Stage models of the Internet marketing capability

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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:

• Level 1. Company places an entry in a web site that lists company names such as Yellow Pages ( to make people searching the web aware of the existence of the company or its products. There is no web site at this stage.

• Level 2. Simple static web site created containing basic company and product information (sometimes referred to as 'brochureware').

• Level 3. Simple interactive site where users are able to search the site and make queries to retrieve information such as product availability and pricing. Enquiries submitted by a form and transmitted by e-mail may also be supported.

• Level 4. Interactive site supporting transactions with users. The functions offered will vary according to the company. If products can be sold direct then an electronic commerce option for online sales will be available. Other functions might include an interactive customer-service helpdesk.

• Level 5. Fully interactive site providing relationship marketing with individual customers and facilitating the full range of marketing functions relevant for the sector.

A variety of online stage models have been produced since Quelch and Klein (1996) noted the sequence in which web sites develop for different types of company. They distinguish between existing major companies (see Figure 4.6(a)) and start-up companies (see Figure 4.6(b)) that start as Internet companies. The main difference is that Internet start-ups are likely to introduce transaction facilities earlier than existing companies.

However, they may take longer to develop suitable customer service facilities. Stage models can be usefully applied to SME businesses and Levy and Powell (2003) have reviewed different adoption ladders which broadly speaking have four stages of (1) publish, (2) interact, (3) transact and (4) integrate.

(a) Multinational companies

(b) Internet start-ups

Figure 4.6 Levels of web site development in: (a) the information to transaction model and (b) the transaction to information model of Quelch and Klein (1996)

Stage models have been criticised for a variety of reasons. First, as a generic model they typically apply to businesses that have products which are suitable for online sale, but may not apply to the full range of businesses such as the four types of online presence introduced in Chapter 1. Secondly, these stage models are externally focused and do not address the broader development of Internet marketing capabilities within an organisation. Dave Chaffey writing for E-consultancy (2005) has recently developed a framework for assessing internal digital marketing capabilities across a range of companies (Table 4.1). In the Internet marketing context, 'capabilities' refers to the processes, structures and skills adopted for planning and implementation of digital marketing. This was inspired by the capability maturity models devised by the Carnegie Mellon Software Engineering Institute ( to help organisations improve their software development practices. Table 4.1 is intended to help:

1 Review current approaches to digital marketing to identify areas for improvement;

2 Benchmark with competitors who are in the same market sector or industry and in different sectors;

3 Identify best practice from more advanced adopters;

4 Set targets and develop strategies for improving capabilities.

Of the companies assessed within the research, the majority were at Level 3 or 4 overall, although companies may occupy different levels according to different criteria. We return to assessing capabilities using the 7 Ss to implement Internet marketing strategy at the end of the chapter.

Table 4.1 Capability maturity model of E-commerce adoption based on E-consultancy (2005) research


Strategy process and Structure:

performance improvement Location of e-commerce

Senior management buy-in

Marketing integration

Online marketing focus

1 Unplanned


Online channels not part of business planning process. Web analytics data collected, but unlikely to be reviewed or actioned

Experimen tation. No clear centralised e-commerce resources in business. Main responsibility typically within IT


No direct involvement in planning and little necessity seen for involvement

Poor integration. Some interested marketers may experiment with e-communications tools

Content focus. Creation of online brochures and catalogues. Adoption of first style guidelines

2 Diffuse management

Low-level. Online referenced in planning, but with limited channel-specific objectives. Some campaign analysis by interested staff


Small central e-commerce group or single manager, possibly with steering group controlled by marketing. Many separate web sites, separate online initiatives, e.g. tools adopted and agencies for search marketing, e-mail marketing. E-communications funding from brands/businesses may be limited


Management becomes aware of expenditure and potential of online channels


Increased adoption of e-communications tools and growth of separate sites and microsites continues. Media spend still dominantly offline

Traffic focus.

Increased emphasis on driving visitors to site through pay-per-click search marketing and affiliate marketing

3 Centralised management


Specific channel objectives set. Web analytics capability not integrated to give unified reporting of campaign effectiveness


Common platform for content management, web analytics. Preferred-supplier list of digital agencies. Centralised, independent e-commerce function, but with some digital-specific responsibilities by country/product/brand


Directly involved in annual review and ensures review structure involving senior managers from Marketing, IT, operations and finance


Marketing and e-commerce mainly work together during planning process. Limited review within campaigns. Senior e-commerce team-members responsible for encouraging adoption of digital marketing throughout organisation

Conversion and customer experience focus. Initiatives for usability, accessibility and revision of content management system (including search engine optimisation) are common at this stage

Level Strategy process and Structure: Senior management Marketing integration Online marketing focus performance improvement Location of e-commerce buy-in

4 Decentralised operations


Close cooperation between e-commerce and marketing. Targets and performance reviewed monthly. Towards unified reporting. Project debriefs

Decentralised. Digital marketing skills more developed in business with integration of e-commerce into planning and execution at business or country level, e-retailers commonly adopt direct-channel organisation of which e-commerce is one channel. Online channel profit and loss accountability sometimes controlled by businesses/brands, but with central budget for continuous e-communications spend (search, affiliates, e-communications)

Driving performance. Involved in review at least monthly


Marketing and e-commerce work closely together through year. Digital media spend starts to reflect importance of online channels to business and consumers

Retention focus. Initiatives on analysis of customer purchase and response behaviour and implementation of well-defined touch strategies with emphasis on e-mail marketing. Loyalty drivers well known and managed

5 Integrated and optimised

Multi-channel process. The interactions and financial contribution of different channels are well understood and resourced and improved accordingly


Majority of digital skills within business and e-commerce team commonly positioned within marketing or direct sales operation. 'Front-end' systems development skills typically retained in e-commerce team


Less frequent in-depth involvement required. Annual planning and six-monthly or quarterly review.

Complete. Marketing has full complement of digital marketing skills, but calls on specialist resource from agencies or central e-commerce resource as required. Online potential not constrained by traditional budgeting processes

Optimisation focus. Initiatives to improve acquisition, conversion and retention according to developments in access platform and customer experience technologies. May use temporary multi-disciplinary team to drive performance

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