The Entire Revamped E-Marketing Effort Through the Linked - Term Paper Example

___________ ____________ ____November 2007 E-Marketing Introduction Selling and developing business has become a highly competitive business in the global market arena with the globalization of the markets which are securely integrated by the World Wide Web and the information technology. While companies of all sizes are seeking a piece of international markets another trend which is being witnessed is towards consolidation of the domestic markets using the strength provided by the World Wide Web and the information technology. However World Wide Web is a double edged sword and is available for informational value to all categories of customers whether domestic or international; it is only when global market objectives are crystallized that global markets can be realized by developing a proper interface with the international payment system and the permission and licensing system of the global markets being targeted. This report focuses on the development of market of an existing UK furniture supplying firm through the instrumentality of e-marketing which is essentially a term used to refer to the process of addressing categories of market segments over the internet using the capabilities afforded by the information technology. This kind of marketing may involve a majority of informational content or it may be a combination of informational contents and an interface that accepts orders and payments. The proposal would use the SOSTAC model to develop an e-marketing plan for the furniture business. PR Smith (2006) states that , "While many people seem to use the SOSTAC acronym as a generic term, it derives from the SOSTAC Planning System created by writer and speaker PR Smith in the 1990's, and is actually a protected registered trademark (registration number 2219677 to be precise). The SOSTAC model and associated methodology are now used by blue chip corporations around the world and also by many smaller businesses and organizations". SOSTAC acronym stands for: Situation analysis - which means where are we now Objectives - which means where do we want to go Strategy - which summarizes how we are going to get there. Tactics - which are the details of strategy Action - putting the plan to work. Control - which means measurement, monitoring, reviewing, updating and modifying PR Smith (2006) puts the marketing plan and the SOSTAC model in the strategic perspective when it states the following, "Finally, one question that commonly arises: Where would you put Target Markets, Marketing Mix and Positioning in SOSTAC The answer is that Target Markets pop up almost everywhere. Target Markets are so important that once you have identified them in the objectives, they pop up all over a marketing plan - in the situation analysis, objectives, strategy, tactics and so on. A summary of the current marketing mix and positioning will appear in the Situation Analysis under a 'review' section. The future mix and positioning and target markets are often summarized under Strategy and explained in detail under Tactics". Situational Analysis Present Scenario- The UK furniture market Literature has been predicting healthy growth rates for the home furniture markets. Healthy growth rates imply that such rates are neither spectacular nor very low. "With an estimated value of over 210 million in 2005, the home office furniture market is forecast to maintain reasonably healthy growth rates in the short-medium term, depending on external economic and other micro market factors.(Home,2006) In terms of looking at the trends in the demand for the products; the trends that have emerged from early 2000 have been consolidating and repeating themselves over the years. While the last 7 years trends have indicated that the customers preferred elegance combined with simplicity and space and cost effectiveness; a newer refinement has been in terms of modern designs that are durable and long lasting. "In terms of NPD, stylishness is likely to be big. Demand for good quality, compatible pieces could grow, particularly if they are of modern design. Manufacturers need to consider price points, but many consumers seem prepared to pay for quality. Exciting room layouts could also give a boost to the sector and mitigate trends discussed above. There is a need to inject excitement into this market". (Home, 2007) As new computer acquisitions move into multiple acquisitions per family the distinction between home and office computer furniture needs has boiled down to the quantity demanded. "There is no sign that workstations have had their day, however. Demand for low-priced multi functional pieces shows no sign of abating, although they may become more stylish in design and more easily accommodated in different rooms of the house". (Home, 2007) The above quoted industry report also gives out the emerging trends in the industry best practices in following words, " Flexible work practices, meaning increasing numbers of employees work from home occasionally and the increase in the number of self-employed people have also helped fuel demand for home office furniture. Furniture retailing is highly responsive to changes in the housing market, and helped by relatively low interest rates the housing market has remained buoyant. Demand for big-ticket items such as kitchens and living room furniture slowed down, however, home office furniture was somewhat protected by the fact that most items in this market are not relatively expensive. Ownership of workstations is much higher than it was two years ago (33%) when research was last carried out (albeit, previous research was carried out on a sample of 991 adults aged 15+, and the research was not done online). Workstations are the most popular item of home office furniture, helped by the fact that over 70% of households own a PC in their homes in the UK. They are a relatively space-saving item of furniture negating the need for a separate standard/writing desk and computer table.