Excerpt
Table of contents
Abstract
List of figures
List of abbreviations
1 Introduction
2 Online Marketing
2.1 Definition
2.2 Objectives
2.3 Marketing strategies
2.3.1 Structure of a marketing strategy
2.3.2 Push Strategy vs. Pull Strategy
2.4 Instrumental view of online marketing
2.4.1 Product policy
2.4.2 Price policy
2.4.3 Distribution policy
2.4.4 Communications policy
2.5 Advertising on the internet
2.6 Ten rules for a successful online marketing
2.7 Internet project management
3 Methodology
4 Online marketing tools
4.1 Web sites & Usability
4.1.1 Functionality
4.1.2 Design
4.2 Email Marketing
4.2.1 Email
4.2.2 RSS-Feeds
4.3 Search Engine Marketing (SEM)
4.3.1 Introduction
4.3.2 Search Engine Advertising (SEA)
4.3.2.1 Overview about SEA
4.3.2.2 Planning a SEA campaign
4.3.2.3 SEA Products
4.3.2.4 Disadvantages of SEA
4.3.3 Search Engine Optimisation (SEO)
4.3.3.1 Introduction
4.3.3.2 Search engine algorithm
4.3.3.3 On-page optimisation
4.3.3.4 Off-page optimisation
4.3.3.5 Negative SEO drivers
4.4 Other Online Marketing tools
4.4.1 Banner and Pop ups
4.4.2 Link Exchange
4.4.3 Social Marketing
4.4.4 Affiliate Marketing
4.4.5 Blogs
4.5 Web Controlling
4.5.1 Definition
4.5.2 Key figures
4.5.3 Methods
4.5.4 Web Controlling Software
5 Conclusion
Reference list
Bibliography
Appendices
Abstract
Title: A study of Marketing and Online Marketing tools which improve online success.
Purpose
The objective of this study was to identify and analyse the opportunities of new technologies for companies and how they take benefit of it. The most important online marketing tools were presented in detail to underpin the theoretic concepts of marketing.
Methodology
A literature review about marketing and online marketing objectives were carried out. This was used on recent occurrences and developments in the online marketing sector.
Findings
Online marketing is not only important for companies to increase turnover, it is nowadays necessary to stay competitive to survive. Companies which do not implement online marketing in their classical marketing activities have a strong competitive disadvantage in today’s environment.
Research limitations / implications
More insight could be given on how important online marketing is for different industrial sectors. In some sectors a classical customer relationship could be still more important than others, so one has to be cautious with generalisations about how useful online marketing is for each company individually.
Practical implications
Small and middle-sized companies which still have no idea of how to implement an online marketing campaign or who still only use classical marketing methods should think about hiring online marketing specialists to stay competitive in this rapid changing environment.
Originality / value
The study shows how online marketing tools have to be used to be successful, but it also shows that exaggerated use of these tools could have the contrary effect. Every activity has to be well-planned and well-considered.
List of figures
Figure 1: Marketing objectives
Figure 2: Push Strategy
Figure 3: Pull Strategy
Figure 4: The marketing mix
Figure 5: Decision of selection
Figure 6: The online marketing mix
Figure 7: Age groups which use the internet
Figure 8: Web site structure
Figure 9: Google’s geo marketing
Figure 10: Worldwide click fraud
Figure 11: Significance of keywords in title-tags
Figure 12: Affiliate commission in Amazon
Figure 13: SEO key figures
Figure 14: SEA key figures
Figure 15: Google Analytics Dashboard
Figure 15: Webstats Dashboard
List of Abbreviations
illustration not visible in this excerpt
1. Introduction
“When people visit your company´s web site, they aren’t there to hear your slogan or see your logo again. They want information, interaction, and choice – and you’d be a fool not to give it to them” (Scott, 2007, Cover). The environment of Marketing has changed in the last ten years. Some companies have been established which only sell their products by the internet. Other companies which still only sell through catalogues are about to go bankrupt. Amazon.de drives the classical mail-order companies out of business and a company like Google which does not even have a product has grown up to be one of the world greatest companies. So what has changed in the world of business and marketing?
