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Chapter 8 E-marketing
According to Chaffey et al. 2009 the term ‘marketing’ tends to be used in two distinct respects in modern management practice. It can describe:
1
The range of specialist marketing functions carried out within many organizations. Such functions include market research, brand and product management, public relations and
customer service.
2
An approach or concept the marketing concept that can be used as the guiding philos- ophy for all functions and activities of an organization. Such a philosophy encompasses all
aspects of a business. Business strategy is guided by an organization’s market and competitor focus and everyone in the organization should be required to have a customer
focus in their job.
The modern
marketing concept
Houston, 1986 unites these two meanings and stresses that marketing encompasses the range of organizational functions and processes that seek to
determine the needs of target markets and deliver products and services to customers and other key stakeholders such as employees and financial institutions. Valentin 1996 argues
that the marketing concept should lie at the heart of the organization, and the actions of directors, managers and employees should be guided by its philosophy.
The modern concept of marketing is much broader than the lay person’s view of mar- keting simply as advertising and sales. Modern marketing philosophy also requires that
organizations be committed to a
marketing or customer orientation
Jaworski and Kohli, 1993. This concept involves all parts of the organization coordinating activities to
ensure that customer needs are met efficiently, effectively and profitably. The development of e-commerce services in response to changes in market needs is one example of market
orientation, as Hughes 2001 has pointed out. In his study of new Internet start-ups and traditional banking operations which use e-commerce, he found that the Internet or
e-business start-ups were more involved in conducting research to understand the cus- tomer experience and then adapting the service accordingly.
E-marketing defined
The term ‘Internet marketing’ tends to refer to an external perspective of how the Internet can be used in conjunction with traditional media to acquire and deliver services to cus-
tomers. An alternative term is ‘
e-marketing
’ for example, McDonald and Wilson, 1999 which can be considered to have a broader scope since it refers to any use of technology to
achieve marketing objectives and has an external and an internal perspective. This is more consistent with the concept of e-business which involves managing both internal and
external communications.
Digital marketing is another similar term, explained in Chapter 1, which is used by online marketing agencies and trade publications.
Distinguishing between e-marketing, e-business and e-commerce
Given that the marketing concept implies a broad meaning for marketing, how can we distin- guish between e-business and e-marketing? We can use a similar device to that of Figure 1.3
to help distinguish between them. The options are:
a Electronic business has some degree of overlap with electronic marketing. From the discussion of the marketing concept above we can reject this since both e-business and e-marketing
are broad topics. b Electronic business is broadly equivalent to electronic marketing. This is perhaps more realistic,
and indeed some marketers would consider e-business and e-marketing to be synonymous. c Electronic marketing is a subset of electronic business. It can be argued that this is most
realistic since e-marketing is essentially customer-oriented and it has less emphasis on supply chain and procurement activities in comparison with e-business.
The marketing concept
The management of the range of organizational
activities that impact on the customer as part of
marketing.
Marketing orientation
Coordinating all organizational activities
that impact on the customer to deliver
customer requirements.
E-marketing
Achieving marketing objectives through use
of electronic communications
technology.
Referring back to Figure 1.3 once more, you may ask what, if e-commerce is best considered as a subset of e-business and e-marketing is also a subset of e-business, is the relationship
between e-commerce and e-marketing? The implication is that they are similar, but e-com- merce is perhaps broader than e-marketing since it involves both buy-side and sell-side
transactions, whereas e-marketing concentrates on sell-side transactions and communications.
An
e-marketing plan
is needed in addition to a broader e-business strategy to detail how the sell-side specific objectives of the e-business strategy will be achieved through marketing
activities such as marketing research and marketing communications. Since the e-marketing plan is based on the objectives of the e-business or business strategy there is overlap between
the elements of each approach, particularly for environment analysis, objective setting and strategic analysis. Figure 8.2 shows how e-marketing activities will inform the e-business
strategy which, in turn, will inform the e-marketing plan.
We will use a similar strategy process model for e-marketing planning to that introduced in Chapter 5. In this chapter we use the SOSTAC™ framework developed by Paul Smith
1999 and this summarizes the different stages that should be involved in a marketing strat- egy from strategy development to implementation Figure 8.3. The stages involved can be
summarized as:
Situation – where are we now? Objectives – where do we want to be?
Strategy – how do we get there? Tactics – how exactly do we get there?
Action – what is our plan? Control – did we get there?
Measurement of the effectiveness of e-marketing is an integral part of the strategy process in order to assess whether objectives have been achieved. The loop is closed by using the analy-
sis of web analytics data Chapter 12 metrics collected as part of the control stage to continuously improve e-marketing through making enhancements to the web site and asso-
ciated marketing communications.
We will now review the six elements of the SOSTAC™ approach to e-marketing planning. Overlap between this coverage and that in Chapter 5 is minimized by cross-referencing
between these chapters.
Is a separate e-marketing plan required?
If there is a specific resource for e-marketing activities such as an e-marketing or e-commerce manager, then they will be responsible for
the e-marketing plan. However, where there is no identified responsibility for e-marketing, which is still the case in many small and medium organi-
zations, there is likely to be no e-marketing plan. This often occurs when marketing managers have limited resources or other priorities and a lack
of recognition that a separate e-marketing plan is valuable.
These problems are typical and commonplace when there is no clear planning or control for e-marketing:
1
Customer demand for online services will be underestimated if this has not been researched and it is under-resourced and no or unrealistic objectives are set to achieve
online marketing share.
E-marketing planning
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Part 2 Strategy and applications
E-marketing plan
A plan to achieve the marketing objectives of
the e-business strategy.
Is a distinct e-marketing plan necessary?
‘A separate e-marketing plan is not necessary as part of the marketing
planning process – e-marketing can and should be integrated into existing
marketing plans.’ Debate 8.1
2
Existing and start-up competitors will gain market share if insufficient resources are devoted to e-marketing and no clear strategies are defined.
3
Duplication of resources will occur, for example different parts of the marketing organ- ization purchasing different tools or different agencies for performing similar online
marketing tasks.
4
Insufficient resource will be devoted to planning and executing e-marketing and there is likely to be a lack of specific specialist e-marketing skills which will make it difficult to
respond to competitive threats effectively.
5
Insufficient customer data are collected online as part of relationship building and these data are not integrated well with existing systems.
6
Efficiencies available through online marketing will be missed, for example, lower communications costs and enhanced conversion rates in customer acquisition and reten-
tion campaigns.
7
Opportunities for applying online marketing tools such as search marketing or e-mail marketing will be missed or the execution may be inefficient if the wrong resources are
used or marketers don’t have the right tools.
8
Changes required to internal IT systems by different groups will not be prioritized accordingly.
9
The results of online marketing are not tracked adequately on a detailed or high-level basis.
10
Senior management support of e-marketing is inadequate to drive what often needs to be a major strategic initiative.
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Figure 8.3
SOSTAC™ – a generic framework for e-marketing planning Situation
analysis
Tactics Actions
Strategy Control
How do we monitor performance? • 5 Ss + web analytics – KPIs
• Usability testingmystery shopper
• Customer satisfaction surveys • Site visitor profiling
• Frequency of reporting • Process of reporting and
actions
The details of tactics, who does what and when
• Responsibilities and structures • Internal resources and skills
• External agencies
Where are we now? • Goal performance 5 Ss
• Customer insight • E-marketplace SWOT
• Brand perception • Internal capabilities and resources
How exactly do we get there? the details of strategy
• E-marketing mix, including: the communications mix, social networking,