ELC 310

DAY 4

Agenda Assignment 1 Due Assignment #2 coming soon Questions? Finish Discussion on the Marketing

Plan Begin Discussion on Leveraging

Technology eMarketing Plans due October 22 (6

weeks from now)

Overview of the E-Marketing Planning Process Creating an E-Marketing Plan

The Napkin Plan The Venture Capital E-Marketing Plan

A Six-Step E-Marketing Plan Step 1—Situation Analysis Step 2—Link E-Business with E-Marketing Strategy Step 3— Formulate ObjectivesStep 4—Design Implementation Plan to Meet the Objectives Step 5—Budgeting Step 6—Evaluation Plan

Overview

A Six-Step E-Marketing Plan

Step Tasks

1 Situation analysis 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. 2 Link e-business with e-

marketing strategy Identify revenue streams suggested by e-business models Tier 1 Perform Marketing Opportunity Analysis to identify target

stakeholders. Specify brand differentiation variables. Select positioning strategy. Tier 2 Design the offer, value, distribution, communication, and market/partner relationship management strategies.

3 Objectives Identify general goals. Select target specific goals.

4 Implementation plan Design e-marketing mix tactics. product/service offering pricing/valuation distribution/supply chain integrated communication mix

Design relationship management tactics. Design information gathering tactics. Design organizational structures for implementing the plan.

5 Budget Forecast revenues. Evaluate costs to reach goals.

6 Evaluation plan Identify appropriate performance metrics.

Exhibit 3 - 1 Marketing Plan Process

Overview of the E-Marketing Planning ProcessCreating an E-Marketing Plan

The Napkin Plan The Venture Capital E-Marketing Plan

A Six-Step E-Marketing Plan Step 1—Situation Analysis Step 2—Link E-Business with E-Marketing Strategy Step 3— Formulate ObjectivesStep 4—Design Implementation Plan to Meet the Objectives Step 5—Budgeting Step 6—Evaluation Plan

Overview

Step 1—Situation AnalysisPlanning for e-marketing does not mean starting from scratch but working with existing business, e-business, and marketing plans is an excellent place to start.

Opportunities Threats Hispanic markets growing and

untapped in our industry. Save postage costs through e-mail

marketing.

Pending security law means costly softwareupgrades.Competitor X is aggressively using e-commerce.

Strengths Weaknesses1. Strong customer service department.2. Excellent Web site and database

system.

1. Low tech corporate culture2. Seasonal business: peak is summer

months.E-business Goal: Initiate e-commerce in within one year.Metric: Generate $500,000 in revenues from e-commerce during the first year.

Exhibit 3 - 1 SWOT, Objective, and Metric Example from E-Business Plan

Step 1—Situation Analysis

The organizational e-business plan: SWOT analysis => e-business strategy.

The marketing plan: gathers information about the firm’s products, the markets currently served, and so forth. The distribution plan: identifies areas where the products are currently sold

and suggests geographic gaps that might be receptive to e-commerce. Promotion plan information: gives clues about how the Internet fits with the

firm’s current advertising, sales promotion, and other marketing communications.

The firm and brand positioning in the marketplace: Internet planners must decide how closely Web site content and promotion will follow current positioning strategies.

The marketer moves to strategy formulation.

Step 2—Link E-Business with E-Marketing Strategy

Marketers need to:

1. Review the marketing and e-business plans,

2. Conduct strategic planning to help achieve the firm’s e-business goals + define potential revenue streams,

3. Create supporting e-marketing strategy for the e-business goals:

a) A Tier one strategy:

marketers design segmentation, targeting, differentiation, and positioning strategies,

b) B Tier two strategy:

deals with the 4P’s and relationship management by creating strategies around the offer (product), value (pricing), distribution (place), and communication (promotion),

4. Further, marketers design customer and partner relationship strategies (CRM/PRM).

Segmentation

Targeting

Value

Differentiation

CRM/PRM

Positioning

Communication

Distribution

Offer

E-MarketingStrategy

Tier 2tasks

Tier 1tasks

Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers

Tier One E-Marketing Strategic Planning: Segmenting & Targeting

Market opportunity analysis (MOA):

The demand analysis = market segmentation analyses to describe and evaluate the potential profitability, sustainability, accessibility, and size of various potential segments.

