92
2 Services-oriented relationship-building web site
Provides information to stimulate purchase and build relationships. Products are not
typically available for purchase online. Information is provided through the web site
and e-newsletters to inform purchase decisions. The main business contribution is
through encouraging offline sales and generating enquires or leads from potential cus-
tomers. Such sites also add value to existing customers by providing them with detailed
information to help them support them in their lives at work or at home.
Visit these examples: B2B management consultants such as PricewaterhouseCooper
(www
.pwcglobal.com
) and Accenture (www
.accentur
e.com
), B2C portal for energy sup-
plier British Gas (www
.house.co.uk
).
3 Brand-building site
Provide an experience to support the brand. Products are not typically available for
online purchase. Their main focus is to support the brand by developing an online expe-
rience of the brand. They are typical for low-value, high-volume fast-moving consumer
goods (FMCG) brands for consumers.
Visit these examples: Tango (www
.tango.com
), Guinness (www
.guinness.com
).
WHAT BENEFITS DOES THE INTERNET PROVIDE FOR THE MARKETER?
15
Table 1.1 The 5 Ss of Internet marketing
Benefit of e-marketing
How benefit is delivered
Typical objectives
Sell – Grow sales
Achieved through wider distribution to
• Achieve 10% of sales online in market
customers you can’t readily service
• Increase online sales for product by
offline or perhaps through a wider
20% in year
product range than in-store, or lower
prices compared to other channels
Serve – Add value
Achieved through giving customers
• Increase interaction with different
extra benefits online or inform product
content on site
development through online dialogue
• Increase dwell-time duration on site by
and feedback
10% (sometimes known as ‘stickiness’)
• Increasing number of customers actively
using online services (at least once
per month) to 30%
Speak – Get closer to
This is creating a two-way dialogue
• Grow e-mail coverage to 50% of
customers
through web and e-mail forms and
current customer database
polls and conducting online market
• Survey 1000 customers online
research through formal surveys
each month
and informally monitoring chat
• Increase visitors to community site
rooms to learn about them.
section by 5%
Also speak through reaching them
online through PR
Save – Save costs
Achieved through online e-mail
• Generate 10% more sales for same
communications, sales and service
communications budget
transactions to reduce staff, print
• Reduce cost of direct marketing by
and postage costs
15% through e-mail
• Increase web self-service to 40% of all
service enquiries and reduce overall
cost-to-serve by 10%
Sizzle – Extend the
Achieved through providing a new
• Improve branding metrics such as:
brand online
proposition and new experience
brand awareness, reach, brand
online while at the same time
favourability and purchase intent
appearing familiar
Source: Smith and Chaffey, 2005
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68
4 Portal or media site
Provide information or news about a range of topics. ‘Portal’ refers to a gateway of infor-
mation. This is information both on the site and through links to other sites. Portals
have a diversity of options for generating revenue including advertising, commission-
based sales, sale of customer data (lists).
Visit these examples: Yahoo! (www
.yahoo.com
) (B2C) and Silicon (www
.silicon.com
)
(B2B).
Each of these different types of sites tend to increase in sophistication as organisa-
tions develop their Internet marketing. Many organisations began the process of
Internet marketing with the development of web sites in the form of brochureware sites
or electronic brochures introducing their products and services, but are now enhancing
them to add value to the full range of marketing functions. In Chapters 2 and 4 we look
at stage models of the development of Internet marketing services, from static brochure-
ware sites to dynamic transactional sites that support interactions with customers.
A powerful method of evaluating the strategic marketing opportunities of using the
Internet is to apply the strategic marketing grid of Ansoff (1957) as discussed in the strat-
egy formulation section of Chapter 4 (Figure 4.10). This shows how the Internet can
potentially be used to achieve four strategic directions:
1 Market penetration. The Internet can be used to sell more existing products into exist-
ing markets.
2 Market development. Here the Internet is used to sell into new geographical markets,
taking advantage of the low cost of advertising internationally without the necessity
for a supporting sales infrastructure in the customers’ countries.
