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Structure
9.1 Introduction
Objectives
9.2 Creating New Sources of Competitive Advantage
9.3 Direct Distribution Model
9.4 Re-engineering the Supply Chain
9.5 Targeting Underserved Segments
9.6 Lower Price Barrier
9.7 Delivery Systems for Digital Products
9.8 Creates an Efficient Marketplace
9.9 Creates a Virtuous Cycle
9.10 Summary
9.11 Glossary
9.12 Terminal Questions
9.13 Answers
9.14 Case Study
Caselet
Hotel Boosts Business, Cuts Costs with Facebook Contests
It has been a decade since Ramesh Murthy purchased the Beach View
Hotel in Goa. The hotelier had spent approximately `10 lakh a year on
newspaper and radio advertising to promote his business holiday events
without any dramatic results. That changed in December 2011, when Murthy
decided to forego traditional advertising and focus his resources on social
media. He now uses Offerpop to run competitions and promotions on his
hotels Facebook page. Offerpop is a social marketing application that
creates a social profile for every person who interacts with your page. It
provides campaign tools and applications that help marketers run smart
programs that fit the way their customers use social media. This results in
fun, effective ways to get people to participate with a brand and spread the
word, recruit more fans and followers, and drive revenue. Murthy says
business is already up 18 per cent since he started focusing on social media,
while his marketing costs are only 20 per cent of what they once were.
Source: Adapted from http://streetfightmag.com/2012/08/09/case-studyhotel-boosts-business-while-cutting-costs-with-facebook-contests/.
(Retrieved on 14 November 2012)
E-Marketing
Unit 9
9.1 Introduction
In the previous units, you have studied about the tools, techniques, as well as
the marketing mix involved in e-marketing. In the last unit, you read about the
applications of e-marketing. E-marketing is fast becoming popular in business,
as it offers several strategic benefits to businesses. More than merely selling
online, e-marketing uses Internet technology to establish links between sellers
and buyers and with vendors and channel partners. It helps organizations to
compete in a borderless world. It rewrites the rules of competition and offers
limitless opportunities to discover new markets, diversify into new businesses
and create new distribution channels. It creates new sources of competitive
advantage; provides a direct distribution model; reengineers the supply chain;
targets underserved segments; lowers the price barrier; leads to new delivery
methods, as well as creates a virtuous cycle. Let us take a close look at each of
these benefits in detail.
Objectives
After studying this unit, you should be able to:
discuss the creation of new sources of competitive advantage
describe the direct distribution model
explain supply chain re-engineering
discuss targeting of underserved segments
identify the delivery methods and efficient marketplace
explain the concept of lower price borrier
describe delivering systems for digital products
discuss how e-marketing creates an efficient market place
explain how e-marketing creates a virtuous cycle
E-Marketing
Unit 9
One of the major steps and the first one in the process of the market
assessment is the analysis of the market for finding the specific offerings and
geographic targets. This market assessment could be done in fives phases of
screening. First, the initial screening (with the aim of the basic need of the product
in the market). The second type of screening would be eliminating the markets
that do not fulfill the financial and economic requirements. Here the major financial
aspects studied are the inflation rates, expected return on investment, interest
rates, the buying habits and credit availability. The economic aspects of the
market will include the demand influences and market indicators that could be
judged on the basis of the size, intensity and growth of the market. The third way
of screening would be the political and legal forces in which the entry barriers
like import restrictions and local competition become important factors. Along
with this, some issues like the patents, trademarks and copyrights could also
be analysed. The fourth type of screening would be that of the socio-cultural
forces like language, customs, work habits, religion and values which can be
crucial in locating the companys operations. The fifth and last type of screening
would be of the competitive forces, which will help in deciding the final choice.
As per Porter (1990), when one enters a competitive market, one has to establish
competitive advantage, which then compels the company to become more
efficient and effective. This enhances the companys competitiveness.
E-marketing offers new sources of competitive advantage in the following ways:
Redefining the business landscape: E-commerce is radically changing
the way products, services and information are exchanged. It is redefining
our way of doing business, whether it is education, entertainment, financial
services, banking or hospitality management. The power of e-commerce
is creating a new business landscape and a new way of life which no
business firm can afford to ignore.
