Transcript elc310day4

ELC 310
DAY 4
©2006 Prentice Hall
Agenda
• Questions?
• Begin discussion on the eMarketing Plan
• Assignment 1 (due in 7 days)
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E-Marketing 4/E
Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 3: The E-Marketing Plan
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Chapter 3 Objectives
• After reading Chapter 3 you will be able to:
• Discuss the nature and importance of an emarketing plan and outline its 7 steps.
• Show the form of an e-marketing objective and
highlight the use of an objective-strategy matrix.
• Describe the tasks that marketers complete as they
create e-marketing strategies.
• List some key revenues and costs identified during
the budgeting step of the planning process.
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3-2
The Playboy Story
• CEO Christie Hefner revitalized the company in
the 1990s by adding multimedia content to the
Playboy magazine format.
• Playboy.com came online in 1994 with a
marketing plan to generate revenues from
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Advertising
E-commerce
Online gaming
Online events
• They project online gaming will generate much
of future revenue. Do you agree?
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Overview of the E-Marketing Planning
Process
• The e-marketing plan is a blueprint for emarketing strategy formulation and
implementation.
• The plan serves as a road map to guide the
firm, allocate resources, and make decisions.
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Two common types of plans
• Napkin plan
• Dot-com entrepreneurs jotted down “strategic plan” on a
napkin.
• Just-do-it, activity-based, bottom-up plan
• A comprehensive plan is necessary when
entrepreneurs seek venture capital
• Sources of funding
• Debt
• Sometimes bank loans
• Debt financed (20% down)
• Banks seek leverage
• Equity
• Private funds
• Angel investors
• Venture capitalists (VCs)
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The Venture Capital E-Marketing Plan
• VCs look for a way to get their money and profits
out of the venture within a few years:
- The golden exit plan is to go public and issue stock in an
initial public offering (IPO),
- As soon as the stock price rises sufficiently, the VC
cashes out and moves on to another investment.
• All VCs’ investments are not successful. But if
even one out of 20 is an Amazon.com, the risk was
well worth the reward.
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Questions that business plans should
cover
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Who is the new venture’s customers?
How does the customer make decisions about buying this
product or service?
To what degree is the product or service a compelling
purchase for the customer?
How will the product or service be priced?
How will the venture reach all the identified customer
segments?
How much does it cost (in time and resources) to acquire a
customer?
How much does it cost to produce and deliver the product or
service?
How much does it cost to support a customer?
How easy is it to retain a customer?
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Seven-Step E-Marketing Plan
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Situation analysis
E-Marketing strategic planning
Plan objectives
E-Marketing strategy
Implementation plan
Budget
Evaluation plan
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Step 1: Situation Analysis
• Environmental factors
• Legal factors
• Technological factors
• Market-related factors
• SWOT analysis
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Strengths
Weaknesses
Opportunities
Threats
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SWOT Analysis Leading to E-Marketing
Objective
Opportunities
Threats
1.
1.
2.
Hispanic markets growing and
untapped in our industry.
Save postage costs through e-mail
marketing.
2.
Pending security law means costly
software upgrades.
Competitor X is aggressively using ecommerce.
Strengths
Weaknesses
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Strong customer service
department.
Excellent Web site and database
system.
Low-tech corporate culture.
Seasonal business: Peak is summer
months.
E-Marketing Objective: $500,000 in revenues from e-commerce in one year.
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Step 2: E-Marketing Strategic Planning
• Market and product strategies, called Tier 1 tasks or
strategies, are outcomes of strategic planning.
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Segmentation
Targeting
Differentiation
Positioning
• Marketers conduct analyses to determine strategies.
• Market opportunity analysis
• Demand analysis
• Segment analysis
• Supply analysis
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Differentiation
Tier 1
tasks
Tier 2
tasks
Segmentation
Positioning
Targeting
E-Marketing
Strategy
Offer
CRM/PRM
Communication
Value
Distribution
Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers
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E-Marketing Strategic Planning:
Segmenting & targeting
- Market opportunity analysis (MOA):
- The demand analysis = market segmentation analyses to describe
and evaluate the potential profitability, sustainability, accessibility,
and size of various potential segments.
- The segment analysis in the B2C market with demographic
characteristics, geographic location, selected psychographic, and
past behavior toward the descriptors help firms identify potentially
attractive markets.
 Allows the company to select its target market and understand
its characteristics, behavior, and desires in the firm’s product
category.
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E-Marketing Strategic Planning:
Segmenting & targeting
Tools:
- Traditional segmentation analyses.
- Analyzes of customer bases using cookies, database
analyses, and other techniques,
- Supply analysis: forecasts segment profitability + finds
competitive advantages,
- Study of competition to find the company own
performance advantages.: strengths and weaknesses, emarketing initiatives, …
- Identify future industry changes.
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E-Marketing Strategic Planning:
Identifying brand differentiation variables
and positioning strategies
• The understanding of the competition + the target(s)
 Differentiation of the products to provide benefits perceived as
important by the target.
• The positioning statement: the desired image for the
brand relative to the competition.
