The emarketing mix

1
The e-marketing mix

• Gary Akehurst

2
e-marketing mix
7 Ps of the marketing mix
Product Digital value Experiencing the brand
Price Price transparency New pricing models
Process Optimizing processes through the web
Marketing mix
Place Representation New distribution models
Physical Evidence Online evidence integration
Promotion Online vs offline mix Integration
People Resourcing and training Contact
strategies
Source Smith Chaffey (2002 34)
3
e-marketing mix

• The marketing mix generally controllable
  variables which when mixed correctly satisfy
  customers and generate a profit
• The digital world changes a number of things but
  the principles stay the same (find out what
  customers want and supply that better than
  competitors)
• What do targeted customers rate highly? is it
  best price, good service, fast delivery, image,
  quality, etc?

4
e-marketing mix

• Electronic differences
• Web site quality, navigation, design
• Product range and service information
• Ease of ordering, selection and access to
  information
• Payment options
• Customer support
• Returns policies

5
e-marketing mix

• Product
• A bundle of benefits that satisfies the needs of
  organisations or consumers, for which they are
  prepared to pay
• The digital world offers all kinds of challenges
  and opportunities
• What business are you in and can it be delivered
  online?
• What benefits (added values) are delivered to
  your customers?
• Can these benefits be deliverable online?
• What other benefits do your customers want? (do
  you know?)
• Can these additional benefits be delivered
  online?

6
e-marketing mix

• Some new products are unique to the internet
  (e.g. search engines) but most products and
  services will be able to add value online (it is
  a question of what information do our traget
  customers want?)
• Some existing products just use the internet as a
  new distribution channel, sometimes adding new
  technology-enables services (e.g. books)
• Some products are well-suited to online sales
  (books, CDs, DVDs, white goods, books, insurance)
• Some products ill-suited to online sales
  (clothes, shoes, perfumes)

7
e-marketing mix

• Reasons for failed online purchases (ranked)
• High shipping/delivery prices (72)
• Browsing or comparison shopping (61)
• Changed mind (56)
• Savings items for later purchases (51)
• Total cost of items too high (43)
• Checkout process too long (41)
• Checkout requires too much personal information
  (35)
• Site requires registration before purchase (34)
• Site unstable or unreliable (31)
• Checkout process confusing (27)
• Source Goldwyn (2001)

8
e-marketing mix

• Reasons for failed online purchases (ranked)
• Page took too long to load (48)
• Site was confusing/couldn't find product (45)
• Product not available/not in stock (32)
• Got logged off or system crashed (26)
• Had to contact customer service (20)
• Product took too long to arrive (15)
• Returned the product (10)
• Site wouldnt accept credit card (9)
• Tried/failed to contact customer service (85)
• Site made unauthorised charge to credit card (5)
• Ordered product but never came (4)
• Wrong product arrived and couldnt return it (4)
• Source Boston Consulting Group (2001)

9
e-marketing mix

• Proportion connecting online in the USA 2004
• Send email (93)
• Send instant message (42)
• Chat in forums (25)
• Share files - music, video, DVD, games (23)
• Dating services (9)
• Make internet phone call (7)
• Check email on mobile device (5)
• Source www.pewinternet.org

10
e-marketing mix

• Internet Activities 
• Source www.pewinternet.org Pew Internet
  American Life Project Tracking surveys 2007
• 70 of American adults use the internet (about
  141 million people).  
• Send or read e-mail  91
• Use a search engine to find information  91
• Search for a map or driving directions  84
• Look for health/medical information 79
• Research a product or service before buying
  it  78
• Check the weather  78
• Look for information on a hobby or interest  77

11
e-marketing mix

• Get travel information  73
• Buy a product  71
• Get news  67
• Visit a local, state or federal government
  website 66
• Buy or make a reservation for travel   63
• Surf the Web for fun   62
• Go to a website that provides information or
  support for a specific medical condition or
  personal situation   58
• Research for school or training  57
• Watch a video clip or listen to an audio
  clip  56
• Source www.pewinternet.org, Pew Internet
  American Life Project Tracking surveys 2007

12
e-marketing mix

• Look for "how-to," "do-it-yourself" or repair
  information 55
• Do any type of research for your job 50
• Get sports scores and information online 45
• Do any banking online  43
• Download other files such as games, videos, or
  pictures  42
• Get financial info online, such as stock quotes
  or mortgage interest rates   41
• Pay bills online  38
• Play online games 35
• Listen to music online at a website  34
• Listen to a live or recorded radio broadcast
  online, such as a newscast, sporting event, or
  radio show  29
• Participate in an online auction  27
• Make a telephone call over the internet 13
• Visit an adult website  13
• Source www.pewinternet.org, Pew Internet
  American Life Project Tracking surveys 2007

13
e-marketing mix

• The extended product (moving beyond the core
  product and enhancing your competitive advantage)
• Warranties and guarantees
• Customer service
• Customer reviews and testimonies
• Celebrity and professional endorsements
• Awards

14
e-marketing mix

• Segmentation based on online viewing behaviour
• Simplifiers want convenience, easier lives with
  quick, quality service, been online for five
  years or more
• Surfers want whats new, move quickly, always
  searching for new experiences to capture surfer
  loyalty web sites need to be cutting edge with
  constant updates and strong brand
• Connectors are novelty seekers, relative novices,
  main purpose to build relationships through chat
  forums and emails
• Bargainers look for deals, spending least time
  online
• Routiners want something special, search news and
  financial sites
• Sportsters want highly interactive content
• These segments will overlap because we use the
  internet for different purposes at different times