The segment analysis in the B2C market with demographic characteristics, geographic location, selected psychographic, and past behavior toward the descriptors help firms identify potentially attractive markets.

Allows the company to select its target market and understand its characteristics, behavior, and desires in the firm’s product category.

Tier One E-Marketing Strategic Planning: Segmenting & Targeting

Tools: Traditional segmentation analyses. Analyzes of customer bases using cookies,

database analyses, and other techniques Supply analysis: forecasts segment profitability +

finds competitive advantages Study of competition to find the company own

performance advantages.: strengths and weaknesses, e-marketing initiatives,

Identify future industry changes.

Tier One E-Marketing Strategic Planning:

Identifying brand differentiation variables and positioning strategies

The understanding of the competition + the target(s)

Differentiation of the products to provide benefits perceived as important by the target.

The positioning statement: the desired image for the brand relative to the competition.

Tier Two E-Marketing Strategic Planning

The two Tiers are elaborated in an interative process:

It is difficult to know what the brand position should be without understanding the offer that comprises the brand promise.

The Offer: Product Strategies

The organization can:- Sell merchandise, services, or advertising on the Web

site, - Adopt a e-business model such as online auctions,- Create new brands for the online market,- Simply sell selected current or enhanced products in

that channel. A firm must decide how online product prices will

compare with offline equivalents considering the differing costs of sorting and delivering products to individuals through the online channel as well as competitive and market concerns.

Value There are two online pricing trends are:

Dynamic pricing—this strategy applies different price levels for different customers or situations. The Internet allows firms to price items automatically and “on the fly” while users view pages,

Online bidding—this presents a way to optimize inventory management.

E.g. Priceline.com, eBay.com

Distribution Strategies

Many firms use the Internet to distribute products or create efficiencies among supply chain members in the distribution channel.

Direct marketing—Many firms sell directly to customers, by-passing intermediaries in the traditional channel for some sales.

Agent e-business models—Firms such as eBay and E*Trade bring buyers and sellers together and earn a fee for the transaction.

Marketing Communication Strategies

The Internet spawned a multitude of new marketing communication strategies, both to draw customers to a Web site and to interact with brick-and-mortar customers.

Firms use Web pages and e-mail to:- Communicate with their target markets and

business partners - Build brand images- Create awareness of new products - Position products using the Web and e-mail.

Relationship Management Strategies

E-marketing communication strategies help build relationships with a firm’s partners, supply chain members, or customers using:

- Customer relationship management (CRM) software to retain customers and increase average order values and lifetime value,

- Partner relationship management (PRM) software to integrate customer communication and purchase behavior into a comprehensive database,

- Extranets—two or more proprietary networks linked for better communication and more efficient transactions among firms (PRM).

Step 3— Formulate Objectives

In general, an objective in an e-marketing plan takes the form:

Task (what is to be accomplished), Measurable quantity (how much), Time frame (by when).

Typical E-Marketing Objectives

Most e-marketing plans aim to accomplish multiple objectives such as: Increase market share, Increase sales revenue, Reduce costs, Achieve branding goals, Improve databases, Achieve customer relationship management

goals, Improve supply chain management.

E-Marketing Objective-Strategy Matrix

Objective-strategy matrix presents the firm’s e-marketing strategies and accompanying goals.

