1. Lecture 2 Internet marketing strategy

2. Michael Porter on the Internet
‘The key question is not whether to deploy
Internet technology – companies have no choice
if they want to stay competitive – but how to deploy it.’
Porter, M. (2001) Strategy and the Internet,
Harvard Business Review, March 2001, 62–78.

3. Influences on e-marketing strategy
Internal and external influences on Internet marketing strategy

4. Why do we need an internet marketing strategy?
…it provides a consistent direction for online marketing activities
…the company can achieve its hierarchy of objectives
Gives a focus to choice of target markets, positioning and the use of the marketing mix
…it means analysis of the external environment, internal resources and capabilities will take place
A digital marketing strategy is needed because…
Tells us how resources will be deployed and how the organisation will be structured to achieve the strategy.
…following it will help the company achieve competitive advantage
It helps us to understand which strategies and tactics should not be pursued

5. Examples of Strategic Initiatives
New proposition for customers
Getting more customers (acquisition)
Converting customers
Improving experience
Improving delivery of offers
Improving the infrastructure to enhance marketing capabilities

6. What are the options?
A website is likely to be central to an internet marketing strategy…
Also:
Partner with online intermediaries e.g. portals, social networks and infuencers like bloggers…
Use social media marketing on own pages with user- generated content but also using social networks like Facebook, Google+, LinkedIn, Twitter, Pinterest, etc
Use , mobile, apps and databases as communications and relationship-building tools.
Link with offline marketing communications.
Reduce costs, generate revenue, communicate and brand.

7. Strategic Frameworks
SOSTAC Model
RACE Model

8. SOSTAC- a Generic framework for e marketing plan

9. Engaging Customers with Brands (RACE) Reach-Act-Convert-Engage
Convert – Achieve marketing goals e.g. new fans, leads or sales
Engage – Build customer relationships through time to achieve retention goals
Interact – Engage audience and encourage them to act / interact with company or other customers.
Reach – Build awareness & traffic
Step 1
Step 2
Step 3
Step 4
Source: Smart Insights (2010) from REAN (Blanc & Jackson, 2009)

10. Integrating the models

11. Demand Analysis
To set realistic strategic objectives such as leads or sales levels for online revenue contributions for digital channels e- marketing managers need to:
assess the level of customer Internet access and activity for different markets
Assess online market share that a particular organisation has achieved
share of customers who are influenced by using the digital channel but purchase using another channel
share of customers who purchase using the digital channel.

12. 5 S Model for objectives

13. Example objectives
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.

14. Business models- Timmers (1999)
E Shop
E Procurement
E Mall
E Auctions
Virtual Communities
Collaboration Platforms
Third Party Marketplaces
Value Chain Integrators
Value Chain Service Providers
Information Broakerage
Trust and other Services

15. E-business strategy model
1. Web presence
2. E-commerce
3. Integrated
e-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 or e-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

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

17. Revenue models •Subscription access to content
•Pay Per View content access
•CPM Display advertising
•CPC advertising on site
•Sponsorship of sections, content or widgets
•Affiliate revenue (CPA or CPC)
•Subscriber data for marketing
•Access to customers for research purposes

18. Using the Internet to support different growth strategies

19. Target marketing
Stages in target marketing strategy development

20. A range of targeting and segmentation approaches for a digital campaign

21. Customer lifecycle segmentation

22. Online value proposition
A 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

23. The importance of VALUE
Cheaper to retain customers than recruit new ones
Lifetime value and greater ‘share of wallet’
Customers can become advocates
Value can be a source of competitive advantage
Incentives and collectables can encourage further purchases and return visits to your site
Can help you drive thought leader strategy for B2B e.g. give white papers for free
Can lock them in to your brand and stop churn / switching
Customers consolidate number of websites they use over time so ensure your site is a favourite

24. Managing Expectations
Understand expectations: customer research,, site benchmarking, customer scenarios
Set and communicate the service promise: guarantees or promises
Delivering the service promise: on-site support, employee support, physical fulfilment, logistics, delight the customer.

25. Online Value Proposition
Online Value Proposition
Your USP online…
Links to your brand positioning and tells customers who you are, what you offer, which markets you serve and what makes you different.
It identifies to customers why they should click on the site, return, register, buy and share their experiences. It’s a point of difference from competitors.
Source: Smart Insights 2014

26. Customer Information Processing Model 5 Stages of Information Processing: Hofacker (2001)
Review effectiveness of communications and web pages. Can your customers progress through each hurdle?
Exposure – is the information there long enough for a customer?
Attention – what grabs the attention? Movement? Colour?
Comprehension & perception – how does the customer interpret the stimulus?
Yielding & acceptance – is the information accepted by the customer?
Retention – how well can the customer recall their experience?

27. Customer Decision-Making Models Low & High Involvement
Awareness
Interest
Desire
Action
Problem Identification
Information Search
Evaluation of Alternatives
Purchase
Post-purchase Evaluation
How does your decision-making differ for the following purchases:
Buying some breakfast cereal
Buying a car
Buying a music album from a brand new band
Buying your first home

28. Supporting the Buying Process with Site Content
Source: Chaffey & Smith, 2013

29. The IDIC Loyalty Model (Peppers & Rogers, 1997)
The IDIC approach provides a framework for using the web effectively to form and build relationships:
Customer identification – identify customers on first and subsequent visits through cookies / login
Customer differentiation – build a profile to segment customers
Customer interaction – on-site interactions such as customer service questions or create a tailored product
Customer communications – personalisation or mass-customisation of content or s according to segmentation.

30. User Experience Design – How does a user feel when using a system?
Source: Smashing Design Magazine

31. Starting to think about user experience…
User-centred design (Bevan, 1999) starts with understanding the nature and variation between user groups:
Who are the important users?
What is their purpose for accessing the site?
How frequently will they visit?
What experience and expertise do they have?
What nationality are they? Can they read your language?
What type of information are they looking for?
How will the use the information? Read it online, print it, download it, share it?
What type of browser or platform will they use? How fast will their links be?
How large a screen will they have and with how many colours?

32. Ovp examples •‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com)
•‘Earth’s biggest selection’. Amazon (
•‘Search the largest inventory of cars and trucks on the Internet. More than 1.5 million listings, updated daily’ (
•The Citibank site design ( 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

33. Positioning and differentiation strategy
Deise et al (2000) and Chaston (2000) suggest four positioning options:
Product performance excellence
Price performance
Transactional Excellence
Relationship Excellence
These positioning options have much in common with Porter’s generic competitive strategies of cost leadership and differentiation

34. However unlike Porter’s belief, Kim et al (2004) concluded that for online businesses ‘integrated strategies that combine elements of cost leadership and differentiation will outperform cost leadership or differentiation strategies’

35. Autotrader site (www. autotrader. co
Autotrader site ( clearly communicates its proposition

36. BA ‘Have you clicked yet?’ campaign web site

37. WEBPAGESTHATSUCK.COM