Chapter 5

E-Marketing
Revised Date: 2/5/2012
Learning Outcomes
Define e-marketing and its goals
Discuss e-marketing processes
Outline e-marketing strategy
Develop e-marketing plan
Examples
What is 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 profitably

What is e-marketing?
Chaffey (2009) defined:


e-business tools such as web, email,
search engine marketing, etc.
To identify how to utilize the Internet for marketing research to
find out customers needs and wants
Anticipating anticipating the demand for digital services

Satisfying how to achieve customer satisfaction through the electronic
channel

Profitably

Achieving marketing objectives through the use
of electronic communications technology
What is e-marketing?
Figure 8.1 The e-marketing plan in the context of other plans
E-marketing planning
A e-marketing plan is needed to detail the
specific objectives of the e-business strategy
through marketing activities
May use SOSTAC framework

E-marketing planning-SOSTAC
Developed by Paul
Smith (1999)
Summarizes the
different stages that
should be involved in
a marketing strategy
from strategy
development to
implementation
Figure 8.2 SOSTAC a generic framework for e-marketing planning
SOSTAC-Situation Analysis
To understand the current
and future environment
in which the company
operates
Involves consideration of
all of the related factors
and will form the basis for
defining objectives,
strategies and tactics
Figure 8.4 Inputs to the e-marketing plan from situation analysis
SOSTAC-Situation Analysis
Situation Analysis-Methods

Demand analysis

What percentage of customer businesses have
access to the Internet?
What percentage of members of the buying unit 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?
Figure 8.5 Customer demand analysis for the car market
Example
Situation Analysis-Methods

Situation Analysis-Methods

Competitor Analysis

The monitoring of competitor use
of e-commerce to acquire and
retain customer
Companies should review:
Well-known competitors
Well-known international competitors
New Internet companies locally and
worldwide

Situation Analysis-Methods

Other methods
Intermediary analysis
Internal marketing audit
Find out what need to be done for these two
methods
SOSTAC- Objective Setting
SMART approach
Specific
Measurable
Achievable
Realistic
Time-constrained
Find any article
about SMART
approach!!!
Objective Setting-Examples
Start-ups acquiring a specific number of new customers or to
sell advertising space to generate a specified revenue that will
hopefully exceed investment in site creation and promotion!
Established mobile-phone operator increase customer
retention by reducing churn from 25 per cent to 20 per cent.
Established media company increase online revenue, target
of 20 per cent online contribution to revenue by offering new
online services and media sales.
Established business-to-business engineering company
increase overall revenue by 5 per cent, through targeting sales
in new international markets.
Reduce costs of routine customer service by 10 per cent to
enable focus on delivery of specialized customer service.
SOSTAC- Strategy
Define how e-marketing objectives will be achieved.
Evaluation and selection of appropriate market
segments and the development of appropriate offers
Refer to strategy definition chapter 5 (text book)
chapter 4 (notes)
Figure 8.8 Stages in target marketing strategy development
Target market strategies
SOSTAC- Strategy
5 questions when
developing strategy:
Who are our customers?
How are their needs
changing?
Which do we target?
How can we add value?
How do we become first
choice?

Characteristics of new marketing
communications tools 6 Is
Interactivity
Intelligence
Individualization
Integration
Industry restructuring
Independence of location
Figure 8.9 Summary of communication models for (a) traditional media,
(b) new media
Characteristics- Interactivity
Characteristics- Intelligence
Low cost method for market research
Create two ways interaction
Speed up communication process
Gather and disseminate information can
be done continuously
Ex. Nestle is able to profile their
customers based on the information
received through questionnaire


Figure 8.10 Summary of degree of individualization for (a) traditional media (same
message), (b) new media (unique messages and more information exchange
between customers)
Characteristics- Individualization
Individualization- Example
Figure 8.11 Channels requiring integration as part of integrated e-marketing strategy
Characteristic-Integration
Integration- Example
Integration -Examples of integrated
communication tools
The internet can be used as a direct-response
tool enabling customers to respond to offers
and promotions publicized in other media
The web site can have a direct response or
callback facility built into it.
The Internet can be used to support the
buying decision even if the purchase does not
occur via web site.
Figure 8.12 Channel integration required for e-marketing and mixed-mode buying
Integration- Example
Characteristic-Industry restructuring
Disintermediation
Reintermediation
Countermediation
Key concepts- Find
out how
these concepts can
benefit
your e-marketing
plan
Characteristic-Independence of
location
Possibility to reach global market
How this affect your marketing plan?
SOSTAC-Tactics
Cover the 7ps.
Self reading on this part, page 365-372.
Tactics