Online Goals Online StrategiesOnlineAdvertising

DatabaseMarketing

DirectE-mail

Online Sales ViralMarketing

Findaffiliates

No No No No Yes

Gathercustomerinformation

No Yes Yes Yes Yes

Improvecustomerservice

No Yes Yes Yes No

Increasebrand nameawareness

Yes Yes Yes Yes Yes

Sell goods orservices

Yes Yes Yes Yes Yes

Exhibit 3 - 1 E-Marketing Objective-Strategy MatrixSource: Adapted from Embellix eMarketing Suite

Step 4 — Design Implementation Plan to Meet the Objectives

Select:- The marketing mix (4 Ps), - Relationship management tactics, - Other tactics to achieve the plan objectives.

Devise detailed plans for implementation.

Check the right marketing organization is in place for implementation.

Step 4 — Design Implementation Plan to Meet the Objectives

Information technologies are especially adept at automating these processes, this is why the information gathering tactics are important:

- Web site forms, feedback e-mail, and online surveys,

- Web site log analysis software helps firms review user behavior at the site and make changes to better meet the needs of users,

- Business intelligence uses the Internet for secondary research, assisting firms in understanding competitors and other market forces.

Step 5 — Budgeting

A key part of any strategic plan is to identify the expected returns from an investment.

Returns are matched against costs to develop a cost/benefit analysis, ROI calculation, or internal rate of return (IRR)

Determine whether the effort is worthwhile.

During plan implementation, marketers will closely monitor actual revenues and costs

To monitor of results are on track for accomplishing the objectives.

Revenue Forecast

The firm uses an established sales forecasting method for estimating the site revenues in the short, intermediate, and long term.

Inputs: The firm’s historical data, industry reports, and competitive actions.

An important part of forecasting is to estimate the level of Web site traffic over time.

This number affects the amount of revenue a firm can expect to generate from its site.

Revenue streams:- Web site direct sales, - Advertising sales, - Subscription fees, - Affiliate referrals, - Sales at partner sites, - Commissions, and

other fees.

Budgeting

Intangible Benefits:

Putting a financial figure on such benefits is challenging but essential for e-marketers.

What is the value of increased brand awareness from a Web site?

Cost Savings:

Money saved through Internet efficiencies is considered soft revenue for a firm.

E-Marketing Costs

Costs for employees, hardware, software, programming, and more.

Some traditional marketing costs may creep into the e-marketing budget

The cost of a Web site can range from $5000 to $50 million. Few of the costs site developers incur:

Technology costs: software, hardware, Internet access or hosting services, educational materials and training, and other site operation and maintenance costs.

Site design. Web sites need graphic designers to create appealing page layouts, graphics, and photos.

E-Marketing Costs

Other costs site developers incur: Salaries. All personnel that work on Web site development

and maintenance are budget items. Other site development expenses. If not included in the

technology or salary categories, any other expenses will be here (registration of multiple domain names and hiring consultants).

Marketing communication. All advertising, public relations, and promotions activities, both online and offline, to draw site traffic. Search engine registration, online directory costs, e-mail list rental, prizes for contests, and more.

Miscellaneous. Other typical project costs might fall here—expenses such as travel, telephone, stationery printing to add the new URL, and more.

Step 6 — Evaluation Plan Once the e-marketing plan is implemented, its

success depends on continuous evaluation. The tracking systems should be in place before the electronic doors open.

What should be measured? The plan objectives need to be evaluated with:

- Balanced scorecard for e-business - ROI …

E-Marketing, 3rd editionJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 4: Leveraging Technology

© Prentice Hall 2003

Overview The Marriage of Marketing

&TechnologyProduct Technologies

Building a Web Site HTML Forms Java Dynamic HTML (DHTML) XHTML XML Multimedia Database Marketing Computer Viruses Denial of Service Attacks

Price Technologies Distribution Technologies

Bandwidth and Market Opportunities Content Filtering Transaction Security IMC Technologies Proxy Servers How Search Engines

Work Log Files and Cookies Rotating and Targeted Ad Banners

Relationship Marketing Technologies

The Marriage of Marketing and Technology

Marketing managers need to understand the capabilities of new media to develop and implement an effective marketing plan.

