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E Marketing Lecture, Part 1


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Lecture by Dr. Marwan Khammash at Summer School on "Corporate Communications", TU Braunschweig, Institut für Wirtschaftsinformatik (wi2).

E Marketing Lecture, Part 1

  1. 1. 1-1 Welcome to E-MARKETING 2009 Lecture 1 E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Part I: E-Marketing in Context Chapter 1: Past, Present, and Future Bangor Business Dr. Marwan Khammash School/Wi2
  2. 2. Lecture1 Objectives 1-2   After Lecture1, you will be able to:   Explain how the internet and information technology advances offer benefits and challenges to consumers, businesses, marketers, and society.   Distinguish between e-business and e-marketing.   Explain how increasing buyer control is changing the marketing landscape.   Understand the distinction between information or entertainment as data.   Identify several trends that may shape the future of e- marketing.
  3. 3. Dell Starts Listening 1-3   In 2004, Dell held 28.2% of U.S. computer market share.   To reduce costs, Dell Computer began outsourcing customer service to a firm in India.   Market share increased to 28.8% but complaints and consumer dissatisfaction rose.   Dell digital media manager initiated blogs in several languages to improve communication.
  4. 4. Dell Starts Listening, cont. 1-4   Dell’s blogs became mechanisms for handling consumer complaints and ideas.   Blog usage resulted in over 20 changes to the company.   What are the opportunities and risks in utilizing blogs for improving customer service?
  5. 5. Internet 101 1-5   The internet is a global network of interconnected networks.   E-mail and data files move over phone lines, cables, and satellites from sender to receiver.   There are two special uses of the internet:   Intranet:network that runs internally in an organization.   Extranet: two joined networks that share information.
  6. 6. Internet 101, cont. 1-6   E-business is the continuous optimization of a firm’s business activities through digital technology.   E-commerce is the subset of e-business focused on transactions.   E-marketing is one part of an organization’s e- business activities.
  7. 7. E-Marketing is Bigger than the Web 1-7   The Web is the portion of the internet that supports a graphical user interface for hypertext navigation with a browser.   The Web is what most people think about when they think of the Internet.
  8. 8. The Web Is One Aspect of E-Marketing 1-8   Exhibit 1.1
  9. 9. E-Marketing is Bigger than Technology 1-9   The internet provides individual users with convenient and continuous access to information, entertainment, and communication.   Communities form around shared photos, videos, and online profiles.   The digital environment enhances processes and activities for businesses.   Societies are enhanced through more efficient markets, more jobs, and information access.
  10. 10. Global Internet Users 1-10   Exhibit 1.3
  11. 11. E-Marketing’s Past: Web 1.0 1-11   The Internet started in 1969 as the ARPANET, a network for academic and military use.   Web pages and browsers appeared in 1993.   The first generation of e-business was like a gold rush.   Between 2000 and 2002, more than 500 internet firms shut down in the U.S.   By Q4 2003, almost 60% of public dot-coms were profitable.
  12. 12. E-Business to Just Business 1-12   Exhibit 1.5
  13. 13. E-Marketing Today: Web 2.0 1-13   Web 1.0 connected people to networks.   Web 2.0 connected people with machines and each other.   Web 2.0 is the second generation of internet technology and includes:   Blogs   Social networking   Photo, video, and bookmark sharing
  14. 14. The Future: Web 3.0 1-14   The newest technologies allow marketers to focus on user:   Engagement   Participation   Co-creation   Online gaming represented over $1 billion in revenue and 15 million players in 2006.
  15. 15. Consumers Have More Control 1-15   The internet provides a communication platform for individual comments, both positive and negative.   Comments can spread quickly and rapidly.   New technologies such as digital video recorders (DVRs) will increase consumer control.   You tube?
  16. 16. Power Shift from Companies to Individuals 1-16   Exhibit 1.7
  17. 17. Wireless Networking Increases 1-17   Cell phones, PDAs, and laptops connect to the internet via wireless modem worldwide.   Starbucks   Hotels and airports   Queen Mary II luxury liner   train stations   Customers will have information, entertainment, and communication when, where, and how they want it.
  18. 18. WiFi at Train Station in France 1-18
  19. 19. Appliance Convergence 1-19   The receiving appliance is separate from the media type.   Computers can receive digital radio and TV.   TV sets can receive the Web.   New types of “smart” receiving appliances will emerge.   Internet refrigerator is many digital appliances in one.   Global positioning systems (GPS) allow in-car communication and entertainment.
  20. 20. Semantic Web 1-20 The Semantic Web will utilize a standard definition protocol that will allow users to find information based on its type, such as:   The next available appointment for a doctor.   Details about an upcoming concert.   Menu at the local restaurant.   Represents the next huge advance: providing worldwide access to data on demand without effort.
