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ELC 310

ELC 310 . DAY 4. Agenda. Assignment 1 Due Assignment #2 coming soon Questions? Finish Discussion on the Marketing Plan Begin Discussion on Leveraging Technology eMarketing Plans due October 22 (6 weeks from now). Overview . Overview of the E-Marketing Planning Process

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ELC 310

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  1. ELC 310 DAY 4

  2. Agenda • Assignment 1 Due • Assignment #2 coming soon • Questions? • Finish Discussion on the Marketing Plan • Begin Discussion on Leveraging Technology • eMarketing Plans due October 22 (6 weeks from now)

  3. Overview • Overview of the E-Marketing Planning Process • Creating an E-Marketing Plan • The Napkin Plan • The Venture Capital E-Marketing Plan • A Six-Step E-Marketing Plan • Step 1—Situation Analysis • Step 2—Link E-Business with E-Marketing Strategy • Step 3— Formulate Objectives • Step 4—Design Implementation Plan to Meet the Objectives • Step 5—Budgeting • Step 6—Evaluation Plan

  4. A Six-Step E-Marketing Plan

  5. Overview • Overview of the E-Marketing Planning Process • Creating an E-Marketing Plan • The Napkin Plan • The Venture Capital E-Marketing Plan • A Six-Step E-Marketing Plan • Step 1—Situation Analysis • Step 2—Link E-Business with E-Marketing Strategy • Step 3— Formulate Objectives • Step 4—Design Implementation Plan to Meet the Objectives • Step 5—Budgeting • Step 6—Evaluation Plan

  6. Step 1—Situation Analysis Planning for e-marketing does not mean starting from scratch but working with existing business, e-business, and marketing plans is an excellent place to start.

  7. Step 1—Situation Analysis • The organizational e-business plan: SWOT analysis => e-business strategy. • The marketing plan: gathers information about the firm’s products, the markets currently served, and so forth. • The distribution plan: identifies areas where the products are currently sold and suggests geographic gaps that might be receptive to e-commerce. • Promotion plan information: gives clues about how the Internet fits with the firm’s current advertising, sales promotion, and other marketing communications. • The firm and brand positioning in the marketplace: Internet planners must decide how closely Web site content and promotion will follow current positioning strategies. • The marketer moves to strategy formulation.

  8. Step 2—Link E-Business with E-Marketing Strategy • Marketers need to: • Review the marketing and e-business plans, • Conduct strategic planning to help achieve the firm’s e-business goals + define potential revenue streams, • Create supporting e-marketing strategy for the e-business goals: • A Tier one strategy: marketers design segmentation, targeting, differentiation, and positioning strategies, • B Tier two strategy: deals with the 4P’s and relationship management by creating strategies around the offer (product), value (pricing), distribution (place), and communication (promotion), • Further, marketers design customer and partner relationship strategies (CRM/PRM).

  9. Tier One 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 firm’s product category.

  10. Tier One 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, e-marketing initiatives, • Identify future industry changes.

  11. Tier One 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.

  12. Tier Two E-Marketing Strategic Planning The two Tiers are elaborated in an interative process: It is difficult to know what the brand position should be without understanding the offer that comprises the brand promise.

  13. The Offer: Product Strategies • The organization can: • Sell merchandise, services, or advertising on the Web site, • Adopt a 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 considering the differing costs of sorting and delivering products to individuals through the online channel as well as competitive and market concerns.

  14. Value • There are two online pricing trends are: • Dynamic pricing—this 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 bidding—this presents a way to optimize inventory management. • E.g. Priceline.com, eBay.com

  15. Distribution Strategies • Many firms use the Internet to distribute products or create efficiencies among supply chain members in the distribution channel. • Direct marketing—Many firms sell directly to customers, by-passing intermediaries in the traditional channel for some sales. • Agent e-business models—Firms such as eBay and E*Trade bring buyers and sellers together and earn a fee for the transaction.

  16. 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.

  17. Relationship Management Strategies • E-marketing communication strategies help build relationships with a firm’s 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, • Extranets—two or more proprietary networks linked for better communication and more efficient transactions among firms (PRM).

  18. Step 3— Formulate Objectives • In general, an objective in an e-marketing plan takes the form: • Task (what is to be accomplished), • Measurable quantity (how much), • Time frame (by when).

  19. Typical E-Marketing Objectives • Most e-marketing plans aim to accomplish multiple objectives such as: • Increase market share, • Increase sales revenue, • Reduce costs, • Achieve branding goals, • Improve databases, • Achieve customer relationship management goals, • Improve supply chain management.

