Online Marketing in four simple steps

STEP 4 SYSTEM: The Technology

The main areas where the System-related decisions are to be made are:
Web site administration, maintenance and service. Availability of technical and service personnel on a 24-hour, 7 days a week basis is the basic requirement for a reliable site.
Web server hosting and choice of the Internet Service Provider. External hosting is a popular option mainly for small and medium-size organisations.
Site construction. Constructing an above the average, transactional E-Commerce site requires a substantial initial investment. Outsourcing this activity is usual, there are however many editing tools available for low-budget solutions. Presentation quality, user friendliness, easy navigation, browser independence and speed are important success factors determining the choice of programming and development tools.
Content management. Important elements of content management are the frequent reviewing and updating of the content in response to constantly changing customer needs, market conditions, competitive strategies and market trends as well as the decentralisation of the Web site updating procedures. The later requires training and empowerment of employees of different departments in managing the site data under their responsibility and is needed for avoiding bureaucratic procedures harmful for the content quality.
Site security. Protection against any forms of malicious attacks as well as transaction and customer data safety are paramount concerns of E-Commerce managers and online customers alike. Identifying the proper security level for each content category is a sensitive issue since increasing security levels usually result in reduced functionality or diminishing user friendliness. A good approach is customising security levels on the different site elements therefore avoiding unnecessary safety overdoses while the sensitive data is adequately protected with minimum functionality sacrifice.
Transaction functionality. The main elements here are the construction of communication interfaces, the choice of the transaction and payment technology, the testing and administration of the system.
Collection, processing and dissemination of the Web site traffic and transaction data. This type of data fulfils, next to its administrative significance, an important commercial role as the vital input for evaluating the site performance, testing new ideas or assessing the effect of promotional activities.
System backup. A sound back-up mechanism is vital for Internet organisations expected to be operational on an around-the-clock availability basis. Technical problems and system failures must be quickly addressed with the minimum operational disruption.
Finally the site technical management must regularly and in collaboration with the commercial management identify and evaluate new technologies and new available products that could upgrade the site performance, enhance the customer experience and effectuate operational economies.

Questions: you can always email me in e.constantinides@utwente.nl

The Original 4S Web Marketing Mix paper

Online Marketing in four simple steps

STEP 3
SYNERGY: The Organizational Integration

Creating an online presence is one thing but making this part of your organization and its network is another. These are the issues that the Synergy in the Web Marketing Mix model is dealing with.
Integration into the organizational processes, value chain and network is a process often underestimated by web designers and site operators. Yet this can make the difference between functional and dysfunctional web sites, between online success and failure.
What is exactly the Synergy and what are the main issues underpinning the integration of the online and the offline organization? Synergy is the integrating processes necessary for realising the virtual organisation’s objectives. Synergies can develop between the virtual and the physical organisation as well as between the virtual organisation and third parties. This Synergy factor embraces a wide range of issues divided into three categories of integration: The Front Office, the Back Office and the Third Parties.

a. The Front Office Integration. Refers to integration of the company web presence with the conventional above the line marketing activities i.e. the corporate communication and product distribution. That means the full integration of the Web operation into the company’s communication plan (advertisement, promotions, PR) as well as the existing channel structures.
It makes a lot of sense to integrate the online presence part of the marketing program by assimilating for example the promotion of the virtual activities into the current promotional plan. The effort must be focused on utilising existing communication strategies, brands, tools and channels in order to promote and support the Web operation during the introduction stage. The objective of this communication is to inform existing as well as potential customers about the firm’s Web activities and communicate to target markets the advantages of doing business online.
In addition to the promotional integration the web operation must become an integral part of the existing distribution structures. Depending on the type of the firm distribution structure this integration can face different degrees of difficulty. The easiest case manifests itself when existing distribution models can accommodate the online distribution requirements without serious changes and disruption of existing operations. Mail-order or telephone sales firms had no difficulty whatsoever to use the existing distribution structures for virtual operations.

b. The Back Office Integration. The second type of synergy refers to integration of the web activities into the value-adding organizational activities like production, fulfilment, logistics and Total Quality Management. Often firms underestimate the effects of online operations on their operations, something resulting in bottlenecks and unhappy customers. The web forces many firms to review their traditional methods and find ways to improve their efficiency: Online customers require customize rather than mass products and the disintermediation of the Internet means that organizations must be able to respond directly to changes in demand levels without the luxury of the dealer’s buffer inventory; firms are forced to introduce lean and clean production and logistics structures.
Other organizational integration issues often overlooked are the assimilation of the web activity into the legacy TQM and control systems, ERP Systems and Databases. While these types of integration seem trivial they often become the reason of major bottlenecks and source of customer dissatisfaction.

c. Third party Integration. Until last year when I was referring to this type of integration I was talking about integrating the web activities into the organizational value chain by finding how to create win-win situations with channel partners and avoid channel conflicts. Another form of third party integration refers to finding other parties and co-operate with them in order to increase your online exposure and attract more customers. In this sense search engine optimization and affiliate marketing can be very useful tools.
However the last years another form of third party integration emerges. With the advent of the Web 2.0 and the Social Media, online firms and traditional companies must explore the available options to utilize such media as part of their online networks but also as means of informing their customers, listening to their wishes or complaints and influencing their buying behavior. Using the social media as marketing tools is a very interesting yet complicated issue but worthwhile to look at: according to a recent study of Deloitte Touche in the USA 62% of the US consumers read consumer-generated online reviews and 98% of them find these reviews reliable enough while 80% of these consumers say that reading reviews has affected their buying intentions. Engaging the social media as means to influence consumers is the secret of the tremendous success of companies like Amazon.com and it is also the dream of every direct marketer.