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Step 3: Objectives
• Objectives are typically related to task,
measurable quantity and timeframe.
• Most e-marketing plans seek to:
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Increase market share
Increase sales revenue
Reduce costs
Achieve branding goals
Improve databases
Achieve customer relationship management goals
Improve supply chain management
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Step 4: E-Marketing Strategies
• Marketers craft strategies for the 4 P’s and
relationship management to achieve plan
objectives.
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Product strategies
Pricing strategies
Distribution strategies
Marketing communication strategies
Relationship management strategies
• These are referred to as Tier 2 tasks or
strategies.
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Steps 2, 3, and 4 of the
E-Marketing Plan
Differentiation
Segmentation
Step 2
Tier 1 Tasks
Positioning
Targeting
Step 3
E-Marketing Objectives
Offer
(Product)
CRM/PRM
Step 4
Tier 2 Tasks
Value
(Price)
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Communication
(Promotion)
Distribution
(Place)
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The Offer: Product Strategies
• The organization can:
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Sell merchandise, services, or advertising on the Web site,
Adopt a e-business model such as online auctions,
Create new brands for the online market,
Simply sell selected current or enhanced products in that
channel.
• A firm must decide how online product prices will compare
with offline equivalents considering the differing costs of
sorting and delivering products to individuals through the
online channel as well as competitive and market concerns.
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The Offer: Product Strategies
• There are two online pricing trends are:
• Dynamic pricing—this strategy applies different price
levels for different customers or situations. The Internet
allows firms to price items automatically and “on the fly”
while users view pages,
• Online bidding—this presents a way to optimize
inventory management.
• E.g. Priceline.com, eBay.com
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Distribution Strategies
• Many firms use the Internet to distribute products or create
efficiencies among supply chain members in the
distribution channel.
• Direct marketing—Many firms sell directly to
customers, by-passing intermediaries in the traditional
channel for some sales.
• Agent e-business models—Firms such as eBay and
E*Trade bring buyers and sellers together and earn a
fee for the transaction.
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Marketing Communication
Strategies
• The Internet spawned a multitude of new marketing
communication strategies, both to draw customers to a Web
site and to interact with brick-and-mortar customers.
• Firms use Web pages and e-mail to:
- Communicate with their target markets and business
partners,
- Build brand images,
- Create awareness of new products,
- Position products using the Web and e-mail.
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Relationship Management
Strategies
• E-marketing communication strategies help build relationships
with a firm’s partners, supply chain members, or customers
using:
- Customer relationship management (CRM) software to retain
customers and increase average order values and lifetime value,
- Partner relationship management (PRM) software to integrate
customer communication and purchase behavior into a
comprehensive database,
- Extranets—two or more proprietary networks linked for better
communication and more efficient transactions among firms (PRM).
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Step 5: Implementation Plan
• Tactics are used to achieve plan objectives
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Marketing mix (4 P’s) tactics
Relationship management tactics
Marketing organization tactics
Information-gathering tactics
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E-Marketing Objective-Strategy
Matrix
Objective-strategy matrix presents the firm’s e-marketing
strategies and accompanying goals.
Online Goals
Online
Advertising
Find
affiliates
Gather
customer
information
Improve
customer
service
Increase
brand name
awareness
Sell goods or
services
Database
Marketing
Online Strategies
Direct
Online Sales
E-mail
Viral
Marketing
No
No
No
No
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Exhibit 3 - 1 E-Marketing Objective-Strategy Matrix
Source: Adapted from Embellix eMarketing Suite
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Design Implementation Plan to Meet the
Objectives
• Information technologies are especially adept at
automating these processes, this is why the information
gathering tactics are important:
- Web site forms, feedback e-mail, and online surveys,
- Web site log analysis software helps firms review user behavior
at the site and make changes to better meet the needs of users,
- Business intelligence uses the Internet for secondary research,
assisting firms in understanding competitors and other market
forces.
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Step 6: Budget
• The plan must identify the expected return from
marketing investments.
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Revenue forecast
Intangible benefits, such as brand equity
Cost savings
E-Marketing costs
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Technology
Site design
Salaries
Other site development expenses
Marketing communication
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Revenue Forecast
• The firm uses an established sales forecasting method for
estimating the site revenues in the short, intermediate, and long
term.
• Inputs: The firm’s historical data, industry reports, and
competitive actions.
• An important part of forecasting is to estimate the level of Web
site traffic over time.
 This number affects the amount of revenue a firm can expect to
generate from its site.
• Revenue streams:
- Web site direct sales,
- Subscription fees,
- Sales at partner sites,
fees.
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- Advertising sales,
- Affiliate referrals,
- Commissions, and other
Step 7: Evaluation Plan
• Marketing plan success depends on continuous
evaluation.
• E-marketers must have tracking systems in
place to measure results.
• Review the Balanced Scorecard for e-business
in Chapter 2.
• Today’s firms are ROI driven.
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Preparing Your Marketing Plan
• See Guidelines in WebCT
• See example marketing plan for Rainbow Cove
LLC
• See example MOA
• DUE October 31
• 7 weeks from today
• Get started by developing an idea
©2006 Prentice Hall