Cuts costs and saves time: The most important advantage of emarketing is that it reduces coststhe cost of searching and monitoring,
the cost of more retail outlets, the cost of sourcing, supply chain
management and other transactional costs.
Makes organizations global: It helps to expand the size of the market
from regional to national and from national to global. By offering better
service, firms are able to establish better customer relations and create
more customers across the globe. National borders do not stand in the
way of making sales.
Greater opportunities to increase sales and improve revenue
streams: With more efficient personnel and through instantaneous
Sikkim Manipal University
E-Marketing
Unit 9
response, the chances for improving sales are brighter. Companies can
improve their profitability by offering a variety of services to their
consumers, whether it is direct sales, online advertising, subscriptions or
banking services.
More precise target market: It helps to target market segments more
precisely and makes the marketing plan a goal-directed effort. Marketers
can target their message to consumers based on geography, purchasing
behaviour and demographic information.
Improved marketing research: It enables one to gather more accurate
information about consumers and thereby improves customer service
experience. It can simplify the communication process by offering a variety
of alternativesonline contact forms, voice mail, e-mail, instant chat, etc.
Building customer loyalty: Like direct mail, it can deliver all the relevant
information, offer more effective service and create a more positive attitude
in the minds of consumers about the products and services and help to
build customer loyalty.
Direct to end user: Manufacturers can bypass trade intermediaries and
sell directly to the end user, whether they are business customers or
ultimate consumers, with greater efficiency and economy.
Public service can be improved: Speed, accessibility, accurate
information and competitive advantage enable businesses to reengineer
their production and distribution process, minimize costs and offer better
service to customers. Similarly, it can also help to improve public service
by facilitating improved delivery system, greater interconnectivity and
quicker response to address customer complaints and public grievances.
No-entry barrier: It is open to large, medium and small businesses and
even to entrepreneurs operating on a small scale, without any need to
make a heavy investment.
E-Marketing
Unit 9
Activity 1
Collect information and prepare a report, with examples, of how e-marketing
is helpful to businesses.
Hint: You may look at www.internetmarketing.com, www.dell.com and
www.cisco.com to get some idea
E-Marketing
Unit 9
E-Marketing
Unit 9
E-Marketing
Unit 9
E-Marketing
Unit 9
mobile telephone companies see the large untapped rural population in India as
an enormous potential market. Mobile service providers are using SMS/WAP
based applications to provide rural farmers with weather updates, information
about seeds, fertilizers, agri inputs etc. Also, there are central Internet-enabled
locations in villages that are connecting to online portals to sell agricultural produce.
While the use of e-marketing has enabled advanced and specific targeting
of segments, businesses also benefit from finding local partners to reach the
underserved segments. This gives businesses access to new markets, with
the help of new capabilities, expertise, and access that they may not possess
on their own.
E-Marketing
Unit 9
E-Marketing
Unit 9
marketing is a network which increases the point of sale and purchase. Also, an
online buyer can purchase at any point and at any time.
Internet delivery methods could include:
Postcards
Mailed letter with a brochure
E-mail notification
Press releases
Newsletter
LinkedIn, Facebook, Twitter
Unique landing page
Online form
Print marketing sales tools like brochures, business cards, letterheads and
signage (brick and mortal companies) should fit in with the Website image and
Internet marketing strategy, a client is pursuing.
E-Marketing
Unit 9
E-Marketing
Unit 9
Economies
of Scale
Lower price
of products
Greater
efficiency
Increased
sales and
new markets
Competitive
advantage
E-Marketing
Unit 9
9.10 Summary
Let us recapitulate the important concepts discussed in this unit:
E-marketing is fast becoming popular in business, as it offers several
strategic benefits to businesses.
It offers new sources of competitive advantage by cutting costs and saving
time; making organizations global; increasing sales and improve revenue
streams; enabling more precise targeting; improved marketing research
and customer service, etc.
The direct distribution model of e-marketing is fast becoming a costeffective marketing tool that does away with several intermediaries.
It has brought about structural changes in the supply chain, with growing
focus on the customer as manufacturers can now to understand the
needs of the customer, ie the type of product he wants, how it can be
packaged, as well as where to ship it.
