Lecture 2 Internet marketing strategy

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Lecture 2Internet marketing strategy
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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, 6278.
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Influences on e-marketing strategy
Internal and external in?uences on Internet
marketing strategy
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Why do we need an internet marketing strategy?
it provides a consistent direction for online
marketing activities
the company can achieve its hierarchy of
objectives
Gives a focus to choice of target markets,
positioning and the use of the marketing mix
it means analysis of the external environment,
internal resources and capabilities will take
place
A digital marketing strategy is needed because
Tells us how resources will be deployed and how
the organisation will be structured to achieve
the strategy.
following it will help the company achieve
competitive advantage
It helps us to understand which strategies and
tactics should not be pursued
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Examples of Strategic Initiatives

• New proposition for customers
• Getting more customers (acquisition)
• Converting customers
• Improving experience
• Improving delivery of offers
• Improving the infrastructure to enhance marketing
  capabilities

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What are the options?

• A website is likely to be central to an internet
  marketing strategy
• Also
• Partner with online intermediaries e.g. portals,
  social networks and infuencers like bloggers
• Use social media marketing on own pages with
  user-generated content but also using social
  networks like Facebook, Google, LinkedIn,
  Twitter, Pinterest, etc
• Use email, mobile, apps and databases as
  communications and relationship-building tools.
• Link with offline marketing communications.
• Reduce costs, generate revenue, communicate and
  brand.

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Engaging Customers with Brands (RACE)Reach-Act-Co
nvert-Engage
Source Smart Insights (2010) from REAN (Blanc
Jackson, 2009)
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SOSTAC- a Generic framework for e marketing plan
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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 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. 1825-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.

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5 S Model for objectives
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Business models- Timmers (1999)

• E Shop
• E Procurement
• E Mall
• E Auctions
• Virtual Communities
• Collaboration Platforms
• Third Party Marketplaces
• Value Chain Integrators
• Value Chain Service Providers
• Information Broakerage
• Trust and other Services

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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 e-commerce 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
Organizational scope Departments acting independently, e.g. marketing department, IS department Co-ordination through steering committee ore-commerce manager Cross-organisational Across the enterprise and beyond (extraprise)
Transformation Technological infrastructure Technology and new responsibilities identified for e-commerce 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 value-chain approach E-business strategy incorporated as part of business strategy
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Strategic options for a company in relation to
the importance of the Internet as a channel
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Revenue models

• Subscription access to content
• Pay Per View content access
• CPM Display advertising
• CPC advertising on site
• Sponsorship of sections, content or widgets
• Affiliate revenue (CPA or CPC)
• Subscriber data for e-mail marketing
• Access to customers for research purposes

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Using the Internet to support different growth
strategies
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Target marketing
Stages in target marketing strategy development
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A range of targeting and segmentation approaches
for a digital campaign
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Customer lifecycle segmentation
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Online value proposition

• A clear differentiation of the proposition from
  competitors based on product features or service
  quality
• Target market segment(s) that the proposition
  will appeal to
• How the proposition will be communicated to site
  visitors and in all marketing communications.
  Developing a tag line can help this

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The importance of VALUE

• Cheaper to retain customers than recruit new ones
• Lifetime value and greater share of wallet
• Customers can become advocates
• Value can be a source of competitive advantage
• Incentives and collectables can encourage further
  purchases and return visits to your site
• Can help you drive thought leader strategy for
  B2B e.g. give white papers for free
• Can lock them in to your brand and stop churn /
  switching
• Customers consolidate number of websites they use
  over time so ensure your site is a favourite

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Managing Expectations

• Understand expectations customer research,, site
  benchmarking, customer scenarios
• Set and communicate the service promise
  guarantees or promises
• Delivering the service promise on-site support,
  employee support, physical fulfilment, logistics,
  delight the customer.

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Online Value Proposition
http//www.smartinsights.com/digital-marketing-str
ategy/online-value-proposition/online-value-propos
ition-examples/

• Your USP online
• Links to your brand positioning and tells
  customers who you are, what you offer, which
  markets you serve and what makes you different.
• It identifies to customers why they should click
  on the site, return, register, buy and share
  their experiences. Its a point of difference
  from competitors.

http//www.impactbnd.com/blog/10-value-proposition
s-you-wish-you-had
Source Smart Insights 2014
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Customer Information Processing Model5 Stages of
Information Processing Hofacker (2001)

• Review effectiveness of communications and web
  pages. Can your customers progress through each
  hurdle?
• Exposure is the information there long enough
  for a customer?
• Attention what grabs the attention? Movement?
  Colour?
• Comprehension perception how does the
  customer interpret the stimulus?
• Yielding acceptance is the information
  accepted by the customer?
• Retention how well can the customer recall
  their experience?

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Customer Decision-Making ModelsLow High
Involvement

• Awareness
• Interest
• Desire
• Action
• Problem Identification
• Information Search
• Evaluation of Alternatives
• Purchase
• Post-purchase Evaluation

• How does your decision-making differ for the
  following purchases
• Buying some breakfast cereal
• Buying a car
• Buying a music album from a brand new band
• Buying your first home

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Supporting the Buying Process with Site Content
Source Chaffey Smith, 2013
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The IDIC Loyalty Model (Peppers Rogers, 1997)

• The IDIC approach provides a framework for using
  the web effectively to form and build
  relationships
• Customer identification identify customers on
  first and subsequent visits through cookies /
  login
• Customer differentiation build a profile to
  segment customers
• Customer interaction on-site interactions such
  as customer service questions or create a
  tailored product
• Customer communications personalisation or
  mass-customisation of content or emails according
  to segmentation.

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User Experience Design How does a user feel
when using a system?

• http//www.youtube.com/watch?vOvj4hFxko7c

Source Smashing Design Magazine
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Starting to think about user experience

• User-centred design (Bevan, 1999) starts with
  understanding the nature and variation between
  user groups
• Who are the important users?
• What is their purpose for accessing the site?
• How frequently will they visit?
• What experience and expertise do they have?
• What nationality are they? Can they read your
  language?
• What type of information are they looking for?
• How will the use the information? Read it online,
  print it, download it, share it?
• What type of browser or platform will they use?
  How fast will their links be?
• How large a screen will they have and with how
  many colours?

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Ovp examples

• Compare. Buy. Save. Kelkoo (www.kelkoo.com)
• Earths biggest selection. Amazon
  (www.amazon.com)
• Search the largest inventory of cars and trucks
  on the Internet. More than 1.5 million listings,
  updated daily (www.autotrader.com)
• The Citibank site design (www.citibank.com) uses
  a range of techniques to illustrate its core
  proposition and OVP. The main messages are
• Welcome to Citibank The one-stop solution for
  all your financial needs
• Look for a product or service Learn about a
  financial product Find a location

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Positioning and differentiation strategy

• Deise et al (2000) and Chaston (2000) suggest
  four positioning options
• Product performance excellence
• Price performance
• Transactional Excellence
• Relationship Excellence
• These positioning options have much in common
  with Porters generic competitive strategies of
  cost leadership and differentiation

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• However unlike Porters belief, Kim et al (2004)
  concluded that for online businesses integrated
  strategies that combine elements of cost
  leadership and differentiation will outperform
  cost leadership or differentiation strategies

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Autotrader site (www.autotrader.co.uk) clearly
communicates its proposition
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BA Have you clicked yet? campaign web site
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WEBPAGESTHATSUCK.COM