3 Product development. New products or services are developed which can be delivered
by the Internet. These are typically digital products.
4 Diversification. In this sector, the Internet supports selling new products which are
developed and sold into new markets.
As well as assisting large corporate organisations develop their markets, perhaps the
most exciting potential of the Internet is to help small and medium enterprises (SMEs)
expand. Read Mini Case Study 1.1 ‘North West Supplies extends its reach online’ which
also illustrates some of the challenges of managing an online business and highlights
the need for continual investment.
CHAPTER 1 · AN INTRODUCTION TO INTERNET MARKETING
16
Brochureware site
A simple site with
limited interaction with
the user that replicates
offline marketing
literature.
Stage models
Models for the
development of
different levels of
Internet marketing
services.
Transactional sites
Sites that support
online sales.
NWS commenced operations in March 1999 when Andrew Camwell, a member of the RAF Volunteer
Reserve at the time, spotted a gap in the UK market for mail-order supplies of military garments to
people active in the Volunteer Reserve and the Air Cadet Force. Andrew, his wife Carys, and her sister
Elaine Hughes, started running a mail-order business out of shop premises in the village of Cemaes Bay.
The web store at www
.nor
thwestsupplies.co.uk
has been on-line since November 2002. As it can
take several months for a web site to be indexed by search engines, NWS used pay-per-click advertising
(PPC – see Chapter 8) as a method of very quickly increasing the web site’s presence in the major search
engines. This marketing method proved successful. The directors were pleasantly surprised as they had
previously been somewhat dubious about the prospect of the Internet generating sales in their sector.
Within six months of running the web site, the company had increased turnover by £20,000, but further
Mini Case Study 1.1
North West Supplies extends its reach online
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37
WHAT BENEFITS DOES THE INTERNET PROVIDE FOR THE MARKETER?
17
advances would incur a high advertising cost. Following an eCommerce Review by Opportunity Wales,
the company decided to tackle the issues by implementing search engine optimisation (SEO – see
Chapter 8) and a site re-design which included:
Improved graphic design– this was to be changed to a more professional and up-to-date look.
Best, featured and latest products – the introduction of a dynamic front page to entice customers to
re-visit the site on a regular basis. The contents of this page would feature the best sellers, and latest
or featured products.
Reviews and ratings – to provide confidence to consumers and allow some kind of interaction with
them, which would allow users to review products they have purchased and give them a star rating.
Cross-selling – when customers view a product there may be other products or categories that may
be of interest or complementary, hence there was a proposal to allow staff to link products and
categories so that these would be displayed.
Segmentation – the site would be split into two sections emphasising the segmentation of product
lines into military wear and outdoor wear sectors, thus being less confusing, and easier to use for the
respective users (see Figure 1.8 under ‘Best, featured and latest products’).
Navigation by sub-categories – as the product range had expanded, the additional pages created in
each category made it harder for customers to find specific items or have to browse many pages
before finding a suitable product. The introduction of sub-categories would provide a clear link to the
areas of interest and contain fewer pages to browse thus helping the customer to make a choice more
easily and more quickly. A new search tool and order tracking were also seen as important parts of
the online customer experience (Chapter 8).
Figure 1.8 North West Supplies Ltd site (www
.northw
es
tsupplies.c
o.uk
)
Source: Opportunity Wales
54
To realise the benefits of Internet marketing that we have described, an organisation
needs to develop a planned, structured approach. As we will see in Chapter 4, which
covers Internet marketing strategy, there are many risks if an ad-hoc rather than strategic
approach to managing online channels is used. Some of the problems that we have com-
monly seen in organisations are:
Unclear responsibilities for the many different Internet marketing activities shown in
Figure 1;
No specific objectives are set for Internet marketing;
Insufficient budget is allocated for Internet marketing as customer demand for online serv-
ices is underestimated and competitors potentially gain market share through superior
online activities;
Budget is wasted as different parts of an organisation experiment with using different
tools or suppliers without achieving economies of scale;
New online value propositions for customers are not developed since the Internet is
treated as ‘just another channel to market’ without review of opportunities to offer
improved, differentiated online services;
Results from digital marketing are not measured or reviewed adequately, so actions cannot
be taken to improve effectiveness;
An experimental rather than planned approach is taken to using e-communications with
poor integration between online and offline marketing communications.
