Strategic goal setting

Any marketing strategy should be based on clearly defined corporate objectives, but there has been a tendency for Internet marketing to be conducted separately from other business and marketing objectives. Porter (2001) has criticised the lack of goal setting when many organisations have developed Internet strategies. He notes that many companies, responding to distorted market signals, have used 'rampant experimentation' that is not economically sustainable. This has resulted in the failure of many 'dot-com' companies and also poor investments by many established companies. He suggests that economic value or sustained profitability for a company is the final arbiter of business success.

It is best, of course, if the Internet marketing strategy is consistent with and supports business and marketing objectives. For example, business objectives such as increasing market share in an overseas market or introducing a new product to market can and should be supported by the Internet communications channel.

Goal setting for the Internet will be based on managers' view of the future relevance of the Internet to their industry. Scenario-based analysis is a useful approach to discussing alternative visions of the future prior to objective setting. Lynch (2000) explains that scenario-based analysis is concerned with possible models of the future of an organisation's environment. He says:

Scenario-based analysis

Models of the future environment are developed from different starting points.

The aim is not to predict, but to explore a set of possibilities; scenarios take different situations with different starting points.

Lynch distinguishes qualitative scenario-based planning from quantitative prediction such as that of Activity 4.3 (see page 171). In an Internet marketing perspective, scenarios that could be explored include:

1 One player in our industry becomes dominant through use of the Internet ('Amazoning' the sector).

2 Major customers do not adopt e-commerce because of organisational barriers.

3 Major disintermediation (Chapter 2) occurs in our industry.

4 B2B marketplaces do or do not become dominant in our industry.

5 New entrants or substitute products change our industry.

Through performing this analysis, better understanding of the drivers for different views of the future will result, new strategies can be generated and strategic risks can be assessed. It is clear that the scenarios above will differ between worst-case and best-case scenarios.

As a starting point for setting specific objectives, it is useful to think through the benefits of the Internet channel so that these benefits can be converted into objectives. It is useful to identify both tangible benefits, for which monetary savings or revenues can be identified, and intangible benefits, for which it is more difficult to calculate financial benefits and costs, but are still important, for example customer service quality. Table 4.2 presents a summary of typical benefits of Internet marketing.

Table 4.2 Tangible and intangible benefits from Internet marketing

Tangible benefits

Intangible benefits

Increased sales from new sales leads giving

*

Corporate image communication

rise to increased revenue from:

*

Enhance brand

• new customers, new markets

«

More rapid, more responsive marketing

• existing customers (repeat-selling)

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