Transcript OHT 4.1

OHT 4.1
Chapter 4
Internet marketing strategy
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.2
Learning objectives
• Relate Internet marketing strategy to
marketing and business strategy;
• identify opportunities and threats arising
from the Internet;
• evaluate alternative strategic approaches
to the Internet.
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.3
Questions for marketers
• How does Internet marketing strategy
relate to other strategy development?
• What are the key strategic options for
Internet marketing?
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.4
Michael Porter on the Internet
• ‘The key question is not whether to deploy
Internet technology – companies have no
choice if they want to stay competitive –
but how to deploy it.’
Porter, M. (2001) Strategy and the Internet,
Harvard Business Review, March 2001, 62–78.
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.5
Influences on
e-marketing strategy
Figure 4.1 Internal and external influences on Internet marketing strategy
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.6
Stages in
Internet development
Figure 4.2 A simple framework for Internet marketing strategy development
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OHT 4.7
Strategy development process
Figure 4.3 A ten-step strategic marketing planning process
Source: McDonald, 1999
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
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Dynamic strategy model
Figure 4.4 Dynamic e-business strategy model
Source: Adapted from description in Kalakota and Robinson (2000)
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
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Stage models
(Quelch and Klein (1996))
Figure 4.5 Levels of web site development in: (a) the information to transaction
model and (b) the transaction to information model of Quelch and Klein (1996)
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.10
E-business strategy model
1. Web presence
2. E-commerce
3. Integrated
e-commerce
4. E-business
Services available
Brochureware or interaction
with product catalogues and
customer service
Transactional ecommerce on buy-side
or sell-side. Systems
often not integrated
Buy and sell-side
integrated with ERP or
legacy systems.
Personalisation of
services
Full integration between
all internal
organisational processes
and elements of the
value network
Organisational
scope
Departments acting
independently,
e.g. marketing department,
IS department
Co-ordination through
steering committee or ecommerce manager
Cross-organisational
Across the enterprise
and beyond (extraprise)
Transformation
Technological infrastructure
Technology and new
responsibilities
identified for ecommerce
Internal business
processes and company
structure
Change to e-business
culture, linking of
business processes with
partners
Strategy
Limited
Sell-side e-commerce
strategy, not well
integrated with business
strategy
E-commerce strategy
integrated with business
strategy using a valuechain approach
E-business strategy
incorporated as part of
business strategy
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.11
1.
2.
3.
4.
Types of web presence
Transactional e-commerce site.
Services-oriented relationship
building web site.
Brand-building site.
Portal site.
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.12
Demand analysis – car market
Figure 4.6 Customer demand analysis for the car market
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
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Demand analysis – new vs existing
Figure 4.7 Demand analysis assessing the ratios Access : Choose : Buy for (a)
new customers and (b) existing customers
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.14
Internet SWOT
Figure 4.8 A generic SWOT analysis showing typical opportunities and threats
presented by the Internet
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.15
Internet marketing benefits
Tangible benefits
• Increased sales from new sales leads giving rise to
increased revenue from:
• new customers, new markets
• existing customers (repeat-selling)
• existing customers (cross-selling)
• Cost reductions from:
• reduced time in customer service
• online sales
• reduced printing and distribution costs of
marcomms
Intangible benefits
• Corporate image communication
• Enhance brand
• More rapid, more responsive marketing
communications including PR
• Improved customer service
• Learning for the future
• Meeting customer expectations
• Identify new partners, support existing partners
• Better management of marketing information and
customer information
• Feedback from customers on products
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.16
Example objectives
• Achieve 10 per cent online revenue contribution within two years;
• achieve first or second position in category penetration in the
countries within which we operate (this is effectively online market
share and can be measured through visitor rankings such as Hitwise
(Chapter 2) or better by online revenue share;
• cost reduction of 10 per cent in marketing communications within
two years;
• increase retention of customers by 10 per cent;
• increase by 20 per cent within one year the number of sales arising
from a certain target market, e.g. 18–25-year-olds;
• create value-added customer services not available currently;
• improve customer service by providing a response to a query within
two hours, 24 hours per day, seven days a week;
• all other objectives to be achieved profitably giving a return on
investment in a three year period.
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.17
Online revenue contribution
examples
Table 4.3 Variations in online revenue contribution
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.18
Product suitability
to e-commerce
Figure 4.9 Grid of product suitability against market adoption for transactional
e-commerce (online purchases)
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
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Target marketing
Figure 4.10 Stages in target marketing strategy development
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OHT 4.20
Common online targeting options
– Brand loyalists – convert online
– Not brand loyal – encourage trial
– Most profitable – deepen relationships
– Larger companies (B2B)
– Smaller companies(B2B)
– Key members of the buying unit (B2B)
– Difficult to reach using other media
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.21
Alternative positionings
for online services
Figure 4.12 Alternative positionings for online services
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The value proposition
‘First identify customer needs and define a
distinctive value proposition that will meet
them, at a profit. The value proposition
must then be delivered throught the right
product and service and the right channels
and it must be communicated consistently.
The ultimate aim is to build a strong, longlasting brand that delivers value to the
company marketing it.’
Varianini and Vaturi (2000)
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.23
Strategy options
Figure 4.14 Strategic options for a company in relation to the importance of the
Internet as a channel
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
OHT 4.24
Flow chart
Figure 4.15 Flow chart for deciding on the significance of the Internet to a
business
Source: After Kumar (1999)
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Risk/reward analysis
Figure 4.16 Example of risk–reward analysis
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Example –
growth in Egg customers
Figure 4.17 Number of Egg customers, 1998–2001
Compiled from Egg Investor relations (www.egg.com and www.investis.com/eggplc)
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003
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Organisation structures
for e-commerce
Figure 4.19 Summary of alternative organisational structures for e-commerce
suggested in Parsons et al. (1996)
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Example – dabs.com
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Example - Blackstar
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Example - Smile
Chaffey: Internet Marketing, 2nd edition © Pearson Education Limited 2003