Transcript e-business - University of Birmingham

The University of
Birmingham
MSc International Business (2013)
International e-business
Lecture 4: Marketing on the Web
Customer Attraction and Retention
Website Development and
E-Commerce / e-Business Marketing
E-business Strategy
1
Learning Objectives
The University of
Birmingham
• Identify the key features of the Internet audience
• Discuss the basic concepts of consumer behaviour and
purchasing decisions
• Understand how consumers behave online
• Describe the basic marketing concepts needed to understand
Internet marketing
• Identify and describe the main technologies that support online
marketing
• Identify and describe basic e-commerce marketing and
branding strategies
• Develop an appropriate strategy process model for e-biz
• Consider tools to generate and select e-business strategies
• Explain how online market research is conducted
2
Learning Objectives (2)
The University of
Birmingham
• Understand use of product-based and customer-based
marketing strategies, including e-mail marketing
• Appreciate communication activities with different market
segments
• Identify customer relationship characteristics and how to
respond to them
• Understand the customer relationship life cycle and Customer
Relationship Management (CRM and e-CRM)
• Appreciate how companies advertise and engage in marketing
communications (marcomms) online
• E-mail marketing strategies, brand creation and development
online, including use of search engines
• Use of social media in viral marketing campaigns
3
Website and Marketing:
Life-Cycle Model
The University of
Birmingham
2
“What criteria
determine who will be
our most profitable
customers?”
1
Customer
Selection
“How can we increase
the loyalty and
profitability of this
customer?”
Customer
Acquisition
Relationship
Marketing
Customer
Extension
“How can we acquire
this customer in the
most efficient /
effective way?
Customer
Retention
3
“How can we keep this
customer for as long as
possible?”
4
Gartner’s Model of Customer Interaction: http://www.gartner.com
See also: http://www.google.com Customer Lifecycle Marketing
4
Marketing Mix: 4Ps (Old Hat)
The University of
Birmingham
• Product
• Physical item or service sold
• Brand: customers’ product perception
• Price
• Amount customer pays for product / service
• Customer value: customer benefits minus total cost
• Promotion
• Means of spreading word about product / service
• Place (distribution)
• Need to have products or services available in many
different locations
• Getting right products to the right places at the best time
to sell them
5
4Ps (Schematic)
The University of
Birmingham
Key Components
6
What drives consumer behaviour?
The University of
Birmingham
• Start by assessing how consumers make
purchase decisions (offline and online)
• Five stages in the consumer decision
process:
•
•
•
•
•
•
awareness of need
search for more information
evaluation of alternatives
the actual purchase decision
post-purchase contact with the firm
How do we use this information?
7
Decision-Making Processes
The University of
Birmingham
8
How does a Website help?
The University of
Birmingham
• Some issues in Web Design and e-business
adoption
STAGES OF WEBSITE DEVELOPMENT AND ITS COMPLEXITY
Initial Question: What is the purpose of the Website?
Communication: Advertising; marketing communication;
notification of presence; description of products and
services
1-way: To provide information to potential customers:
Very Simple (Commonplace in early stage of
e-business) Often called “Brochureware” (a term of abuse!)
2-way: Simple interactivity: Data capture - build Customer
database
e-commerce transactions: take orders online and fulfil
these (either online or offline)
e-business transformation: full integration of suppliers’
and customers databases, supply-chains and processes
(the objective of much B2B) [Can be extremely complex]
9
The University of
Birmingham
Product-Based Marketing Strategies
• Web presence must integrate with image and brand
• Managers often think in terms of products and services sold
• Web site design is ABSOLUTELY CRITICAL when
customers use it to assess product categories
• Web site examples: Home Depot Staples and Apple. Compare.
