E-Marketing, 3rd

edition
Judy Strauss, Adel I. El-Ansary, and Raymond
Frost

Chapter 3: The E-Marketing

Plan
Prentice Hall 2003

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Overview of the EMarketing Planning

Process
How can information technologies assist

marketers in building revenues and

market share or lowering costs?

How can firms identify a sustainable

competitive advantage with the Internet
when so little is understood about how
to succeed?

Overview of the EMarketing Planning

Process

The best firms have clear visions that they

translate, through the marketing process, from ebusiness objectives and strategies into e-marketing
goals and well-executed strategies and tactics for
achieving those goals.

This marketing process entails three steps:

-

Marketing plan creation,

Plan implementation,
Evaluation/corrective action.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Creating an EMarketing Plan

E-marketing plan: It is a guiding, dynamic document that

links the firms e-business strategy (e-business model)
with technology-driven marketing strategies and lays out
details for plan implementation through marketing
management.

The e-marketing plan serves as a roadmap to guide the

direction of the firm, allocate resources, and make tough
decisions at critical junctures.

There are two common types of e-marketing plans:

-

The napkin plan,

The venture capital plan.

Legal - Ethical
Technology
Competition
Other factors

Internet
Markets

SWOT

E-Business
Strategy/
Model

E-Marketing Plan
E-Marketing
Strategy

Implementation
Marketing Mix/CRM

Performance Metrics

Exhibit 3 - 1 E-Marketing Plan Strategy Formulation and Implementation

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

The Napkin Plan

Dot-com entrepreneurs were known to simply jot their ideas

on a napkin over lunch and then run off to find financing.

The big company version of this is the just-do-it. An

employee has an idea, and convinces management to just
do it.

These plans sometimes work and are sometimes even

necessary but they are not recommended when substantial
resources are involved. Sound planning and thoughtful
implementation are needed for long-term success in
business.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

The Venture Capital E-Marketing

Plan

Small to mid-sized firms and entrepreneurs with start-up

ideas usually begin with a napkin plan without going through
the entire traditional marketing planning process.

BUT as the company grows and needs capital, it has to put

together a comprehensive e-marketing plan.

Where does an entrepreneur go for capital?

Sometimes bank loans,
Most of the time, it is equity financed,
Private funds (friends and family),
Angel investors,
Venture capitalists.

The Venture Capital E-Marketing

Plan

Investors are looking for a well-composed business

plan, and more importantly, a good team to
implement it.

The business plan should contain enough data and

logic to prove that:

The e-business idea is solid,

The entrepreneur has some idea of how to run the

business.

The Venture Capital E-Marketing

Plan

9 questions that every business plan should

answer:
1.
2.

3.

4.

Who is the new ventures customer?

How does the customer make decisions
about buying this product or service?
To what degree is the product or service a
compelling purchase for the customer?
How will the product or service be priced?

The Venture Capital E-Marketing

Plan
9 questions that every business plan should
answer:

5.

6.

7.

8.

9.

How will the venture reach all the identified

customer segments?
How much does it cost (in time and
resources) to acquire a customer?
How much does it cost to produce and deliver
the product or service?
How much does it cost to support a
customer?
How easy is it to retain a customer?

The Venture Capital E-Marketing

Plan

VCs look for a way to get their money and

profits out of the venture within a few years:
-

The golden exit plan is to go public and issue stock

in an initial public offering (IPO),
As soon as the stock price rises sufficiently, the VC
cashes out and moves on to another investment.

All VCs investments are not successful. But if

even one out of 20 is an Amazon.com, the risk
was well worth the reward.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

A Six-Step E-Marketing
Plan
Tasks

Step

Situation analysis

Link e-business with

e-marketing strategy

Objectives
Implementation plan

Budget
Evaluation plan

Review the firms environmental and SWOT analyses.

Review the existing marketing plan and any other information
that can be obtained about the company and its brands.
Review the firms e-business objectives, strategies, and
performance metrics.
Identify revenue streams suggested by e-business models
Tier 1

Perform Marketing Opportunity Analysis to identify

target stakeholders.

Specify brand differentiation variables.

Select positioning strategy.
Tier 2
Design the offer, value, distribution, communication, and
market/partner relationship management strategies.
Identify general goals.
Select target specific goals.
Design e-marketing mix tactics.
product/service offering
pricing/valuation
distribution/supply chain
integrated communication mix
Design relationship management tactics.
Design information gathering tactics.
Design organizational structures for implementing the plan.
Forecast revenues.
Evaluate costs to reach goals.
Identify appropriate performance metrics.

Exhibit 3 - 1 Marketing Plan Process

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 1Situation Analysis

Planning for e-marketing does not mean starting from scratch but working with
existing business, e-business, and marketing plans is an excellent place to start.

Step 1Situation Analysis

The organizational e-business plan: SWOT analysis => e-business strategy.

The marketing plan: gathers information about the firms products, the
markets currently served, and so forth.

