E-Marketing Research Paper
‘E-Marketing Plan’
Darryn mclements – 201202531
Connor Stewart -201005559
Kory Redden – 201006019
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Abstract:
In the dot-com boom, many companies spent millions of dollars on e-Marketing campaigns with
the expectations that they would get a high traffic flow to company websites. The results were
disappointing and it left many questioning the whole dot-com craze. Some believed the concept
of e-marketing was overhyped while others just accepted their marketing attempts as a strategic
pitfall. It turns out the Internet has played a crucial role in the way we do business. Literature has
confirmed that today, in the “connected” economy, a well-formulated e-marketing plan is
fundamental in establishing yourself as an online competitor. Research suggests that a successful
e-business establishment will require a carefully outlined e-marketing plan that consists of six
essential elements. The e-Marketing plan will help businesses both large and small adapt to
changing market conditions in the rapidly evolving industry of ecommerce.
The objective of this paper is to develop an understanding of the key components necessary for a
successful e-marketing plan. After reviewing research related to the fundamentals of the emarketing plan, and analysing existing models, a conceptual model has been proposed which
identifies potential components that are an integral part of the e-marketing plan. It illustrates
crucial elements such as tactical initiatives and control mechanisms as well as the importance in
adapting to current social media and telecommunication trends.
Situational Analysis:
The success of an e-marketing plan or any plan in general is a strong foundation. If the
issues regarding to the groundwork of an e-marketing plan are covered and successfully
managed then it is likely that the plan will do well. This process can be referred to as a
situational analysis. Meaning that each aspect of the firm’s current situation need be examined to
determine what the next step will be to form a strong foundation. This process can help to answer
the question, Where are we now?
A strong beginning to answer the question of the firm’s current position would be
to initiate a SWOT analysis. A SWOT analysis is a method of determining a firm’s strengths,
weaknesses, opportunities and threats. In the case of a SWOT analysis; strengths and weaknesses
are internal to a company and opportunities and threats being external to a firm. To achieve a
successful situational analysis and ultimately the starting point to any e-marketing plan, is to
apply the idea of a SWOT analysis to such aspects that are important to firm’s original analysis
of their current situation. A situational analysis will be examining such factors as; customer
insights, market trends, competitor analysis, internal resource abilities and how these compare
and contrast with a SWOT analysis. By doing so, a fundamental starting point to can created to
allow a successful e-marketing plan to continue to grow.
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To understand a customer; you know who they are, what they need, why they need it and
how you are going to meet that need. This is described as customer insight and is vital to the
success of a web-marketing plan. It is important to know what type of customer you are going to
reach out to for an e-marketing plan. The idea of customer insight is determined to be an
opportunity for a firm. This external aspect relates to the market of potential customers whom a
firm wants to establish an online connection between their business and customers via website.
According to the article titled “ The 4S Web Marketing Mix model” a website is a fundamental
aspect of achieving profitable customer insights. “The Web Site is the company–customer
interface, the prime source of customer experience and therefore the most important
communication element of E-Commerce.” (Constantinides, 2006)
Market trends are of a high importance, as the online plan must adapt to the
frequent shape shifting of the market. According to research by Varianini and Vaturi (2000) it is
vital to “Maintain a constant flow of market information and feedback on your activities—and
use it.”(Varianini & Vaturi, 2000) The ever-changing market trends can be seen as either an
opportunity or weakness. A firm must be able to keep with the constant feedback as a market
changes. If they cannot successfully do this, then the market is a firm’s weakness. This is the
opposite for a firm that can successfully turn this information into opportunities. Market trends
relay information to a business about what is wanted and needed by consumers. By following
these patterns, a firm can change its direction to meet that of the consumer. Meeting needs
provides a positive and profitable relationship. Therefore it is safe say that customer insight is
driven by a successful market analysis. The critical feedback allows for the perfect relationship
to be established.
The area of competition and more specifically the field of an e-marketing plan it is
important to stay up to speed with competition. A business must be on top of technology with
competing businesses of similar products and services. If unsuccessful on these terms then it is
not possible to interpret market trends therefore no developing relationships with consumers.
