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E-marketing

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Figure 8.12 The extent to which different types of segmentation variables tend to be ... on the elements of market mix ... use Reverse auctions (B2B) ... – PowerPoint PPT presentation

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Title: E-marketing


1
E-marketing
Chapter 8
2
Econsultancy Interview
  • Read the Econsultancy Interview on pp. 415-416 of
    Chapter 8 and visit the Guess.com to answer the
    following questions
  • Do you see the branding or the store when you
    first visit the Guess.com?
  • How do they choose online partners?

3
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.

4
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?

5
E-marketing
  • What is marketing?
  • Marketing is the management process responsible
    for identifying, anticipating and satisfying
    customer requirements profitability.
    http//www.cim.co.uk/resources/understandingmarket
    /definitionmkting.aspx
  • http//en.wikipedia.org/wiki/Marketing
  • What is e-marketing?
  • The application of marketing principles and
    techniques to achieve marketing goals via
    e-communication technology.http//www.quirk.biz/r
    esources/88/What-is-eMarketing-and-how-is-it-bette
    r-than-traditional-marketing

6
E-Marketing
  • Which e-marketing tools can assist and how?
  • Identifying customer needs
  • Anticipating demand for digital services
  • Satisfying customer needs
  • Profitably

7
Figure 8.1 The operational and management
processes of e-marketingSource Econsultancy
(2008)
8
Figure 8.1 The operational and management
processes of e-marketing (Continued)Source
Econsultancy (2008)
9
Figure 8.2 The e-marketing plan in the context
of other plans
10
E-Marketing Plan
Figure 8.3 SOSTAC a generic framework for
e-marketing planning
11
SOSTAC
  • The last slide mentioned 5S, which is translated
    from Japanese http//en.wikipedia.org/wiki/5S_28m
    ethodology29
  • Sorting
  • Straighten
  • Sweeping (Systematic Cleaning)
  • Standardizing
  • Sustaining

12
Figure 8.4 Usage of detailed e-marketing plans
in e-commerce organizationsSource Econsultancy
(2008)
13
Situation Analysis
Figure 8.5 Inputs to the e-marketing plan from
situation analysis
14
Situation AnalysisSWOT Analysis

Figure 8.6
15
Situation Analysis--Example SWOT Analysis
Figure 8.6
16
Situation Analysis
  • Demand Analysis
  • Web search report such as Google Adwords, ref. p.
    423. table 8.1
  • Consumer research report, ref. p. 423, Fig. 8.7

17
Situation Analysis-Customer demand analysis for
the car market
Figure 8.7
18
Situation Analysis
  • Competitor Analysis
  • The suggested aspects to be analyzed are list on
    p. 426 in the text.
  • A common approach is benchmark testing of various
    aspects between the company and its competitors.

19
Situation AnalysisBenchmarking
  • Financial performance current profitability of
    e-channel activities
  • Marketplace performance market share and sales
    trends and significantly the proportion of sales
    achieved through the Internet.
  • Business and revenue models do these differ
    from other marketplace players?
  • Marketing communications techniques is the
    customer value proposition of 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
    basis? Beyond the competitors site, how do they
    make use of intermediary sites to promote and
    deliver their services?

20
Situation AnalysisBenchmarking
  • Services offered what is offered beyond
    brochureware? Is online purchase possible, what
    is the level of online customer support and how
    much technical information is available?
  • Implementation of services these are the
    practical features of site design such as
    aesthetics, ease of use, personalization,
    navigation and speed.
  • The 7Ps-product, price, package, promote, place,
    positioning, people

21
Situation AnalysisBenchmarking
Figure 8.8 Benchmark comparison of corporate
websitesSource Bowen Craggs Co
(www.bowencraggs.com)
22
Situation AnalysisBenchmarking
  • Intermediary Analysis
  • Who are the intermediaries of the business?
  • Why this analysis is important?
  • Internal Marketing Audit
  • Business effectiveness
  • Marketing effectiveness
  • Internet effectiveness

23
Objective Setting
  • Effective strategies are based on and support
    clearly defined business objectives.
  • SMART should be used to guide the objective
    setting
  • ExamplesRef. p. 429, Table 8.3, p. 430, table
    8.4

