capita (Euromonitor, 2013).
Social
The most popular mode of transport in Russian domestic trips is rail and road
(78% of all domestic trips taken in 2012). Popularity of these modes of
transport has been growing at 3%.
Declining poverty rate pose a positive influence for tourism market
(Euromonitor, 2013).
Technological
Russians are shifting from face-to-face holiday bookings to online ordering
(34% growth in 2012). Growing number of online travel agents and the overall
growing importance of online sales has been observed (Euromonitor, 2013).
Environmental Russia has adopted an environmental management system, but lack of resources
prevents the country from implementing protective measures in efficient ways
(Euromonitor, 2013). An average environmental Performance Index (53, 73th
place) of Russia shows that environmental health and ecosystem vitality may be
at risk (Environmental Performance Index, 2014).
Legal
Since the fall of the USSR, Russian legal system has been ineffective and weak
(Marketline, 2013).
On the positive side, social trends in Russia seem promising for UAB “NoriuNoriuNoriu”
entry. Total domestic trips taken in Russia and St. Petersburg region was growing and declining
poverty rate is signaling that potential (suppressed) tourism demand may shift to effective
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demand in the foreseeable future, meaning that local hotels can expect higher domestic tourist
flows.
Technological part of the analysis shows that Russians are increasingly ordering their
holidays via online channels (rather than legacy ones like face-to-face booking), which is a
positive factor for UAB “NoriuNoriuNoriu”, as they focus on selling their holiday packages via
online platform.
On the negative side, Russia can be identified as unstable and unpredictable country,
where democratic and liberal society has not developed yet. Political relations with western
countries (United States of America and European Union members) are not improving.
From economic perspective Russia cannot be described as “rising star” as well. Recovery
from the last economic crisis is rather slow and economic forecasts are not positive either due to
increasing tension in relations with neighboring and other countries.
From environmental perspective Russia is failing to efficiently implement environmental
management system. The score in Environmental Performance Index (EPI) for Russia was set
only within the frame of average values.
Russian legal system is rather outdated and inefficient, which can become an entry barrier
for UAB “NoriuNoriuNoriu”, especially when it comes to competing with local retailers, who
have higher quality know-how about the local legal affairs.
Customer analysis and segmentation
Market segmentation. According to company‟s internal research, their typical clients are
educated
people,
earning
average
income
and
valuing
quality
recreation.
UAB
“NoriuNoriuNoriu” obviously does not suit everyone, because there are people who like building
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their own holiday plans more than buying pre-packaged holidays. Others prefer traveling abroad
to staying in Lithuania due to weather, price and other reasons.
Therefore, since the typical client for this company is relatively homogenous, at this
moment only two segments are distinguished: men and women. Other factors like age, income,
education, geographical location, etc. are not taken into account because behavioral differences
in these categories do not differ significantly.
Table 3. Market Segmentation
Segment
Size
Women
80%
Men
20%
Description
 Age 26-50
 Seek quality recreation and pay attention to
all details of package offerings. Tend to ask
questions whenever possible