• Not a useful Web site design when customers look
to fulfill a specific need
• Design Web site to meet individual customer needs
• Offer alternative shopping paths to different groups
• See http://www.webpagesthatsuck.com/
www.homedepot.com
www.staples.com
www.apple.com
10
The University of
Birmingham
Customer-based Marketing Strategies
• Web sites to meet various types of customers’
specific needs
• Initial step: identify customer groups sharing
common characteristics
• Make site more accessible and useful for each
group
• Companies need to take view beyond internal
perspective
• Example: University Web sites today focus design
on needs of stakeholders (current students,
prospective students, parents of students,
potential donors, Academic Staff). Any others?
11
Communicating with
Different Market Segments
The University of
Birmingham
• Communications media selection to carry message
• Physical world
• Uses building construction and floor space design
• Online firm
• Communications media selection: critical
• No physical presence
• Customer contact made through image projected through
media and Web site
• Online firm challenge
• Obtain customer trust with no physical presence
• TRUST is essential for e-Business success – especially in B2C
• New businesses need to build sound reputation (Branding)
12
The University of
Birmingham
Trust, Complexity and Media Choice
• The Web
• Broad intermediate step
• Between mass media and personal contact
• Web communication offers:
• Advantages of personal contact selling
• Cost savings of mass media
• Far less costly than print advertising (“menu
costs”)
• Mass media advertising offers lowest trust level
• Still used successfully because costs are spread
over large numbers of people
13
Information Dissemination
The University of
Birmingham
14
The University of
Birmingham
Trust, Complexity, and Media Choice (2)
• Complexity level inherent in product and service
• Important factor in media choice
• Products with few characteristics and easy to
understand
• Promotes well with mass media (e.g. Beer; DVDs)
• Mass media: expensive to produce
• Used primarily for short messages
• Highly complex products and services
• Promote well with personal contact
• Customers may ask questions (e.g. Pharma)
15
The University of
Birmingham
Trust, Complexity, and Media Choice (3)
• Web occupies a wide middle ground
• Offers various elements
• Mass media messaging
• Personal contact interaction
• Anything in between
• People now resistant to mass media messages
• Successful mass media campaigns
• Rely on passive nature of media consumption
• Web user likely to be in an active state
• Better to use a trust-based model approach
• New Internet communications modalities for
individuals and companies
• Web log or blog – and increasingly - SOCIAL MEDIA
16
Market Segmentation
The University of
Birmingham
• Divides potential customer pool into segments
• Defined in terms of demographic characteristics
• Micromarketing
• Practice of targetting very small market segments
• Hampered by cost increases
• Three categories to identify market segments
• Geographic segmentation
• Demographic segmentation
• Psychographic segmentation
• Television advertisers use all three categories
17
Market Segmentation on the Web
The University of
Birmingham
• Web opportunity
• Present different store environments online
• H & M site targets young, fashion-conscious
buyers
• M & S site targets older, more established
buyers
• Limitations of physical retail stores
• Floor and display space
• Must convey one particular message
• Web stores
• Separate virtual spaces for different market
segments
18
Offering Customers a Choice
The University of
Birmingham
• One-to-one marketing (now possible using Big Data,
data-mining and Analytics [see later])
• Offering products, services closely matched to needs
of a particular customer
• Example: Dell (Not as good as it used to be)
• Offers several different ways to do business
• Home page links for each major customer group
• Specific products, product categories links available
• Dell Premier accounts
• High level of customer-based market segmentation
http://contentmarketinginstitute.com/2012/05/serve-multipleaudiences-with-a-segmented-site-structure/
(Good reference site)
19
University of
Beyond Market Segmentation: CustomerTheBirmingham
Behaviour & Relationship
• Reminder: Companies target similar customer
groups as market segments
• One-to-one marketing
• Chance to create individually unique Web experiences
• Next step
• Use the Web to target specific customers in different
ways at different times
• Same person
• Needs different combinations of products and services
• Depending on the occasion [Christmas; Chinese New
Year; Singles’ Day; Valentine’s; Summer; Winter, etc]
• Occasion segmentation
20
Segmentation & Behaviour
The University of
Birmingham
• Online world: single Web site design [e.g. IBM]
• Easier to meet needs of different behavioral modes
• Can include elements appealing to different behavioral
segments
• Usage-based market segmentation
• Customizing visitor experiences to match the site
usage behavior patterns of each visitor or type of
visitor
• Categories of online behavior patterns
• Browsers, buyers, and shoppers
• Browsers OK; Buyers better; Shoppers even better
• LOYAL LONG-TERM Customers: Best of all!
