The online revenue contribution

A key objective for Internet marketing is the online revenue contribution. This is a measure of the extent to which a company's online presence directly impacts the sales revenue of the organisation and can be used to influence resource allocation to the online channels. Online revenue contribution objectives can be specified for different types of products, customer segments and geographic markets. For example, in 1997, low-cost airline easyJet set an online contribution objective of 50 by the...

Zopa launches a new lending model

It might be thought that innovation in business models was left behind in the dot-com era, but still fledgling businesses are launching new online services. Zopa is an interesting example launched in March 2005. Zopa is an online service which enables borrowers and lenders to bypass the big high street banks. It is an example of a consumer-to-consumer exchange intermediary. It illustrates the challenges and opportunities of launching a new business online, especially a business with a new...

External value chains and value networks

Reduced time to market and increased customer responsiveness can be achieved through reviewing the efficiency of internal processes and how information systems are deployed. However, these goals are also achieved through consideration of how partners can be involved to outsource some processes that have traditionally been considered to be part of the internal value chain of a company. Porter's original work considered both the internal value chain and the external value chain or network. Since...

Stage 2 Defining the performance metrics framework

Measurement for assessing the effectiveness of Internet marketing can be thought of as answering these questions 1 Are corporate objectives identified in the Internet marketing strategy being met 2 Are marketing objectives defined in the Internet marketing strategy and plan achieved 3 Are marketing communications objectives identified in the Internet marketing plan achieved How efficient are the different promotional techniques used to attract visitors to a site These measures can also be...

Stage 3 Tools and techniques for collecting metrics and summarising results

Techniques to collect metrics include the collection of site-visitor activity data such as that collected from site log-files, the collection of metrics about outcomes such as online sales or e-mail enquiries and traditional marketing research techniques such as questionnaires and focus groups which collect information on the customer's experience on the web site. We start by describing methods for collecting site-visitor activity data and then review more traditional techniques of market...

Intermediary analysis

Chapter 2 highlighted the importance of web-based intermediaries such as portals in driving traffic to an organisation's web site. Situation analysis will also involve identifying relevant intermediaries for a particular marketplace and look at how the organisation and its competitors are using the intermediaries to build traffic and provide services. For example, an e-tailer needs to assess which comparison services such as Kelkoo www.kelkoo.com and Pricerunner www.pricerunner.com it and its...

Campaign response mechanics

Ethanol Production Process Corn Oil

Digital media have increased the choice of response mechanisms. We will look at online and offline response mechanisms that need to be considered for both online and offline campaign media. Reviewing response mechanisms is important since too narrow may limit response, but too broad and unfocused may not give the right types of response -marketers need to emphasise the response types most favourable to the overall success of the campaign. Policies for response mechanism across campaigns should...

Downward pressure on price

An efficient market where there are an infinite number of suppliers and buyers and complete price transparency. Price transparency is one reason for downward pressure on price. The Internet also tends to drive down prices since Internet-only retailers which do not have a physical presence do not have the overhead of operating stores and a retailer distribution network. This means that online companies can offer lower prices than offline rivals. This phenomenon is marked in the banking sector...

Key concepts of relationship marketing

'Consistent application of up to date knowledge of individual customers to product and service design which is communicated interactively in order to develop a continuous and long term relationship which is mutually beneficial' (Cram, 1994 , One-to-many communication between a company and potential customers, with limited tailoring of the message, The approach to Internet marketing function is based on customer behaviour within the target audience and then seeks to fulfil the needs and wants of...

The characteristics of interactive marketing communications

Traditional techniques such as print and TV advertising used to generate web site traffic. The customer's purchase decision is influenced by a range of media such as print, TV and Internet. Communications are broadcast from an advertiser to consumers of the message who are passive recipients. The consumer is proactive in selection of the message through actively seeking out a web site. Through understanding the key interactive communications characteristics enabled through digital media we can...

The IDIC approach to relationship building

Idic Framework

Collecting information about customer needs through their lifetime, An alternative process for building customer relationships online has been suggested by Peppers and Rogers 1998 and Peppers et al. 1999 . They suggest the IDIC approach as a framework for customer relationship management and using the web effectively to form and build relationships Figure 6.8 . Examples of the application of IDIC include 1 Customer identification. This stresses the need to identify each customer on their first...

Online Customer Experience Pyramid

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The combination of rational and emotional factors of using a company's online services that influences customers' perceptions of a brand online. Developing the capability to create and maintain an effective online presence through a web site is a key part of Internet marketing. 'Effective' means that the web site and related communications must deliver relevance to its audience, whether this be through news content for a portal, product and service information for a business-to-business site or...