In 2008 69 percent of households in Germany had an internet connection at home and 66 percent of people from the age of 10 up used it daily. In comparison to that only 17 percent of German households had an internet connection ten years ago and only 4 percent used it weekly (Destasis, 2009). But it is not only the fact that two thirds of the households nowadays have an internet connection, but also the velocity of connections has changed. With the supply of broadband connections over the last few years new possibilities and markets have opened up. The consequences of these were the Web 2.0. Shopping is no longer a one-way event where customers buy something without the possibility to report their experiences in public. Because of the new technologies companies now have to interact with their customers in order to survive in the market. They have to change their marketing strategies in this quick changing environment.
27 million people in Germany have bought something on the internet in the first quarter of 2008 (Destatis, 2008). Due to this trend companies connect their classical marketing campaigns on TV, radio or newspaper with the internet. They repeat their web address as often as possible in every medium they publish in order to get visitors to their home pages. In this highly competitive environment a nearly perfect competition grows with perfect information, transparency of prices, no entry barriers and homogeneous products.
For that reason the core objective of this dissertation is to discover the tools companies use for increasing their turnover on the internet and the effectiveness of them. With the right strategy and the use of relevant online marketing tools it is still possible to enter the online market. This study takes a close look at relevant online marketing tools and how they are used correctly. The main focus will be on search engine marketing. Here are the greatest opportunities to be successful with a manageable amount of invested money and time. There is also a close look at customer expectations and web controlling methods to measure success of any online activity. At the end this thesis ventures to give a view of the future with the chances and risks which arise from the internet trend.
Therefore the question that will be researched within the dissertation is:
“Which are the most important marketing and online marketing tools a company should consider when planning online activities?”
Academic literature review will be given on the topics:
- Marketing objectives
- Marketing strategies
- Marketing mix
- Online marketing
- Project management
For in depth understanding of the topics concerned.
The topic areas that will be dealt with in the dissertation for the secondary research will include:
- The importance of Web Usability
- The use of Email Marketing
- Search Engine Marketing and its effects
- Measure Online Marketing with Web Controlling
Title of the dissertation:
“A study of the Marketing tools which improve online success.”
The structure of the dissertation will be the following:
- Chapter 1: Introduction to the topic and the main question
- Chapter 2: Academic literature review with the different areas sur- rounding the topic which is mentioned above
- Chapter 3: Methodology
- Chapter 4: Results of secondary research and findings
- Chapter 5: Conclusion – Summary of the main points, answer to the research questions and objectives as well as rec- ommendations for further research
- Chapter 6: Reference list / Bibliography
2. Online Marketing
2.1 Definition
There is no standard definition for the term of online marketing. It is a form of marketing where internet sources are used in order get in touch with customers (Bullhost, 2005). The strength of online marketing in particular is the velocity to send data and information to clients (Roth, 2004, p.36-39).
There are two different types of online marketing: On the one hand the passive online marketing which is about a website for itself. On the other hand there is the active online marketing which tries to reach potential buyers on the internet. This could be realised inter alia with newsletters, search engine marketing, branding and other tools. In addition to that there is the aspect of customer loyalty where customers need an incentive to visit the web page more than once, for example with news, forum, services, blogs, raffles and many other possibilities (Schradi, 2009).
Marketing is a process in the economy to satisfy the needs and desires of people or groups by producing, offering and exchanging products and services. This means that all activities of a company, internally as well as externally, are interpreted as the needs of a market. Marketing is known as an entrepreneurial mindset which seeks the consistent customer orientation. This connects the customer management, the improvement of customer needs, systematic planning and innovative solutions (Kotler and Bliemel, 2007, p.8).
Generally nothing has changed in the economic processes and the marketing in the last few years. On the one hand there are the sellers which offer a product and on the other hand the buyers which want to exchange a valid equivalent for the product. It does not play a role whether a process takes place online via the internet or offline via a shopping centre, the clue is that there is a transaction. With marketing you can achieve these business and financial aims (Barowski and Müller, 2000, p.7). But marketing is not just an isolated operational function, it is much more. It is the driving force that fills the whole organization with life and controls it. The objective of marketing is to produce customer satisfaction by building up a relationship with the customers, because the customer can expect a satisfaction of his needs for the long term (Kotler et al., 2006, p.17). The worldwide spreading of the internet has opened new markets and new communication channels for companies. This brings many benefits for the customers (Kotler and Bliemel, 2007, p.1128):
Ease
Customers can find information from any place at any time and can purchase whatever they want. They save much time if they buy online instead of in a shopping centre.