The distribution plan: identifies areas where the products are currently sold
and suggests geographic gaps that might be receptive to e-commerce.

Promotion plan information: gives clues about how the Internet fits with the
firms current advertising, sales promotion, and other marketing
communications.

The firm and brand positioning in the marketplace: Internet planners must
decide how closely Web site content and promotion will follow current
positioning strategies.

The marketer moves to strategy formulation.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing
Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 2Link E-Business

with E-Marketing Strategy

Marketers need to:

1

Review the marketing and e-business plans,

2 Conduct a strategic planning to help achieve the firms ebusiness goals + define potential revenue streams,
3 Create supporting e-marketing strategy for the e-business
goals:
A Tier one strategy: marketers design segmentation, targeting,
differentiation, and positioning strategies,
B Tier two strategy deals with the 4Ps and relationship management
by creating strategies around the offer (product), value (pricing),
distribution (place), and communication (promotion),

Further, marketers design customer and partner relationship

strategies (CRM/PRM).

Differentiation

Tier 1
tasks

Tier 2
tasks

Segmentation
Positioning

Targeting

E-Marketing
Strategy

Offer

CRM/PRM

Communication

Value
Distribution

Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers

Tier One E-Marketing

Strategic Planning:
Segmenting & targeting

Market opportunity analysis (MOA):

The demand analysis = market segmentation analyses to

describe and evaluate the potential profitability, sustainability,
accessibility, and size of various potential segments.

The segment analysis in the B2C market with demographic

characteristics, geographic location, selected psychographic, and
past behavior toward the descriptors help firms identify
potentially attractive markets.

Allows the company to select its target market and understand

its characteristics, behavior, and desires in the firms product
category.

Tier One E-Marketing

Strategic Planning:
Segmenting & targeting

Tools:
- Traditional segmentation analyses.
Analyzes of customer bases using cookies,
database analyses, and other techniques,
Supply analysis: forecasts segment profitability +
finds competitive advantages,
Study of competition to find the company own
performance advantages.: strengths and
weaknesses, e-marketing initiatives,
Identify future industry changes.

Tier One E-Marketing Strategic

Planning:
Identifying brand differentiation variables
and positioning strategies

The understanding of the competition + the

target(s)
Differentiation of the products to provide benefits
perceived as important by the target.
The positioning statement: the desired image for
the brand relative to the competition.

Tier Two E-Marketing

Strategic Planning
The two Tiers are elaborated in an interactive
process:
It is difficult to know what the brand position should
be without understanding the offer that comprises
the brand promise.

The Offer: Product

Strategies

The organization can:

-

Sell merchandise, services, or advertising on the Web site,

Adopt an e-business model such as online auctions,
Create new brands for the online market,
Simply sell selected current or enhanced products in that
channel.

A firm must decide how online product prices will

compare with offline equivalents considering the
differing costs of sorting and delivering products to
individuals through the online channel as well as
competitive and market concerns.

The Offer: Product

Strategies

There are two online pricing trends are:

Dynamic pricingthis strategy applies different
price levels for different customers or situations.
The Internet allows firms to price items
automatically and on the fly while users view
pages,

Online biddingthis presents a way to optimize

inventory management.

E.g. Priceline.com, eBay.com

Distribution Strategies

Many firms use the Internet to distribute products or

create efficiencies among supply chain members in
the distribution channel.

Direct marketingMany firms sell directly to

customers, by-passing intermediaries in the
traditional channel for some sales.

Agent e-business modelsFirms such as eBay

and E*Trade bring buyers and sellers together and
earn a fee for the transaction.

Marketing Communication
Strategies

The Internet spawned a multitude of new marketing

communication strategies, both to draw customers to a
Web site and to interact with brick-and-mortar
customers.

Firms use Web pages and e-mail to:

- Communicate with their target markets and
business partners,
- Build brand images,
- Create awareness of new products,
- Position products using the Web and e-mail.

Relationship Management
Strategies

E-marketing communication strategies help build

relationships with a firms partners, supply chain members,
or customers using:
-

Customer relationship management (CRM) software to retain

customers and increase average order values and lifetime value,

Partner relationship management (PRM) software to integrate

customer communication and purchase behavior into a
comprehensive database,

Extranetstwo or more proprietary networks linked for better

communication and more efficient transactions among firms (PRM).

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 3 Formulate
Objectives

In general, an objective in an e-marketing plan

takes the form:

Task (what is to be accomplished),

Measurable quantity (how much),

Time frame (by when).

Typical E-Marketing
Objectives

Most e-marketing plans aim to accomplish multiple

objectives such as:

Increase market share,

Increase sales revenue,

Reduce costs,

Achieve branding goals,

Improve databases,

Achieve customer relationship management goals,

Improve supply chain management.

E-Marketing Objective-Strategy
Matrix
Objective-strategy matrix presents the firms e-marketing strategies and accompanying
goals.

