The E-Marketing Plan

Creating an E-Marketing Plan

Why would a company pay so much to design and build its Internet presence ?
To protect the corporate and brand identities

Complexity of designing emarketing strategies

Creating an E-Marketing Plan

An E-Marketing Plan is a companys blueprint for strategic direction Ad hoc Companies develop strategies without the development of an EMarketing Plan
Example: www.yahoo.com

75% of e-business will fail due to flaws in planning

A Seven Step Marketing Plan

1. 2. 3. 4. Conduct a situation analysis. Identify target stakeholders Set objectives Design marketing mix strategies to meet objectives 5. Design action plan 6. Develop a budget 7. Develop an evaluation plan

Exhibit 8 - 2 Marketing Plan Process

Venture Capital E-Marketing Plan

Large Web sites are not profitable ventures, but
they are more concerned with establishing their brands, ex: Amazon Start-Up companies are funded by: Private funds (family and friends) Angle Investors

Venture capitalist (VCs)

I invest in people, not ideas, Arthur Rock (VC), If you find good people, if theyre wrong about the product, theyll make a switch.

Venture Capital E-Marketing Plan

VCs look for plans that show:

the e-business idea is a solid one,

the entrepreneur has some idea of how to run the business

Once the start up business begins to boom, the VC looks for an exit plan, and the stock usually goes public, IPO

The VC gets their money back and looks for another investment

Key Success Factors

Key Dangers

Make it easy for customers to do business with you. Focus on the end customer for your products and services. Redesign your customer-facing business processes from the end customers point of view. Wire your company for profit: Design a comprehensive, evolving electronic business architecture. Foster customer loyalty, the key to profitability in electronic commerce.

Dont completely redesign a business to become an e-business. Dont suspend good project management rules in the name of ebusiness. Dont assume technology can do all the heavy lifting in e-business implementation. Dont focus solely on current customers for e-business. Stay alert for new competition.

Exhibit 8 - 3 Critical Success Factors and Dangers for E-Business Source: Success from Seybold (1998); danger from GartnerGroup (1999)

The Existing Marketing Plan

Working with existing information is the best place to start, if you want to follow current positing strategies.

Situation Analysis
Conduct an Environmental Scan
Legal/Political Environment
Taxation, access, copyrights, & encryption

Technological Environment
Communication Infrastructures

Bandwidths, and New browsing devices

Situation Analysis
Conduct an Environmental Scan
USER Trends
Focus on how the net audience has changed over the last six months, last year, etc Are there any trends? Is there any important target segments coming online?

World Economies
Understand overseas economies, also do they have the proper infrastructures to support what we are doing?

Situation Analysis
Develop a Market Opportunity Analysis
- Includes both demand & supply analysis
Demand side, reviews potential profitability Supply side, reviews competition, and finds competitive advantages

- SWOT

Internal Capability

Examples

Customer interactions

E-commerce, customer service, distribution channels SCM, production scheduling, inventory management Culture, skills, knowledge management, leadership and commitment to e-business ERP systems, legacy applications, networks, Web site, security, IT skills Financial systems, R&D, HR

Production and fulfillment

People

Technology

Core infrastructure

Exhibit 8 - 4 Key Internal Capabilities for E-Business Source: Adapted from Kalakota (1999)

Situation Analysis
Develop a Market Opportunity Analysis
Market Opportunity Analysis includes both demand and supply analyses. The demand portion reviews various market segments in terms of potential profit. The supply analysis review competition in selected segments that are under consideration The purpose of the supply analysis is to assist in forecasting segment profitability and finding competitive advantages in the online market.

SWOT
Strengths, Weaknesses, Opportunities and Threats

This analysis objectively evaluates the companys strengths and weaknesses with respect to the environment and the competition

Strategic Opportunities
A Key element in setting strategic goals is to take stock of where the company currently is and the level of commitment that it wishes to make to a business. The lowest level impacts individual business activities such as order processing.

The next level impacts business processes such as customer relationship management
The next level, enterprise is where the firm automates many business processes in a unified system EB = EC + BI + CRM + SCM + ERP ERP the key here is to make sure that the processes work well together in a unified system

Level of business impact

Business transformation (competitive advantage, industry redefinition)

Pure Play Enterprise

Pure dot-com (E*Trade)

Click and Mortar (eSchwab)

Effectiveness (Incremental sales, customer retention)

Business Process

Customer relationship management

Efficiency (Cost reduction)

Activity

Brochureware, Order processing

Exhibit 8 - 5 Level of Commitment to E-Business Source: adapted from www.mohanbirsawhney.com

Pure Play
Advantages
The final level is comprised

of internet pure plays

Pure plays are companies without brick and mortar presence

They are not held to the same standards of profitability as the brickand-mortar stores They are held to be smaller and have more agile cultures able to move quickly in response to market fluctuations

Activity Level

Business Process Level

Enterprise Level

Online market research Online purchasing Brochureware Content publisher E-mail Online advertising Online sales promotions Order processing Cost reduction using electronic means Negotiated pricing online Segmented pricing online Content sponsorship online

Knowledge management Customer relationship management (CRM) Supply chain management (SCM) E-Commerce: tangible products Direct selling Community building online Affiliate program Database marketing

E-tailer Bit vendor Online exchange Online brokerage Metamediary Infomediary Virtual mall Shopping agent Reverse auction Online buyers coop Mass-customization tools

Exhibit 8 - 6 Menu of Opportunities at Various Levels of Commitment

Identify Target Stakeholders

When multiple targets are identified, they should be ranked in order of importance so resources can be allocated accordingly
Each market should be well profiled by its characteristics, behavior and desires

Firms must understand the value proposition for each market.