(Home,2007) The 2003 edition of the above report had included the following details about the home and office furniture market, "With an estimated value of around 190 million in 2002, the home office furniture market is forecast to maintain healthy growth rates in the short-medium term, depending on external economic and political factors. Specific points of interest: Continued growth in household penetration of home office furniture Increasing levels of PC ownership Growth in the flat pack sector of the market Flexible working practices, particularly home working, becoming more common Price pressures, leading to higher levels of imported furniture. Greater choice of designs and increased availability of products in the high street" (UK, 2003) On a comparison of the major findings of the two editions of the above industry report it is abundantly clear as to the directions in which the home furniture industry is bound. The two comparisons also indicate at the political, economic, social, technological, legal and environmental factors affecting the home furniture industry. Present Scenario- The Company The marketing definition of the company's business can be given as it is in the business of Interior Design Fulfillment - not just selling furniture. Through furniture sales the company is meeting the following underlying needs of the consumers: interior design, brand, lifestyle, an aspiration, and experience. The company has steady relationships with suppliers as it has worked with some for 10 years. They often offer direct home delivery and quick lead times. The best selling products of the company are: Morris Furniture, Zones, G Plan .This comprises the mid to higher end market for furniture .In such a market a table with six chairs can cost around 1200. The company is working on the assumption that its major customers' segment is that of the time -short professional couples who don't have time to shop around. It tends to support its assumption from the observation that a majority of its sales had come during office hours and it had very insignificant sales from residential districts .the company states that they have had only 3 to 4 sales from Newport, South Wales where the company was based. Most of company's orders came from the offices predominant districts of London, Manchester & Glasgow. However major retailers like the Argos and the Tesco stores are taking over the lower end of the market with cheap furniture. The main source of competition that company faces is from the online competition .This also explains the objective of developing a strong e-marketing plan. There are also local competitors such as George Street Furnishers in Newport, Arthur Glenn, Leekes and also places like Furniture123. Company also assemble furniture for the customer and remove all packaging from their premise. This is a value added feature. Another similar value added service appears to be the specialist delivery for customers to mock furniture. Customers sign for this and have 7 days to change their mind. Company charges 30 for the retrieval of the furniture if the customer decides against it. Company offers no form of credit facility to customers at the moment. Company has very little offline activity - and it does not participate in any public exhibitions or trade exhibitions. Currently the company is known as an innovation and style provider, which is much in keeping with the trends of Europe. However the company is serving only limited markets in the UK and Channel Islands. Although the company is presently providing impeccable customer service under the Distance Selling Regulations 2000, wherein the customers are entitled to 7 days to change their mind of the product and by selling to Auckland, Isle of Wight and Isle of Man. The company has stopped selling in these markets because of the loss. Moreover the company does not hold seasonal sales or any related campaign despite the fact that it has a trend that most of is ales come out of a particular season. For instance, the company observes that last January was the biggest month of the year and it accounted for 25% of sales of the entire year! Company maintains that it sells contemporary products according to Mintel. Natural wood is used for products and this tie in well with the "English" & "British" image. Present Online Status The company has a website which has been designed by a male designer. Company let its first e-marketing slip go by unnoticed when its website shared its name with that of another charity that had a similar name and for 12 months after setting up the company continuously received phone calls that were directed towards them apart from loosing from the customers that thought the company website to be the website of the charity. The company is in collaboration with the designer of its website. This designer advertises the company on his website and vice versa. It's a two way thing in order to boost company's ranking on Google. The company is placed at Page 5 link on Google at present. But it is worth remembering