Comparison of information
Customers can easily access information about products, companies, competition and prices. There are many online portals like www.pricerunner.co.uk where one can compare the price and quality of products.
Low intrusiveness
I n the online environment customers are not bothered by salespersons who want to use emotional factors to get a purchase.
The advantages of online marketing include the rapid market adjustments, for example by product or price change. The costs are lower than with traditional communication tools because with the new web 2.0 applications like blogs, forums or comments, it is very easy for a company to identify weaknesses in its products. The opinion of a customer is easier to access. These tools also help a company to build up a customer relationship. The internet also offers a wide range of controlling tools for marketers. With a classical TV advert it is difficult to measure how many people saw it, but with an online advert you get exact data of impression, clicks and conversions.
2.2 Objectives
Internet has made work for marketers more complex. E-Commerce, Customer Relationship Management, Cross Marketing or Community Building is nowadays obligatory for companies. Online marketing is about all measures which concern the internet, commercial and non-commercial online services (Herrmann and Sulzmaier, 2001, p.15).
The modern society needs objectives which are measurable with data, facts and graphs. It is difficult to assess results without facts. Marketing objectives can be differentiated by various aspects. For example it can be differentiated by quantitative and qualitative objectives, short-, medium- and long-term objectives, psychological and economical objectives as well as monetary and non-monetary objectives (Weis, 2004, p.28; Bruhn, 2001, p.26).
Figure 1: Marketing objectives
illustration not visible in this excerpt
All of these objectives have to be specific, measurable, achievable, relevant and timetabled (SMART). This means that a company has to complete on the one hand its own marketing objectives like the image and benefits and on the other hand it has to satisfy the needs of the customers (Doran, 1981).
2.3 Marketing strategies
Companies must conduct themselves in a market in a systematic and aim oriented way. To achieve the desired aims a company has to use specific behaviours within the marketing, so-called marketing strategies. A marketing strategy is a time scaled behaviour used by a company to achieve success in a market. The development of a marketing strategy is a task of the management to set the way for achieving the objectives of a company. This contains decisions of the market election and market cultivation which are fixed by a behaviour plan for the different business units. A marketing strategy contains four key areas: Product-, price-, communication- and distribution policy. It should be a main part of the business plan to create a prerequisite for the company´s growth (Weis, 2004, p.91; Bruhn, 2001, p.53).
2.3.1 Structure of a marketing strategy
It depends on the objectives of a company which strategy it chooses in view of the marketing, the behaviour of the market and the resulting advantages. Basically a company can choose between the following marketing strategies:
- Differentiation strategy
- Adaptation strategy
- Choice market strategy
- Market development strategy
The differentiation strategy is a strategy where a company cannot compete on the price and has to differentiate its product from the competition with value added products. The adaption strategy is a strategy where one looks at the competition in order to see what they do right to adapt it. Besides it should be discussed whether the whole market should be reached or only a sector. The market choice strategy determines in which sectors of a market a company wants to go. This can be realised through strategic business units. A strategic business unit is an own department within a company with own fields of activities. The core activity is to find out in which submarket a company concentrates its efforts and which submarket can be eliminated. The market development strategy compares the strategies of the market participants, for example the consumers, marketing agents and the competitors. It depends if one uses a marketing agent oriented strategy or a consumer oriented strategy which of the following two strategies are used (Weis, 2004, p.92; Meffert et al., 2008, p.511-517).
2.3.2 Push Strategy vs. Pull Strategy
Depending on whether a company wants to use a push or pull strategy, the communication and marketing mix has to be designed differently.
Figure 2: Push Strategy
illustration not visible in this excerpt
Source: Learnmarketing,
The push strategy “pushes” a product through the trade channels. A producer wants to convince a wholesaler to buy his product. The conditions are so lucrative that the resale to the retailers has first priority. This results in a better competitive position for the product, because all participants make more profit with the sale of this product than with others.
Figure 3: Pull Strategy
illustration not visible in this excerpt
Source: Learnmarketing,
The pull strategy focuses its marketing activities to the consumer. The objective is to create a loyalty with that a customer demands only the own product. This results in a better position for negotiations with wholesaler and retailers, because they are obligated to offer this product (Kotler et al., 2006, p. 691-692).