21
Segmentation & Behaviour (2)
The University of
Birmingham
• Browsers
• Visitors just surfing or browsing
• Web site must offer something to trigger visitors’
interest
• Trigger words
• Prompt visitor to stay and investigate products or
services
• Have links to site explanations, instructions
• Include extra content related to product, service
• Leads to favourable impression (bookmark)
22
Segmentation & Behaviour (3)
The University of
Birmingham
• Buyers
•
•
•
•
Ready to make a purchase right away
Offer direct route into purchase transaction
Amazon (and other sites recognize returning buyers)
How? Use of “cookies” – small text file sent to browser
• Shopping cart
• Part of the Web site
• Keeps track of selected items for purchase
• Automates purchasing process
• Page offers link back into shopping area
• Primary goal: get buyer to shopping cart as quickly
as possible
23
Segmentation & Behaviour (4)
The University of
Birmingham
• Shoppers
• Motivated to buy
• Looking for more information before purchase
• Offer comparison tools, product reviews, and features lists
• People do not necessarily retain behavioural categories from
one visit to the next
• Even for the same Web site
• Alternative Models: McKinsey’s 6 behavioural groups
• Simplifiers (convenience) Surfers (exploring) Connectors
(Communicating with others) Routiners (regularly return to
same sites) Sportsters (look at sport and entertainment)
• Question: Does the same strategy work for all? NO!!!
• Need to identify groups and formulate different ways of
generating Revenues (and Profits).
24
Customer Relationships and
LifeCycle Segmentation
The University of
Birmingham
• One-to-one marketing and usage-based
segmentation value
• Strengthen companies’ relationships with
customers
• Good customer experiences
• Create intense loyalty feeling
• Typical five-stage model of customer loyalty
• First four stages show increase in relationship
intensity
• Fifth stage (separation)
• Decline occurs, relationship terminates
25
Advertising on the Web
The University of
Birmingham
• Effective advertising involves communication
• Five-stage customer loyalty model helpful in creating advertising
messages
• Awareness stage
• Advertising message should inform
• Exploration stage
• Message should explain how product, service works
• Encourage switching brands
• Familiarity stage
• Message should be persuasive, convince customer to buy
• Commitment stage
• Customer sent reminder messages, offers, news, cases
• Separation stage
• Customer not targetted
• Online advertising
• Always coordinate with existing advertising efforts. Why?
26
5 Stages of Customer Loyalty
The University of
Birmingham
Touchpoints: Online and offline customer contact points
Touchpoint consistency: Goal of providing similar levels
and quality of service at all touchpoints
27
The University of
Birmingham
5 Stages & Life-Cycle Segmentation
• Characteristics of the five stages
• Awareness
• Customers recognize company name, product
• Exploration
• Customers learn more about company, products
• Familiarity
• Customers have completed several transactions
• Customers aware of returns and credits policies
• Customers aware of pricing flexibility
• Customers just as likely to shop at competitors’ sites
• Commitment
• Customer experiences highly satisfactory encounters
• Customer develops fierce loyalty or strong preference
• Often tells others (WOM – best marketing there is!)