  21. 21. Semantic Web 1-21 ♦  Marketers want to give customers information when and where they want it. ♦  They use several different receiving appliances to convey their messages. ♦  The Semantic Web is an extension of the current Web making it easer to obtain information by: a. Providing information based on type b. Person, contact information, next available appointment, restaurant menu’s. ♦  The Semantic Web was invented by Sir Tim Berners-Lee.
  22. 22. Internet-Time Analogy Ex.1.9 1-22
  23. 23. Group Presentations   Case Study Analysis   In a group of 5 members, you have to analyze a company’s online strategies using the book concepts and terminology. Each lecture, I will select a company with a large online presence. It will be a well known company so that you can find articles written about its internet strategies and not have to rely solely on its Website. Be sure to read the press releases at the site for more insight. Please note that groups will be formed alphabetically.   Each group will present their findings in a 20 minute power point presentation. In a group of 5, each member has to present for 5 minutes. There will be 5 minutes for Q&A afterwards. Please include the following in your presentation:
  24. 24. Group Presentations Part 1 Overview: Internet Properties & Marketing Implications • Website analysis • Web and other online content (such as mobile content) • Website properties (table 1.6 in the core textbook) • Website design and usability features • Multimedia and interactive features Part 2 Benefit, Cost & Value Creation – The Marketing Mix • Creating a positive customer experience • Benefit, cost & value creation • Internet marketing mix • Customer relationship management features
  25. 25. Group Presentations Part 3 Consumer Characteristics & Branding Strategy • Branding and consistency online/offline branding • Environmental, situational, and personal factors affecting users • Market segments served • Brand position • Offline versus online customers Part 4 Website Analysis • Currency • Content, including multimedia and user engagement opportunities • Usability: navigation, access • Other company owned sites (e.g., microsites or
  26. 26. Group Presentations Part 5 Business Model • Business pyramid model • Specific e-business models used (chapter 2 in the core textbook) • Customer value (products, price) • Revenue stream sources Part 6 E-Marketing Metrics • Site objectives • Metrics likely used at this site (using balanced scorecard and other approaches in chapter 3 of the core textbook) Part 7 Conclusion and Outlook • Evaluation of the company’s online properties • Recommendations for improving the business model or opportunities.
  27. 27. Good Luck See you in the afternoon!
  28. 28. 1-28 Welcome to E-MARKETING 2009 Lecture 2 E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Part I: E-Marketing in Context Chapter 2: Strategic E-Marketing and Performance Metrics Bangor Business Dr. Marwan Khammash School/Wi2
  29. 29. Lecture 2 Objectives 29-2   After Lecture 2, you will be able to:   Explain the importance of strategic planning, strategy, e-business strategy, and e-marketing strategy.   Identify the main e-business models at the activity, business process, and enterprise levels.   Discuss the use of performance metrics and the Balanced Scorecard to measure e-business and e- marketing performance.
  30. 30. 2-30   Founded in 1995 as an online retailer.   Did not become profitable until Q4 2001.   In 2007, generated $14.8 billion in net sales, $476 million in net income.   Leveraged its competencies into different e-business models.   Establishede-commerce partnerships with Target, Macy’s, and others.   Provided developer services.   Created the first affiliate program.
  31. 31., cont. 2-31   Amazon’s success is based on selection, lower prices, product availability, innovative technology, and better product information.   CEO Jeff Bezos is not interested in expanding to the physical world.   Which of Amazon’s core competencies do you think will drive its strategy in the future? 
  32. 32. Strategic Planning 2-32   A managerial process to develop and maintain a viable fit between the organization and its changing market opportunities.   Process identifies firm’s goals for   Growth   Competitive position   Geographic scope   Other objectives, such as industry, products, etc.
  33. 33. ESP: Environment, Strategy, and Performance 2-33   The e-marketing plan flows from the organization’s overall goals and strategies.   The ESP framework illustrates the relationships among environment, strategy, and performance.   A SWOT analysis of the business environment (E) leads to the development of strategy (S) and the measurement of performance (P).
  34. 34. Strategy 2-34   Strategy is the means to achieve a goal.   E-business strategy   Strategy that deploys enterprise resources to reach performance objectives, competitive advantages.   E-marketing strategy   Strategy that capitalizes on information technology to reach marketing objectives.
  35. 35. Business Models 2-35   A business model is a method for long-term survival and a value proposition for partners, customers, and revenue.   E-business models include the use of information technology to achieve long-term goals.   Firm selects one or more models as strategies to accomplish enterprise goals.
