Topic 10 Emarketing plan 1

CHAPTER 8
Slide 8.1

E-MARKETING

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007

2

Learning outcomes
 Assess the need for separate e-business and e-
marketing strategies
 Create an outline e-marketing plan intended to
implement the e-marketing strategy
 Distinguish between marketing communication
characteristics of traditional and new media.


3

Management issues
 How do we integrate traditional marketing
approaches with e-marketing?
 How can we use electronic communications to
differentiate our products and services?
 How do we redefine our marketing and
communications mixes to incorporate new
media?


4

Marketing
 The definition of marketing by the Chartered Institute of
Marketing (http://www.cim.co.uk/) is:

‘M rke ting is the m a na g e m e nt p ro c e s s re s p o ns ible fo r
a
id e ntify ing , a ntic ip a ting a nd s a tis fy ing c us to m e r
re q uire m e nts p ro fita bly ’

 Whic h e -m a rke ting to o ls c a n a s s is t?
 We b, e -m a il, d a ta ba s e s , wire le s s a nd d ig ita l te le v is io n.


5

How do e-tools support
marketing?
 I e ntify ing – ho w c a n the I rne t be us e d fo r m a rke ting
d nte
re s e a rc h to find o ut c us to m e rs ’ ne e d s a nd wa nts

 A ip a ting – a ntic ip a ting the d e m a nd fo r d ig ita l s e rvic e s
ntic

 Sa tis fy ing – ho w to a c hie ve c us to m e r s a tis fa c tio n thro ug h
the e le c tro nic c ha nne l

 Pro fita bly


Figure 8.1 The e-marketing plan in the context of other plans

7

E-marketing defined
 Achieving marketing objectives through use of
electronic communications technology
 Another similar term is digital marketing


8

E-marketing planning
 A e-marketing plan is needed to detail the
specific objectives of the e-business strategy
through marketing activities


Figure 8.2 SOSTAC™ – a generic framework for e-marketing planning

10

SOSTAC
 Developed by Paul Smith (1999)
 Summarizes the different stages that should
be involved in a marketing strategy from
strategy development to implementation


Is a separate e-marketing plan
Slide 8.11

required?
 Customer demand will be underestimated
 Existing and start-up competitors will gain
market share
 Duplication of resources
 Insufficient resources will be devoted to
planning
 Insufficient customer data are collected
 Efficiencies available through online marketing
will be missed

Figure 8.3 Usage of detailed e-marketing plans in UK e-commerce organizations
Source: E-consultancy (2005)

Figure 8.4 Inputs to the e-marketing plan from situation analysis

14

Situation Analysis
 To understand the current and future
environment in which the company operates
 Involves consideration of all of these factors
and will form the basis for defining objectives,
strategies and tactics


15

Demand analysis
 What percentage of customer businesses have access to
the Internet?
 What percentage of members of the buying unit in these
businesses have access to the Internet?
 What percentage of customers are prepared to purchase
your particular product online?
 What percentage of customers with access to the Internet
are not prepared to purchase online, but are influenced by
web-based information to buy products offline?
 What are the barriers to adoption amongst customers and
how can we encourage adoption?


Figure 8.5 Customer demand analysis for the car market

17

Competitor Analysis
 The monitoring of competitor use of e-
commerce to acquire and retain customer
 Companies should review:
 Well-known competitors
 Well-known international competitors
 New Internet companies locally and worldwide


18

Benchmarking solutions
 Fina nc ia l p e rfo rm a nc e
 M rke tp la c e p e rfo rm a nc e – market share and sales trends and significantly
a
the proportion of sales achieved through the Internet.
 Bus ine s s a nd re ve nue m o d e ls – do these differ from other marketplace
players?
 M rke ting c o m m unic a tio ns te c hniq ue s – is the customer value proposition of
a
the site clear? Does the site support all stages of the buying decision from
customers who are unfamiliar with the company through to existing
customers, are special promotions used on a monthly or periodic basic?
Beyond the competitor’s site, how do they make use of intermediary sites to
promote and deliver their services?
 Se rvic e s o ffe re d – what is offered beyond brochureware? Is online purchase
possible, what is the level of online customer support and how much technical
information is available?
 I p le m e nta tio n o f s e rvic e s – these are the practical features of site design
m
such as aesthetics, ease of use, personalization, navigation and speed.
 The 7Ps.