According to a study on competition in the e-marketplace, “Firms use competitor analysis to
attempt to define and develop a deeper understanding of their industries and identify and target
existing, as well as potential, competitors, determining their strengths and weaknesses and
anticipating their strategic and tactical moves.” (Yihua, Mykytyn, Litecky, & Allen, 2005). By
not completing a competitor analysis firms cannot compete with those who do so. A business
that is not competitive will not examine market trends, ultimately losing connection with
consumers. This domino effect will eventually cause businesses to fail in online marketing.
A firm can establish a positive and profitable customer relationship through the process
of interpreting market trends and being competitive. This all means nothing if a firm does not
have the proper resources. A firm’s internal resources will determine how all the steps will come
together. Not all firms have the same financial abilities so they must develop a situational
analysis that fits their needs in terms of resources. Meaning that a firm must develop a e3
marketing connection in the market that will allow them to be competitive by also profitable. A
firm cannot compete in all markets, so the importance comes from the right ones.
The development of a situational analysis is a key process. The following aspects of
customer insights, market trends, customer insight and internal resources all allow a firm to
answer the question of, where are we now? They position a firm of who they want to target, how
other competitors are targeting them and what the firm can do financially to respond to market
trends. By doing this, the initial process for a successful e-marketing plan has been complete.
Objectives:
The next process to keep the ball rolling for a marketable, successful e-marketing plan is
defining the firm’s objectives and aligning their own goals with those objectives. By setting clear
and distinct objectives it increases the firm’s probability of creating a well-organized online
marketing plan. Specific areas of interest within a firm’s objective phase are; gaining customers
and keeping them, satisfying customer needs, added value to a product or service, interacting
with customers and finally real profitable gains. This all can be summed up with the question,
where to we want to be? The answer will position a firm in their direction of interest.
In order for an e-marketing plan to continue growing they must meet the objective of
selling. In order to sell, a firm must gain and retain customers in order to sustain a market of
interest. Many ways to achieve customer acquisition would be methods including; advertising,
social media, word of mouth, etc.
Once customer acquisition is complete then there is a market for the firm to meet the
needs of the consumers. These categories include satisfying individual or group needs, showing
some sort of added value and finally interacting with customers to build trust and loyalty to a
brand. According to a study by (Jang et al. 2008) “Consumer loyalty to a brand requires both
satisfaction and commitment to sustain the firm to consumer relationship” the ideas of
commitment to a customer and satisfaction as well will result in a long-term profitable
relationship for a firm. If a consumer is satisfied with a product or service, then commitment is
bound to follow.
Once an e-marketing plan has achieved a customer base and satisfaction of those
consumers then the next step is to interact with customers. By interacting with customers it
provides trust in a firm’s brand and this leads into added value as well. According to research by
(Zeithaml, 1988) “This definition of value can be conceptualised as the value- for-money as a
result of consumers’ cognitive tradeoffs between perceptions of quality and sacrifice. Thus, each
consumer might differently weight the perceived value”. In order to comply with what different
consumers consider what is valueable to them in reference to a product or service a firm must
interact with their customers. Not everyone’s “value-for-money” is the same so it is vital to
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support a strong communication link between the business and consumer as mentioned in the
article above.
The final aspect of initiating objectives and implementing the idea of where we want to
be is creating a lucrative e-marketing plan that allows a firm to be competitve and attractive but
at the same time being profitable. By examining the factors related to being profitable a firm can
determine the allocation of resources to the right objectives. According to a study by (Zarrad &
Debabi 2012), “Understanding well tbe factors influencing online purchasing would allow firms
the possibility of adjusting their strategies to finally attract most of their potential consumers and
profit most from the opportunities offered by e-commerce.” They stress the importance of
finding the proper strategies in order to achieve a profitable outcome from the right target
consumers. Once these strategies are perfected, a proper e-marketing plan continues to develop.
To recap on the objective portion of a firm’s objectives in an e-marketing plan it is noted
that acquiring the proper customer market that can be sustained will lead to satisfaction and
committment. Those go hand in hand. Once there is satisfaction and commitment it is easy to
interact with customers to initiate the proper forms of added value that will meet all needs of that
target market. Put all those factors together and add strategic planning on the basis of developing
profts, the beginning of a lucrative e-marketing plan has be obtained.
