The E-Marketing Plan

Creating an E-Marketing Plan

Why would a company pay so much to design and build its Internet presence ?

– To protect the corporate and brand identities

– Complexity of designing e-marketing strategies

Creating an E-Marketing Plan An E-Marketing Plan is a company’s

blueprint for strategic direction

Ad hoc – Companies develop strategies without the development of an E-Marketing Plan

• Example: www.yahoo.com

75% of e-business will fail due to flaws in planning

A Seven Step Marketing Plan

1. Conduct a situation analysis.

2. Identify target stakeholders

3. Set objectives

4. Design marketing mix strategies to meet objectives

5. Design action plan

6. Develop a budget

7. Develop an evaluation plan

Exhibit 8 - 2 Marketing Plan Process

• Large Web sites are not profitable ventures, but they are more concerned with establishing their brands, ex: Amazon

• Start-Up companies are funded by:

–Private funds (family and friends)

–Angle Investors

–Venture capitalist (VCs)

•“I invest in people, not ideas,” Arthur Rock (VC), “If you find good people, if they’re wrong about the product, they’ll make a switch.”

Venture Capital E-Marketing Plan

• VCs look for plans that show:

• the e-business idea is a solid one,

• the entrepreneur has some idea of how to run the business

• Once the start up business begins to boom, the VC looks for an exit plan, and the stock usually goes public, IPO

• The VC gets their money back and looks for another investment

Venture Capital E-Marketing Plan

Key Success Factors Key Dangers

    Make it easy for customers to do business with you.    Focus on the end customer for your products and services.    Redesign your customer-facing business processes from the end customer’s point of view.    Wire your company for profit: Design a comprehensive, evolving electronic business architecture.    Foster customer loyalty, the key to profitability in electronic commerce.

    Don’t completely redesign a business to become an e-business.    Don’t suspend good project management rules in the name of e-business.    Don’t assume technology can do all the heavy lifting in e-business implementation.    Don’t focus solely on current customers for e-business.    Stay alert for new competition.

Exhibit 8 - 3 Critical Success Factors and Dangers for E-BusinessSource: Success from Seybold (1998); danger from GartnerGroup (1999)

The Existing Marketing Plan

• Working with existing information is the best place to start, if you want to follow current positing strategies.

Conduct an Environmental Scan

–Legal/Political Environment •Taxation, access, copyrights, & encryption

– Technological Environment•Communication Infrastructures

•Bandwidths, and New browsing devices

Situation Analysis

Conduct an Environmental Scan

–USER Trends •Focus on how the net audience has changed over the last six months, last year, etc…

•Are there any trends?

•Is there any important target segments coming online?

–World Economies •Understand overseas economies, also do they have the proper infrastructures to support what we are doing?

Situation Analysis

Develop a Market Opportunity Analysis

- Includes both demand & supply analysis

•Demand side, reviews potential profitability

•Supply side, reviews competition, and finds competitive advantages

- SWOT

Situation Analysis

Internal Capability Examples

Customer interactions E-commerce, customer service, distribution channels

Production and fulfillment SCM, production scheduling, inventory management

People Culture, skills, knowledge management, leadership and commitment to e-business

Technology ERP systems, legacy applications, networks, Web site, security, IT skills

Core infrastructure Financial systems, R&D, HR

Exhibit 8 - 4 Key Internal Capabilities for E-BusinessSource: Adapted from Kalakota (1999)

Situation Analysis Develop a Market Opportunity Analysis

Market Opportunity Analysis includes both demand and supply analyses.

The demand portion reviews various market segments in terms of potential profit.

The supply analysis review competition in selected segments that are under consideration

The purpose of the supply analysis is to assist in forecasting segment profitability and finding competitive advantages in the online market.

SWOT

Strengths, Weaknesses, Opportunities and Threats

This analysis objectively evaluates the company’s strengths and weaknesses with respect to the environment and the competition

Strategic Opportunities A Key element in setting strategic goals is to take stock of where the company

currently is and the level of commitment that it wishes to make to a business.

The lowest level impacts individual business activities such as order processing.

The next level impacts business processes such as customer relationship management

The next level, enterprise is where the firm automates many business processes in a unified system

EB = EC + BI + CRM + SCM + ERP

ERP – the key here is to make sure that the processes work well together in a unified system

Activity

Business Process

Enterprise

PurePlayBusiness transformation

(competitive advantage,industry redefinition)

Effectiveness(Incremental sales,customer retention)

Efficiency(Cost

reduction)

Pure dot-com(E*Trade)

Click and Mortar(eSchwab)

Customerrelationshipmanagement

Brochureware,Order processing

Leve

l of

busi

ness

impa

ct

Exhibit 8 - 5 Level of Commitment to E-Business

Source: adapted from www.mohanbirsawhney.com

Pure Play Advantages

They are not held to the same standards of profitability as the brick-and-mortar stores

They are held to be smaller and have more agile cultures able to move quickly in response to market fluctuations

The final level is comprised of internet pure plays

Pure plays are companies without brick and mortar presence

Activity Level Business Process Level Enterprise Level

Online market research Online purchasing Brochureware Content publisher E-mail Online advertising Online sales promotions Order processing Cost reduction using electronic means Negotiated pricing online Segmented pricing online Content sponsorship online

Knowledge managementCustomer relationship management (CRM)Supply chain management (SCM)E-Commerce: tangible productsDirect sellingCommunity building onlineAffiliate programDatabase marketing

E-tailerBit vendorOnline exchangeOnline brokerageMetamediaryInfomediaryVirtual mallShopping agentReverse auctionOnline buyer’s coopMass-customization tools

Exhibit 8 - 6 Menu of Opportunities at Various Levels of Commitment

Identify Target Stakeholders

When multiple targets are identified, they should be ranked in order of importance so resources can be allocated accordingly

Each market should be well profiled by its characteristics, behavior and desires

Firms must understand the value proposition for each market.

