E-COMMERCE
MODULE III
LECTURE-I
Marketing Strategies on the Web
ARVIND BANGER
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT
FACULTY OF SOCIAL SCIENCES
DEI
What is E-business
E-business Firm that targets customers by
collecting and analyzing business information,
conducting customer transactions, and maintaining
online relationships with customers.
E-marketing Strategic process of creating,
distributing, promoting, and pricing goods and
services to a target market over the Internet or
through digital tools.
E-marketing
The definition of marketing by the Chartered
Institute of Marketing 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-business 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.
The e-marketing plan in the
context of other plans
Figure -1 The e-marketing plan in the context of other plans
E-Marketing Plan
Figure 2. SOSTAC™ – a generic framework for e-marketing planning
Stages in target marketing strategy
development
Figure-3 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?
Examples of 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.
The elements of the marketing mix
Figure-7 The elements of the marketing mix
Issues with varying the mix online
Do we vary the mix online or replicate offline?
Is the offer clear – brand proposition, online
offer
Is online differentiation defined?
Is online differentiation communicated?
Key online mix variables
◦ Product
◦ Price
◦ Place
◦ Promotion
◦ Service: People, Process, Physical evidence
Online mix options
Product
◦ Extend range (Tesco)
◦ Narrow range (WH Smith iDTV)
◦ Online-only products (banks)
◦ Develop new brand (Egg)
◦ Migrate existing brand (HSBC)
◦ Partner with online brand (Waterstones and
Amazon)
Online mix options
Price
◦ Differential pricing:
Reduce online prices due to price
transparency and competition (easyJet)
Maintain price to avoid cannibalization
of offline sales (Dixon)
◦ New pricing options (software, music):
Rental
Pay per use
Reverse auctions (B2B)
Dynamic pricing (concert tickets)
Online mix options
Place = avoiding channel conflicts
◦ Disintermediation – sell direct
◦ Reinter mediation – partner with new
intermediaries
◦ Counter mediation:
Form new intermediaries
Partner with existing intermediaries
Distance from intermediaries
(Abbey National)
Online mix options
Promotion
◦ Selective use of new online tools for different
stages of the buying process and customer
lifecycle
◦ Online only campaigns
◦ Integrated campaigns – incorporating online
tools into communications mix
Online mix options
Service
◦ People
Automate – use web self-service,
offer customer choice
◦ Process
Change process for service – contact
strategies
◦ Physical evidence
Site design – differentiate or support brand
Fulfillment quality
Examples : Online revenue contributions
Organization Sector Online Overall
contribution turnover
Cisco B2B Networking 90% $19bn
hardware
easyJet B2C Air travel 90% £264m
Dell B2B, B2C 48% $25bn
Computers
Lands End Clothing B2C Clothing 11% $1.3bn
Book Club B2C Books 10% £100m
Associates
Electrocomponents B2B Electronics 7% £761m Group
Domino’s Pizza B2C Food 3.4% £76m
Tesco B2C Grocery 1.4% £18.4bn
Thomas Cook B2C Travel <1% £1.8bn
Acquisition, Conversion, and Retention of
Customers
Acquisition cost
◦ Money a site spends to draw one visitor to the
site
Conversion
◦ Converting a first-time visitor into a customer
◦ Conversion cost: the cost of inducing one visitor
to make a purchase, sign up for a subscription, or
register
Retained customers
◦ Customers who return to the site one or more
times after making their first purchases
19
Advertising on the Web
Terms and Concepts
Cost per thousand (CPM)
◦ Pricing metric used when a company purchases
mass media advertising
Trial visit
◦ First time a visitor loads a Web site page
Page view
◦ Each page loaded by a visitor
Impression
◦ Each time the banner ad loads
20
Advertising on the Web
Terms and Concepts
Pop-up ad
◦ Appears in its own window when the user opens
or closes a Web page
Ad-blocking software
◦ Prevents banner ads and pop-up ads from loading
Interstitial ad
◦ When a user clicks a link to load a page, the
interstitial ad opens in its own browser window
Clickstream
◦ Information (e.g., page visits, duration, etc.) that a
Web site can gather about its visitors
21
Affiliate Marketing Strategies
Affiliate marketing
◦ One firm’s Web site includes descriptions,
reviews, ratings, or other information about a
product that is linked to another firm’s site
◦ Affiliates receive compensation from the selling
site’s brand in exchange for the referral
◦ Cause marketing is a type of affiliate marketing
program that benefits a charitable organization
22
Viral Marketing Strategies
Relies on existing customers to tell other people
about products or services they have enjoyed
using
Example:
◦ Blue Mountain Arts
◦ Woot
◦ gmail
23
E-business and e-marketing challenges
Online payment systems
• Companies have developed secure payment systems to
protect customer information.
Privacy issues• Protection of personal information is
customers’ top security concern.
• Cookies and spyware allow companies to personalize
Internet experience but also invade computer users’ privacy.
• To reassure customers, many online merchants have signed
on with online privacy organizations..
• Companies install firewalls to protect private corporate
data.
Internet fraud
• Internet Crime Complaint Center logged more than 231,000 complaints in a
recent year.
• Phishing High-tech scam that uses authentic-looking e-mail or pop-up
messages to get unsuspecting victims to reveal personal information.
• Payment fraud is also growing.
Web site design and service
• As many as 70 percent of Internet shopping carts are abandoned before any
purchase is made.
• Companies that have brick-and-mortar experience often have more
experience satisfying customers than Internet-only retailers.
Channel conflicts
• Direct sales to customers can compete with business partners such as
retailers and distributors, disputes called channel conflicts.
Measuring web site effectiveness
Click-through rate: Percentage of
people
presented with a banner ad who click
on it.
Conversion rate: Percentage of
visitors to a Web site who make a
purchase.
END of LECTURE
