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E-MARKETING 5/EJUDY STRAUSS AND RAYMOND FROST

Chapter 2: Strategic E-Marketing and Performance

Metrics

2009 Pearson Education,

Inc. Publishing as PrenticeHall

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Chapter 2 Objectives

After reading Chapter 2, you will be able to:

Explain the importance of strategic planning,strategy, e-business strategy, and e-marketing

strategy. Identify the main e-business models at the

activity, business process, and enterpriselevels.

Discuss the use of performance metrics andthe Balanced Scorecard to measure e-business and e-marketing performance.

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2009 Pearson Education, Inc.Publishing as Prentice Hall

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Amazon.com


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Founded in 1995 as an online retailer.Did not become profitable until Q4 2001.

In 2007, generated $14.8 billion in net sales,

$476 million in net income. Leveraged its competencies into different e-

business models. Established e-commerce partnerships with Target,

Macys, and others. Provided developer services.

Created the first affiliate program.

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Amazon.com, cont.

Amazons success is based on selection,

lower prices, product availability, innovativetechnology, and better product information.

CEO Jeff Bezos is not interested in expandingto the physical world.

Which of Amazons core competencies do you

think will drive its strategy in the future?

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Strategic Planning

A managerial process to develop and maintain aviable fit between the organization and itschanging market opportunities.

Process identifies firms goals forGrowth

Competitive position

Geographic scopeOther objectives, such as industry, products,

etc.

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ESP: Environment, Strategy, andPerformance


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The e-marketing plan flows from theorganizations overall goals and strategies.

The ESP framework illustrates the

relationships among environment, strategy,and performance.

A SWOT analysis of the business environment

(E) leads to the development of strategy (S)and the measurement of performance (P).

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ESP Framework


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Strategy

Strategy is the means to achieve a goal.

E-business strategy

Strategy that deploys enterprise resources to

reach performance objectives, competitiveadvantages.

E-marketing strategy

Strategy that capitalizes on informationtechnology to reach marketing objectives.

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Business Models

A business model is a method for long-termsurvival and a value proposition for partners,customers, and revenue.

E-business models include the use ofinformation technology to achieve long-termgoals.

Firm selects one or more models as strategiesto accomplish enterprise goals.

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Selecting a Business Model


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A firm will select one or more business modelsas strategies to accomplish enterprise goals.

Components of business model selections:

Customer value Scope

Price Revenue sources

Connected activities Implementation

Capabilities Sustainability

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Level of Commitment to E-Business


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Pure

Play

Enterprise

Business Process

Activity

Pure Dot-Com

(Amazon)

Click and Mortar

(eSchwab, most retailers)

Customer

Relationship

Management

Brochureware

E-Mail

Le

veo

usnessImpact

Business Transformation

(competit ive advantage,industry redefinition)

Effectiveness

(customer

retention)

Efficiency

(cost

reduction)

Both online and offline

(Dell and most retailers)

e-mail, blog

Pure dot-com

(Amazon, MySpace)

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Activity-Level Models

1. Order processing

2. Online purchasing

3. E-mail

4. Content publisher

5. Business intelligence (BI)

6. Online advertising and public relations (PR)

7. Online sales promotions

8. Dynamic pricing strategies online

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Business Process-Level Models

1. Customer relationship management (CRM)

2. Knowledge management (KM)

3. Supply chain management (SCM)

4. Community building online

5. Database marketing

6. Enterprise resource planning (ERP)

7. Mass customization

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Enterprise-Level Models

1. E-commerce, direct selling, content sponsorship

2. Portal

3. Social networking

4. Broker models Online exchange, hub

Online auction

5. Agent models Manufacturers/selling agents

Shopping agent

Reverse auction

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Pure Play Models

Pure plays are businesses that began on theinternet.

They represent the top level of the E-Business

pyramid. Pure plays face significant challenges.

They must compete as new brands.

They may need to take customers away fromestablished businesses.

Some pure plays have redefined industries:E*Trade, eBay, Yahoo!, MySpace.

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Performance Metrics

Performance metrics are specific measuresdesigned to evaluate the effectiveness andefficiency of operations.

Performance metrics:Provide measurable outcomes.

Must be easy to understand and use.

Must be actionable.Can be utilized for employee evaluations.

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Web Analytics


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Web analytics, commonly called metrics, is thestudy of user behavior on Web pages.

Metrics measure activities such as:

Click throughsVisitor patterns

Length of time spent on a page or site

Conversions to sales Web analytics software helps companies

analyze data on server logs for marketingpurposes.

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Social Engagement Metrics


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Online measurement also includes metrics forevaluating Web 2.0 technologies.

Social engagement metrics allow marketers to

know howvisitors participate, not just whetherthey landed on a page.

Time spent viewing a video, playing a game,or listening to music.

Writing a comment on a blog.

Downloading a MP3 file, ring tone, or othercontent.

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The Balanced Scorecard


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The Balanced Scorecard provides a frameworkfor understanding e-marketing metrics.

The Balanced Scorecard provides 4

perspectives.Customer perspective

Internal perspective

Learning and growth perspectiveFinancial perspective

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The Balanced Scorecard:Customer Perspective

The customer perspective scorecard includes waysto measure goals such as customer loyalty,satisfaction, appropriateness of target markets, etc.

Loyalty and satisfaction measures may includepercentage of visitors who return to site and timebetween visits.

Transaction measures may include measurement

of unique visitors, online sales abandoned, etc. Exhibit 2.6 provides a list of customer goals and

measures.

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The Balanced Scorecard:Internal Perspectives


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The Internal perspective scorecard includesways to measure goals related to the quality ofonline services.

Quality of online technical help such asamount of time to answer e-mail

Web page loading time

Inventory levels, inventory turns Exhibit 2.7 provides a list of internal goals and

measures.

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The Balanced Scorecard:Learning and Growth Perspectives

The learning and growth perspective scorecardincludes ways to measure goals related toonline service innovation and continuous

improvement.Average time from concept to start

Speed to match a rivals site

Time between site relaunches

Exhibit 2.8 provides a list of learning and growthgoals and measures.

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The Balanced Scorecard:Financial Perspectives


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The financial perspective scorecard includesways to measure financial goals.

Sales growth and market share

Return on invested capitalAverage order value

Individual customer profit

Exhibit 2.9 provides a list of financial goals andmeasures.

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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.Publishing as Prentice Hall

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