E-MarketingJudy Strauss, Adel I. El-Ansary, and Raymond Frost – 4/E

Chapter 1: Past, Present and FutureChapter 2 : Strategic E-MarketingChapter 3 : The E-Marketing Plan

Delivered by : Djati Adi Wicaksono- Session 4 -

©2006 Prentice Hall

©2006 Prentice Hall

E-Marketing 4/EJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 1: Convergence

E-marketing Defined

The use of information technology to create, communicate, and deliver

value to customers. for managing customer relationships

to benefit the organization. The result of information

technology applied to traditional marketing.

E-Business, E-Commerce, andE-Marketing

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.

The Internet A global network of interconnected networks. Data move over phone lines, cables and

satellites. Three types of networks form part of the

Internet: Intranet: network that runs internally in an

organization. Extranet: two joined networks that share

information. Web: how most people refer to the

Internet.

Internet across the globe:(source : www.internetworldstats.com, Jun 2009)

The Web Is One Aspect of E-Marketing

E-mail

Internet

UPC Scanner

PDACell Phone

Web

PC

Television Refrigerator

Database

Automobile

Technology Peak of Trough of Slope of Plateau of Trigger Inflated Disillusionment Enlightenment Profitability Expectation 1990-1996 1999 2000 2001 2002 2003 2004 2005 2006 Equity Times Debt Times Positive Cash Flow

Visibility

Dot-Com Peak

U.S. Recession

E-Business Becomes “Just

Business”

E-Business Recovery Is Sweet

E-Marketing Today

Power shift from sellers to buyers Marketing fragmentation: mass market to one

customer Death of distance Time compression Knowledge/database management is key Marketing and technology: an interdisciplinary

focus Intellectual capital is important resource

Consumer Control

New technologies such as personal video recorders (PVRs) will increase consumer control. Convergence of television, radio, print, etc. Customer-controlled entertainment, and

shopping on demand.

Refined Metrics

Internet provides great deal of data, not all of which is very useful.

Tracking customer acquisition cost (CAC) and other key metrics is a critical marketing function still in its infancy.

Future metrics will provide better measures of performance, return on investment, etc.

IMC Metrics and Industry Averages

Metric Definition/formula Online Averages

CPM Cost Per Thousand Impressions CPM = [Total Cost (Impressions)] 1000

$7 to $15 for banners1 $75 and $200 for e-mail ads2

$20 and $40 for e-mail newsletter2

Click-through rate (CTR)

Number of clicks as percent of total impressionsCTR = Clicks Impressions

0.3% - 0.8% for banners3,5

2.4% rich media ads5

3.2% - 10% opt-in e-mail3,9

Cost Per Click (CPC)

Cost for each visitor from ad clickCPC = Total Ad Cost Clicks

Varies widelyGoogle.com ranges from a few cents to a few dollars

Conversion Rate Percent of people who purchased from total number of visitorsConversion Rate = Orders Visitors

1.8% for Web sites6

5% for e-mail9

Customer Acquisition Cost (CAC)

Total marketing costs to acquire a customer 

Varies by industry$82 for online retail pure-plays; $31 for multi-channel brick and mortar retailers7

Wireless Networking Increases

Cell phones, PDAs and laptops connect to the Internet via wireless modem worldwide. Starbucks Hotels and airports

Customers will have information, entertainment and communication when, where and how they want it.

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 position systems (GPS) allow in-car communication and

entertainment.

 Criterion

 TV

 Radio

 Magazine

 Newspaper

Direct Mail

 Web

Involvement passive passive active active active Interactive

MediaRichness

multi-media

audio text and graphic

text and graphic

text and graphic

multi-media

GeographicCoverage

global local global local varies Global

CPM low lowest high medium high medium

Reach high medium low medium varies medium

Targeting good good excellent good excellent excellent

Track effectiveness

fair fair fair fair excellent excellent

Message flexibility

poor good poor good excellent excellent

Strengths and Weaknesses of Major Media

©2006 Prentice Hall

E-Marketing 4/EJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 4: Strategic E-Marketing

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.

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.