  36. 36. Selecting a Business Model 2-36   A firm will select one or more business models as strategies to accomplish enterprise goals.   Components of business model selections: Customer value Scope Price Revenue sources Connected activities Implementation Capabilities Sustainability
  37. 37. Level of Commitment to E-Business 2-37 Pure dot-com (Amazon, MySpace) Both online and offline (Dell and most retailers) e-mail, blog
  38. 38. Activity-Level Models 2-38 1.  Order processing 2.  Online purchasing 3.  E-mail 4.  Content publisher 5.  Business intelligence (BI) 6.  Online advertising and public relations (PR) 7.  Online sales promotions 8.  Dynamic pricing strategies online
  39. 39. Business Process-Level Models 2-39 1.  Customer relationship management (CRM) 2.  Knowledge management (KM) 3.  Supply chain management (SCM) 4.  Community building online 5.  Database marketing 6.  Enterprise resource planning (ERP) 7.  Mass customization
  40. 40. Enterprise-Level Models 2-40 1.  E-commerce, direct selling, content sponsorship 2.  Portal 3.  Social networking 4.  Broker models   Online exchange, hub   Online auction 5.  Agent models   Manufacturer’s/selling agents   Shopping agent   Reverse auction
  41. 41. Pure Play Models 2-41   Pure plays are businesses that began on the internet.   They represent the top level of the E-Business pyramid.   Pure plays face significant challenges.   They must compete as new brands.   They may need to take customers away from established businesses.  Some pure plays have redefined industries:
  42. 42. Performance Metrics 2-42   Performance metrics are specific measures designed to evaluate the effectiveness and efficiency of operations.   Performance metrics:   Provide measurable outcomes.   Must be easy to understand and use.   Must be actionable.   Can be utilized for employee evaluations.
  43. 43. Web Analytics 2-43   Web analytics, commonly called metrics, is the study of user behavior on Web pages.   Metrics measure activities such as:   Click throughs   Visitor patterns   Length of time spent on a page or site   Conversions to sales   Web analytics software helps companies analyze data on server logs for marketing purposes.
  44. 44. Social Engagement Metrics 2-44   Online measurement also includes metrics for evaluating Web 2.0 technologies.   Social engagement metrics allow marketers to know how visitors participate, not just whether they landed on a page.   Time spent viewing a video, playing a game, or listening to music.   Writing a comment on a blog.   Downloading a MP3 file, ring tone, or other content.
  45. 45. The Balanced Scorecard 2-45   The Balanced Scorecard provides a framework for understanding e-marketing metrics.   The Balanced Scorecard provides 4 perspectives.   Customer perspective   Internal perspective   Learning and growth perspective   Financial perspective
  46. 46. The Balanced Scorecard: Customer Perspective 2-46   The customer perspective scorecard includes ways to measure goals such as customer loyalty, satisfaction, appropriateness of target markets, etc.   Loyalty and satisfaction measures may include percentage of visitors who return to site and time between visits.   Transaction measures may include measurement of unique visitors, online sales abandoned, etc.
  47. 47. The Balanced Scorecard: Internal Perspectives 2-47   The Internal perspective scorecard includes ways to measure goals related to the quality of online services.   Quality of online technical help such as amount of time to answer e-mail   Web page loading time   Inventory levels, inventory turns
  48. 48. The Balanced Scorecard: Learning and Growth Perspectives 2-48   The learning and growth perspective scorecard includes ways to measure goals related to online service innovation and continuous improvement.   Average time from concept to start   Speed to match a rival’s site   Time between site relaunches
  49. 49. The Balanced Scorecard: Financial Perspectives 2-23   The financial perspective scorecard includes ways to measure financial goals.   Sales growth and market share   Return on invested capital   Average order value   Individual customer profit
  50. 50. 1-50 Welcome to E-MARKETING 2009 Lecture 3: The E-Marketing Plan E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Chapter 3: The E-Marketing Plan Bangor Business Dr. Marwan Khammash School/Wi2
  51. 51. Lecture 3 Objectives 3-2   After reading Lecture 3, you will be able to:   Discuss the nature and importance of an e-marketing plan and outline its 7 steps.   Show the form of an e-marketing objective and highlight the use of an objective-strategy matrix.   Describe the tasks that marketers complete as they create e-marketing strategies.   List some key revenues and costs identified during the budgeting step of the planning process.
  52. 52. The Second Life Story 3-52   Second Life (SL) is a multiplayer online role-playing game launched in 1999.   SL had 2.3 million residents in 2008 who created SL’s 3- D virtual world.   Over 50,000 businesses, including Adidas, Pontiac, IBM, and Toyota, have a presence in SL.   Companies are using SL to build product buzz and connect with SL’s residents.   In-world advertising revenue in the U.S. was $186 million in 2005.
