Sunday, 30 June 2019

What is E-Marketing?

What is E-Marketing?

e-marketing


This article introduces you to the world of e-marketing; its background and its benefits. It explores the current e-marketing situation, e-marketing definitions and examples of good and bad e-marketing. Chances are your organization is already engaged in e-marketing, so in this article and throughout the book, we give you a planning framework and checklists to evaluate and improve your current e-marketing practices or plan new initiatives. The article is structured using a simple aide-mémoire, called SOSTAC ®. SOSTAC  ® is used by thousands of professionals to produce all kinds of plans (marketing plans, corporate plans, advertising plans, and e-marketing plans). In later articles and, in particular, we provide a step-by-step guide to creating an e-marketing plan. In this article, we ’ll use SOSTAC ® to provide a structure for an initial review.

INTRODUCING SOSTAC PLANNING FOR E-MARKETING

SOSTAC ® stands for Situation Analysis, Objectives, Strategy, Tactics, Actions and Control (Figure 1.1 ). It is described in more detail in Smith (1998, 2001) and Smith et al. (1999, 2004) who note that each stage is not discrete, but there is some overlap during each stage of planning – previous stages may be revisited and refined, as indicated by the reverse arrows in Figure 1.1 . For creating an e-marketing plan, the planning stages are: 
● Situation Analysis means ‘where are we now? ’ (In the context of this article, this includes a definition of ‘ e ’ terms, growth in users and change in the marketplace, as well as examples of good and bad e-marketing.)
● Objectives mean ‘where do we want to be? ’ Why bother going online, what are the benefits, what is the purpose of going to all of this effort? We describe five main objectives, reasons or benefits of being online which you should exploit.
● Strategy means ‘how do we get there? ’ Strategy summarizes how to fulfill the objectives. What stage of ‘ e ’ evolution and level of database integration is required, what segments and positioning should drive the overall marketing mix and the promotional mix, right down to the different contact strategies for different segments, and which e-tools should be selected? Getting your e-strategy right is crucial. As Kenichi Ohmae says ( Ohmae, 1999 ), ‘ there ’ s no point rowing harder if you ’re rowing in the wrong direction’.
● Actions refer to action plans and project management skills – essential skills we won ’ t go into in this article.
● Control looks at how you know if your e-efforts are working, and what improvements can be made – again, we won ’ t delve in too deeply in this article

e-marketing

Situation – the wired-up world 

Let ’ s consider the current situation of e-marketing – where the marketplace migrates into the electronic marketspace. How significant is this change? The Internet is continuing to grow rapidly and seamlessly across borders and into an online world already inhabited by over a billion customers. Given its scale and the benefits it offers to these customers and business, it is a big part of the future of all businesses. The Internet is far more than ‘ just another channel to market ’ – a misguided phrase that is heard surprisingly frequently. We will explain how the Internet can and should be used to transform how a business communicates with its audience and delivers enhanced brand experiences. Despite the vast number of people (and businesses) buying online, don ’t you think it ’s a little weird when you consider that millions, billions and even trillions of dollars, pounds and euros pass seamlessly through wires interconnecting lots of devices all around the world? Google has built a billion-dollar business simply by charging for mouse clicks, some costing up to $50! Perhaps it’s even weirder when you consider that in future a lot of it will be wireless. In China, there are already more mobile phone subscribers than the population of the US, while meanwhile in Japan, surveys by Comscore show that usage of the web by mobile nearly equals that by PC. Some say it ’s ‘ surreal ’ others say it ’s ‘ sublime ’ and others again say ‘ridiculous ’ when you consider that the direction of many of these millions, billions and trillions will be determined by robots, info-bots, shopping-bots, portals, and infomediaries. The future Weird Wired World may sound like a wonder of convenience when our refrigerators negotiate the best price for new supplies or a washing machine chooses the best utility supplier for any particular wash – courtesy of embedded chips complete with Internet access. Or is it introducing unnecessary complexity for which demand is limited? Consumers often take longer to embrace new ideas than technologists or some marketers expect.

THE CONNECTED WORLD BY E-MARKETING

And it ’s not just washing machines, but rather anything and everything can be wired up, or connected, to the Internet. The most common way of accessing the Internet remains the desktop computer or laptop. What are the up-and-coming ways of accessing the Internet? Interactive digital TV, interactive radio, interactive kiosks, mobile phones, palmtops, planes, trains, and automobiles all access the Internet. In fact, the average luxury car today has more computing power in it than the rocket that landed on the moon. Cars can also be ‘ connected ’ so that they can alert roadside repair companies to your location before you actually break down. Just about anything can be wired up, courtesy of the powerful combination of computer chips and cordless or wireless technology, including higher speed data transfer protocols such as 3G, HSDPA (High-Speed Data Packet Access), WAP technology (Wireless Application Protocol) for rendering simple content and Bluetooth for data transfer between mobile phones and other hand-held devices.

RESEARCH, TRENDS, AND FORECASTS OF E-MARKETING

To effectively plan your e-marketing to predict your results, you need to tap into the wealth of research about current Internet usage and future trends. In Table 1.1 we summarize a selection of free and paid for services to help you analyze your e-marketplace.


Situation – B2C, B2B, C2B, and C2C E-Marketing

The options for digital communications between a business and its customers are summarized in Figure 1.2. Traditionally, the bulk of Internet transactions are from business-to-business or industrial and commercial markets known as B2B (business-to-business) and consumer markets known as business-to-consumer ( B2C ) markets (like cars and cola).

