The EMarketing Plan Creating an EMarketing Plan w

The E-Marketing Plan

Creating an E-Marketing Plan w 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 w An E-Marketing Plan is a company’s blueprint for strategic direction w Ad hoc – Companies develop strategies without the development of an EMarketing Plan • Example: www. yahoo. com w 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 they’re wrong about the product, they’ll 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 customer’s 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. § Don’t completely redesign a business to become an e-business. § Don’t suspend good project management rules in the name of ebusiness. § Don’t assume technology can do all the heavy lifting in e-business implementation. § Don’t 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 Gartner. Group (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 Production and fulfillment SCM, production scheduling, inventory management People Culture, skills, knowledge management, leadership and commitment to e-business Technology ERP systems, legacy applications, networks, Web site, security, IT skills Core infrastructure Financial systems, R&D, HR Exhibit 8 - 4 Key Internal Capabilities for E-Business Source: Adapted from Kalakota (1999)

Situation Analysis Develop a Market Opportunity Analysis w Market Opportunity Analysis includes both demand supply analyses. w The demand portion reviews various market segments in terms of potential profit. w The supply analysis review competition in selected segments that are under consideration w 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 company’s strengths and weaknesses with respect to the environment and the competition

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

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 w They are not held to the same standards of profitability as the brickand-mortar stores w 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 buyer’s 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 Ø Each market should be well profiled by its characteristics, behavior and desires Ø Firms must understand the value proposition for each market.

Set Objectives w 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.

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

Marketing Mix Component Chapter Business Model Product 4 Digital value through new products Price 4 Cost reduction using E-marketing Negotiation Segmented pricing Distribution 5 Content sponsorship Direct selling Infomediary Intermediaries Broker: Online exchange Online auction Agent: Manufacturer’s agent Affiliate program Metamediary Virtual mall Shopping agent Reverse auction Buyer cooperative E-tailer bit vendor Tangible products Marketing Communication 6 Content publishing E-mail Community building Online advertising Online sales promotion Relationship Marketing 7 CRM Exhibit 8 - 7 Selected EBusiness Models Are Also Marketing Strategies

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: w w 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: w w w w 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 1999 Projected Revenue (in thousands) 276, 844 % Increase over 1998 1999 Employees 1 Sapient 1 Cambridge, MA 67. 9 2, 011 2 i. XL, Atlanta 1 Atlanta *214, 000 230. 8 *1, 700 3 USWeb/CKS 1, 2 San Francisco *170, 000 86. 8 *1, 050 4 Razorfish (Omnicom) 1 New York 150, 000 983. 6 1, 300 5 Digitas 2 Boston *135, 000 237. 5 700 6 TMP Worldwide 1, 2 New York *125, 000 149. 2 *350 7 c 2 o Interactive Architects (EDS) 1 Dallas 125, 000 177. 8 350 8 Euro RSCG Worldwide Interaction (Havas) 1 New York 120, 900 54. 0 793 9 App. Net 1 Bethesda, MD 110, 000 521. 5 1, 000 1 0 Grey New Technologies 1 New York 106, 000 41. 3 850 1 1 Ogilvy. Interactive 1 (WPP) New York 100, 000 66. 7 650 1 2 Agency. com 1 (Omnicom) New York *100, 000 278. 0 1, 000 1 3 Luminant Worldwide (Y&R) Dallas 95, 883 NA 800 1 4 Organic (Omnicom) San Francisco *80, 000 188. 8 681 1 5 Xceed 1 New York 74, 000 19. 4 450 Exhibit 8 - 8 Top 15 U. S. Interactive Advertising Agencies Source: Adapted from Adweek. Online (www. adweek. com)

Site Promotion w w w w 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 w Decide How Often to Update Site w Decide Whether to Outsource or Update in House w Evaluate the need for Human Resource for Web Site Maintenance

Budgeting Evaluate the cost/benefits analysis & Identify Potential Revenue Streams: w E-Commerce – Do we sell on-line? w Content Sponsorship – Banners, Buttons, Sponsorships w Intermediary Fees – Broker and Agent Fees

Revenue Streams w Initial funds to support a Web site come from: – Investors – Loans – Firm’s operating budget w Revenue streams that produce Internet profits come mainly from: – Direct sales – Advertising sales – Other fees

Cost Savings By Selling and Marketing On-line w Eliminating elements of the traditional distribution chain w Increases possibilities of greater revenue w Saves on traditional marketing costs (printing, postage) w 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 w w w Goodwill Brand Equity Audience Measurement Public Relations Customer Satisfaction

Cost/Benefit Analysis Analyze the cost of e-marketing versus the benefits Benefits w w w Revenue increases Cost decreases Intangible benefits Goodwill Brand/Image Building Relationship Building Costs w ISP Costs w Hardware and Software Costs w Design Costs w Maintenance Costs

Evaluation Plan Monitor and Track Site Usage w Cognitive Measure unique visits and impressions w Attitudinal Survey customers for brand satisfaction objective: CRM, firm would use AOV (average order value) and LTV (lifetime customer value) w Transactive Measure purchases, site traffic, previous paths and click-through rate

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