Chapter 5

E-MarketingRevised Date: 2/5/2012

Learning OutcomesDefine e-marketing and its goalsDiscuss e-marketing processesOutline e-marketing strategyDevelop e-marketing plan

Examples

What is marketing?The 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

What is e-marketing?Chaffey (2009) defined:

e-business tools such as web, email, search engine marketing, etc.To identify how to utilize the Internet 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 Profitably

Achieving marketing objectives through the use of electronic communications technology

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

E-marketing planningA e-marketing plan is needed to detail the specific objectives of the e-business strategy through marketing activitiesMay use SOSTAC framework

E-marketing planning-SOSTACDeveloped by Paul Smith (1999)Summarizes the different stages that should be involved in a marketing strategy from strategy development to implementationFigure 8.2 SOSTAC a generic framework for e-marketing planning

SOSTAC-Situation AnalysisTo understand the current and future environment in which the company operatesInvolves consideration of all of the related factors and will form the basis for defining objectives, strategies and tactics

Figure 8.4 Inputs to the e-marketing plan from situation analysisSOSTAC-Situation Analysis

Situation Analysis-Methods

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 marketExampleSituation Analysis-Methods

Situation Analysis-Methods

Competitor Analysis

The monitoring of competitor use of e-commerce to acquire and retain customerCompanies should review:Well-known competitorsWell-known international competitorsNew Internet companies locally and worldwide

Situation Analysis-Methods

Other methodsIntermediary analysisInternal marketing auditFind out what need to be done for these two methods

SOSTAC- Objective SettingSMART approachSpecificMeasurableAchievableRealisticTime-constrainedFind any article about SMARTapproach!!!

Objective Setting-ExamplesStart-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.

SOSTAC- StrategyDefine how e-marketing objectives will be achieved.Evaluation and selection of appropriate market segments and the development of appropriate offersRefer to strategy definition chapter 5 (text book) chapter 4 (notes)

Figure 8.8 Stages in target marketing strategy developmentTarget market strategiesSOSTAC- Strategy5 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?

Characteristics of new marketing communications tools 6 IsInteractivityIntelligenceIndividualizationIntegrationIndustry restructuringIndependence of location

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

Characteristics- IntelligenceLow cost method for market research Create two ways interactionSpeed up communication processGather and disseminate information can be done continuouslyEx. Nestle is able to profile their customers based on the information received through questionnaire

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)Characteristics- Individualization

Individualization- Example

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

Integration- Example

Integration -Examples of integrated communication toolsThe internet can be used as a direct-response tool enabling customers to respond to offers and promotions publicized in other mediaThe 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 buyingIntegration- Example

Characteristic-Industry restructuringDisintermediationReintermediationCountermediationKey concepts- Find out howthese concepts can benefit your e-marketing plan

Characteristic-Independence of locationPossibility to reach global marketHow this affect your marketing plan?

SOSTAC-TacticsCover the 7ps.Self reading on this part, page 365-372.

Tactics

Online value propositionA 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 processHow the proposition will be delivered and supported by resources is the proposition genuine? Will resources be internal or external?

Tactic- ExampleCompare. Buy. Save. Kelkoo (www.kelkoo.com) Earths biggest selection. Amazon (www.amazon.com)Search the largest inventory of cars and trucks on the Internet. More than 1.5 million listings, updated daily (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:Welcome to Citibank: The one-stop solution for all your financial needs.Look for a product or service; Learn about a financial product; Find a location.

Tactic-Product Extend range of product (Tesco)Narrow range of product (Apple)Online-only products (banks)Develop new brand (Maybank2u/ Click CIMB)Migrate existing brand (HSBC/ Airasia)Partner with online brand (Waterstones and Amazon).

Tactic-Product (Example)

Tactic-PriceDifferential 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):RentalPay per useReverse auctions (B2B)Dynamic pricing (Concert tickets).