To Business To Consumer To GovernmentInitiated byBusiness

Business-to-Business(B2B)FreeMarketswww.freemarkets.com

Business-to-Consumer (B2C)CDNowWww.cdnow.com

Business-to-Government (B2G)Western AustralianGovernment Supplywww.ssc.wa.gov.au/

Initiated byConsumer

Consumer-to-Business(C2B)Better Business Bureausitewww.bbb.org

Consumer-to-Consumer(C2C)eBaywww.ebay.com

Consumer-to-Government(C2G)GovWorkswww.govworks.com

Initiated byGovernment

Government-to-Business(G2B)Small BusinessAdministration sitewww.sba.gov

Government-to-Consumer(G2C)California state siteWww.state.ca.us

Government-to-Government(G2G)GovOne Solutionshttp://www.govonesolutions.com/

Exhibit 1 - 1 E-Business MarketsSource: Marian Wood (2001) with minor adaptation (p. 2)

Level of Commitment to E-Business

Pure Play

Enterprise

Business Process

Activity

Pure Dot-Com (Amazon) Click and Mortar (eSchwab, most retailers) Customer Relationship Management Brochureware E-Mail

Leve

l of b

usin

ess

Impa

ct

Business Transformation (competit ive advantage, industry redefinition) Effectiveness (customer retention) Efficiency (cost reduction)

Activity-level models Online purchasing Order processing E-mail Content publisher (brochureware) Business intelligence Online advertising Online sales promotion Pricing strategies

Business Process-Level Models

Customer relationship management (CRM)

Knowledge management Supply chain management Community building Affiliate programs Database marketing Enterprise resource planning (ERP) Mass customization

Enterprise-Level Models E-commerce

Direct selling Content sponsorship

Portal Online broker

Exchange Auction

Metamediary Purchasing agent Virtual mall

Pure Play Model A Pure Play is a business that

began on the Internet. Top level of the E-Business

pyramid. Examples: E*Trade, eBay, Yahoo! Most dot-com crash failures were

pure plays.

Performance Metrics Performance metrics are specific

measures designed to evaluate the effectiveness and efficiency of operations.

The Balanced Scorecard provides a framework for understanding e-marketing metrics. Four perspectives: customer, internal,

innovation and learning (growth), and financial

©2006 Prentice Hall

E-Marketing 4/EJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 3: The E-Marketing Plan

Seven-Step E-Marketing Plan

1. Situation analysis2. E-Marketing strategic planning3. Plan objectives4. E-Marketing strategy5. Implementation plan6. Budget7. Evaluation plan

Step 1: Situation Analysis Environmental factors

Legal factors Technological factors Market-related factors

SWOT analysis Strengths Weaknesses Opportunities Threats

3-8©2006 Prentice Hall

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.

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 analyses to determine strategies.

Market opportunity analysis Demand analysis Segment analysis Supply analysis

Step 3: Objectives Objectives are typically related to

task, measurable quantity and timeframe.

Most e-marketing plans seek to: Increase market share Increase sales revenue Reduce costs Achieve branding goals Improve databases Achieve customer relationship management goals Improve supply chain management

Step 4: E-Marketing Strategies Marketers craft strategies for the 4

P’s and relationship management to achieve plan objectives.

Product strategies Pricing strategies Distribution strategies Marketing communication strategies Relationship management strategies

These are referred to as Tier 2 tasks or strategies.

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

Segmentation

Targeting

Value(Price)

Differentiation

CRM/PRM

Positioning

Communication(Promotion)

Distribution(Place)

Offer(Product)

Step 3 E-Marketing Objectives

Step 4Tier 2 Tasks

Step 2Tier 1 Tasks

Step 5: Implementation Plan Tactics are used to achieve plan

objectives Marketing mix (4 P’s) tactics Relationship management tactics Marketing organization tactics Information-gathering tactics

Step 6: Budget

The plan must identify the expected return from marketing investments. Revenue forecast Intangible benefits, such as brand

equity Cost savings E-Marketing costs

Technology Site design Salaries Other site development expenses Marketing communication

Step 7: Evaluation Plan Marketing plan success depends

on continuous evaluation. E-marketers must have tracking

systems in place to measure results.

Use the Balanced Scorecard for e-business

Today’s firms are ROI driven.