Strategy:
With the web being such a diverse platform it certainly is a new medium to which you
can offer your product or service. The question is, how? There are many ways to implement a
strategy and introduce yourself as a competitor in the online world. In the past, part of the
problem for businesses attempting to transition to an online channel was that they didn’t
understand the dynamics of the online medium. This concept is known as “fallacy of
transference” and is still a real issue today because establishing a business presence online is
much different than establishing a presence in the Brick and Mortar world. As (Shabazz, 2004)
explains, in the e-marketing world the user becomes empowered as the web allows for great
interactivity with an overabundance of media options and the convenience of access to a
seemingly endless variety of choices.
According to (Evans & King, 1999), an important piece to developing a solid
strategy should involve analyzing the extent to which other companies in the industry use Web
marketing and determining how to strategically use the unique characteristics of the web to
achieve marketing goals. Other considerations include having specific goals that reflect both the
firm’s and the Web site user’s perspectives. Also, tradeoffs need to be planned as part of the
strategy. For example should we compromise speed of the website for better graphics and audiovisuals? (Evans & King, 1999) Research suggests that a critical aspect of a strategy and overall
e-business plan is market segmentation and determining whom your target market is and how to
provide them with the best user experience. An e-marketing plan strategy should fit accordingly
to the target market whether it B2B, B2C, C2B, or C2C business and the major demographic and
behavioral/usage factors of the target should be identified (Evans & King, 1999).
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One common characteristic that an e-business strategy does have with a brick and mortar
strategy is that it complements traditional strategic marketing tools that a brick and mortar
startup may use (Evans & King, 1999). It’s evident that an e-business strategy involves different
aspects of the e-business plan, but it’s all about how the aspects are going to function in a
meaningful and profitable manner. Strategy in e-business, like any other business involves both a
long term and short term plan that determines how a firm is going to get where it wants to go.
Content of a strategy should answer questions like how do we want to divide up the
markets? Which segments of the market do we wish to focus upon? And how do we want to be
perceived in each different target segments?
The answers, like the questions, are very broad however according to (Forsyth & J.e,
2000), consumers are defined by their online behavior and other traits such as the amount of time
they spend online, the number of pages and sites they access, the time they spend actively
viewing each page, and the kinds of sites they visit. These online consumers then fall into six
segments that help identify targets and should aid in helping a business determine the necessary
strategy to use in determining how they wish to portray themselves to consumers. According to
(Forsyth & J.e, 2000), the six segments are:
Simplifiers; The most attractive consumers and any plan to target this segment should
recognize their need easily accessible web material and end-to-end convenience. Part of the
strategy should be to include readily available product information, reliable customer service,
and easy returns. Advertising or product/service reviews should be of great importance if
targeting this segment because Simplifiers are very keen on evidence of product or service
benefits.
Next target segment are called Surfers. Surfers use the Internet for all sorts of reasons and
strategy used to attract this segment must offer a strong on-line brand, cutting-edge design and
features, constant updates, and a rich variety of products and services.
Third segment are the Bargainers. Bargainers care mainly about getting a good deal and
they are keen on having control over the business transaction. They also enjoy a sense of
community like that of which eBay offers. To get Bargainers to repeat their visits, a site must
commit to their desired needs. For example, eBay recognizes Bargainers need to interact and
gather information so they established a newsletter, chat groups, a library, and opportunities to
make donations.
Fourth are the Connectors. This segment uses the Internet for a means of connecting with
other people though things like chat services. Perhaps if the e-business venture is operating on
the sole means of providing a chat service, blogging network, or anything similar to that of
Facebook or twitter, they should be looking to form a strategy that caters to the “Connectors.”
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The fifth segment is considered Routiners. Routiners use the Internet to extract content
such as news and financial information. If an e-business venture is considering offering a service
that offers financial information or news, a strategy for the firm should be to establish
opportunities where it can convert regular users to exclusive members where they can access
content that makes them feel like true insiders.
Finally the last segment in which a firm should form their strategy according to is
Sportsters. Sportsters are similar to Routiners and therefore the strategy involved can be similar.
Sportsters tend to be highly interested in sports and entertainment sites. Generating revenue from
Sportsters and Routiners is a tough task but attempts to gain some revenue from these segments
should involve trying to transform visitors from consumers of free content into paying
subscribers.
