Ch08-e Marketing Lecture
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Transcript of Ch08-e Marketing Lecture
Slide 8.1
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
CHAPTER 8E-MARKETING
Slide 8.2
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
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.
Slide 8.3
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
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?
Slide 8.4
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
MarketingThe definition of marketing by the Chartered Institute of Marketing (http://www.cim.co.uk/) is:
‘Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably’
Slide 8.5
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
How do e-tools support marketing?
Identifying – how can the Internet be used for marketing research to find out customers’ needs and wants
Anticipating – anticipating the demand for digital services
Satisfying – how to achieve customer satisfaction through the electronic channel
Slide 8.6
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
E-marketing defined
Achieving marketing objectives through use of electronic communications technology
Another similar term is digital marketing
Which e-marketing tools can assist? Web, e-mail, databases, wireless and digital
television.
Slide 8.7
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Distinguish between e-marketing, e-business, and e-commerce E-marketing is a subset of e-business E-commerce is a subset of e-business E-commerce involve both bye side and
sell side transaction E-marketing concentrate on sell side
transaction and communication
Slide 8.8
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
E-marketing planning
A e-marketing plan is needed to detail the specific objectives of the e-business strategy through marketing activities
Slide 8.9
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Is a separate e-marketing plan required? Customer demand will be
underestimated Existing and start-up competitors will
gain market share Duplication of resources Insufficient customer data are collected Efficiencies available through online
marketing will be missed
Figure 8.2 SOSTAC™ – a generic framework for e-marketing planning
Situation: where are we now?
Objectives: where do we want to be?
Strategy: how do we get there?
Tactics: how exactly we get there?
Actions: what is our plan?
Control: did we get there?
Slide 8.11
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
SOSTAC
Developed by Paul Smith (1999) Summarizes the different stages that
should be involved in a marketing strategy from strategy development to implementation
Slide 8.12
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
SITUATION ANALYSIS
1-STAGE OF ‘SOSTAC’
Slide 8.13
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Situation Analysis
Aim is to understand the current and future environment in which the company operates.
Environment analysis and review of internal processes and resources
Figure 8.4 Inputs to the e-marketing plan from situation analysis
Slide 8.15
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Demand analysis It examines use of digital channel by current and
projected customers within different target markets.
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
Slide 8.17
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Competitor Analysis
The monitoring of competitor use of e-commerce to acquire and retain customer
Companies should review: Well-known local competitors Well-known international competitors New Internet companies locally and
worldwide
Slide 8.18
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Competitor Analysis
Equation used to appraise competitors:
Product quality * service quality
Customer value = ____________________________
Price * fulfillment time
Slide 8.19
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Intermediary analysis
To what extent competitors are using disintermediation or reintermediation
Identifying relevant intermediaries for a particular marketplace
Identify strategic partners when executing an online advertising campaigns
Slide 8.20
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Internal marketing audit
This will assess the capability of the resources of the company such as its people, processes and technology to deliver e-marketing compared with its competitors
Review the following elements of an e-com site…….
Slide 8.21
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Internal marketing audit Business effectiveness:
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.
Marketing effectiveness. These measures may include: 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.
Internet effectiveness: These are specific measures that are used to 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.
Slide 8.22
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
OBJECTIVE SETTING
2-STAGE OF ‘SOSTAC’
Slide 8.23
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
SMART e-marketing objectives Specific Measurable Achievable Realistic Time-constrained
Slide 8.24
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
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.
Slide 8.25
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
The Online Revenue Contribution A measure of extent to which a
company’s online presence directly impacts on the sales revenue of the organization
An assessment of the direct contribution of the internet or other digital media to sales
ORC objective can be specified for different type of products, customer segments, geographical markets
ORC objective can also be set for different digital channels such as web, mobile or interactive digital TV.
Slide 8.26
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
STRATEGY
3- stage
Slide 8.27
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Strategy
The strategy element of an e-marketing plan defines how e-marketing objectives will be achieved.
Slide 8.28
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Target market strategies
Evaluation and selection of appropriate segments and the development of appropriate offers
5 questions when developing customer-centric strategy for e-marketing: Who are our customers? How are their needs changing? Which do we target? How can we add value? How do we become first choice?
Slide 8.29
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Characteristics of new-media marketing communications
Traditional media: TV, radioNew digital media: web sites, interactive
TV, mobile commerceSummery of difference : ‘6 I’ of e-
marketing Interactivity Intelligence Individualization Integration Industry restructuring Independence of location
Slide 8.30
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
6 I’s
Interactivity Traditional media is push media where
the marketing message is broadcast from company to customer
Limited interaction with customer Internet is a pull media where customer
initiate contact and seek information on web site
Internet used to encourage two-way communication.
