Where are we going?




Friday, November 20, 2009
Nothing sells like




Friday, November 20, 2009
Strategy without tactics is
   the slowest route to victory.


   Tactics without
   strategy is the          Text




   ...
A strategy is a long term
    plan of action
    in order to achieve
    a particular outcome.



Friday, November 20, 2009
A tactic is a specific
 method or action that



Friday, November 20, 2009
Children as a business model?
                                                Ben Stein




Friday, November 20, 2009
8                          Keys to a business

                              model
Friday, November 20, 2009
1.Value Proposition


                              The Why?




Friday, November 20, 2009
Fresh food from the



  growers                                         to the people




Friday, November 20, 2009
Fresh food from the



  growers                                         to the people




Friday, November 20, 2009
• Webvan lost over 1 billion

Friday, November 20, 2009
Fresh Direct
 founded in 2002

 270 million in sales
 40k orders a week
 $145 avg. Order
 Delivery $6.49




Friday, Novem...
Fresh



  Technology                   Success         Focus




                            NO free shipping




Friday,...
2. Revenue Model




Friday, November 20, 2009
•     Ad Revenue / AOL
               •     Subscription / Netflix
               •     Sales- Retail / AMAZON
            ...
Friday, November 20, 2009
Friday, November 20, 2009
US   $160   Million




Friday, November 20, 2009
3. Market Opportunity




Friday, November 20, 2009
HSN
                                              TV        OFFLINE
                                              CATALOG ...
Market opportunity analysis!
                                        Create More Efficient
                                ...
Market opportunity analysis!
      Customer!




    Competition!



      Company!


     Technology!




Friday, Novembe...
Identify customer needs
   The “Customer Decision Process” framework: analyze and discover customer needs

               ...
4. Competitive Environment




Friday, November 20, 2009
What do they have in common




Friday, November 20, 2009
Strategic analysis

           When it comes to competitors, remember the
            Information Economy.
           Who ...
Friday, November 20, 2009
Assess competitive advantages
      Direct competitors
            –! Firms offering products or services that are “close
...
5. Competitive Advantage




Friday, November 20, 2009
First Mover




Friday, November 20, 2009
Friday, November 20, 2009
Friday, November 20, 2009
Background
          • Founded in 1998 by now CEO
            Mark Vadon
          • Based in Seattle
          • Went pub...
Firm Statistics


       • Profits have risen 24% since 2005
       • Current market value of $1 B
       • Online market ...
Technology
 • Offers unique programs through website
       – Ex. “Build Your Own Ring”


 • Point of sale system
       –...
Competitive Advantage

       • Exclusive contracts & distribution rights with
         diamond suppliers
       • Low acq...
Competitive Advantage

                            • Doesn’t keep inventory
                            • Price transparen...
Rival Firms
       • Traditional brick and mortar jewelers
              – Zale
              – Tiffany’s
              – ...
Opportunities/Threats

       • Rising costs
              – online marketing, diamond prices
       • Diamonds as a commo...
7. Market Strategy




         Search
        SEO/SEM                                    Viral     Social
               ...
Customers Spread the word




Friday, November 20, 2009
7. Org. Development




Friday, November 20, 2009
8. Management team




Friday, November 20, 2009
Internet business
        models

Friday, November 20, 2009
B2C   B2B




                            C2C   C2B




Friday, November 20, 2009
Friday, November 20, 2009
Friday, November 20, 2009
P

                            PEOPLE


Friday, November 20, 2009
Products


              •     Products can be digital (e.g. software)
              •     Technology aids with developing...
Price


              •     Easier access to comparative websites allows
                    consumers to find lowest price...
Placement


              •     Digital products can be digitally distributed
                    (e.g. download MP3)
    ...
Promotion

              •     The Internet provides a wealth of
                    promotional tools
              •    ...
What about “new” Ps?




Friday, November 20, 2009
What about “new” Ps?




