PRINCIPLES OF INTERNET MARKETING
Baseline Definition of e-Marketing: “…identifying, understanding, collaboratively creating, and meeting a segment of human and social needs, wants, desires, wishes digitally.”
PRINCIPLES OF
INTERNET MARKETING
NAPA CONSULTING GROUP
Topic: Internet Marketing
E-Marketing vs. marketing
Internet demographics
Advantages
New contagions of information
Impact on Product Mix
New innovation paradigm
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First A Few Facts
E-Marketing ≠ sales
Marketing plan ≠ e-Marketing plan
Most organizations have no:
Marketing strategy
Marketing plan
e-Marketing plan
Brand advocacy strategy
Good news: The Internet keeps on growing
Bad news: Getting harder to be found
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Baseline Definition of e-Marketing
“…identifying, understanding,
collaboratively creating, and meeting a
segment of human and social needs,
wants, desires, wishes digitally.”
Adaptation of Philip Kotler’s original definition of marketing. 4
Customer Integrated Into Process
BEFORE AFTER
Supplier Customer Internet Customers
Supplier
Monologue Dialogue
One way One-to-one marketing
Mass communication Real-time
Static Dynamic
No interaction among customers Collaborative
Shotgun approach Segmented
Hard to identify customers Rich customer interaction
Hard to manage customers Rich customer data
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E-Marketing:
More Than Just Your Website Outsource
Partners
Other Blogs
Other Blogs
Admin portal
Regional
Branded Agent
ACME site communities
By industry
By application
Regional Portals
Site linking
By industry
By application Industry
Portals PORTAL
Verticals Partners
Forum
A
A Search engines
Regionally
B Worldwide B
C Business resource Hubs
C
Small businesses
First time visitors from search engines. B2B partners
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Global Online Population
Currently about 1.2 billion
Projected to grow to 1.8 billion by 2010
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Websites Worldwide
70 million
blogs in just
In May 2007, the number reported 4 years.
was a little over 118 million 120K blogs
worldwide being added
each day.
Netcraft November 2006 survey
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U.S. Online Ad Spending:
5.9% of the $285 billion total U.S. advertising market in 2006
$16.9
Source: Wall Street Journal, May 25, 2007, pg. B1
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Advantages
Democratization of advertising
Reach: Collapsing barriers of time & space
Lower risk of product / services innovation
Lower cost / higher ROI
Digitization of all information
Virtual supply chains
Virtual markets
Virtual real-time interaction with customers & suppliers
Scalability
Ability to coalesce and reach increasingly
fragmented markets
Streamline business process
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Strategic Advantages
Create new sources of competitive advantage
More direct distribution model
Reengineer the supply chain
Invent new business models
Target underserved segments
Lower price barrier
New delivery methods to reduce capital
expenditure and pricing
Create more efficient marketplace
Create a “virtuous cycle”
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Benefit of Creating A “Virtuous Cycle”
Reduce the risk of guessing by letting the
community define the need, want, problem,
and value proposition
Speed development cycles
Create precise features / value
Create brand advocates
Community endorsement
Community and feedback loop integral
part of shaping product
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Recognize Elements of Value Creation:
Generic Value Chain
Visual representation of what organizations do to create value. Margin is the difference between Customer Perceived
Value (CPV) and cost. The primary and second activities attribute to cost.
Cost + Profit = $ Price
(Customer Perceived Value)
Support Activities
Firm Infrastructure
Human Resources Ma
r gin
Technology Development
Procurement
Marketing
Inbound Outbound in
Operations & Service rg
Logistics Logistics
Sales Ma
Source: Porter’s value chain
Primary Activities
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Traditional Industry Supply Chain
Look to bypass intermediaries.
Production based value Commerce based value creation.
creation. (transforming inputs (arbitrage)
into outputs)
SERVICE VAR
OEM End User
PROVIDER Reseller
Value Chain Value Chain Value Chain
Typical Service Provider Supply Chain
Each entity looks very little beyond the next partner in the food chain.
Incremental value added.
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Rearrange Your Supply Chain:
Create More Strategic & Symbiotic B2B Relationships
Build more strategic & symbiotic value chain. Think in terms of solving the common
objectives, interests, and obstacles.
Pursue common challenges.
OEM Pursue common goals.
Value Chain
Remove common obstacles.
Achieve collective profitability
G How?
Service O By removing inefficiencies and
duplicity of efforts in each discrete
Provider A End User
value chain.
Value Chain
L Collaborate together to link strategies,
validate new applications, how to
market them, how to price them, and
how to launch them,
VAR The basic principle is to leverage,
Reseller link, and coordinate resources at a
Value Chain strategic level towards achieving the
Reduce duplicity same fundamental goals.
Reduce costs
Leverage resources
Increase value
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Disintermediate
Look for new ways to disintermediate the supply chain.
New players like are disintermediating the old
supply chain. In doing so, converting cost
Internet $ cost savings as a source of competitive advantage.
Web
Centric
Value Chain
$ cost $ cost $ cost
Service
OEM Reseller End User $ Price
Provider
Value Chain Value Chain Value Chain
Leverage business models or disintermediate to capture sources of competitive advantage.
ASP, On Demand, or B2B relationships to capture cost savings and revenue sharing.
Every step along the way (middleman or channel) is a cost point. Each step that can be
optimized means a cost savings that can contribute to more competitive offering.
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Baseline Guidelines
Create an E-marketing plan
Choose top level domain name early
Choose & trademark branded domains
Design & linkage
Relationship of all internal websites to target customers, industry sites,
suppliers, business sites, portals, blogs
Infrastructure: Who will host sites, applications, and associated servers
SEO plan and strategy for your websites
Indexing
Real-time analytics
Communication utilities
E-mail, IM, real-time voice, weblogs
E-mail list management and opt in / out best practice (CAN-SPAM ACT)
Online advertising or “soft branding”
E-commerce site
Drive traffic
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New Paradigm
Sell your idea first
Find your actors (audience) first
Size does not matter - PlentyOfFish
Reduce risk by pushing control out
Value creation increases at the edge
Decentralize authority, process, and IP
Transparency creates value
Truth travels fast
Price alone is not sustainable
Reengineer your value chain
Skip intermediaries wherever possible
Reinvent your business models
Change the status quo
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Impact on Product Mix
Product / service strategy
Shared risk through open collaboration
Place (channel)
Actors & marketspace
Agents
Pricing
Hypercompetitive
Convert traffic to advertisement revenue
Promotion
Community
Customer support
24 X 7
Virtual
FAQ, forums, electronic
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Almost no feedback
Old 4Ps Paradigm loop. Higher risk of
innovation and
guessing market.
Value Creator Customer
Product
Place
Pricing
Promotion
4Ps
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