1. Revised Date: 2/5/2012
Chapter 5
E-Marketing

2. Learning Outcomes Define e-marketing and its goals
Discuss e-marketing processes
Outline e-marketing strategy
Develop e-marketing plan

3. Examples…

4. What is marketing?
The definition of marketing by the Chartered Institute of Marketing ( is: ‘Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably’

5. What is e-marketing? Chaffey (2009) defined:
e-business tools such as web, , search engine marketing, etc.
To identify how to utilize the Internet for marketing research to find out customers’ needs and wants
Anticipating – anticipating the demand for digital services
Satisfying – how to achieve customer satisfaction through the electronic channel
Profitably
Achieving marketing objectives through the use
of electronic communications technology

6. What is e-marketing?
Figure 8.1 The e-marketing plan in the context of other plans

7. E-marketing planning
A e-marketing plan is needed to detail the specific objectives of the e-business strategy through marketing activities
May use SOSTAC framework

8. E-marketing planning-SOSTAC
Developed by Paul Smith (1999)
Summarizes the different stages that should be involved in a marketing strategy from strategy development to implementation
Figure 8.2 SOSTAC™ – a generic framework for e-marketing planning

9. SOSTAC-Situation Analysis
To understand the current and future environment in which the company operates
Involves consideration of all of the related factors and will form the basis for defining objectives, strategies and tactics

10. SOSTAC-Situation Analysis
Figure 8.4 Inputs to the e-marketing plan from situation analysis

11. Situation Analysis-Methods
Demand analysis
What percentage of customer businesses have access to the Internet?
What percentage of members of the buying unit in these businesses have access to the Internet?
What percentage of customers are prepared to purchase your particular product online?
What percentage of customers with access to the Internet are not prepared to purchase online, but are influenced by web-based information to buy products offline?
What are the barriers to adoption amongst customers and how can we encourage adoption?

12. Situation Analysis-Methods
Example
Figure 8.5 Customer demand analysis for the car market

13. Situation Analysis-Methods
Competitor Analysis
The monitoring of competitor use of e-commerce to acquire and retain customer
Companies should review:
Well-known competitors
Well-known international competitors
New Internet companies locally and worldwide

14. Situation Analysis-Methods
Other methods
Intermediary analysis
Internal marketing audit
Find out what need to be done for these two methods…

15. SOSTAC- Objective Setting
SMART approach
Specific
Measurable
Achievable
Realistic
Time-constrained
Find any article
about SMART
approach!!!

16. Objective Setting-Examples
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 per cent to 20 per cent.
Established media company – increase online revenue, target of 20 per cent online contribution to revenue by offering new online services and media sales.
Established business-to-business engineering company – increase overall revenue by 5 per cent, through targeting sales in new international markets.
Reduce costs of routine customer service by 10 per cent to enable focus on delivery of specialized customer service.

17. SOSTAC- Strategy Define how e-marketing objectives will be achieved.
Evaluation and selection of appropriate market segments and the development of appropriate offers
Refer to strategy definition – chapter 5 (text book) chapter 4 (notes)

18. SOSTAC- Strategy Target market strategies
5 questions when developing 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?
Figure 8.8 Stages in target marketing strategy development

19. Characteristics of new marketing communications tools – 6 Is
Interactivity
Intelligence
Individualization
Integration
Industry restructuring
Independence of location

20. Characteristics- Interactivity
Figure 8.9 Summary of communication models for (a) traditional media, (b) new media

21. Characteristics- Intelligence
Low cost method for market research
Create two ways interaction
Speed up communication process
Gather and disseminate information can be done continuously
Ex. Nestle is able to profile their customers based on the information received through questionnaire

22. Characteristics- Individualization
Figure Summary of degree of individualization for (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)

23. Individualization- Example

24. Characteristic-Integration
Figure Channels requiring integration as part of integrated e-marketing strategy

25. Integration- Example

26. Integration -Examples of integrated communication tools
The internet can be used as a direct-response tool enabling customers to respond to offers and promotions publicized in other media
The web site can have a direct response or callback facility built into it.
The Internet can be used to support the buying decision even if the purchase does not occur via web site.

27. Integration- Example
Figure Channel integration required for e-marketing and mixed-mode buying

28. Characteristic-Industry restructuring
Key concepts- Find out how
these concepts can benefit
your e-marketing plan
Disintermediation
Reintermediation
Countermediation

29. Characteristic-Independence of location
Possibility to reach global market
How this affect your marketing plan?

30. SOSTAC-Tactics
Cover the 7ps.
Self reading on this part, page

31. Tactics 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.
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?