that the designer's link is after all an outbound one and not an independent and direct link. Company does not advertise on other search engines besides Google. However, it is linked and comes up online on other search engines. Company, when it first set up its furniture finders, aimed to sell "ready furnished" rooms but logistically this was impossible. It was impossible to deliver a ready room at one time. Trends have indicated that the website of the company was searched by browsing public through searching Google and usually when they searched for a famous brand such as Morris Furniture. Company tends to use whatever text the manufacturer comes up for the promotion of a product. This is because often the company is governed by the way it is allowed to display products on the website by the manufacturers. For example, some brands will only allow the company to advertise 1 range and from that 1 table with 1 chair. Manufacturers often advise the company that potential customer can see their catalogues. Company has to make negotiations about providing ready links to such catalogues in the future. The company website does not have any photos and understandably this means people have to look elsewhere - meaning an inconvenience! The company also does not promote the brands on the web.In major lacunae of the present online system of the company it was observed that the company has a list of customers that have placed orders with it in the past but there is no structured and report generating database as such. Company has witnessed some online activity in terms of orders .The average order was around 500. This figure used to be 300 when the company first started but has been rising since. Company got a lot of orders which were worth 2,000 to 3,000 but the company did not adequately follow up such orders. The largest sale achieved was for 5,000 - after negotiating with the customer for a better price telephonically. Though the company provides the option that the product prices can be negotiated via telephone by the customer however, because company sells brand names, it is often governed by the manufacturers' regulations in terms of the extent to which it can entertain negotiations. Most disconcerting feature of the online presence was the online conversion rate, which was 1% and which dropped further a measly 0.34% in the present scenario. This has necessitated the need fro the company to devise a strong and robust e-marketing strategy to boost up conversion ratios. It is more important to realize that the company is not offering any Loyalty programme to its customers. Objectives Company has a definitive objective of moving into the lucrative office furniture market by stocking such office furniture but it is not clear about the time frame for this objective. Company also maintains the objective of diversifying into linked accessories. Similarly company does not sell sofas - in fact company did not analyse the bed/sofa market when it began setting up. There is no concrete financial explanation for ignoring this major and huge online market. The company has plans for a shop as an attempt to have offline presence .Company feels that when such an objective is concretized it would need a strong public relations campaign to launch. Most important company objective seems to be making its online presence very strong and competitive through a robust e-marketing plan which helps improve the online conversion rates from the abysmally low ones that the company is witnessing today. Strategy It is important to restate that the 5ps of marketing and the other inputs of a typical marketing strategy would keep on appearing in the discussions that follow under SOSTAC format. The most important strategy for the company would be to continue to define its business as that of Interior Design Fulfillment - not just selling furniture. Through furniture sales the company is meeting the following underlying needs of the consumers: interior design, brand, lifestyle, an aspiration, and experience. This has to become the unique selling proposition of the company. . In general, a unique selling proposition (USP) is essential to differentiate products from competitors (Boyd et al., 2002). In order to be successful, a USP should propose a benefit to the customer, it needs to be unique in a way that it cannot be easily replicated by competitors, and it has to be strong enough to attract new customers (Kotler, 2003). Thus, "differentiation is one of the most important strategic and tactical activities in which companies must constantly engage. It is not discretionary"(Trout &Rivkin, 2000).The current level of differentiation in the form of supplying materials from different manufacturers has to be improved in the form of better negotiations with such manufacturers for right t use more of their information for e-marketing. Successful low cost firms treasure austerity but invest on requisite scales on cost-saving improvements. Cost reductions may increase operational effectiveness. This can lead to a "new best practice" in the industry, which eventually might be adopted by competitors (Porter, 2001).Cost reduction, however, is not necessarily a long-term strategy; it may barely be a tactic (Porter, 1996). In the present instant low cost strategy would translate into entering the low cost furniture market so as to compete with retailers like Argo and Tesco. Similarly another strategy would be overhauling the current market segmentation of the company by broad basing the target segments across user