According to (Kao & Diana, 2003), existing e-commerce models offer very little
insight into planning e-commerce initiatives. (Kao & Diana, 2003) recognize strategy as the core
of an e-commerce venture. They suggest surrounding the core strategy are dimensions of
finance, legality, logistics, marketing, operations, security, and technology and these are aspects
of the overall plan. If there are concerns about the deployment of these dimensions, they should
be given deep consideration.
Consumers are defined by their online behavior and other traits such as the
amount of time they spend online, the number of pages and sites they access, the time they spend
actively viewing each page, and the kinds of sites they visit. As part of the overall plan, in terms
of finance, when laying down the plans for an e-business, one should consider the ability of the
organization to arrange sufficient funding to support the venture and determine the ability of the
firm to generate a return on investment (Kao & Diana, 2003). Logistical strategies are also part
of the e-marketing plan. Digital logistics involves the efficient and effective flow of digital
communications and products across telecommunications networks (Kao & Diana, 2003). It will
determine how the organization will reach its customers. Strategies should be implemented with
the consumer in mind; therefore marketing strategies should be formed that promote the
confidence and trust of the end user. Two operational issues that should be incorporated into the
strategies include human resource planning and operational planning. (Kao & Diana, 2003)
suggests a firm should have sufficient skilled staff and determine if they have such things as
proper methods of accepting payments or functional warehouses if the business requires any.
Security threats not only threaten a business, they drive away customers, therefore security is a
critical aspect of strategy. And finally, according to (Kao & Diana, 2003), technological
concerns relevant to the new e-commerce venture can be divided into two groups when
strategizing; Technological capabilities of the organization and technological capabilities of the
consumer. Lack of hardware or software indicated a major roadblock to the e-commerce venture.
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The last piece of the strategy puzzle that is of great significance can be
considered cost leadership strategy. Everyone likes a good deal now and again and the Internet
has allowed for online customers to practice price comparison-shopping. Research suggests that
some customers are price sensitive and may not always go to the retailer offering the lowest
price. This should be taken into serious consideration when developing a strategy. Many Internet
retailers offer their customers a low price in an attempt to compete with the assumption that
customers will buy products from the retailer who offers the lowest price (Kim & Hee-Woong,
2007). (Kim & Hee-Woong, 2007) argue that if an Internet retailer can lower the effect of price
on consumers purchase decisions, it could generate more price premiums and more profits by
charging higher prices. One of the most important things to consider when forming a pricing
strategy is the fierce pricing competition and low search cost in electronic markets (Kim & HeeWoong, 2007). Finding the drivers of price premium is critical to the sustainability and
profitability of online business. As suggested by the authors (Kim & Hee-Woong, 2007),
reputation, switching costs, familiarity, and pleasure are four factors that lower price sensitivity
and should be taken into consideration when thinking about the pricing strategy. The reputation
of the firm according to past customers will greatly determine the amount of customers you have,
and the price in which you can set. Switching costs refers to a customer’s subjective perception
of the one-time costs associated with the process of switching form one retailer to another (Kim
& Hee-Woong, 2007).
In terms of familiarity, this refers to how well a customer understands and feels
comfortable with your website and the procedures necessary for transacting with a vendor. Make
the customer want to come back for more and provide them with a memorable shopping
experience and this will justify a premium price.
We know that a successful strategy should consider web marketing in determining how to
use the unique characteristics of the web to achieve specific goals that reflect user perspectives.
We mentioned the importance of considering tradeoffs as part of the strategy and stressed the
significance of answering such questions, as how do we want to divide up the market? Which
segments of the market do we wish to focus upon? And how do we want to be perceived in each
target segment? These questions can be answered by segmenting consumers according the nature
of the online business and the intent of the consumer. Customers can be classified as Simplifiers,
Surfers, Bargainers, Connectors, Routiners, and Sportsters. We also discovered that strategy is
the core of an e-commerce venture and surrounding the core are dimensions of finance, legality,
logistics, marketing, operations, security, and technology, all which in some way or form are part
of the overall marketing plan. Finally we discussed cost leadership strategy, which helps to
determine how to set a competitive price according to the drivers of price premium; reputation,
switching costs, familiarity, and pleasure. Much of the e-marketing plan can be organized or
structured so that constituent units function cooperatively. For this reason, we believe that the emarketing plan should have a variety of integrated strategies like the ones mentioned above.
