This chapter discusses marketing strategy in internet marketing. It covers defining marketing strategy, exploring effective segmentation for pure play and bricks-and-mortar firms, examining traditional targeting and positioning strategies, and analyzing eBay's corporate and business unit strategy. The key topics covered are marketing strategy and fit, segmentation, targeting, positioning, and eBay's strategy of segmenting its auction market based on offering.

2. chapter
3
Marketing Strategy in Internet
Marketing
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

3. Marketing Strategy in Internet
Marketing — Today’s Objectives
 Objectives will be to:
 Define the concept of marketing strategy
 Explore effective segmentation, especially for pure play and
bricks-and-mortar (BAM) firms
 Examine traditional targeting and positioning strategies
 Discuss the corporate and business-unit strategy of eBay

4. Chapter 3: Marketing Strategy in
Internet Marketing
 Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion

5. Chapter 3: Marketing Strategy in
Internet Marketing
 Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion

6. Exhibit 3.1: Assessing Business-Unit
and Marketing Strategy Fit
Fit
Implementation
Alignment
Resource
Alignment
Goal
Alignment
Activity Alignment

7. Exhibit 3.2: Marketing-Strategy
Decisions
Positioning and
Target-Market
Selection
Product
Price
Promotion
Distribution

8.  Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion
Chapter 3: Marketing Strategy in
Internet Marketing

9. Exhibit 3.4: Prioritizing Segments
Buyer Readiness Stage
Attitude
Willingness to Pay
Segmentation
Prioritization
Trend/Market Leaders

10. Exhibit 3.6: Marketing-Strategy
Formulation for Pure-Play vs. BAM
Online
Business-Unit
Strategy
Marketing
Strategy for
Online
Business
Business-Unit
Strategy
 Overall
 Online
 Offline
Integrated
Marketing
Strategy
Marketing
Strategy for
Offline
Business
Marketing
Strategy for
Online
Business
Choices
1. Segmentation
2. Target market selection
3. Positioning
Choices
1. Same vs. different segment
2. Same vs. different target market
3. Same vs. different positioning
Pure-Play Bricks-and-Mortar

11. Exhibit 3.7: Perceptual Map for the
Online Automobile Industry

12. Exhibit 3.8: Perceptual Map with
Customer Preference Clusters

13. No
Market
Expansion
No Yes
Yes
Reclassified—
Expansion
Market
Reclassification
No Change
Change in Segmentation Characteristics
Due to Internet
Changes
in
Size
of
Market
Segments
Exhibit 3.9: Bricks-and-Mortar
Segmentation Scenarios

14.  Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion
Chapter 3: Marketing Strategy in
Internet Marketing

15. Exhibit 3.11: Bricks-and-Mortar
Targeting Scenarios

16.  Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion
Chapter 3: Marketing Strategy in
Internet Marketing

17. Porrtions
of
a
Segment
Blanket Targeting
•Borrow heavily from existing
offlline positioning
•Tout basic advantages of the
Internet – convenience and
accessibility
Same Customers Different Customers
Entire
Segment New Opportunity Targeting
•Reposition entirely
•Position differentiations which
cater to the new segment
Bleed-Over Targeting
•Use dual positioning
•Leverage existing positioning
•Position added benefits, such
as augmented offerings via the
Internet (e.g., increased
product customizability)
Beachhead Targeting
•Also borrow from offline
positioning
•Focus more, however, on
needs of the smaller group
•Stress value-added
advantages of the Internet
Customer Similarity
Focus
of
Effort
Exhibit 3.9: Bricks-and-Mortar
Positioning Scenarios and Guidelines

18.  Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion
Chapter 3: Marketing Strategy in
Internet Marketing

19. Exhibit 3.13: Breakdown of EBay’s
Gross Merchandise Listed
Everything Else
3%
Antiques & Art
3%
Books
5%Business, Office, & Industrial
1%
Clothing & Accessories
9%
Coins
2%
Collectibles
20%
Computers
3%
Consumer Electronics
4%
Dolls & Bears
2%
Home & Garden
4%
Jewelry
6%
Movies & TV
5%
Music
7%
Photo
1%
Pottery & Glass
4%
Real Estate
0%
Sports
11%
Stamps
2%
Tickets & Travel
0%
Toys & Hobbies
9%

20. Exhibit 3.17: EBay’s Business-Unit
Strategies
EBay Premier EBay Motors Half.com EBay Stores
Large
User Base
Expands reach of offer to
specific customer niche
and general community
Offline car buyers, sellers
and collectors
Differentiated user base
of customers averse to
auction-like transactions
Targets profitable small-
business segment
Local and
International
Serves local and
international users
Serves local and
international users
Serves local and
international users
Serves local and national
users
Strong
Brand
Leverages eBay brand to
traditional auction house
community
Leverage eBay brand to
collectible and used-car
buyers and sellers
Sellers cost-effectively
sell relatively inexpensive
items previously
prohibitively expensive to
list
Provides sellers with a
merchandising showcase
for multiple listings and
buyers with a single
shipping destination
Broad
Trading
Platform
Expands core business Expands core business Expands core business Expands core business
Community
Affinity
High-end items appeal to
a more affluent
demographic
Replaces classified ads
for sellers and used-car
showrooms for buyers
Sellers can list items by
entering the ISBN or UPC
barcode number of their
item, along with the item’s
condition and selling price
People can pick up or
deliver items to others in
their vicinity
Features
and
Functionality
Stable source of
traditional auction house
merchandise
Access to inventory and
channels
Opportunity to road-test
fixed-price trading without
risking core business
All of a seller’s auctions
are available in one place

21. Exhibit 3.18: Offering-Based
Segmentation of Auction Market

22.  Marketing Strategy and the Importance of Fit
 Segmentation
 Targeting
 Positioning
 Corporate and Business-Unit Strategy of EBay
 Conclusion
Chapter 3: Marketing Strategy in
Internet Marketing

23. Marketing Strategy in Internet
Marketing — Conclusion
 Marketing Strategy and Business-Unit Strategy must be
properly aligned for maximum impact
 Both pure play and brick-and-mortar firms can rely on
segmentation, targeting, and positioning in the online and
offline domains
 The classical framework for strategic management remains the
same; however, networked-economy firms require further
consideration.