categories, product categories (sofas, accessories etc) and geographical territories. Company can further redefine this strategy by bundling these strategies with its current orientation and label of an innovative furniture supplier that caters to styles in natural wood. Similarly another strategy for the company would be to set up its offline activities in addition to its online activities. Most important strategy would be to stream line it's e-marketing by an overhauling of its website and supporting it with Customer Relationships Management (CRM) software. Tactics Tactics go on to explain the steps to implement the strategies. In the instant case the most important tactic would be to concentrate on making the website of the company more content rich and information based which is supported by all possible illustrated manufacturers' catalogues. In order to do this the company has to enter into negotiations with the manufacturers and put up banners to link to such catalogues. Next important tactic would be to bargain in contractual form with the manufacturers to offer price discounts. This would enable the company to follow up telephonically with the customers on the interests shown and offer them competitive rates. This would improve the conversion ratio as well. An additional tactic here would be to enter into negotiations with lower end manufacturers to compete with large retailers like Tesco. Market segmentation of the company appears to be too narrow as to present date. This appears to be either based on incomplete data or no data. In order to generate the requisite data .In order to obtain this data the company has to move over to a CRM that is integrated with its web site and analyse the data generated over a horizon of 6 months to one year to segment its markets. This data would reveal important insights into consumer behaviour and help fine tuned segmentation. The complex process of decision making and choice has received attention in literature from various angles to examine above characteristics of consumer choices. For example, discussions of freedom and consumer behavior have been there for at least 15 years (e.g., Kozinets 2002; Thompson, Locander, and Pollio 1989). Also, the intermingling contributions of history and culture in consumer behavior have been lucidly analyzed (Arnould and Thompson 2005). More research efforts have looked for consumer choice across time and as a function of social interactions (Ariely and Levav 2000; Coulter et al. 2003; Ward and Reingen 1990 ;), in addition to the impact of consumer choice on matters of personal and social well being (e.g., Carmon et al. 2003). Action Immediate actions would be needed in respect of renaming the website uniquely in order to remove any remaining confusion with any other website having similar names. Introducing and designing a loyalty programme that attracts repeat purchases. This program would add to click bank and contribute rich information to CRM database and help in better market segmentation. Place website banners of available manufacturers catalogues. Provide all available product information so as to make the website contents rich and informative. Introduce an email campaign accompanied by direct advertisements on all the popular search engines so as to increase the site click bank. Come out of the selling concept of selling full room furniture sets so to provide total room based solutions to customers; instead leave the flexibility on customers to make single furniture articles based decisions. Implement a system of email based follow up, in addition to telephonic follow-up so as provide the customer additional method of settling queries and bargains. Introduce a staff commission system which is telescopic in nature, in the sense that the commission gets reduced as the monetary value of the purchased articles or order declines, so as to improve follow -up. In fact this follow up would be an essential use to which the CRM software would be put to. Similarly one low end furniture manufacturer may be put up immediately with all links so as to test this market segment for possible exploitation in immediate future. Similarly the company can test the sofa beds and accessories markets immediately by offering to supply such products after typing up with manufacturers. All of the above aspects would go to establish an independent and strong identity for company's website and help it on the path of a strong e-market presence. Control Control is the most important aspect of the entire revamped e-marketing effort through the linked, enriched and CRM supported website. Proper use of the CRM can itself ensure a great dead of control. However certain important ratios an be monitored on regular basis .For instance one can have average dollar value of clicks-which is the weekly dollar sales divided by the weekly number of clicks on the company website. Similarly another ratio can be the conversion ratio itself-which can be evaluated at fortnightly intervals. Similarly order clicks to general/informational clicks can be a good ratio. However in order to ensure that the website of the company remains a strong tool of e-marketing one has to follow certain principles of designing and maintaining such websites. A good primer on the e-marketing, particularly for specialized businesses like home furniture businesses is provide by Marketing (2006) in following words, "the Websites and the internet can seem extremely complex, and on certain levels they are, but the fundamentals are simple. Don't