Tactic-Implications for priceIncreased price transparency Downward pressure on priceNew pricing approachesAlternative pricing structure or policies

Tactic- PlacePlace = avoiding channel/ marketplace conflictsDisintermediation sell direct Reintermediation partner with new intermediariesCountermediation:Form new intermediariesPartner with existing intermediariesDistance from intermediaries.

Tactic-Implications on placePlace of purchaseNew channel structuresChannel conflictsVirtual organizations

Tactic- PromotionSelective use of new online tools for different stages of the buying process and customer lifecycleOnline 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 > onlineTactic- Promotion

TacticPeopleAutomate use web self-service, offer customer choiceProcessChange process for service contact strategiesPhysical evidenceSite design differentiate or support brandFulfillment quality.

Online Branding

Materials:

http://www.youtube.com/watch?v=VWhbyjGtYWY

Online Branding- Class ActivityWhat comprises a successful online brand? What do you think?High traffic?Good name recognition? Sites with modest sales?Profitable brand?Good customer service?What does branding means in online context?How important is branding to an existing companies?

Online BrandingA brand the characteristic of product or services perceived by a user that uniquely meet their needs.Branding a process of creating and evolving successful brands.Refer to definition given in page 373.

Online Branding3 characteristics highlighted by this definitionBrand is dependent on customer perceptionPerception is influenced by the added value characteristics of the productThe added value characteristics need to be sustainable

Online BrandingBrand identityAnything about the brand including name and symbol that must be communicated to increase brand awareness.NOW EVERYBODY CAN FLYWhat does this tell you?

Online BrandingBrand identityOptions for changing brand identity onlineTransfer traditional brand onlineExtend traditional brandPartner with existing digital brandCreate a new digital brandSelf reading- Mini case study 8.1 : Napster.com brand identity, page 375-376.

Online brandingSuccess factors:Content qualityAdequate performance of web site architectureAfter sales supportQuality of responses to enquiries and fulfillmentAcknowledgement of customer privacyReflecting and supporting the characteristics of the offline brand

SOSTAC-ActionNeed to finalize the actions required to execute the plan, for example: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?Refer to page 380 -381- an example of B2B e-marketing plan

SOSTAC- ControlIt can be achieved through a combination of traditional techniques such asConduct marketing research Analysis of web-server log files Intranets can be used to share informationRead case study 8.2- page 381- Napster marketing mix

SOSTAC- ExampleTo launch a e-laundry business at UNITEN

ComponentWhat need to be doneSituation analysis (what is it?) who is our potential customers? Students? Staff? Public? where we should operate? how can we promote the service online? Any demand?Objective (who are we? Where are we now? What we want to be?) vision : to deliver the best laundry services mission Objective: to gain profit 15% through online servicesStrategy (what we should do to achieve the objective) promote the services to students and staff fulfillment of services within 24 hoursTactic (how we should execute the strategy) online marketing member get member program human resource for delivery and pickupAction ( what need to be done) online advertisement at Unitens website incentive such as reward point for member get member program hire students for delivery and pickupControl (how to monitor and maintain) measure quality of work, man hour, punctuality

Issues with varying the mix onlineDo we vary the mix online or replicate offline?Is the offer clear brand proposition, online offerIs online differentiation defined?Is online differentiation communicated?Key online mix variablesProductPricePlacePromotionService: People, Process, Physical evidence

Figure 8.13 The elements of the marketing mixThe Marketing Mix using 7Ps

SummaryE- marketing the application of technology to achieve marketing objectivesIt is how you want to market/sell your product and services online.SOSTAC framework can be used as a guideline to develop e-marketing plan.

TutorialDefine e-marketingDescribe SOSTAC frameworkSummarize the opportunity to vary the marketing mix.Develop an e-marketing plan for the business of your choice.

ReferencesGoogle Image, http://www.google.com accessed on 13 April 2011.Chaffey, D., (2007, 2009), E-Business and e-Commerce Management, 3rd and 4th Edition, Prentice Hall.

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