– Multichannel Buying Models

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3 – Multichannel Buying Models

  • Customer experience involves the impact of multi-channels which is important to build assess customer behavior, expectations & perceptions.

Lexus Example:

  • Asses the relative consistency between channels to know channel importance to overall attitude towards brand purchase & experience.

  • Main result was that the relations through interactive channels has imperative role in influencing attitudes & build best experience.

4 – Trust-based models
Drivers of Trust:

  1. Brand Strength: Supported by: Ads, WOM, offline contracts

  2. Privacy: Supported by: Disclosures, reputation, guarantees

  3. Security: Supported by: Disclosures, reputation, guarantees

  4. Navigation and presentation: Supported by: usability, accessibility, persuasion

  5. Advice: Supported by: detailed, information, buyer's guide

  6. Community: Supported by: reviews, ratings, forum

  7. Order fulfillment: Supported by: customer, promise, experience

  8. Absence of errors: Supported by: experience, independent, ratings

Attitudes to trust are dependant on:

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):

Trust  Engagement and Flow  Purchase Intent  Loyalty  Advocacy

Segmentation based on information need and trust:


Ignore advisors "do it yourself"

Depend on advisors "Do it with me"

Gather own detailed information


Value: Information control, speed.


Value: Comparison tables, online chats.

Don't gather information


Value: simplicity, trust, reassurance


Value: Interactive product selectors, online chat. Phone support.

5 – Social Interaction Communication Model

  • 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.

Competitors Analysis

  • 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.

Suppliers Analysis

  • 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.

Cybermediaries Analysis

  • 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.

Value Chain Model:

Two alternatives models of the value chain:

    1. Traditional value chain model

    2. 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?

  1. Sell-Side @ supplier site: one-to-many, trade via supplier's website (ex, Amazon)

  2. Buy-side @ buyer site: many-to-one, trade via buyer's website (ex, Aggregator websites like lastminutes.com)

  3. 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"

E-marketing strategy essentials

  • E-marketing strategy is a channel strategy

  • Objectives for online contribution %

    • Sales, service, profitability should drive our strategy

  • E-marketing strategy defines how we should:

    • Communicate benefits of using the channel

    • Prioritize audiences targeted through channel

    • Prioritize products available through channel

    • Hit our channel leads & sales targets

      • Acquisition, Conversion, Retention

    • Channel strategies thrives on differentials propositions

    • But, need to manage channel integration.

Internal & External influences on Internet marketing strategy

Internal Influences:

  • Corporate objectives and strategy

  • Marketing strategy

External Influences:

  • Market structure and demand

  • Competitor strategies

  • Emerging opportunities and threats

Problems of E-Marketing Strategy

  • Underestimated demand for online services

  • Market share loss

  • Resource duplication

  • Insufficient resources

  • Insufficient customer data

  • Reduced efficiencies available through online marketing

  • Fewer opportunities for applying online marketing tools

  • Changes required to internal IT systems

  • Inadequate tracking

  • 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

  • Resource duplication

  • Insufficient resources

  • 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)

    • Customer insight

    • E-marketplace SWOT

    • Brand Perception

    • Internal capabilities and resources

  • Objectives: (Where do we want to be?)

5S's objectives

    • 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?

    • Details of contact strategy

    • E-campaign

  • Actions: (The details of tactics, who does what and when?)

    • Responsibilities and structures

    • Internal resources and skills

    • External agencies

  • Control: (How do we monitor performance?)

    • 5S's _ web analytics – KPIs

    • Usability testing/mystery shopper

    • Customer satisfaction surveys

    • Site visitor profiling

    • Frequency of reporting

    • Process of reporting and actions

Levels of website development:

  1. The information to transaction model

  2. The transaction to information model

A generic Internet-specific SWOT Analysis:

Showing typical opportunities and threats presented by the Internet:

Internet Marketing Benefits:
Tangible benefits

  • Increased sales from new sales leads giving rise to increased revenue from:

    • new customers, new markets

    • existing customers (repeat-selling)

    • existing customers (cross-selling)

  • Cost reductions from:

    • reduced time in customer service

    • online sales

    • reduced printing and distribution costs of communications

Intangible benefits

  • Corporate image communication

  • Enhance brand

  • More rapid, more responsive marketing communications including PR

  • Improved customer service

  • Learning for the future

  • Meeting customer expectations

  • Identify new partners, support existing partners

  • Better management of marketing information and customer information

  • Feedback from customers on products

Example Allocation of Internet Marketing Objectives:

The Balanced Scorecard Framework for a transactional e-commerce site

Strategy Formulation & the eight Strategic decisions

    1. Market & product development strategy

    2. Business & Revenue model strategy

    3. Target Market Strategy

    4. Differentiation & positioning strategy

    5. Multichannel distribution strategy.

    6. Multichannel communications strategy.

    7. Online communication mix & budget.

    8. Organizational capabilities.

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:

  1. Niche/Concentration

  2. Mass/Undifferentiated

  3. Differentiated/Selective

  4. Mass Customization

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.

Common online targeting options:

  • Brand loyalists – convert online

  • Not brand loyal- encourage trial

  • Most profitable – deepen relationships

  • Larger companies (B2B)

  • Small companies (B2B)

  • Key members of the buying unit (B2B)

  • Difficult to reach using other media

Customer Lifecycle Segmentation:

    1. First-time visitor

    2. Return visitor

    3. Newly registered visitor

    4. Registered visitor

    5. Purchased once or n times

    6. Purchased inactive

    7. Purchased active: e-responsive


Strategic Options for a company in relation to the importance of the Internet as a channel:

Channel coverage map showing the company's preferred strategy for communications with different customer segments with different value:

Example of Risk-Reward Analysis:

Chapter 5: Internet & the Marketing Mix

The Marketing Mix

  • In 1963 Bartels said: "a marketer is like a chef in a kitchen… a mixed of ingredients"

  • Variable used to define key elements of marketing strategy

  • From the 4Ps of Jerome McCarthy to the 7Ps of Booms and Bitner sometimes referred to as the services M-mix.

  • 4Ps – Product, Price, Place, Promotion

  • 7Ps – add People, Process, and Physical Evidence

  • 8Ps online – add Partner ships

Mixing the M-elements online

  • Which variables are important for the ideal customer?

    • Price and Quality?

    • Where they Buy?

  • So need to decide on target markets first and do the research on the mix variables

  • Remember the mix is not generic for all customers, but for segments.

The Elements of the Marketing Mix

E-Marketing Mix based n 7C's

Marketing Mix


Product (Customer needs and wants)

Range of product, online services/value proposition, core product, sales levels, Extended product offering, and Branding.

Price (Cost)

Differential pricing

Place (Convenience)

Representation on third party sites, Co-branding and partnering arrangements

Promotion (Customer experience)

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.

Extra: Definitions

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"

  • Core Product

    • 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:

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– Multichannel Buying Models

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