Age 26-50
Seek good rest as their top priority and do
not tend to judge every single detail when
making decision
Source. Company‟s internal research (2013).
Notice. It is important to acknowledge that most clients travel with their significant other or
family, therefore the table above shows data only about the people who complete the booking
action. It does not represent all actual service users.
It is obvious that women are the most common booking makers at UAB
“NoriuNoriuNoriu”. Although this table does not show information about the end-users of the
final product, it is possible to derive an anecdotal finding that in most cases women acted as
“managers” of family‟s holiday. Also, the most obvious difference between men and women
when it comes to ordering a holiday package was the fact that women pay a lot more attention to
details of the offer, while the top priority for men was just a high quality experience in overall.
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Having defined the two main customer segments, it is important to outline what kind of
benefits are sought and how important is each of them to each segment when making buying
decisions. It was decided to distinguish two separate groups of benefits: Pre-booking (related to
“NoriuNoriuNoriu” intermediary services) and after-booking (related to services at the actual
hotel). This decision is grounded on the fact that during the buying process, a customer evaluates
not only what a hotel offers, but also the overall booking experience, which is provided by
“NoriuNoriuNoriu”. In most cases, buyers do not communicate with hotels directly before the
booking on “NoriuNoriuNoriu” platform is made.
Table 4. Benefits Sought – Pre-booking
“NoriuNoriuNoriu”
Importance of factor to the segment
Benefits sought by the customer
ability to serve a
Women
Men
need
Offering the best hotels in the 9
7
10
market
Lowest price guarantee
9
4
Rigid inspection and selection of 10
hotels
10
3
Fast search / Easy-to-use online 8
platform
2
9
14 day money back guarantee
8
8
10
7
Quality customer service
Attention to customer feedback
10
10
/ 10
Source. Developed by the author.
For women, the most important benefits offered by UAB “NoriuNoriuNoriu” were “rigid
inspection of hotels” and “quality customer service / attention to customer feedback”. It can be
explained by the previously mentioned fact that female clients of this company are very attentive
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to details. Importance of customer service can be justified by a common assumption that women
value sincere relationship and interaction more than men do. Other benefits, sorted by
importance, were as follows: lowest price guarantee, 14 day money back guarantee, offering the
best hotels in the market, fast search / easy-to-use online platform.
The most important benefits sought by men were “offering the best hotels in the market”
and “fast search / easy-to-use online platform”. The former can be explained by the outcome of
company‟s internal research (men pay more attention to the overall experience rather than
specific details), and the latter can be justified by a common assumption that men are more
technical than women. The less important benefits for men are indicated as follows: 14 day
money back guarantee, quality customer service / attention to customer feedback, lowest price
guarantee, rigid inspection and selection of hotels. The only benefit that was found as of equal
(and rather high) importance to men and women – “14 day money back guarantee”.
UAB “NoriuNoriuNoriu” capabilities of fulfilling the above mentioned benefits were
high, although not perfect. To be more specific, the benefit of “offering the best hotels in the
market” might be contradicting itself because the company also claims to be offering lowest
price guarantee. But it is likely that some of the best hotels (especially boutique) are not
interested in offering discounts. Since the lowest price guarantee cannot be breached (it is one of
the main unique selling propositions for the company), it is a possible scenario that some of the
best hotels are omitted. Also, the definition of which hotels are considered as “the best” is not
clearly presented in company‟s website.
Additionally, the benefit of “fast search / easy-to-use online platform” is not served
perfectly because the mobile version of the platform is still not available. While visitors can still
visit the website and book holiday packages on mobile devices, it is not comfortable and there
ONLINE MARKETING STRATEGY DEVELOPMENT
23
are specific web elements obstructing the view on a mobile phone. However, this disadvantage
will soon be corrected with the planned introduction of dedicated mobile version.
Table 5. Benefits Sought – After-booking
Benefits sought by the customer Hotels ability to serve a need
Importance of factor the
segment
Women
Men
Quality of accommodation
Varies
8
10
SPA procedures
Varies
10
5
Water facilities (baths, pools)
Varies
7
9
Concerts & Theaters
Varies
9
4
Fine dining
Varies
9
9
Bicycle rent
Varies
5
8
Source. Developed by the author.
The after-booking benefits part focuses on the general amenities offered by hotels,
therefore in the table above it is impossible to evaluate hotel‟s ability to serve the needs, because
each hotel is different and creating separate tables for every hotel in partnership is, obviously, not
the goal of this paper. Therefore, only the importance of factors to each segment is evaluated in
this part.
It is clear that for women the most important benefit is that SPA procedures would be
available at the hotel facilities. It is not unexpected, since women are called the “gender of
beauty”. Further on, “concerts & theaters”, “fine dining” and “quality of accommodation” stand
in the list of secondary priorities for women. And finally, “water facilities” and “bicycle rent”
were identified as benefits carrying least importance.
ONLINE MARKETING STRATEGY DEVELOPMENT
24
For men, though, the quality of accommodation (in overall) is more important than for
women. Again, it can be explained by the fact that men do not tend to pay much attention to
every single detail of the offer, and quality rest is more important than any other factor. Looking
further, “water facilities”, “fine dining” and “bicycle rent” were identified as a bit less important.
In the end, “SPA procedures” and “concerts & theaters” carried only minimal importance to men.
The only benefit which was evaluated as carrying equal importance to both men and
women was “fine dining”. It can be explained by the fact that eating is a vital activity and eating
out usually means enriching relationship within a couple. The highest difference was observed in
the evaluation of “SPA procedures” and “concerts & theaters” benefits – in both cases, these
benefits were not particularly important for men.
Competitor analysis
The goal of competitor analysis is to find out the main players in St. Petersburg holiday
market and to compare them with UAB “NoriuNoriuNoriu”.
It is important to note that, similarly like in Lithuanian market, there are no identical
companies to UAB “NoriuNoriuNoriu” in Russia in terms of specialization. However, three
groups of companies reselling the same or similar product can be identified: conventional
booking systems, group/discount buying portals and gifts portals. In this analysis, four
competitors were selected (two from the first category and one for the second and third
categories) after sorting out all other competitors which were identified as too similar, therefore
carrying only minor marginal scientific value for this research.
The main features of UAB “NoriuNoriuNoriu” competitors are outlined in the table
below.
ONLINE MARKETING STRATEGY DEVELOPMENT
Table 6. Competitor Analysis
Company
Description
Acase.ru
Agency
offering
individual and group
stays in Russia and
former
USSR
countries.
Market
presence since 1990,
serves up to 2 million
clients per year. It is
the first tour operator
registered in Russian
Federation.
JustGoRussia.co.uk
Online
booking
system for hotels in
Russia. Also offers
various
adventure
packages and trips
outside Russia.
Strengths
Has
offices
Moscow and
Petersburg
25
Weaknesses
in Inconvenient, outdated
St. online booking system
Does not offer allDirect contracts with inclusive
holiday
over 2000 hotels in packages (only hotel
Russia
stays)
No branches in other
Russian regions
Russia‟s
leading Slow booking system
inbound
travel
agency, World Travel
Awards winner
No
credit
card
required for booking
KupiKupon.ru
Group/discount
Modern design, easy Limited
buying portal. Offers to book
hotels
a wide array of items
and
services, Big discounts
including hotel stays
with
recreational
packages.
Bodo.ru
Gifts/gifts
ideas
portal. Offers not
only physical gifts
but also various
entertainment
or
recreational services
choice
of
Attractive display of Offers are relatively
offers, usually with a expensive
(for
promotional video
example: 130 EUR for
a 90 min massage)
All services providers
are
checked
by Offers only recreational
bodo.ru
services
–
accommodation
in
hotels has to be
purchased at extra cost
Source. Developed by the author
Judging from the table, KupiKupon.ru can be considered as the closest competitor
because of similar strengths, weaknesses and product design (short-term hotel stays with
ONLINE MARKETING STRATEGY DEVELOPMENT
26
recreational packages). Distinctive strengths (e.g. award winning company or direct contracts
with a huge variety of hotels) were identified in some of the competitors; however, they had
important drawbacks (e.g. slow/outdated booking system or offering only hotel stays without
recreational packages). Moreover, none of the mentioned competitors offer lowest price and 14day money back guarantees as UAB “NoriuNoriuNoriu” does, meaning that these features can be
identified as unique selling propositions for the latter company.
Competitors’ ability to serve customer needs. The table below was developed to see in
what position competitors in Russia stand when compared to UAB “NoriuNoriuNoriu” abilities
to fulfil pre-booking benefits which are sought by clients. The last benefit of “quality customer
service / attention to feedback” was omitted in this table, because it can only be evaluated by
observation (becoming an actual client of the companies). However, this method of evaluation is
not feasible in this research.
Table 7. Analysis of Competitors in the Ability to Fulfill Major Consumer Benefits
UAB “Noriu Noriu
Major pre-booking benefits
Noriu” and major
competitors
Best
hotels
Lowest
price
Rigid
inspection
Modern
platform
NoriuNoriuNoriu.lt
3
3
3
Acase.ru
1
2
JustGoRussia.co.uk
2
KupiKupon.ru
Bodo.ru
Total
sum of
points
3
Money
back
guarantee
3
15
2
1
1
7
1
2
1
2
8
3
3
3
3
1
13
2
1
3
2
1
9
ONLINE MARKETING STRATEGY DEVELOPMENT
27
Source. Developed by the author.
Note. The assessment is made in 3 point scale, where 1 is poor fulfillment, 2 – medium
fulfillment, 3 – excellent fulfillment.
When looking into abilities to serve customer needs, KupiKupon.ru seems to be the
closest competitor. Other 3 competitors scored lower because of certain weaknesses. Although in
some categories (e.g. “rigid inspection of hotels” or “working only with best hotels”) all hotels
scored relatively well, UAB “NoriuNoriuNoriu” was unbeatable in the “money back guarantee”
category. Only “JustGoRussia.co.uk” agency offered partial money back guarantee, in the
unexpected case of political instability or unrest within the region where the particular hotel is
located. Acase.ru took the last place in the final ranking – although they position themselves as
the first tour agency in Russian Federation, it seems that they have lost the lead in the fields of
product innovation and overall customer experience.
Positioning maps. Using the evaluation of competitors‟ abilities to serve customer needs,
two positioning maps were developed. The first one shows relationships between “best hotels”
and “user-friendly online platform” benefits, while the second one indicates relationships
between “lowest prices” and “money back guarantee”.
ONLINE MARKETING STRATEGY DEVELOPMENT
28
Best hotels
3
NoriuNoriuNoriu.lt
Acase.ru
2
JustGoRussia.co.uk
KupiKupon.ru
Bodo.ru
1
1
2
3
User-friendly online platform
Figure 2. Positioning map: best hotels / user-friendly online platform.
Lowest prices
3
NoriuNoriuNoriu.lt
Acase.ru
2
JustGoRussia.co.uk
KupiKupon.ru
Bodo.ru
1
1
2
3
Money back guarantee
Figure 3. Positioning map: lowest prices / money back guarantee.
Judging from the positioning maps, it is clear that NoriuNoriuNoriu.lt holds the leading
position when it comes to offering the best hotels in a user-friendly online platform. Also, one of
ONLINE MARKETING STRATEGY DEVELOPMENT
29
the competitors in Russia – KupiKupon.ru holds the same position. The other two competing
companies – JustGoRussia.co.uk and Bodo.ru scored lower, while Acase.ru holds the weakest
position in this chart.
In the second positioning map, NoriuNoriuNoriu.lt is also recorded as the leading
company – when it comes to offering lowest prices and money back guarantees. The latter
feature was not found among the three other competitors – KupiKupon.ru, Acase.ru and Bodo.ru.
On the other hand, the former feature (lowest prices) is not offered by Bodo.ru and
JustGoRussia.co.uk. Therefore, all other competitors hold only average positions in this
positioning map with Bodo.ru scoring the lowest.
SWOT analysis
When developing marketing strategy for St. Petersburg market, it is important to identify
the 4 main groups of factors describing the company: strengths (what it should leverage on),
weaknesses (what should be fixed), opportunities (what can be expected on the positive side) and
threats (what the company should be afraid of).
Table 8. SWOT Analysis
Strengths
 Partnership only with the best hotels
 High customer satisfaction
 Easy-to-use and modern online platform
 Unique positioning strategy
 Professional and devoted team
Opportunities
 Growing St. Petersburg tourism market
 No identical competitors in Russia
 Increasing popularity of online channels for
booking holidays
 Government support on domestic tourism
development
Weaknesses
 Limited financial resources
 Young company
 No experience in Russian market
 Limited automation of business processes
Threats
 Competition from established conventional
booking systems and other retailers
 Inefficient legal system
 Risk of fluctuating currency exchange rates
 Competition from foreign countries as
destinations for Russian travelers
ONLINE MARKETING STRATEGY DEVELOPMENT
30
After analyzing the internal situation of UAB “NoriuNoriuNoriu” and external
environment, it is clear that the company stands in a firm position for entry into foreign markets.
Also, although the political, economic and legal environment in the target market (St.
Petersburg) is not promising, technological and social improvements add up to making a
plausible foundation for the company entering this market. Also, the rapid increase in domestic
tourism flows within St. Petersburg region is a very important factor. Although UAB
“NoriuNoriuNoriu” is still a young company with no experience in Russian market, its proven
track record and unique positioning strategy makes a solid balance over the identified threats.
However, since the company mainly operates through its online platform, development of
online marketing strategy is crucial before entering any new market. The following section
reviews different online marketing techniques together with possible ways and areas of
implementation.
Theoretical background
The definition of marketing is described as a social and managerial process which helps
people and organizations creating and exchanging goods to fulfill their needs (Kotler &
Armstrong, 2010). Online marketing in particular involves internet, email, database and wireless
network technologies. The ultimate goal of online marketing is helping the overall marketing
activities when seeking corporate profit, customer satisfaction and retention (Chaffey & EllisChadwick, 2012).
Going further, it is important to understand what are the exact objectives which are
supposed to be achieved with the help of online marketing.
ONLINE MARKETING STRATEGY DEVELOPMENT

31
Raising brand awareness. The task is that people would notice advertisements related
to company and would recognize its brand in other communications;

Direct selling. Customers can buy goods or services on a website;

Attraction of potential customers. Online visitor is presented with goods or services
offered by a company on website and the task is to get the contact details of the
potential customer in order to build relationship and make sales;

Distribution of products. It is relevant in case of selling digital products, such as
books, music, software, mobile applications, etc.;

Customer support. Provision of information about products or services on a website,
answering of customer questions, helpdesk;