19

Intermediary analysis
 Identifying relevant intermediaries for a
particular marketplace
 Identify strategic partners when executing an
online advertising campaigns
 To consider the way the marketplace is
operating


20

Internal marketing audit
 Bus ine s s e ffe c tive ne s s : Contribution of site to revenue (see objective
setting), profitability and any indications of the corporate mission for the
site. The costs of producing and updating the site will also be reviewed, i.e.
cost-benefit analysis.
 M rke ting e ffe c tive ne s s . These measures may include:
a
 leads; sales; retention; market share; brand enhancement and loyalty;
 Customer service.
 These measures will be assessed for each of the different product lines
delivered through the web site. The way in which the elements of the marketing
mix are utilized will also be reviewed.
 I rne t e ffe c tive ne s s : These are specific measures that are used to
nte
assess the way in which the web site is used, and the characteristics of the
audience.
 Such measures include specialist terms such as hits and page impressions that
are collected from the log file, and also more typical techniques such as focus
groups and questionnaires to existing customers. From a marketing point of
view, how clear the value proposition of the site for the customer, is should be
noted.


21

OBJECTIVE SETTING

SMART e-marketing objectives
Slide 8.22

 Specific
 Measurable
 Achievable
 Realistic
 Time-constrained


23

Examples of SMART e-
marketing objectives
 Start-ups – acquiring a specific number of new customers or to sell
advertising space to generate a specified revenue that will hopefully
exceed investment in site creation and promotion!
 Established mobile-phone operator – increase customer retention by
reducing churn from 25 per cent to 20 per cent.
 Established media company – increase online revenue, target of 20
per cent online contribution to revenue by offering new online services
and media sales.
 Established business-to-business engineering company – increase
overall revenue by 5 per cent, through targeting sales in new
international markets.
 Reduce costs of routine customer service by 10 per cent to enable
focus on delivery of specialized customer service.


Assessment of the future online promotion contribution and online revenue
Figure 8.6
for The B2B Company, for Product A, Europe

The Online Revenue
Slide 8.25

Contribution
 A measure of extent to which a company’s
online presence directly impacts on the sales
revenue of the organization


26

STRATEGY

27

De Kare Silvers ES test
1. Pro d uc t c ha ra c te ris tic s . Does the product need to be
physically tried or touched before it is bought?
2. Fa m ilia rity a nd c o nfid e nc e . Considers the degree the
consumer recognizes and trusts the product and brand.
3. Co ns um e r a ttribute s . These shape the buyer’s behaviour
– are they amenable to online purchases in terms of
access to the technology skills available and do they no
longer wish to shop for a product in a traditional retail
environment?


28

ES Test results
Product 1. Product 2. 3. Consumer Total
characteristics Familiarity attributes (30)
(10) and
confidence
(10)

1. Groceries 4 8 15 27

2. Mortgages 10 1 4 15

3. Travel 10 6 15 31

4. Books 8 7 23 38


Figure 8.8 Stages in target marketing strategy development

30

Target market strategies
 Evaluation and selection of appropriate
segments and the development of appropriate
offers
 5 questions when developing strategy:
 Who are our customers?
 How are their needs changing?
 Which do we target?
 How can we add value?
 How do we become first choice?


31

Characteristics of new-media
marketing communications
 Interactivity
 Intelligence
 Individualization
 Integration
 Industry restructuring
 Independence of location


Summary of communication models for (a) traditional media,
Figure 8.9
(b) new media

33

Intelligence


Summary of degree of individualization for (a) traditional media (same
Figure 8.10
message), (b) new media (unique messages and more information exchange
between customers)

35

Individualization


Figure 8.11 Channels requiring integration as part of integrated e-marketing strategy

37

Integration


38

www.dell.com.my


Examples of integrated
Slide 8.39

communication tools
 The internet can be used as a direct-response
tool enabling customers to respond to offers
and promotions publicized in other media
 The web site can have a direct response or
callback facility built into it.
 The Internet can be used to support the
buying decision even if the purchase does not
occur via web site.


Figure 8.12 Channel integration required for e-marketing and mixed-mode buying

41

TACTICS

42

Online value proposition
 A clear differentiation of the proposition from competitors
based on product features or service quality.
 Target market segment(s) that the proposition will appeal to.
 How the proposition will be communicated to site visitors
and in all marketing communications. Developing a tag line
can help this.
 How the proposition is delivered across different parts of the
buying process
 How the proposition will be delivered and supported by
resources – is the proposition genuine? Will resources be
internal or external?