CHAPTER 1 · AN INTRODUCTION TO INTERNET MARKETING
18
Benefits
The owners describe the benefits of the improvements to the site as follows:
Increased Direct Sales – ‘The new launch increased sales and appealed to a broader audience –
young and old’. The annual turnover of the business has increased from £250,000 to £350,000 and
this is mainly attributable to the new web site. The high profile launch aimed at existing customers,
the greater visibility in search engines, and the greater usability of the site have all contributed to this.
Improved Promotion of the Whole Range of Stock – ‘We started selling stuff that we hadn’t sold
before’. The changes in navigation, particularly division into two market segments (military and
outdoors) and greater use of sub-categories, meant that products were easier to find and hence
easier to buy, leading to increased sales of products that had previously been slow sellers.
New Customers – ‘We now send more items abroad’. The better performance of the site in search
engines has led to an increase in orders from new customers and from abroad. The company now has
regular sales to Canada, Australia, New Zealand and various European states. 60% of orders are from
new customers – not bad for a business that initially set up on the premise of a niche market for UK
based cadet forces.
Adding Value to the Brand – ‘New corporate clients could look at our Web site and see we weren’t fly-
by-night and that we meant business’. Improvements to the design have raised confidence levels in
visitors and this has led to increased sales. But perhaps more significantly, the professional image of
the site was a good boost to confidence for potential business partners in the emerging business-to-
business division that started to trade as North Star Contracts.
A strategic approach to Internet marketing
55
Consequently, this book defines a strategic approach to Internet marketing which is
intended to manage these risks and deliver the opportunities available from online
channels. In Figure 1.9 we suggest a process for developing and implementing an
Internet marketing which is based on our experience of strategy definition in a wide
range of companies. This diagram highlights the key activities and their dependencies
which are involved for creation of a typical Internet marketing. The purpose of strategic
Internet marketing activities and the main point at which these topics are covered in
this book are as follows:
A Defining the online opportunity
Setting objectives to define the potential is the core of this phase of strategy develop-
ment. Key activities are:
1. Set e-marketing objectives (Chapter 4): Companies need to set specific numerical
objectives for their online channels and then resource to deliver these objectives.
These objectives should be informed by and influence the business objectives and
also the following activities:
1.a. Evaluate e-marketing performance (Chapters 4 and 9): Applying web analytics tools
to measure the contribution of leads, sales and brand involvement currently delivered
by online communications such as search engine marketing, online advertising and e-
mail marketing in conjunction with the web site.
1.b. Assess online marketplace (Chapters 2, 3 and 4): Situation analysis reviewing the
micro-environment (customers, competitors, intermediaries, suppliers and internal
capabilities and resources) and the broader macro-environment which influences
strategy such as legal requirements and technology innovation.
B Selecting the strategic approach
2. Define e-marketing strategy (Chapter 4): Select appropriate strategies to achieve the
objectives set at stage A1.
2a. Define customer value proposition (Chapters 4 to 7): Define the value proposition
available through the online channel and how it relates to the core proposition deliv-
ered by the company. Reviewing the marketing mix and brand values to evaluate how
they can be improved online.
2b. Define e-communications mix (Chapters 4 and 8): Selecting the offline and online com-
munications tools to encourage usage of an organisation’s online services and to generate
leads and sales. Developing new outbound communications and event-triggered touch
strategies to support customers through their relationship with the company.
C Delivering results online
3. Implement e-marketing plan (Part 3): This details the implementation of the strategy.
3a. Implement customer experience (Chapter 7): Build the web site and create the e-mail
marketing communications’ which form the online interactions customers make with
a company. Create online customer relationship management capabilities to under-
stand customers’ characteristics, needs and behaviours and to deliver targeted,
personalised value (Chapter 6).