15
e-marketing mix
Price
Customer Expectations customer profiles price
expectations (maximum, lowest, expected) product
quality expectations
What Profit Do we require? Gross and Net
Your Costs what are our true costs? (direct,
indirect, fixed, variable, step) what is our
break-even point?
Your Price
Competitors who are they, what are their
products and prices? what makes their products
distinctive? What are they up to?
16
e-marketing mix

• Try and look at your product as your customers
  do
• price is not the only factor which sells a
  product
• if a product is not selling online or offline
  dont automatically assume the price is too high
• customers do not automatically buy the cheapest
  product
• customers often believe that a higher price means
  higher quality

17
e-marketing mix

• Price is about dynamic information
• Consumer awareness of price
• Consumer knowledge of different prices and
  sources
• The internet helps this consumer awareness and
  actions (e.g. price scrapping sites like Kelkoo)
• The internet increases consumer price sensitivity
• Consumers moving to online purchasing across a
  broad range of products and services (prices
  often lower, more convenient, awareness of
  substitutes etc)
• Moving towards personalised pricing (based on the
  targeted customer), loyalty discounts and
  personalised coupons and offers
• Online auctions popular (especially eBay)

18
e-marketing mix

• A low initial price (market penetration pricing)
  is dangerous
• it may be difficult to raise price in the future
• underselling does not guarantee sales
• Remember potential customers will need persuading
  of the benefits of using your product rather than
  competitor products
• better quality
• extra or new features

19
e-marketing mix

• it is very easy to under-estimate all your costs
• set a contingency
• some overheads are often ignored
• you must set price to make a good profit

20
e-marketing mix

• do your market research when setting price
• research what competitors are charging
• research what customers are prepared to pay
• research what benefits customers are seeking

21
e-marketing mix

• Know your customers
• Why do customers buy your product?
• What benefits are they seeking?
• What is their spending power?
• Ask potential customers
• what their maximum price ceiling may be
• what their minimum price floor may be
• expectations of what they would have to pay
• Segment your market, target the winners
• (the most profitable long-term)

22
e-marketing mix

• Remember
• as the volume of business increases, costs
  increase
• as business increases, step costs may be incurred
  in order to expand your capacity
• costs will always accumulate
• direct costs will need to be met whatever the
  volume of business
• Turnover is vanity - profit sanity

23
e-marketing mix

• Pricing Strategies
• pricing must reflect the business objectives and
  nature
• are we trying to increase market share?
• do we have to earn a particular return on capital
  employed?
• are we trying to increase profit to finance
  re-equipping or high product development costs?
• working capital management especially maintaining
  cash flow is essential

24
e-marketing mix

• Pricing can be a problem when you set a price for
  the first time
• when you develop or acquire a new product
• when you introduce a regular product into a new
  market
• when you regularly enter bids for new contract
  work
• Basing your prices on competitors is dangerous
• try and differentiate your product
• if your prices are higher stress the benefits
• if your prices are lower promote this fact
• if you rely on lowest price someone will
• undercut you

25
e-marketing mix

• Remember - higher prices are charged for products
  with high perceived value because
• they are niche or unique products
• they save time, save money and reduce risks
• are faster, last longer, are fashionable
• make the task easier and reduce maintenance costs
• they are attractively packaged
• but you will have to provide good service

26
e-marketing mix

• The e-marketing mix elements of place
  (distribution) and promotion will be covered
  under
• eCRM, B2B e-marketing
• brand building
• online marketing communications

27
e-marketing mix

• People
• A significant mix element service quality is
  essential
• Need to decide on the balance between automated
  online customer service and traditional human
  service to provide service quality, while keeping
  costs under control

28
e-marketing mix

• Use of autoresponders
• Email notifications (order received, update on
  order status, item in stock, order dispatched)
• Call backs
• FAQs (frequently asked questions)
• Online chat
• On-site search engines and site maps

29
e-marketing mix

• Physical Evidence
• Physical evidence reassures online customers
  (offline this means buildings, staff appearance,
  etc)
• Online customers look for reassuring cues and
  clues
• A well-designed, consistent web site
• Guarantees
• Refund policies
• Privacy policies
• Security features
• Professional and trade body memberships
• Quality awards
• Customer reviews and endorsements
• Independent reviews and news items
• Offline evidence needs to managed as well
  (offline and online evidence is complimentary)

30
e-marketing mix

• Process
• Internal and external processes, transactions and
  communications
• All processes impact on customers (product and
  service quality)
• Online most important to continually review and
  revise processes
• Need to integrate back office systems and front
  office systems to provide efficient responses to
  customer orders and requests

31
e-marketing mix

• Chaffey, D., Mayer, R., Johnston, K.
  Ellis-Chadwick, F. (2006). Internet marketing.
  Strategy, implication and practice, (3rd ed).
  London Pearson Education. (2nd ed 2003), chapter
  5 The internet and marketing mix
• Smith, P.R. Chaffey, D. (2002) E-marketing
  excellence. Oxford Butterworth Heinemann,
  chapter 2 ReMix
• Strauss, J., El Ansary, A. and Frost, R. (2006)
  E-marketing. (4th ed), Upper Saddle River, NJ
  Pearson Prentice Hall, chapter 10 Product
  Chapter 11 Price Chapter 12The internet for
  distribution