32. Tactic- Example ‘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. Tactic-Product Extend range of product (Tesco)
Narrow range of product (Apple)
Online-only products (banks)
Develop new brand (Maybank2u/ Click CIMB)
Migrate existing brand (HSBC/ Airasia)
Partner with online brand (Waterstones and Amazon).

34. Tactic-Product (Example)

35. Tactic-Price Differential pricing:
Reduce online prices due to price transparency and competition (easyJet)
Maintain price to avoid cannibalisation of offline sales (Dixon)
New pricing options (software, music):
Rental
Pay per use
Reverse auctions (B2B)
Dynamic pricing (Concert tickets).

36. Tactic-Implications for price
Increased price transparency
Downward pressure on price
New pricing approaches
Alternative pricing structure or policies

37. Tactic- Place Place = avoiding channel/ marketplace conflicts
Disintermediation – sell direct
Reintermediation – partner with new intermediaries
Countermediation:
Form new intermediaries
Partner with existing intermediaries
Distance from intermediaries.

38. Tactic-Implications on place
Place of purchase
New channel structures
Channel conflicts
Virtual organizations

39. Tactic- Promotion
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.

40. Tactic- Promotion
Figure Options for the online vs offline communications mix (a) online > offline, (b) similar online and offline, (c) offline > online

41. Tactic People Process Physical evidence
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.

42. Online Branding
Materials:

43. Online Branding- Class Activity
What comprises a successful online brand? What do you think?
High traffic?
Good name recognition?
Sites with modest sales?
Profitable brand?
Good customer service?
What does branding means in online context?
How important is branding to an existing companies?

44. Online Branding
A brand – the characteristic of product or services perceived by a user that uniquely meet their needs.
Branding – a process of creating and evolving successful brands.
Refer to definition given in page 373.

45. Online Branding 3 characteristics highlighted by this definition
Brand is dependent on customer perception
Perception is influenced by the added value characteristics of the product
The added value characteristics need to be sustainable

46. Online Branding Brand identity
Anything about the brand including name and symbol that must be communicated to increase brand awareness.
NOW EVERYBODY CAN FLY
What does
this tell you?

47. Online Branding Brand identity
Options for changing brand identity online
Transfer traditional brand online
Extend traditional brand
Partner with existing digital brand
Create a new digital brand
Self reading- Mini case study 8.1 : Napster.com brand identity, page

48. Online branding Success factors: Content quality
Adequate performance of web site architecture
After sales support
Quality of responses to enquiries and fulfillment
Acknowledgement of customer privacy
Reflecting and supporting the characteristics of the offline brand

49. SOSTAC-Action
Need to finalize the actions required to execute the plan, for example:
What level of investment in the Internet channel is sufficient to deliver services?
What training of staff is required?
What new responsibilities are required for effective Internet marketing?
Are changes in organizational restructuring required?
What activities are involved in creating and maintaining the web site?
Refer to page an example of B2B e-marketing plan

50. SOSTAC- Control
It can be achieved through a combination of traditional techniques such as
Conduct marketing research
Analysis of web-server log files
Intranets can be used to share information
Read case study 8.2- page 381- Napster marketing mix

51. SOSTAC- Example To launch a e-laundry business at UNITEN Component
What need to be done
Situation analysis (what is it?)
who is our potential customers? Students? Staff? Public?
where we should operate?
how can we promote the service online? Any demand?
Objective (who are we? Where are we now? What we want to be?)
vision : to deliver the best laundry services
mission
Objective: to gain profit 15% through online services
Strategy (what we should do to achieve the objective)
promote the services to students and staff
fulfillment of services within 24 hours
Tactic (how we should execute the strategy)
online marketing
member get member program
human resource for delivery and pickup
Action ( what need to be done)
online advertisement at Uniten’s website
incentive such as reward point for member get member program
hire students for delivery and pickup
Control (how to monitor and maintain)
measure quality of work, man hour, punctuality

52. Issues with varying 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

53. The Marketing Mix using 7Ps
Figure The elements of the marketing mix

54. Summary
E- marketing – the application of technology to achieve marketing objectives
It is how you want to market/sell your product and services online.
SOSTAC framework can be used as a guideline to develop e-marketing plan.

55. Tutorial Define e-marketing Describe SOSTAC framework
Summarize the opportunity to vary the marketing mix.
Develop an e-marketing plan for the business of your choice.

56. References
Google Image, accessed on 13 April 2011.
Chaffey, D., (2007, 2009), E-Business and e-Commerce Management, 3rd and 4th Edition, Prentice Hall.