ASSIGNMENT ON

TECHNICAL
ANALYSIS OF
ETHNIC ISSUES IN
E-MARKETING

Submitted To:
Submitted By:
Prof. Satinder Kumar Amit
Jain
MBA 2
B
Rollno-
5860

E-marketing strategy - Situation analysis

Introduction

The importance of developing an effective e-marketing strategy is indicated

by Michael Porter (2001) who has said:

‘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.’

The Internet has brought media to a global audience. The interactive nature
of e marketing in terms of providing instant responses and eliciting
responses are the unique qualities of the medium. Internet marketing is
sometimes considered to be broad in scope because it not only refers to
marketing on the Internet, but also includes marketing done via e-mail and
wireless media. Management of digital customer data and electronic
customer relationship management (ECRM) systems are also often grouped
together under internet marketing.

E marketing ties together creative and technical aspects of the Internet,

including: design, development, advertising, and sales.

E marketing also refers to the placement of media along many different

stages of the customer engagement cycle through search engine marketing
(SEM), search engine optimization (SEO), banner ads on specific websites,
e-mail marketing, and Web 2.0 strategies.

An e-marketing strategy is needed to provide consistent direction for an

organisation’s e-marketing activities that integrates with its other marketing
activities and supports the overall objectives of the business. For many
companies, the first forays into e-marketing or Internet marketing are not
the result of a well-defined, integrated Internet strategy; rather, they are a
response to competitors activities or customers demand.

After a site has been in existence for a year or so, marketing staff and senior
managers in a company will naturally question its effectiveness. This is
often the point at which the need for a coherent Internet marketing strategy
becomes apparent. As a result, the starting point used in approaches to e-
marketing strategy, is when a company that has an existing site and it is
reviewing the current site and its effectiveness with a view to future
improvements.

The e-marketing strategy process

There is no evidence to suggest that the approach to developing and

implementing a strategy should be significantly different for e-marketing.
Established frameworks for corporate strategy development or strategic
marketing planning should still be followed. These frameworks provided a
logical sequence to follow which ensures inclusion of all key activities of
strategy development. It can be argued, however, that with e-marketing
there is an even greater need for a highly responsive strategy process model
where rapid reaction can occur to events in the marketplace. The use of
Soviet-style 5 year planning does not seem appropriate, a preferable
approach is an emergent e-marketing strategy process that is part of a
continuous improvement.

Chaffey (2002) notes that e-business or e-marketing strategy process

models tend to share the following characteristics:

 Continuous internal and external environment scanning or analysis

are required.

 Clear statement of vision and objectives is required.

 Strategy development can be broken down into formulation and

selection.

 After strategy development, enactment of the strategy occurs as

strategy implementation.

 Control is required to detect problems and adjust the strategy

accordingly.

 They must be responsive to changes in the marketplace.

E-marketing strategy development has a four stage model. The four stages
are:

Strategic analysis:

Continuous scanning of the micro and macro-environment of an

organization are required with particular emphasis on the changing needs of
customers, actions and business models of competitor and opportunities
afforded by new technologies. Techniques include resource analysis,
demand analysis and competitor analysis, applications portfolio analysis,
SWOT analysis and competitive environment analysis.

Strategic objectives:

Organisations must have a clear vision on whether digital media will

complement or replace other media and their capacity for change. Clear
objectives must be defined and in particular goals for the online revenue
contribution should be set.

Strategy definition:

Strategy definition is discussed by asking eight questions:

 Target market strategies.

 Positioning and differentiation strategies.

 Resourcing - Internet marketing priorities – significance to

organization.

 CRM focus and financial control

 Market and product development strategies.

 Business and revenue models including product development and

pricing strategies.

 Organisational restructuring required.

 Channel structure modifications.

Strategy implementation:

It includes devising and executing the tactics needed to achieve strategic

objectives. This includes relaunching a web site, campaigns associated with
promoting the site and monitoring the effectiveness of the site.

Types of e Marketing
E marketing can be of following types:

Viral Marketing
The buzzwords viral marketing and viral advertising refer to marketing
techniques that use pre-existing social networks to produce increases in
brand awareness or to achieve other marketing objectives (such as product
sales) through self-replicating viral processes, analogous to the spread of
pathological and computer viruses. It can be word-of-mouth delivered or
enhanced by the network effects of the Internet. Viral promotions may take
the form of video clips, interactive Flash games, advergames, e-Books,
brand able software, images, or even text messages.