B2B AND B2C

This is where the bulk of online business occurs. Most estimates suggest that B2B companies will reap ten times more revenue than their B2C counterparts. Once upon a time marketing used to learn from the FMCG manufacturers like Guinness, Coca-Cola, and Heinz, while industrial marketing, or B2B marketing, was considered by some to be less exciting. This is now no longer the case. In the online world, B2B is already much bigger than B2C. Almost ten years ago General Electric made the decision to procure $1 billion worth of purchases online in year one, followed by $3 billion in year two, followed by total procurement online. Cisco systems announced many years ago that they will no longer do business with suppliers who can ’ t take orders over the web. Major organizations, such as government councils, are also moving online, e.g. from 2005 the British Government ’s Local District Councils only procure their goods and services online. Several years ago Ford and General Motors combined forces through the B2B marketplace Covisint ( www.covisint.com ) and moved their then $300 and $500 billion dollar supply chains online.

This created great hype about the potential of online B2B auctions which did ’ t really realize expectations. Today, Covisint is no longer an open marketplace used by a handful of motor manufacturers, instead, it is a software provider which helps over 30 000 companies in automotive and other sectors, such as Healthcare, manage communications with their suppliers. In 2003, Covisint sold its auctions business to Ariba which now has 120 000 suppliers in its network – a surprisingly small number for the largest online network. Auctions or ‘sourcing events ’ are only part of a range of ‘spend management solutions ’ available to buyers. Today the benefits of online B2B commerce are more about identifying products in electronic catalogs from a range of suppliers, selecting the best option and then managing the paperwork and workflow electronically. The eBay auction model has not really taken hold in B2B, although eBay does have their own B2B auction facility ( http://business. ebay.com, Figure 1.3 ) selling products as diverse as tractors and office furniture, where there is an annual turnover of $2 billion in goods. But this is a small fraction of all products sold which had a Gross Merchandized Volume (GMV) of $52 billion in 2006. Remember that eBay is ’t just about auctions, with 40% of its turnover now arising from fixed-price sales. However, the marketplace model is ’t dead, it just didn't ’t grow as quickly as many anticipated.


C2C AND C2B

Whether B2C or B2B, don ’t forget C2C and C2B. C2C models have proved one of the most disruptive examples of online business technology. An early indication of the popularity of C2C was the growth of online consumer auctions at eBay and niche communities focusing on interests such as sport, films or pastimes. More recently, dramatic growth in C2C interactions has been fuelled by the growth of social networks such as Bebo, Facebook, and MySpace and their business equivalent Linked- In which we examine in more detail in article Social interactions are now so important that they are reducing consumption of other forms of digital media and traditional media, so all companies need to develop a strategy to engage these consumers. Customer-to-business models may play a significant role in some B2B or B2C sectors. In this model, a potential buyer approaches a marketplace of sellers who then compete for the sale. In the consumer market Priceline ( www.priceline.com ) and other price comparison sites such as Kelkoo follow this model. In B2B, the Covisint and Ariba services referred to above have C2B options. C2B also involves customers developing their own content online, which is known as user-generated content UGC) where businesses facilitate it. For example, many smaller travel companies, such as Spa breaks ( www.supabreaks.com ) and TravelRepublic ( www.travel- republic.co.uk ) have exploited the approach originally adopted by Trip Advisor ( www.tripadvisor.com ). Do you have a plan for UGC?


TYPES OF ONLINE PRESENCE

When assessing the relevance and potential of e-marketing for a business, remember that different business types offer different opportunities and challenges. Chaffey et al. (2006) identify five main types of online presence or components possible as part of a site: 
1 Transactional e-commerce site. Manufacturers or e-retailers provide products available for purchase online. The main business contribution is through the sale of these products. The sites also support the business by providing information for consumers who prefer to purchase products offline.

2 Services-oriented relationship building web site. Provides information to stimulate purchase and build relationships. Products are not typically available for purchase online. Information is provided through the web site, along with e-newsletters, to inform purchasing decisions. The main business contribution is through encouraging offline sales and generating inquiries or leads from potential customers. Such sites also help by adding value for existing customers by providing them with information of interest to them.

3 Brand-building site. Provides an experience to support the brand. Products are not typically available for online purchase, although merchandise may be. The main focus is to support the brand by developing an online experience of the brand. They are typical for low-value, high-volume, fast-moving consumer goods (FMCG brands).

4 Portal or media site. These intermediaries provide information or news about a range of topics. Portal refers to a gateway to information with a range of services such as a search engine, directory, news, shopping comparison, etc. This is information both on the site and links through to other sites. These are the three different types of destination sites described above. Portals have a diversity of options for generating revenue, including advertising, commission-based sales, and sale of customer data (lists).

5 Social network or community site. A site enabling community interactions between different consumers (C2C model). Typical interactions including posting comments and replies to comments, sending messages, rating content and tagging content in particular categories. Well-known examples include Bebo, Facebook, MySpace, and Linked-In. Other startups also have a social network element such as Delicious (social bookmarking or rating web pages), Digg (comment on blog postings), Flickr (image tagging), Technorati (blog postings) and YouTube (videos). In addition to distinct social network sites such as these, they can also be integrated into other site types, in particular into media owned sites. Large social networks such as Facebook or MySpace are effectively media owners and advertising is their main revenue source.

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