Relationship building. It is important for any company to maintain viable
relationships with its clients. Therefore, online questionnaires can be provided in
order to better understand the needs and problems of clients (Chaffey & EllisChadwick, 2012).
Usually, companies use websites in order to seek the goals mentioned above. However, to
successfully accomplish that, it is important not only to understand the goals, but also to be
aware of the specific methods enabling to reach them. According to the book “Electronic
commerce” (Schneider, 2013), online marketing channels are defined as follows:

Banner ads

Email marketing

Content marketing

Search engine optimization
ONLINE MARKETING STRATEGY DEVELOPMENT

Paid search marketing

Directory marketing

Classified ads marketing

Social network marketing

Partnership marketing

Viral marketing

Online public relations
32
Each of these eleven online marketing channels needs to be described with further details.
Banner ads. It is one of the oldest and most widely used online marketing methods.
Banner ad is a commercial message placed in a constrained area on a website. Usually, those
messages encourage a visitor to click on the banner, which leads them (redirects) to another
website (Schneider, 2013). Banners can be static or dynamic (with moving pictures), but they can
also be made in other forms, for example: pop-up (a window appears in front of other windows),
pop-under (a window appears behind other windows, usually in a background tab of a browser)
and interstitial ad (advertisement which is shown to a visitor before proceeding to the intended
page).
Email marketing. This technique is described as direct sending of messages for potential
or existing customers (Laudon & Traver, 2014). It is considered as one of the most effective
online marketing tools because of low costs and high returns. However, it is true only if the email
campaign is relevant for a specific list of recipients and if the campaign itself is prepared
professionally.
ONLINE MARKETING STRATEGY DEVELOPMENT
33
Content marketing. It is the creation of content which is interesting for the target market
or specific segments of the market. Some of the most commonly used modes of content
marketing are: articles, blog posts, free electronic books, press releases and social media posts.
According to Kotler (2012), integration of content marketing into marketing strategy helps to
increase customer response to traditional advertising forms.
Search engine optimization. The purpose of search engine is to help people find other
websites (Schneider, 2013). Search engines have robots which automatically scan all websites
available on the internet and rank them according to keywords by using sophisticated algorithms.
Being listed on a search engine is an effective way to increase online presence and reach
potential customers, because visitors are highly targeted. However, it is important to understand
that unlike other forms of advertising, this channel does not create demand – instead, it is used
for fulfilling already existing demand.
Paid search marketing. It is one of the fastest ways to attract visitors to a website. It is
similar to the previously mentioned technique (search engine optimization) in a way that
potential customers also come from a search engine; however, the difference is that they come
after clicking an ad which is shown above organic search results. The advertisement itself is
always relevant to the keywords entered by a search engine user. Compared to other modes of
online marketing, paid search is cheaper because the investment required to create promotional
material is minimal – since ads in paid search are text-based.
Directory marketing. Internet directories are similar to search engines in the sense that
people come to this kind of websites to find information. But directories possess a distinctive
factor of categorization. It means that the information about other websites is sorted according to
ONLINE MARKETING STRATEGY DEVELOPMENT
34
industry, city, title and other variables. In essence, an internet directory is an analogue of printed
catalogues. Internet directories are usually either general or specialized for specific markets.
Classified ads marketing. Classified ads websites is the place where people look for
goods and services, usually in the area of their residence. Use of classified ads is particularly
effective when a company is targeting lower income customers, is offering lower prices than
competitors or is entering a new market. Most of the classified ads websites have a search feature
and the ads are categorized. Therefore, it is important to place advertisements in all possible
categories of interest for the target customers.
Social network marketing. Marketing in social networks is a relatively new technique.
The reason is that the world‟s most popular social network – Facebook – was launched only ten
years ago, in 2004. There are other popular social networks as well – such as Twitter, which is
designed for communicating short messages. Another popular network is LinkedIn – it is
designed for professional purposes and people use it to expand their lists of business contacts.
For marketers, one of the most important features of social networks is the possibility of
sophisticated segmentation of the target market. Segmentation is a way to distinguish people
according to demographic, psychographic, geographical and behavioral attributes (Hastings,
2007).
Partnership marketing. The core principle of this technique is profit sharing. A
company selling products or services offers its partners a certain commission for referring clients
– it is a win-win situation for both sides of the partnership (Brown, 2009). This compensation
scheme is called “pay per conversion” or “pay per sale”.
Viral marketing. This technique is based on the “word of mouth” principle – when
existing clients transfer a message about the company to other people. Before the advent of
ONLINE MARKETING STRATEGY DEVELOPMENT
35
internet, creating a viral campaign was expensive – reaching big audiences was only possible
through television, radio or press. Currently, messages about companies can be spread through
social networks by the clients themselves with no additional cost. Therefore, social networks
have become a major channel for viral marketing. The core elements of successful viral
marketing are: easy way (platform) for sharing information, relevancy and attractiveness of
information (message) (Schneider, 2013).
Online public relations. A lot of website owners constantly look for interesting content.
Creating quality articles related to the field of company‟s operation and sending them to the
editors of news portals or blogs is the main principle of this technique. Quality content helps to
attract visitors to the website. It also positively influences rankings in search engines because
each backlink from the articles improves authority of the website (Levinson, 2009).
Figure 4. Classification of online marketing channels.
The figure above summarizes and classifies previously described online marketing
channels into two groups. For the case of UAB “NoriuNoriuNoriu”, Group A consists of
ONLINE MARKETING STRATEGY DEVELOPMENT
36
channels that are rather used for creation of demand (attraction of interest). Group B holds the
other kind of channels which are mostly used for fulfilling existing demand (pointing to
consumers with already expressed needs).
Figure 5. Classification of research aspects.
Going further, the figure above shows two different aspects which are needed to be taken
into account in this research. Group A represents questions about habits of potential customers
related to online marketing strategies. Since habits can only be revealed by real actions, the
questions inquire specifically about that and start with “have you ever … (did something)”.
Group B represents questions about attitudes, which can be revealed by asking about the
probability of a person completing a buying action related to online marketing (“how likely is
that you would do … (something)”. The construct of question and scales were adapted from a
research about attitudes toward TV advertising by Rossiter (1977).
Entering a new foreign market for UAB “NoriuNoriuNoriu” is not an easy task,
especially without explicit knowledge and experience. Therefore, it is crucially important to
develop an online marketing before taking real actions.
ONLINE MARKETING STRATEGY DEVELOPMENT
37
The paper continues to the empirical research part, which will help to explore the habits
and attitudes of potential customers in St. Petersburg region. Further on, the managerial solutions
part will provide an online marketing strategy based on the findings of empirical research.
Empirical Research
This part of the paper is dedicated for the analysis and description of collected data about
potential customers in UAB “NoriuNoriuNoriu” target market. Emphasis on the most significant
results is provided in this part as well.
Methodology of Empirical Research
The purpose of this research is to answer the problem question of the thesis, which was
defined as „How to market to customers for UAB "NoriuNoriuNoriu" in the St. Petersburg
domestic tourism market through online channels?‟ The collected data will be used in
development of online marketing strategy in St. Petersburg region of Russia for the year 2015.
Specifically, the answers of potential customers about online behavior and attitudes towards
different online marketing methods will be crucially important in the process of budget allocation
and media planning.
The main objectives of empirical research:

To understand the attitudes, preferences and needs (related to domestic holidays) of
potential customers;

To identify appropriate online marketing channels for the market of St. Petersburg
region;