Friday, November 20, 2009
Idris Mootee’s 4 New Ps




Friday, November 20, 2009
Friday, November 20, 2009
1. Personalization

              •     Internet allows for Mass Customization
                   •        Marketing
     ...
1. Personalization


                                                Text




                            Converse allows ...
Friday, November 20, 2009
2. Participation

              •     Social media
              •     Consumers collaborate with companies to
           ...
2. Participation




Friday, November 20, 2009
3. Predictive modeling




Friday, November 20, 2009
Peer-to-Peer
                      •     Most trusted is “someone like me”
                      •     Social networks enc...
What are their needs?
        What problems do they
        have that you can solve?




Friday, November 20, 2009
Make the customer the


                            centre



                             of your marketing
Friday, Novem...
Price

                            What is a cynic?
                            A man who
                            know...
Product



              •     Does your product fulfill customer needs?




Friday, November 20, 2009
Product




                            •   Does your product fulfill customer needs?




Friday, November 20, 2009
Making money is a
                    hobby that will
                    complement any
                    other hobbies...
Placement




Friday, November 20, 2009
Promotion


              •     The Internet was created to share
                    information, not to market products
...
Deve
                     loping
                              a mar
                                      keting
        ...
1. Know yourself and
           your market
                            •   Internal audit and market
                    ...
Friday, November 20, 2009
2. Strategic analysis


              •     Thorough market analysis
              •     Strength’s, Weaknesses, Opportuni...
Friday, November 20, 2009
3. Set objectives

                            • What are the desired
                              outcomes?
            ...
4. Generate
strategies and
tactics
•    The nitty gritty: what are you actually going
     to do?




Friday, November 20,...
5. Evaluate strategies

    •     Budget and resources
    •     Prioritize
    •     SWOT




Friday, November 20, 2009
helpful       harmful
                        external internal


                                              strengths ...
6. Implement


                            Just do it



Friday, November 20, 2009
7. Track, Analyze,
           Optimize


              •     Online, be flexible
              •     Track, and adapt as re...
What does what?




Friday, November 20, 2009
Tactic            Outcome
              Email Marketing Customer Retention
             Online Advertising Acquisition Bra...
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Online Marketing Strategy (McGill)

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I am currently giving a course at McGill university and this is the 2nd session of 13,

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Pinny

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Online Marketing Strategy (McGill)