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Tactics:
After a firm has determined their current situation within the industry, and has established
where the firm’s goals lie as far as creating this e-marketing plan, it is time to begin the tactical
stage. This is the stage in the project where the project becomes less concerned with what the
particular targets are, to the initiatives that will be put in place to help ensure success. This is a
stage that must not be overlooked, as without having a strategy backed up with tactical
procedures has major potential for a failure. For the most part, as discussed above the Emarketing plan is very similarly based upon the traditional marketing plan, but has added
complexities due to the increasing technology and new channels to consider. Due to these
reasons there has been an increase to what has been known as the ``4 P`s”, which in traditional
marketing terms are product, price, promotion and place. Although it cannot be said that the
original four are not common within the E-marketing plan, as they are important as well, but in
some ways have been changed in the recent years. By having an online presence, the Place is the
one that has been changed the most with offering your goods or services online. People and
potential consumers of the product or service offered will not have the difficulties of having to
physically make the effort to go to you. Now, with internet service for the potential consumers,
they can view, compare and even order your goods within their homes, 24/7, virtually anywhere
with the correct technology. The focus of this paper is not so much with the original four, but
the ones that are being integrated to make firms more consumer oriented in their marketing.
It is Constantinides explains why maybe these 4 P’s have been so prominent universally
used in numerous firms, and it is due to the ease to remember and to apply. It is also one of the
most remembered tools for many graduates of a university due to how much it is stressed in the
basic and even higher level marketing classes. As this some of this information is derived from
2006, it is very interesting to learn marketers were starting to question one of the basic concepts
of marketing, some that should be altered and some that possibly were inadequate.
(Constantinides, 2006)There is a constantly changing atmosphere in which different firms are
competing in, due to the rapid speed that technology, ultimately information is spread and
consumed. After the transformation from block and mortar businesses to ecommerce, having
your availability and inventory on the internet, it then rapidly opened the door for the next
transformation, Web 2.0. Web 2.0 is a difficult term to put a precise definition on it, but it has a
lot of focus on user generated content, collaboration and the ability for individuals, the potential
and current consumers to have more a voice. Some emerging technologies that came along with
Web 2.0 that marketers are now creating new channels are blogs and the increase of social
media. There has been a power shift between how the 4 P’s are utilized, as in today’s
marketplace it seems like there are some constraints on the original, and there should be some
other concepts to aid with the increasing options for marketing and different types of marketing.
The focus for many firms looking begin conducting business online is of course to find new
customers, as traditional marketing has, but now to keep customers coming back and to create
long lasting relationships with them. Although the researchers a few years ago did not quite
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understand where the rapid increase in technology would take them, but it could be argued in for
E-marketing there is the possibility to adding some more to the basic concepts to the original
four.
Some recommended increased tactics that should be included in most E-marketing plan
that wish to be relevant, there are more suggested tactics, following the pattern of P’s might be
included. The additions, with the focus mostly on the basis of Web 2.0 would be personalization,
participation and predictive modeling. These examples are great because within them they
improve the quality of the plan by thinking more about the customer and their experience with
your firm, virtually. The first, personalisation is defined as providing content or
recommendations that are relevant to what the consumer has already shown interest in, based on
individual preferences and characteristics. With personalization, it is important to try to provide
a customer with a great experience, showing them the products and services and the features, but
doing so by still respecting their privacy. Smith shows that there are four different
methodologies that can be followed when looking to implement personalisation into an Emarketing strategy, dynamic content, e-promotions, data mining and collaborative filtering. The
above methods can all be applied within a business, each with their own strengths and
weaknesses. The important thing to take into consideration and not to over look is the privacy
that must be respected in terms of customers who are having their information stored and
analysed. This is a very important fine line, due to the fact that many potential consumers could
be turned off if they had any doubt of privacy. There are both national and local laws that must
be followed when collecting data, and should also give the customer a certain degree of being in
charge of the data collected. Predictive modeling is closely related to personalisation, but
includes the storing consumer’s information into the Customer Relationship Management data
base. Predictive modeling is gathering mass amounts of information and helping to make the
decision making process easier, trying to increase the probability or success right when working
with the data and applying the tactics. By creating a blog for a particular product or service, you
are opening a dialogue with the consumers. There are advantages of this such as the speed that
your message can reach the target and without being censored. (Smith, 2005) The ability for the
consumer to leave comments on either blogs or social media pages can be viewed as either an
advantage of disadvantage. Some guidelines and practices to ensure a positive online image will
be discussed later. This phenomenon of allowing dialogue of consumers enables both
communication with the firm and as well as peer to peer, allowing users to comment amongst
themselves. This is now creating more transparency with prices and of firms as a whole, so it
must be taken into consideration when implementing the E-marketing plan. The new concept if
Web 2.0 is changing constantly even today, more than likely is at an even more accelerated rate
than before, and is a double edge sword. On one hand the message being seen by an increased
user base and on the other hand the firm gives up their control over the content which is a
security threat and poor customer comments and feedback made publically can hurt the
campaign.