To find out statistically significant differences of answers from different groups of
respondents;
ONLINE MARKETING STRATEGY DEVELOPMENT
38
In terms of research method, the quantitative approach was chosen because it is important
to be able to generalize and draw conclusions about a target market (population) from which the
sample was derived (Mazzocchi, 2008). Another reason is that rich quantitative data about a new
market is currently more important for a company compared to data provided by other methods.
The choice of research technique was considered from three options, based on the work
of Mazzochi (2008): observational research, physiological research and survey research. Since
the execution of observational or physiological research requires extensive financial and time
resources, the survey technique was chosen as the most appropriate for the current situation,
when resources are limited and the population is not physically approachable due to geographical
and political reasons.
Sample selection
In order to derive a sample and estimate its required size, it is important to define the
population. The total number of people living in the region of St. Petersburg is estimated at
5,030,000 (Federal State Statistics Service of Russian Federation, 2013). Due to the reason that
UAB “NoriuNoriuNoriu” markets and sells mostly through online channels, it is also important
to know how many people are using internet in the target market. According to the report by
AC&M Consulting (2013), the penetration rate in St. Petersburg is 70%, which is above the
average of Russia (61%; Internet World Stats, 2013). Since no additional restraints were added to
the population, the number of 3,520,000 people was used for the determination of sample. The
online sample size calculator from “Raosoft” was used to calculate the required sample size, and
it was estimated for 385 respondents, with a confidence level of 95% and an acceptable margin
of error of 5%.
ONLINE MARKETING STRATEGY DEVELOPMENT
39
Due to limited resources, the convenience sampling method was chosen for this research.
A list of email subscribers was rented from a local company which targets residents of St.
Petersburg region. The size of the list was 28824 at the day of sending out an invitation for the
survey (November 11th, 2014). The collection of subscribers for this list was started in May 2012
using only ethical methods which are not prohibited by law. Since the target market for UAB
“NoriuNoriuNoriu” foreign expansion is the residents of St. Petersburg region, the usage of this
list was considered as an appropriate and cost-effective source for quick collection of data.
The survey was active from November 11th to 16th (2014) and 197 replies were collected
in total.
Justification of Research Instrument
Due to the problem of this research (identification of appropriate marketing channels for
the region of St. Petersburg) and the chosen source of potential respondents, the online
questionnaire instrument was selected as the most efficient way for collection of data. The
original forms of questionnaires in English and Russian are provided in the appendices part
(appendix No. 1 and No. 2).
Table 9. Categories of questions.
Part
1
2
3
4
Category of questions
Screening question
Lifestyle and needs related to domestic holidays
Online marketing channels – habits
Online marketing channels – attitudes
General information
Question number
1
2-5
6-15
16-24
25-27
In total, 27 questions were provided. A combination of Likert scale and “Yes/No/Don‟t
remember” questions was used. Also, there were three demographic questions and one question
ONLINE MARKETING STRATEGY DEVELOPMENT
40
where respondents were allowed to choose multiple selections (Q6). The questions were
translated to the Russian language by a Russian-speaking employee at UAB “NoriuNoriuNoriu”.
“Visitor Voice” proprietary survey tool was used (developed by ClientEngage) because it
was recommended by the company.
Login data:
URL: http://survey.mediniaibaldai.lt/
Email: [email protected]
Password: abc123
Empirical Research Process
The questionnaire starts with a screening question asking if the respondent is a resident of
St. Petersburg region, to be sure that only the people of company‟s interest would be surveyed.
The first part inquires about lifestyle and needs of potential customers (Q2 – Q5). The
respondents were asked about how many times per year they stay in hotels for leisure purposes in
Russia and abroad (Q2, Q3) in order to find out the propensity of their usage of UAB
“NoriuNoriuNoriu” services. Multiple choice answers with absolute values are provided for
these questions, ranging from “never” to “more than 6 times per year”. Also, the respondents
were asked about their attitude towards ordering a holiday package over organizing their
holidays themselves to better understand their lifestyle (Q4). Likert scale of 7 choices ranging
from “unfavorable” to “favorable” was used for this question. Finally, people were asked about
how much time they spend on social networks compared to their overall time spent online (when
not working) (Q5) for the same purpose of understanding their lifestyle. Multiple choice answers
with objective values were provided for this question, ranging from “I don„t use social networks
at all” to “80-100%”.
ONLINE MARKETING STRATEGY DEVELOPMENT
41
The second part of the questionnaire is related to people‟s habits in response for online
marketing (Q6 - Q15). The respondents were asked about the usual ways they get to know about
holiday offers (Q6) in order to find out how internet compares to the other ways of
communication. Multiple choice answers were provided for this question with a possibility to
select more than one choice. Further questions asked if the respondents have ever responded to
various online marketing channels by buying some goods or services to understand what habits
they have developed through their buying behavior (Q7 – Q15). The channels of interest were
covered: social networks (Q7), banner ads (Q8), content marketing (also applies to public
relations marketing) (Q9), newsletter marketing (Q10), search engine marketing (also applies to
search engine optimization) (Q11), online directories (Q12), classified ads websites (Q13), viral
marketing (Q14), partnership marketing (Q15). For these questions, straightforward answers
were provided (Yes, No, Don‟t remember) in a multiple choice system.
The third part of the survey inquires about people‟s attitudes toward marketing domestic
holiday packages through various online channels (Q16 – Q24). The reasoning behind these
questions is the need to estimate which marketing channels would be the most likely to become
successful for UAB “NoriuNoriuNoriu” marketing of holiday packages in St. Petersburg. The
questions are formed around the same channels as in the second part of the questionnaire and
follow the same order. For these questions, a Likert scale of 7 choices was used, ranging from
“very unlikely” to “very likely”.
The fourth part and final part of the survey asks for general information about the
respondents (Q25 – Q27). The questions about age (Q25), gender (Q26) and average personal
monthly income (Q27) are provided to justify the grouping of respondents in the analysis part.
For the questions about age and income, sensible multiple choice answers were provided with
ONLINE MARKETING STRATEGY DEVELOPMENT
42
age or income categories. In overall, all questions are related to getting first-hand data about
what would be the most effective ways of online marketing of domestic holiday packages in the
target market of entry for UAB „NoriuNoriuNoriu‟.
Limitations of Empirical Research
As mentioned earlier, the calculated required sample size is 385 respondents. Out of
28824 people who received the invitation for survey via email, 197 people actually completed it.
The low response rate may have been influenced by the part of email list subscribers who are
inactive. Also, the fact that the required sample size was not fulfilled can be explained by these
reasons:
Time. The survey lasted only for 5 days, because of limited time resources.
Financial and geopolitical reasons. It was not possible to advertise the survey via paid
channels due to the lack of financial resources. Also, a physical visit to St. Petersburg region was
not considered as an alternative because of high costs of traveling, visa and unpredictable
political environment.
Irrelevance. The subscribers of the rented email list may have had limited interest in the
topic of survey and domestic holiday packages in overall.
The lower than required sample size of 197 respondents was used in the analysis, because
time, financial and geopolitical constraints did not allow to capture more answers.
Results of Empirical Research
In this part of the paper, the results from empirical research will be analyzed. Firstly,
descriptive charts and explanations will be provided in order to better understand the scope and
nature of gathered responses. Secondly, the respondents will be grouped and compared to see if
ONLINE MARKETING STRATEGY DEVELOPMENT
43
there are any meaningful relationships and differences among their answers. Thirdly, statistical
tests will be carried out on those relationships to find out if they carry statistical significance.
Social and demographic information . The biggest age group (Q25) was 36-45 years,
accounting for 49% of all respondents (96 respondents). The older age group (46-55 years) was
the second most popular – 18% (36 respondents). Three groups of young people were less
common: 13% of respondents were aged from 25 to 35 years (25), 11% for the 18-24 years
group (22) and only 2% of respondents were younger than 18 years (4). People who were over
55 accounted for 7% of all respondents (14).
7%
2%
11%
18%
Less than 18
13%
18-24
25-35
36-45
46-55
Over 55
49%
Figure 6. Respondents by age.
According to income (Q27), 43% of respondents (85) belonged to lower than average
personal monthly income group (0 – 17999 RUB). Average income group (18000 – 38999 RUB)
consisted of 34% respondents (66). And finally, only 14% belonged to higher than average
income group (28 respondents), which was not unexpected keeping in mind the high income
inequality in Russia, indicated by the Gini index (Euromonitor, 2012). Also, 9% of respondents
(18) did not want to provide their monthly income figures.
ONLINE MARKETING STRATEGY DEVELOPMENT
30%
44
27%
Part of respondents
25%
20%
15%
10%
10%
5%
13%
12%
11%
9%
7%
4%
3%
4%
0%
Ranges of income
Figure 7. Respondents by income.
From the point of view of genders (Q26), there were more female than male respondents.
The former group consisted of 63% of respondents (125), while the group of men was smaller –
37% (72).
ONLINE MARKETING STRATEGY DEVELOPMENT
45
37%
Female
Male
63%
Figure 8. Respondents by gender.
Frequency of staying in hotels for leisure purposes. Q2 and Q3 inquired about the
habits of people related to their traveling and staying in hotels in Russia (Q2) and abroad (Q3),
for leisure purposes (to exclude those who are staying in hotels for business and other purposes).
Talking about local stays in Russia, the group of people who accommodate themselves in hotels
up to once per quarter was the biggest – 39% of respondents (77) indicated that they stay in
hotels 1 or 2 times per year. 25% of respondents (49) claimed that they stay in hotels 3 – 4 times
per year. Even 20% of responses (39) indicated that they never stay in hotels, while the smallest
two groups of respondents said that they use hotel accommodation 5 – 6 and more than 6 times
per year (11% and 5%, 22 and 10 respectively).
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Frequency of hotel usage (domestically)