3b. Execute e-communications (Chapter 8): Managing the continuous online marketing
communications such as search engine marketing, partnerships, sponsorships and
affiliate arrangements and campaign-based e-marketing communications such as
19
A STRATEGIC APPROACH TO INTERNET MARKETING
60
online advertising, e-mail marketing and microsites to encourage usage of the online
service and to support customer acquisition and retention campaigns.
4. Customer profiling (Chapter 6), monitoring and improving online activities and maintaining
the online activities (Chapter 9): Capturing profile and behavioural data on customer inter-
actions with the company and summarising and disseminating reports and alerts about
performance compared with objectives in order to drive performance improvement.
You will see that in the process diagram, Figure 1.9, many double-headed arrows are used,
since the activities are often not sequential, but rather inform each other, so activity 1, set
e-marketing objectives, is informed by the activities around it, but may also influence them.
Similarly, activity 4, profile, measure and improve, is informed by the execution of online
activities, but there should be a feedback loop to update the tactics and strategies used.
Internet marketing differs significantly from conventional marketing communications
because of the digital medium used for communications. The Internet and other digital
media such as digital television and mobile phones enable new forms of interaction and
CHAPTER 1 · AN INTRODUCTION TO INTERNET MARKETING
20
Figure 1.9 A generic Internet marketing strategy development process
2. Define
e-marketing
strategy
4. Profile,
measure and
improve
a. Define
customer value
proposition
b. Define
e-communications
mix
3. Implement
e-marketing
plan
a. Implement
customer
experience
b. Execute
e-communications
1. Set
e-marketing
objectives
Business
objectives
a. Evaluate
e-marketing
performance
B. Selecting
the strategic
approach
C. Delivering
results
online
A. Defining
the online
opportunity
b. Assess
online
marketplace
How do Internet marketing communications differ from traditional
marketing communications?
51
new models for information exchange. A useful summary of the differences between
these new media and traditional media has been developed by McDonald and Wilson
(1999) – they describe the ‘6 Is of the e-marketing mix’. Note that these can be used as a
strategic analysis tool, but they are not used in this context here. The six Is are useful
since they highlight factors that apply to practical aspects of Internet marketing such as
personalisation, direct response and marketing research, but also strategic issues of
industry restructuring and integrated channel communications.
1 Interactivity
John Deighton was one of the first authors to summarise this key characteristic of the
Internet. He identified the following characteristics inherent in a digital medium
(Deighton, 1996) which are true for much online marketing activity, but not all:
the customer initiates contact;
the customer is seeking information (pull);
it is a high-intensity medium – the marketer will have 100 per cent of the individual’s
attention when he or she is viewing a web site;
a company can gather and store the response of the individual;
individual needs of the customer can be addressed and taken into account in
future dialogues.
Figure 1.10(a) shows how traditional media are predominantly push media where the
marketing message is broadcast from company to customer and other stakeholders.
During this process, there is limited interaction with the customer, although interaction
is encouraged in some cases such as the direct-response advert or mail-order campaign.
On the Internet, it is often the customer who initiates contact and is seeking information
through researching information on a web site. In other words it is a ‘pull’ mechanism
where it is particularly important to have good visibility in search engines such as
Google, Yahoo! and MSN when customers are entering search terms relevant to a com-
pany’s products or services. Note though, that outbound e-mail marketing and online
advertising can be considered as ‘push’ broadcast techniques. Figure 1.10(b) shows how
21
HOW DO INTERNET MARKETING COMMUNICATIONS DIFFER FROM TRADITIONAL MARKETING COMMUNICATIONS?
Figure 1.10 Summary of communication models for: (a) traditional media, (b) new media
Company
Customer
Direct response
Traditional TV, print, radio media
Direct mail communications
Interactivity
Dialogue not monologue
Two-way feedback
Push
(a)
Company
Customer
Pull/Push
Intelligence
(b)
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