Internet Marketing Strategy

Internet marketing strategy

• ‘The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it.’ Porter, M. (2001) Strategy and the Internet, Harvard Business review, March 2001, 62–78.

Internet marketing strategy

To provide consistent direction for an organization's emarketing activities, so that they can integrate with other marketing activities

E-marketing strategy essentials • • •

E-marketing strategy is a channel strategy. Objectives for online contribution % – sales, service, profitability should drive our strategy. E-marketing strategy defines how we should: 1. 2. 3. 4.

Communicate benefits of using this channel Prioritise audiences targeted through channel Prioritise products available through channel Hit our channel leads & sales targets – Acquisition, Conversion, Retention.

• •

Channel strategies thrive on differentials. BUT, need to manage channel integration.

Influences on e-marketing strategy

Retention

conversion

Acquisition

Problems if no E-marketing strategy Underestimated demand for online services Market share loss Resource duplication Insufficient resource Insufficient customer data Efficiencies available through online marketing Opportunities for applying online marketing tools Changes required to internal IT systems Inadequate tracking Senior management support limited

Stages in Internet development

Stage model full interactive web site

User interactive web site

Simple interactive web site

Static web site

web name

No web site

Stage models (Quelch and Klein (1996))

E-business strategy model 1. Web presence

2. E-commerce

3. Integrated e-commerce

4. E-business

Services available

Brochureware or interaction with Transactional e-commerce on Buy and sell-side product catalogues and customer buy-side or sell-side. Systems integrated with ERP or service often not integrated legacy systems. Personalisation of services

Full integration between all internal organisational processes and elements of the value network

Organisational scope

Departments acting independently, e.g. marketing department, IS department

Co-ordination through steering Cross-organisational committee or e-commerce manager

Across the enterprise and beyond (extraprise)

Transformation

Technological infrastructure

Technology and new Internal business processes Change to e-business culture, responsibilities identified for e- and company structure linking of business processes commerce with partners

Strategy

Limited

Sell-side e-commerce strategy, E-commerce strategy not well integrated with integrated with business business strategy strategy using a valuechain approach

E-business strategy incorporated as part of business strategy

Internet marketing benefits

Tangible benefits • Increased sales from new sales leads giving rise to increased revenue from: • new customers, new markets • existing customers (repeat-selling) • existing customers (cross-selling) • Cost reductions from: • reduced time in customer service • online sales • reduced printing and distribution costs of marcomms

Intangible benefits • Corporate image communication • Enhance brand • More rapid, more responsive marketing communications including PR • Improved customer service • Learning for the future • Meeting customer expectations • Identify new partners, support existing partners • Better management of marketing information and customer information • Feedback from customers on products

Example objectives • Achieve 10 per cent online revenue contribution within two years; • 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 (Chapter 2) or better by online revenue share; • cost reduction of 10 per cent in marketing communications within two years; • increase retention of customers by 10 per cent; • increase by 20 per cent within one year the number of sales arising from a certain target market, e.g. 18–25-year-olds; • create value-added customer services not available currently; • improve customer service by providing a response to a query within two hours, 24 hours per day, seven days a week; • all other objectives to be achieved profitably giving a return on investment in a three year period.