24
Table 8.3 The relationship of objectives,
strategies and performance indicators for a B2B
company (in order of priority)
25
Table 8.3 The relationship of objectives,
strategies and performance indicators for aB2B
company (in order of priority) (Continued)
26
Table 8.4 Example Internet marketing objectives
within the balanced scorecard framework for a
transactional e-commerce site
27
Objective Setting
Figure 8.9 Future online promotion contribution
and online revenue for a B2B company
28
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 to
    20
  • Established media company increase online
    revenue, target of 20 online contribution to
    revenue by offering new online services and media
    sales

29
Examples of SMART e-marketing objectives
  • Established business-to-business engineering
    company increase overall revenue by 5, through
    targeting sales in new international markets
  • Reduce costs of routine customer service by 10
    to enable focus on delivery of specialized
    customer service

30
Case Study
  • Read Case Study 8.1 EasyJet on pp. 431-433 and
    visit the EasyJet.com website
  • Answer the questions 1-3 on p. 433

31
Strategy Setting
  • It defines how the e-marketing objectives will be
    achieved.
  • Exampleref. pp. 434-435, table 8.5

32
Strategy Setting
Table 8.5 Summary of typical focus for main
types of e-commerce-related strategic initiatives
33
Strategy Setting
Table 8.5
34
Strategy Setting
Table 8.5 Summary of typical focus for main
types of e-commerce-related strategic initiatives
(Continued)
35
Strategy SettingDe Kare Silvers ES test
  • The author suggests that the likelihood of a
    customer buying online is affected by
  • Product characteristics. Does the product need to
    be physically tried, or touched before it is
    bought?
  • Familiarity and confidence. Does the consumer
    recognizes and trusts the product and brand?
  • Consumer attributes. These shape the buyers
    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?

36
Strategy Setting
Table 8.6 Product scores in de Kare-Silver
(2000), electronic shopping potential test
37
Strategy Setting
  • Marketing and Product Positioning
  • the aggregate perception the market has of a
    particular company, product or service in
    relation to their perceptions of the competitors.
    http//en.wikipedia.org/wiki/Positioning_28market
    ing29
  • Ch 5, Fig. 5.19 on p.301 presents options to gain
    certain market positions
  • Digital products may be offered on the web to
    enhance the value of existing products

38
Strategy Setting --target marketing strategy
development
Figure 8.11
39
Strategy Setting
  • Target Market Strategies
  • Evaluation and selection of appropriate segments
    and the development of appropriate offers
  • It involves 4 stages as displayed in Fig. 8.11 on
    p. 437
  • Various options for a digital marketing campaign
    are summarized in table 8.7 on p. 438 displayed
    on the next slide

40
Table 8.7 A range of targeting and segmentation
approaches for a digital campaign
41
Strategy Setting
  • Target Market StrategiesOnline Campaign
  • Should we target the campaign based on one
    variable or multiple variables?
  • Depending on what variables are used, the
    response rate changes as displayed on the next
    slide.

42
Figure 8.12 The extent to which different types
of segmentation variables tend to be predictive
of response
43
Strategy Setting
  • 5 questions should be asked when setting the
    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?

44
Strategy Setting
  • Online value proposition
  • A clear differentiation of the proposition from
    competitors based on product features or service
    quality http//en.wikipedia.org/wiki/Perceptual_ma
    pping
  • 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

45
Strategy Setting
  • Online value proposition
  • 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?

46
Strategy Setting
  • Example OVPs
  • Compare. 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

47
Figure 8.13 Firebox (www.firebox.com) Use Web
2.0 for interaction
48
New Media Marketing
  1. Interactivity
  2. Intelligence
  3. Individualization
  4. Integration
  5. Industry restructuring
  6. Independent of location

49
Figure 8.14 Summary of communication models for
(a) traditional media,(b) new media
50
Figure 8.15 Summary of degree of
individualization for (a) traditional media(same
message), (b) new media (unique messages and more
informationexchange between customers)
51
Figure 8.16 Channels requiring integration as
part of integrated e-marketing strategy
52
Figure 8.17 Channel integration required for
e-marketing and mixed-mode buying
53
Tactics
  1. Market tactics are traditional based on the
    elements of market mix (4 Ps and 7Ps)
  2. Alternatives approaches include customer-driven
    tactics ad customer-relationship management

