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E-Marketing Mix
Ch.5 of Internet marketing strategy,
implementation, and practice-3rd-edition by David Cheffay
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The marketing mix
In 1963 Bartels said:
a marketer is like a chef in a kitchen a mixer of
ingredients
Variables used to define key elements of marketingstrategy
From the 4Ps of Jerome McCarthy to the 7Ps of Booms
and Bitner sometimes referred to as the services mix
4PsProduct, Price, Place, Promotion
7Psadd People, Processes and Physical Evidence
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Figure The elements of the marketing mix
The Marketing Mix
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Issues with varying the mix online
vary the mix online? or replicate offlinemix?
Is online differentiation defined?
Is online offer clear and defined?
Is online offer & differentiation reflectedin People & Process?
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Product
The element of the marketing mix thatinvolves researching customers needs anddeveloping appropriate products
Characteristics of a product, service, or brand Internet product decisions can be divided
Core product The fundamental features of the product that meet the
users needs. Extended product
Additional features and benefits beyond the coreproduct.
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Options for Varying Core Product
What Features of core products be changed/enhanced
New products/services be offered
Digital Value be added
Options
Provide complete product/service online (e.g. books,videos, songs etc. financial services)
Provide partial product/service online (e.g. concerttickets, travel services, after sale services)
Provide or repackage information about productonline; helping to make decisions online (e.g. pricecomparison, package comparison)
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Product/Service
Offered Online Complete Partial Partial
Information Online Online OnlineOrder Placement Online Online Offline
Payment Online Online/Offline Offline
Consumption Online Offline Offline
Product Example Books, Music Apparel, Shoes Same
Service Example
Webinars,
email, data
storage etc. Travel, Tickets Same
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Extended product options
Examples:
Add-on servicesgift wrapping @ Amazon Product customization
Warranties & Guarantees
Rewards
Money back offers
Incorporating tools to help users during theiruse of the product
Additional valuable Information
Customer service (see people, process andphysical evidence)
Endorsements, Testimonies, Customercomments
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Product
Nikehelping
customer
makedecision
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Product Decisions
Product Range Existing Range (Nishat)
Extend range (Tesco, Pakistani example?)
Narrow range (Stylo, Shirt & Tie Shop) Online-only products (banks)
Brand
Develop new brand (Egg.com)
Migrate existing brand (HSBC)
Partner with an online brand (e.g. Waterstonesand Amazon).
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Price
Implications on Price in Online World Increased availability of free information and
services
Increased price transparency (easy pricecomparison)
Downward pressure on price due to Price transparency
e.g. low set-up cost and over heads for e-tailers
Online discounts
New & Alternative (e.g. dynamic pricing, zeroprice)
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Price
Pricing depends on other elements of MIX
Pricing may have implications on otherelements of MIX
How to set prices
Define pricing models
Common approach on the internet
Offer low prices
Transfer existing prices
Offer higher prices
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Pricing options
Any traditional pricing model can be offeredonline
Cost-plus Add profit margin to operational costs
Target pricing Based on a particular rate of return or profit
Competition-based pricing
Premium-pricing
Penetration pricing
Loss leader strategy
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Alternative Pricing
Alternative pricing : Free content/information/services (Ad
supported)
Rise in Forward (B2C, C2C) and Reverseauctions (B2B)
Pay per use
Barter
Dynamic pricing (Concert tickets, airlines,travel)
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Place
Place of purchase
New channel structures
Channel conflicts
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Place
New channel structure
Disintermediationsell direct
Re-intermediationpartner with new
intermediaries Counter-mediation (e.g. opodo.com)
creation of new intermediaries
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Place channel conflicts
Distributor/wholesalers/retailers(b2c)
Sales staff (b2b)
Offline Customer concernsDecision to be made on:
1.A communication channel only.
2.A distribution channel to intermediaries.
3. A direct sales channel to customers.
4.Any combination of the above.
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Place of purchase
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Promotion
Promotion has a range of meanings. It can be used to
describe the marketing communications aspect of the
marketing mix or, more narrowly, as in sales promotion.
In its very broad sense it includes the personal methods
of communications, such as face to face or telephone
selling, as well as the impersonal ones such as
advertising. When we use a range of different types of
promotion direct mail, exhibitions, publicity, etc we
describe it as the promotional mix.Wilmshurst (1993)
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Promotion toolsPromotional mix Online executions
1 Advertising Interactive display ads, pay per click searchadvertising
2 Selling Virtual sales staff and chat and affiliate marketing
3 Sales promotion Incentives, rewards, online loyalty scheme
4 PR Online editorial, e-zines, newsletters, social networks,
links and virals
5 Sponsorship Sponsoring and promoting an online/offline event,
site or service
6 Direct mail Opt-in e-mail using e-newsletters and e-blasts
7 Exhibitions Virtual exhibitions, Virtual tours
8 Merchandizing Product catalogs, product information, promotional
ad serving on retail sites, personalized
recommendations and e-alerts
9 Packaging real packaging is displayed online
10 Word-of-mouth Viral, affiliate marketing, e-mail a friend, links
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Promotion
Selective use of new online tools fordifferent stages of the buying process and
customer lifecycle
Online only campaigns Integrated campaignsincorporating online
tools into communications mix.
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Figure 8.14 Options for the online vs offline communications mix
(a) online > offline, (b) similar online and offline, (c) offline > online
Integrating & Balancing
Online & Offline Promotions
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Service Ps
People
Process
Change process for servicecontact
strategies
Physical evidence
Site designdifferentiate or support brand
Fulfillment quality.
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People
People or Staff are crucial in services
Happy Staff = Happy Customers = Happy
Shareholders
Recruit right people, give them right training,
give them responsibility, empower them,
make them accountable, and reward them
appropriately
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Process
Process
Online business process are relatively invisible(offline are somewhat visible)
Execution is the key to customer services andcustomer satisfaction
Optimize all processes (pre-sale, during-sale,
post-sale) Front end must integrate with back end
systems
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Physical Evidence In offline world (buildings, offices, environment, logos, uniform, staff
behavior)
In online world the evidence is digital
Most important is website design
further extended by
Guarantees Refund policies
Privacy policies
Security icons
Trade body memberships, certificates
Awards
Customer lists
Customer endorsements, testimonials
Independent reviews
News clippings
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Physical Evidence
Physical evidence should integrate online-
offline world (e.g. coupon to be redeemed
offline; same branding)
Goods purchased or provided information
about online and delivered offline should
provide physical evidence both online-offline
(e.g. packaging, delivery staff etc)
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