First part of a set of marketing models for eBusiness. From MAANZ MXpress course notes (www.marketing.org.au)

1. The MAANZ MXpress Program
Planning and Strategy Model Types
Part 1
Dr Brian Monger
Copyright January 2013.
This Power Point program and the associated documents remain the intellectual property and the
copyright of the author and of The Marketing Association of Australia and New Zealand Inc. These
notes may be used only for personal study associated with in the above referenced course and not in any
education or training program. Persons and/or corporations wishing to use these notes for any other purpose
should contact MAANZ for written permission.

2. MAANZ International
• MAANZ International, is a Not for Profit,
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institute which has operated for over 25 years.
• MAANZ International offers Professional
Memberships;
• Marketing Courses (Formal and Short)
• And Marketing Publications
• www.marketing.org.au
Marketing In Black and White 2

3. Dr. Brian Monger
• Brian Monger is the CEO of MAANZ International and a
Professional marketer and consultant with over 40 years
experience.
Marketing In Black and White 3

4. 4
Strategic Planning
• Strategic planning = the “managerial process of developing and
maintaining a viable fit between the organisation’s objectives, skills,
and resources and its changing market opportunities.”
• Two key elements of strategic planning are:
‐ The preparation of a SWOT analysis,
‐ The establishment of strategic objectives.

5. 5
Elements of a solid business planning
process
• The major elements of a business planning process include the
following:
– Defining the value proposition
– Framing the market opportunity
– Detailing how to reach customers
– Developing an implementation plan
– Evaluating potential external influences
– Articulating the revenue model
– Calculating preliminary financial projections
– Establishing critical milestones
– Summarizing the advantage

6. 6
Michael Porter on the Internet
• ‘The key question is not whether to deploy
Internet technology – companies have no
choice if they want to stay competitive – but
how to deploy it.’
Porter, M. (2001) Strategy and the Internet,
Harvard Business Review, March 2001, 62–78.

7. 7
Influences on
eMarketing strategy
Figure 1 Internal and external influences on Internet marketing strategy

8. 8
Overview of the eMarketing Planning
Process
• How can information technologies assist marketers in building revenues
and market share or lowering costs?
• How can firms identify a sustainable competitive advantage with the
Internet when so little is understood about how to succeed?

9. 9
Overview of the eMarketing Planning
Process
• The best firms have clear visions that they translate, through the marketing process,
from eBusiness objectives and strategies into eMarketing goals and well‐executed
strategies and tactics for achieving those goals.
• This marketing process entails three steps:
‐ Marketing plan creation,
‐ Plan implementation,
‐ Evaluation/corrective action.

10. 10
Creating an eMarketing Plan
• eMarketing plan: It is a guiding, dynamic document that links the firm’s eBusiness
strategy (eBusiness model) with technology‐driven marketing strategies and lays out
details for plan implementation through marketing management.
• The eMarketing plan serves as a roadmap to guide the direction of the firm, allocate
resources, and make tough decisions at critical junctures.
• There are two common types of eMarketing plans:
‐ The napkin plan,
‐ The venture capital plan.

11. 11
P
Legal - Ethical
Technology
Competition
Other factors
E-Business
Strategy/
Model
Performance Metrics
SWOT
E-Marketing Plan
E-Marketing
Strategy
Implementation
Marketing Mix/CRM
Markets
Internet
E
S
Exhibit 3 - 1 E-Marketing Plan – Strategy Formulation and Implementation

12. 12
The Napkin Plan
• Dot‐com entrepreneurs were known to simply jot their ideas on a napkin over lunch
and then run off to find financing.
• The big firm version of this is the just‐do‐it. An employee has an idea, and convinces
management to just do it.
• These plans sometimes work and are sometimes even necessary but they are not
recommended when substantial resources are involved. Sound planning and
thoughtful implementation are needed for long‐term success in business.

13. 13
The Venture Capital eMarketing Plan
• Small to mid‐sized firms and entrepreneurs with start‐up ideas usually begin with a
napkin plan without going through the entire traditional marketing planning process.
• BUT as the firm grows and needs capital, it has to put together a comprehensive
eMarketing plan.
• Where does an entrepreneur go for capital?
‐ Sometimes bank loans,
‐ Most of the time, it is equity financed,
‐ Private funds (friends and family),
‐ Angel investors,
‐ Venture capitalists.

14. 14
The Venture Capital eMarketing Plan
• Investors are looking for a well‐composed business plan, and more importantly, a good
team to implement it.
• The business plan should contain enough data and logic to prove that:
– The eBusiness idea is solid,
– The entrepreneur has some idea of how to run the business.

15. 15
The Venture Capital eMarketing Plan
• 9 questions that every business plan should answer:
1. Who is the new venture’s customer?
2. How does the customer make decisions about buying this product or
service?
3. To what degree is the value offer a compelling purchase for the
customer?
4. How will the value offer be priced?

16. 16
The Venture Capital eMarketing Plan
• 9 questions that every business plan should answer:
5. How will the venture reach all the identified customer segments?
6. How much does it cost (in time and resources) to acquire a customer?
7. How much does it cost to produce and deliver the product or service?
8. How much does it cost to support a customer?
9. How easy is it to retain a customer?

