Docstoc

E Marketing Rajamangala University of Technology Suvarnabhumi E Marketing 05 220 502

Document Sample
E Marketing Rajamangala University of Technology Suvarnabhumi E Marketing 05 220 502 Powered By Docstoc
					                Rajamangala University of Technology Suvarnabhumi




                E-Marketing
                           (05-220-502)

    Part I E-Marketing in Context

    Chapter II Strategic
               E-marketing
suraphon@2009
Chapter II Strategic e-marketing

     The main goal of this chapter is to understand strategic planning
 and the companies seek to achieve their objectives through strategies
 involving e-business and e-marketing.

 After learning this chapter, you will be able to :
 1. Explain the importance of strategic planning, strategy, e-business
      strategy and e-marketing strategy.
 2.   Distinguish between e-business model and identify the main
      e-business models at the activity, business process and enterprise
      level.
 3.   Discuss the use of metrics and the Balance Scorecard to measure
      e-business and e-marketing performance.

                                                                           2
Chapter II Strategic e-marketing


               Case study

     ให้นักศึกษาอ่านกรณีศึกษา เรื่องของ Amazon
           จากเอกสารประกอบการสอนที่แจกให้
         พร้อมสรุปความรู้ที่ได้รับจากเรื่องดังกล่าว

         The Amazon Story

                                                      3
Chapter II Strategic e-marketing


Strategic Planning

Amazon, like every other marketer on and off the web, uses strategic

planning to get ready for a profitable and sustainable business.

Strategic Planning is the “managerial process of developing and maintaining

a viable fit between the organization’s objectives, skills and recourses and

its changing market opportunities” (Kotler 2003 p.89). Two key elements

of strategic planning are the preparation of a SWOT analysis and the

establishment of strategic objectives.
                                                                               4
Chapter II Strategic e-marketing


SWOT Analysis

SWOT (Strength, Weakness, Opportunities and Threats)


Company’s Internal Strengths and Weaknesses with respect to
Environment and the competition and looks at external opportunities
and threats.


Opportunities may help to define a target market or identify new
product opportunities.


Threats are areas of exposure.
                                                                      5
Chapter II Strategic e-marketing


SWOT Analysis

Amazon.com seized the opportunity to sell online.


It had no significant competition.


Its biggest threat was a full-scale push by one of large bookstore chains
to claim the online market.


The company’s greatest weakness was that it had no experience selling
Books or even processing credit card transactions.

                                                                            6
      Chapter II Strategic e-marketing

Internal Capability         Examples
Customer interactions      E-commerce, customer service,
                           Distribution channels
Production and fulfillment SCM, production scheduling,
                           Inventory management
People                     Culture, skills, knowledge management, leadership and
                           commitment to e-business
Technology                 ERP system, legacy application, networks, web site,
                           security, IT skills
Core infrastructure        Financial systems, R&D, HR
            Exhibit 2-1 Key Internal Capabilities for E-business                   7
Chapter II Strategic e-marketing


Strategic Objectives

  Growth   How much can the firm reasonably expect to grow
           in terms of revenues and how fast ? The answer to
           these questions involves a thorough understanding
           of the competition, product life cycle and market
           factors.



                                                               8
Chapter II Strategic e-marketing


Strategic Objectives

 Competitive   How should the firm position it self against other
 position      firms in the industry? Viable positions are industry
               leader (Microsoft), price leader (priceline.com),
               quality leader (Mercedes), nice firm (google.com),
               best customer service (Dell.com) and so forth.



                                                                      9
   Chapter II Strategic e-marketing


  Strategic Objectives

Geographic scope   Where should the firm serve its customers on the
                   continuum of local to multinational ?
Other objectives   Companies often set objectives for the number of
                   industries they will enter, the range of products they will
                   offer, the core competencies they will foster, and so on.



                                                                                 10
Chapter II Strategic e-marketing


Strategic Objectives
For Example:
Amazon switched direction in 2001.

Choosing profitability instead of growth as a strategic objectives.

Next, companies select appropriate strategies to accomplish their
strategic objectives.
                                                                      11
Chapter II Strategic e-marketing


Strategy

Strategy has been used to describe everything from “the course we chart, the
Journey we imagine and at the same time, the course we steer and the trip we
actually make (Nickols 2000, p.6)

Strategy is the means to achieve a goal.