The goal of marketers interested in creating successful viral marketing

programs is to identify individuals with high Social Networking Potential
(SNP) and create viral messages that appeal to this segment of the
population and have a high probability of being taken by another
competitor.

The term "viral marketing" has also been used pejoratively to refer to
stealth marketing campaigns—the unscrupulous use of astroturfing on-line
combined with under market advertising in shopping centers to create the
impression of spontaneous word of mouth enthusiasm.

Search Engine Marketing

Search engine marketing, or SEM, is a form of Internet marketing that

seeks to promote websites by increasing their visibility in search engine
result pages (SERPs) through the use of search engine optimization, paid
placement, contextual advertising, and paid inclusion.

Search engine optimization consultants expanded their offerings to help

businesses learn about and use the advertising opportunities offered by
search engines, and new agencies focusing primarily upon marketing and
advertising through search engines emerged. The term "Search Engine
Marketing" was proposed by Danny Sullivan in 2001[9] to cover the
spectrum of activities involved in performing SEO, managing paid listings
at the search engines, submitting sites to directories, and developing online
marketing strategies for businesses, organizations, and individuals.

Some of the latest theoretical advances include Search Engine Marketing

Management (SEMM). SEMM relates to activities including SEO but
focuses on return on investment (ROI) management instead of relevant
traffic building (as is the case of mainstream SEO). SEMM also integrates
organic SEO, trying to achieve top ranking without using paid means of
achieving top in search engines, and PayPerClick SEO. For example some
of the attention is placed on the web page layout design and how content
and information is displayed to the website visitor.

Search Engine Optimization

Search engine optimization (SEO) is the process of improving the visibility
of a web site or a web page in search engines via the "natural" or un-paid
("organic" or "algorithmic") search results. Other forms of search engine
marketing (SEM) target paid listings. In general, the earlier (or higher on
the page), and more frequently a site appears in the search results list, the
more visitors it will receive from the search engine. SEO may target
different kinds of search, including image search, local search, video search
and industry-specific vertical search engines. This gives a web site web
presence.

As an Internet marketing strategy, SEO considers how search engines work

and what people search for. Optimizing a website may involve editing its
content and HTML and associated coding to both increase its relevance to
specific keywords and to remove barriers to the indexing activities of
search engines. Promoting a site to increase the number of backlinks, or
inbound links, is another SEO tactic.

The acronym "SEO" can refer to "search engine optimizers," a term

adopted by an industry of consultants who carry out optimization projects
on behalf of clients, and by employees who perform SEO services in-house.
Search engine optimizers may offer SEO as a stand-alone service or as a
part of a broader marketing campaign. Because effective SEO may require
changes to the HTML source code of a site, SEO tactics may be
incorporated into web site development and design. The term "search
engine friendly" may be used to describe web site designs, menus, content
management systems, images, videos, shopping carts, and other elements
that have been optimized for the purpose of search engine exposure.

Another class of techniques, known as black hat SEO or spamdexing, uses

methods such as link farms, keyword stuffing and article spinning that
degrade both the relevance of search results and the user-experience of
search engines. Search engines look for sites that employ these techniques
in order to remove them from their indices.
Affiliate Marketing

Affiliate marketing is a marketing practice in which a business rewards one

or more affiliates for each visitor or customer brought about by the
affiliate's marketing efforts. Examples include rewards sites, where users
are rewarded with cash or gifts, for the completion of an offer, and the
referral of others to the site. The industry has four core players: the
merchant (also known as 'retailer' or 'brand'), the network, the publisher
(also known as 'the affiliate'), and the customer. The market has grown in
complexity to warrant a secondary tier of players, including affiliate
management agencies, super-affiliates and specialized third parties vendors.

Affiliate marketing overlaps with other Internet marketing methods to some

degree, because affiliates often use regular advertising methods. Those
methods include organic search engine optimization, paid search engine
marketing, e-mail marketing, and in some sense display advertising. On the
other hand, affiliates sometimes use less orthodox techniques, such as
publishing reviews of products or services offered by a partner.

Affiliate marketing—using one website to drive traffic to another—is a

form of online marketing, which is frequently overlooked by advertisers.
While search engines, e-mail, and website syndication capture much of the
attention of online retailers, affiliate marketing carries a much lower
profile. Still, affiliates continue to play a significant role in e-retailers'
marketing strategies

Blog Marketing

Blog marketing is the term used to describe internet marketing via web
blogs. These blogs differ from corporate websites because they feature
daily or weekly posts, often around a single topic. Typically, corporations
use blogs to create a dialog with customers and explain features of their
products and services.