• Separation
• Conditions that made relationship valuable change
• Parties enter separation stage
28
The University of
Birmingham
Acquisition, Conversion & Retention
• Goal
• Attract new visitors to a Web site
• Acquisition cost
• Total amount of money site spends drawing one visitor
to site
• Conversion
• Convert first-time visitor into a customer
• Conversion cost
• Total amount of money site spends to induce one
visitor to make a purchase, sign up for a subscription,
or register
• May exceed profit earned on average sale
29
Acquisition, Conversion & Retention (2)
The University of
Birmingham
• Retained customers
• Return one or more times after making first purchases
• Retention costs
• Costs of inducing customers to return and buy again
• Importance of measuring these costs
• Indicates successful advertising, promotion strategies
• More precise than classifying into five loyalty stages
• What can we do with this information?
• Loyalty gifts – Air Miles; Cashback; Special Offers;
• Prizes – Lotteries; Gifts; Offers to friends and relatives
• Other ideas? …
30
The University of
Birmingham
Acquisition, Conversion & Retention
• Funnel model
• Conceptual tool
• Provides understanding of overall nature of
marketing strategy
• Clear structure for evaluating specific strategy
elements
• Very similar to customer life-cycle model
• Less abstract
• Better at showing effectiveness of two or more
specific strategies
• Provides good analogy: large number of
prospects with fewer and fewer converted to loyal
patrons
31
Funnel Model
The University of
Birmingham
Note the High Attrition Rate.
http://visualign.wordpress.com/2013/03/31/visualizing-conversion-rates-funnels-bullet-charts/
32
Banner Ads
The University of
Birmingham
• Banner ad
• Small rectangular object with stationary or moving graphic
• Includes hyperlink to advertiser’s Web site
• Versatile: informative and persuasive functions
• Attention-grabbing banner ads
• Use animated GIFs and rich media objects
• Created using Shockwave, Java, Flash, HTML5
• Interactive marketing unit (IMU) ad formats
• Voluntary standard banner sizes
• Universal ad package (UAP) – see Schneider
• Banner Ad Exchanges: Brokers between advertisers and
websites carrying the ads
33
New Banner Ad Moves
The University of
Birmingham
• New strategies for banner ads
• Banner ads were a novelty initially, but now ignored
• Lost ability to attract attention
• Solutions (suggested)
• Introduce animated GIFs with moving elements
• Create ads displaying rich media effects
(movie clips)
• Add interactive effects (Java programs):
respond to user’s click with some action
• Create ads acting like mini video game
• Create ads appearing to be dialogue boxes
(misleading and probably unethical)
34
Text Ads
The University of
Birmingham
• Short promotional message
• No graphic elements
• Usually placed along Web page top or right side
• Deceptively simple but surprisingly very effective
• Example: Google
• Initially criticized for including unobtrusive ads on its
pages
• Now clearly labels ads to prevent confusion
• Inline text ad
• Text in stories displayed as hyperlinks
35
Other Web Ad Formats
The University of
Birmingham
• Pop-up ad
• Appears in its own window
• When user opens or closes Web page
• Considered to be extremely annoying
• Must click close button (small) in window of ad
• Pop-behind ad
• Pop-up ad followed by a quick command
• Returns focus to original browser window
• Appears when browser is closed
• Ad-blocking software
• Prevents banner ads and pop-up ads from loading
• You can set your browser to block pop-ups (sitespecific)
36
Even More Ad Formats
The University of
Birmingham
• Interstitial ad
• User clicks link to load page
• Interstitial ad opens in its own browser window instead
of page user intended to load (very annoying)
• Many close automatically
• Others require user to click a button
• Rich media ads (active ads)
• Generate graphical activity that “floats” over the Web
page itself
• Example: 30 second ad before television show
• Very Annoying: Especially on YouTube
37
Mobile Device Advertising
The University of
Birmingham
• Massive Growth Area, with Enormous Potential
• Some mobile software applications (mobile apps)
include advertising element
• Messages displayed from advertisers
• Part of the app screen or in a separate screen