It is concerned with how the firm will achieve its objectives

                                                                               12
Chapter II Strategic e-marketing


Strategy

Strategy has its roots in military action.
For example, the country’s objective is to win the war.
Its strategy is to deploy troops to a particular country, and its
tactics are to land a particular battalion in a specific location
at a specified day and time.
This translates well to business strategy because the firm sets its
growth and other objectives.

                                                                      13
    Chapter II Strategic e-marketing


    From Strategy to Electronic Strategy

E-business strategy is the deployment of enterprise resources to capitalize
On technologies for reaching specified objectives that ultimately improve
performance and create sustainable competitive advantage.

E-Business Strategy = Corporate Strategy + Information Technology


                                                                              14
     Chapter II Strategic e-marketing


     From Strategy to Electronic Strategy

E-Marketing Strategy = Marketing Strategy + Information Technology
    Strategic e-marketing is the design of marketing strategy that capitalizes on the
    organization’s electronic or information technology capabilities to reach
    specified objectives.



                                                                                        15
Chapter II Strategic e-marketing


       Legal – Ethical

 E     Technology
       Competition
       Other Factors
                                Internet
                                                  Markets
           SWOT

                                          E-Marketing Plan
       E=Business
 S      Strategy
         Model              E-Marketing              Implementation
                              Strategy              Marketing Mix/CRM



 P                          Performance Metrics


 Exhibit 2-2 Focusing on Strategy and Performance                       16
Chapter II Strategic e-marketing

Kalakota and Robinson (1999) suggest four appropriate types of rationale :
1.    Strategic justification shows how the strategy fits with the firm’s overall
      Mission and business objectives and where it will take the firm if
      Successfully accomplished.
2.    Operational justification identifies and quantifies the specific process
      improvements that will result from the strategy. For example, if CRM
      software is proposed, how will that translate to increased customer
      retention and higher revenues ?

                                                                                    17
Chapter II Strategic e-marketing

Kalakota and Robinson (1999) suggest four appropriate types of rationale :
3.    Technical justification shows how the technology will fit and provide
      synergy with current information technology capabilities. For example,
      is there interoperability along the currently integrated supply chain ?
4.    Financial justification examines cost/benefit analysis and uses standard
      measures such as ROI (Return on investment) and NPV (net present value)



                                                                                 18
Chapter II Strategic e-marketing


From Business Models to E-Business Models
Business is the method of doing business by which a company can
sustain itself that is, generate revenue. (Rappa 2002, p. 1)

Business models contain three streams :
        - the value proposition
        - the revenue stream
        - the logistical stream
                                                                  19
Chapter II Strategic e-marketing


From Business Models to E-Business Models
E-Business Models • Customer Value
                    • Scope
                    • Price
                    • Revenue sources
                    • Connected activities
                    • Implementation
                    • Capabilities
                    • Sustainability
                                             20
Chapter II Strategic e-marketing



E-Business Models = Business Models + Information Technology
E-Business Models = Internet Business Models
E-Business Models can capitalize on digital data collection and distribution
Techniques without using the Internet.

Internet spawned the vast majority of e-business models.

                                                                               21
Chapter II Strategic e-marketing

Value and Revenue
E-business model is the ways in which it creates value for customer and partners.

Business Partner might include supply chain members such as :
         Suppliers
         Wholesalers
         Retailers
         Firms with which the company joins forces to create new brand


                                                                                    22
Chapter II Strategic e-marketing

Value
Value encompasses the customer’s perceptions of the product’s benefits,
Specifically its attributes, brand name and support services.

                Value = Benefits - Costs
Information technology usually (not always) increase benefits and lower costs
to stakeholders.