Many organizations use blogs with their user community. This allows them
to share and preview product features, functions, and benefits before the
products are released. Blogs are an excellent way to gather feedback and to
make sure products meet the needs of users. Blogs have become the next
generation marketing tool to corporate websites which merely post
collateral and do not provide any interactive feedback. Blogs are also
supplementary to a User Group. User Groups happen annually for example
while blogs provide users constant daily and weekly feedback.

Blogs are Basic websites which are updated regularly. They act as a Private
news interface for any Company / Website with regular updates being
handled by the company executive team, product marketing, and product
strategy teams. The need for fresh content on the web makes the Blogs a
preferred destination for Resources. Blogs have been focused as a primary
platform for Marketing since the early 2006.

Email Marketing

E-mail marketing is a form of direct marketing which uses electronic mail

as a means of communicating commercial or fundraising messages to an
audience. In its broadest sense, every e-mail sent to a potential or current
customer could be considered e-mail marketing. However, the term is
usually used to refer to:

 sending e-mails with the purpose of enhancing the relationship of a

merchant with its current or previous customers, to encourage
customer loyalty and repeat business,

 sending e-mails with the purpose of acquiring new customers or

convincing current customers to purchase something immediately,
  adding advertisements to e-mails sent by other companies to their
customers, and

 sending e-mails over the Internet, as e-mail did and does exist
outside the Internet (e.g., network e-mail and FIDO).

Researchers estimate that United States firms alone spent US $400 million
on e-mail marketing in 2006.

Specific issues of strategic analysis and objective setting

related to e-marketing:

Strategic analysis:

In common with traditional marketing strategy, strategic analysis or

situation analysis for e-marketing involves review of the:

 Internal resources and processes of the company and a review of its

activity in the marketplace;

 Immediate competitive environment (micro-environment) including

customer demand and behaviour, competitor activity, marketplace
structure and relationships with suppliers and partners.

 Wider environment (macro-environment) in which a company

operates including the social, legal, economic, political and
technological factors.

The key aspects of the internal and external environment that need to be
assessed when developing an e-marketing strategy.

Internal resources

These are of particular importance for e-marketing:

 Portfolio analysis and stage models – Considers the sophistication

of online services offered to prospects and customers. From basic
‘brochureware’ sites with no interaction through those offering
online catalogues to fully transactional sites offering full support for
all stages of the customer lifecycle from acquisition, retention to
extension and all stages of the buying process.

 E-marketing effectiveness – How effective is the organisation at

converting browsers to visitors and visitors to prospects and buyers?
Analysis of web logs using diagnostics is important here.

 Financial resources and cost/benefit – in particular the breakdown

 for costs of running the online presence between site development,
promotion and maintenance. Many organisations still do not have
good visibility of these costs and the benefits such as those
described in the objective setting section.

 Service quality – human resources and software assistance for

answering customer queries and dispatching goods.

 Technology infrastructure resources – availability and performance

(speed) of web site and service level agreements with the ISP.

 Structure – what are the responsibilities and control mechanisms

used to co-ordinate Internet marketing across different departments
and business units.

 Strengths and Weaknesses – SWOT analysis can be readily applied

to e-marketing specific issues.

The Internet micro-environment

Pertinent factors for the Internet include demand analysis, competitor

analysis intermediary analysis, channel structure. Porter (2001) has written
extensively about how the Internet has changed the dynamic of the
marketplace and has reinterpreted his often-quoted five forces model in the
Internet era.

Demand analysis or online customer activity is a key factor driving e-

marketing and e-business strategy objectives. It assesses the current level
and future projections of customer demand for e-commerce services in
different market segments. In a B2B context customer activity can be
determined by asking for each market:

 What % of customer businesses have access to the Internet?

 What % of members of the buying decision in these businesses have

access to the Internet?

 What % of customers are prepared to purchase your particular

product online?

 What % of customers with access to the Internet are not prepared to

purchase online, but choose or are influenced by web-based
information to buy products offline?

 What are the barriers to adoption and the facilitators amongst

customers and how can we encourage adoption?

Qualitative research is important to informing strategy since it identifies the

differences in psychographics between current online customers and those
that are not offline.

Resources for assessing the ratio of ‘Access : Choose : Buy’ online have
been reviewed in WNIM 5 and 6.

Competitor analysis or the monitoring of competitor use of e-commerce to

acquire and retain customers is especially important in the e-marketplace
due to the dynamic nature of the Internet medium. Chaffey (2002) suggests
comparing the activity of an organisation and its competitors for their
different channels by trying to answer these questions:
1. Business contribution

How does Internet marketing contribute to the bottom line? What is the
online revenue contribution (direct and indirect), costs and profitability?

