Many have assumed that the Internet changes everything, rendering all the old rules about
companies and competition obsolete. That may be a natural reaction, but it is a dangerous
one... [resulting in] decisions that have eroded the attractiveness of their industries and
undermined their own competitive advantages.
The key strategic decisions for e-marketing are the same as strategic decisions for tra-
ditional marketing. They involve selecting target customer groups and specifying how to
deliver value to these groups. Segmentation, targeting, differentiation and positioning
are all key to effective digital marketing.
The main thrust of Internet marketing strategy is taking decisions on the selective tar-
geting of customer groups and different forms of value delivery for online channels.
Rather than selective targeting, another strategic option is to replicate existing offline
segmentation, targeting, differentiation and positioning in the online channels. While
this is relatively easy to implement, the company is likely to lose market share relative to
more nimble competitors that modify their approach for online channels. An example
of where companies have followed a ‘do-nothing strategy’ is grocery shopping where
some have not rolled out home shopping to all parts of the country or do not offer the
service at all. These supermarkets will lose customers to the most enthusiastic adopters
of online channels such as Tesco.com and Sainsbury which will be difficult to win back
in the future (see Case Study 4 for examples).
As mentioned at the start of the chapter, we should remember that Internet market-
ing strategy is a channel marketing strategy and it needs to operate in the context of
multi-channel marketing. It follows that it is important that the Internet marketing
strategy should:
Be based on objectives for online contribution of leads and sales for this channel;
Be consistent with the types of customers that use and can be effectively reached
through the channel;
Support the customer journey as they select and purchase products using this channel
in combination with other channels;
Define a unique, differential proposition for the channel;
Specify how we communicate this proposition to persuade customers to use online
services in conjunction with other channels;
Manage the online customer lifecycle through the stages of attracting visitors to the
web site, converting them to customers and retention and growth.
This said, many of the decisions related to Internet marketing strategy development
involve reappraising a company’s approach to strategy based on familiar elements of
marketing strategy. We will review these decisions:
Decision 1: Market and product development strategies
Decision 2: Business and revenue models strategies
Decision 3: Target marketing strategy
Decision 4: Positioning and differentiation strategy (including the marketing mix)
Decision 5: Multi-channel distribution strategy
Decision 6: Multi-channel communications strategy
Decision 7: Online communications mix and budget
Decision 8: Organisational capabilities (7S).
The first four decisions are concerned with fundamental questions of how an organi-
sation delivers value to customers online and which products are offered to which
markets online. The next four decisions are more concerned with the mix of marketing
communications used to communicate with customers across multiple channels.
STRATEGY FORMULATION