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session-8 digital marketing strategy

7/21/2011

Learning objectives
Relate Digital marketing strategy to marketing and business strategy. Identify opportunities and threats arising from the Digital media. Evaluate alternative strategic approaches.

Integrated Digital Marketing Strategy

Session-8 Kalpana Chauhan


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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 strategy?
Strategy is the direction and scope of an organisation over the long-term: which achieves competitive advantage for the organisation through its configuration of resources within a hallenging environment, to meet the needs of markets and to fulfill stakeholder expectations
(Johnson and scholes)

Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, 6278.

Competitive strategy is about being different to create and enhance value for customers. It means deliberately choosing a different set of activities to deliver a unique mix of value." (porter)
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session-8 digital marketing strategy

7/21/2011

Business Strategy
Strategy describes how an organisation intends to create value for its shareholders. The overarching strategic objectives is to create sustained growth in shareholder value. Complementary strategic themes: Business development strategy Customer management strategy Service innovation strategy Operational effectiveness strategy

What Strategy does 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 organisation

Strategy Formulation for BPO Service Providers

Vision & Mission

Strategy Formulation versus Execution


Strategy formulation involves gaining continuous insights on the external market, creating innovative alternatives, developing a business design and ensuring the executability of that design by orchestrating and developing the organizations capabilities (in the context of its values). Execution (strategy implementation) involves assessing and building the organizational capabilities needed to deliver market results.

Vision "We will be a globally respected corporation. (Infosys) Goal Practice Mission To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large." Direction Strategy: defined, credible and coherent, reflecting market, positioning, resources and constraints

Action Governance: organisation and processes for significant degree of control

session-8 digital marketing strategy

7/21/2011

What is Digital marketing strategy?


Strategy by which digital marketing supports Marketing and Business Objectives ---------------------- Provides a future direction to digital marketing activities articulate Internet marketing objectives that support marketing objectives; includes strategy formulation to include typical marketing strategy options such as target markets, positioning and specification of the marketing mix; specify how resources will be deployed and the organization will be structured to achieve the strategy.

Digital Marketing strategy essentials


Digital Marketing strategy is a channel strategy. Objectives for online contribution % sales, service, profitability should drive our strategy. Digital Marketing strategy defines how we should:
1. 2. 3. 4. Communicate benefits of using this channel Prioritise audiences targeted through channel Prioritise products available through channel Hit our channel leads & sales targets
Acquisition, Conversion, Retention.

Channel strategies thrive on differentials BUT, need to manage channel integration.


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Influences(internal and external) on digital marketing strategy


Corporate Objectives and Strategy

Challenges of integrated digital marketing strategy


Conflicts of ownership and tensions between a digital marketing team and other teams Coordination with different channels Managing and integrating customer information Achieving consistent reporting, review, analysis and follow-up actions of digital marketing Structuring the specialist digital team and integrating into the organisation; In-sourcing vs outsourcing online marketing tactics, i.e. search, affiliate, e-mail marketing, PR; Staff recruitment and retention.
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Marketing Strategy

Internet/digit al Marketing Strategy

Market Structure and demand Emerging opportunities and threats

Competitive Strategy

session-8 digital marketing strategy

7/21/2011

Is separate plan Needed?


Problems if no Digital-Marketing strategy is planned
1. 2. 3. 4. 5. 6. 7. 8. Underestimated demand for online services Market share loss Resource duplication Insufficient customer data Efficiencies available through online marketing Changes required to internal IT systems Inadequate tracking Senior management support limited

The main challenges of Digital Marketing (n = 84)

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Process for developing a digital marketing strategy


A strategy process model provides a framework that gives a logical sequence or roadmap to follow, so that all strategy formulation and implementation activities are included

A simple framework for Internet marketing strategy development

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session-8 digital marketing strategy

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Dynamic strategy model


Digital strategy activity
Source:: Adapted from description in Kalakota and Robinson (2000)

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Framework for digital marketing strategy development

