Task 2 Develop Projected Profit and Loss Statement for eBusiness

2.3 Develop Marketing Mix Plan

The marketing consultant to estimate the yearly marketing budget for the next two years, assuming some unspecified mix of marketing methods (e.g., AdWords on search engines, optimizing our web site, email marketing, print ads, etc.). The marketing budget for Year One is $875,000 and for Year Two is $1,500,000. You need recommend a mix of marketing approaches that maximizes bang for the buck, and you need to know how the mix should evolve over the next two years by quarter.

One thing to keep in mind is your eBusiness has built a good quality email list of 10,000 store customers which you can leverage for the eBusiness. The coordinator would also like you to evaluate whether additional print, radio or TV marketing should play a role in the marketing plan, and provide some justification for your answer.

Please provide your recommendations and supporting reasoning in a short document.

1. Evaluate different marketing methods. Review the click through rates and purchase conversion rates for various eMarketing approaches from Marketing Consultant: Marketing Recommendations for your eBusiness. Investigate costs and results of more traditional marketing approaches and determine whether they are appropriate for your eBusiness.

2. Research pricing. You can refer to Google AdWords to determine their pricing for individual queries. For costs related to email campaigns and banner ads, refer to the Marketing Recommendations for an eBusiness.

Note: Don't pay more to get a customer than that customer is worth. Revisit your revenue and traffic estimates to calculate what an average customer is worth to the business. For example, if a customer is worth $8 to the company in sales you don't want to recommend a method that costs more than $8 to attract a customer.

3. Determine the appropriate mix of methods. Synthesize what you've learned about the effectiveness of different marketing approaches, their relative costs, and each method's role in marketing and promotion. Determine which mix of methods will best drive sales and increase brand awareness over the next two years. Keep in mind that the mix you recommend must not exceed the marketing budget.

Note: Consider how to evolve your marketing efforts to keep pace with your success. In the initial stages, the focus is on paid strategies to generate traffic. In these early stages you will begin work on Search Engine Optimization (SEO), but won't necessarily see the benefits right away. In the mid-stage, SEO efforts begin to take hold and paid strategies are minimized. As the site evolves, initial SEO efforts begin to plateau and there is a need to enhance SEO efforts by optimizing for additional search terms. Adding targeted paid strategies can help boost customers as the additional SEO efforts begin to show results.

4. Write up your recommendations. Summarize your recommended marketing approaches and the staging of those approaches over the next two years. Include a brief explanation of your reasoning for your recommendations.

5. Complete the marketing cost spreadsheet. Enter the costs allocated to each method over the next two years by quarter in an Excel worksheet. Total the costs allocated to all methods and verify that you have not exceeded the planned marketing budget.

6. Submit both your Mix Marketing Plan and the Excel worksheet with the allocated marketing costs.

Appendix:

Marketing Consultant: Marketing Recommendations for Your E-business

Executive Summary

The life-blood of an eCommerce site is relevant traffic. The online retail sales market is estimated to be over $873 billion dollars, and growing rapidly. The most effective way to attract some of the customers driving this immense industry and growth is search engine optimization (SEO). SEO provides the greatest amount of return on investment of any promotional method, and is a more trusted method of finding information than traditional advertising for users. In this report, we outline a strategy that emphasizes SEO promotion and compliments it with supporting efforts in AdWords, email, and banner advertising. With the right execution and a good mix of strategies, Your company can generate revenues from day one, with excellent prospects for future growth.

Your Website Objectives

The image you want to project with your website

The target market for your E-business is the individual or small business buyer who is purchasing either for themselves individually, or for an organization of less than 100 people. These consumers are especially sensitive to price, brand reputation, and storefront image. Most do not have an IT infrastructure supporting them, and therefore require additional customer or technical support.

Factors that are most important to this demographic of customers include price competitiveness, excellent customer support, a hassle-free experience, and access to the latest technology. In order to most effectively meet our customers expectations and minimize the effort or resistance to doing business, the website should exude the feeling of calm and competent expertise. We recommend lighter hues and tones of color with stylish contrasting trim. Most of these customers are professionals who appreciate a smooth navigation experience that is intuitive and contains few surprises. In this respect, navigating your (Green Bay) E-business website should be easy for someone who has never seen the website before, based on their experience with other similar product websites.

A distinctive color scheme and eye-catching design is certainly important, but the factors that really keep customers coming back are comfort, reliability, quality, competitive pricing, and most importantly an easy-to-locate website with strong visibility in the search engines.

The value-add your website will provide to your customers

Your E-business will serve individual and small business customers with top-of-the-line customer support, technology advice, aggressive competitive pricing, and a no hassle shopping experience.

Your eCommerce business model How your website will achieve its revenue objectives

Central to achieving your revenue objectives is the acquisition of new customers for the online business unit. While referrals from satisfied customers at your bricks and mortar operation will provide one stream of potential customers, new customers from outside your existing sphere of influence are the most desirable for developing new revenue in the online retail business unit and will represent the vast majority of new revenue.

The most cost-effective source of potential customers will be from search engines. To access the stream of users typing in searches that are relevant to your business and the products that you sell, an aggressive search engine optimization strategy is recommended. Depending on the size of the online promotion efforts, your website can be effectively optimized to place well in the search results for between 10 and 50 search terms.

In addition to search engine optimization efforts, purchasing AdWord placement in Google and the equivalent in Yahoo or Bing is an effective complementary method of boosting traffic.

Your On-Line Market

A description of your on-line marketplace (size, characteristics, etc.)

The consumer electronics marketplace is worth over $873 billion in annual revenue, growing at an estimated compound annual growth rate of approximately 7%. Presently, demand is led by the United States and Europe, while future demand is expected to be further boosted by developed and developing Asian economies as demand for consumer electronics deepens through their populations. The majority of this market transacts business online, defining an extraordinarily large market with opportunity for agile, cutting edge electronic retailers to gain market share.

Although competition in the consumer electronics retail industry is very aggressive and price-sensitive, premium experiences, as well as uncommon regional value add schemes, have the opportunity to gain significant traction in the marketplace. Critical for the success of any online electronic retail business is the volume of potential customers visiting the website with intent or possibility to buy. Not only do these potential customers generate revenue directly, but the information that your online business unit will collect about these customers contains potential value in itself, and the efficiency with which you acquire new customers will be a major factor in the valuation of your business. Therefore the importance of activity that generates relevant traffic to your website cannot be overstated.

How your market uses the internet for research and purchasing

Online research, including product reviews, is the single largest contributing factor to a purchase decision for consumer electronics buyers. Of those that purchased online, the primary determining factor in where they purchased was price, followed by convenience. Based on these factors your website must combine access to relevant information for your customers with highly competitive pricing and a convenient, easy-to-use purchase process.

The Competition

Primary competitors and summary analysis of their business

Pure online electronics retailer competitors include Amazon.com, newegg.com, and BestBuy.com, as well as many more first- and second-tier competitors.

Primary competitor website features and services

Aggressive pricing, intuitive navigation, and convenient purchase processes are prevalent on all of these websites. All of these websites include some form of product recommendation system based on product popularity, or some other form of data mining.

Competitor rankings in Google, and Bing for your keywords

These websites also compete aggressively for high search result ranking on relevant terms, including specific product names. Although these electronic retailers are established, market share can still be captured from them by capturing users with competitive search engine rank placement, then converting them into paying customers on your website by providing all of the relevant information as well as a convenient and hassle-free purchase experience.