17. 17
The Venture Capital eMarketing Plan
• VCs look for a way to get their money and profits out of the venture within a
few years:
‐ The golden exit plan is to go public and issue stock in an initial public offering
(IPO),
‐ As soon as the stock price rises sufficiently, the VC cashes out and moves on to
another investment.
• All VCs’ investments are not successful. But if even one out of 20 is an
Amazon.com, the risk was well worth the reward.

18. 18
Step 2—Link eBusiness with
eMarketing Strategy
• Marketers need to:
1 Review the marketing and eBusiness plans,
2 Conduct a strategic planning to help achieve the firm’s eBusiness goals
+ define potential revenue streams,
3 Create supporting eMarketing strategy for the eBusiness goals:
A Tier one strategy: marketers design segmentation, targeting,
differentiation, and positioning strategies,
B Tier two strategy deals with the 4P’s and relationship management by
creating strategies around the offer (product), value (pricing), distribution
(place), and communication (promotion),
4 Further, marketers design customer and partner relationship strategies
(CRM/PRM).

19. 19
Segmentation
Targeting
Value
Differentiation
CRM/PRM
Positioning
Communication
Distribution
Offer
E-Marketing
Strategy
Tier 2
tasks
Tier 1
tasks
Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers

20. 20
Tier One eMarketing Strategic Planning: Segmenting &
targeting
• Market opportunity analysis (MOA):
• The demand analysis = market segmentation analyses to describe and evaluate the
potential profitability, sustainability, accessibility, and size of various potential
segments.
•
• The segment analysis in the B2C market with demographic characteristics,
geographic location, selected psychographic, and past behavior toward the
descriptors help firms identify potentially attractive markets.
Allows the firm to select its target market and understand its characteristics, behavior,
and desires in the firm’s product category.

21. 21
Tier One eMarketing Strategic Planning: Segmenting &
targeting
• Tools:
• ‐ Traditional segmentation analyses.
• Analyzes of customer bases using cookies, database analyses, and other techniques,
• Supply analysis: forecasts segment profitability + finds competitive advantages,
• Study of competition to find the firm own performance advantages.: strengths and
weaknesses, eMarketing initiatives, …
• Identify future industry changes.

22. 22
Tier One eMarketing Strategic Planning:
Identifying brand differentiation variables
and positioning strategies
• The understanding of the competition + the target(s)
Differentiation of the products to provide benefits perceived as important by the target.
• The positioning statement: the desired image for the brand relative to the
competition.

23. 23
Tier Two eMarketing Strategic
Planning
• The two Tiers are elaborated in an interative process:
• It is difficult to know what the brand position should be without understanding
the offer that comprises the brand promise.

24. 24
Stages in
Internet development
Figure 3 A simple framework for Internet marketing strategy development

25. 25
Strategy development process
Figure 4 A ten-step strategic marketing planning process
Source: McDonald, 1999

26. 26
Dynamic strategy model
Figure 5 Dynamic eBusiness strategy model
Source: Adapted from description in Kalakota and Robinson (2000)

27. 27
eBusiness strategy model
1. Web presence 2. E-commerce 3. Integrated
e-commerce
4. eBusiness
Services available Brochureware or interaction with
product catalogues and customer
service
Transactional e-commerce on
buy-side or sell-side. Systems
often not integrated
Buy and sell-side integrated
with ERP or legacy systems.
Personalisation of services
Full integration between all
internal organisational
processes and elements of the
value network
Organisational scope Departments acting independently,
e.g. marketing department, IS
department
Co-ordination through
steering committee or e-
commerce manager
Cross-organisational Across the enterprise and
beyond (extraprise)
Transformation Technological infrastructure Technology and new
responsibilities identified for
e-commerce
Internal business processes
and firm structure
Change to eBusiness culture,
linking of business processes
with partners
Strategy Limited Sell-side e-commerce strategy,
not well integrated with
business strategy
E-commerce strategy
integrated with business
strategy using a value-chain
approach
eBusiness strategy
incorporated as part of
business strategy

28. 28
Stage models
(Quelch and Klein (1996))
Figure 6 Levels of web site development in: (a) the information to transaction
model and (b) the transaction to information model of Quelch and Klein (1996)

29. 29
How Does a Firm Develop an
Online Offering?
single product category
several product categories
Identify
scope of offering
problem recognition
information search
evaluation of alternatives
purchase decision
satisfaction
Loyalty
Disposal
Identify customer
decision process
purchase-decision cycle
egg diagram
Map offering to
customer decision process
Online Offering

30. 30
What Is a Successful Resource
System?
• Modifications to the activity system logic for
the online marketplace
– Shift from physical world to virtual and back to
physical world
– Shift from a supply‐side focus to a demand‐side
focus
– Shift from activities to capabilities
– Shift from single to multifirm systems

31. 31
Specifying a Resource System
• Step 1: Identify core benefits in the value cluster
• Step 2: Identify capabilities that relate to each benefit
• Step 3: Link resources to each capabilities
• Step 4: Identify to what degree the firm can deliver each capability
• Step 5: Identify partners who can complete capabilities

