Lecture 2


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  • BP, Shell involved with this Limited in structure. Not an initiative – like DM – needs to be done. Green are the central, other are the departments.
  • Lecture 2

    1. 2. <ul><li>Relate Internet marketing strategy to marketing and business strategy </li></ul><ul><li>Identify opportunities and threats arising from the Internet </li></ul><ul><li>Evaluate alternative strategic approaches to the Internet. </li></ul>
    2. 3. <ul><li>What approaches can be used to develop Internet marketing strategy? </li></ul><ul><li>How does Internet marketing strategy relate to other strategy development? </li></ul><ul><li>What are the key strategic options for Internet marketing? </li></ul>
    3. 4. <ul><li>What is strategy? </li></ul><ul><ul><li>‘ Defines how we will meet our objectives’ </li></ul></ul><ul><ul><li>‘ Sets allocation of resources to meet goals’ </li></ul></ul><ul><ul><li>‘ Selects preferred strategic options to compete within a market’ </li></ul></ul><ul><ul><li>‘ Provides a long-term plan for the development of the organisation’ </li></ul></ul>
    4. 5. Internal and external influences on Internet marketing strategy
    5. 6. <ul><li>Underestimated demand for online services </li></ul><ul><li>Market share loss </li></ul><ul><li>Resource duplication </li></ul><ul><li>Insufficient resources </li></ul><ul><li>Insufficient customer data </li></ul><ul><li>Reduced efficiencies available through online marketing </li></ul><ul><li>Fewer opportunities for applying online marketing tools </li></ul><ul><li>Changes required to internal IT systems </li></ul><ul><li>Inadequate tracking </li></ul><ul><li>Senior management support limited </li></ul>
    6. 8. Source : E-consultancy (2005)
    7. 9. A simple framework for Internet marketing strategy development
    8. 10. Dynamic e-business strategy model Source : Adapted from description in Kalakota and Robinson (2000)
    9. 11. Levels of web site development in: (a) the information to transaction model and (b) the transaction to information model of Quelch and Klein (1996)
    10. 12. 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 or e-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
    11. 13. Source: E-consultancy (2005) report ‘Managing an E-commerce team’ Author: Dave Chaffey Stage 1 . Unplanned Limited E - commerce maturity stage Strategy process and performance improvement process Structure : Location of e - commerce Senior management buy - in Marketing integration Online marketing focus Uncontrolled experimentation Limited Discrete Content : Brochureware Stage 1 . Unplanned Low - level objectives Diffuse Aware Common initiatives Traffic : visitor acquisition Stage 2 . Diffuse management Stage 1 . Unplanned Specific organisational objectives Centralised Involved Annual planning collaboration Conversion & customer experience Stage 3 . Centralised management Stage 1 . Unplanned Refined online channel improvement Decentralised Driving performance Partnership Retention Stage 4 . Decentralised operations Stage 1 . Unplanned Integrated multi - channel improvement Integrated Integral Complete Whole lifecycle optimisation Stage 5 . Integrated & optimised
    12. 15. Grid of product suitability against market adoption for transactional e-commerce (online purchases)
    13. 16. <ul><li>Tangible benefits </li></ul><ul><li>Increased sales from new sales leads giving rise to increased revenue from: </li></ul><ul><ul><li>new customers, new markets </li></ul></ul><ul><ul><li>existing customers (repeat-selling) </li></ul></ul><ul><ul><li>existing customers (cross-selling) </li></ul></ul><ul><li>Cost reductions from: </li></ul><ul><ul><li>reduced time in customer service </li></ul></ul><ul><ul><li>online sales </li></ul></ul><ul><ul><li>reduced printing and distribution costs of marcomms </li></ul></ul><ul><li>Intangible benefits </li></ul><ul><li>Corporate image communication </li></ul><ul><li>Enhance brand </li></ul><ul><li>More rapid, more responsive marketing communications including PR </li></ul><ul><li>Improved customer service </li></ul><ul><li>Learning for the future </li></ul><ul><li>Meeting customer expectations </li></ul><ul><li>Identify new partners, support existing partners </li></ul><ul><li>Better management of marketing information and customer information </li></ul><ul><li>Feedback from customers on products </li></ul>
    14. 17. <ul><li>Achieve 10 per cent online revenue contribution within two years; </li></ul><ul><li>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; </li></ul><ul><li>Cost reduction of 10 per cent in marketing communications within two years; </li></ul><ul><li>Increase retention of customers by 10 per cent; </li></ul><ul><li>Increase by 20 per cent within one year the number of sales arising from a certain target market, e.g. 18–25-year-olds; </li></ul><ul><li>Create value-added customer services not available currently; </li></ul><ul><li>Improve customer service by providing a response to a query within two hours, 24 hours per day, seven days a week; </li></ul><ul><li>All other objectives to be achieved profitably giving a return on investment in a three year period. </li></ul>
    15. 19. Source : Friedlein (2002)
    16. 21. Smile ( www.smile.co.uk )
    17. 23. Stages in target marketing strategy development
    18. 24. <ul><ul><li>Brand loyalists – convert online </li></ul></ul><ul><ul><li>Not brand loyal – encourage trial </li></ul></ul><ul><ul><li>Most profitable – deepen relationships </li></ul></ul><ul><ul><li>Larger companies (B2B) </li></ul></ul><ul><ul><li>Smaller companies(B2B) </li></ul></ul><ul><ul><li>Key members of the buying unit (B2B) </li></ul></ul><ul><ul><li>Difficult to reach using other media </li></ul></ul>
    19. 26. Euroffice e-mail ( www.euroffice.co.uk ) Source : Adapted from the company web site press releases and Revolution (2005a)
    20. 27. Alternative positionings for online services
    21. 28. <ul><li>‘ First identify customer needs and define a distinctive value proposition that will meet them, at a profit. The value proposition must then be delivered through the right product and service and the right channels and it must be communicated consistently. The ultimate aim is to build a strong, long-lasting brand that delivers value to the company marketing it. ’ </li></ul>Varianini and Vaturi (2000)
    22. 29. Autotrader site ( www.autotrader.co.uk ) clearly communicates its proposition
    23. 30. BA ‘Have you clicked yet?’ campaign web site
    24. 31. Strategic options for a company in relation to the importance of the Internet as a channel
    25. 32. Flow chart for deciding on the significance of the Internet to a business Source : After Kumar (1999)
    26. 33. Channel coverage map showing the company’s preferred strategy for communications with different customer segments with different value
    27. 34. The main challenges of e-marketing ( n = 84) Source : E-consultancy (2005)
    28. 35. Summary of alternative organisational structures for e-commerce suggested in Parsons et al. (1996)
    29. 36. Options for location of control of e-commerce Source : E-consultancy (2005)
    30. 37. Example of risk–reward analysis
    31. 38. Number of Egg customers, 1998–2001 Compiled from Egg Investor relations ( www.egg.com and www.investis.com/eggplc )