Comparing three b2b or b2c web strategies Essay Example

commercial networks and services, has been accompanied by an astounding increase in the population of Internet users. The huge potential of customers and consumers has businesses scrambling to get on to the Web, with its low cost and broad reach. Millions of people worldwide can utilize the Web's affordable and easy access to view product, service and information offerings from an unknown number of potential entrepreneurs. (Chaffey et. al., 2003)

Estimates say that the business side of the Internet is small today, but with untold billions in potential sales looming ahead. The prospect of millions of bright, well-educated, upwardly mobile people searching for some new outlet in which to spend their money has been too attractive for many businesses to ignore, in spite of slow initial momentum (Johnson, 1995). Estimates of such explosive growth have either lured businesses into planning for Internet marketing or scared them to death because they are not prepared for it.

I.B. Nature of business on the Net

Although the commercial market of the Internet might be small today, it is likely to grow tremendously in the future. Millions of people all over the world can view the contents of the worldwide Internet. It has become affordable and easy to get access to the Internet and most potential customers like to see companies represent themselves there. Customers can search the products of a company and can ask questions directly without having the inconvenience of leaving home. However, a business's traditional strategies are not likely to be appropriate, and thus directly transferable, to electronic commerce. (Allun et. al., 2000)

II. Part - A

The industry selected is the telecommunication industry and the three key players are:

1.Telstra

- www.telstra.com.au

2.Optus - www.optus.com.au

3. Primus - www.iprimus.com.au

All the three players compete in Australia. Before conducting the strategic review, comparing their mix, and sales quality their websites are examined individually to know what are the products/services they offer online, their strengths and then discuss other e-marketing issues later in this report.

II.1. Telstra.com.au

Telestra Profile

Telstra is Australia's leading telecommunications and information services company, with one of the best-known brands in Australia. They offer a full range of services and compete in all telecommunications markets throughout Australia, providing more than 10.3 million Australian fixed line (Telephone lines) and more than 6.5 million mobile services.

Their main activities include the provision of:

basic access services to most homes and businesses in Australia;

local and long distance telephone calls in Australia and international calls to and from Australia;

mobile telecommunications services; a comprehensive range of data and internet services;

management of business customers' IT and/or telecommunications services; wholesale services to other carriers and carriage service providers;

advertising, directories and information services;

and cable distribution services for FOXTEL's cable subscription television services.

Strength

One of Telstra's major strengths in providing integrated telecommunications services is their vast geographical coverage through both our fixed and mobile network infrastructure. This network and systems infrastructure underpins the carriage and termination of the majority of Australia's domestic and international voice and data telephony traffic.

Online Services

Services, which are offered through quick links in the homepage, are as follows, and their links are explained along with them.

Billing & Payments - pay your home, business or mobile phone bills online...

Telstra Shop - browse and buy the latest mobile phones and plans...

Online Tools - access Web Mail, send an SMS via the web, change

your ring tone and more...

Investor Relations - share price, financial reports and more...

Telstra Country Wide - services and support for regional Australia...

Home Phone Services - plans and features to suit your budget and needs...

Order Telstra Services - save time by ordering online...

A telstra search engine is also present along with the service which is used to search information within the website.

In the As advertised' section of Telstra offers

1. Essential Home Phone Promotion where you can when you switch to Telstra and connect to a Telstra HomeLine Plus or HomeLine Advanced Plan and stay connected for 12 months.

2. Hire DVDs online from Telstra where you can choose from thousands of DVDs in the BigPond Movies online DVD library and have them delivered direct to your mailbox, which is also a three day free trial.

3. Double up your credit, where you can connect a Nokia 2112 to Telstra Prepaid Plus by a specified to double your recharges for a year!

In the site to visit' section of Telstra offers Bigpond channels where customers can watch movies, play games, listen to movies and much more. This is an unmetered site for Bigpond subscribers.

Other services like Directories' such as White and yellow pages are also available in the Telstra.com website.

