MRKG 2312: E-commerce

2006 Prentice Hall

Agenda

Questions?
Begin discussion on the eMarketing Plan
Assignment 1 Posted
eMarketing plan guidelines posted

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E-Marketing 4/E

Judy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 3: The E-Marketing Plan

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Chapter 3 Objectives
After reading Chapter 3 you will be able to:
Discuss the nature and importance of an emarketing plan and outline its 7 steps.
Show the form of an e-marketing objective and
highlight the use of an objective-strategy matrix.
Describe the tasks that marketers complete as they
create e-marketing strategies.
List some key revenues and costs identified during
the budgeting step of the planning process.

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The Playboy Story

CEO Christie Hefner revitalized the company in
the 1990s by adding multimedia content to the
Playboy magazine format.
Playboy.com came online in 1994 with a
marketing plan to generate revenues from

Advertising
E-commerce
Online gaming
Online events

They project online gaming will generate much

of future revenue. Do you agree?
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Overview of the E-Marketing Planning

Process
The e-marketing plan is a blueprint for emarketing strategy formulation and
implementation.
The plan serves as a road map to guide the
firm, allocate resources, and make decisions.

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Two common types of plans

Napkin plan

Dot-com entrepreneurs jotted down strategic plan on a

napkin.
Just-do-it, activity-based, bottom-up plan

A comprehensive plan is necessary when

entrepreneurs seek venture capital
Sources of funding
Debt
Sometimes bank loans
Debt financed (20% down)

Banks seek leverage

Equity

Private funds
Angel investors
Venture capitalists (VCs)
Go Public

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The Venture Capital E-Marketing Plan

VCs look for a way to get their money and profits
out of the venture within a few years:
- The golden exit plan is to go public and issue stock in an
initial public offering (IPO),
- As soon as the stock price rises sufficiently, the VC
cashes out and moves on to another investment.

All VCs investments are not successful. But if

even one out of 20 is an Amazon.com, the risk was
well worth the reward.

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Questions that business plans should

cover

Who is the new ventures customers?

How does the customer make decisions about buying this
product or service?
To what degree is the product or service a compelling
purchase for the customer?
How will the product or service be priced?
How will the venture reach all the identified customer
segments?
How much does it cost (in time and resources) to acquire a
customer?
How much does it cost to produce and deliver the product or
service?
How much does it cost to support a customer?
How easy is it to retain a customer?

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Seven-Step E-Marketing Plan

1.
2.
3.
4.
5.
6.
7.

Situation analysis (ch.4, 5)

E-Marketing strategic planning tier 1 (ch.8,9)
Plan objectives
E-Marketing strategy tier 2 (ch.10 14)
Implementation plan
Budget
Evaluation plan

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Step 1: Situation Analysis

Environmental factors
Legal factors
Technological factors
Market-related factors

SWOT analysis

Strengths
Weaknesses
Opportunities
Threats

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SWOT
Analysis Leading
to E-Marketing
Opportunities
Threats
Objective
1.
2.

Hispanic markets growing and

untapped in our industry.
Save postage costs through e-mail
marketing.

1.
2.

Pending security law means costly

software upgrades.
Competitor X is aggressively using ecommerce.

Strengths

Weaknesses

1.

1.
2.

2.

Strong customer service

department.
Excellent Web site and database
system.

Low-tech corporate culture.

Seasonal business: Peak is summer
months.

E-Marketing Objective: $500,000 in revenues from e-commerce in one year.

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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

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Differentiation

Tier 1
tasks

Tier 2
tasks

Segmentation
Positioning

Targeting

E-Marketing
Strategy

Offer

CRM/PRM

Communication

Value
Distribution

Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers

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E-Marketing Strategic Planning:

Segmenting & targeting
- Market opportunity analysis (MOA):
- The demand analysis = market segmentation analyses to describe
and evaluate the potential profitability, sustainability, accessibility,
and size of various potential segments.
- The segment analysis in the B2C market with demographic
characteristics, geographic location, selected psychographic, and
past behavior toward the descriptors help firms identify potentially
attractive markets.

Allows the company to select its target market and understand

its characteristics, behavior, and desires in the firms product
category.

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E-Marketing Strategic Planning:

Segmenting & targeting

Tools:
- Traditional segmentation analyses.
- Analyzes of customer bases using cookies, database
analyses, and other techniques,
- Supply analysis: forecasts segment profitability + finds
competitive advantages,
- Study of competition to find the company own
performance advantages.: strengths and weaknesses, emarketing initiatives,
- Identify future industry changes.
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E-Marketing Strategic Planning:

Identifying brand differentiation variables
and positioning strategies

The understanding of the competition + the target(s)

Differentiation of the products to provide benefits perceived as
important by the target.

The positioning statement: the desired image for the brand

relative to the competition.