54
Figure 8.18 The elements of the marketing mix
55
TacticsIssues with 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

56
Figure 8.19 Zipfs law, showing decrease in
popularity of items within an ordered
sequenceRead Box 8.2 on p. 450
57
Tactics Online mix options
  • Product
  • Extend range
  • Narrow rangeonly some products online
  • Online-only products (banks)
  • Develop new brand (Egg, CanadianTire bank)
  • Migrate existing brand (HSBC)
  • Partner with online brand (Waterstones and
    Amazon)
  • More optionsref. p. 452

58
Tipping Point
  • Read the Box 8.3 on pp. 452-453
  • What is the tipping point as discussed?
  • What is stickiness factor as discussed?
  • How can the stickiness factor concept be applied
    for ecommerce website?

59
Case Study 8.2
  • Read the case study on pp. 453-456
  • Answer the question on p. 456
  • What do you think about the effectiveness of the
    Dell model?

60
Tactics Online mix options
  • Price
  • Differential pricing
  • Reduce online prices due to price transparency
    and competition (easyJet)
  • Maintain price to avoid cutting into offline
    sales (Dixon)
  • New pricing options (software, music)
  • Rental
  • Pay per use
  • Reverse auctions (B2B)
  • Dynamic pricing (Concert tickets)

61
Figure 8.20 Price elasticity of demand for a
relatively elastic product Price Elasticity
change in quantity demanded / change in price
62
Tactics Online mix options
  • Place avoiding channel conflicts
  • How to avoid channel conflct?
  • Disintermediation sell direct
  • Reintermediation partner with new
    intermediaries
  • Countermediation
  • Form new intermediaries
  • Partner with existing intermediaries
  • Distance from intermediaries (Abbey National)

63
Tactics Online mix options
  • Promotion
  • Promotion elementsRef. p.462, Table 8.8
  • 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

64
Figure 8.22 Options for the online vs offline
communications mix (a) online gt offline,(b)
similar online and offline, (c) offline gt online
65
Tactics Online mix options
  • Typically important for service delivery
  • http//marketingteacher.com/Lessons/lesson_marketi
    ng_mix.htm
  • Peopleinteraction with customers
  • 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

66
Branding
  • Leslie de Chernatony and Malcolm McDonald
    described brand 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.

67
BrandingAaker brand equity
  • Brand awareness
  • Perceived quality
  • Brand associations
  • Brand loyalty

How can these be enhanced online for the B2C
Company?
68
Table 8.9 Traditional measures of brand equity
and online measures of brand equity
69
Branding-Identity
  • 8 Principles for choosing a brand name
  • Short
  • Simple
  • Suggestive of the category
  • Unique
  • Illiterative
  • Speakable
  • Shocking
  • Personalized

70
Figure 8.23 Changes to brand perception and
behaviour as a result of using the Internet for
researchSource BrandNewWorld AOL UK/Anne Molen
(Cranfield School of Management)/Henley Centre,
2004
71
Figure 8.24 The influence of brand knowledge on
purchase. Matrix for question I willbuy a
product if Source BrandNewWorld AOL UK/Anne
Molen (Cranfield School of Management)/Henley
Centre, 2004
72
Actions and Control
  • What activities should be conducted
  • Questions to be asked
  • Typical e-marketing plan frameworkref. pp.
    469-470
  • Control can be achieved using both traditional
    marketing research and web analytics

73
Case Study
  • Read Case Study 8.3 on pp.471-475 and visit the
    napster.com
  • Answer the question on p.475

74
Figure 8.25 Napster (www.napster.co.uk)
75
NEXT CLASS
  • Read the Econsultancy interview on pp 484-485 and
    visit http//www.warnerleisurehotels.co.uk/
  • Answer these questions
  • What did Warner Breaks (WB) found about the
    online marketing?
  • What did they do to attract and retain customers?
  • What special about the older generation regarding
    on line transactions?
  • Do you feel that their website is well-designed
    for the targeted audience?
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