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 School/Wi2

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Dr. Marwan Khammash

Lecture1 Objectives

  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.

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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.

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?

Internet 101

  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.

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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.

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.

The Web Is One Aspect of E-Marketing 1-8

  Exhibit 1.1

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.

Global Internet Users 1-10

  Exhibit 1.3

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.

E-Business to Just Business 1-12

  Exhibit 1.5

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

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.

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?

Power Shift from Companies to Individuals 1-16

  Exhibit 1.7

Wireless Networking Increases

  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.

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WiFi at Train Station in France 1-18

Appliance Convergence

  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.

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Semantic Web

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.

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Semantic Web

♦  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.

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Internet-Time Analogy Ex.1.9 1-22

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:

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

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 support.dell.com)

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.

Good Luck

See you in the afternoon!

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 School/Wi2

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Dr. Marwan Khammash

Lecture 2 Objectives

  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.

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Amazon.com 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.  Established e-commerce partnerships with Target,

Macy’s, and others.  Provided developer services.  Created the first affiliate program.

Amazon.com, cont.

  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?

  www.amazon.co.uk

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Strategic Planning

  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.

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ESP: Environment, Strategy, and Performance

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  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).

Strategy

  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.

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Business Models

  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.

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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

Level of Commitment to E-Business 2-37

Both online and offline

(Dell and most retailers)

e-mail, blog

Pure dot-com

(Amazon, MySpace)

Activity-Level Models

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

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Business Process-Level Models

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

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Enterprise-Level Models

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

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Pure Play Models

  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: www.eTrade.com www.eBay.com www.Yahoo.com www.MySpace.com

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Performance Metrics

  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.

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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.

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.

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

The Balanced Scorecard: Customer Perspective

  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.

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The Balanced Scorecard: Internal Perspectives

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  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

The Balanced Scorecard: Learning and Growth Perspectives

  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

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The Balanced Scorecard: Financial Perspectives

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  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

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 School/Wi2

1-50

Dr. Marwan Khammash

Lecture 3 Objectives

  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.

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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.

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?

Overview of the E-Marketing Planning Process

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  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.

Ex 3.1 3-55

Two Common Types of Plans 3-56

  Napkin plan  Entrepreneurs may 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.

Sources of Funding 3-57

  Bank loans   Private funds   Angel investors   Venture capitalists (VCs)

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

Step 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.

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SWOT Analysis Leading to E-Marketing Objective

Opportunities Threats

1.  Hispanic markets growing and untapped in our industry.

2.  Save postage costs through e-mail marketing.

1.  Pending security law means costly software upgrades.

2.  Competitor X is aggressively using e-commerce.

Strengths Weaknesses

1.  Strong customer service department.

2.  Excellent Web site and database system.

1.  Low-tech corporate culture. 2.  Seasonal business: Peak is summer

months.

E-Marketing Objective: $500,000 in revenues from e-commerce in one year.

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Step 2: E-Marketing Strategic Planning

  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

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Step 3: Objectives

  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)

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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

Step 4: E-Marketing Strategies

  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

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Step 4: E-Marketing Strategies, cont. 3-65

 Distribution strategies  Direct marketing  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.

Steps 2, 3, and 4 of the E-Marketing Plan

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Step 5: Implementation Plan

  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

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Step 6: Budget

  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)

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Revenues and Costs 3-69

 Revenue forecast   Intangible benefits, such as brand equity  Cost savings  E-Marketing costs

 Technology  Site design  Salaries  Other site development expenses  Marketing communication  Miscellaneous

Step 7: Evaluation Plan

  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.

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