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Action:
During the implementation of your E-marketing plan, due to the increase of technology
and complexity of the plan, there are a few concerns that arise. It is not only the technology that
is changing, but also the economical and sociological factors that following the same trend of
ongoing changes. This means you and your team putting the plan in action must be ready to
make changes along through time to keep your marketing relevant and on pace to meet your
specified targets. In other words, it is very important to keep up to date with the environmental
conditions even at the same stage as the implementation, because the market is growing very
fast. The two Latvian authors break the technology into four different technologies influences
that are creating such a rampant and fast pace market. Many of these theories, when proposed at
the beginning may have been seen as very optimistic, have actually held true to this day. Moores
Law is a phenomenon that has been holding true to its theory since when it was created in the
late 1950’s. The law states that data processing power doubles every eighteen months, thus the
product can be bought for half the price a year and a half from its release date. This was a theory
proposed by Gordon Moore, the founder of Intel. For consumers in western, more developed
nations who constantly want the newest and most compact technologies, is something that
marketers are aware of and take advantage of this. Marketers make it seem as if the newer
technologies are something that you truly need, even though sometimes there are just minor
adjustments made to it. Apple has been doing a great job over this over the last couple of years,
as every product they release consumers feel it is a must have, and their sales have been
incredible. Another theory that has a large impact on marketing, especially E-marketing is one
of the lesser known one, coined as ‘Gidler’s law’. He stated that the total bandwidth of
communication systems triple every year. To support his theory can be shown in the transition
from the 3G to the 4G network, and there is no indication of this technology slowing down. By
increasing the bandwidth, in essence it is increasing the amount of communication channels to
consumers while simultaneously increasing the speed the message can be delivered. With the
combination of the Moore’s and Gidler’s law, it shows the trend that more communication
devices such as Smartphone’s, laptops and tablets are getting in more consumers hands, while
the ability to communicate with these people is always increasing. This must be taken into
consideration during the implementation because if the firm ignores these laws, the firm is
missing out on numerous opportunities.
When selling your product and service online, one of the main issues with this lies in the
security of the consumer spending money through the internet. For many consumers one of the
biggest reasons for not taking part in e-commerce is the feeling that the transaction is not secure
and could end up losing their money with nothing in return. Other concerns that arise are easy
return, product quality and on time delivery, which shows the difficulty in ensuring each and
every transaction will be safe. There is another possibility of people putting their personal
information, such as credit card information online and the risk of this information being unsafe
for online and ending up in the wrong person’s hands. The focus of this article is in mainly in
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the business to consumer channel rather the business to business. Essentially there are three
ways in which a firm can confirm safety of online transactions, by the firm itself, its consumers
or a third party that focuses on internet security. First it is recommended that Internet consider
providing assurances for customer’s key potential concerns that are mentioned above. It is vital
to focus on those that the consumers deem the most risk, focus on ensuring consumers safety
throughout the consumer process. The second step is to transition from the ‘easy access and noteasy return and not easy return’ to ‘easy access and easy return’. By implanting this it allows
potential customers to be able to leave the current page of entering personal information to the
privacy agreements and then back to the checkout screen without having to start the order
process over again. The article indicates four ways in which a company can install these options,
varying in degrees of consumer satisfaction. The first and most likely most effective would be
having it automatically appear on the checkout page without a hyperlink, which increases trust
assurance. Another potential way of showing the consumer the privacy and security is having a
hyperlink that opens a pop up window reviewing the firm’s privacy and security standards. This
is known as the ‘easy access and easy return’, allowing within one click of the mouse to see what
is needed to know and return to the checkout screen. The following two assurance delivery
modes are less desirable, the third being ‘easy access and not-easy return. Rather having a popup
that opens within your checkout window, the customer has to leave the checkout inorder to find
the information, making the transaction more difficult. The customers must leave the window,
and upon return reenter the personal information, which is discouraging and may lead to a loss of
sales. The final and least desirable is the ‘not easy to access’ model, which essentially means
there is no direct link to what the customer wants to investigate, making them stop checking out
their products and making them go to other sources, such as frequently asked questions. (Kim &
Benbasat, 2010) In order to maximize your firm’s sales in an online marketplace, it first must
continently and effectively prove to the potential customers that the sale will be conducted safely
and all that was promised in the agreement will be followed through.
