Transcript Marketing on the Internet

E-Marketing
Judy Strauss, Adel I. El-Ansary, and Raymond Frost – 4/E
©2006 Prentice Hall
Chapter 1: Past, Present and Future
Chapter 2 : Strategic E-Marketing
Chapter 3 : The E-Marketing Plan
Delivered by : Djati Adi Wicaksono
- Session 4 -
E-Marketing 4/E
Judy Strauss, Adel I. El-Ansary, and Raymond Frost
©2006 Prentice Hall
Chapter 1: Convergence
E-marketing Defined
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The use of information technology
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to create, communicate, and deliver value
to customers.
for managing customer relationships to
benefit the organization.
The result of information technology
applied to traditional marketing.
E-Business, E-Commerce, and
E-Marketing
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E-business is the continuous optimization of a
firm’s business activities through digital
technology.
E-commerce is the subset of e-business
focused on transactions.
E-marketing is one part of an organization’s ebusiness activities.
The Internet
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A global network of interconnected networks.
Data move over phone lines, cables and satellites.
Three types of networks form part of the Internet:
 Intranet: network that runs internally in an
organization.
 Extranet: two joined networks that share
information.
 Web: how most people refer to the Internet.
Internet across the globe:
(source : www.internetworldstats.com, Jun 2009)
The Web Is One Aspect of E-Marketing
Automobile
Refrigerator
Television
Web
UPC Scanner
Internet
PC
Database
PDA
Cell Phone
E-mail
E-Business Recovery Is Sweet
Visibility
Technology Peak of
Trigger
Inflated
Expectation
1990-1996 1999
Equity Times
E-Business
Becomes “Just
Business”
U.S.
Recession
Dot-Com
Peak
2000
Trough of
Disillusionment
2001 2002
Debt Times
Slope of
Plateau of
Enlightenment Profitability
2003
2004 2005 2006
Positive Cash Flow
E-Marketing Today
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Power shift from sellers to buyers
Marketing fragmentation: mass market to one
customer
Death of distance
Time compression
Knowledge/database management is key
Marketing and technology: an interdisciplinary focus
Intellectual capital is important resource
Consumer Control
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New technologies such as personal video
recorders (PVRs) will increase consumer
control.
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Convergence of television, radio, print, etc.
Customer-controlled entertainment, and shopping
on demand.
Refined Metrics
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Internet provides great deal of data, not all
of which is very useful.
Tracking customer acquisition cost (CAC)
and other key metrics is a critical marketing
function still in its infancy.
Future metrics will provide better measures
of performance, return on investment, etc.
Metric
Definition/formula
Online Averages
CPM
Cost Per Thousand Impressions
CPM = [Total Cost  (Impressions)] 
1000
$7 to $15 for banners1
$75 and $200 for e-mail ads2
$20 and $40 for e-mail
newsletter2
Click-through rate
(CTR)
Number of clicks as percent of total
impressions
CTR = Clicks  Impressions
0.3% - 0.8% for banners3,5
2.4% rich media ads5
3.2% - 10% opt-in e-mail3,9
Cost Per Click (CPC)
Cost for each visitor from ad click
CPC = Total Ad Cost  Clicks
Varies widely
Google.com ranges from a
few cents to a few dollars
Conversion Rate
Percent of people who purchased from
total number of visitors
Conversion Rate = Orders  Visitors
Total marketing costs to acquire a
customer
1.8% for Web sites6
5% for e-mail9
Customer
Acquisition Cost
(CAC)
IMC Metrics and Industry Averages
Varies by industry
$82 for online retail pureplays; $31 for multi-channel
brick and mortar retailers7
Wireless Networking Increases
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Cell phones, PDAs and laptops connect to the
Internet via wireless modem worldwide.
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Starbucks
Hotels and airports
Customers will have information, entertainment
and communication when, where and how they
want it.
Appliance Convergence
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The receiving appliance is separate from the
media type.
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Computers can receive digital radio and TV.
TV sets can receive the Web.
New types of “smart” receiving appliances will
emerge.
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Internet refrigerator is many digital appliances in one.
Global position systems (GPS) allow in-car communication and
entertainment.
