Download - Lecture 2
Slide 1 of 42Stephen Ginns
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Relate Internet marketing strategy to
marketing and business strategy
Identify opportunities and threats arising
from the Internet
Evaluate alternative strategic approaches
to the Internet.
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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?
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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’
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Internal and external influences on Internet marketing strategy
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Underestimated demand for online services
Market share loss Resource duplication Insufficient resources Insufficient customer data Reduced efficiencies available through
online marketing Fewer opportunities for applying online
marketing tools Changes required to internal IT systems Inadequate tracking Senior management support limited
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Source: E-consultancy (2005)
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A simple framework for Internet marketing strategy development
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Dynamic e-business strategy model Source: Adapted from description in Kalakota and Robinson (2000)
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Levels of web site development in: (a) the information to transaction model and (b) the transaction to information model of Quelch and Klein (1996)
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1. Web presence 2. E-commerce 3. Integratede-commerce
4. E-business
Services available Brochureware or interaction with product catalogues and customer service
Transactional e-commerce on buy-side or sell-side. Systems often not integrated
Buy and sell-side integrated with ERP or legacy systems. Personalisation of services
Full integration between 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 partners
Strategy Limited Sell-side e-commerce strategy, not well integrated with business strategy
E-commerce strategy integrated with business strategy using a value-chain approach
E-business strategy incorporated as part of business strategy
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Source: E-consultancy (2005) report ‘Managing an E-commerce team’ Author: Dave Chaffey
Stage 1.
UnplannedLimited
E-commerce
maturity stage
Strategy process
and performance
improvement
process
Structure:
Location of e -
commerce
Senior
management
buy-in
Marketing
integration
Online marketing
focus
Uncontrolled
experimentationLimited Discrete
Content:
Brochureware
Stage 1.
Unplanned
Low-level
objectivesDiffuse Aware
Common
initiatives
Traffic:
visitor acquisition
Stage 2.
Diffuse
management
Stage 1.
Unplanned
Specific
organisational
objectives
Centralised InvolvedAnnual planning
collaboration
Conversion &
customer
experience
Stage 3 .Centralised management
Stage 1.
Unplanned
Refined
online channel
improvement
DecentralisedDriving
performancePartnership Retention
Stage 4.
Decentralised
operations
Stage 1.
Unplanned
Integrated
multi-channel
improvement
Integrated Integral CompleteWhole lifecycle
optimisation
Stage 5.
Integrated &
optimised
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Grid of product suitability against market adoption for transactional e-commerce (online purchases)
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Tangible benefits
• Increased sales from new sales leads
giving rise to increased revenue from:
• new customers, new markets
• existing customers (repeat-selling)
• existing customers (cross-selling)
• Cost reductions from:
• reduced time in customer service
• online sales
• reduced printing and distribution costs
of marcomms
Intangible benefits
• Corporate image communication
• Enhance brand
• More rapid, more responsive
marketing communications including PR
• Improved customer service
• Learning for the future
• Meeting customer expectations
• Identify new partners, support existing
partners
• Better management of marketing
information and customer information
• Feedback from customers on products
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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 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.
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Source: Friedlein (2002)
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Smile (www.smile.co.uk)
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Stages in target marketing strategy development
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• Brand loyalists – convert online
• Not brand loyal – encourage trial
• Most profitable – deepen relationships
• Larger companies (B2B)
• Smaller companies(B2B)
• Key members of the buying unit (B2B)
• Difficult to reach using other media
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Euroffice e-mail (www.euroffice.co.uk) Source: Adapted from the company web site press releases and Revolution (2005a)
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Alternative positionings for online services
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‘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 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)
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Autotrader site (www.autotrader.co.uk) clearly communicates its proposition
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BA ‘Have you clicked yet?’ campaign web site
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Strategic options for a company in relation to the importance of the Internet as a channel
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Flow chart for deciding on the significance of the Internet to a businessSource: After Kumar (1999)
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Channel coverage map showing the company’s preferred strategy for communications with different customer segments with different value
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The main challenges of e-marketing (n = 84) Source: E-consultancy (2005)
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Summary of alternative organisational structures for e-commerce suggested in Parsons et al. (1996)
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Options for location of control of e-commerce Source: E-consultancy (2005)
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Example of risk–reward analysis
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Number of Egg customers, 1998–2001Compiled from Egg Investor relations (www.egg.com and www.investis.com/eggplc)
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