5%
11%
20%
Never
1-2
3-4
5-6
25%
More than 6
39%
Figure 9. Hotel stays per year (in Russia).
Question 3 asked about how often (pear year) the respondents stay in hotels abroad. Half
of the respondents – 50% (99) indicated that they never do. The groups of respondents who
claimed that they stay abroad 1 – 2 or 3 – 4 times per year were smaller – 28% and 12 %, 56 and
24 respectively. Further on, 6% of respondents said that they stay abroad 5 or 6 times per year
(12 respondents), and only 3% (6 respondents) positioned themselves as relatively frequent users
of hotels in foreign countries (more than 6 times per year).
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Frequency of hotel usage (abroad)
6%
3%
12%
Never
1-2
50%
3-4
5-6
More than 6
28%
Figure 10. Hotel stays per year (abroad).
Attitude towards buying a holiday package. This question (Q4) inquired about how
people favor ordering a fully prepared holiday package which requires little preparation over
organizing their holidays themselves. It turned out that on average, respondents were a bit more
willing to organize their holiday themselves – the average score for this question was 3.13, which
represents a little bit more unfavorable than favorable response (on a 7-point Likert scale). The
question is important when defining who will be the target group of online marketing strategy in
St. Petersburg region.
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General attitude towards buying a holiday
package
Evaluation of attitude
7 - favorable
13%
6
7%
5
19%
4
11%
3
25%
2
13%
1 - unfavorable
11%
0%
5%
10%
15%
20%
Part of respondents
25%
30%
Figure 11. Attitudes towards buying a holiday package instead of self-organized holidays.
Usage of social networks. The purpose of Q5 was to gather a picture about how
frequently and intensively the respondents use online social networks. Specifically, the question
inquired how much time people spend in social network sites compared to their overall time
spent online (excluding the time spent online while working). 10% of respondents (20) indicated
that they do not use social networks at all. 8% (12 respondents) claimed that they spend 0 – 20 %
of time in social networks out of their total online time. The biggest groups were those who on
average spend 20 – 40% and 40 – 60% of online time in social network sites (25% and 27%, 49
and 53 respectively). 14% of respondents (27) said that 60 – 80% of their online time is spent in
social networks, and a slightly bigger group of 16% respondents (32) consists of those who said
that they spend from 80% up to 100% of their online time in social network sites.
ONLINE MARKETING STRATEGY DEVELOPMENT
49
This question gives insight for the managerial solutions part about how important is the
use social networks as part of the online marketing strategy for the company.
Proportion of time
"What part of your online leisure time do you
spend on social networks?"
80-100%
16%
60-80%
14%
40-60%
27%
20-40%
25%
0-20%
0%
8%
10%
0%
5%
10%
15%
20%
Part of respondents
25%
30%
Figure 12. Proportion of online leisure time spent on social networks.
Ways people get to know about holiday offers. Question 6 asked respondents to select
from which marketing channels they usually get to know about various holiday offers (in
general). Multiple answers were allowed, therefore, the total sum of percentages is higher than
100%. It was discovered that the most popular way for getting news about holiday offers was
“word of mouth” – from other people (67% or 131 respondents selected this choice). The second
most popular way was radio – it was selected by 58% (114) of respondents. 44% of respondents
(86) chose internet as one of the ways for getting to know about holiday offers. TV and offline
advertisement appeared to be almost equally frequent selections among the respondents (37% –
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72 and 73). Press was only one percentage point less popular – it was selected by 36% (70) of
respondents. Finally, the choice “other” was selected by only a minor fraction of the respondents
– 13% (26). When defining online marketing strategy, this question helps to understand what is
the current spread of marketing of domestic holiday packages through online means in the target
market.
Marketing channels
"How do you get to know about holiday
offers?"
Other people
67%
Radio
58%
Internet
44%
Offline advertisement
37%
TV
37%
Press
36%
Other
13%
0%
10%
20%
30%
40%
50%
Part of respondents
60%
70%
80%
Figure 13. Ways respondents get to know about holiday offers.
Habits of potential customers. Questions numbered from 7 to 15 asked about the real
actions made by the respondents. Specifically, it was inquired whether the respondents have ever
ordered something after being reached by various online marketing channels, with possible
answers “Yes”, “No” and “I don‟t remember”. Q7 asked about advertisement on social networks
(if the respondents have ever bought something after seeing and advertisement on social
ONLINE MARKETING STRATEGY DEVELOPMENT
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networks. Q8 inquired if the respondents have ever reacted to a banner (visual online
advertisement). Q9 was dedicated for content marketing – if the respondents have ever ordered
something after reading an article online. Q10 asked if the respondents have ever made a
purchase after reading a newsletter received in their email inboxes. Q11 inquired about the effect
of search engines – whether the respondents have ever bought something after searching for that
product or service on a search engine. Q12 was related to online directories – if the respondents
have ever ordered something from a website after finding it in an online directory. Q13 asked
about classified ads websites – whether the respondents have ever bought something after
searching for that product or service on a website listing classified ads. Q14 was dedicated for
“word of mouth” – to find out whether the respondents have ever bought something after
receiving a recommendation from other people they know. The last question about online
marketing habits was Q15, which asked the respondents if they have ever bough something after
getting a recommendation from another company they trust.
Since only positive answers are useful for this paper, the summarized overview for
questions 7 – 15 is provided below. Percentage points in the figure below indicate what part of
the respondents answered “Yes” to the question “if they have ever ordered something through …
(channel name)”.
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Marketing channels
"Have you ever ordered something through ... ?"
Search engines
85%
Classified ads
84%
Word of mouth
77%
Email newsletter
76%
Social networks
54%
Recommendations from companies
43%
Banners
39%
Online articles
26%
Online directories
14%
0%
Yes
No
20%
40%
60%
80%
100%
Don't remember
Figure 14. Habits of potential customers related to ordering online.
Judging from the results, it is clear that the most occasions when people ordered
something are attributed to search engines (buying after searching online) – 85% of respondents
selected this choice. Classified ads, other people (“word of mouth”) and email newsletter were
indicated as a bit less effective channels but communication through these channels still led to
buying decisions quite frequently – 84%, 77% and 76% of the respondents respectively claimed
that they have bought something after being reached through these channels. Social network
marketing channel was selected by 54% of the respondents, and the other options received
attention from less than a half of the respondents. For the development of online marketing
strategy, the questions raised above will be useful in understanding how common is the reaction
to marketing through online means in the target market.
Attitudes towards online marketing channels. The second big group of questions (Q16
– Q24) was related to the attitudes of potential customers. Specifically, they asked how likely is
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that the respondents would by a domestic holiday package after being reached by different online
marketing channels (Likert scale 1-7). The channels of question were the same as in the previous
group about habits (Q7 – Q15) : social networks (Q16), banner – visual online advertisement
(Q17), online articles (Q18), email newsletter (Q19), search engine (Q20), online directory
(Q21), classified ads websites (Q22), other people – “word of mouth” (Q23) and
recommendation from a company they trust (Q24) . The averages for each question are provided
in the figure below.
Marketing channels
"How likely is that you would buy a domestic
holiday package through ... ?"
Search engines
5,81
Classified ads
4,87
Recommendations from companies
4,59
Email newsletters
4,4
Social networks
4,16
Online articles
3,54
Word of mouth
3,41
Banners
3,34
Online directories
2,86
1
2
3
4
5
6
Score (1 - unfavorable, 7 - favorable)
7
Figure 15. Attitudes of potential customers related to ordering domestic holiday packages.
The figure above reveals that it is very likely that the respondents would buy a domestic
holiday package after searching for it on a search engine (average score was 5.81). The following
channels are sorted in order of popularity: Q22 – classified ads websites (4.87), Q24 –
recommendation from a trusted company (4.59), Q19 – email newsletter (4.4), Q16 –
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advertisement on social network website (4.16), Q18 – online article (3.54), Q23 – other people
(“word of mouth”) (3.41), Q17 – banner (visual online advertisement) (3.34), Q21 – online
directory (2.86).
There is a number of different ways online marketing strategy can be developed, by
defining market segments and using different marketing channels and techniques. Therefore, it is
important to evaluate the relevance of possible channels and to find out how it differs among
distinctive groups of respondents, representing the target market. As descriptive analysis has
shown, people indeed have different priorities, preferences and habits.
In the following sections, the respondents are grouped by income and age. Only
differences that were found to be statistically different are provided and explained.
Statistically significant differences among different income groups. ANOVA
statistical test was performed for all questions about attitudes (Q16-Q24).
Table 10. Differences in answers among different income groups.
Question
(marketing
channel)
Evaluation of attitude
Low income
Medium income
group
group
High income
group
Value of p
Q16.
Advertisement on
social networks
2,99
5,20
6,14
0
Q18. Content
marketing (online
articles)
3,08
3,80
4,43
0
Q19. Email
newsletters
4,26
4,32
4,50
0,03
Q21. Online
directories
2,66
2,67
3,57
0,005
Q22. Classified
4,11
5,36
5,64
0
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ads websites
Q23.
2,85
Recommendations
from other people
(“word of
mouth”)
4,02
3,86
0
4,00
Q24.
Recommendations
from a trusted
company
4,83
5,50
0
First of all, the answers to Q16 were found to be significantly different (p=0.00<0.05).
Specifically, it was observed that people with higher personal monthly income are more likely to
buy a domestic holiday package after seeing an advertisement on social networks.
For the Q18, asking about attitudes towards buying a domestic holiday package after
reading an article online, the same pattern was found. The value of p equals 0.00<0.05.
The same pattern was found for Q19 as well – respondents with higher personal monthly
income are more likely to buy a domestic holiday package after reading an email newsletter
(p=0.03<0.05).
