Building an Internet Marketing Strategy

Building an Internet marketing strategy - A presentation by Stefan B. Bazan

Building an Internet Marketing Strategy

Internet marketing is different from classic marketing

Failure is the norm in Internet commercial projects

Lack of knowledge, lack of decision

Professional approach leads to professional results

A mistake in the thinking is a disaster in the making

Lack of anticipation, lack of results

Technology should serve objectives

Know your enemy

Content rules

The hippie period of the web is over



Introduction: Business on the Internet

Knowledge: The environment

Thinking: Internet strategy development

Winning: Internet marketing communication

Planning: Website development

Guideline: A business plan



Action is the only truth of intention

Jean-Paul Sartre



Why?

Cisco can make 90% of its revenue with online sale

EasyJet gains 90% of its tickets sales online

Hannibal won the battle of Canae

Because:

Strategy enables firms with smaller resources to overcome larger and more powerful opponents



Basic definitions

E-marketing

E-commerce

E-business



What benefits?It depends on the approach:

Conservative approach on existing market and product = Market penetration

Conservative approach on new market and product = Market development

Progressive approach on existing market and product = Product development

Progressive approach on existing market and product = Diversification



What benefits?

Tangible benefits

Increased sales from sales leads giving rise to increase revenueCost reduction from reduced time in transaction, service, communication

Intangible benefits

Corporate image / brand improvedMore responsive marketing communication

Improved customer serviceMeeting customer expectations

Better management of marketing communicationFeedback from customers on products



Keys to success: The 6 Is – John Deighton

Interactivity – Internet is a pull medium

Intelligence – Ideas reign

Individualization – Tailored communications

Integration – Communication and information

Industry restructuring – Re-intermediation

Independence of location – New markets


The Internet environment

MARKET

CUSTOMERS

COMPETITORS & INTERMEDIARIES

TECHNOLOGY

SOCIAL AND ECONOMICAL FACTORS



Organisation

Micro-environment

InternationalEconomic factorsLegal constraintsCultural factors

Country specificEconomic factorsLegal constraintsCultural factors

SocietyPublic opinionMoral & Ethics

Technology - Innovation - Trends

Suppliers

Customers

Intermediaries

Competitors



The market

Porter’s five forces

Increased bargaining power of buyers - Commodization

Reduced bargaining power of suppliers - Wider choice

Threat of substitute products and services - New business models

Reduced barriers to entry

Greater rivalry between existing competitors

“CHOOSE YOUR BUSINESS MODEL”



Business models

E-shop

E-malls

E-auctions

Virtual communities

Collaboration platform

Hubs

Value-chain providers

Information brokers

Trust



Revenue models

E-shop: Direct product sales, Direct service sales

Retailer / reseller Intermediary: Subscription, Rental of service

Marketplace intermediary: Affiliation, Auction, Marketplace – Commission based sales

Supply chain provider or integrator: Banners, Ads, Sponsorship



The customers

Adoption = Access + value proposition + usage + securitySegmentation = Localization + psychology + culture + experience



The intermediaries

Independent sites that are used to bring buyers and sellers together

Directories (Yahoo)

Search engines (Google)

E-malls (BarclaySquare)

Virtual resellers (Amazon)

Financial intermediaries (Netcommerce)

Virtual communities

Evaluators (Kelkoo)

Portals

Access, horizontal and vertical integration, geographical, marketplace



Macro-environment

The Technology Challenge

Successfully assess which new technological innovations

can be applied to give competitive advantage

Social, economical and cultural factors

Barriers:

Psychological – Culture, religion, etc. - Behavior

Operational – Infrastructure

Organizational – Internet governance, taxation

Product / market – Not the right place to sell


The Internet marketing strategy

Generic strategic approach

Situation review

Setting goals

Formulate strategy

Implementing E-CRM



Michael Porter

“The key question is not whether to deploy internet technology - But how to deploy it”

Objective:

Provide consistent direction for an organization’s e-marketing activities that integrates with its other

marketing activities and supports the overall objectives of the business

Process:

A strategic process model provides a framework that gives a logical sequence of “roadmap” to follow to ensure inclusion of all keys activities of strategy

development and implementation



Carlos GHOSN

Where am I going?

is

The first thing to say

to generate motivation



Modes of strategy development

Logical rational planning

Use analytical tools and frameworks

Pragmatic incremental

Minor adjustments to the external environment

Subjective visionaryResult of a dominant or charismatic leader



The planning process

Phase 1: Goal settings: Mission + objectives

Phase 2: Situation review: Marketing audit + SWOT

Phase 3: Strategy formulation: Marketing strategy + Expected results

Phase 4: Resource allocation and monitoring: Budget + Implementation project



The classical framework for strategic management

Mission

Objectives

Strategyformulation

Implementation

ControlMonitoring

External analysis Internal analysis



Phase 1: Strategic goals setting

Build a scenario

Qualitative scenarios + Quantitative scenarios

+

Benefits identification - Rampant experimentation

=

Positive return on investment



What benefits?

According to the European companies

Speed of transactions increasedManagement of information improved

Improved understanding of customer requirements Increased service level to customers

Removal of time constraintsAccess to global markets

Removal of distance constraintsAbility to complete total transaction electronically

Access to full competitive arenaOpportunities for new revenues / services

Cost effectivenessMore effective relationships with business partners



Phase 2: Situation review

Internal resources

Processes in the company

Activity on the marketplace

Immediate competitive environment

Wider environment

1 – Internal audit

2 – External audit




Internal audit

Resources

Financial

Technological

Human

Responsibility

SWOT

Online presence




External audit

Demand

Customers

Competitors

Intermediaries

SWOT




SWOT Analysis

OpportunitiesNew markets, new servicesNew distribution channels

Reduced power of suppliersDemographic characteristics

Cost reduction

ThreatsNew entrants, new products

Faster respondingChannel conflictsCustomer choice

Regulation

StrengthsFlexibility

Strong brandSenior management committment

Strategy in placeChannels in place

WeaknessesWeak brandInflexibility

Lack of leadershipNo strategy



Phase 4: Strategy formulation

Segmentation

Identify customer needs and segment markets(Is the market attractive? Which segments within the market is the most attractive?)