                                                                                23
Chapter II Strategic e-marketing

E-Marketing Contributes to the E-Business Model
E-Marketing Increase Benefits
• Online mass customization (Difference products and messages to different
  Stakeholders)
• Personalization (giving stakeholders relevant information)
• 24/7 convenience
• Self-service ordering and tracking
• One-stop Shopping

                                                                             24
Chapter II Strategic e-marketing

E-Marketing Contributes to the E-Business Model
E-Marketing Decrease Costs
• Low-cost distribution of communication messages (e-mail)
• Low-cost distribution channel for digital products
• Lowers costs for transaction processing
• Lowers costs for knowledge acquisition (research and customer feedback)
• Creates efficiencies in supply chain (through communication and inventory
  optimization)
• Decreases the cost of customer service
                                                                              25
Chapter II Strategic e-marketing

E-Marketing Contributes to the E-Business Model
E-Marketing Increase Revenue
• Online transaction revenues such as product, information, advertising and
  subscriptions sales : or commission/fee on a transaction of referral
• Add value to products/services and increase prices
• Increase customer base by reaching new markets
• Build customer relationships and thus increase current customer spending
  (share of wallet)

                                                                              26
   Chapter II Strategic e-marketing

                                                   Pure dot-com
   Business Transformation           Pure          (Amazon)
   (competitive advantage            Play
   Industry redefinition)                             Click and Mortar
                                   Enterprise         (eSchwab, most retailers)
Effectiveness
(customer retention)            Business Process             CRM

Efficiency                                                        Brochure ware
(Cost reduction)                   Activity
                                                                  E-Mail
                       Level of Commitment to E-Business                          27
Chapter II Strategic e-marketing


Activity Level of E-Business Model
             Online purchasing
             Order processing
             E-Mail
             Content publisher
             Business Intelligence (BI)
             Online Advertising
             Online sales promotion
             Pricing strategies
                                           28
          Chapter II Strategic e-marketing
                E-Business Model Classification
          Activity Level               Business Process Level            Enterprise Level
1.   Online processing            1.   Customer relationship     1.   E-commerce, direct selling,
2.   Order purchasing                  Management (CRM)               content sponsorship
3.   E-Mail                       2.   Knowledge management      2.   Portal
4.   Content publisher                 (KM)                      3.   Broker models Online
     Business Intelligence (BI)                                       exchange, hub , Online
5.                                3.   Supply chain Management        auction
6.   Online Advertising           4.   Community building        4.   Agent models
7.   Online sales promotion            online                         Manufacturer’s agent
8.   Dynamic Pricing strategies   5.   Database marketing             Catalog aggregator
     online
                                  6.   Enterprise resource            Metamediary
                                       planning (ERP)                 Shopping agent
                                  7.   Mass customization             Reverse auction
                                                                                                    29
Chapter II Strategic e-marketing


Pure Play
 Pure Play are business that began on the Internet, even if they subsequently
 added a brick-and-mortar presence.

 We do not include pure plays in E-business Model Classifies because they
 start right at the top of pyramid rather than progressing upward as do
 traditional brick-and-mortar firms.


                                                                                30
Chapter II Strategic e-marketing


   Fully optimized e-business that uses the Internet to sell is the sum
   of multiple e-business activities and process :



EB = EC+BI+CRM+SCM+ERP

                                                                          31
     Chapter II Strategic e-marketing


                  Balance Scorecard
Customer         Internal Business Innovation and       Financial
Perspective      Perspective       Learning Perspective Perspective
Goals Measures   Goals Measures Goals Measures Goals Measures




                                                                      32
Chapter II Strategic e-marketing


             ROI (Return On Investment)
ROI is calculated by dividing net profit by total assets.
Marketer often evaluate ROI for specific e-business projects by dividing the
Project’s profits by its investment dollars-such as the research, development
And testing funds needed to introduce the new service.




                                                                                33
Chapter II Strategic e-marketing


           ROI (Return On Investment)
          Net Profit                        Firm-Wide Return on Investment
Formula   Net Profit (Before taxes)=Sales   ROI = Net Profit / Total Assets
          Revenue minus :                   Total Assets :
          1.   Cost of goods sold           1.    Fixed assets
          2.   Expenses (sales,             2.    Current assets (Cash +
               marketing, delivery,               inventory + accounts
               overhead, miscellaneous)           receivable)
Example   $1 million in sales minus         ROI = $50,000 / $2,000,000
          ($500,000 cost of goods sold,
          $250,000 marketing costs and
          $200,000 administrative costs)
          = $50,000 net profit (5%)         ROI = 2.5 %
                                                                              34
                Rajamangala University of Technology Suvarnabhumi




                E-Marketing
                            (05-220-502)

          Chapter II Strategic
                     E-marketing

                            Q&A
suraphon@2009

				
DOCUMENT INFO