  1. 1. Where are we going? Friday, November 20, 2009
  2. 2. Nothing sells like Friday, November 20, 2009
  3. 3. Strategy without tactics is the slowest route to victory. Tactics without strategy is the Text noise before defeat. Friday, November 20, 2009
  4. 4. A strategy is a long term plan of action in order to achieve a particular outcome. Friday, November 20, 2009
  5. 5. A tactic is a specific method or action that Friday, November 20, 2009
  6. 6. Children as a business model? Ben Stein Friday, November 20, 2009
  7. 7. 8 Keys to a business model Friday, November 20, 2009
  8. 8. 1.Value Proposition The Why? Friday, November 20, 2009
  9. 9. Fresh food from the growers to the people Friday, November 20, 2009
  10. 10. Fresh food from the growers to the people Friday, November 20, 2009
  11. 11. • Webvan lost over 1 billion Friday, November 20, 2009
  12. 12. Fresh Direct founded in 2002 270 million in sales 40k orders a week $145 avg. Order Delivery $6.49 Friday, November 20, 2009
  13. 13. Fresh Technology Success Focus NO free shipping Friday, November 20, 2009
  14. 14. 2. Revenue Model Friday, November 20, 2009
  15. 15. • Ad Revenue / AOL • Subscription / Netflix • Sales- Retail / AMAZON • Transaction Fee / Etrade • Affiliate / Linkshare Friday, November 20, 2009
  16. 16. Friday, November 20, 2009
  17. 17. Friday, November 20, 2009
  18. 18. US $160 Million Friday, November 20, 2009
  19. 19. 3. Market Opportunity Friday, November 20, 2009
  20. 20. HSN TV OFFLINE CATALOG ONLINE 20% 43% 22% 16% Friday, November 20, 2009
  21. 21. Market opportunity analysis! Create More Efficient Markets, e.g., eBay ! Enable Ease of Access, Liberate e.g., Gap ! Trapped Create More Efficient Value! Systems, e.g., FedEx ! Look at Value Disrupt Current Pricing System to Power, e.g., Priceline ! Discover New Business Opportunities! Customize Offerings, e.g. MyYahoo ! Introduce Extend Reach and Access, e.g., keen.com! New-to- the- Build Community, e.g., MyFamily.com! World Value ! Enable Collaboration, e.g., ProjectPoint ! Introduce New Functionality/Expertise, e.g., C-Mode ! Friday, November 20, 2009
  22. 22. Market opportunity analysis! Customer! Competition! Company! Technology! Friday, November 20, 2009
  23. 23. Identify customer needs The “Customer Decision Process” framework: analyze and discover customer needs Gift Interested in Author/ Need for Activity/Class Problem Recognition ! Subject Matter Prepurchase Read Reviews Search for Availability Review Contents Information Gathering Evaluation Price Quality Availability Fits Needs Purchase Purchase Decision ! Purchase Online Purchase Offline Satisfaction Arrived on Time Good Quality of Contents Easy Buying Experience Postpurchase ! Repeat Purchases High Percentage of Loyalty Consumers’ Book ! Purchases Friday, November 20, 2009
  24. 24. 4. Competitive Environment Friday, November 20, 2009
  25. 25. What do they have in common Friday, November 20, 2009
  26. 26. Strategic analysis When it comes to competitors, remember the Information Economy. Who is competing with you on CUSTOMER ATTENTION. It might not be the obvious candidate. Friday, November 20, 2009
  27. 27. Friday, November 20, 2009
  28. 28. Assess competitive advantages Direct competitors –! Firms offering products or services that are “close substitute” –! Rivals in the same industry Indirect competitors –! Substitute Producers •! Firms that, though they reside in different industries, offer products and services that perform the same function –! Adjacent Competitors •! Firms that have the potential to provide products or services that are substitutes Friday, November 20, 2009
  29. 29. 5. Competitive Advantage Friday, November 20, 2009
  30. 30. First Mover Friday, November 20, 2009
  31. 31. Friday, November 20, 2009
  32. 32. Friday, November 20, 2009
  33. 33. Background • Founded in 1998 by now CEO Mark Vadon • Based in Seattle • Went public in May 2004 • Largest online retailer of diamonds and other jewelry • 159 employees Friday, November 20, 2009
  34. 34. Firm Statistics • Profits have risen 24% since 2005 • Current market value of $1 B • Online market share 50% • Stock valued at around $56 a share Friday, November 20, 2009
  35. 35. Technology • Offers unique programs through website – Ex. “Build Your Own Ring” • Point of sale system – Knowing their customer • Personal website – My Blue Nile Friday, November 20, 2009
  36. 36. Competitive Advantage • Exclusive contracts & distribution rights with diamond suppliers • Low acquisition costs – Creates barriers to entry for competitors • Purchases diamonds after customers pay – Allows for a negative working-capital cycle Friday, November 20, 2009
  37. 37. Competitive Advantage • Doesn’t keep inventory • Price transparency – Compare prices, can choose cheaper diamonds • Large selection – Over 60,000 diamonds to choose from Friday, November 20, 2009
