PP 08

Slide 8.
Chapter 8
E-marketing
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009
Slide 8.2
Econsultancy Interview
Read the Econsultancy Interview on pp. 415416 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?
Slide 8.3
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.
Slide 8.4
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?
Slide 8.5
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 ecommunication technology.
http://www.quirk.biz/resources/88/What-is-eMarketing-and-how-is-it-better-than-traditional-marketing
Slide 8.6
E-Marketing
Which e-marketing tools can assist and how?
Identifying customer needs
Anticipating demand for digital services Satisfying customer needs
Profitably
Slide 8.7
Figure 8.1
The operational and management processes of e-marketing
Source: Econsultancy (2008)
Slide 8.8
Figure 8.1
The operational and management processes of e-marketing (Continued)
Slide 8.9
Figure 8.2
The e-marketing plan in the context of other plans
Slide 8.10
E-Marketing Plan
Figure 8.3
SOSTAC a generic framework for e-marketing planning
Slide 8.11
SOSTAC
The last slide mentioned 5S, which is translated from Japanese http://en.wikipedia.org/wiki/5S_%28methodology%29
Sorting Straighten
Sweeping (Systematic Cleaning)

Standardizing Sustaining
Slide 8.12
Figure 8.4
Usage of detailed e-marketing plans in e-commerce organizations
Slide 8.13
Situation Analysis
Figure 8.5
Inputs to the e-marketing plan from situation analysis

Slide 8.14
Situation AnalysisSWOT Analysis
Figure 8.6
Slide 8.15
Situation Analysis--Example SWOT Analysis
Figure 8.6
Slide 8.16
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
Slide 8.17
Situation Analysis-Customer demand analysis for the car market
Figure 8.7
Slide 8.18
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.
Slide 8.19
Situation Analysis
Benchmarking
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?
Slide 8.20
Situation Analysis
Benchmarking
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
Slide 8.21
Situation Analysis
Benchmarking
Figure 8.8
Benchmark comparison of corporate websites
Source: Bowen Craggs & Co (www.bowencraggs.com)
Slide 8.22
Situation Analysis
Benchmarking
Intermediary Analysis
Who are the intermediaries of the business? Why this analysis is important?
Internal Marketing Audit

Business effectiveness Marketing effectiveness Internet effectiveness
Slide 8.23
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
Slide 8.24
The relationship of objectives, strategies and performance indicators for a B2B company (in order of priority)
Table 8.3
Slide 8.25
The relationship of objectives, strategies and performance indicators for a B2B company (in order of priority) (Continued)
Table 8.3
Slide 8.26
Example Internet marketing objectives within the balanced scorecard framework for a transactional e-commerce site
Table 8.4
Slide 8.27
Objective Setting
Figure 8.9 Future online promotion contribution and online revenue for a B2B company
Slide 8.28
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
Slide 8.29
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
Slide 8.30
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
Slide 8.31
Strategy Setting
It defines how the e-marketing objectives will be achieved.
Exampleref. pp. 434-435, table 8.5
Slide 8.32
Strategy Setting
Summary of typical focus for main types of e-commerce-related strategic initiatives

Table 8.5
Slide 8.33
Strategy Setting
Table 8.5
Slide 8.34
Strategy Setting
Summary of typical focus for main types of e-commerce-related strategic initiatives (Continued)
Table 8.5
Slide 8.35
Strategy Setting
De Kare Silvers ES test
The author suggests that the likelihood of a customer buying online is affected by
1. Product characteristics. Does the product need to be physically tried, or touched before it is bought? 2. Familiarity and confidence. Does the consumer recognizes and trusts the product and brand? 3. 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?
Slide 8.36
Strategy Setting
Table 8.6
Product scores in de Kare-Silver (2000), electronic shopping potential test

Slide 8.37
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_%28marketing%29
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
Slide 8.38
Strategy Setting --target marketing strategy development
Figure 8.11
Slide 8.39
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
Slide 8.40
Table 8.7
A range of targeting and segmentation approaches for a digital campaign
Slide 8.41
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.
Slide 8.42
The extent to which different types of segmentation variables tend to be predictive of response
Figure 8.12
Slide 8.43
Strategy Setting
5 questions should be asked when setting the strategy
1. 2. 3. 4. 5. 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 8.44
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_mapping 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
Slide 8.45
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?
Slide 8.46
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
Slide 8.47
Figure 8.13
Firebox (www.firebox.com) Use Web 2.0 for interaction
Slide 8.48
New Media Marketing