• Mobile apps’ advertising space marketed in same way
as Web sites’ banner advertising
• Also Site Sponsorships:
• Offer opportunity to sponsor all (or parts) of their sites
• Quite subtle; Ties Company or Product to an Event
e.g. Olympic Games; World Cup; Cultural Events
• Raises a number of Ethical Questions (advertising
message closely woven into sites’ contents)
38
Cost & Effectiveness
The University of
Birmingham
• Companies want Web sites to make favourable
impression on potential customers
• Raises issue of measuring Web site effectiveness
• Cost per thousand (CPM) for mass media advertising
• “M” Roman numeral for “thousand”
• Amount paid for every thousand people in the
estimated audience
• Measuring Web Audiences: Complicated
• Web’s Interactivity is critical (needs careful Design)
• Depends on information gathered from Visitor
• Visit
• Trial visit
• Repeat visits
39
Cost & Effectiveness (2)
The University of
Birmingham
• Page view (Key Metric)
• Each page loaded by a visitor (Key Metric)
• Ad view (Key Metric)
• Occurs if page contains an ad
• Impression
• Each time banner ad loads
• Click (click-through) (Key Metric)
• Action whereby a visitor clicks banner ad to open advertiser’s
page
• New metrics to evaluate advertising yield outcomes
• Measure number of new visitors who buy first time after
arriving at site (Key Metric)
• By way of click-through (Key Metric)
• Calculate advertising cost of acquiring one customer on the
Web (Key Metric)
• Compare these to how much it costs to acquire one
customer through traditional channels – assess campaign
40
CPM Rates
Source: Schneider, 2013 ($ US)
The University of
Birmingham
41
The University of
Birmingham
Effectiveness of Online Advertising
•
•
•
Online advertising effectiveness
• Remains difficult to measure
Major problem
• Lack of single industry standard measuring service
Solution (2004)
• Set of media measurement guidelines
• Used by all online advertisers
• Produce comparable ad view numbers
•
•
•
•
Difficulties remain
• Site visitors change Web surfing behaviors, habits
Online advertising only one element in marketing strategy
• Use variety of media to reach potential customers
Online advertising developments
• AdAge.com, eMarketer, Online Publishers Association
Online advertising much more effective using market segmentation
42
E-Mail Marketing
The University of
Birmingham
• Can be a powerful element of advertising strategy
• Used to announce new products or features
• Used to announce sales on existing products
• Unsolicited Commercial E-mail (UCE, “Spam”)
• Electronic junk mail
• Wastes time, disk space, and consumes large amounts of
Internet capacity
• Can use Spam and Junk Mail Filters, but not 100% effective
• 2 Problems: False-Positives; False-Negatives (Uses Bayesian
Filtering: Improves over time, as software learns)
• Key element
• Obtain customers’ approvals
• Prior to sending marketing or promotional e-mail
• Anti-Spam Laws pretty useless
43
The University of
Birmingham
Permission Marketing: More Ethical
• Conversion rate
• Percentage of recipients responding to an ad or promotion
• Ranges from 10 percent to more than 30 percent on
requested e-mail messages
• Opt-in e-mail
• Practice of sending e-mail messages to people who request
information
• Part of marketing strategy: permission marketing
• More successful than mass media general promotional
message
• Makes better use of customer’s time
• Return Path offers opt-in e-mail services
• Provides e-mail addresses to advertisers
• Rates vary depending on type and price of the product
• Minimum of about $1 to a maximum of 25–30 percent of the selling
price of the product
44
What IS Strategy?
The University of
Birmingham
• What is strategy?
• ‘Defines how we will meet our
objectives’
• ‘Sets allocation of resources to meet
goals’
• ‘Selects preferred strategic option to
compete within a market’
• ‘Provides a long-term plan for the
development of the organization’
45
Management Issues
The University of
Birmingham
• How does e-business strategy differ from traditional
business strategy?
• How should we integrate e-business strategy with
existing business and IS strategy?
• How should we evaluate our investment priorities
and returns from e-business?
• How do we need to alter our marketing strategies as
we develop web presence and capabilities?
• What Marketing Mix should we adopt?
