Mark 404 Internet Marketing

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Mark 404 Internet Marketing

• Chapter 3 Marketing Strategy in Internet
  Marketing
• Presented by Holly Chen Belinda Collins

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Contents

• The link between Business Unit Strategy
  Marketing strategy
• Marketing Strategy A Basic Review
• Internet Marketing strategies Pure play vs
  Bricks-and-mortar

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Business-level strategy vs Marketing Strategy

• KEY CONCEPT There must be a fit between
  Business-level strategy Marketing strategy
• the business strategy directs the choices made
  in the marketing strategy, so there must be an
  ALIGNMENT between the two strategies, e.g.

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The four alignments required for a good business
marketing strategy fit
Goal Alignment
Implementation Alignment
Resource Alignment
Fit
Activity Alignment
Mohammed, Fisher, Jaworski Paddison, (2004)
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Question time

• 1. What are the three key components of marketing
  strategy?
• 2. What are the 4 aspects that contribute to
  positioning and target-market selectionhint,
  they all start with P!

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The 3 key components of traditional marketing
strategies

• Segmentation, Targeting Positioning

Marketing Strategy Decisions
Product
Promotion
Positioning and Target-Market Selection
Price
Distribution
Mohammed, Fisher, Jaworski Paddison, (2004)
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Segmentation prioritization

• Firms prioritize segments based on selling
  potential and/or market size. Firms must target
  customers who are
• Buyer-ready (ready to buy today)
• Receptive attitude (to the product)
• If a new product target trend/market leaders
  first
• Target only those willing to pay for the
  product/service

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Example of segmentation at work
Mohammed, Fisher, Jaworski Paddison, (2004)
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Segmentation example 2
Mohammed, Fisher, Jaworski Paddison, (2004)
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Internet Marketing StrategiesPure Play

• The marketing strategies for pure play companies
  are significantly different to traditional firms
  because
• Pure plays do not need to integrate their online
  offline strategies
• Their segmentation is more complex because
  geographic boundaries are broken, so there is
  more potential customers in more regions of the
  world to be targeted

Pure Play
Online Business-Unit Strategy
Marketing Strategy for Online Business

• Choices
• 1. Segmentation
• 2. Target market selection
• 3. Positioning

Mohammed, Fisher, Jaworski Paddison, (2004)
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Segmentation target market selection for Pure
Plays

• Effective segmentation must be Meaningful,
  Actionable and Financially Attractive
• The most attractive target market is identified
  by Segment Size Growth, Structural
  Attractiveness (profitable entry?), and company
  resources (alignment of company capabilities
  resources)

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Positioning for pure plays
Positioning on features/service

• Very similar to traditional marketing strategy
  positioning although must be applied to the
  online market

Positioning on benefits
Positioning on specific usage occasions
Positioning on user category
Positioning against another product
Product-class positioning
Mohammed, Fisher, Jaworski Paddison, (2004)
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Five step positioning model for pure plays
Identify actualproduct positioning

Develop alternate strategies for achieving ideal
product position
Select andimplement themost promisingalternativ
e
Compare new actual position with ideal position
Determine ideal product position

• Uses a perceptual map to identify the variables
  that matter to consumers when they make purchases

• Generates alternatives for either repositioning
  to reach ideal state or the introduction of a new
  product

• Chooses plan that is most consistent with the
  companys objectives, resources and strengths

• Evaluates outcome of positioning efforts

• Identifies the most favorable placement on the
  perceptual map that the product could occupy

Mohammed, Fisher, Jaworski Paddison, (2004)
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Bricks and Mortar Companies

• (BAM) Internet Strategies

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Bricks--Mortar
Bricks-and-Mortar
Business-Unit Strategy

• Bricks--Mortar firms on the other hand, need to
  integrate their Business-Unit Strategy with their
  internet strategy to align their offline
  capabilities with their online potential

• Overall
• Online
• Offline

Integrated Marketing Strategy
Marketing Strategy for Offline Business
Marketing Strategy for Online Business

• Choices
• 1. Same vs. different segment
• 2. Same vs. different target market
• 3. Same vs. different positioning

Mohammed, Fisher, Jaworski Paddison, (2004)
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Bricks--Mortar segmentation changes due to
internet introduction

• Segmentation will either result in
• Reclassified expansion when segments change in
  both size characteristics
• Market reclassification when customer segments
  are different on the internet
• Market Expansion characteristics are the same
  for online offline segments
• No change

Change in Segmentation Characteristics Due to
Internet
Yes

• Reclassified Expansion

• Market Expansion

Changes in Size of Market Segments

• Market Reclassification

No

• No Change

No
Yes
Mohammed, Fisher, Jaworski Paddison, (2004)
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Bricks--Mortar targeting strategies online

• Segment characteristics stay the same, but size
  may increase. Online capabilities are a product
  enhancement, appealing to all targeted customers.
  
• Online capabilities are a product enhancement,
  appealing to only a subset of customers.
• New capabilities online appeal to new online
  segments as well as offline ones.
• New capabilities offer online appeal to only
  online customers.

Blanket Targeting
Beachhead Targeting
Bleed-Over Targeting
New Opportunity Targeting
Mohammed, Fisher, Jaworski Paddison, (2004)
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Framework to target segments
Customer Similarity
Different Customers
Same Customers
Serve Same Segment Online as Offline
Serve New Segment Online
Blanket Targeting
New Opportunity
Entire Current Segment
Serve Part of Offline Segment as Well as New
Segment Online
Beachhead Targeting
Bleed-Over Targeting
Serve a Portion of Offline Segment Online
Portions of a Segment
Mohammed, Fisher, Jaworski Paddison, (2004)
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Positioning strategies continued
Customer Similarity
Different Customers
Same Customers

• Blanket Targeting

• New Opportunity Targeting

• Borrow heavily from existing offline positioning
• Tout basic advantages of the Internetconvenience
  and accessibility

• Reposition entirely
• Position differentiations that cater to the new
  segment

Entire Segment
Focus of Effort

• Bleed-Over Targeting

• Beachhead Targeting

• Also borrow from offline positioning
• Focus more, however, on needs of the smaller
  group
• Stress value-add of the Internet

• Use dual positioning
• Leverage existing positioning
• Position added benefits, such as augmented
  offerings via the Internet (e.g., increased
  product customizability)

Portions of a Segment
Mohammed, Fisher, Jaworski Paddison, (2004)
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Summary

• Business-Unit Strategy must fit with Marketing
  Strategy to ensure that there is alignment
  between goals, resources, activities and
  implementation of strategies.
• The three key components of traditional marketing
  strategies also apply to pure play companies
• Internet marketing is more complex for
  Bricks--Mortar companies because they must
  integrate their traditional strategies with their
  internet strategies
• Segmentation is more complex for Pure Play
  companies because geographic boundaries are
  broken
• Segmentation for BAM companies may result in new
  segment characteristics and sizes, as well as the
  ability to meet new customers needs from
  different locations