Marketing Strategy in Internet Marketing What is Internet Marketing? The previous definition can be divided into five components: 1. A Process; 2. Building and Maintaining Customer Relationships; 3. Online; 4. Exchange; and 5. Satisfaction of Goals of Both Parties. Seven Stages of Internet Marketing 1. Setting Corporate and Business-Unit Strategy 2. Framing the Market Opportunity 3. Formulating the Market Strategy 4. Designing the Customer Experience 5. Designing the Marketing Program 6. Crafting the Customer Interface 7. Evaluating the Results of the Marketing Program What is Marketing Strategy? Marketing strategy has three components: 1. Segmentation, or identifying relevant market segments with specific needs 2. Targeting, or choosing an attractive segment consistent with a firm’s resources and goals; and 3. Positioning, or strategically communicating the product’s benefits to the target segment. Egghead.com Example Initially an offline software retailer, it changed its business strategy completely in 1998 by moving its entire business online. Unique assets include: Currently being the largest retail auction site on the Internet A strong brand name Strong wholesale relationship with United Stationers Business center that provides specialty services How does Egghead.com compete? Targets small and medium businesses, and government and education segments. Positions itself on three variables: value, selection and customer service. Internet Marketing Scenarios Pure-Play Scenario Brick-and-Mortar Scenario Firms such as Yahoo!, eBay Firms such as The Gap with and Egghead.com both offline retail stores and an Highly likely that both online online store and offline marketing levers (e.g. customer e-mails and Since offline stores preceded print ads) are going to be online store, Gap online must used to build a customer optimize its online marketing relationship. strategy within the context of Processes of segmentation, Gap’s broader strategy – i.e. targeting and positioning its offline positioning, image, remain largely the same as and asset base. for offline business. Internet Marketing Strategy: Pure Play Firms Bases for Segmentation Demographic, geographic, psychographic, cognitive and behavioral. Effective segmentation is meaningful, actionable and financially attractive. Target Market Segment size and growth Segment structural attractiveness Company objectives and resources Internet Marketing Strategy: Pure Play Firms Positioning Features/ services Benefits Specific usage occasions User category Against another product Product-class Hybrid Positioning Plan 1. Identify actual product positioning. 2. Determine ideal product positioning. 3. Develop alternative strategies for achieving ideal. 4. Select and implement the most promising alternative. 5. Compare new actual position with ideal. Internet Marketing Strategy: Brick-and-Mortar Firms Segmentation for BAMs moving online No change Market expansion Market reclassification Reclassified expansion Targeting for BAMs moving online Blanket targeting Beachhead targeting Bleed-over targeting “Be different” targeting Internet Marketing Strategy: Brick-and-Mortar Firms Positioning for BAMs moving online Blanket positioning Beachhead positioning Bleed-over positioning “Be different” positioning Marketing Strategy in the New Economy Firm The Internet has and will continue to affect marketing strategy in four broad ways: 1. Finer gradations of segmentation 2. Faster cycle time of marketing strategy decisions 3. Increased accountability of marketing efforts 4. Increased integration of marketing strategy with business strategy and operations Stage Four: Designing the Customer Experience Customer experience should correlate with the firm’s positioning and marketing strategy. Customer experience constitutes a bridge between high-level marketing (step three) and marketing program tactics (step five).
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