Relate Internet marketing strategy to marketing Relate Internet marketing strategy to marketing

and business strategy

Identify opportunities and threats arising from

the Internet

Evaluate alternative strategic approaches to the

Internet.

What approaches can be used to develop What approaches can be used to develop

Internet marketing strategy?

How does Internet marketing strategy relate to

other strategy development?

What are the key strategic options for Internet

marketing?

What is strategy?

‘Defines how we will meet our objectives’

‘Sets allocation of resources to meet goals’

‘Selects preferred strategic options to compete within a

market’

‘Provides a long-term plan for the development of the

organisation’

Missed opportunities for additional sales on Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-sideFall behind competitors in delivering online services – may become difficult to catch up, e g Tesco Delle.g. Tesco, DellPoor customer experience from poorly integrated channelsintegrated channels

‘The key question is not whether to deployy q p yInternet technology – companies have no choiceif they want to stay competitive – but how to deploy it.’

Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, 62–78., ,

Internal and external influences on Internet marketing strategy

The capability to innovate and so gain The capability to innovate and so gain competitive advantage within a market place by monitoring changes within an

i i ’ k l d h organization’s marketplace and then to efficiently evaluate alternative strategies and then select, review and implement and then select, review and implement appropriate candidate strategies

Chaffey et al (2008)

Situation analysis related to customers is very important to setting realistic objectives estimates important to setting realistic objectives estimates for online customers and developing appropriate propositions for customers online.

e-marketing managers need to assess the level of t I t t d ti it f diff t customer Internet access and activity for different

markets and the online market share that a particular organisation has achieved.particular organisation has achieved.

For each customer segment and for each digital channel such as Internet, interactive digital TV or mobile we need to work to assess the vol me and mobile we need to work to assess the volume and share of customers who:

1 Have access to the digital channel;2 Are influenced by using the digital channel but 2 Are influenced by using the digital channel but purchase using another channel as part of the multi-channel buyer behaviour;3 Purchase using the digital channel.

Internet AccessInternet Accesswww.internetworldstats.com, www.clickz.com

Consumers influenced by using the online channel

Purchased OnlineES Test by De Kare Sliver (2000)Customer Characteristics

Internet Usage pdfInternet Usage.pdf

Grid of product suitability against market adoption for transactional e-commerce (online purchases)

Product characteristics. Does the product Product characteristics. Does the product need to be physically tried, or touched before it is bought? 2.Familiarity and confidence. Considers the degree the consumer recognizes and trusts the product and brandthe product and brand.3.Consumer attributes. These shape the buyer’s behaviour –are they amenable to buyer s behaviour are they amenable to online purchases in terms of access to the technology skills available and do they no l i h t h f d t i longer wish to shop for a product in a traditional retail environment?

Achieve 10 per cent online revenue contribution within two years;

Achieve first or second position in category penetration in the countries within which we

operate (this is effectively online market share and can be measured through visitor

rankings such as Hitwise or better by online revenue share;

Cost reduction of 10 per cent in marketing communications within two years;

Increase retention of customers by 10 per cent;

Increase by 20 per cent within one year the number of sales arising from a certain Increase by 20 per cent within one year the number of sales arising from a certain

target market, e.g. 18–25-year-olds;

Create value-added customer services not available currently;

Improve customer service by providing a response to a query within two hours, 24

hours per day, seven days a week;

All other objectives to be achieved profitably giving a return on investment in a three

year period.

1 Web presence 2 E commerce 3 Integrated 4 E b siness1. Web presence 2. E-commerce 3. Integratede-commerce

4. E-business

Services available Brochureware or interaction with product catalogues and

Transactional e-commerce on buy-side or sell-side

Buy and sell-side integrated with ERP or

Full integration between all internalwith product catalogues and

customer serviceon buy side or sell side. Systems often not integrated

integrated with ERP or legacy systems. Personalisation of services

all internal organisational processes and elements of the value network

Organizational scope Departments acting independently, e.g. marketing department, IS department

Co-ordination through steering committee ore-commerce manager

Cross-organisational Across the enterprise and beyond (extraprise)

Transformation Technological infrastructure Technology and new responsibilities identified for e-commerce

Internal business processes and company structure

Change to e-business culture, linking of business processes with partnersp

Strategy Limited Sell-side e-commerce strategy, not well integrated with business strategy

E-commerce strategy integrated with business strategy using a value chain

E-business strategy incorporated as part of business strategy

strategy a value-chain approach

Strategic options for a company in relation to the importance of the Internet as a channel

E Shop E Procurement

E MallE A tiE AuctionsVirtual CommunitiesCollaboration PlatformsCollaboration PlatformsThird Party MarketplacesValue Chain IntegratorsValue Chain IntegratorsValue Chain Service ProvidersInformation BroakerageInformation BroakerageTrust and other Services

www.wiley.com/go/ebusiness27

•Subscription access to contentSubscription access to content•Pay Per View content access•CPM Display advertisingp y g•CPC advertising on site•Sponsorship of sections, content or widgetsp p , g•Affiliate revenue (CPA or CPC)•Subscriber data for e-mail marketing•Access to customers for research purposes

Stages in target marketing strategy development

‘First identify customer needs and define a distinctive value proposition that will meet them, at a profit. The value proposition must then be delivered through the right product and service and the right channels and it must and service and the right channels and it must be communicated consistently. The ultimate aim is to build a strong, long-lasting brand that delivers value to the company marketing it.’

Varianini and Vaturi (2000)

A clear differentiation of the proposition A clear differentiation of the proposition from competitors based on product features or service quality

•Target market segment(s) that the iti ill l tproposition will appeal to

How the proposition will be communicated •How the proposition will be communicated to site visitors and in all marketing communications. Developing a tag line can p g ghelp 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? external?

•‘Compare Buy Save’ Kelkoo (www kelkoo com)• Compare. Buy. Save . Kelkoo (www.kelkoo.com)

•‘Earth’s 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’ ( d )listings, updated daily’ (www.autotrader.com)

•The Citibank site design (www.citibank.com) uses a range of techniques to illustrate its core a range of techniques to illustrate its core proposition and OVP. The main messages are–Welcome to Citibank: The one-stop solution pfor all your financial needs–Look for a product or service; Learn about a fi i l d t Fi d l tifinancial product; Find a location

Deise et al (2000) and Chaston (2000) suggest Deise et al (2000) and Chaston (2000) suggest four positioning options:

Product performance excellencePrice performanceTransactional ExcellenceRelationship ExcellenceRelationship Excellence

These positioning options have much in common with Porter’s generic competitive common with Porter s generic competitive strategies of cost leadership and differentiation

However unlike Porter’s belief, Kim et al However unlike Porter s belief, Kim et al (2004) concluded that for online businesses ‘integrated strategies that combine elements f l d hi d diff i i ill of cost leadership and differentiation will

outperform cost leadership or differentiation strategies’strategies

Autotrader site (www.autotrader.co.uk) clearly communicates its proposition

BA ‘Have you clicked yet?’ campaign web site