Note: All drivers of trust must be considered seriously and taken care of in order to ensure a smooth flow in which it would lead to customer's trust.
Consumer Response (The flow that leads to complete trust):
Based on the role of digital media which dramatically increased the importance of recommendations from others.
Community portals & social networks allow users to share information, experience, socialize with others from same background and interest.
Reviewing the internet marketing services offered by new & existing competitors to know the adoption level by their customers.
Competitors' benchmark: is one of the most important analyses on an online services analysis of capabilities, resources, & performance to know the retention, acquisition, conversion & growth.
As in traditional marketing activities, e-suppliers playing an important role in influencing quality and price of products & services.
Marketers must analysis suppliers and comparing the contribution of each one of them to the desired added value and competitive advantage' creation.
Websites that facilitate exchanges between consumers and business suppliers.
Types or E-Intermediaries:
Infomediaries: Search engines (known as portals), directories, and News/Information publishers.
Price comparison sites (Aggregators), virtual malls, and virtual reseller.
Financial intermediaries (PayPal)
Auction sites (eBay)
Social Networks, virtual communities, and forums.
Porter's Five Forces Model:
Value creation = Reduce cost by disintermediation Increase intangible benefits for consumers.
(READ ABOUT VALUE CHAIN IN BOOK)
Value Chain Model:
Two alternatives models of the value chain:
Traditional value chain model
Revised virtual value chain model: Market Research New product development Market products Procure materials Procure products Manage selling and fulfillment.
Disintermediation: The process of removing one or more or all intermediaries. For example, omitting the wholesaler by going directly to retailers or a company remove all intermediaries and deal directly with the customer without retailers or wholesalers.
Reintermediation: The process of getting back to the use of one or more intermediaries. These intermediaries are not necessarily the same as the previously chosen intermediaries by the producer. Reintermediation could occur only after a disintermediation has taken place previously.
Different types of online trading (e-marketplace) location, what representation do we have on the internet?
Buy-side @ buyer site: many-to-one, trade via buyer's website (ex, Aggregator websites like lastminutes.com)
Many-to-many: Neutral exchanges, trade via intermediary website (ex, eBay)
Business Models in e-Commerce:
Business model is a summary of how companies will generate revenue, identifying their products offering, value add service, revenue & target customers.
It is important to understand different business models that the web facilitates for e-commerce: (e-shop, e-mall, e-procurement, e-auction, virtual community, collaboration platforms, third party marketplace, value chain integrator, value chain service provider, information brokerage, trust and other sites).
Chapter 4: Internet Marketing Strategy Michael Porter on the Internet:
"The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it."
What is an E-marketing strategy?
What is strategy?
"Defines how we will meet our objectives"
"Sets allocation of resources to meet goals"
"Selects preferred strategic options to compete within a market"
"Provides a long-term plan for the development of the organization"
Reduced efficiencies available through online marketing
Fewer opportunities for applying online marketing tools
Changes required to internal IT systems
Senior management support limited
Summary of typical focus for main types of e-commerce-related strategic initiatives
Check Uploaded Pictures for the complete table
Type of digital marketing strategy initiative
1. New customer proposition (product and pricing)
These are new site features or other online communications which are directly related to offering new products or services that will generate revenue
2. Customer acquisition
These are strategic project to enhance a site's capability to deliver…
3. Customer conversion and customer experience strategic initiatives
4. Customer development and growth strategic initiatives
Investments to improve the experience and delivery of offers to existing customers
5 Enhance marketing capabilities through site infrastructure improvements
These typically involve "back-end or back-office features" which won't be evident to users of the site, but will help in the management or administration of the site will often involve improving customer insight capabilities.
Hierarchy of organization plans including e-marketing plans
Problems if no E-marketing strategy
Underestimated demand for online services
Market share loss
Insufficient customer data
Reduced efficiencies available through online marketing will be miseed.
Fewer opportunities for applying online marketing tools will be missed.
Changes required to internal IT systems will be prioritised.
Inadequate tracking of results.
Senior management support limited
An addition to the 7P's (8 P's): Partnerships
The SOSTAC planning framework applies to digital Internet
Situation Analysis: (Where are we now?)
Goal performance (5 Ss)
Internal capabilities and resources
Objectives: (Where do we want to be?)
Sell - customer acquisition and retention targets
Serve - Customer satisfaction targets
Sizzle - site stickiness, visit duration
Speak - trialogue; number of engaged customers
Save – quantified efficiency gains
Strategy: (How do we get there?)
Segmentation, targeting and positioning
OVP (online value proposition)
Sequence (credibility before visibility)
Integration (consistent OVP) and database
Tools (web functionality, e-mail, IPTV etc.)
Tactics: (How exactly do we get there? "The details of strategy")
E-marketing mix (8 Ps), including: the communications mix, social networking, what happens when?
Example Allocation of Internet Marketing Objectives:
The Balanced Scorecard Framework for a transactional e-commerce site
Strategy Formulation & the eight Strategic decisions
Market & product development strategy
Business & Revenue model strategy
Target Market Strategy
Differentiation & positioning strategy
Multichannel distribution strategy.
Multichannel communications strategy.
Online communication mix & budget.
The first 4 are customer based,
while the rest are for how to deal with marketing mix.
Using the Internet to support different organizational growth strategies: Ansoff Matrix
Stages in target marketing strategy development:
Market Targeting Strategies:
Horizontal Market & Vertical Market
Vertical marketing is a term used to define a company's approach towards targeting that focuses on specific industries. For example, a software vendor might say "We concentrate on the following vertical markets: wood component manufacturers and thermoformed plastic manufacturers"
Horizontal marketing is when you single out a target audience that shares other characteristics, yet can be found in all industries. Common ways to horizontally market are by company size, by geography or by job title.
Attraction efficiency (visitor volume, share of search), Reach
Process (Customer experience)
Conversion efficiency to online marketing outcomes – engagement, conversion to opportunity, conversion of opportunity to sales Retention efficiency.
People (Customer experience)
Response quality, e-mail, co-browsing, chat.
Physical evidence (Customer experience)
Usability, Accessibility, Performance, and Availability.
Product Dimensions are always related to the: (Could come on Exam)
Lines Width: How many product lines.
Length: How many products within a line.
Depth: How many forms of one item (ex, AlJallal Razor Blade, AlJallal Razor Blade Plus, AlJallal Razor Blade Ultimate)
Consistency: Refers to the consistency between all the products within all lines.
Differential Pricing: Method in which a product has different prices based on the type of customer, quantity ordered, delivery time, payment terms, etc. Also called discriminatory pricing or multiple pricing.
Product Introduced "The element of the marketing mix that involves researching customers' needs and developing appropriate products"
The fundamental features of the product that meets the user's needs.
Extended Product: (Actual Augmented)
Additional features and benefits beyond the core product.
Web Options to Enhance Core Product:
For new and existing digital products, transactions where the actual product has been replaced by information about the product.
The information of product creates a Digital value.