Google marketing case
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Google faces growing competition and must manage innovation in the future. Its mission is to organize the world's information and make it universally accessible. It generates most revenue from advertising but is exploring new business solutions like Google Apps. While it has strong brand recognition and an innovative culture, it risks losing relevance if it does not focus on core customers or diversify carefully. Integrating core search capabilities into new markets and products could increase revenue without deviating from its mission.
Google marketing case
- 2. Problem Statement Google’s future growth strategy? How is Google going to deal with growing competition? How is Google going to manage innovation in the future?
- 3. Google Inc. Mission: Organize the world's information and make it universally accessible and useful. Google Inc. – Founded 1998 Sergey Brin and Larry Page PageRank IPO in August 2004
- 4. Situation Analysis Industry Massive internet industry with many competitors Major competitors include Yahoo!, MSN, and eBay—all well known internet portals. Huge opportunity for Google by offering paid listings and advertisement opportunities Google – Q3 2005 37% of U.S. search traffic 68% of International search traffic 60% of U.S. search-related revenue
- 5. Core Competence PageRank technology to index information based upon relevance Google’s brand strength Google’s innovative culture and employees
- 6. Business Model Two initial opportunities for generating revenue: Search services Advertising Advertising products that generate majority of revenues: Google AdWords Google AdSense Business solutions starting to grow: Google Apps provide powerful tools for organizations Google Search Appliance Unconventional approaches for managing innovation: New areas are explored, and ideas are prototyped
- 7. Target Market Advertisers “ Google AdWords” drives qualified traffic to advertisers’ sites Site Owners “ Google AdSense” delivers ads targeted to relevant search results on publishing partners’ sites. Businesses “ Google Apps” provides simple, powerful tools for organizations without the usual hassle and cost. Google Search Appliance is a scalable and secure appliance that delivers accurate search results across intranets.
- 8. Products – Internet Customers
- 9. Products – Business Solutions
- 10. Pricing Revenue is dependent on four factors: Listing’s coverage rate Click-through rate Average cost per click Revenue split (sharing) In late 2003, cost per click (CPC): Overture’s average estimated to be $0.40 Google’s average was $0.30
- 11. Place & Promotion Predominantly web based applications, tools, and services Some downloadable desktop products like Picasa, Google Earth, Google Toolbar, and Web accelerator Word of mouth from satisfied users Cross-promotion strategy in some areas
- 12. Strengths The most efficient search engine on the Internet Brand equity - most recognized brand of 2003 Default search engine for many Innovative culture Comprehensive product mix
- 13. Weaknesses Eccentric practices confuse and anger investors Produces less relevant hits than subject-specific subscription databases Poor product marketing Not focusing core competency on core customers - advertisers
- 14. Opportunities Computer literacy is on the rise U.S trend towards telecommuting and at-home-businesses Increasing demand for information International market Expand profits with diversification
- 15. Threats Legal challenges Specialized search engines (Gale, Lexis-Nexis, ProQuest) Multi industry competition Click fraud
- 16. Main Competitor – Yahoo! Inc. Founded in February 1994 by David Filo and Jerry Yang Acronym “Yet Another Hierarchical Officious Oracle” Reached 1 millionth hit in fall of 1994 March 1995, Filo and Yang incorporated Yahoo! IPO in April 1996 with 49 employees Yahoo! now services more than 345 million users
- 17. Yahoo! Google’s PageRank software used by Yahoo! $5.3 billion and has 300 million monthly visitors Offers many current products that rival Google’s Ranks lower in market share compared to Google Yahoo! is a portal, Google is not
- 18. SPM – Google Inc. (in millions)
- 19. Alternative 1: Market Penetration Improve search engines Partnerships to increase exposure Higher number of paid listings (CPCs) Higher CPC rates Positives Capitalize on core competencies in a known market Negatives Google’s large market share limits growth
- 20. Alternative 2: Market Development Partner or acquire other companies to enter new markets License search engine to desktop applications Positives Additional areas for growth Negatives How to monetize?
- 21. Alternative 3: Diversification Portal – i Google E-commerce “ Web-ized” desktop applications Positive New markets for growing core products Negative New products = high risk Could hurt Google’s reputation
- 22. Recommendation: Integrated Strategy Integrate core competencies into new markets and products without deviating from the mission which increases its revenue through search engine and also through Ads. Positive Increased exposure of core products Utilize existing paid listing model Negative New product = risks Over-exposure or under-performance
- 23. Got We’ve got
- 24. Google Today “ We’re not competing with newspapers , we’re not competing with television stations , and we’re not competing with the Viacoms of the world, we are trying to partner with them. ” Eric E. Schmidt, CEO Google Business Week Magazine 2007
- 25. Google Today Offers many new products Google Documents Images, videos, news, maps, mail, calendar, blogger, orkut, products New initiatives: Acquired YouTube for $1.65 billion in late 2006 Acquired DoubleClick for $3.1 billion in April 2007—offers more marketing and advertising opportunities Google OpenSocial code (LinkedIn, Myspace and more) Google Open Handset Alliance (ANDROID)
- 26. Google Today Partnerships : EchoStar and Astound Cable on a TV Ads Clear Channel and New support for Google AdSense for radio ads Working with Salesforce.com to give companies better tools to build their business online . Partnered with Four US states (CA, Utha, AZ, Va) in bringing all the government web sites under one roof