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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

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S.M.A.R.T.
1. Specific Objectives should specify what they want
to achieve.
2. Measurable You should be able to measure
whether you are meeting the objectives or not.
3. Achievable - Are the objectives you set achievable?
4. Realistic Can you realistically achieve the
objectives with the resources you have
5. Time When do you want to achieve the set
objectives?

An objective maybe to increase sales 10%

from 2007 2008.

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Step 4: E-Marketing Strategies

Marketers craft strategies for the 4 Ps 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.
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Steps 2, 3, and 4 of the

E-Marketing Plan
Differentiation
Step 2
Tier 1 Tasks

Segmentation

Positioning

Targeting

Step 3
E-Marketing Objectives
Offer
(Product)

Value
(Price)

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CRM/PRM
Step 4
Tier 2 Tasks

Distribution
(Place)

Communication
(Promotion)

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The Offer: Product Strategies

The organization can:
-

Sell merchandise, services, or advertising on the Web site,

Adopt an e-business model such as online auctions,
Create new brands for the online market,
Simply sell selected current or enhanced products in that
channel.

A firm must decide how online product prices will compare

with offline equivalents by considering the differing costs of
sorting and delivering products to individuals through the
online channel as well as competitive and market concerns.

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The Offer: Pricing Strategies

There are two online pricing trends are:
Dynamic pricingthis strategy applies different price
levels for different customers or situations. The Internet
allows firms to price items automatically and on the fly
while users view pages.
Online biddingthis presents a way to optimize
inventory management.
E.g. Priceline.com, eBay.com

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Distribution Strategies

Many firms use the Internet to distribute products or create

efficiencies among supply chain members in the distribution
channel.
Direct marketingMany firms sell directly to customers,
by-passing intermediaries in the traditional channel for
some sales.
Agent e-business modelsFirms such as eBay and
E*Trade bring buyers and sellers together and earn a fee
for the transaction.

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Marketing Communication
Strategies

The Internet spawned a multitude of new marketing

communication strategies, both to draw customers to a Web
site and to interact with brick-and-mortar customers.
Firms use Web pages and e-mail to:
- Communicate with their target markets and business
partners,
- Build brand images,
- Create awareness of new products,
- Position products using the Web and e-mail.

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Relationship Management
Strategies
E-marketing communication strategies help build relationships
with a firms partners, supply chain members, or customers
using:
- Customer relationship management (CRM) software to retain
customers and increase average order values and lifetime value,
- Partner relationship management (PRM) software to integrate
customer communication and purchase behavior into a
comprehensive database,
- Extranetstwo or more proprietary networks linked for better
communication and more efficient transactions among firms (PRM).

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Step 5: Implementation Plan

Tactics are used to achieve plan objectives

Marketing mix (4 Ps) tactics

Relationship management tactics
Marketing organization tactics
Information-gathering tactics

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E-Marketing Objective-Strategy
Matrix
Objective-strategy matrix presents the firms e-marketing strategies and accompanying goals.

Online Goals
Online
Advertising
Find
affiliates
Gather
customer
information
Improve
customer
service
Increase
brand name
awareness
Sell goods or
services

Database
Marketing

Viral
Marketing

No

No

No

No

Yes

No

Yes

Yes

Yes

Yes

No

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Exhibit 3 - 1 E-Marketing Objective-Strategy Matrix

Source: Adapted from Embellix eMarketing Suite
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Online Strategies
Direct
Online Sales
E-mail

Step 5: Design Implementation Plan to Meet

the Objectives
Information technologies are especially adept at
automating these processes, this is why the information
gathering tactics are important:
- Web site forms, feedback e-mail, and online surveys,
- Web site log analysis software helps firms review user behavior
at the site and make changes to better meet the needs of
users,
- Business intelligence uses the Internet for secondary research,
assisting firms in understanding competitors and other market
forces.

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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

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Revenue Forecast
The firm uses an established sales forecasting method for
estimating the site revenues in the short, intermediate, and long
term.
Inputs: The firms historical data, industry reports, and
competitive actions.
An important part of forecasting is to estimate the level of Web
site traffic over time.
This number affects the amount of revenue a firm can expect to
generate from its site.

Revenue streams:
- Web site direct sales,
- Subscription fees,
- Sales at partner sites,

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- Advertising sales,
- Affiliate referrals,
- Commissions, and other fees.

Step 7: Evaluation Plan

Marketing plan success depends on continuous
evaluation.
E-marketers must have tracking systems in
place to measure results.
Review the Balanced Scorecard for e-business
in Chapter 2.
Todays firms are ROI driven.

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Preparing Your Marketing Plan

DUE April 25th, 2008
10 weeks from today
Get started by developing an idea
Research on sample Marketing Plan

2006 Prentice Hall