The e-marketing mix

Gary Akehurst
 e-marketing mix

7 Ps of the marketing mix

Product

Digital value
Experiencing the
brand
Process Price

Optimizing Price transparency

processes through New pricing models
the web

Marketing mix Place

Physical Representation
Evidence New distribution
models
Online evidence
integration

People Promotion
Resourcing and
Online vs offline mix
training
Integration
Contact strategies
Source: Smith & Chaffey (2002: 34)
 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?
 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
 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?
 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)
 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)

 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 wouldn’t 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 couldn’t return it (4%)
 Source: Boston Consulting Group (2001)
 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
 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).

1. Send or read e-mail 91%

2. Use a search engine to find information 91%
3. Search for a map or driving directions 84%
4. Look for health/medical information 79%
5. Research a product or service before buying it 78%
6. Check the weather 78%
7. Look for information on a hobby or interest 77%
 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
 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
 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
 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 what’s 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
 e-marketing mix

Price Customer Expectations

customer profiles
price expectations (maximum, lowest,
expected)
product quality expectations

Your Costs What Profit Do

what are our true costs?
(direct, indirect, we
fixed, variable, step) Your Price require?
what is our break-even Gross and Net
point?

Competitors
who are they, what are their products
and prices?
what makes their products distinctive?
What are they up to?
 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 don’t 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
 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)
 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
 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
 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
 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)
 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”
 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
 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
 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
 e-marketing mix

The e-marketing mix elements of place (distribution)

and promotion will be covered under:

1. eCRM, B2B e-marketing

2. brand building
3. online marketing communications
 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
 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
 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)
 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
 •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 12:The internet for
distribution