Criterion
TV
Radio
Magazine
Newspaper
Direct
Mail
Involvement
passive
passive
active
active
active
Interactive
Media
Richness
multimedia
audio
text and
graphic
text and
graphic
text and
graphic
multimedia
Geographic
Coverage
global
local
global
local
varies
Global
CPM
low
lowest
high
medium
high
medium
Reach
high
medium
low
medium
varies
medium
Targeting
good
good
excellent
good
excellent
excellent
Track
effectiveness
fair
fair
fair
fair
excellent
excellent
Message
flexibility
poor
good
poor
good
excellent
excellent
Strengths and Weaknesses of Major Media
Web
E-Marketing 4/E
Judy Strauss, Adel I. El-Ansary, and Raymond Frost
©2006 Prentice Hall
Chapter 4: Strategic E-Marketing
Strategic Planning
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A managerial process to develop and
maintain a viable fit between the
organization and its changing market
opportunities
Process identifies firm’s goals for
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Growth
Competitive position
Geographic scope
Other objectives, such as industry, products, etc.
Business Models
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A business model is a method for long
term survival and a value proposition for
partners, customers and revenue
E-business models include the use of
information technology to achieve long
term goals.
Firm selects one or more models as
strategies to accomplish enterprise goals.
Initiated by
Business
Initiated by
Consumer
Initiated by
Government
To Business
Business-to-Business
(B2B)
FreeMarkets
www.freemarkets.com
To Consumer
Business-toConsumer (B2C)
CDNow
Www.cdnow.com
Consumer-to-Business
(C2B)
Better Business Bureau
site
www.bbb.org
Government-to-Business
(G2B)
Small Business
Administration site
www.sba.gov
Consumer-toConsumer
(C2C)
eBay
www.ebay.com
Government-toConsumer
(G2C)
California state site
Www.state.ca.us
Exhibit 1 - 1 E-Business Markets
Source: Marian Wood (2001) with minor adaptation (p. 2)
To Government
Business-toGovernment (B2G)
Western Australian
Government Supply
www.ssc.wa.gov.au/
Consumer-toGovernment
(C2G)
GovWorks
www.govworks.com
Government-toGovernment
(G2G)
GovOne Solutions
http://www.govonesol
utions.com/
Level of business Impact
Level of Commitment to E-Business
Business Transformation
(competitive advantage,
industry redefinition)
Pure
Play
Pure Dot-Com
(Amazon)
Enterprise
Effectiveness
(customer
retention)
Efficiency
(cost
reduction)
Business Process
Activity
Click and Mortar
(eSchwab, most retailers)
Customer
Relationship
Management
Brochureware
E-Mail
Activity-level models
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Online purchasing
Order processing
E-mail
Content publisher (brochureware)
Business intelligence
Online advertising
Online sales promotion
Pricing strategies
Business Process-Level Models
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Customer relationship management (CRM)
Knowledge management
Supply chain management
Community building
Affiliate programs
Database marketing
Enterprise resource planning (ERP)
Mass customization
Enterprise-Level Models
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E-commerce
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Portal
Online broker
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Direct selling
Content sponsorship
Exchange
Auction
Metamediary
Purchasing agent
Virtual mall
Pure Play Model
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A Pure Play is a business that began on
the Internet.
Top level of the E-Business pyramid.
Examples: E*Trade, eBay, Yahoo!
Most dot-com crash failures were pure
plays.
Performance Metrics
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Performance metrics are specific measures
designed to evaluate the effectiveness and
efficiency of operations.
The Balanced Scorecard provides a
framework for understanding e-marketing
metrics.
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Four perspectives: customer, internal,
innovation and learning (growth), and financial
E-Marketing 4/E
Judy Strauss, Adel I. El-Ansary, and Raymond Frost
©2006 Prentice Hall
Chapter 3: The E-Marketing Plan
Seven-Step E-Marketing Plan
1.
2.
3.
4.
5.
6.
7.
Situation analysis
E-Marketing strategic planning
Plan objectives
E-Marketing strategy
Implementation plan
Budget
Evaluation plan
Step 1: Situation Analysis
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Environmental factors
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Legal factors
Technological factors
Market-related factors
SWOT analysis
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Strengths
Weaknesses
Opportunities
Threats
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
1.
1.
2.
2.
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.
©2006 Prentice Hall
3-8
Step 2: E-Marketing Strategic
Planning
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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.
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Market opportunity analysis
Demand analysis
Segment analysis
Supply analysis
Step 3: Objectives
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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
Step 4: E-Marketing Strategies
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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.
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)
Communication
(Promotion)
Distribution
(Place)
Step 5: Implementation Plan
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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
Step 6: Budget
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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
Step 7: Evaluation Plan
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Marketing plan success depends on
continuous evaluation.
E-marketers must have tracking
systems in place to measure results.
Use the Balanced Scorecard for ebusiness
Today’s firms are ROI driven.