E-marketing has enabled advanced and specific targeting of segments,
as it is useful in identifying and targeting underserved segments such as
rural populations, women, the senior citizens, etc.
E-marketing reduces coststhe cost of searching and monitoring, the
cost of more retail outlets, the cost of sourcing, supply chain management
and other transactional costs.
It is being used for new delivery methods including sales, distribution,
negotiations, order taking, inventory control, customer service and sales
support.
E-marketing has created efficient markets, where the flow of relevant
information about the products, services and investment choices is easily
available and accurate.
It has created a virtuous cycle, that is, a complex chain of events that
reinforce each other through a feedback loop and have favourable results.
9.11 Glossary
Efficient markets: Those where the flow of relevant information about
the products, services and investment choices is easily available and
accurate.
E-Marketing
Unit 9
9.13 Answers
Self Assessment Questions
1. Customer service
2. Intermediaries
3. True
4. False
5. Supply chain
6. Customization
7. SMS/WAP
8. False
9. Costs
10. False
11. False
Sikkim Manipal University
E-Marketing
Unit 9
12. Company
13. Internet
14. True
15. Virtuous
16. False
Terminal Questions
1. E-marketing is targeted at creating a new competitive advantage for the
company. For more details, refer section 9.2.
2. The direct distribution model of e-marketing gives the product an edge as
it is a cost-effective marketing tool that does away with several
intermediaries. For more details, refer section 9.3.
3. Supply chain is a system of organizations, people, technology, activities,
information and resources involved in moving a product or service
from supplier to customer. For more details, refer section 9.4.
4. In most industries, there are large segments of the population that are
underserved, that is, all the products or services are not reaching them.
For more details, refer section 9.5.
5. The most important advantage of e-marketing is that it reduces costs.
For more details, refer sections 9.6 and 9.7.
6. Efficient markets are those where the flow of relevant information about
the products, services and investment choices is easily available and
accurate. For more details, refer sections 9.8 and 9.9.
E-Marketing
Unit 9
and groups that we not controlled at the corporate level. They need a
consolidated approach and guidelines for success moving forward.
The Goal: To design a social media plan based on Facebook and
YouTube as well as an employee handbook that could be used to execute
social media marketing strategies internally.
The Strategy: The strategy started with four weeks of discovery, marketing
research, competitive analysis, and social media plan development. The
social media plan would incorporate all research findings, social media
channels and how to use them, an editorial calendar, social media content
development guidelines, and an employee handbook for engaging in social
media. Once the plan was finished, IMI would act as a consultant and help
Oceania execute the plan. The strategy included the following:
Social media plan development
Social media consulting
SEO consulting
The Results: The results were fantastic and have helped Oceania reach
record levels of Facebook engagement. The company now has a solid
platform for interacting with customers and travel agents worldwide as well
as a channel for sales and promotions. The final plan was essentially a 60page business plan for social media.
The plan included:
Identification of key platforms
Identification of key stakeholders
Social media content guidelines
Editorial calendars
Employee guideline
Phase One Build the plan
Phase Two Ongoing consulting with weekly meetings & deliverables
Phase Three Regular recommendations for innovative social media
engagement ideas
Oceania started with approximately 350 fans and now has over 12,500 with
incredible levels of customer interaction. With IMIs guidance, Oceania has
run many successful contests and regularly sells out cruises months in
advanced.
E-Marketing
Unit 9
Discussion Questions
1. List the strategic advantages of e-marketing with respect to the success
story of Oceania.
2. List the salient features of a social media plan that would apply to an
Indian travel company.
Source: Adapted from http://www.internetmarketinginc.com/oceaniacruises-case-study/. (Retrieved on 15 November 2012)
References
Dennis C.E, T Fenech, B Merrilees, (2004), E-retailing, London, Routledge.
Chaffey D, (2006), E-Business and E-Commerce Management: Strategy,
Implementation and Practice.
Neelamegham, S, (2011), Marketing in India: Text and Cases, New Delhi,
Vikas Publishing House.
E-References
http://www.sba.gov/content/email-marketing. (Retrieved on 25 March 2013)