  53. 53. The Second Life Story, cont. 3-53   Research firm Gartner Group believes that 80 percent of active online users will join a virtual world by 2010.   Are you or your friends a member of a virtual world today?   Do you think you might join one in the future?   Do you think SL represents a good business opportunity?
  54. 54. Overview of the E-Marketing 3-54 Planning Process   The e-marketing plan is a blueprint for e-marketing strategy formulation and implementation.   The plan serves as a road map to guide the firm, allocate resources, and make decisions.
  55. 55. Ex 3.1 3-55
  56. 56. Two Common Types of Plans 3-56   Napkin plan   Entrepreneursmay jot down ideas on a napkin.   Large companies might create a just-do-it, activity- based, bottom-up plan.   The Venture Capital E-Marketing Plan is a more comprehensive plan for entrepreneurs seeking start- up capital.
  57. 57. Sources of Funding 3-57   Bank loans   Private funds   Angel investors   Venture capitalists (VCs)
  58. 58. Seven-Step E-Marketing Plan 3-58 1.  Situation analysis 2.  E-Marketing strategic planning 3.  Objectives 4.  E-Marketing strategy 5.  Implementation plan 6.  Budget 7.  Evaluation plan
  59. 59. Step 1: Situation Analysis 3-59   Review the firm’s environmental and SWOT analyses.   Review the existing marketing plan and any other information that can be obtained about the company and its brands.   Review the firm’s e-business objectives, strategies, and performance metrics.
  60. 60. SWOT Analysis Leading to E-Marketing Objective 3-11 Opportunities Threats 1.  Hispanic markets growing and 1.  Pending security law means costly untapped in our industry. software upgrades. 2.  Save postage costs through e-mail 2.  Competitor X is aggressively using marketing. e-commerce. Strengths Weaknesses 1.  Strong customer service 1.  Low-tech corporate culture. department. 2.  Seasonal business: Peak is summer 2.  Excellent Web site and database months. system. E-Marketing Objective: $500,000 in revenues from e-commerce in one year.
  61. 61. Step 2: E-Marketing Strategic Planning 3-61   Market and product strategies, called Tier 1 tasks or strategies, are outcomes of strategic planning.   Segmentation   Targeting   Differentiation   Positioning   Marketers conduct analysis to determine strategies.   Market opportunity analysis   Demand analysis   Segment analysis   Supply analysis
  62. 62. Step 3: Objectives 3-62   An objective in an e-marketing plan may include the following aspects:   Task(what is to be accomplished)   Measurable quantity (how much)   Time frame (by when)
  63. 63. Step 3: Objectives, cont. 3-63   Most e-marketing plans aim to accomplish objectives such as the following:   Increase market share   Increase the number of comments on a blog   Increase sales revenue   Reduce costs   Achieve branding goals   Increase database size   Achieve customer relationship management goals   Improve supply chain management
  64. 64. Step 4: E-Marketing Strategies 3-64   Tier 2 strategies include strategies related to the 4 P’s and relationship management to achieve plan objectives.   Product strategies   Pricing strategies   Dynamic pricing   Online bidding
  65. 65. Step 4: E-Marketing Strategies, cont. 3-65   Distribution strategies   Directmarketing   Agent e-business models   Marketing communication strategies   Relationship management strategies   Some firms use CRM (customer relationship management) or PRM (partner relationship management) software to integrate customer communication and purchase behavior into a database.
  66. 66. Steps 2, 3, and 4 of the 3-17 E-Marketing Plan
  67. 67. Step 5: Implementation Plan 3-67   Tactics are used to achieve plan objectives   Marketing mix (4 Ps) tactics   Relationship management tactics   Marketing organization tactics   Staff   Department structure   Information-gathering tactics   Web site log analysis   Business intelligence and secondary research
  68. 68. Step 6: Budget 3-68   The plan must identify the expected returns from marketing investments, including:   Cost/benefit analysis   ROI calculation   Internal rate of return (IRR) calculation   Return on marketing investment (ROMI)
  69. 69. Revenues and Costs 3-69   Revenue forecast   Intangible benefits, such as brand equity   Cost savings   E-Marketing costs   Technology   Sitedesign   Salaries   Other site development expenses   Marketing communication   Miscellaneous
  70. 70. Step 7: Evaluation Plan 3-70   Marketing plan success depends on continuous evaluation.   E-marketers must have tracking systems in place to measure results.   Various metrics relate to specific plan goals.   Today’s firms are ROI driven.   E-marketers must show how intangible goals will lead to higher revenue.   Accurate and timely metrics can help justify expenditures.