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?
Tactic- Example
Compare. Buy. Save. Kelkoo (www.kelkoo.com)
Earths 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.
Tactic-Product
Extend range of product (Tesco)
Narrow range of product (Apple)
Online-only products (banks)
Develop new brand (Maybank2u/ Click CIMB)
Migrate existing brand (HSBC/ Airasia)
Partner with online brand (Waterstones and
Amazon).
Tactic-Product (Example)
Tactic-Price
Differential pricing:
Reduce online prices due to price transparency and
competition (easyJet)
Maintain price to avoid cannibalisation of offline sales
(Dixon)
New pricing options (software, music):
Rental
Pay per use
Reverse auctions (B2B)
Dynamic pricing (Concert tickets).
Tactic-Implications for price
Increased price transparency
Downward pressure on price
New pricing approaches
Alternative pricing structure or policies
Tactic- Place
Place = avoiding channel/ marketplace
conflicts
Disintermediation sell direct
Reintermediation partner with new
intermediaries
Countermediation:
Form new intermediaries
Partner with existing intermediaries
Distance from intermediaries.

Tactic-Implications on place
Place of purchase
New channel structures
Channel conflicts
Virtual organizations
Tactic- 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.

Figure 8.14 Options for the online vs offline communications mix (a) online > offline,
(b) similar online and offline, (c) offline > online
Tactic- Promotion
Tactic
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.
Online Branding

Materials:

http://www.youtube.com/watch?v=VWhbyjGtYWY
Online Branding- Class Activity
What comprises a successful online brand?
What do you think?
High traffic?
Good name recognition?
Sites with modest sales?
Profitable brand?
Good customer service?
What does branding means in online context?
How important is branding to an existing
companies?


Online Branding
A brand the characteristic of product or
services perceived by a user that uniquely
meet their needs.
Branding a process of creating and evolving
successful brands.
Refer to definition given in page 373.

Online Branding
3 characteristics highlighted by
this definition
Brand is dependent on
customer perception
Perception is influenced by
the added value
characteristics of the product
The added value
characteristics need to be
sustainable
Online Branding
Brand identity
Anything about the brand including name and
symbol that must be communicated to increase
brand awareness.
NOW EVERYBODY CAN FLY
What does
this tell you?
Online Branding
Brand identity
Options for changing brand identity online
Transfer traditional brand online
Extend traditional brand
Partner with existing digital brand
Create a new digital brand
Self reading- Mini case study 8.1 : Napster.com
brand identity, page 375-376.
Online branding
Success factors:
Content quality
Adequate performance of web site architecture
After sales support
Quality of responses to enquiries and fulfillment
Acknowledgement of customer privacy
Reflecting and supporting the characteristics of
the offline brand
SOSTAC-Action
Need to finalize the actions required to execute the
plan, for example:
What level of investment in the Internet channel is sufficient to
deliver services?
What training of staff is required?
What new responsibilities are required for effective Internet
marketing?
Are changes in organizational restructuring required?
What activities are involved in creating and maintaining the web site?
Refer to page 380 -381- an example of B2B e-
marketing plan
SOSTAC- Control
It can be achieved through a combination of
traditional techniques such as
Conduct marketing research
Analysis of web-server log files
Intranets can be used to share information
Read case study 8.2- page 381- Napster
marketing mix
SOSTAC- Example
To launch a e-laundry business at UNITEN

Component What need to be done
Situation analysis (what is it?) who is our potential customers? Students? Staff? Public?
where we should operate?
how can we promote the service online? Any demand?
Objective (who are we? Where
are we now? What we want to
be?)
vision : to deliver the best laundry services
mission
Objective: to gain profit 15% through online services
Strategy (what we should do to
achieve the objective)
promote the services to students and staff
fulfillment of services within 24 hours
Tactic (how we should execute
the strategy)
online marketing
member get member program
human resource for delivery and pickup
Action ( what need to be done) online advertisement at Unitens website
incentive such as reward point for member get member program
hire students for delivery and pickup
Control (how to monitor and
maintain)
measure quality of work, man hour, punctuality
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
Figure 8.13 The elements of the marketing mix
The Marketing Mix using 7Ps
Summary
E- marketing the application of technology
to achieve marketing objectives
It is how you want to market/sell your
product and services online.
SOSTAC framework can be used as a guideline
to develop e-marketing plan.

Tutorial
Define e-marketing
Describe SOSTAC framework
Summarize the opportunity to vary the
marketing mix.
Develop an e-marketing plan for the business
of your choice.
References
Google Image, http://www.google.com
accessed on 13 April 2011.
Chaffey, D., (2007, 2009), E-Business and e-
Commerce Management, 3
rd
and 4
th
Edition,
Prentice Hall.