1. Interactivity
2. Intelligence
3. Individualization
4. Integration
5. Industry restructuring 6. Independent of location
Slide 8.49
Summary of communication models for (a) traditional media, (b) new media
Figure 8.14
Slide 8.50
Summary of degree of individualization for (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)
Figure 8.15
Slide 8.51
Figure 8.16
Channels requiring integration as part of integrated e-marketing strategy
Slide 8.52
Figure 8.17
Channel integration required for e-marketing and mixed-mode buying
Slide 8.53
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
Slide 8.54
Figure 8.18
The elements of the marketing mix
Slide 8.55
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
Slide 8.56
Zipfs law, showing decrease in popularity of items within an ordered sequenceRead Box 8.2 on p. 450
Figure 8.19
Slide 8.57
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
Slide 8.58
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?
Slide 8.59
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?
Slide 8.60

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)
Slide 8.61
Figure 8.20
Price elasticity of demand for a relatively elastic product
Price Elasticity = %change in quantity demanded / % change in price
Slide 8.62

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)
Slide 8.63

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
Slide 8.64
Options for the online vs offline communications mix (a) online > offline, (b) similar online and offline, (c) offline > online
Figure 8.22
Slide 8.65

Typically important for service delivery
http://marketingteacher.com/Lessons/lesson_marketing_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
Slide 8.66
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.
Slide 8.67
Branding
Aaker brand equity
Brand awareness Perceived quality Brand associations Brand loyalty
How can these be enhanced online for the B2C Company?
Slide 8.68
Table 8.9
Traditional measures of brand equity and online measures of brand equity
Slide 8.69
Branding-Identity
8 Principles for choosing a brand name
Short Simple Suggestive of the category Unique Illiterative Speakable Shocking Personalized
Slide 8.70
Changes to brand perception and behaviour as a result of using the Internet for research
Figure 8.23
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004
Slide 8.71
The influence of brand knowledge on purchase. Matrix for question I will buy a product if
Figure 8.24
Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004
Slide 8.72
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
Slide 8.73
Case Study
Read Case Study 8.3 on pp.471-475 and visit the napster.com Answer the question on p.475
Slide 8.74
Figure 8.25
Napster (www.napster.co.uk)
Slide 8.75
NEXT CLASS
Read the Econsultancy interview on pp 484485 and visit http://www.warnerleisurehotels.co.uk/ Answer these questions
1. What did Warner Breaks (WB) found about the online marketing? 2. What did they do to attract and retain customers? 3. What special about the older generation regarding on line transactions? 4. Do you feel that their website is well-designed for the targeted audience?

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Slide 8.

Identifying customer needs

Anticipating demand for digital services Satisfying customer needs

The operational and management processes of e-marketing

Source: Econsultancy (2008)

The operational and management processes of e-marketing (Continued)

Source: Econsultancy (2008)

The e-marketing plan in the context of other plans

SOSTAC a generic framework for e-marketing planning

Sweeping (Systematic Cleaning)

Usage of detailed e-marketing plans in e-commerce organizations

Source: Econsultancy (2008)

Inputs to the e-marketing plan from situation analysis

Situation AnalysisSWOT Analysis

Situation Analysis--Example SWOT Analysis

Situation Analysis-Customer demand analysis for the car market

Benchmark comparison of corporate websites

Source: Bowen Craggs & Co (www.bowencraggs.com)

Internal Marketing Audit

Examples of SMART e-marketing objectives

Examples of SMART e-marketing objectives

Answer the questions 1-3 on p. 433

Exampleref. pp. 434-435, table 8.5

Summary of typical focus for main types of e-commerce-related strategic initiatives

Product scores in de Kare-Silver (2000), electronic shopping potential test

Ch 5, Fig. 5.19 on p.301 presents options to gain certain market positions

Strategy Setting --target marketing strategy development

A range of targeting and segmentation approaches for a digital campaign

Online value proposition

Online value proposition

Firebox (www.firebox.com) Use Web 2.0 for interaction

New Media Marketing

Channels requiring integration as part of integrated e-marketing strategy

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

of market mix (4 Ps and 7Ps)

The elements of the marketing mix

TacticsIssues with the mix online

Tactics Online mix options

Case Study 8.2

Tactics Online mix options

New pricing options (software, music):

Price elasticity of demand for a relatively elastic product

Price Elasticity = %change in quantity demanded / % change in price

Tactics Online mix options

Tactics Online mix options

Tactics Online mix options

Peopleinteraction with customers

How can these be enhanced online for the B2C Company?

Traditional measures of brand equity and online measures of brand equity

Actions and Control

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