• Combination of 4Ps (or 7Ps) to achieve goals
46
The University of
Birmingham
Traditional vs. e-business Strategy
47
University of
Integration of e-business Strategy TheBirmingham
with Existing Business and IS Strategy?
Alternative forms of
Organizational Strategy
INTEGRATION is CRITICAL
Chaffey (2011) Chapter 5
48
Evaluation of ROI: DIFFICULT
The University of
Birmingham
http://www.ginaabudi.com/articles/using-return-on-investment-to-evaluate-project-management-training/
49
Relationships between e-business
and Other Strategies
Chaffey: Chapter numbers refer
The University of
Birmingham
50
Sell-side e-strategy
(e-marketing / e-CRM strategy)
The University of
Birmingham
• Sell-side e-commerce is a channel strategy
• Objectives for online contribution percentage should
drive our strategy
• Our e-commerce strategy defines how we should
• Hit our channel leads and sales targets
• Acquisition, Conversion, Retention, Service,
Profitability (Customer LifeCycle Model)
• Communicate benefits of using this channel
• Prioritize products available through channel
• Prioritize audiences targeted through channel
• Select partners for this channel
• Channel strategy thrives on differentials
• BUT, need to manage channel integration
Source: Chaffey
51
The University of
Buy-side e-business Strategy
Birmingham
(e-supply-chain Management Strategy)
• Buy-side e-commerce strategy is about maximizing
operational efficiencies while improving customer
service quality
• Operational efficiency KPIs should drive our strategy
• Our buy-side e-commerce strategy defines how we
should
• Automate internal processes
• Link internal resource management systems with
external purchasing systems
• Prioritize suppliers / partners collaborating using this
channel
• Prioritize applications for E-SCM –
create a roadmap
• Involves selection of appropriate strategic partners
52
Marketing Strategy Focus: Product?
The University of
Birmingham
• Web presence must integrate with image and brand
• Managers often think in terms of products and
services sold
• Useful Web site design when customers use
product categories
• Web site examples: B & Q, IKEA, TPS (Trade
Plumbing Supplies), Staples (Office Supplies),
many other examples
• Not a useful Web site design when customers are
looking to fulfill a specific need
• Design Web site to meet individual customer needs
• Offer alternative shopping paths
• Display the complete range of products available
• Provide a search option (amazing how few sites do!)
53
Marketing Strategy Focus: Customer?
The University of
Birmingham
• Web sites to meet various types of customers’
specific needs
• Initial step: identify customer groups sharing
common characteristics
• Make site more accessible and useful for each
group
• Companies need to take view beyond internal
perspective
• Example: university Web sites today focus
design on needs of stakeholders (current
students, prospective students, parents of
students, potential donors, funders, academic
and ancillary staff)
• Example: Apple: Functional design, visual
appeal, ease of use, capability, fun to use,
powerful and innovative, etc.
54
The University of
Birmingham
Communication: Different Segments
• Communications media selection to carry message
• Physical world
• Uses building construction and floor space
design
• Online firm
• Communications media selection: critical
• No physical presence
• Customer contact made through image
projected through media and Web site
• Online firm challenge:
• Obtain Customer trust with no physical
presence
• Communicate Organization’s ethics and image
• Engage visitors and grow their interest in
products and services – turn into Customers
55
TV Advertising Tailoring
The University of
Birmingham
• Companies try to:
• Match advertising messages to market segments
• Build sales environment for a product or service
• Correspond to market segments trying to reach
56
Management Issues
The University of
Birmingham
• 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?
57
e-Marketing
The University of
Birmingham
• The definition of marketing by the Chartered Institute
of Marketing (http://www.cim.co.uk/) is:
‘Marketing is the management process responsible
for identifying, anticipating and satisfying customer
requirements profitably’
• Which e-marketing tools can assist?
• Web, e-mail, databases, wireless and digital
television, mobiles, Tablets, PDAs, etc.