When putting your plan into action, evidence shows that as time goes on there are a lot
more variables than there has been in the past. The firm must both ensure that the decisions
made in the strategy which was compiled by the firm’s current place in the market and their
objectives, and follow this strategy. At the same time there is a lot of evidence showing the
increased and accelerated rate in the growth of both overall markets and the increases in
technology. By staying relevant and up to date on their actions they are taking while
communicating and maintaining relationships with customers, they will end up being more
profitable. By having a well-planned and executing plan, it is possible to gain many new
customers while creating a more personal relationship which helps with repeat business.
Measuring Core Processes:
Taking a look at the more traditional means of performance measurement we have found
that a proper e-business plan should consist of a control management system to determine how
the firm can measure, monitor, review, and develop its online business according to its
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objectives. Barua and Anitesh argue that firms engaged in electronic business must make
synergistic investments in both company resources and customer relationships in order maximize
the benefits doing business online.
Dubosson-Torbay and Magali suggest an ideal method of measurement should consist of
four components such as product, customer, infrastructure, and finance.
First, starting with product measurement, the authors noted how product measures should
assess the originality of the value proposition and address potential opportunities to better
develop long-term growth, innovation, creativity, employee capabilities, and turnover
(Dubosson-Torbay & Magali, 2002). If you can’t generate a solid customer base, your site won’t
have a purpose, and chances are you won’t see any significant profit. Measurement of registered
users and visitors per day will indicate the depth of your customer base. Analyzing aspects of the
value proposition that pertain to a product can involve measuring such things as the average days
of exclusivity for product introduction or major features and capabilities of the firm such as the
percent of on-line orders shipped within 24 hours (Dubosson-Torbay & Magali, 2002).
Secondly, measurements should be made based on customer retention, acquisition,
satisfaction, and overall profit gained from a desired customer base to evaluate the relationship
between a firm and its customers. We agree that the Internet has changed the rules of
engagement with customers but it hasn’t changed the underlying fact that addressing customers’
needs leads to sustainable profit. Therefore it’s important to measure customer’s satisfaction
based on the websites functionality, quality, price, timeliness, brand image, availability, and
shopping experience (Dubosson-Torbay & Magali, 2002). Measurements that determine the
percent of on-line sales abandoned before completion or the percent of first time visitors who
return to a site within a year are said to be great metrics for determining the strength of the
relationship you have with your customers. Bounce rate is another method of measuring
customer interaction with your web site. The bounce rate is the percentage of visits in which a
user views a single page and leaves immediately. Tracking bounce rate is a useful tool in
identifying areas of the site that are failing to meet user expectations (Wayne, 2012). The extent
to which you serve your customers can also be measured through customer support personnel
and the business ability to provide fast and reliable resolutions to problems that may occur.
Infrastructure is the third aspect the value proposition that can be measured. Measuring
the firm’s infrastructure should involve identifying internal and outsourced activities that are part
of the value chain and which have the greatest impact on customer satisfaction and financial
objectives. Osterwalder and Alexander describe infrastructure measurement as a means of
identifying activity configuration that create and deliver value between inn-house resources and
assets as well as the firm’s partner network.