II.2. Optus.com.au

Optus Profile

Optus aims to be the leader in integrated communications solutions for government, corporate, large and medium business. To achieve this aim the Business Services division work towards creating a future for our customers - through innovative solutions, that provide a seamless total communications service.

Strength

With a heritage of over 120 years, SingTel is now paving the way for Optus to become a stronger, more strategic telecommunications

player within the Asia-Pacific region.

Online Services

The homepage Optus.com.au offers services in a different way which has special headings under which the services are allocated under each which are as follows

About Optus - Contains corporate profile, this contains the corporate information, organisational chart and careers at Optus, news room which covers media releases made for optus and all of its services, speeches, investor relations and other reports, Corporate and regulatory, sponsorship and whole sale which contains economic regulation, public policy, arts business and sports under sponsorship.

Business services - Offers services for small business' such as Telephony Mobile Internet and Customers and for large business' such as Voice Over DSL ,Broadband, Online office, Recommend me, Help centre and Customer support which are available online in the website where the businesses can either add or apply for a later service

Home services - Offers Yes rewards', Internet services where services include Local calls, Long Distance, Are you in an Optus cabled area?, FreeTime rates calculators, International barred destinations, Mass service disruption notices, Customer information and television services' where Optus TV packs are available.

Mobile services - Offers services under Browse or buy' such as Personal mobile

Pre-paid mobile, Where to buy, Small business mobile, Hottest deals and network coverage information.

Clever and useful - Under My Optus account' services such as Pay my bill, Set up direct debit, Request a copy, Request a refund, My Optus Mobile, Home services billing, Large business billing.

II.3. Iprimus.com.au

Iprimus (Primus Telecom) Profile

Primus provides a competitive advantage to their clients through excellence in total telecommunications, data, internet and eCommerce solutions while significantly reducing their overall costs.

Strenth

Primus Telecom, one of Australia's largest telecommunications carrier, is one of the

Competitive New Carriers (CNC's) that entered the Australian market and is rapidly defining the standards in service excellence in the industry.

The company's objective is to enable businesses to get online easily and affordably and to take advantage of the Internet's ability to open up new markets on a global scale. This would level the playing field with the larger companies already operating in these markets.

In the eCommerce area, Primus has formed several major relationships with key strategic partners that will change the face of business in Australia and unlock the doors of economic and business success for Australia's SMEs.

Online services

The products and services that are offered online are for internet' such as the Dial-up i.e., the ISP (Internet Service Provider), business' and home phone' which include Broadband internet accesses, ISDN, internet networking and mobile services for both the former ones.

The main homepage comprises of notices for all the services they provide. There are two search engines in the web-site one for searching information inside the website and another for web-search i.e., other sites as well.

Quick links are available on the homepage which directs them to Hotmail, Employment, Weather, Whitepages, Yellow pages, Ninemsn, Yahoo! Mail and ICQ

Live News headlines as links for as breaking news', Sport', Entertainment' and Most popular' are available in the homepage itself.

Other searches such as the Job search, Domain search and Personal search are also available in the homepage.

Primus subscribers can pay their bill online, through the account toolbox and customer support online is also available.

III. Part A. Discussion

Similarities and differences for the three players' marketing strategy in the Internet.

III. A. Target Market (Targeting)

Using traditional segmentation with an Internet audience may

be not only fruitless but also unnecessary. While the demographics and psychographics of Internet users and purchasers are not fully known at this time, some things are definite: they initiate contact, they control information flow, and they control message content. The target market for all the three players are the same whose monthly income is at least $1000 individually and for business customers the monthly income of about $2500 per month. The former one is for B2C including family and the later is the business transaction. Because of the interactivity of the medium, consumers choose the messages they want, and by selecting from finely tuned options, they segment themselves based on their desired product benefits which are obtained either online in their websites or through other advertisements in television or from the call centers. Because all the three players advertise in the internet, television and market even through call centres. This puts the onus on marketers to know the benefits consumers seek from their particular product offerings and so customize messages around them. The key to Internet segmentation is benefits.

