chapter 3 marketing strategy in internet marketing mcgraw-hill/irwin © 2004 the mcgraw-hill...
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chapter
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Marketing Strategy in Internet Marketing Strategy in Internet MarketingMarketing
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
Marketing Strategy in Internet Marketing — Today’s Objectives
Objectives will be to:
Define the concept of marketing strategy
Explore effective segmentation, especially for pure play and bricks-and-mortar (BAM) firms
Examine traditional targeting and positioning strategies
Discuss the corporate and business-unit strategy of eBay
Chapter 3: Marketing Strategy in Internet Marketing
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Exhibit 3.1: Assessing Business-Unit and Marketing Strategy Fit
FitImplementation
AlignmentResourceAlignment
GoalAlignment
Activity Alignment
Exhibit 3.2: Marketing-Strategy Decisions
Positioning andTarget-Market
Selection
Product
Price
Promotion
Distribution
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Exhibit 3.4: Prioritizing Segments
Buyer Readiness StageBuyer Readiness Stage
AttitudeAttitude
Willingness to PayWillingness to Pay
SegmentationPrioritization
Trend/Market LeadersTrend/Market Leaders
Exhibit 3.6: Marketing-Strategy Formulation for Pure-Play vs. BAM
Online Business-Unit
Strategy
Online Business-Unit
Strategy
Marketing Strategy for
Online Business
Marketing Strategy for
Online Business
Business-Unit Strategy
Business-Unit Strategy Overall Online Offline
Integrated Marketing Strategy
Integrated Marketing Strategy
Marketing Strategy for
Offline Business
Marketing Strategy for
Offline Business
Marketing Strategy for
Online Business
Marketing Strategy for
Online Business
Choices 1. Segmentation 2. Target market selection 3. Positioning
Choices 1. Same vs. different segment 2. Same vs. different target market 3. Same vs. different positioning
Pure-Play Bricks-and-Mortar
No
Market
Expansion
No Yes
Yes Reclassified—
Expansion
Market
ReclassificationNo Change
Change in Segmentation Characteristics Due to Internet
C
han
ges
in S
ize
of
M
arke
t S
egm
ents
Exhibit 3.9: Bricks-and-Mortar Segmentation Scenarios
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Por
rtio
ns o
f a
Seg
men
tBlanket Targeting
•Borrow heavily from existing offlline positioning
•Tout basic advantages of the Internet – convenience and accessibility
Same Customers Different Customers
Ent
ire S
egm
ent New Opportunity Targeting
•Reposition entirely
•Position differentiations which cater to the new segment
Bleed-Over Targeting
•Use dual positioning
•Leverage existing positioning
•Position added benefits, such as augmented offerings via the Internet (e.g., increased product customizability)
Beachhead Targeting
•Also borrow from offline positioning
•Focus more, however, on needs of the smaller group
•Stress value-added advantages of the Internet
Customer Similarity
F
ocu
s o
f E
ffo
rt
Exhibit 3.9: Bricks-and-Mortar Positioning Scenarios and Guidelines
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Exhibit 3.13: Breakdown of EBay’s Gross Merchandise Listed
Everything Else3%
Antiques & Art3%Books
5%Business, Office, & Industrial1%
Clothing & Accessories9%
Coins2%
Collectibles20%
Computers3%
Consumer Electronics4%
Dolls & Bears2%
Home & Garden4%
Jewelry6%
Movies & TV5%
Music7%
Photo1%
Pottery & Glass4%
Real Estate0%
Sports11%
Stamps2%
Tickets & Travel0%
Toys & Hobbies9%
Exhibit 3.17: EBay’s Business-Unit Strategies
EBay Premier EBay Motors Half.com EBay Stores
Large User Base
Expands reach of offer to specific customer niche and general community
Offline car buyers, sellers and collectors
Differentiated user base of customers averse to auction-like transactions
Targets profitable small-business segment
Local and International
Serves local and international users
Serves local and international users
Serves local and international users
Serves local and national users
Strong Brand
Leverages eBay brand to traditional auction house community
Leverage eBay brand to collectible and used-car buyers and sellers
Sellers cost-effectively sell relatively inexpensive items previously prohibitively expensive to list
Provides sellers with a merchandising showcase for multiple listings and buyers with a single shipping destination
Broad Trading Platform
Expands core business Expands core business Expands core business Expands core business
Community Affinity
High-end items appeal to a more affluent demographic
Replaces classified ads for sellers and used-car showrooms for buyers
Sellers can list items by entering the ISBN or UPC barcode number of their item, along with the item’s condition and selling price
People can pick up or deliver items to others in their vicinity
Features and Functionality
Stable source of traditional auction house merchandise
Access to inventory and channels
Opportunity to road-test fixed-price trading without risking core business
All of a seller’s auctions are available in one place
Marketing Strategy and the Importance of Fit
Segmentation
Targeting
Positioning
Corporate and Business-Unit Strategy of EBay
Conclusion
Chapter 3: Marketing Strategy in Internet Marketing
Marketing Strategy in Internet Marketing — Conclusion
Marketing Strategy and Business-Unit Strategy must be properly aligned for maximum impact
Both pure play and brick-and-mortar firms can rely on segmentation, targeting, and positioning in the online and offline domains
The classical framework for strategic management remains the same; however, networked-economy firms require further consideration.