  38. 38. Rival Firms • Traditional brick and mortar jewelers – Zale – Tiffany’s – Ice.com • eBay and Amazon • Department / Super stores – Macy’s – Wal-Mart Friday, November 20, 2009
  39. 39. Opportunities/Threats • Rising costs – online marketing, diamond prices • Diamonds as a commodity • Complexity of predicting future sale growth • Trying to expand in European market • Customers want to feel diamonds Friday, November 20, 2009
  40. 40. 7. Market Strategy Search SEO/SEM Viral Social Email Comparison Affiliates Marketing Media Friday, November 20, 2009
  41. 41. Customers Spread the word Friday, November 20, 2009
  42. 42. 7. Org. Development Friday, November 20, 2009
  43. 43. 8. Management team Friday, November 20, 2009
  44. 44. Internet business models Friday, November 20, 2009
  45. 45. B2C B2B C2C C2B Friday, November 20, 2009
  46. 46. Friday, November 20, 2009
  47. 47. Friday, November 20, 2009
  48. 48. P PEOPLE Friday, November 20, 2009
  49. 49. Products • Products can be digital (e.g. software) • Technology aids with developing new products, whether digital or not Friday, November 20, 2009
  50. 50. Price • Easier access to comparative websites allows consumers to find lowest price • Organisations need to differentiate themselves, but should not rely on price Friday, November 20, 2009
  51. 51. Placement • Digital products can be digitally distributed (e.g. download MP3) • Stores can be online (e.g. Amazon) Friday, November 20, 2009
  52. 52. Promotion • The Internet provides a wealth of promotional tools • Advertising, personal sales, promotions, public relations and more can be conducted online • Importantly: customers as promoters Friday, November 20, 2009
  53. 53. What about “new” Ps? Friday, November 20, 2009
  54. 54. What about “new” Ps? Friday, November 20, 2009
  55. 55. Idris Mootee’s 4 New Ps Friday, November 20, 2009
  56. 56. Friday, November 20, 2009
  57. 57. 1. Personalization • Internet allows for Mass Customization • Marketing • Products • Experience Friday, November 20, 2009
  58. 58. 1. Personalization Text Converse allows customers to create their own shoes. Friday, November 20, 2009
  59. 59. Friday, November 20, 2009
  60. 60. 2. Participation • Social media • Consumers collaborate with companies to create products • Rapid feedback loop Friday, November 20, 2009
  61. 61. 2. Participation Friday, November 20, 2009
  62. 62. 3. Predictive modeling Friday, November 20, 2009
  63. 63. Peer-to-Peer • Most trusted is “someone like me” • Social networks encourage interactions • Word of mouth can be more easily tracked • Equip engaged users with tools to promote Friday, November 20, 2009
  64. 64. What are their needs? What problems do they have that you can solve? Friday, November 20, 2009
  65. 65. Make the customer the centre of your marketing Friday, November 20, 2009
  66. 66. Price What is a cynic? A man who knows the price of everything and the value of nothing. Friday, November 20, 2009
  67. 67. Product • Does your product fulfill customer needs? Friday, November 20, 2009
  68. 68. Product • Does your product fulfill customer needs? Friday, November 20, 2009
  69. 69. Making money is a hobby that will complement any other hobbies you have Friday, November 20, 2009
  70. 70. Placement Friday, November 20, 2009
  71. 71. Promotion • The Internet was created to share information, not to market products • How can you harness customer needs online? Friday, November 20, 2009
  72. 72. Deve loping a mar keting plan Friday, November 20, 2009
  73. 73. 1. Know yourself and your market • Internal audit and market review • Who are we? • Who are our customers and what are their needs? • What is the social context? Friday, November 20, 2009
  74. 74. Friday, November 20, 2009
  75. 75. 2. Strategic analysis • Thorough market analysis • Strength’s, Weaknesses, Opportunities, Threat Friday, November 20, 2009
  76. 76. Friday, November 20, 2009
  77. 77. 3. Set objectives • What are the desired outcomes? • What are the specific goals? • How will success be measured? Friday, November 20, 2009
  78. 78. 4. Generate strategies and tactics • The nitty gritty: what are you actually going to do? Friday, November 20, 2009
  79. 79. 5. Evaluate strategies • Budget and resources • Prioritize • SWOT Friday, November 20, 2009
  80. 80. helpful harmful external internal strengths weaknesses opportunities threats Friday, November 20, 2009
  81. 81. 6. Implement Just do it Friday, November 20, 2009
  82. 82. 7. Track, Analyze, Optimize • Online, be flexible • Track, and adapt as required. Friday, November 20, 2009
  83. 83. What does what? Friday, November 20, 2009
  84. 84. Tactic Outcome Email Marketing Customer Retention Online Advertising Acquisition Branding Affiliate Marketing Acquisition Branding SEO /SEM Acquisition Branding Branding Social Media Participation Branding Viral marketing Participation Friday, November 20, 2009
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