Finally, financial measurement evaluates such things as the percentage of online revenues
to indicate how efficiently business is conducted (Barua & Anitesh). Financial measures serve as
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the focus for the objectives pertaining to all revenue growth, costs management, asset utilization
and market capitalization (Dubosson-Torbay & Magali, 2002). Financial aspects can be
measured through revenue generators such as advertising, research and marketing revenues,
subscription fees, revenue growth, and number of products sold. Costs associated with doing
business online will also serve as measurement tools. Costs may include operating expenses,
administration costs, investments, and cost structure. We can conclude that simple assessment of
cash flow should be done in order to develop some sort of budget. Starting a business online may
be relatively cheap but in the long run costs can add up which is why it is important to manage
financial assets. Measuring financial activities through income and business expenses while
keeping in mind past performances should allow an individual to measure and effectively budget
for expenses in the future.
Upon analysis of different methods of performance measurement, we could not help but
to realize how significant the focus was on traditional performance measures that a regular brick
and mortar firm would use. Most articles are primarily concerned with establishing value through
simple measures like page views and visits. Other performance measures discussed involved the
balanced scorecard, which tracks all the important elements of a company’s strategy from
continuous improvement and partnerships to teamwork and global scale (Kaplan & Robert,
2002). These metrics are fine but they don’t tell us what we are doing right or wrong and they
don’t offer any critical information that allows us to make a decision.
Further investigation revealed that many performance measuring metrics have evolved
significantly since the early days of the Internet boom, but now performance-measuring tactics
are more efficient and consist of a multi-dimensional framework. Performance measurement
must go far beyond measuring site hit counts because hit counts don’t provide any useful
information for decision making such as where program improvement is needed. Today we also
see a huge emphasis on web-analytics and Key Performance Indicators. In discussing the
importance of web-analytics, Wayne 2012 discussed how there are many different forms of Web
analytics that serve many different purposes but they are all equally important because they all
work together in building and improving a site that delivers value to its user community and to
the organization that hosts it. A successful web analytics program like GOOGLE’s analytics tool
will illustrate the Web sites value and provide solutions for improvement if needed. The great
thing about web analytics is that they act as a continuous cycle for generating new ideas, needed
improvements, and improvement evaluations.
Key Performance Indicators or KPI’s for short will help an organization to better
understand how well their Web site is serving their best interests. KPI’s along with web
analytics develop reports that display crucial information regarding total site usage, common
navigational paths, and a variety of other information. This information gathering is critical when
it comes time to making content decisions because it indicates which pages are highly valuable
to users and which are not and then develops a solution based on the results that will suggest
strategies to introduce visible and greater revenue generating content. Web analytics will also
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inform site developers of necessary site changes and redesigns of such things as poor
navigational paths. This will also help determine what sections of the site are highly trafficked
and which sections are valuable but underused.
We suggest that a huge piece of the value chain that was not deeply discussed is the
firm’s future potential. One method of measuring future potential could be by means of
benchmarking. A firm could evaluate their online business according to what a competitor is
doing. Tracking trends in the industry and anticipating changes to remain prepared for an
unknown future would also be a way to measure the firm’s future potential.
Another aspect that was greatly discussed in different articles related to performance
metrics was that of customer satisfaction. As mentioned earlier, customer satisfaction is crucial
to a firm’s success however we suggest that one of the best ways to measure customer
satisfaction is by becoming active in the digital world of Twitter, Facebook and LinkedIn. These
methods of social interaction are taking the digital world by storm and we feel that any ebusiness plan should contain a strategy to implement these social networks for not only a way to
analyze complaints, reviews, and recommendations but also for marketing purposes and overall
e-Business success.
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Conclusion/Conceptual Framework:
Situation
Analysis
• Where are we now?
• SWOT Analysis
• Customer insights
• Market Trends
• Competitor Analysis
• Internal Resource abilities
Where do we want to be?
Objectives
Strategy


Customer acquisition
Satisfying needs/ interacting with customers
•How do we get there?
•Which segments of the market do we wish to focus on?
•Six segments or the (6S's)
•Analyze aspects of finance, legality, logistics, marketing, opertions, security, and technology and incorporate into
overall strategy
•Cost Leadership
Tactics
•How EXACTLY do we get there?
•Challenge the original 4P's of tradtional marketing
•Consider adding personalization and predictive modeling to 4P's
Action
•The details of tactics
•Keep relavant with technology laws and communication channels
•Maintain relationships with a focus on security
Control
•How do we measure performance?
•Product, customer, infrastructure, and finance measurements
•WEB analytics
•KPI's
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