Exhibit 3 - 1 E-Marketing Objective-Strategy Matrix

Source: Adapted from Embellix eMarketing Suite

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 4 Design Implementation

Plan to Meet the Objectives

Select:
-

The marketing mix (4 Ps),

Relationship management tactics,

Other tactics to achieve the plan objectives.

Devise detailed plans for implementation.

Check the right marketing organization is in place

for implementation.

Step 4 Design Implementation

Plan to Meet the Objectives

Information technologies are especially adept at

automating these processes, this is why the
information gathering tactics are important:
-

Web site
surveys,

forms,

feedback

e-mail,

and

online

Web site log analysis software helps firms review

user behavior at the site and make changes to
better meet the needs of users,

Business intelligence uses the Internet for

secondary
research,
assisting
firms
in
understanding competitors and other market forces.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 5 Budgeting

A key part of any strategic plan is to identify the

expected returns from an investment.

Returns are matched against costs to develop a

cost/benefit analysis, ROI calculation, or internal
rate of return (IRR)

Determine whether the effort is worthwhile.

During plan implementation, marketers will closely

monitor actual revenues and costs

To monitor of results are on track for accomplishing the

objectives.

Revenue Forecast

The firm uses an established sales forecasting method for

estimating the site revenues in the short, intermediate,
and long term.
Inputs: The firms historical data, industry reports, and
competitive actions.
An important part of forecasting is to estimate the level of
Web site traffic over time.

This number affects the amount of revenue a firm can

expect to generate from its site.

Revenue streams:
-

Web site direct sales,

- Advertising sales,
Subscription fees, - Affiliate referrals,
Sales at partner sites,
- Commissions, and
other fees.

Budgeting
Intangible Benefits:
Putting a financial figure on such benefits is challenging but
essential for e-marketers.
What is the value of increased brand awareness from a Web
site?
Cost Savings:
Money saved through Internet efficiencies is considered soft
revenue for a firm.

E-Marketing Costs

Costs for employees, hardware, software, programming, and

more.

Some traditional marketing costs may creep into the e-marketing

budget

The cost of a Web site can range from $5000 to $50 million.

Few of the costs site developers incur:

Technology costs: software, hardware, Internet access or

hosting services, educational materials and training, and other
site operation and maintenance costs.
Site design. Web sites need graphic designers to create
appealing page layouts, graphics, and photos.

E-Marketing Costs

Other costs site developers incur:

Salaries. All personnel that work on Web site development

and maintenance are budget items.
Other site development expenses. If not included in the
technology or salary categories, any other expenses will be
here (registration of multiple domain names and hiring
consultants).
Marketing communication. All advertising, public relations,
and promotions activities, both online and offline, to draw site
traffic. Search engine registration, online directory costs, email list rental, prizes for contests, and more.
Miscellaneous. Other typical project costs might fall here
expenses such as travel, telephone, stationery printing to add
the new URL, and more.

Overview
Overview of the E-Marketing Planning Process
Creating an E-Marketing Plan
The Napkin Plan
The Venture Capital E-Marketing Plan
A Six-Step E-Marketing Plan
Step 1Situation Analysis
Step 2Link E-Business with E-Marketing Strategy
Step 3 Formulate Objectives
Step 4Design Implementation Plan to Meet the
Objectives
Step 5Budgeting
Step 6Evaluation Plan

Step 6 Evaluation Plan

Once the e-marketing plan is implemented, its

success depends on continuous evaluation.
The tracking systems should be in place
before the electronic doors open.

What should be measured? The plan objectives

need to be evaluated with:
- Balanced scorecard for e-business
- ROI

Key Terms
Angel investors

Online bidding

Demand analyses

Partner Relationship
Management (PRM)

Direct marketing
Dynamic pricing
E-marketing plan
Market Opportunity Analysis
(MOA)

Segment analysis
Situation analysis
Supply analyses
Venture Capital (VC)

Review Questions
1.
2.

3.

4.

5.

6.

7.

What are the six steps in an e-marketing plan?

Why do entrepreneurs seeking funding need a venture
capital e-marketing plan rather than a napkin plan?
What is the purpose of the marketing opportunity
analysis and the segment analysis?
What four elements in tier one and five elements in
tier two are devised for e-marketing strategy?
What is the purpose of an e-marketing objectivestrategy matrix?
How do managers use budgeting within the emarketing planning process?
Why do e-marketing
component?

plans

need

an

evaluation

Discussion Questions
1.

2.

3.

4.

If you had money to invest, what would you look for

in a venture capital e-marketing plan?
What kinds of questions should a firm ask in
developing an e-marketing plan to serve customers
in current markets through an online channel?
Why is it important for e-marketers to specify not
only the task but also the measurable quantity and
time frame for accomplishing an objective?
Why would the management of American Airlines
expect its e-marketers to estimate the financial
impact of intangible benefits such as building brand
equity through e-mail messages to frequent flyers?