CHAPTER 2

MARKETING STRATEGIES IN INTERNET

MARKETING

MA RKETING STRATEGIES IN INTERNET MA RKETING

2.1 Discuss the concepts in marketing

strategy
2.1.1 Describe the strategic approach in
Internet Marketing strategy
a. Situation review
b. Strategic goal setting
c. Strategy formulation
d. Strategy implementation
2.1.2 Discuss segmentation, targeting and
positioning market

INTERNET MARKETING
STRATEGY??
Internet Marketing Strategy is essentially a
channel marketing strategy and its needs to
integrated with other channels as part of
multichannel marketing.

Concept of Internet Marketing

Strategy

Determine the strategic significance of the

internet relative to other communications
channel which are used to communicate
directly with customers at different
customer touchpoint.

The Internet marketing strategy should

follow a similar form to traditional strategic
marketing planning process include:

Goal setting
Situation review
Strategy formulation
Resource allocation and monitoring

THE SCOPE OF INTERNET

MARKETING STRATEGY

1)

2)

3)

4)

OBJECTIVE
Cost reduction and value chain efficiencies.
(eg:eliminate paper transaction process)
Revenue generation(eg: wider market to
sell goods)
Channel partnership (Partnering with
distributors using extranets)
Communications and branding (website:to
foster close relationships with customers.

Key Features/Effectiveness
Be aligned with business strategy, more specific annual business
priorities and initiatives
Use clear objectives for business and brand development and the
online contribution.
Be consistent with types of customers who use and can be
effectively reached through the channel.
Diffential the value proposition for the channel which must be
effectively communicated to customers.
Specify the mix of online and offline communication tools used to
attract visitors to the website or interact with other digital media.
Support the customer journey through the buying process.
Manage the online customer lifecycle : attracting visitors to the
website, converting them to customers, and retention and
growth.

GOAL ALIGNTMENT

IMPLEMENTATION
ALIGNMENT

FIT
ACTIVITY ALIGNMENT

RESOURCES
ALIGNTMENT

Type of Digital Marketing strategy

initiative

1) New customer proposition(product and pricing)

- new site site features or other online communications to offer
new product
- eg: comparison service
2) Customer acquisition strategic initiatives
- strategic project to enhance a site capability to deliver new
prospect
- eg: Affiliate marketing
3) Customer conversion and customer experience strategic initiative
- investment to include major new functionality
- improving the customer experience
- eg: secure payment, site engine, buyer guide
4) Customer development and growth strategic initiatives
- investment to improve the experience and delivery of offers to
existing customers.
- eg: Personalised recommendations, e-mail welcome

Describe the strategic approach

in Internet Marketing strategy

(1)SITUATION REVIEW

Collection and review of information

about an organizations internal
processes and resources and external
marketplace factors in order to inform
strategy definition.

Cont

Involve review of:

- the internal capabilities, resources and
process of the company and review of its
marketplace
- the immediate competitive environment
(micro environment) include customer demand
& behaviour, competitor activities & so on.
- The wider environment (macro environment)
includes economic environment & regulation,
law, political & so on.

Internal Audit
1)Assessing the current contribution of Internet to the
organization
Business effectiveness
- contribution of the site to the sales and how well it is
support business objective. The relative cost of producing,
updating and promoting the site also be reviewed
Marketing effectiveness
- sales
- customer retention and loyalty
- online market
- brand enhancement
Internet effectiveness
- asses the way website is used (key performance
indicators)

Cont.External
2) Customer Research
- to capture the core characteristics of target customer
3) Resources analysis
- Review of the technological, financial and human
resources and how the organization utilized the
resources in business process
4) Competitor Analysis
5) Intermediary analysis
6) Assessing opportunities and threats (SWOT Analysis)

(2) STRATEGIC GOAL SETTING

Any marketing strategy should be based
on clearly defined corporate objectives.
It is best if internet marketing strategy is
consistent and aligns with business and
marketing objectives.
Assessing and stating the contribution that
the internet will make to the business in the
future.(eg: revenue, complement or replace
the media)

So, Scenario-based analysis is useful

strategic approach to discuss the future of
the organization environment.
For setting specific objectives, it is useful to
think through the benefits of the internet
channel so the benefits can be converted
into objectives.

