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Chapter 8 E-marketing
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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?
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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.
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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?
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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.
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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
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Figure 8.1 The operational and management processes of e-marketing Source: Econsultancy (2008)
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Figure 8.1 The operational and management processes of e-marketing (Continued) Source: Econsultancy (2008)
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Figure 8.2 The e-marketing plan in the context of other plans
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E-Marketing Plan Figure 8.3 SOSTAC™ – a generic framework for e-marketing planning
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SOSTAC The last slide mentioned 5S, which is translated from Japanese Sorting Straighten Sweeping (Systematic Cleaning) Standardizing Sustaining
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Figure 8.4 Usage of detailed e-marketing plans in e-commerce organizations Source: Econsultancy (2008)
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Situation Analysis Figure 8.5 Inputs to the e-marketing plan from situation analysis
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Situation Analysis—SWOT Analysis
Figure 8.6
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Situation Analysis--Example SWOT Analysis
Figure 8.6
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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
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Situation Analysis-Customer demand analysis for the car market
Figure 8.7
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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.
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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?
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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
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Situation Analysis Benchmarking
Figure 8.8 Benchmark comparison of corporate websites Source: Bowen Craggs & Co (
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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
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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
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Table 8.3 The relationship of objectives, strategies and performance indicators for a B2B company (in order of priority)
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Table 8.3 The relationship of objectives, strategies and performance indicators for a B2B company (in order of priority) (Continued)
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Table 8.4 Example Internet marketing objectives within the balanced scorecard framework for a transactional e-commerce site
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Objective Setting Figure 8.9 Future online promotion contribution and online revenue for a B2B company
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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
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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
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Case Study Read Case Study 8.1 EasyJet on pp and visit the EasyJet.com website Answer the questions 1-3 on p. 433
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Strategy Setting It defines how the e-marketing objectives will be achieved. Example—ref. pp , table 8.5
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Strategy Setting Table 8.5 Summary of typical focus for main types of e-commerce-related strategic initiatives
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Strategy Setting Table 8.5
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Strategy Setting Table 8.5 Summary of typical focus for main types of e-commerce-related strategic initiatives (Continued)
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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?
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Strategy Setting Table 8.6 Product scores in de Kare-Silver (2000), electronic shopping potential test
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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
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Strategy Setting --target marketing strategy development
Figure 8.11
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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
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Table 8.7 A range of targeting and segmentation approaches for a digital campaign
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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.
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Figure The extent to which different types of segmentation variables tend to be predictive of response
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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?
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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
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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?
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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
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Figure 8.13 Firebox (www.firebox.com) Use Web 2.0 for interaction
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New Media Marketing Interactivity Intelligence Individualization
Integration Industry restructuring Independent of location
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Figure 8.14 Summary of communication models for (a) traditional media, (b) new media
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Figure Summary of degree of individualization for (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)
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Figure 8.16 Channels requiring integration as part of integrated e-marketing strategy
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Figure 8.17 Channel integration required for e-marketing and mixed-mode buying
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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
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Figure 8.18 The elements of the marketing mix
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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
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Figure Zipf’s law, showing decrease in popularity of items within an ordered sequence—Read Box 8.2 on p. 450
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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
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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?
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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?
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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)
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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
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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)
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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
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Figure Options for the online vs offline communications mix (a) online > offline, (b) similar online and offline, (c) offline > online
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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
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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.
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Branding Aaker – brand equity
Brand awareness Perceived quality Brand associations Brand loyalty How can these be enhanced online for the B2C Company?
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Table 8.9 Traditional measures of brand equity and online measures of brand equity
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Branding-Identity 8 Principles for choosing a brand name Short Simple
Suggestive of the category Unique Illiterative Speakable Shocking Personalized
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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
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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
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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
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Case Study Read Case Study 8.3 on pp.471-475 and visit the napster.com
Answer the question on p.475
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Figure 8.25 Napster (www.napster.co.uk)
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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?
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