The scope of Internet marketing strategy

When reviewing options for Internet marketing strategy, it is also useful to keep in mind that Internet strategy involves much more than the narrow focus of a strategy to develop web site services. Although this is part of Internet marketing strategy, marketers also examine broader issues of using the web, e-mail and databases strategically as communications and relationship-building tools which must integrate with other marketing communications. Internet strategy may also involve redesigning...

The relaunched Napster changes the music marketing mix

The element of the marketing mix that involves the methods and procedures companies use to achieve all marketing functions. The element of the marketing mix that involves the tangible expression of a product and how it is purchased and used. This case about online music subscription service Napster illustrates how different elements of the mix can be varied online. It also highlights success factors for developing an online marketing strategy since Napster's proposition, objectives, competitors...

Internet Intranet Extranet

Intranet Extranet Internet Relation

Evolution of technologies and communications approaches which have grown in importance since 2004-5. The main characteristics of Web 2.0 are that it typically involves Web services or interactive applications hosted on the web such as Flickr www.flickr.com . Google Maps http maps.aooale.com or blogging services such as Blogger.com or Typepad www.tvpepad.com Supporting participation - many of the applications are based on altruistic principles of community participation Encouraging creation of...

Decision 7 Online communications mix and budget

The decision on the amount of spending on online communications and the mix between the different communications techniques such as search engine marketing, email marketing and online advertising is closely related to the previous one. Varianini and Vaturi 2000 suggest that many e-commerce failures have resulted from poor control of media spending. They suggest that many companies spend too much on poorly targeted communications. They suggest the communications mix should be optimised to...

Performance management for Internet marketing

A process used to evaluate and improve the efficiency and effectiveness of an organisation and its processes. The process by which metrics are defined, collected, disseminated and actioned. To improve results for any aspect of any business, performance management is vital. As Bob Napier, Chief Information Office, Hewlett-Packard was reported to have said back in the 1960s, You can't manage what you can't measure. The processes and systems intended to monitor and improve the performance of an...

A generic strategic approach

A framework for approaching strategy development. A logical sequence and a series of activities leading to the setting of marketing objectives and the formulation of plans for achieving them. A strategy process model provides a framework that gives a logical sequence or 'roadmap' to follow to ensure inclusion of all key activities of strategy development and implementation. In a marketing context, these strategy development and implementation activities are coordinated through a marketing plan,...

Velocity of new product development

Quelch and Klein 1996 note that the Internet can also be used to accelerate new product development since different product options can be tested online more rapidly as part of market research. Companies can use their own panels of consumers to test opinion more rapidly and often at lower costs than for traditional market research. In Chapter 1, Figure 1.7, we saw how the Dubit Informer is used by brands to research the opinions of the youth market. Another aspect of the velocity of new product...

Internet strategy is a channel marketing strategy

Political Web Marketing Strategy

We need to remember that an Internet marketing strategy is a channel marketing strategy which defines how a company should set channel-specific objectives and develop a differential channel-proposition and channel-specific communications consistent with the characteristics of the channel and consumer usage of it. The Internet marketing strategy determines the strategic significance of the Internet relative to other communications channels which are used to communicate directly with customers at...

Decision 8 Organisational capabilities 7S

A useful framework for reviewing an organisation's capabilities to implement Internet marketing strategy is shown in Table 4.5 applied to Internet marketing. This 7S framework was developed by McKinsey consultants in the 1980s and summarised by Waterman et al. 1980 . Which are the main challenges in implementing strategy E-consultancy 2005 surveyed UK e-commerce managers to assess their views on the main challenges of managing e-commerce within an organisation. Their responses are summarised in...

Psychographic segmentation for transactional ecommerce

Psychographic Segmentation Example

Market research firm BMRB 2004 has developed this segmentation which is used to represent different attitudes to purchasing online. 1 Realistic Enthusiasts 14 2004, 15 1999 - characterised by an enthusiastic approach toward e-commerce but they typically like to see the product in real life before making a purchase and they often consider that finding the product to purchase is a difficult process. Examples of this include a willingness to use the Internet for purchases in excess of 500 they are...

Models of online buyer behaviour

Standard models of consumer buyer behaviour have been developed by Bettman 1979 and Booms and Bitner 1981 . In these models, consumers process marketing stimuli such as the 4 Ps and environmental stimuli according to their personal characteristics such as their culture, social group and personal and psychological make-up. Together these characteristics will affect the consumers' response to marketing messages. For the Internet marketer, a review of the factors influencing behaviour is...

Stage models of the Internet marketing capability

A further perspective on assessing current usage of the Internet channel is to assess the current level of Internet services and integration of Internet marketing with other marketing activities. Stage models of capability delivered through the online presence assist in this evaluation. Companies that operate in a particular market tend to follow a natural progression in developing their web site to support their marketing activities. The following levels of Internet marketing can be identified...