Google marketing case

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Google marketing case

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

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