• Streaming video; Webinars; Demonstrations
online; FAQs; Online Chat; Use of Social
Networking (JetBlue, use of Facebook; Integrated
Offline and Online Marketing Communications
(Marcomms), etc.
58
The University of
Birmingham
E-Marketing and Other Business Plans
These need close alignment
59
SOSTAC: Generic Framework
The University of
Birmingham
http://www.businessballs.com/pr_smiths_sostac_planning_method.htm
60
Inputs from Situational Analysis
The University of
Birmingham
61
The University of
Birmingham
Competitive Analysis: Benchmarking
•
•
•
•
•
•
•
Marketplace performance – market share and sales trends and much
more significantly, the proportion of sales achieved through the
Internet.
Business and revenue models – do these differ from other market
players’ approaches?
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 basic? Beyond the competitor’s site, how do they
make use of intermediary sites to promote and deliver their services?
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 – the practical features of site design such
as aesthetics, ease of use, personalization, navigation and speed.
The 7Ps. [www.cim.co.uk/files/7ps.pdf ]
Use FiMO and RECOIL Analysis (Online at Canvas)
62
Assessment of Effectiveness
•
•
•
•
The University of
Birmingham
Business effectiveness. Contribution of site to revenue (see
objective setting), profitability and any indications of the
corporate mission for the site. The costs of producing and
updating the site will also be reviewed, i.e. cost-benefit analysis.
Marketing effectiveness. Measures may include:
• leads; sales; retention rate; market share; brand enhancement
and loyalty;
Customer service: Critical KPI for assessing effectivenes
• These measures must be assessed for each of the different
product lines delivered through the web site. The way in which
the elements of the marketing mix are utilized should also be
reviewed.
Internet effectiveness. These are specific measures used to
assess the way in which the web site is navigated and searched,
and the characteristics of the visiting audience.
• Such measures include specialist terms such as hits and page
impressions that are collected from the log file, and also more
typical techniques such as focus groups and questionnaires
to existing customers. From a marketing point of view, how
clear is the value proposition of the site for the customer; this
should be noted – and acted upon.
63
SMART e-Marketing Objectives
The University of
Birmingham
• http://www.learnmarketing.net/smart.htm
• 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 – increased customer
retention by reducing churn from 25 per cent p.a. to 20 per
cent.
• Established media company – increased 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 –
increased overall revenue by 5 per cent, through targeting
sales in new international markets.
• Reduced costs of routine customer service by 10 per cent to
enable focus on delivery of specialized customer service.
64
Developing Marketing Strategy
The University of
Birmingham
65
De Kare Silvers ES Test
The University of
Birmingham
1. Product characteristics. Does the product
need to be physically tried or touched
before it is bought?
2. Familiarity and confidence. Considers the
degree the consumer recognizes and
trusts the product and brand.
3. 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?
•http://abopress.blogspot.com/2011/05/de-kare-silvers-electronic-shopping.html
66
Online and Offline Communication
The University of
Birmingham
67
Individualization of Message
The University of
Birmingham
68
Customers’ Characteristics
The University of
Birmingham
How can you segment them?
69
How do they behave online?
The University of
Birmingham
70
Integrated Marketing Strategy
The University of
Birmingham
71
Channel Integration
E-Marketing and Mixed Mode Purchasing
The University of
Birmingham
72
Online Marketing Mix: Issues
•
•
•
•
•
The University of
Birmingham
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
73
Elements of Marketing Mix
The University of
Birmingham
74
Online Mix Examples
The University of
Birmingham
• Product
•
•
•
•
•
•
Extend range (Tesco)
Narrow range (WH Smith iDTV)
Online-only products (banks)
Develop new brand (Egg) – FAILED!
Migrate existing brand (HSBC)
Partner with online brand
(Waterstone's and Amazon).