  20. E-Marketing Objective-Strategy Matrix Objective-strategy matrix presents the firm’s e-marketing strategies and accompanying goals.

  21. Step 4 — Design Implementation Plan to Meet the Objectives • Select: • The marketing mix (4 Ps), • Relationship management tactics, • Other tactics to achieve the plan objectives. • Devise detailed plans for implementation. • Check the right marketing organization is in place for implementation.

  22. Step 4 — 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 intelligenceuses the Internet for secondary research, assisting firms in understanding competitors and other market forces.

  23. Step 5 — Budgeting • A key part of any strategic plan is to identify the expected returns from an investment. • Returns are matched against costs to develop a cost/benefit analysis, ROI calculation, or internal rate of return (IRR) • Determine whether the effort is worthwhile. • During plan implementation, marketers will closely monitor actual revenues and costs • To monitor of results are on track for accomplishing the objectives.

  24. Revenue Forecast • The firm uses an established sales forecasting method for estimating the site revenues in the short, intermediate, and long term. • Inputs: The firm’s 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, - Advertising sales, • Subscription fees, - Affiliate referrals, • Sales at partner sites, - Commissions, and other fees.

  25. Budgeting • Intangible Benefits: • Putting a financial figure on such benefits is challenging but essential for e-marketers. • What is the value of increased brand awareness from a Web site? • Cost Savings: • Money saved through Internet efficiencies is considered soft revenue for a firm.

  26. E-Marketing Costs • Costs for employees, hardware, software, programming, and more. • Some traditional marketing costs may creep into the e-marketing budget • The cost of a Web site can range from $5000 to $50 million. • Few of the costs site developers incur: • Technology costs: software, hardware, Internet access or hosting services, educational materials and training, and other site operation and maintenance costs. • Site design. Web sites need graphic designers to create appealing page layouts, graphics, and photos.

  27. E-Marketing Costs • Other costs site developers incur: • Salaries. All personnel that work on Web site development and maintenance are budget items. • Other site development expenses. If not included in the technology or salary categories, any other expenses will be here (registration of multiple domain names and hiring consultants). • Marketing communication. All advertising, public relations, and promotions activities, both online and offline, to draw site traffic. Search engine registration, online directory costs, e-mail list rental, prizes for contests, and more. • Miscellaneous. Other typical project costs might fall here—expenses such as travel, telephone, stationery printing to add the new URL, and more.

  28. Step 6 — Evaluation Plan • Once the e-marketing plan is implemented, its success depends on continuous evaluation. The tracking systems should be in place before the electronic doors open. • What should be measured? The plan objectives need to be evaluated with: • Balanced scorecard for e-business • ROI …

  29. E-Marketing, 3rd editionJudy Strauss, Adel I. El-Ansary,and Raymond Frost Chapter 4: Leveraging Technology © Prentice Hall 2003

  30. Overview The Marriage of Marketing &Technology Product Technologies Building a Web Site HTML Forms Java Dynamic HTML (DHTML) XHTML XML Multimedia Database Marketing Computer Viruses Denial of Service Attacks Price Technologies Distribution Technologies Bandwidth and Market Opportunities Content Filtering Transaction Security IMC Technologies Proxy Servers How Search Engines Work Log Files and Cookies Rotating and Targeted Ad Banners Relationship Marketing Technologies

  31. The Marriage of Marketing and Technology • Marketing managers need to understand the capabilities of new media to develop and implement an effective marketing plan. • E.g. AutoTrader.com

  32. Overview The Marriage of Marketing &Technology Product Technologies Building a Web Site HTML Forms Java Dynamic HTML (DHTML) XHTML XML Multimedia Database Marketing Computer Viruses Denial of Service Attacks Price Technologies Distribution Technologies Bandwidth and Market Opportunities Content Filtering Transaction Security IMC Technologies Proxy Servers How Search Engines Work Log Files and Cookies Rotating and Targeted Ad Banners Relationship Marketing Technologies

  33. Product Technologies E-marketers can use a wide variety of technologies to support their product strategies.

  34. Building a Web Site • Building and publishing Web pages = greatly simplified. • HyperText Markup Language (HTML): language originally used to construct all Web pages. • Today other languages have been added to support interactive Web pages. • These languages creates a computer program that runs • On the Web server = slow response times, • On the user's browser = instantaneous response.

  35. HTML Forms = Text boxes, check boxes, radio buttons, drop-down lists. • When completing a survey or ordering online, the customer fills out an HTML form. • Creating the form is easy. • Processing the information is more difficult. • The processing is performed on the server by a separate program: • Common Gateway Interface (CGI) scripts for Unix operating system, • Active Server Pages (ASP) for servers running Microsoft.