5 BROAD BENEFITS OF EMARKETING

SELL - Grow sales through wider distribution

to customers
SERVE - Add value by giving customers extra
benefits, inform product development
through online dialogue and feedback.
SPEAK - Get closer to customers by tracking
asking, conducting interviews, creating a
dialogue, monitors chatroom.
SAVE- Save cost of service, sales transactions
and administration.
SIZZLE - extend the brand online. Reinforce
brand values in totally new medium.

(3) STRATEGY FORMULATION

Generation, review, and selection of

strategies to achieve strategic objectives.
Involve defining a companys commitment to
the Internet; setting an appropriate value for
customers of the website; identifying the role
of the internet in exploiting new markets,
marketplaces and distribution channels in
delivering new products and services.
The key strategic decisions for e-marketing
same as traditional marketing.(segmentation,
targeting, differentiation, and positioning.)

The elements of Internet

marketing strategy
1) Market and product development strategies
2)Business and revenue models strategies
3)Target marketing strategy
4)Positioning and differentiation strategy
(include mktg mix)
5)Multichannel distribution strategy
6)Multichannel communication strategy
7)Online communications mix and budget
8)Organizational capabilities

Effectives of Internet Marketing

Strategy should:
Be based on objectives (eg: to leads brand awareness
& sales
Can effectively reached target customer through the
channel
Support the customer journey to select and purchase
product
Define a unique, differential proposition for the channel
How to communicate the proposition to persuade
customers to use online services
Manage the online customer lifecycle from attracting
visitors to website,, converting them to customers,
retention, and growth.

(4) STRATEGY
IMPLEMENTATION
Implementing customer relationship
management
Delivering online services via a website
Interactive marketing communications
Monitoring and maintaining the online
presence.

SEGMENTATION
Involve breaking up a market of customers
into identifiable groups or segment with
specific need.
So, the firm might differentiate and position
a product or services that can meet the
needs of specific segment.

Bases for Segmentation

1)

2)

3)

Demographic
- age, gender, occupation, ethnicity, income,
family status, and life status.
Geographic
- ISP domain, country, region, city, and
density (urban, sub urban, rural)
Psychographic

lifestyle, social class and personality

4) Cognitive and Behavioral
- benefit sought, usage rate, loyalty
status, attitude towards product.
-

Effective Segmentation

Should follow 3 rules:

1) Meaningful
- help describe and explain why customers
currently behave in a specific way.
2) Actionable
- allow for feasible execution, in terms of
targeting and positioning to that segment
3) Financially attractive
-must be economically worth going after.

TARGETING

The process of evaluating market segments

for overall attractiveness, and choosing
segments that are consistent with the firms
marketing strategy and capabilities.

In evaluating market segments for

overall attractiveness, firm can look at
three factors:
1)

Segment size and Growth

- the segment would be worthwhile
financially.
- attractive segment size depends largely
on the firm.
- Segment growth is usually a natural
attraction for choosing segment.(hope to
grow in line with the segments)
- however, growing segments often attract
competitors.

2)

Segment Structural Attractiveness

- A segment characteristics
- can provide insight into a segments
future profitability.
- based on Porters five forces model.

3)

Company Objectives and Resources

- Even if a segment is financially and
structurally attractive, it is not a best
segment for the firm if not consistent with
firms own goals and resources.

POSITIONING
Positioning allows companies to place about
their products in the minds of their target
segment by communicate distinct
advantages over competing brands.

Positioning Strategies
1)

2)

3)

Positioning on features/services
- to be perceived as the best in a particular
product or service attribute. (style, speed
of delivery)
Positioning on benefits
- to be perceived as effectively providing
benefits (happiness, fun)
Positioning on specific usage
- to be perceived as being practical and
functional for a given purpose

4)

5)

6)

7)

Positioning on user category

- to be perceived as the appropriate offering
for a specific type of user
Positioning on against another products
- to be perceived as better than a competitor.
Product-class positioning
- to be perceived as offering a different type
of product from what customers aspect
Hybrid positioning
-combination of two or more of the above
categories.