75
Online Mix (2)
The University of
Birmingham
• Price
• Differential pricing:
• Change online prices due to price
transparency and competition (EasyJet)
• Maintain price to avoid cannibalisation of
offline sales (Dixon)
• New pricing options (software, music):
•
•
•
•
Rental (“cloud computing”) – see later
Pay per use (“cloud computing”)
Reverse auctions (B2B)
Dynamic pricing (Concert tickets).
76
Online Mix (3)
The University of
Birmingham
• Place = avoiding channel conflicts
(Channel Strategy = sell – side activity)
• Disintermediation – sell direct
• Reintermediation – partner with new
intermediaries
• Countermediation:
• Form new intermediaries
• Partner with existing intermediaries
• Distance from intermediaries.
(Abbey National)
77
Online Mix (4)
The University of
Birmingham
• 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.
78
Online Mix (5)
The University of
Birmingham
• Service
• People
• 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.
79
The University of
Birmingham
Activity: Varying Mix (Supermarkets)
Mix
Tactics applied online
Product
Price
Place
Promotion
Service
www.tesco.com, www.sainsburystoyou.co.uk, www.waitrose.com
80
Varying Mix: Airlines
Mix
The University of
Birmingham
Tactics applied online
Product
Price
Place
Promotion
Service
www.ryanair.com, www.easyjet.com, www.ba.com
81
Branding
The University of
Birmingham
Malcolm McDonald 1992:, Creating Powerful
Brands
Defines Brand 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.”
82
The University of
Birmingham
Aaker & Joachimsthaler: Brand Equity
•
•
•
•
•
Key Components:
Brand awareness
Perceived quality
Brand associations
Brand loyalty.
Question: How does one value a brand?
Answer: With extreme difficulty
83
2004 Cranfield Study
The University of
Birmingham
84
How do Customers find you?
source: Laudon &Traver, 2011
The University of
Birmingham
85
What Entices Them to Buy?
Source: Laudon & Traver, 2011
The University of
Birmingham
86
What do we need to offer?
The University of
Birmingham
87
What do we need to offer?
The University of
Birmingham
In my opinion: Customer Service
88
Not Products, but BRANDS
The University of
Birmingham
89
Marketing Communications
The University of
Birmingham
• What is marketing communications?
• Two aspects:
• Branding (statements of “quality, reliability, non-price
factors”)
• Sales (promotion)
• Promotional aspect : “buy NOW!”
• Branding aspect: Focus on differentiated benefits of product
• Online Brand Development and brand reinforcement
• CRITICAL to business success
• Develop and sustain competitive advantage
• Create a climate of TRUST (building guanxi)
• Create corporate “image” in mind of online visitor
• Online Advertising
• A mixed blessing - permission marketing: OK; spam: BAD
• Try http://www.emarketer.com
90
e-Commerce Adoption
The University of
Birmingham
• “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.
91
Online marketing jargon
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Banner ad
Pop-up
Pop-under
Button
Rich media ad
Interstitial ad
Superstitial ad
Banner swapping
Banner exchanges
Cross-linking
Search engine marketing
Placement
Paid listing
Sponsorship
Affiliate marketing
Direct e-mail marketing
The University of
Birmingham
Please do some online searches
for these terms and concepts
and build a database (on cards,
or whatever), to ensure that
you understand the concepts
and their importance to
e-enabled business operation
92
Reading etc
The University of
Birmingham
• Chaffey: Chapters 4 8 and 2
• Schneider: Chapter 3 and 4
• Dahlen, Lange & Smith (2010): Marketing
Communications, Chichester, John Wiley & Sons
Ltd.
• Chen: Chapters 3 & 4
• Laudon & Traver: Chapters 2, 4, 7& 8
• Jelassi & Enders: Chapters 4, 5 and 6
• http://www.davechaffey.com/E-marketing-Insights/
• http://www.clickz.com/experts/brand/emkt_strat
• http://www.emarketingandcommerce.com/
• http://www.google.co.uk/intl/en/adwords/
• http://www.marketingtoday.com/emarketing/index.ht
m
93