Online users are a different audience, initiating contact with marketers as they explore the vast reaches of the Internet. How are they reached? They come to you. A different decision process is at work, as consumers take a more active role, using the Net and Web to actively search for information, evaluate alternatives, and even purchase and relay feedback.

Telstra and Optus understood this so the websites are easy to find because they advertise the website net address in ads and on product packages but primus telecom do not advertise its website net address along with their

product. So in targeting the market primus telecom uses a slightly different method apart from Telstra and Optus.

The accessibility matter is seriously taken into consideration by all the three players so three companies accessibility is enhanced by utilizing click-throughs' from linkages with other websites.

III.A.1 Consumer Hesitancy - a factor affecting online buying

For example, products already enjoying consumer awareness fare well over the Net owing to familiarity; e.g. well-recognized brands that consumers may have purchased previously or about which consumers already have information, such as IBM computers, AT;T phone services, and People magazine. In addition, consumer hesitancy is often assuaged by products or services with definite specifications. Computer shoppers generally understand "32 MB of RAM" or a "3 gigabyte hard drive" regardless of the computer brand. Many air travelers feel comfortable purchasing tickets from Melbourne to Sydney because they know the price.

III.B. Product strategy

The Internet has already indicated its potential in generating brand recognition, developing brand image and building brand equity for all the three companies. So interactive, highly graphic Web sites are used by them to attract attention and interest for products. Actual purchasing, however, has proven so far to be a different story, since only 7 percent of Internet users have actually purchased something via the Net (Aldridge et. al., 1997). Part of this hesitancy can be attributed to the paucity of products available online; many desired items simply are not there yet. However, this fact does not hide consumers' genuine hesitancy to engage in commerce for an unseen product with an unknown seller in an unplaced "store" under the unforgiving eyes of countless strangers who just might be stealing credit card numbers. As

a result, products most likely to sell well over the Net, at least at this stage of its development, have definite characteristics.

Product strategy for Telstra and Optus centers on authenticity - of both the product/service they offer and their respective vendor. Well-recognized brands and vendors will have an edge over newcomers or other unfamiliar names. Guarantees and liberal return policies is prominently displayed, thoroughly explained and vigorously supported. Additional product literatures in hard copy are offered at Web sites for all the three players because consumers are concerned about their inability to see or touch products. Primus telecom's product strategies do not centre for authenticity.

Initially, the three Organisations may appear to have the advantage over retailers as they move into direct channels with consumers. Telstra and Optus brands often enjoy strong brand equity due to heavy promotional support and years of brand building, particularly appealing to risk-averse consumers, than Primus Telecom. But Primus have an advantage over retailers in new product development expertise, and will likely use that expertise to avoid direct competition by developing products specifically for the Net. For price-sensitive consumers, bypassing retailers and buying "factory-direct" offers the additional lure of lower prices.

However, consumers view the Internet less as an avenue for discount pricing and more as a tool for convenience (Aldridge et. al., 1997). Varied merchandise assortments have always been the purview of retailers, and retailers will maintain this advantage on the Internet. Buying direct will likely mean buying from a limited assortment and thus require a willingness to forgo convenience for price. If consumers are unwilling to undergo this change in buying habit, retailers will still have an assortment/convenience advantage.

In response, coalitions of non-competing player like Primus will form to offer more extensive product assortments. In deference to the quality pledge symbolized by brands, family brands and mega brands will grow in importance, whether owned by producers or retailers. In addition, private branding is likely to see an increase on the Net as consumer's voice their confidence in known retailers with whom they are accustomed to dealing. Many of these retailers have a store presence nearby for problem solving or returns handling like in the case of Optus and Telstra. Retailers' assurance of quality and backing of their own brands are imperative as the entire players move into direct channels with their consumers. (Aldridge et. al., 1997).