Target marketing

Evaluate and select target segments(Can we serve customers in this segment better than the competition can?)

Positioning and differentiating

Identify proportion and online value proposition for each segment(Can we outperform the competition and build significant competitive advantage?)

Planning – Deploy resources



E-CRM Approaches

Attract new and existing customers to site

Incentives visitors to action

Capture customer information to maintain relationship

Maintain dialogue using online communication

Maintain dialogue using offline communication

E-CRM Tools

Databases

Personalization

E-mail

Virtual communities


Planning website development

The process

Analysis

Design

Development

Testing

+ Content management



It is a natural mistake amongst those creating a new web site

for the first time to ‘dive in’ and starts creating pages without forward planning

(Chaffey)

But

Experience of developing information systems has shown that an approach that involves to much up-front planning, analysis and design before development is started does

not work well

(Bocij)



The development process

Pre-development

Content planning

Content development and testing

Publishing and launching of the site

Analysis

Develop

Test & review Design



1 - The process: Analyzing

Find customer needs

Design customer orientation

Adapt to localization

Review competitors’ websites



2 - The process: Design

1 - Design the user experience

Information architecture: Presentation / Interaction / Representation

2 - Develop customer oriented content

Awareness / interest / evaluation / trial / adoption

and

Develop marketing oriented content

Acquisition / conversion / retention / service quality / branding




Encourage people to act

A great website will allow people to act in a variety of ways. People should be encouraged to:

Buy your product or complete some other transaction with you

Get in touch with you

Contribute to a discussion forum

Subscribe to a newsletter

Fill out a form

Download something

Inform someone else about your website

Print out your content in a printer-friendly format

Link to you

Republish a selection of your content (where appropriate)




User-centered design

Who are the important users?

What is their purpose for accessing the site?

How frequently will they visit the site?

What experience and expertise do they have?

What nationality (language) are they?

What type of information are they looking for?

How do they want the information to be presented to them?

What type of computers / screens / browsers do they use?

Evaluate design: effectiveness, productivity, satisfaction




Basic elements of web design

Identification / Navigation / Content / Interactivity

The 7CS of advanced customer interface design

ContentContext

CommerceCommunity

CustomizationConnection

Communication




About content management systems…

What is a CMS?

http://en.wikipedia.org/wiki/Content_management_system




About content management systems…

A taste of “New thinking”, by Gerry McGovern

Benefits of a CMS

A quality CMS can help you streamline your publishing processes.

It can allow you to develop an information architecture that is robust, yet flexible.

It can allow you to manage your content efficiently and cost-effectively.

A CMS makes it easier for people to create, edit and publish content on a website.

A good CMS allows non-technical authors to easily and quickly publish their content.

More >>



3 - The process: Testing and reviewing


Interactive marketing communication

Characteristics

Objectives

Offline

Online











Build a great website and they will come!

From:

1 – Search engines : 33%

2 – Links : 29%

3 - URL

3 main objectives of interactive marketing communication

Use online and offline communication to drive visitors to a web site

Use on-site communication to deliver an effective message

Integrate all communication channels to achieve marketing objectives



Characteristics

From push to pull

From monologue to dialogue

From one to many to one to some and one to one

From lean back to lean forward

Hoffman & Novak (1997)

Consumers can interact with the medium, firms can provide contentto the medium and in the most radical departure from

traditional marketing environments,consumers can provide commercially-oriented content to the media



Integration

Web site

URL offline promptURL offline prompt Offline AdOffline Ad PR or WoMPR or WoM

Search engine

Search engine LinksLinks

Paid bannerOr

Sponsorship

Paid bannerOr

Sponsorship

E-mail adDirect e-mail

E-mail adDirect e-mail



Conversion marketing objectives

200.000 reach

10.000 site visitors

1000 qualified leads

100 customers

5% search engine conversion

10% website conversion

10% sales reps conversion



Rowley’s 4 stages

Contact

Interact

Transact

Relate

Content

Communication

Commerce

Community



Offline promotion techniques

Incidental advertising offline

Classic strap line: “Visit our website!”

Site value-proposition strap line: “Detailed information on the product online”

Specific campaign strap line: “Instant quote online”




Direct marketing

Easyjet campaign 2000 with Times magazine:

www.times.easyjet.com

50000 seats offered to readers40.000 sold in 3 days

100.000 in 5 weeks

=

£2M to the airline




Physical reminders

Word of mouth

A typical Internet user tells 12 other people about his online shopping

He’ll tell 24 people if his experience was bad…



Online promotion techniques

Banner advertising

Purpose (Cartellieri – 1997):

Delivering content

Enabling transaction

Shaping branding

Soliciting response



Online promotion techniques

Location for placing banner advertising

Portals

News services

Special interest sites

Advertising Network

Rings or affiliated networks



Strengths and weakenesses

Search engines:

+ Large online reach / - Works best for specialist products

Affiliate campaigns:

+ Payment by results / Cost increasing for larger campaigns

Banner:

+ efficient, good for branding / - does not directly lead to sales

E-mail marketing:

+ Push medium, can’t be ignored / Dilution and dangerous for branding


The end

I thank you very much for your attention

Documents

Building an Internet Marketing Strategy