E.g. AutoTrader.com

Overview The Marriage of Marketing

&TechnologyProduct Technologies

Building a Web Site HTML Forms Java Dynamic HTML (DHTML) XHTML XML Multimedia Database Marketing Computer Viruses Denial of Service Attacks

Price Technologies Distribution Technologies

Bandwidth and Market Opportunities Content Filtering Transaction Security IMC Technologies Proxy Servers How Search Engines

Work Log Files and Cookies Rotating and Targeted Ad Banners

Relationship Marketing Technologies

Product Technologies

E-marketers can use a wide variety of technologies to support their

product strategies.

Building a Web Site Building and publishing Web pages = greatly simplified.

HyperText Markup Language (HTML): language originally used to construct all Web pages.

Today other languages have been added to support interactive Web pages.

These languages creates a computer program that runs On the Web server = slow response times, On the user's browser = instantaneous response.

HTML Forms= Text boxes, check boxes, radio buttons, drop-down

lists. When completing a survey or ordering online, the

customer fills out an HTML form.

Creating the form is easy.

Processing the information is more difficult. The processing is performed on the server by a separate

program: Common Gateway Interface (CGI) scripts for Unix

operating system, Active Server Pages (ASP) for servers running

Microsoft.

Java

= A general-purpose computer language developed by Sun Microsystems that can be used to develop interactive Web sites.

Fast: Programs run very quickly on the user’s computer system.

Flexible: Programs support animation, streaming media, 3D visualization, or almost any other task.

Java Safe: Programs run in a protected memory

space where they cannot infect or otherwise damage the user’s computer system.

Difficult to program: A Java Development Kit (JDK) can simplify the process but Java is a language for professional programmers.

Dynamic HTML: Enhanced form of HTML providing many of the interactive functions of java without the heavy-duty programming.

Dynamic HTML (DHTML) DHTML encompasses a range of enhancements

to the HTML standard to make it: more interactive, more capable of multimedia, better suited to professional page layout.

These enhancements include: JavaScript, Cascading style sheets (CSS), plug-ins, ActiveX.

JavaScript Name: has nothing to do with Java+ was chosen

because of the cachet of the Java language.

Origin: It was developed by Netscape and then became an industry standard.

Use: Create the fancy buttons and rollover effects, Check user input for errors and issue warning messages, Detect the user’s browser version and monitor size and

send a version of the Web page optimized for the user’s machine,

Create calculators, clocks, games, and many other applications.

ActiveX

= A competitor to Java but has not achieved nearly the same market share.

It works only with the Windows operating system:

Developers programming in ActiveX risk alienating a portion of the user base,

ActiveX programs can access the file system on the user’s computer = opens up the possibility of privacy abuse.

Plug-Ins= Small programs that must be downloaded and installed on the

user’s computer.

Use: Play multimedia content encoded in a specific format, Create content with relatively little effort.

Safety: For fear of viruses, users are disinclined to download and

install software, Some plug-ins are so prevalent that they have a large

installed base of users and are safe.

Plug-Ins The best known plug-ins:

RealPlayer: Plays streaming audio and video over low-bandwidth connections,

Acrobat: Allows professional page layouts to be saved with the possibility lock the document so it cannot be altered,

Flash: Plays animations including charts, graphics, sounds, scrolling lists, tickers, and movie clips.

Cascading Style Sheets (CSS)

Assist with precise formatting of text and graphics on the Web page.

Enable relatively painless sitewide updates. Allow the separation of a document’s content from

its presentation in separate files.

Have to be used with caution because some older browser versions cannot support them:

Solution: create multiple versions of each page, then send the appropriate one to the user.

XHTML Goals:

Bring more uniformity to the HTML language by requiring every tag to have a matching end tag,

Increase the separation between document content and presentation (CSS).

XHTML can be seen as an intermediate step toward the real direction that the Web may be heading = XML.

XML XML completes the separation of document content and

presentation opening up a significant business application:

Web enabling business databases + the exchange of information from those databases:

Consumers can request online account information, product availability, which are sent from database to Web page instantaneously on demand,

Businesses can easily exchange data with their supply chain partners, gaining a significant competitive advantage.