Next week: The Technology Issues (SYSTEM)
Details: The 4S Web Marketing Mix paper

Online Marketing in four simple steps

STEP 2
SITE: The Web Experience

The second S of the Web Marketing Mix model refers to the operational issues involved in creating the proper online or Web Experience. The corporate web site is the main source of customer experience and therefore a lot of attention must be given to this element of E-Commerce. Important questions to be asked here are:

- What do customers expect in the site?
- Why customers will make use of the site?
- What motivates customers to come back?

The web site plays a multiple role: it is the virtual product display, promotional material, price catalogue and sales/distribution point. The site is therefore the functional platform of communication, interaction and transaction with the online customer.
The prime mission of the web site is to attract traffic, establish contact with the online target markets and brand the online organisation. Next to this “generic” mission and depending on the type of the online firm, the web site can be assigned a mix of commercial and non-commercial objectives and tasks. These will be defined in the Scope step as you remember.

Some of the common site objectives and tasks are:
- Communicating and promoting the E-business image, labels and products/services.
- Providing company information to customers and stakeholders
- Effectively communicating the firm physical or virtual promotional activities
- Providing customer service and helpdesk functionality in order to enhance the customer loyalty and retention
- Providing sales leads and customer /market data.
- Allowing customers to communicate and interact with the company as well as creating online content.
- Allowing direct sales and facilitating online payments (transactional sites)
Trying to achieve all or some of these objectives results in what the web customer experiences when visiting the site, what is commonly referred to as the online experience.
The quality of online (or Web) Experience is very important. There are studies indicating that a site visitor needs only 50 milliseconds in order to form a positive or negative opinion about a web site[1]. An important question here is: What are the components of Web Experience and what is the importance of these for the customer’s choice?

The buying behavior of online consumers is an area where a lot of scientific research takes place. Part of the research has been focused on the identification of factors influencing the online consumer, in other words on the identification of the Web Experience components. A few years ago I published a paper where – based on about 50 different academic studies - I classified these factors in five categories:

USABILITY, INTERACTIVITY, TRUST, AESTHETICS and MARKETING MIX

Next to that my colleagues and I try to identify what of these factors are really important influencers for customers searching for and buying products online.
Our first findings (published in 2005) are that in the case of transactional sites the Usability is by far the most important factor, followed by the Trust and the Marketing Mix elements. To our surprise we have found that the effects of the aesthetics of online shops do not influence the customer’s choice as much as one would expect (having in mind the effects of aesthetics of physical shops) To our surprise in our experiment here in Holland we found that Interactivity can even have a negative effect to online customers who obviously do not appreciate loosing time in interaction when they shop online!
In any case this is an area we have for some time now focused our attention here in Twente and in Spain in cooperation with colleagues from the University of Castillia La Mancha. At this moment we analyze the data of a new experiment meant to identify the exact effects of online shop aesthetics on buying behavior. More news about this soon.

[1] Lindgaard G., Fernandes G., Dudek C., Brown J., (2006), Attention web designers: you have 50 milliseconds to make a good first impression. Business & Information technology, vol 25, nr. 2. pp 115 - 126

Next week: The Organizational Issues (SYNERGY)

Details: The 4S Web Marketing Mix paper

Online Marketing in four simple steps

STEP 1
SCOPE: The Strategy

What’s the use of running if you are not on the right road? (German Proverb)

Every marketing plan is (or should be) part of a strategy with clear vision, mission and objectives. In the case of E-Marketing there is no difference: a clear and well-defined strategy is the basis of a successful online presence.
This sounds quite logical to most people yet there is a difference between the strategy formulation and content in traditional marketing contexts and e-marketing. In traditional settings the strategy formulation is a top-down process, taking place in boardrooms, in regular mostly yearly strategic sessions, by and large focused on the long term. In the case of E-Marketing the strategic context is different: Market conditions change very rapidly, good strategies are relatively easy to be copied and maintaining competitive advantages in the long run is difficult, something recognized also by M. Porter.
Under such circumstances successful online corporations are those able to adapt quickly their online strategy to new conditions, constantly innovate and build / maintain short-term rather than long-term competitive advantages. This is a strategy I described in a 2004 research paper , consequently followed by the most successful online firms since the 90's.
It is obvious that the online strategic process is essentially different than the traditional strategic process: Short-term oriented, subject to continuous review and appraisal, frequently updated and in very close proximity to operations. This is the reason that SCOPE makes part of the Web Marketing Mix model as the first and basic component of it. In simple terms Scope refers to Strategy and Strategic Objectives online. The online strategy is (or should be for that matter) part of the total corporate strategy, if we deal with traditional companies operating also online.


Next to the “operational” nature of the online strategic process a legitimate question is what are the components of the online strategy? In a sense not much different than what we are used to as strategists (components 1 and 2) yet there is something new here (components 3 and 4) . The main issues to be addressed are:
1. Market Analysis: In what type of market we operate online? Main issues to be analyzed: Competition basis, competitors, market potential, market forecast and market trends
2. Potential Customer: Who is our potential customer? Main issues: Profile(s), motivation, (online) behavior, needs/desires and current way to fulfill the, priorities
3. Internal Analysis: To what degree is our organization ready for the web? Main Issues: Internal resources, processes and values. Is the Internet a sustaining or disruptive technology for our firm?
4. Strategic role of Web activities: What do we expect the Internet to do for us? Main Issue is the identification of the role of the web as part of our total marketing program. Generic roles are: Informational, Educational, Relational, Promotional, Transactional. In practice most firms engage the web in a combination of the generic functions.

Golden Rule: The Scope is subject to continuous review. The Online Strategy is a short-term Strategy

The four components in combination form the basis of the Internet presence i.e. the platform for creating a web site and the organization behind it.
Next week: The Internet Presence (SITE)

Details: The 4S Web Marketing Mix paper