let 'experts' baffle you with science. Have faith in common-sense principles and your own experience when using websites. Here are some basic rules for good internet and website marketing, and particularly for creating effective business-to-business websites: KISS - "keep it simple, stupid." The internet and the website medium are ideally suited to specialized providers, suppliers, companies, etc., so try to specialize and be the best in what you offer within that specialization on the web. Give as much as you can free online from your website - material that can be printed or downloaded, or information that can be read from the web page are all good worthy free things to offer. A website should be like a shop - think about it in the same way - ease of access to what you want - make browsing is easy - layout clear and clean - the experience should be warm and welcoming Remove obstacles like registrations and password requirements as far as possible - these are barriers to visitors - shops don't have barriers and registration requirements do they... Fancy graphics visual effects please designers but not customers - fancy complicated design puts people off Lots of text is good - if it's relevant search engines like lots of text too, but it must be relevant Keep information up-to-date - many search engines take account of update frequency, so update your website frequently (i.e., weekly at least) even if it's just small changes Offer what people are interested in - not what you want to push Good websites will be found by most search engines - don't pay for regular submissions services unless you have a very complicated and extensive internet and website strategy The big three search engines are Google, Yahoo and MSN. Google is by some considerable margin the most popular search engine, accounting for a sizeable majority of all searches. Google's listings are based on Google's very clever ranking algorithms, basic details of which freely available at Google's own website. Following four years of collaboration with Google, Yahoo - which is the next most popular search engine, accounting for around 15% of all searches - now use their own search engine system (as of February 2004). As Google no longer underpins the Yahoo search engine, getting a good listing with Google no longer guarantees automatic ranking on Yahoo too. MSN is the next most popular search engine, accounting for about 10% of all searches. These three search engines - Google, Yahoo and MSN - therefore account for virtually 95% of all search engine visitors to all websites, so if you concentrate on your listings with anyone, concentrate on these. Other sites linking to yours will certainly improve your search engine rankings, so reciprocal links are okay, but building a site that other sites will want to link to is far more beneficial than directing all that effort instead into a reciprocal ink campaign. Search engines downgrade or de-list sites that cheat, so don't cheat. If you want to know what constitutes cheating look on the web for the very many highly complicated website marketing and promotion websites. www.deadlock.com is a good one, and they also have lots of really detailed advice far beyond these basic principles when and if you're ready for it. Measure your traffic - there are lots of trackers and systems to use - www.extreme-dm.com is a good example of a system that is either free (their 'public' version) or paid-for (multiple pages 'private' version). Aside from these separate trackers most website hosting solutions and providers now include traffic statistics packages. If you engage a website designer or agency follow the principles for engaging with any creative agency - develop your specification first (i.e., especially all text, spelling and grammar checked, structure and process implications) and then let them get on with it - don't waste a designer's time finalizing and correcting these fundamental content and material issues once they've begun the design stage". The above aspects are to be monitored on regular basis and website design changes implemented as soon as one of the above aspects seems to be out of synchronization. Work Cited p r smith's sostac planning model.(2006). Retrieved on November 9, 2007 from http://www.businessballs.com. Home Office Furniture Market UK.(2006).Retrieved on November 9, 2007 from http://www.amaresearch.co.uk/HomeOfficeFurniture06.html Home Office Furniture- UK.(2007). 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Strategy and the Internet, Harvard Business Review, March-April: 63-78. Kozinets, Robert V. (2002)."Can Consumers Escape the Market Emancipatory Illuminations from Burning Man". Journal of Consumer Research. 29 (1)., 20-38. Thompson, Craig J., William B. Locander, and Howard R. Pollio.(1989). "Putting Consumer Experience Back into Consumer Research: The Philosophy and Method of Existential-Phenomenology". Journal of Consumer Research. 16 (2), 133-146. Arnould, Eric and Craig J. Thompson.(2005)."Consumer Culture Theory (CCT): Twenty Years of Research". Journal of Consumer Research. 31 (4), 868-882. Ariely, Dan and Jonathan Levav.(2000)."Sequential Choice in Group Settings: Taking the Road Less Traveled and Less Enjoyed". Journal of Consumer Research, 27 (3), 279-290. Coulter, Robin A., Linda L. Price, and Lawrence Feick.(2003)."Rethinking the Origins of Involvement and Brand Commitment: Insights from Post socialist Central Europe". Journal of Consumer Research. 30 (2). 151-169. 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