XML Drawbacks:

Lack of support for the standard by Netscape (pages have unpredictable displays on a Netscape browser),

It is relatively difficult to program and only accessible to professional programmers.

Developers have three options:1. Learn XML and become professional programmers, 2. Use an XML authoring tool such as Microsoft Word to

automatically generate XML, 3. Ignore the standard in the same way that many

developers ignored Java.

Multimedia Challenge: Deliver multimedia content over the Web

requiring high bandwidth to slow home connections.

Solutions: Speed up the home Internet connection using a high-bandwidth

wired or wireless connection, Compress the multimedia content into smaller packets of

information, RealNetworks: compression audio (RealAudio) and video

(RealVideo), MP3: compression technology for music (1/10th of original size, Stream the multimedia so that the user can play a piece of it while

the rest downloads, Distribute multiple copies of the multimedia content around the

Internet so that it is closer to the end users and delays are avoided.

Database Marketing

= Utilize relational databases to store tables of information:

Can be mined for information about clients. Can be used to generate promotional campaigns.

A collection of tables containing information about a common subject.

Relational databases such as Oracle and DB2 utilize a very powerful query language called SQL.

Database Marketing E-marketers use the client and interest files to

target by demographics or psychographics.

Structured Query Language (SQL): used to extract information from large databases.

How does the user data get it into the database? Explicit method: User fills out a short survey during

the registration process at a Web site, Implicit method: Study of the user ’s pattern of

frequenting pages on a site.

Computer Viruses

= Intrusive pieces of computer code that secretly attach to existing software, reproducing themselves and wreaking havoc with data.

They can spread throughout a computer network.

Problem: Reinforce consumer perceptions that the Internet is not secure.

Computer Viruses 4 common types of viruses are:

Macro viruses: attached to data files and infect Microsoft Word or Excel when users open the infected data file,

Worms: replicate rapidly, eating up memory,

Trojan Horses: are activated at a certain date or event,

Boot viruses: reside on floppy disks and destroy operating systems when users mistakenly boot the computer with a disk inserted.

Computer Viruses What can e-marketers do?

The best place to stop a computer virus is before it reaches the end user.

All e-mail messages pass through a mail server that stores the messages on a disk drive in users’ mailboxes:

Software installed on the mail server can scan all incoming messages for known viruses and destroy them.

Anti-viral software can also be installed on each individual computer such as McAfee Anti-Virus, or the Symantec's Norton AntiVirus.

Denial of Service Attacks Occurs when a hacker floods a computer system

with millions of requests for information and effectively exceeds its ability to respond.

Remedies: Distribute multiple copies of a Web site around

the country in the hope that all sites will not be attacked simultaneously,

Infrastructure companies are also working together to develop procedures for early detection and neutralization of attacks.

Price Technologies Shopping agents are a key technology that e-marketers

need to understand when planning pricing strategies.

A shopping agent: Helps consumers shop by compiling all the

information they need to complete a purchase, Knows which stores to visit, provides accurate

product and price information, Helps buyers compare product features and prices,

negotiates specials on their behalf, Completes the transaction with the click of a button, Uses a technology called parallel pull.

Price Technologies The merchants’ benefits: The agents attract customers to

their sites.

The agents’ benefits: Sell preferred placement and advertising inventory as well as by collecting referral fees.

Easy price-shop + little product or merchant differentiation perception

Commodity markets with all prices reaching similar levels.

BUT most consumers are brand sensitive about their merchants:

Look at the price sorted results for a familiar merchant name.

Price Technologies For whom is the agent really working?

The buyer: the agents do not charge vendors a fee for listing such as PriceSCAN.

The vendors: certain agents may charge a fee for listing and additional fees for preferred placement in the listings but the consumer is usually able to sort the listings by price.

One weakness: vendor ‘s selectivity is not prominently mentioned on the site.