  36. Java = A general-purpose computer language developed by Sun Microsystems that can be used to develop interactive Web sites. • Fast: Programs run very quickly on the user’s computer system. • Flexible: Programs support animation, streaming media, 3D visualization, or almost any other task.

  37. Java • Safe: Programs run in a protected memory space where they cannot infect or otherwise damage the user’s computer system. • Difficult to program: A Java Development Kit (JDK) can simplify the process but Java is a language for professional programmers. • Dynamic HTML: Enhanced form of HTML providing many of the interactive functions of java without the heavy-duty programming.

  38. Dynamic HTML (DHTML) • DHTML encompasses a range of enhancements to the HTML standard to make it: • more interactive, • more capable of multimedia, • better suited to professional page layout. • These enhancements include: • JavaScript, • Cascading style sheets (CSS), • plug-ins, • ActiveX.

  39. JavaScript • Name: has nothing to do with Java+ was chosen because of the cachet of the Java language. • Origin: It was developed by Netscape and then became an industry standard. • Use: • Create the fancy buttons and rollover effects, • Check user input for errors and issue warning messages, • Detect the user’s browser version and monitor size and send a version of the Web page optimized for the user’s machine, • Create calculators, clocks, games, and many other applications.

  40. ActiveX = A competitor to Java but has not achieved nearly the same market share. • It works only with the Windows operating system: • Developers programming in ActiveX risk alienating a portion of the user base, • ActiveX programs can access the file system on the user’s computer = opens up the possibility of privacy abuse.

  41. Plug-Ins = Small programs that must be downloaded and installed on the user’s computer. • Use: • Play multimedia content encoded in a specific format, • Create content with relatively little effort. • Safety: • For fear of viruses, users are disinclined to download and install software, • Some plug-ins are so prevalent that they have a large installed base of users and are safe.

  42. Plug-Ins • The best known plug-ins: • RealPlayer: Plays streaming audio and video over low-bandwidth connections, • Acrobat: Allows professional page layouts to be saved with the possibility lock the document so it cannot be altered, • Flash: Plays animations including charts, graphics, sounds, scrolling lists, tickers, and movie clips.

  43. Cascading Style Sheets (CSS) • Assist with precise formatting of text and graphics on the Web page. • Enable relatively painless sitewide updates. • Allow the separation of a document’s content from its presentation in separate files. • Have to be used with caution because some older browser versions cannot support them: • Solution: create multiple versions of each page, then send the appropriate one to the user.

  44. XHTML • Goals: • Bring more uniformity to the HTML language by requiring every tag to have a matching end tag, • Increase the separation between document content and presentation (CSS). • XHTML can be seen as an intermediate step toward the real direction that the Web may be heading = XML.

  45. XML • XML completes the separation of document content and presentation opening up a significant business application: • Web enabling business databases + the exchange of information from those databases: • Consumers can request online account information, product availability, which are sent from database to Web page instantaneously on demand, • Businesses can easily exchange data with their supply chain partners, gaining a significant competitive advantage.

  46. XML • Drawbacks: • Lack of support for the standard by Netscape (pages have unpredictable displays on a Netscape browser), • It is relatively difficult to program and only accessible to professional programmers. • Developers have three options: • Learn XML and become professional programmers, • Use an XML authoring tool such as Microsoft Word to automatically generate XML, • Ignore the standard in the same way that many developers ignored Java.

  47. Multimedia • Challenge: Deliver multimedia content over the Web requiring high bandwidth to slow home connections. • Solutions: • Speed up the home Internet connection using a high-bandwidth wired or wireless connection, • Compress the multimedia content into smaller packets of information, • RealNetworks: compression audio (RealAudio) and video (RealVideo), • MP3: compression technology for music (1/10th of original size, • Stream the multimedia so that the user can play a piece of it while the rest downloads, • Distribute multiple copies of the multimedia content around the Internet so that it is closer to the end users and delays are avoided.

  48. Database Marketing = Utilize relational databases to store tables of information: • Can be mined for information about clients. • Can be used to generate promotional campaigns. • A collection of tables containing information about a common subject. • Relational databases such as Oracle and DB2 utilize a very powerful query language called SQL.

  49. Database Marketing • E-marketers use the client and interest files to target by demographics or psychographics. • Structured Query Language (SQL): used to extract information from large databases. • How does the user data get it into the database? • Explicit method: User fills out a short survey during the registration process at a Web site, • Implicit method: Study of the user ’s pattern of frequenting pages on a site.

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