Set Objectives

Use carefully worded objectives that flow from plan analyses that have a task, contain a specific measurement device, and has a time frame for accomplishment.

Design Marketing Mix Strategies to Meet the Objectives

Strategic justification – shows how the strategy fits with the firms overall mission and objectives

Operational justification – identifies and quantifies the specific process improvements that will result from the strategy

Technical justification – shows how technology will fit and provide synergy with current IT capabilities

Financial justification – examines cost/benefit analysis

Marketing Mix Component Chapter Business Model

Product 4 Digital value through new products

Price 4 Cost reduction using E-marketingNegotiationSegmented pricing

Distribution 

5 Content sponsorshipDirect sellingInfomediaryIntermediaries Broker: Online exchangeOnline auction Agent: Manufacturer’s agentAffiliate programMetamediaryVirtual mallShopping agent Reverse auctionBuyer cooperative E-tailer bit vendorTangible products

Marketing Communication 6 

Content publishingE-mailCommunity buildingOnline advertisingOnline sales promotion

Relationship Marketing 7 CRM

Exhibit 8 - 7 Selected E-

Business Models Are

Also Marketing

Strategies

Action Plan

Project Scope Site Development Site Promotion Site Maintenance

An action plan will decide which strategies are best to promote the business or company. Having decided that an Internet presence is essential the following considerations are necessary:

Web Site Example:Project Scope

•To decide the level of Internet and e-commerce commitment that is both beneficial, cost effective and advantageous to the company.

•To evaluate the need for e-mail contact between stakeholders and staff, and what staffing is necessary to implement such a program.

Site DevelopmentBuild, Buy or Rent, the Following Considerations

Apply:

Outsourcing – speeds completion of the project Personnel Cost Savings Faster Loading Site User Friendly Product More Professional Graphics & Information Outsourcers are aware of Copyright Rules First Impression is Paramount

http://www.forrester.com/

    Agency (Affiliation)

  Headquarters

1999 Projected Revenue (in thousands)

 % Increase over 1998

  1999 Employees

1 Sapient 1 Cambridge, MA

276,844 67.9 2,011

2 iXL, Atlanta 1 Atlanta *214,000 230.8 *1,700

3 USWeb/CKS 1, 2 San Francisco *170,000 86.8 *1,050

4 Razorfish (Omnicom) 1 New York 150,000 983.6 1,300

5 Digitas 2 Boston *135,000 237.5 700

6 TMP Worldwide 1, 2 New York *125,000 149.2 *350

7 c2o Interactive Architects (EDS) 1

Dallas 125,000 177.8 350

8 Euro RSCG Worldwide Interaction (Havas) 1

New York 120,900 54.0 793

9 AppNet 1 Bethesda, MD 110,000 521.5 1,000

10

Grey New Technologies 1 New York 106,000 41.3 850

11

OgilvyInteractive 1 (WPP)

New York 100,000 66.7 650

12

Agency.com1 (Omnicom) New York *100,000 278.0 1,000

13

Luminant Worldwide (Y&R)

Dallas 95,883 NA 800

14

Organic (Omnicom) San Francisco *80,000 188.8 681

15

Xceed1 New York 74,000 19.4 450

Exhibit 8 - 8 Top 15 U.S. Interactive Advertising Agencies

Source: Adapted from AdweekOnline (www.adweek.com)

Site Promotion Register Site with Search Engines Use Metatags, Keywords and HTML tags List Site with Appropriate Directories Utilize Electronic Press Releases Link to Complimentary Web Sites Incorporate Web Site Address in all Media Consider Banner Advertising Consider Hiring an Outside Firm to Promote Web Site

Links to Site Promotion & Search Engines: www.yahoo.com/ www.hotbot.com

www.excite.com http://www.adjacency.com/

Exhibit 8 - 9 Adjacency (Sapient) Builds and Promotes Web Sites for Clients

Source: www.adjacency.com

Site Maintenance

Decide How Often to Update Site

Decide Whether to Outsource or Update in House

Evaluate the need for Human Resource for Web Site Maintenance

Budgeting Evaluate the cost/benefits analysis &

Identify Potential Revenue Streams:

E-Commerce – Do we sell on-line?

Content Sponsorship – Banners, Buttons, Sponsorships

Intermediary Fees – Broker and Agent Fees

Revenue Streams

Initial funds to support a Web site come from:– Investors– Loans– Firm’s operating budget

Revenue streams that produce Internet profits come mainly from:– Direct sales– Advertising sales– Other fees

Cost SavingsBy Selling and Marketing On-line

Eliminating elements of the traditional distribution chain

Increases possibilities of greater revenue

Saves on traditional marketing costs (printing, postage)

Increases target market to world-wide audience

Intangible Benefits

Goodwill Brand Equity Audience Measurement Public Relations Customer Satisfaction

The industry is developing exponentially creating new marketing opportunities, although they may be hard to measure

Cost/Benefit AnalysisAnalyze the cost

of e-marketing versus the benefits

Revenue increases Cost decreases Intangible benefits Goodwill Brand/Image Building Relationship Building

ISP Costs Hardware and

Software Costs Design Costs Maintenance Costs

Benefits Costs

Evaluation PlanMonitor and Track Site Usage

Cognitive Measure unique visits and impressions

Attitudinal Survey customers for brand satisfaction objective: CRM, firm would use AOV (average order value) and LTV (lifetime

customer value) Transactive

Measure purchases, site traffic, previous paths and click-through rate

The End