Set Objectives
Use carefully worded objectives that flow from plan analyses that have a task, contain a specific measurement device, and has a time frame for accomplishment.

 Strategic justification shows how the strategy fits with the firms overall mission and objectives Operational justification identifies and quantifies the specific process improvements that will result from the strategy Technical justification shows how technology will fit and provide synergy with current IT capabilities Financial justification examines cost/benefit analysis

Design Marketing Mix Strategies to Meet the Objectives

Marketing Mix Component

Chapter

Business Model

Product

Digital value through new products

Price

Cost reduction using E-marketing Negotiation Segmented pricing

Distribution

Content sponsorship Direct selling Infomediary Intermediaries Broker: Online exchange Online auction Agent: Manufacturers agent Affiliate program Metamediary Virtual mall Shopping agent Reverse auction Buyer cooperative E-tailer bit vendor Tangible products Content publishing E-mail Community building Online advertising Online sales promotion CRM

Marketing Communication

Exhibit 8 - 7 Selected EBusiness Models Are Also Marketing Strategies

Relationship Marketing

Action Plan
An action plan will decide which strategies are best to promote the business or company. Having decided that an Internet presence is essential the following considerations are necessary:

Project Scope Site Development Site Promotion Site Maintenance

Web Site Example: Project Scope

To decide the level of Internet and e-commerce commitment that is both beneficial, cost effective and advantageous to the company.
To evaluate the need for e-mail contact between stakeholders and staff, and what staffing is necessary to implement such a program.

Site Development
Build, Buy or Rent, the Following Considerations

Apply:
Outsourcing speeds completion of the project Personnel Cost Savings Faster Loading Site User Friendly Product More Professional Graphics & Information Outsourcers are aware of Copyright Rules First Impression is Paramount http://www.forrester.com/

Agency (Affiliation)

Headquarters

1 2 3 4 5 6 7 8

Sapient 1 iXL, Atlanta 1 USWeb/CKS 1, 2 Razorfish (Omnicom) Digitas 2 TMP Worldwide 1, 2 c2o Interactive Architects (EDS) 1 Euro RSCG Worldwide Interaction (Havas) 1 AppNet 1 Grey New Technologies 1 OgilvyInteractive (WPP)
1 1

Cambridge, MA Atlanta San Francisco New York Boston New York Dallas New York

1999 Projected Revenue (in thousands) 276,844 *214,000 *170,000 150,000 *135,000 *125,000 125,000 120,900

% Increase over 1998 67.9 230.8 86.8 983.6 237.5 149.2 177.8 54.0

1999 Employees 2,011 *1,700 *1,050 1,300 700 *350 350 793

9 1 0 1 1 1 2 1 3 1 4 1 5

Bethesda, MD New York New York New York Dallas San Francisco New York

110,000 106,000 100,000 *100,000 95,883 *80,000 74,000

521.5 41.3 66.7 278.0 NA 188.8 19.4

1,000 850 650 1,000 800 681 450

Exhibit 8 - 8 Top 15 U.S. Interactive Advertising Agencies Source: Adapted from AdweekOnline (www.adweek.com)

Agency.com1 (Omnicom) Luminant Worldwide (Y&R) Organic (Omnicom) Xceed1

Site Promotion
Register Site with Search Engines Use Metatags, Keywords and HTML tags List Site with Appropriate Directories Utilize Electronic Press Releases Link to Complimentary Web Sites Incorporate Web Site Address in all Media Consider Banner Advertising Consider Hiring an Outside Firm to Promote Web Site

Links to Site Promotion & Search Engines:

www.yahoo.com/ www.excite.com www.hotbot.com http://www.adjacency.com/

Exhibit 8 - 9 Adjacency (Sapient) Builds and Promotes Web Sites for Clients Source: www.adjacency.com

Site Maintenance
Decide How Often to Update Site

Decide Whether to Outsource or Update in House

Evaluate the need for Human Resource for Web Site Maintenance

Budgeting
Evaluate the cost/benefits analysis &

Identify Potential Revenue Streams:

E-Commerce Do we sell on-line? Content Sponsorship Banners, Buttons, Sponsorships Intermediary Fees Broker and Agent Fees

Revenue Streams
Initial funds to support a Web site come from:
Investors Loans Firms operating budget

Revenue streams that produce Internet profits come mainly from:

Direct sales Advertising sales Other fees

Cost Savings By Selling and Marketing On-line

Eliminating elements of the traditional distribution chain

Increases possibilities of greater revenue

Saves on traditional marketing costs (printing, postage) Increases target market to world-wide audience

Intangible Benefits
The industry is developing exponentially creating new marketing opportunities, although they may be hard to measure

Goodwill Brand Equity Audience Measurement Public Relations Customer Satisfaction

Cost/Benefit Analysis Analyze the cost of e-marketing versus the benefits

Benefits
Revenue increases Cost decreases Intangible benefits Goodwill Brand/Image Building Relationship Building

Costs
ISP Costs Hardware and Software Costs Design Costs Maintenance Costs

Evaluation Plan
Monitor and Track Site Usage
Cognitive
Measure unique visits and impressions

Attitudinal
Survey customers for brand satisfaction objective: CRM, firm would use AOV (average order value) and LTV (lifetime customer value)

Transactive
Measure purchases, site traffic, previous paths and click-through rate

The End