While the term e-commerce refers to all online transactions, B2C stands
for "business-to-consumer" and applies to any business or organization
that sells its products or services to consumers over the Internet for
its own use. When most people think of B2C e-commerce, they think of
Amazon, the online bookseller that launched its site in 1995 and quickly
took on the nation's major retailers. In addition to online retailers,
B2C has grown to include services such as online banking, travel
services, online auctions, health information and real estate sites.
Peer-to-peer sites such as Craigslist also fall under the B2C category.
B2C e-commerce went through some tough times, particularly after the
technology-heavy Nasdaq crumbled in 2000. In the ensuing dotcom carnage,
hundreds of e-commerce sites shut their virtual doors and some experts
predicted years of struggle for online retail ventures. Since then,
however, shoppers have continued to flock to the web in increasing
numbers. In fact, North American consumers adopted e-commerce so much
that despite growing fears about identity theft, they spent $172 billion
shopping online in 2005, up from $38.8 billion in 2000.
By 2010, consumers are expected to spend $329 billion each year online,
according to Forrester Research. What’s more, the percentage of U.S.
households shopping online is expected to grow from 39 percent this year
to 48 percent in 2010.
In October 2010, an extension of B2C, B21 was coined (sometimes referred
to as B2I). While B2C includes all manners of a business marketing or
selling to consumers, B21 is specifically targeted towards an
individual. B21 requires specific Personalization for that individual.
B21 requires Insight in order to create the personalized experience.
Monday, April 9, 2012
Tuesday, March 13, 2012
Targeting and Positioning
One of the most significant uses of industrial market segmentation
schemes is to make targeting and product positioning decisions.
Companies chose to target some segments and downplay or avoid other
segments in order to maximize their competitive advantage and the
likelihood of success.
“There is a critical difference in emphasis between target market and [target] audience. The term audience is probably most useful in marketing communication”. (Croft, 1999) Target markets can include end user companies, procurement managers, company bosses, contracting companies and external sales agents. Audiences, however, can include individuals that have influence over purchasing decision, but may not necessarily buy a product themselves, e.g. design engineers, architects, project managers and operations managers, plus those in target markets.
Croft quotes Friestad, Write, Boush and Rose (1994) as stating that because the purpose of advertising is to persuade, consumers become sceptical of its methods and approaches [and indeed intentions]. However, while this may be entirely true in consumer marketing, the level of trust and reliance on marketing communication by industrial customers is fairly high due to the professional experience and knowledge of the industrial buyer. Some even appreciate advertising because it keeps them informed of the products and services available in the market.
“There is a critical difference in emphasis between target market and [target] audience. The term audience is probably most useful in marketing communication”. (Croft, 1999) Target markets can include end user companies, procurement managers, company bosses, contracting companies and external sales agents. Audiences, however, can include individuals that have influence over purchasing decision, but may not necessarily buy a product themselves, e.g. design engineers, architects, project managers and operations managers, plus those in target markets.
Croft quotes Friestad, Write, Boush and Rose (1994) as stating that because the purpose of advertising is to persuade, consumers become sceptical of its methods and approaches [and indeed intentions]. However, while this may be entirely true in consumer marketing, the level of trust and reliance on marketing communication by industrial customers is fairly high due to the professional experience and knowledge of the industrial buyer. Some even appreciate advertising because it keeps them informed of the products and services available in the market.
Monday, February 20, 2012
Offensive marketing warfare strategies
In marketing and strategic management, marketing warfare strategies are a
type of marketing strategy that uses military metaphor to craft a
businesses strategy. See marketing warfare strategies for background and
an overview. Offensive marketing warfare strategies are a type of
marketing warfare strategy designed to obtain an objective, usually
market share, from a target competitor. In addition to market share, an
offensive strategy could be designed to obtain key customers, high
margin market segments, or high loyalty market segments.
[edit] Fundamental Principles
There are four fundamental principles involved:
1. Assess the strength of the target competitor. Consider the amount of support that the target might muster from allies. Choose only one target at a time.
2. Find a weakness in the target’s position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot.
3. Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at one place.