43

Example OVPs
 ‘Co m p a re . Buy . Sa ve ’. Kelkoo (www.kelkoo.com)
 ‘Ea rth’s big g e s t s e le c tio n’. Amazon (www.amazon.com)
 ‘Se a rc h the la rg e s t inve nto ry o f c a rs a nd truc ks o n the
I rne t. M re tha n 1 . 5 m illio n lis ting s , up d a te d d a ily ’ (
nte o
www.autotrader.com)
 The Citibank site design (www.citibank.com) uses a range
of techniques to illustrate its core proposition and OVP.
The main messages are:
 We lc o m e to Citiba nk: The o ne -s to p s o lutio n fo r a ll y o ur fina nc ia l
ne e d s .
 Lo o k fo r a p ro d uc t o r s e rv ic e ; Le a rn a bo ut a fina nc ia l p ro d uc t; Find
a lo c a tio n.


44

Issues with varying the mix online
 Do we vary the mix online or replicate offline?
 Is the offer clear – brand proposition, online offer
 Is online differentiation defined?
 Is online differentiation communicated?
 Key online mix variables
 Product
 Price
 Place
 Promotion
 Service: People, Process, Physical evidence


The Marketing Mix

Figure 8.13 The elements of the marketing mix

46

Product
 Extend range (Tesco)
 Narrow range (WH Smith iDTV)
 Online-only products (banks)
 Develop new brand (Egg)
 Migrate existing brand (HSBC)
 Partner with online brand (Waterstones and
Amazon).


47

Product


48

Price
 Differential pricing:
 Reduce online prices due to price transparency and
competition (easyJet)
 Maintain price to avoid cannibalisation of offline
sales (Dixon)
 New pricing options (software, music):
 Rental
 Pay per use
 Reverse auctions (B2B)
 Dynamic pricing (Concert tickets).


49

Implications for price
 Increased price transparency
 Downward pressure on price
 New pricing approaches
 Alternative pricing structure or policies


50

Place
 Place = avoiding channel conflicts
 Disintermediation – sell direct
 Reintermediation – partner with new
intermediaries
 Countermediation:
 Form new intermediaries
 Partnerwith existing intermediaries
 Distance from intermediaries.
(Abbey National)


51

Implications on place
 Place of purchase
 New channel structures
 Channel conflicts
 Virtual organizations


52

Promotion
 Selective use of new online tools for different
stages of the buying process and customer
lifecycle
 Online only campaigns
 Integrated campaigns – incorporating online
tools into communications mix.


Options for the online vs offline communications mix (a) online > offline,
Figure 8.14
(b) similar online and offline, (c) offline > online

54

Service
 People
 Automate – use web self-service,
offer customer choice
 Process
 Change process for service – contact strategies
 Physical evidence
 Site design – differentiate or support brand
 Fulfillment quality.


55

Branding
Malcolm McDonald in their classic 1992 book,
Cre a ting Po we rful Bra nd s as a n id e ntifia ble
p ro d uc t o r s e rvic e a ug m e nte d in s uc h a wa y
tha t the buy e r o r us e r p e rc e ive s re le va nt uniq ue
a d d e d va lue s whic h m a tc h the ir ne e d s m o s t
c lo s e ly . Furthe rm o re , its s uc c e s s re s ults fro m
be ing a ble to s us ta in the s e a d d e d va lue s in the
fa c e o f c o m p e titio n.


Options for changing brand
Slide 8.56

identity online
 Transfer traditional brand online
 Extend traditional brand
 Partner with existing digital brand
 Create a new digital brand


Figure 8.15 Percent of marketing communications budget spent on e-communications
(n = 76)
Source: E-consultancy (2005)

Changes to brand perception and behaviour as a result of using the
Figure 8.16
Internet for research
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004

The influence of brand knowledge on purchase. Matrix for question ‘I will
Figure 8.17
buy a product if …’
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004

60

Actions
 What level of investment in the Internet
channel is sufficient to deliver services?
 What training of staff is required?
 What new responsibilities are required for
effective Internet marketing?
 Are changes in organizational restructuring
required?
 What activities are involved in creating and
maintaining the web site?


61

Control
 Conduct marketing research
 Analysis of web-server log files
 Intranets can be used to share information


Topic 10 Emarketing plan 1

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