Stages of Strategy development


Situation analysis (marketing audit) Goal setting Strategy formulation

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session-8 digital marketing strategy

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Situation analysis
Assessment of current contribution of digital marketing (if any) Resource analysis-review of technological, financial and human resources. Includes assessment of organization to deliver digital services External audit
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Stage model of digital marketing capability


1. Web presence 2. E-commerce 3. Integrated e-commerce 4. E-business

Services available

Brochureware or interaction with product catalogues and customer service

Transactional ecommerce on buy-side or sell-side. Systems often not integrated

Buy and sell-side integrated with ERP or legacy systems. Personalisation of services

Full integration between all internal organisational processes and elements of the value network Across the enterprise and beyond (extraprise)

Organisational scope

Departments acting independently, e.g. marketing department, IS department Technological infrastructure

Co-ordination through steering committee or e-commerce manager

Cross-organisational

Transformation

Technology and new responsibilities identified for ecommerce Sell-side e-commerce strategy, not well integrated with business strategy

Internal business processes and company structure

Change to e-business culture, linking of business processes with partners E-business strategy incorporated as part of business strategy

Strategy

Limited

E-commerce strategy integrated with business strategy using a value-chain approach

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CMM model of e-business


E-commerce maturity stage Strategy process and performance improvement process
Limited

A generic SWOT analysis showing typical opportunities and threats presented by the Internet

Structure: Location of ecommerce


Uncontrolled experimentation

Senior management buy-in

Marketing integration

Online marketing focus

Stage 1. Unplanned Stage 2. Stage 1. Diffuse Unplanned management Stage 3. Stage 1. Centralised Unplanned management Stage 4. Stage 1. Decentralised Unplanned operations Stage 5. Stage 1. Integrated & Unplanned optimised

Limited

Discrete

Content: Brochureware Traffic: visitor acquisition Conversion & customer experience Retention

Low-level objectives Specific organisational objectives Refined online channel improvement Integrated multi-channel improvement

Diffuse

Aware

Common initiatives Annual planning collaboration

Centralised

Involved

Decentralised

Driving performance

Partnership

Integrated

Integral

Complete

Whole lifecycle optimisation

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session-8 digital marketing strategy

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Product suitability to online buying

digital marketing benefits/objectives


Tangible benefits Increased sales from new sales leads giving rise to increased revenue from: new customers, new markets existing customers (repeatselling) existing customers (crossselling) Cost reductions from: reduced time in customer service online sales reduced printing and distribution costs of marketing comms 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

Grid of product suitability against market adoption


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Set SMART objectives


Specific Measurable Actionable Relevant Time-related

Example objectives
Achieve 10 per cent online revenue contribution within two years; achieve first or second position in category penetration in the countries within which we operate (this is effectively online market share and can be measured through visitor rankings such as Hitwise cost reduction of 10 per cent in marketing communications within two years; increase retention of customers by 10 per cent; increase by 20 per cent within one year the number of sales arising from a certain target market, e.g. 1825-year-olds; create value-added customer services not available currently; improve customer service by providing a response to a query within two hours, 24 hours per day, seven days a week; all other objectives to be achieved profitably giving a return on investment in a three year period.

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session-8 digital marketing strategy

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Frameworks for objective setting

Example allocation of Internet marketing objectives within the balanced scorecard framework
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An example of a performance measurement system for an electrical goods retailer


Source: Friedlein (2002)

Thanks. See remaining slides for some difinitions

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session-8 digital marketing strategy

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Definitions-E-business & ecommerce


Electronic business, commonly referred to as "eBusiness" or "e-business", or an internet business, may be defined as the application of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the essential activities of any business. Electronic commerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses.
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Efficiency Minimising resources or time needed to complete a process. Doing the thing right. Effectiveness Meeting process objectives, delivering the required outputs and outcomes. Doing the right thing.

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The Balanced Scorecard


The Balanced Scorecard translates an organizations mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system. It measures organizational performance in four balanced perspectives: Financial, customer, internal business process, learning and growth

It is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.
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