02 EMarketing MIX

8/12/2019 02 EMarketing MIX

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E-Marketing Mix

Ch.5 of Internet marketing strategy,

implementation, and practice-3rd-edition by David Cheffay


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The marketing mix

In 1963 Bartels said:

a marketer is like a chef in a kitchen a mixer of

ingredients

Variables used to define key elements of marketingstrategy

From the 4Ps of Jerome McCarthy to the 7Ps of Booms

and Bitner sometimes referred to as the services mix

4PsProduct, Price, Place, Promotion

7Psadd People, Processes and Physical Evidence


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Figure The elements of the marketing mix

The Marketing Mix


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Issues with varying the mix online

vary the mix online? or replicate offlinemix?

Is online differentiation defined?

Is online offer clear and defined?

Is online offer & differentiation reflectedin People & Process?


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Product

The element of the marketing mix thatinvolves researching customers needs anddeveloping appropriate products

Characteristics of a product, service, or brand Internet product decisions can be divided

Core product The fundamental features of the product that meet the

users needs. Extended product

Additional features and benefits beyond the coreproduct.


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Options for Varying Core Product

What Features of core products be changed/enhanced

New products/services be offered

Digital Value be added

Options

Provide complete product/service online (e.g. books,videos, songs etc. financial services)

Provide partial product/service online (e.g. concerttickets, travel services, after sale services)

Provide or repackage information about productonline; helping to make decisions online (e.g. pricecomparison, package comparison)


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Product/Service

Offered Online Complete Partial Partial

Information Online Online OnlineOrder Placement Online Online Offline

Payment Online Online/Offline Offline

Consumption Online Offline Offline

Product Example Books, Music Apparel, Shoes Same

Service Example

Webinars,

email, data

storage etc. Travel, Tickets Same


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Extended product options

Examples:

Add-on servicesgift wrapping @ Amazon Product customization

Warranties & Guarantees

Rewards

Money back offers

Incorporating tools to help users during theiruse of the product

Additional valuable Information

Customer service (see people, process andphysical evidence)

Endorsements, Testimonies, Customercomments


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Product

Nikehelping

customer

makedecision


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Product Decisions

Product Range Existing Range (Nishat)

Extend range (Tesco, Pakistani example?)

Narrow range (Stylo, Shirt & Tie Shop) Online-only products (banks)

Brand

Develop new brand (Egg.com)

Migrate existing brand (HSBC)

Partner with an online brand (e.g. Waterstonesand Amazon).


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Price

Implications on Price in Online World Increased availability of free information and

services

Increased price transparency (easy pricecomparison)

Downward pressure on price due to Price transparency

e.g. low set-up cost and over heads for e-tailers

Online discounts

New & Alternative (e.g. dynamic pricing, zeroprice)


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Price

Pricing depends on other elements of MIX

Pricing may have implications on otherelements of MIX

How to set prices

Define pricing models

Common approach on the internet

Offer low prices

Transfer existing prices

Offer higher prices


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Pricing options

Any traditional pricing model can be offeredonline

Cost-plus Add profit margin to operational costs

Target pricing Based on a particular rate of return or profit

Competition-based pricing

Premium-pricing

Penetration pricing

Loss leader strategy


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Alternative Pricing

Alternative pricing : Free content/information/services (Ad

supported)

Rise in Forward (B2C, C2C) and Reverseauctions (B2B)

Pay per use

Barter

Dynamic pricing (Concert tickets, airlines,travel)


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Place

Place of purchase

New channel structures

Channel conflicts


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Place

New channel structure

Disintermediationsell direct

Re-intermediationpartner with new

intermediaries Counter-mediation (e.g. opodo.com)

creation of new intermediaries


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Place channel conflicts

Distributor/wholesalers/retailers(b2c)

Sales staff (b2b)

Offline Customer concernsDecision to be made on:

1.A communication channel only.

2.A distribution channel to intermediaries.

3. A direct sales channel to customers.

4.Any combination of the above.


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Place of purchase


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Promotion

Promotion has a range of meanings. It can be used to

describe the marketing communications aspect of the

marketing mix or, more narrowly, as in sales promotion.

In its very broad sense it includes the personal methods

of communications, such as face to face or telephone

selling, as well as the impersonal ones such as

advertising. When we use a range of different types of

promotion direct mail, exhibitions, publicity, etc we

describe it as the promotional mix.Wilmshurst (1993)


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Promotion toolsPromotional mix Online executions

1 Advertising Interactive display ads, pay per click searchadvertising

2 Selling Virtual sales staff and chat and affiliate marketing

3 Sales promotion Incentives, rewards, online loyalty scheme

4 PR Online editorial, e-zines, newsletters, social networks,

links and virals

5 Sponsorship Sponsoring and promoting an online/offline event,

site or service

6 Direct mail Opt-in e-mail using e-newsletters and e-blasts

7 Exhibitions Virtual exhibitions, Virtual tours

8 Merchandizing Product catalogs, product information, promotional

ad serving on retail sites, personalized

recommendations and e-alerts

9 Packaging real packaging is displayed online

10 Word-of-mouth Viral, affiliate marketing, e-mail a friend, links


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Promotion

Selective use of new online tools fordifferent stages of the buying process and

customer lifecycle

Online only campaigns Integrated campaignsincorporating online

tools into communications mix.


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Figure 8.14 Options for the online vs offline communications mix

(a) online > offline, (b) similar online and offline, (c) offline > online

Integrating & Balancing

Online & Offline Promotions


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Service Ps

People

Process

Change process for servicecontact

strategies

Physical evidence

Site designdifferentiate or support brand

Fulfillment quality.


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People

People or Staff are crucial in services

Happy Staff = Happy Customers = Happy

Shareholders

Recruit right people, give them right training,

give them responsibility, empower them,

make them accountable, and reward them

appropriately


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Process

Process

Online business process are relatively invisible(offline are somewhat visible)

Execution is the key to customer services andcustomer satisfaction

Optimize all processes (pre-sale, during-sale,

post-sale) Front end must integrate with back end

systems


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Physical Evidence In offline world (buildings, offices, environment, logos, uniform, staff

behavior)

In online world the evidence is digital

Most important is website design

further extended by

Guarantees Refund policies

Privacy policies

Security icons

Trade body memberships, certificates

Awards

Customer lists

Customer endorsements, testimonials

Independent reviews

News clippings


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Physical Evidence

Physical evidence should integrate online-

offline world (e.g. coupon to be redeemed

offline; same branding)

Goods purchased or provided information

about online and delivered offline should

provide physical evidence both online-offline

(e.g. packaging, delivery staff etc)


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02 EMarketing MIX

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