internet marketingx 7 8

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 e-

marketing 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. Communicate benefits of using this channel

2. Prioritise audiences targeted through channel

3. Prioritise products available through channel

4. 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

Acquisition

conversion

Retention

Problems if no E-marketing strategy

Underestimated demand for online servicesMarket share loss

Resource duplicationInsufficient resource

Insufficient customer dataEfficiencies available through online marketing

Opportunities for applying online marketing toolsChanges required to internal IT systems

Inadequate trackingSenior management support limited

Stages in Internet development

No web site

web name

Static web site

Simple interactive web site

User interactive web site

full interactive web site

Stage model

Stage models (Quelch and Klein (1996))

E-business strategy model

1. Web presence 2. E-commerce 3. Integratede-commerce

4. E-business

Services available Brochureware or interaction with product catalogues and customer service

Transactional e-commerce on buy-side or sell-side. Systems often not integrated

Buy and sell-side integrated with ERP or 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 committee ore-commerce manager

Cross-organisational Across the enterprise and beyond (extraprise)

Transformation Technological infrastructure Technology and new responsibilities identified for e-commerce

Internal business processes and company structure

Change to e-business culture, linking of business processes with partners

Strategy Limited Sell-side e-commerce strategy, not well integrated with business strategy

E-commerce strategy integrated with business strategy using a value-chain 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.