2. Marketing outcomes

How many marketing outcomes are achieved online? For example, what
proportion of leads, sales, service contacts occur online? How effective is
online marketing at acquiring, converting and retaining customers?

3. Customer satisfaction

What are the customers’ opinions of the online experience and how does
this affect their loyalty?

4. Customer behaviour (Web analytics)

This assesses how different customer segments interact with web site
content and assesses how the actions they take are influenced by usability,
design, content, promotions and services.

5. Site promotion

How effective are the different promotional tools such as search engines, e-
mail, direct marketing and advertising at driving quality traffic to the web
site? Measures include attraction efficiency, referrer efficiency, cost of
acquisition, reach and the integration between tools. Analysis of the use of
intermediaries to build and service business is also important here.

The Internet macro-environment

It can be suggested that of the different Social, Legal, Economic, Political

and Technological characteristics of the macro-environment, the three most
significant factors described in more depth in chapter 3 are legal constraints
– What are the legal limitations to online promotion and trade such as data
protection and taxation, ethical constraints such as privacy and
technological constraints – what is the current availability and usage of
technology to access the Internet and offer distinctive services and how is
this likely to vary in the future?

Strategic objectives:

Smith and Chaffey (2001) suggest there are five broad benefits, reasons or
objectives of e-marketing. This framework is useful since it presents a
comprehensive range of objectives. Marketers will decide whether all or
only some will drive e-marketing:

 Sell – Grow sales (through wider distribution to customers you

can’t service offline or perhaps through a wider product range
than in-store, or better prices)

 Serve – Add value (give customers extra benefits online: or

inform product development through online dialogue and
feedback)

 Speak – Get closer to customers by tracking them, asking them

questions, conducting online interviews, creating a dialogue,
monitoring chat rooms, learning about them
  Save – Save costs - of service, sales transactions and
administration, print and post. Can you reduce transaction costs
and therefore either make online sales more profitable? Or use
cost-savings to enable you to cut prices, which in turn could
enable you to generate greater market share?

 Sizzle – Extend the brand online. Reinforce brand values in a

totally new medium. The Web scores very highly as a medium
for creating brand awareness, recognition and involvement.

Specific objectives should be created for each of the 5Ss. Consider Sales –
a typical objective might be:

‘To grow the business with online sales e.g. to generate at least 10% of
sales online. Within 6 months.’

or

‘To generate an extra £100,000 worth of sales online by December’.

These objectives can be further broken down according to CRM objectives

of acquisition, conversion and retention, e.g. to achieve £100,000 of online
sales means you have to generate 1,000 online customers spending on
average £100 in the time period. If, say, your conversion rate of visitors to
customers was 1% then this means you have to generate 100,000 visitors to
your site. Achieving repeat visits and sales would form further
objectives.

The online revenue contribution

The key objective for e-marketing is the online revenue contribution. This
is a measure of the extent to which a companies online presence directly
impacts the sales revenue of an organisation. Online revenue contribution
objectives can be specified for different types of products, customer
segments and geographic markets.

Companies that can set a high online revenue contribution objective of say
25% for 2 years time will need to provide more resource allocation to the
Internet than those companies who anticipate a contribution of 2.5%. Cisco
Systems Inc (www.cisco.com) maker of computer networking gear, is now
selling around 90% of its 20 billion dollars sales online. This was achieved
since senior executives at Cisco identified the significance of the medium,
setting aggressive targets for the online revenue contribution and resourcing
the e-commerce initiative accordingly.

A further example is provided by Sandvik Steel. The Financial Times

reported in June 2001 that around 20 per cent of all orders from Denmark
are online and 31 per cent of those from Sweden. The proportion in the US,
however, is only 3 per cent, since most business goes through distributors
and is conducted by EDI (electronic data interchange), the pre-internet
means of e-commerce. Over the next six months, the company hopes to
raise the US figure to 40 per cent. Mr Fredriksson hopes that in two years,
between 40 and 50 per cent of total orders will come via the web.

However, for some companies such as an FMCG manufacturer, it is

unrealistic to expect a high direct online revenue contribution. In this case,
an indirect online contribution can be stated. This considers the Internet as
part of the promotional mix and its role in reaching and influencing a
proportion of customers to purchase the product or in building the brand. In
this case a company could set an online promotion contribution of 5% of its
target market visiting the web site and interacting with the brand. Where
sales achieved offline are a consequence of online selection of products this
is referred to as the indirect revenue contribution.