Figure 8.9 Summary of communication models for (a) traditional media,(b) new media
Slide 8.32
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Intelligence
Internet is Low cost method of collecting marketing research about customer perception of product and services.
It is Used to create two way feedback It is used to collect marketing research
information Company can respond in real time to
buyer behavior
Slide 8.33
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Individualization
Traditional media: same message broadcast to everyone
Internet: information is not unique to individuals, but to those with a common interest
Figure 8.10 Summary of degree of individualization for (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)
Slide 8.35
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Integration
Internet provides scope for integrated marketing communication
It is just one of many different media channels
Figure 8.11 Channels requiring integration as part of integrated e-marketing strategy
Slide 8.37
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Examples of integrated 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 called as mixed-mode buying or channel switching
Figure 8.12 Channel integration required for e-marketing and mixed-mode buying
Slide 8.39
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Industry restructuring
Disintermediation, reintermediation, countermediation concepts should be considered.
Which intermediaries should we be represented on?
Slide 8.40
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Independence of location
Electronic media gives opportunities to sell into international market.
Slide 8.41
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
TACTICS
4 - stage
Slide 8.42
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Tactics
Marketing tactics to implement strategy and objective, are based on the elements of marketing mix.
marketing mix: 4 P’s ?Product, Price, Place, Promotion
+ People, processes, physical evidence
=7 P’s
Slide 8.43
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Tactic
Marketing mix provide a framework to vary different elements of the product offering to influence demand for the product within the target market
Eg. To increase sales of product , price can be decreased
Figure 8.13 The elements of the marketing mix
The Marketing Mix
Slide 8.45
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Product Core product (digital product/information
about product) Extended product
(warranties/guarantees/money back offers)
Mass customization of 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).
Slide 8.46
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Product
Slide 8.47
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Price
Price element of marketing mix refers to an organizations pricing policies which are used to set price for product and services
Start-up companies use low prices to gain a customer base
Reduce online prices due to price transparency and competition
Maintain price to avoid cannibalization (negative result) of offline sales
Slide 8.48
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Implications of the internet for price
1) Increased price transparency Customers may be able to quickly find
out about price discrimination and they will object to it.
Customer knowledge of pricing is enhanced through internet
Customer can visit sites of rival suppliers or can visit sites of price comparison engines like kelko and Pricerunner
Slide 8.49
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
2) Downward pressure on price Use of auction in B2B exchange can
drive down the price3) New pricing approaches Dynamic pricing: new customers will be
automatically given discounted purchases for the first three items
Slide 8.50
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
4) Alternative pricing structure or policies
Basic price Discount Guarantees and warranties Order cancellation terms Refund policies
Slide 8.51
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Place
Internet has a global reach
Place = avoiding channel conflicts Disintermediation – sell direct Reintermediation – partner with new
intermediaries Countermediation
Slide 8.52
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Implications on place
Place of purchase: Manufacturers own site, intermediary
New channel structures: Changes introduced by disintermediation,
reintermediation, countermediation Channel conflicts:
Disintermediation threaten distribution arrangement with existing partners
Virtual organizations Internet provide new options for forming
partnership to mutually benefit all parties
Slide 8.53
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Promotion Part of communication strategy This include selection of target market and
integration of different communication tools Internet offers new ,additional marketing
communication channels to inform customers about benefit of product and assist in buying decision
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.
Figure 8.14 Options for the online vs offline communications mix (a) online > offline, (b) similar online and offline, (c) offline > online
Slide 8.55
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
People, process, physical evidence
Important for service delivery 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.
Slide 8.56
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
BrandingMalcolm McDonald in their classic 1992
book, Creating Powerful Brands as an------“ identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition.”
Slide 8.57
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Options for changing brand identity online Transfer traditional brand online Extend traditional brand Partner with existing digital brand Create a new digital brand
Slide 8.58
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
ACTIONS
5 - stage
Slide 8.59
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Actions
It refers to activities conducted by manager to execute plan.
Questions that need to be resolve when specifying actions include:
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? What activities are involved in creating and
maintaining the web site?
Slide 8.60
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
CONTROL
6 - stage
Slide 8.61
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Control
Conduct marketing research Analysis of web-server log files Intranets can be used to share
information