For another three questions the same pattern was observed as well: people with higher
personal monthly income are more likely to buy a domestic holiday package after finding a
website on an online directory (Q21), after finding an offer on a classified ads website (Q22) and
after receiving a recommendation from a trusted company (Q24). The p values are as follows:
0.005, 0.00 and 0.00 respectively.
Question 23 showed a slightly different pattern: people with medium personal monthly
income were the most likely to buy a domestic holiday package after getting a recommendation
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from other people (“word of mouth”), while respondents from the high income group stood in
the second position and those with low income took the last position (p=0.00<0.05).
Statistically significant differences among different age groups. For this section, only
young and middle-aged groups were compared using the T-Test of Independent Samples.
Table 11. Differences in answers among different age groups.
Question (marketing
channel)
Evaluation of attitude
Young age group
Middle age group
Q16. Advertisement on
social networks
4,51
4,13
0,002
Q17. Banner (visual)
advertisement
4,88
2,86
0,017
Q19. Email newsletters
3,84
4,73
0,044
Q20. Search engines
5,82
5,80
0,035
Q21. Online directories 2,59
3,02
0
Value of p
The first question that showed statistically significant differences was Q16, asking about
the attitudes towards buying a domestic holiday package after seeing an advertisement on social
networks (p=0.002<0.05). The pattern of middle-aged people being less responsive to
advertisement on social networks was observed.
The second question with significant differences was Q17, asking how likely is that the
respondents would react (and purchase) to a banner (visual) advertisement of a domestic holiday
package (p=0.017<0.05). The same trend was found as in the Q16: middle-aged people are less
likely to react to banner advertisements.
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Question 19 also showed statistically significant differences: middle-aged respondents
were more likely to buy a domestic holiday package after reading an email newsletter than young
respondents (p=0.044<0.05).
Question 20 revealed that middle-aged people are less likely to purchase a domestic
holiday package after searching for it on a search engine, however, this difference between
middle-aged and young respondents is very slight, although statistically significant
(p=0.035<0.05).
Question 21 showed that middle-aged people were more likely to buy a domestic holiday
package after finding a website with this offering on an online directory (p=0.00<0.05).
Relevancy of different online marketing channels among different groups of
respondents. Pivot tables have also shown other relationships between groups of respondents
and answers to survey questions. Those relationships that were found to be different are provided
in this section, together with the results of statistical tests.
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1. Middle-aged respondents are more likely to buy a holiday package rather than
young or old people.
Preference of buying a holiday package
Evaluation of preference
7
6
5
4,14
4
3,43
3,31
3
2
1
young
middle
Age groups
old
Figure 16. Preference of buying a holiday package (instead of self-organized
holidays) – comparison by age groups.
Question number 4 was used for the test. Preference for this and three following
charts was measured with Likert scale, 1 representing an unfavorable preference and
7 – a favorable preference. All respondents were grouped by age into three groups:
young (from less than 18 years up to 35 years), middle-aged (36-55 years) and old
(over 55 years). ANOVA test could not be performed due to the fact that the third
group was too small (only 14 respondents). Therefore, the T-Test of Independent
Samples between young and middle-aged groups was performed. The result was
p=0.07>0.05, therefore, no significant difference was found.
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2. People with higher income are more likely to choose a holiday package instead of
organizing their holidays themselves.
Preference of buying a holiday package
Evaluation of preference
7
5,71
6
5
4,52
4
3
2,67
2
1
low
medium
Income groups
high
Figure 17. Preference of buying a holiday package (instead of self-organized
holidays) – comparison by income groups.
The respondents were grouped into three income groups: low (from less than 6000 up
to 17999 RUB per month), average (18000-38999 RUB per month) and high (3900055000 RUB and more). ANOVA statistical test was performed and it showed that
p=0.00<0.05, therefore, the statistically significant difference does exist - it can be
stated that people who have higher personal monthly income prefer buying a prepared
holiday package to organizing their holidays themselves.
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3. Frequent users of hotel accommodation in Russia are more likely to buy a
holiday package instead of organizing their holidays themselves.
Preference of buying a holiday package
Evaluation of preference
7
6
5,00
5
4
3,09
3
2
1
rare
frequent
Frequency of hotel usage (domestically)
Figure 18. Preference of buying a holiday package (instead of self-organized
holidays) – comparison by frequency of stays in Russian domestic hotels.
All respondents were grouped into two groups (similar in size) according to their
answer about how frequently they stay in hotels in Russia. Those who stay in Russian
hotels up to 2 times per year were attributed as “rare users”, and the other group was
called “frequent users”. T-test of independent samples was performed and the result
was p=0.303>0.05, therefore, no statistically significant difference was observed.
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4. Frequent users of hotel accommodation abroad are more likely to buy a holiday
package instead of organizing their holidays themselves.
Preference of buying a holiday package
Evaluation of preference
7
6
4,81
5
4
3,62
3
2
1
rare
frequent
Frequency of hotel usage (abroad)
Figure 19. Preference of buying a holiday package (instead of self-organized
holidays) – comparison by frequency of stays in hotels abroad.
As in the previous statement, the respondents were grouped into two groups
according to their answer about how frequently they stay in hotels in Russia. Those
who stay in hotels abroad up to 2 times per year were defined as “rare users”, and the
other group was called “frequent users”. T-test of independent samples was
performed and the result was p=0.774>0.05. Similarly like in the previous statement,
no statistically significant difference was observed.
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5. There is a difference in overall attitudes towards online marketing channels
between middle-aged and other age groups.
Overall attitudes towards online
marketing channels
7
Overall attitudes
6
5
4,12
4,16
3,57
4
3
2
1
young
middle
Age groups
old
Figure 20. Overall attitudes towards online marketing channels – comparison of
different age groups.
The average of answers to questions 16-24 (asking about how likely is that people
would buy a domestic holiday package when being approached through specified
online marketing channels) was chosen for this test. All respondents were grouped by
age into three groups: young (from less than 18 years up to 35 years), middle-aged
(36-55 years) and old (over 55 years). ANOVA test could not be performed due to the
fact that the third group was too small (only 14 respondents). Therefore, the T-Test of
Independent Samples between young and middle-aged groups was performed. The
result of the test was p=0.08>0.05, therefore, no significant difference was observed.
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6. Higher frequency of social network usage correlate with a more favorable
attitude towards marketing of domestic holiday packages on social networks.
Attitude towards marketing of domestic
holiday packages on social networks
Evaluation of attitude
7
6
4,58
5
4
3,72
4,07
3
2
1
rare
average
frequent
Frequency of social network usage
Figure 21. Attitude towards buying a domestic holiday package after seeing an
advertisement on social networks – comparison by frequency of social network usage.
Question 16 was chosen for this test (“How likely is that you would buy a domestic
holiday package after seeing an advertisement on social networks?”). All respondents
were grouped into three groups by the frequency (Q5) of social network usage:
“rare”, “average”, “frequent”. ANOVA statistical test was performed and it was found
that there is no significant difference (p=0.72>0.05).
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Conclusions of Empirical Research Findings
Descriptive analysis of data gathered through the quantitative survey showed that the
respondents in general more often stayed in domestic hotels (located in Russia) than in the hotels
abroad. The evaluation of general attitude towards buying a holiday package was a bit lower than
average – 3.13 (out of 7 points on a Likert scale). Most of the respondents spend from 20% to
60% of their online leisure time on social networks, but 10% of people claimed that they do not
use social networks at all. The most popular way people currently get to know about holiday
offers was “other people” (“word of mouth”), and the least popular of the mentioned ways was
“press”. The online behavior of respondents was varied – even 85% marked that they have
ordered something after searching for that product or service on search engines or on classified
ads websites (84%). On the other side, only 14% have ordered something from a website found
in online directories. The same was found in the attitudes section of the survey – the respondents
indicated that it is most likely that they would order a domestic holiday package after searching
for it on search engines. And it is least likely that they would order this product after finding it in
an online directory.
Additionally, statistical tests were performed individually for each question of the
attitudes towards marketing channels section (Q16-Q24), grouping all respondents by income
and age. Some of the tests showed statistically significant differences.
In overall, respondents with higher income were found to be more likely buy a domestic
holiday package after reading an article online (Q18), after reading an email newsletter (Q19),
after finding a website on an online directory (Q21), after finding an offer on a classified ads
website (Q22) and after receiving a recommendation from a trusted company (Q24). However, it
was found that the respondents from medium income group were the most likely buy a domestic
ONLINE MARKETING STRATEGY DEVELOPMENT
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holiday package after getting a recommendation from other people (“word of mouth”) (Q23),
followed by people with high and low income.
Middle-aged respondents were found to be more likely to buy a domestic holiday
package after reading an email newsletter (Q19) and after finding a website (offering such
product) on an online directory (Q21) than young respondents. On the other hand, middle-aged
respondents were found to be less likely to order a domestic holiday package after seeing an
advertisement on social networks (Q16), after seeing a banner (visual advertisement) on a
website (Q17) and after searching for it on a search engine (Q20) than young respondents.
Having collected and analyzed data gathered from the survey, the next task is to make
suggestions on what actions to take based on the collected data. The results of this task, which is
