1. Chapter 8
E-marketing

2. Econsultancy Interview
Read the Econsultancy Interview on pp 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? What is e-marketing?
Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability.
What is e-marketing?
The application of marketing principles and techniques to achieve marketing goals via e-communication technology.

6. E-Marketing Which e-marketing tools can assist and how?
Identifying customer needs
Anticipating demand for digital services
Satisfying customer needs
Profitably
This slide left deliberately blank for student Q&A interaction.
Potential answers given on p416 6

7. Figure 8.1 The operational and management processes of e-marketing Source: 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
Sorting
Straighten
Sweeping (Systematic Cleaning)
Standardizing
Sustaining

12. Figure 8.4 Usage of detailed e-marketing plans in e-commerce organizations Source: Econsultancy (2008)

13. Situation Analysis
Figure 8.5 Inputs to the e-marketing plan from situation analysis

14. Situation Analysis—SWOT 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 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 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 competitor’s site, how do they make use of intermediary sites to promote and deliver their services?

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

21. Situation Analysis Benchmarking
Figure 8.8 Benchmark comparison of corporate websites Source: Bowen Craggs & Co (

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

23. Objective Setting
Effective strategies are based on and support clearly defined business objectives.
SMART should be used to guide the objective setting
Examples—Ref. 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 a B2B 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 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.
Example—ref. pp , 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 Setting De 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 buyer’s 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.
Ch 5, Fig 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 on p. 437
Various options for a digital marketing campaign are summarized in table 8.7 on p 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 Strategies—Online 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 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. Online value proposition
Strategy Setting
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

45. Online value proposition
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 (
‘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

47. Figure 8.13 Firebox (www.firebox.com) Use Web 2.0 for interaction

48. New Media Marketing Interactivity Intelligence Individualization
Integration
Industry restructuring
Independent of location

49. Figure 8.14 Summary of communication models for (a) traditional media, (b) new media

50. Figure Summary of degree of individualization for (a) traditional media (same message), (b) new media (unique messages and more information exchange 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
Market tactics are traditional based on the elements of market mix (4 Ps and 7Ps)
Alternatives approaches include customer-driven tactics ad customer-relationship management

54. Figure 8.18 The elements of the marketing mix

55. Tactics—Issues 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 Zipf’s law, showing decrease in popularity of items within an ordered sequence—Read Box 8.2 on p. 450

57. Tactics— Online mix options
Product
Extend range
Narrow range—only 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 options—ref. 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. Price Elasticity = %change in quantity demanded / % change in price
Figure 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 elements—Ref. 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 Options for the online vs offline communications mix (a) online > offline, (b) similar online and offline, (c) offline > online

65. Tactics— Online mix options
Typically important for service delivery
People—interaction 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. Branding Aaker – 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 Changes to brand perception and behaviour as a result of using the Internet for research Source: BrandNewWorld: AOL UK/Anne Molen (Cranfield School of Management)/Henley Centre, 2004

71. Figure 8. 24 The influence of brand knowledge on purchase
Figure The influence of brand knowledge on purchase. Matrix for question ‘I will buy 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 framework—ref. pp
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 and visit
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?