External audits or analysis
External audits consider the business and economic environment in which the company
operates. These include the economic, political, fiscal, legal, social, cultural and techno-
logical factors usually referred to by the SLEPT acronym and reviewed in Chapter 3. Of
these various factors, it is worth noting how three of them are particularly relevant to
the Internet and should be monitored regularly since the way in which they vary will
directly affect the viability of the Internet channel. The three most significant factors,
described in more depth in Chapter 3, are:1 Legal constraints. What are the legal limitations to online promotion and trade such as
privacy, disability discrimination (see Chapter 7 section on accessibility) and distance-
selling regulations?
2 Ethical constraints. What are the ethical implications in areas such as privacy which
have not yet been legislated for?
3 Technological constraints. What is the current availability of technology to access the
Internet and to deliver services and what are the emerging opportunities which need
to be planned for?
The external audit should also consider the state of the market in terms of customers
and competitors. Pertinent factors for the Internet include demand analysis, competitor
analysis, intermediary analysis and channel structure. These are described only briefly
here since they were discusssed in more depth in Chapter 2.Demand analysis
A key factor driving e-marketing and e-business strategy objectives is the current level
and future projections of customer demand for e-commerce services in different market
segments. Demand analysisindicates the scale of opportunity for making or influences
sales online and this, in turn, should govern the objectives defined and resources allo-
cated to online channels. In Chapter 2, we saw how companies can model the number
of consumers in a particular demographic who use the Internet and even the volume
and type of key phrases they type into search engines.
An alternative perspective on e-commerce demand analysis is to review demand from
existing customers who migrate online, and those who are new to the company. But, for
some companies whose strategy has been to launch an online brand variant, the e-com-
merce service may have more new customers than those who migrate online from the
current user base. For example, 80% of customers of the Co-operative Bank’s online bank
Smile (www.smile.co.uk) were new customers.Qualitative customer research
It is important that customer analysis is not restricted to quantitative demand analysis.
Varianini and Vaturi (2000) point out that qualitative research provides insights that can
be used to inform strategy. They suggest using graphic profiling, which is an attempt to
capture the core characteristics of target customers – not only demographics, but also
their needs and attitudes and how comfortable they are with the Internet. In Chapter 2
we reviewed how customer personasand scenariosare developed to help inform under-
standing of online buyer behaviour.CHAPTER 4· INTERNET MARKETING STRATEGY
Demand analysis
for e-commerce
Assessment of the
demand for
e-commerce services
amongst existing and
potential customer
segments using the
ratio Access :
Choose : Buy online.
Personas
A thumbnail summary
of the characteristics,
needs, motivations and
environment of typical
web site users.
Customer scenarios
Alternative tasks or
outcomes required by a
visitor to a web site.
Typically accomplished
in a series of stages of
different tasks involving
different information
needs or experiences.