defined in the objectives of this thesis and expected by the company, are provided in the
following (managerial solutions) part.
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Managerial Solutions
Empirical research part of this bachelor thesis revealed what are the lifestyle and needs
related to domestic holidays of potential customers in the region of St. Petersburg. It also
allowed to gain insight about what kind of habits and attitudes towards online marketing
channels the potential customers have. To make grounded strategic suggestions, it is important to
define what kind of marketing channels and techniques could be selected for the online
marketing strategy and to collect information about the possibilities of each marketing channel in
the target market.
For the first year of strategy (2015), the already described model of 11 marketing
channels will be used to make foundation for the online marketing strategy. The model was
adapted from the book “Electronic commerce” (Schneider, 2013).
Banner ads
According to the results of empirical research, banner advertisement is one of the least
effective ways to generate sales. Therefore, this method is suggested to be used only for raising
brand awareness with minor marketing budget allocation. Two possible ways for implementation
of banner advertisement are provided in the next paragraphs.
Renting banner space in other websites. This is one of the most common techniques for
utilizing banner marketing channel. The main advantage of this technique is the possibility to
choose and confine target audience (with the purpose of better efficiency); however, usually only
the CPM pricing is offered for advertisers (cost-per-mille – price for 1000 impressions). This
advertising method is often offered by websites receiving big amounts of visitors (e.g. classified
ads, news portals, entertainment websites), because joining banner networks as publishers is not
financially beneficial for such websites.
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Judging from previous experience in Lithuania (UAB “NoriuNoriuNoriu” rented banner
space in news portals), the same method is suggested to be applied for the St. Petersburg region
market. The most visited news portals of Russia, according to Alexa ranking (2014), are
Rambler.ru and Rbc.ru.
Participating in banner networks. This technique allows to reach even more internet
users, however, since usually there is a high number of different websites participating in banner
networks as publishers, the audience can be diverse and not targeted enough. On the positive
side, CPC pricing is commonly available in banner networks (cost-per-click – paying only for
clicks on banners, instead of paying for all impressions). In Russian market, there is one largest
banner network BannerBank.ru, occupying more than 50% of the market (1.5 billion ad
impressions/month) (eHouse Global PLC, 2014), therefore, participation in this network is
suggested.
Email marketing
Opt-in list building. This technique is usually implemented by collecting e-mail
addresses and other personal information and adding it to e-mail lists, with permission of the email owner. In the long run this technique can bring continuous sales and revenue; however, it
costs time and money to collect subscribers. For incentive, advertisers usually give something
valuable for free (freebie) in exchange for contact details of the user. In Lithuanian market, the
company has used an e-book about tourism locations of Lithuania with routes for weekend trips,
and successfully collected a significant amount of email subscribers which helped to establish a
foundation of paying customers. For the target market, a similar technique (material about
holiday in opportunities St. Petersburg region) is suggested, grounding the suggestion on the
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results of empirical research, which have shown that email marketing stands higher than average
of other measured techniques in generating sales.
Renting a list. The technique for list renting is often called „solo ads‟. The process can be
described as follows: an advertiser buys space for banner or short text message (with a hyperlink
to their website) in broadcast email to all subscribers (or a specific segment) of an email list. The
advertiser can never receive the full list of subscribers (selling of email addresses is considered
illegal in many countries), but it can leverage on that list to spread the message to targeted
subscribers and possibly receive new subscribers to their list (depending on the landing page it
promotes). This technique has not been used by UAB “NoriuNoriuNoriu” in Lithuania, but it is
recommended to implement it in St. Petersburg market for a fast and effective reach of potential
customers.
Joint ventures. It is similar to the previously described list renting technique; with the
only difference that advertiser does not pay to send a message to a list of subscribers owned by
another person or company. Instead, it exchanges an opportunity for a broadcast message to
advertiser‟s own email list. However, it can only be done when both parties have lists of similar
size or value; therefore, this technique is not suggested for UAB “NoriuNoriuNoriu” at current
stage, as it has no previous track record in the target market.
Content marketing
For content marketing, usually articles, audio, video or other kind of medium is used to
spread promotional message about offerings of the company. Also, it is common when
promotional message is mixed with other kind of valuable information (overview, advice,
tutorial, analysis, etc.). For UAB “NoriuNoriuNoriu”, articles about interesting (unconventional)
attractions, restaurants, entertainment services, hotels and places has proved to be a successful
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technique. Empirical research has shown that this technique holds average position in generating
sales; therefore, similar kind of content, adjusted for the needs of residents of the target market is
suggested to be created and marketed with moderate budget allocation.
Search engine optimization
Regardless of country of operation, the optimization process is common for all search
engines. Therefore, the current practice of optimized texts, relevancy of content for the keywords
and backlink collection could be suggested to be implemented for the Russian version of the
website targeting St. Petersburg region customers. However, at the current time the general
importance of technical optimization is decreasing in respect to increasing importance of the
content length and its quality, meaning that search engines are more likely to rank pages with
richer content higher (Rayson, 2014). Also, since the results of empirical research have shown
that respondents are most likely to buy a domestic holiday package after searching for it on a
search engine, focusing on this marketing technique and allocation of relatively high budget is
recommended for the St. Petersburg region market.
Paid search marketing
Essentially, paid search marketing is buying promoted text links, which are shown in the
top section of search results (above organic results) for users that are searching for specific
keywords of advertiser‟s interest. In Lithuanian market, paid search marketing was developed
and implemented for Google search engine by using the AdWords tool and targeting 4 keyword
groups: brand names of hotels, brand name “NoriuNoriuNoriu”, titles of recreational/health
services and the names of resort towns. In Russia, 65% of internet users use search engines at
least weekly (Consumer Barometer, 2014) and the most popular search engines in St. Petersburg
region are: Yandex.ru (58% of monthly visitors), Google.ru (34%) and Search.mail.ru (5%)
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(LiveInternet, 2014). Therefore, implementation of paid search marketing is suggested for all
three search engines, with a direction of narrowing down to 2 or 1 engine after testing period.
Directory marketing
As mentioned earlier in this thesis, directory marketing describes the process of putting
links to company‟s website to online directories with a purpose of getting exposure and
increasing rankings on search engines (due to backlinks). In St. Petersburg region, Rambler‟s
Top 100 and LiveInternet are the most popular online directories (76% and 18% of monthly
visitors respectively). However, research results have shown that marketing in online directories
is relatively the least effective technique. In general, it can be assumed that importance of online
directories is decreasing because of changing technology. Having all of that in mind, adding links
to online directories is not recommended for UAB “NoriuNoriuNoriu”.
Classified ads marketing
Classified ads technique is especially beneficial at the beginning of new market entry,
when brand awareness is low. The results of empirical research have shown that this technique is
relatively of high effectiveness in generating sales for domestic holiday packages. In Russia,
there used to be three classified ads websites (slando.ru, olx.ru and avito.ru), occupying the
largest market share when combined, however, in March 2013 all three websites were merged,
creating the 3rd largest classified ads website in the world and the 5th largest Russian website in
general – Avito.ru (Anderson, 2013). Because of this consolidation, advertising on avito.ru is
recommended with relatively high marketing budget.
Social network marketing
Groups. Groups on social networks are created with a purpose of bringing people who
have similar interests or opinions together. When a group reaches a significant amount of users, it
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becomes possible to get benefit from posting promotional messages in that group; however, the
messages should not be intrusive or filled with spam. One of the examples is previous experience
of UAB “NoriuNoriuNoriu” in Lithuanian market – the creation of group dedicated for people
looking for cheap ways to travel. More than 70,000 members were added in the group, in which
contest offerings – opportunities to win a weekend stay in a resort hotel – were promoted. The
same technique is suggested to be implemented in St. Petersburg market, adjusted for local
environment.
According to LiveInternet (2014), in St. Petersburg region there are three most popular
social networks: vkontakte.ru (65% of monthly visitors), facebook.com (11%) and
odnoklassniki.ru (11%), therefore, implementation of social network groups marketing is
suggested on these three websites.
Advertisement. As in any other conventional website, on social networks it is also
possible to place advertisements (usually banner space or promoted posts). The advantage is that
social networks possess a lot of information about their users and their behavior – it provides
possibilities for very specific targeting of advertisements. The results of empirical research have
proved that marketing in social networks is moderately effective. Therefore, it is suggested for
the company to promote local offers in St. Petersburg for specifically targeted users of social
networks.
Posts. It is the most common kind of content on social networks. Posts can be posted on
behalf of a person or a page, representing an organization. Attractive posts get shared by other
people or pages and it is the way it reaches vast audiences. Creation of attractive posts for target
users is suggested for the company to attract organic attention.
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Partnership marketing
This method involves paying agents (affiliates) for referring visitors who eventually make
