The e-Marketing Plan

Indrawati, Ph.D
 E-marketing
• The definition of marketing by the Chartered Institute of
Marketing (http://www.cim.co.uk/) is:

‘Marketing is the management process responsible for

identifying, anticipating and satisfying customer
requirements profitability’

• Which e-marketing tools can assist?

– Web, e-mail, databases, wireless and digital television
 Distinguishing e-marketing and e-
business
• (a) Electronic business has some degree of overlap with
electronic marketing. From the discussion of the
marketing concept above we can reject this since both e-
marketing and e-marketing are broad topics.
• (b) Electronic business is broadly equivalent to electronic
marketing. This is perhaps more realistic, and indeed
some marketers would consider e-business and e-
marketing to be synonymous.
• (c) Electronic marketing is a subset of electronic business.
It can be argued that this is most realistic since e-
marketing is essentially customer-oriented and it has less
emphasis on supply chain and procurement activities in
comparison with e-business.
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
 The e-marketing plan in the
context of other plans

Figure 8.1 The e-marketing plan in the context of other plans

 SOSTAC – a generic framework
for e-marketing planning

Figure 8.2 SOSTAC™ – a generic framework for e-marketing planning

 Inputs to the e-marketing plan
from situation analysis

Figure 8.3 Inputs to the e-marketing plan from situation analysis

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
Venture Capital E-Marketing Plan
• 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
Key Success Factors Key Dangers

§ Make it easy for customers to do § Don’t completely redesign a

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.
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-Business

Source: 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.
Situation Analysis
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
 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-Business

Source: 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.
 Demand analysis
• What percentage of customer businesses have access to
the Internet?
• What percentage of members of the buying decision in
these businesses have access to the Internet?
• What percentage of customers are prepared to purchase
your particular product online?
• What percentage of customers with access to the
Internet are not prepared to purchase online, but are
influenced by web-based information to buy products
offline?
• What are the barriers to adoption amongst customers
and how can we encourage adoption?
Customer demand analysis for
 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

• ERP – the key here is to make sure that the processes work
well together in a unified system
 Pure Pure dot-com
Business transformation (E*Trade)
Level of business impact

(competitive advantage, Play

industry redefinition)

Enterprise Click and Mortar

(eSchwab)

Effectiveness Custom er
(Incremental sales, Business Process relationship
customer retention) m anagement

Efficiency Brochureware,
(Cost Activity O rder processing
reduction)

Exhibit 8 - 5 Level of Commitment to E-Business

Source: adapted from www.mohanbirsawhney.com
 Pure Play
 The final level is comprised of
internet pure plays
 Pure plays are companies without
brick and mortar presence
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
Activity Level Business Process Level Enterprise Level

Online market research Knowledge management E-tailer

Online purchasing Customer relationship Bit vendor
Brochureware management (CRM) Online exchange
Content publisher Supply chain management Online brokerage
E-mail (SCM) Metamediary
Online advertising E-Commerce: tangible Infomediary
Online sales promotions products Virtual mall
Order processing Direct selling Shopping agent
Cost reduction using Community building online Reverse auction
electronic means Affiliate program Online buyer’s coop
Negotiated pricing online Database marketing Mass-customization tools
Segmented pricing online
Content sponsorship online

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
 Stages in target marketing strategy
development

Figure 8.7 Stages in target marketing strategy development

 Online value proposition
• A clear differentiation of the proposition from competitors’
based on product features or service quality.
• Target market segment(s) that the proposition will appeal to.
• How the proposition will be communicated to site visitors
and in all marketing communications. Developing a tag line
can help this.
• How the proposition is delivered across different parts of the
buying process
• How the proposition will be delivered and supported by
resources – is the proposition genuine? Will resources be
internal or external?
 Example OVPs
• ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com)
• ‘Earth’s biggest selection’. Amazon (www.amazon.com)
• ‘Search the largest inventory of cars and trucks on the
Internet. More than 1.5 million listings, updated daily’
(www.autotrader.com)
• The Citibank site design (www.citibank.com) uses a range
of techniques to illustrate its core proposition and OVP.
The main messages are:
– Welcome to Citibank: The one-stop solution for all your
financial needs.
– Look for a product or service; Learn about a financial
product; Find a location.
Marketing Mix Component Chapter Business Model

Product 4 Digital value through new products

Price 4 Cost reduction using E-marketing

Negotiation
Segmented pricing

Distribution 5 Content sponsorship

Direct selling
Infomediary
Intermediaries
Broker: Online exchange
Online auction
Agent: Manufacturer’s agent
Affiliate program
Metamediary
Virtual mall
Shopping agent
Reverse auction
Buyer cooperative
E-tailer bit vendor
Exhibit 8 - 7
Tangible products Selected E-
Marketing Communication 6 Content publishing
E-mail
Business
Community building Models Are
Online advertising
Online sales promotion Also Marketing
Strategies
Relationship Marketing 7 CRM
 Action Plan

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:

• Project Scope
• Site Development
• Site Promotion
• Site Maintenance
 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 Development
Build, 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/
 1999 %
Agency (Affiliation) Headquarters Projected Increase 1999
Revenue (in over 1998 Employees
thousands)
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 Dallas 125,000 177.8 350

(EDS) 1
8 Euro RSCG Worldwide New York 120,900 54.0 793
Interaction (Havas) 1

9 AppNet 1 Bethesda, MD 110,000 521.5 1,000 Exhibit 8 - 8 Top 15

U.S. Interactive
1 Grey New Technologies 1 New York 106,000 41.3 850
0 Advertising
1 OgilvyInteractive 1 (WPP) New York 100,000 66.7 650 Agencies
1
1 Agency.com1 (Omnicom) New York *100,000 278.0 1,000 Source: Adapted
2 from AdweekOnline
1
3
Luminant Worldwide
(Y&R)
Dallas 95,883 NA 800 (www.adweek.com)
1 Organic (Omnicom) San Francisco *80,000 188.8 681
4
1 Xceed1 New York 74,000 19.4 450
5
 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 Savings
By 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

The industry is developing exponentially

creating new marketing opportunities,
although they may be hard to measure

• Goodwill
• Brand Equity
• Audience Measurement
• Public Relations
• Customer Satisfaction
 Cost/Benefit Analysis
Analyze the cost
of e-marketing versus the benefits

Benefits Costs
• Revenue increases • ISP Costs
• Cost decreases • Hardware and
• Intangible benefits Software Costs
• Goodwill
• Design Costs
• Brand/Image Building
• Maintenance Costs
• Relationship Building
 Evaluation Plan
Monitor 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
Indrawati, Ph.D
Associate Professor
Graduate School of Management
Telkom University Indonesia
Phone: +62 81321922742
Email: indrawati02@yahoo.com
indrawati@telkomuniversity.ac.id
blog: indrawati02.wordpress.com