32. 32
Criteria to Assess the Quality of a
Resource System
• Uniqueness of the system
• Links between capabilities and benefits
• Links among capabilities in the system
• Links among resources
• Links between virtual world and physical
world business systems
• Sustainable advantage

33. 33
A Six‐Step eMarketing Plan
Step Tasks
Situation analysis Review the firm’s environmental and SWOT analyses.
Review the existing marketing plan and any other information
that can be obtained about the company and its brands.
Review the firm’s e-business objectives, strategies, and
performance metrics.
Link e-business with
e-marketing strategy
Identify revenue streams suggested by e-business models
Tier 1
• Perform Marketing Opportunity Analysis to identify
target stakeholders.
Specify brand differentiation variables.
Select positioning strategy.
Tier 2
Design the offer, value, distribution, communication, and
market/partner relationship management strategies.
Objectives Identify general goals.
Select target specific goals.
Implementation plan Design e-marketing mix tactics.
• product/service offering
• pricing/valuation
• distribution/supply chain
• integrated communication mix
Design relationship management tactics.
Design information gathering tactics.
Design organizational structures for implementing the plan.
Budget Forecast revenues.
Evaluate costs to reach goals.
Evaluation plan Identify appropriate performance metrics.
Exhibit 3 - 1 Marketing Plan Process

34. 34
Step 1—Situation Analysis
• Planning for eMarketing does not mean starting from scratch but working with existing business,
eBusiness, and marketing plans is an excellent place to start.
Opportunities Threats
• Hispanic markets growing and
untapped in our industry.
• Save postage costs through e-mail
marketing.
Pending security law means costly software
upgrades.
Competitor X is aggressively using e-
commerce.
Strengths Weaknesses
1. Strong customer service department.
2. Excellent Web site and database
system.
1. Low tech corporate culture
2. Seasonal business: peak is summer
months.
E-business Goal: Initiate e-commerce in within one year.
Metric: Generate $500,000 in revenues from e-commerce during the first year.
Exhibit 3 - 1 SWOT, Objective, and Metric Example from E-Business Plan

35. 35
Step 1—Situation Analysis
• The organizational eBusiness plan: SWOT analysis => eBusiness strategy.
• The marketing plan: gathers information about the firm’s products, the markets currently served,
and so forth.
• The distribution plan: identifies areas where the products are currently sold and suggests
geographic gaps that might be receptive to e‐commerce.
• Promotion plan information: gives clues about how the Internet fits with the firm’s current
advertising, sales promotion, and other marketing communications.
• The firm and brand positioning in the marketplace: Internet planners must decide how closely
Web site content and promotion will follow current positioning strategies.
• The marketer moves to strategy formulation.

36. 36
Environment, Strategy, and Performance (ESP)
• Business environment: legal, technological, competitive, market‐related, and other
environmental factors external to the firm = Opportunities and Threats,
• SWOT analyses = Strengths and Weaknesses,
• eBusiness strategies + eBusiness models + eMarketing plans = Help the firm accomplish its
overall goals,
• Determine the success of the strategies and plans by measuring results.
= Performance metrics, specific measures designed to evaluate the
effectiveness and efficiency of the eBusiness and eMarketing
operations.

37. 37
P
Legal - Ethical
Technology
Competition
Other factors
E-Business
Strategy/
Model
Performance Metrics
SWOT
E-Marketing Plan
E-Marketing
Strategy
Implementation
Marketing Mix/CRM
Markets
Internet
E
S
Exhibit 1 - 1 E-Marketing in Context: the ESP Model

38. 38
Assessing demand
• Need to assess:
1. Access to Internet
2. Proportion of customers influenced by
channel
3. Proportion of customers who buy direct

39. 39
Porter’s five forces
Power of
suppliers
Bargaining
powers of
customers
Extent of rivalry
between
competitors
Threat of
subsitutes
Threat of new
entrants
The business
Figure 7

40. 40
Example objectives
• Achieve 10 per cent online revenue contribution within two years;
• achieve first or second position in category penetration in the countries within which we
operate (this is effectively online market share and can be measured through visitor rankings
such as Hitwise (Chapter 2) or better by online revenue share;
• cost reduction of 10 per cent in marketing communications within two years;
• increase retention of customers by 10 per cent;
• increase by 20 per cent within one year the number of sales arising from a certain target
market, e.g. 18–25‐year‐olds;
• create value‐added customer services not available currently;
• improve customer service by providing a response to a query within two hours, 24 hours per
day, seven days a week;
• all other objectives to be achieved profitably giving a return on investment in a three year
period.

41. 41
Marketing‐led design objectives
• Customer acquisition
– Proposition, recruitment offer
• Conversion
– Engage first time visitors
– Clear call‐to‐action
• Customer retention
– Content and offers should encourage repeat visitors
• Service quality
• Branding
– To reassure

42. 42
Risk/reward analysis
Figure 8 Example of risk–reward analysis

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44. 44
END
MAANZ MXPress Program