The Marketing Book 5th Edition

654 The Marketing Book

conservative use of the Internet, but is a
great opportunity for SMEs to increase
exports at a low cost, but it does require
overcoming the barriers to exporting.
A less evident benefit of the Internet is
that as well as selling into new geographical
markets, products can also be sold to new
market segments or different types of
customers. This may happen simply as a
by-product of having a website. For example,
RS components (www.rswww.com), a supplier
of a range of MRO items, found that 10 per
cent of the web-based sales were to
individual consumers rather than traditional
business customers. The UK retailer Argos
found the opposite was true, with 10 per
cent of website sales from businesses, when
their traditional market was consumer based.
The Internet may offer further opportunities
for selling to market sub-segments that have
not been previously targeted. For example, a
product sold to large businesses may also
appeal to SMEs, or a product targeted at
young people could also appeal to some
members of an older audience. Target market
strategies and positioning are described in
Chapter 5.
3 Product development. New digital products or
services can be developed that can be
delivered by the Internet. These are typically
information products, for example on-line
trade magazine Construction Weeklyhas
diversified to a B2B portal Construction Plus
(www.constructionplus.com), which has new
revenue streams. This is innovative use of the
Internet.
4 Diversification. In this sector, new products are
developed which are sold into new markets.
For example, Construction Plusnow has a more
international orientation.

Strategy should also exploit your distinctive
competitive advantage. Play to your strengths.
Strategy is also is influenced by both the
prioritization of objectives (sell, serve, speak,
save and sizzle) and, of course, the amount of
resources available.

Decision 6. Positioning and differentiation

strategies

Companies can position their products relative

to competitor offerings according to four main

variables: product quality, service quality, price

and fulfilment time. As mentioned earlier,

Deiseet al. (2000) suggest it is useful to review

these as an equation of how they combine to

influence customer perceptions of value or

brand.

Customer value (brand perception) =

Product quality×Service quality

Price×Fulfilment time

Strategies should review the extent to

which increases in product and service quality

can be matched by decreases in price and

fulfilment time.

Chaston (2000) argues that there are four

options for strategic focus to position a com-

pany in the on-line marketplace. He says that

these should build on existing strengths, but

can use the on-line facilities to enhance the

positioning as follows:

 Product performance excellence. Enhance by

providing on-line product customization.

 Price performance excellence. Use the facilities of

the Internet to offer favourable pricing to loyal

customers or to reduce prices where demand

is low (for example, British Midland airlines

use auctions to sell underused capacity on

flights).

 Transactional excellence. A software and

hardware e-tailer can offer transactional

excellence through combining pricing

information with dynamic availability

information on products listing number in

stock, number on order and when expected.

 Relationship excellence. For example,

personalization features to enable customers

to review sales order history and place repeat

orders.

Plant (2000) also identifies four different posi-

tional e-strategic directions which he refers to