a purchase. Online agents have freedom to choose in what ways they are going to promote
affiliate offers, but the techniques can be restricted by the rules of company offering the product.
In Lithuania, UAB “NoriuNoriuNoriu” has more than 20 agents bringing sales for a commission
and it is considered to be a successful technique. Empirical research results have shown that for
potential customers in St. Petersburg region this technique is one of the most effective in
generating sales. Due to this reason, finding agents for implementation of partnership marketing
is recommended in the target market as well, with relatively high budget.
Viral marketing
This channel involves everything that can be shared – whether it is a promotional content
or not. Conventionally, viral marketing definition also involves recommendations from other
companies or people (word-of-mouth). Planning and prediction of results in viral marketing is a
complicated task – therefore, focusing on service and product quality is recommended in St.
Petersburg region without any explicit expenditure on viral marketing.
Budget allocation
Analysis of empirical research results, previous company‟s experience in Lithuanian
market and possible marketing costs allowed to create a plan for budget allocation for marketing
activities in St. Petersburg market in the year 2015. The overall yearly marketing budget
provided by the company is 30,135 EUR.
In the next paragraphs, budget allocation plan is provided together with more detailed
tactical plans for some of the marketing activities (banner advertising, email marketing, paid
search marketing and social network marketing), requiring more profound specifications.
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Figure 22. Allocation of online marketing budget.
Budget allocation for each online marketing technique was calculated according the
results of empirical research and consultations with company‟s employees.
Out of the total budget for banner advertising, 6.6% of it was allocated for the
development of creative material itself (banners). 66% was dedicated for renting banner space in
two websites – three one-month campaigns per year at each of the websites. This decision can be
explained by the „banner blindness‟ phenomenon – repeat visitors of the same website tend to
overlook the same advertisement, therefore, the attention drops with time. Also, since these are
both news portals, it was decided to advertise on only one website at a time because of
possibility of the same visitors coming to read news at different news portals.
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Figure 23. Banner advertisement budget.
Budget for email marketing was divided into three parts: 30% was dedicated for organic
list building and 70% for opportunity to use email lists collected by other people (list rental).
Allocation of budget for the latter technique was made according to seasonality trends after
consultation with UAB “NoriuNoriuNoriu” employees. For the organic list building technique,
67% of the category budget is allocated for creation of incentive material (e.g. free electronic
book about interesting places in St. Petersburg region), while 33% will be used for the creation
of opt-in landing page (part of the website where people can leave their contact details in
exchange for incentive material) in January and July (an improved version of the page will be
presented after sufficient web insight data will be collected and analyzed).
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Figure 24. Email marketing budget.
For the paid search marketing part all budgets was allocated for the 4 categories of
keywords in three main search engines. Budgets in all categories are planned according to
seasonality or in a flat order, except for the “brand name of the company” keyword category.
This can be explained by the fact that paid search marketing is only effective when demand is
already created – in the beginning of market entry, brand awareness of UAB “NoriuNoriuNoriu”
in St. Petersburg region market is expected to be relatively low (due to no previous market
presence), therefore, it was decided to allocate zero budget for this category in the first four
months of online marketing strategy timeline.
Figure 25. Paid search marketing budget.
For the social network marketing part, 32% of the total budget is allocated for activity in
“groups” – creation and maintenance work (posting updates, moderating comments). 68% of the
budget is dedicated for paid advertisement on social networks, adjusted for seasonality. The
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flows of budget between different social networks were calculated according to popularity of
each network by monthly visitors in the region of St. Petersburg (LiveInternet, 2014).
Figure 26. Social network marketing budget.
To sum up, this part evaluated the importance and effectiveness of all provided online
marketing methods individually. Also, explanations on how each of the methods should (or
should not) be implemented were provided, grounded on the results of empirical research and
company‟s previous experience in the Lithuanian market. According to the explanations, budget
allocation and tactical plans for the year 2015 were developed. According to estimated
importance, budget was allocated in the following order: search engine optimization and paid
search marketing, classified ads websites, partnership marketing, email marketing, social
network marketing, content marketing and banner advertisement. Managerial solutions is
planned to be used by the company in the planning phase of online marketing strategy for St.
Petersburg region market in the year 2015.
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Conclusion
According to Lee (2013), in the current age marketers can get quickly distracted by the
vast availability of communication channels. To avoid that, successful marketing professionals
should not focus on mastering all possible methods – instead, they should “remain aware of the
trends while utilizing the tools that logically fit into their firm‟s online ecosystem”.
Essentially, this thesis was written to explore a problem of the same type – how to choose
appropriate online marketing methods for UAB “NoriuNoriuNoriu”. Specifically, this paper
analyzed possible ways on how to organize online marketing activities in the domestic tourism
market of St. Petersburg region – the current target for foreign entry by the company, for the year
2015.
To reach this objective, the analysis of current situation of UAB “NoriuNoriuNoriu” in
Lithuania was done, together with assessment of the Russian market with a particular emphasis
on St. Petersburg region. Further on, information about preferences of potential customers on
different online marketing channels was collected and analyzed with quantitative methods in the
empirical research part. Finally, the developed online marketing strategy with budget and tactical
plans for the year 2015 was provided in the managerial solutions part.
While completing the objective, the following was done:
1. In situation analysis part, general information about UAB “NoriuNoriuNoriu” was
provided – the company has just passed the “start-up” stage, it operates in an
extremely dynamic and volatile market, it currently focuses on selling hotel stays
in the main Lithuanian resort towns, its estimated market share in Lithuanian
market is not less than 1.1% and company‟s rapid growth has been justified by
important achievements in business goals and formal recognition by authorities.
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Overview of current online marketing strategy revealed that the company uses 11
different methods to achieve their sales goals, while one of the most important
and financially successful is email marketing method. PESTEL analysis showed
that the suitability of macro environment conditions in Russia is not homogeneous
– while social, technological trends seem to be promising, political, economic,
environmental and legal perspectives are only of average level. In the market
segmentation part the main two customer segments for the company were
described – men and women aged from 26 to 50 years. Analysis of competitors
and positioning maps indicated that UAB “NoriuNoriuNoriu” holds better than
average positions compared to Russian competitors, however, it was also
emphasized that currently there are no competitors working on identical business
model. SWOT analysis indicated that the company stands in a firm position for
entry into Russian market.
2. For the empirical research part, the quantitative approach was chosen. Online
survey of 27 questions was constructed and sent to potential customers living in
the region of St. Petersburg. The purpose of the survey was to collect data about:
lifestyle and needs related to domestic holidays, habits on online marketing
channels, attitudes on online marketing channels and general demographics of the
respondents. The survey was active for 6 days and 197 replies were collected in
total. The collected data revealed purposeful insights for the company and
statistically significant findings, including the higher propensity of individuals
with higher income to buy a domestic holiday package after reading an article
online, after reading an email newsletter, after finding a website on an online
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directory, after finding an offer on a classified ads website and after receiving a
recommendation from a trusted company. Individuals with medium income had
the highest propensity of buying a domestic holiday package after getting a
recommendation from other people (“word of mouth”). Other significant findings
included the higher likeability of medium-aged respondents to buy a domestic
holiday package after reading an email newsletter and after finding a website
(offering such product) on an online directory. On the contrary, middle-aged
respondents were found to have lower propensity of ordering a domestic holiday
package after seeing an advertisement on social networks, after seeing a banner
(visual advertisement) on a website and after searching for it on a search engine.
3. For the managerial solutions part, the importance and effectiveness of all
researched online marketing methods was evaluated according to survey results.
According to that, budget allocation and tactical plans for the year 2015 were
developed. The plans revealed that while some of the methods carry strong
importance for company‟s foreign entry, there are certain methods that should not
be implemented at all. The following marketing channels were proposed to be
implemented, ranked by importance: Search engine optimization (2004 EUR),
Paid search marketing (6033 EUR), Advertisement on classified ads websites
(6000 EUR), Partnership marketing (5004 EUR), Email marketing (4000 EUR),
Social network marketing (3544 EUR), Content marketing (2040 EUR) and
Banner advertisement (1510 EUR), with a total yearly budget of 30135 EUR. It is
expected that managerial solutions will be used as a contributory material when
planning online marketing strategy for St. Petersburg region.
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List of appendices
Appendix 1. Questionnaire in English language …………………………………………… 84
Appendix 2. Questionnaire in Russian language …………………………………………… 86
83
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Appendix 1
Questionnaire in English language
84
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ONLINE MARKETING STRATEGY DEVELOPMENT
Appendix 2
Questionnaire in Russian language
86
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