2.4 Instrumental view of online marketing
In spite of the significance of communication like the most important online marketing instrument, online marketing is a lot more than only online communication. Besides the communication policy, the tasks of online marketing are also the sale of products, the distribution policy and the realization of services (Bruhn, 1997, p.56).
Following the model of the classical marketing mix, the online marketing mix is composed of the following elements:
Figure 4: The marketing mix
illustration not visible in this excerpt
2.4.1 Product policy
Product policy is concerned with all aspects of the design of the market performance. The product or the service of a company is the exchange object which should offer a specific advantage to the demander. Specifically, these include the product design, product quality, brand policy, product policy, the packaging, the name of the product, the customer service and the warrantee policy (Weis, 2004, p.115).
The specific characteristics of electronic markets also influence the design of market performance. Above all, the constant availability and the ability to digitise a product or a service determine the online product policy. An increasingly important aspect of product policy is the service policy, because personalised services are components which are immaterial and good to digitise (Koppelmann, 2000, p.193).
2.4.2 Price policy
The price policy is those measures that can help to make a purchase by designing prices. These measures concern the price policy, the discount policy, delivery, payments terms and credit policy. Instruments of the price policy include the price, discounts, additional charge for value added services and free gifts (Weis, 2004, p.115).
The online price policy develops a new price calculation with the consumer. For instance it is possible to vary the price depending on different interactions or unlimited possibilities to create product variants. An online shop can offer a section where a customer designs his own product, for example letters on a t-shirt. For this service the shop could charge the customer.
2.4.3 Distribution policy
The distribution policy concerns all measures to deliver the product from the producer to the customer. This includes decisions about distribution channels, involvement of traders as well as the logistic (Weis, 2004, p.115).
Figure 5: Decision of selection
illustration not visible in this excerpt
Source: Bodenstein, 2001, p.
The traditional forms of distribution have to overcome new challenges in the age of the internet and possibilities of online shopping, since it is still important for a customer to receive the product physically.
2.4.4 Communications policy
The communication policy is to establish the task on a personal and / or impersonal way of contact between suppliers and potential customers that can ultimately result in a sale.
Generally one can say that the product policy and the contracting policy should define the supply for the market. The distribution policy has to make the supply available for the market and the communication policy has the task of advertising the supply and to build up a positive image of the product and the company.
The traditional communication tools are advertising, direct marketing, sales promotion, personal selling and public relations. In addition to that there are sponsoring, trade fairs and communication through multimedia channels (Weis, 2004, p.116). The internet should not only be seen as a virtual supermarket, although there are many good possibilities to sell goods and services online. In contrast to a local supermarket goods cannot physically be evaluated, because they are not tangible. This requires a high visibility and a good and accurate representation of the goods. Therefore an online shop should offer a potential customer enough reason to buy the product online and not in one of the conventional shops (Fuzinski and Meyer, 2000, p.109).
2.5 Advertising on the internet
Advertising is defined as any paid form of non personal presentation and promotion of ideas, goods or services in mass media such as newspapers, magazines, television or radio by identifiable advertisers. Advertising is used by many organisations to provide specific information about themselves, their products and services or its behaviour towards a defined target group, with the aim to trigger a response there (Kotler, 2006, p.709).
Almost every user is nowadays able to sell a product over the internet. Often, it is no longer enough to advertise through traditional media, as these forms of advertising are often overlooked because of the high overstimulation of everyday life. In 2008, approximately 3.65 billion Euros was spent on advertising over the internet in Germany. This is about 15 % of the whole advertising budget. The online advertising is also very exhausted, so that many users are already saturated on the internet. This raises the question how an offer could be advertised online to find the correct communication mix between online and offline advertising (OVK, 2009).
Burger King started a good example for an interactive online advertisement campaign in 2004. In an interactive commercial a chicken appears that asks visitors to give him various instructions such as dance, eat, read, sing and 300 other commands. In the very first week Burger King registered 46 million users. The campaign is still online with about 500,000 visitors a month (Burger King, 2004).
The objective of online advertising is consistent with the aim of classic advertising: It is to increase the visibility of products, organisations or persons. But online advertising reaches this objective with a significant lower budget than classical advertising. Online advertising, which is included in the marketing mix, also requires public relations, sponsoring event marketing as well as a precise control, planning, implementation and a follow-up.
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