4. Launch the attack quickly. The element of surprise is worth more than a thousand tanks.
[edit] Types of offensive strategies
The main types of offensive marketing warfare strategies are:
* Frontal Attack - This is a direct head-on assault. It usually involves marshaling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors’ line where it is strong. It often involves an attempt to “liberate” a sizable portion of the target’s customer base. In actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker’s strategic advantage is lost. You will be confronting strength rather than weakness. Also, there are many examples (in both business and warfare) of a dedicated defender being able to hold-off a larger attacker. The strategy is suitable when
o the market is relatively homogeneous
o brand equity is low
o customer loyalty is low
o products are poorly differentiated
o the target competitor has relatively limited resources
o the attacker has relatively strong resources
* Envelopment Strategy (also called encirclement strategy) - This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor’s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor’s market. This encroachment liberates market share from the target. The envelopment strategy is suitable when:
o the market is loosely segmented
o some segments are relatively free of well endowed competitors
o the attacker has strong product development resources
o the attacker has enough resources to operate in multiple segments simultaneously
o the attacker has a decentralized organizational structure
* Leapfrog strategy -This strategy involves bypassing the enemy’s forces altogether. In the business arena, this involves either developing new technologies, or creating new business models. This is a revolutionary strategy that re-writes the rules of the game. The introduction of compact disc technology bypassed the established magnetic tape based defenders. The attackers won the war without a single costly battle. This strategy is very effective when it can be realized.
* Flanking attack - This strategy is designed to pressure the flank of the enemy line so the flank turns inward. You make gains while the enemy line is in chaos. In doing so, you avoid a head-on confrontation with the main force.
[edit] Fundamental Principles
There are four fundamental principles involved:
1. Assess the strength of the target competitor. Consider the amount of support that the target might muster from allies. Choose only one target at a time.
2. Find a weakness in the target’s position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot.
3. Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at one place.
4. Launch the attack quickly. The element of surprise is worth more than a thousand tanks.
[edit] Types of offensive strategies
The main types of offensive marketing warfare strategies are:
* Frontal Attack - This is a direct head-on assault. It usually involves marshaling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors’ line where it is strong. It often involves an attempt to “liberate” a sizable portion of the target’s customer base. In actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker’s strategic advantage is lost. You will be confronting strength rather than weakness. Also, there are many examples (in both business and warfare) of a dedicated defender being able to hold-off a larger attacker. The strategy is suitable when
o the market is relatively homogeneous
o brand equity is low
o customer loyalty is low
o products are poorly differentiated
o the target competitor has relatively limited resources
o the attacker has relatively strong resources
* Envelopment Strategy (also called encirclement strategy) - This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor’s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor’s market. This encroachment liberates market share from the target. The envelopment strategy is suitable when:
o the market is loosely segmented
o some segments are relatively free of well endowed competitors
o the attacker has strong product development resources
o the attacker has enough resources to operate in multiple segments simultaneously
o the attacker has a decentralized organizational structure
* Leapfrog strategy -This strategy involves bypassing the enemy’s forces altogether. In the business arena, this involves either developing new technologies, or creating new business models. This is a revolutionary strategy that re-writes the rules of the game. The introduction of compact disc technology bypassed the established magnetic tape based defenders. The attackers won the war without a single costly battle. This strategy is very effective when it can be realized.
* Flanking attack - This strategy is designed to pressure the flank of the enemy line so the flank turns inward. You make gains while the enemy line is in chaos. In doing so, you avoid a head-on confrontation with the main force.
Wednesday, January 11, 2012
Strategic management
Strategic management is a field that deals with the major intended and
emergent initiatives taken by general managers on behalf of owners,
involving utilization of resources, to enhance the performance of firms
in their external environments.[1] It entails specifying the
organization's mission, vision and objectives, developing policies and
plans, often in terms of projects and programs, which are designed to
achieve these objectives, and then allocating resources to implement the
policies and plans, projects and programs. A balanced scorecard is
often used to evaluate the overall performance of the business and its
progress towards objectives. Recent studies and leading management
theorists have advocated that strategy needs to start with stakeholders
expectations and use a modified balanced scorecard which includes all
stakeholders.
Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Strategic management includes not only the management team but can also include the Board of Directors and other stakeholders of the organization. It depends on the organizational structure.
“Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.
Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Strategic management includes not only the management team but can also include the Board of Directors and other stakeholders of the organization. It depends on the organizational structure.
“Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.
Tuesday, December 20, 2011
market dominance
There are several ways of calculating market dominance. The most direct
is market share. This is the percentage of the total market serviced by a
firm or brand. A declining scale of market shares is common in most
industries: that is, if the industry leader has say 50% share, the next
largest might have 25% share, the next 12% share, the next 6% share, and
all remaining firms combined might have 7% share.
Market share is not a perfect proxy of market dominance. The influences of customers, suppliers, competitors in related industries, and government regulations must be taken into account. Although there are no hard and fast rules governing the relationship between market share and market dominance, the following are general criteria:
* A company, brand, product, or service that has a combined market share exceeding 60% most probably has market power and market dominance.
* A market share of over 35% but less than 60%, held by one brand, product or service, is an indicator of market strength but not necessarily dominance.
* A market share of less than 35%, held by one brand, product or service, is not an indicator of strength or dominance and will not raise anti-competitive concerns by government regulators.
Market shares within an industry might not exhibit a declining scale. There could be only two firms in a duopolistic market, each with 50% share; or there could be three firms in the industry each with 33% share; or 100 firms each with 1% share. The concentration ratio of an industry is used as an indicator of the relative size of leading firms in relation to the industry as a whole. One commonly used concentration ratio is the four-firm concentration ratio, which consists of the combined market share of the four largest firms, as a percentage, in the total industry. The higher the concentration ratio, the greater the market power of the leading firms.
Alternatively, there is the Herfindahl index. It is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them. It is defined as the sum of the squares of the market shares of each individual firm. As such, it can range from 0 to 10,000, moving from a very large amount of very small firms to a single monopolistic producer. Decreases in the Herfindahl index generally indicate a loss of pricing power and an increase in competition, whereas increases imply the opposite.
Market share is not a perfect proxy of market dominance. The influences of customers, suppliers, competitors in related industries, and government regulations must be taken into account. Although there are no hard and fast rules governing the relationship between market share and market dominance, the following are general criteria:
* A company, brand, product, or service that has a combined market share exceeding 60% most probably has market power and market dominance.
* A market share of over 35% but less than 60%, held by one brand, product or service, is an indicator of market strength but not necessarily dominance.
* A market share of less than 35%, held by one brand, product or service, is not an indicator of strength or dominance and will not raise anti-competitive concerns by government regulators.
Market shares within an industry might not exhibit a declining scale. There could be only two firms in a duopolistic market, each with 50% share; or there could be three firms in the industry each with 33% share; or 100 firms each with 1% share. The concentration ratio of an industry is used as an indicator of the relative size of leading firms in relation to the industry as a whole. One commonly used concentration ratio is the four-firm concentration ratio, which consists of the combined market share of the four largest firms, as a percentage, in the total industry. The higher the concentration ratio, the greater the market power of the leading firms.
Alternatively, there is the Herfindahl index. It is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them. It is defined as the sum of the squares of the market shares of each individual firm. As such, it can range from 0 to 10,000, moving from a very large amount of very small firms to a single monopolistic producer. Decreases in the Herfindahl index generally indicate a loss of pricing power and an increase in competition, whereas increases imply the opposite.
Wednesday, September 14, 2011
Marketing strategies
Marketing strategies serve as the fundamental underpinning of marketing
plans designed to fill market needs and reach marketing objectives.[2]
Plans and objectives are generally tested for measurable results.
Commonly, marketing strategies are developed as multi-year plans, with a
tactical plan detailing specific actions to be accomplished in the
current year. Time horizons covered by the marketing plan vary by
company, by industry, and by nation, however, time horizons are becoming
shorter as the speed of change in the environment increases.[3]
Marketing strategies are dynamic and interactive. They are partially
planned and partially unplanned. See strategy dynamics.
Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis.[4] Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints.[5] External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success.[3][6] A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.[7]
Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation.[3] A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.
Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis.[4] Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints.[5] External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success.[3][6] A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.[7]
Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation.[3] A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.
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