III.C. Pricing Strategy

For more conventional products, price will be important online just as it is in traditional marketing, perhaps more so since everyone's prices are so readily ascertainable. Online pricing strategy cannot be made without considering competitors. The best pricing strategy can be upset by competitors' price changes, thereby increasing consumers' price sensitivity. As consumers perceive increasing similarity between competing stores, brands or sellers, price competition increases. Likewise, sellers may sometimes be forced to match competitors' prices. A seller that lowers its price in order to gain market share may not benefit if, as they are likely to do online, competitors quickly follow suit with potentially devastating effects on profitability. As mentioned earlier Primus telecom uses or in other terms follows low-cost strategy than when compared with Telstra and Optus.An effective low price strategy must be based on cost advantage and high volume to be sustained.

III.D. Distribution strategy

Direct marketing is the name of the game on the

Internet, offering both consumers and merchants greater control and lower potential costs of access due to the conveniences of the Net. One big difference between traditional and Internet marketing strategy is the necessity of a direct-to-customer fulfillment mechanism. This positions traditional mail-order and telephone-order (MOTO) merchants to profit from Net marketing due to their familiarity with "remote" customers and their existing direct-to-customer channels. New competitors in fulfillment are likely to appear, competing with USPS, UPS, RPS and other package delivery services.

A unique product, benefit, or service will assuage channel conflict and price competition. Addressing this situation, all the three players are increasingly offering one or more product line through their traditional intermediaries and another differentiated line when selling direct. Example the purchase of an airline ticket from an online travel agency may also include hotel reservations and coupons for local entertainment.

Electronic commerce will force other distribution changes. Traditional site location and atmospherics give way to the importance of the Web site as the consumer destination. Fierce competition forces companies to develop outstanding Web pages, since a company must be first in the industry, first with new technologies, or first with a unique service. Web sites should be informative, entertaining, challenging, and unique. Taking these factors into consideration the key players in the industry as mentioned are interactive, involving, and easy to navigate. Many opportunities exist to custom-make Web sites for individual consumers, effectively implementing a benefits approach.

Selling formats unique to the Net will develop in response to customer needs. These cybermerchants will respond to Internet shoppers' focus on convenience. For example, CyberMall is a selling site where merchants can gather to collectively offer greater accessibility

and convenience to customers. Coalitions of noncompeting manufacturers will have joint Web sites to offer greater assortment like in the case of Primus telecom.

III.E. Promotional strategy

The key to promotional strategy on the Internet is a firm's Web site, the place consumers visit to learn about the company and its products, to judge the firm's creativity, to give feedback about themselves, and, of course, to purchase products. Actual Web page content will depend on the firm's goals for the site and will be based on the nature of the organisation behind it. Some sites focus entirely on demand creation with an emphasis on information, entertainment and novelty, while many large businesses, having vastly different goals and resources, and design their sites for both demand creation and fulfillment where consumers can actually buy. Promotional strategy in the websites of all the players in the industry has taken these factors into consideration and so their websites reflect he strategy.

IV. Security Requirements

Similarity in the security requirements in the websites of all the players in the telecom industry in Australia such as Telstra, Optus and Primus telecom

Authentication - are parties to the transaction who they claim to be?

Privacy and confidentiality - is transaction data protected? The consumer may want to make an anonymous purchase. Are all non-essential traces of a transaction removed from the public network and all intermediary records eliminated?

Integrity - checks that the message sent is complete i.e. that it isn't corrupted.

Non-repudiability - ensures sender cannot deny sending message.

Availability - how can threats to the continuity and performance of the system be eliminated? (Chaffey et. al., 2003)

V. SWOT Analysis for each player in the industry.

Telstra and Optus

have similar SWOT which are as follows

Strength - Strong Brand, well experienced in the industry.

Weaknesses - Inflexibility, no fulfillment mechanism.

Opportunities - New markets, services and distribution, demographic characteristics.

Threats - New entrants, new products, customer choice.

Primus telecom

Strength - Strategy and channels are in place, low-cost strategy

Weaknesses - Weak brand, inflexible

Opportunities - New markets, services and other demographic characteristics.

Threats - Competing against strong brand like Optus and Telstra.

VI. The Micro-environment of the selected industry

The suppliers, organisation (Telstra, Optus and Primus), competitors and Customers.It is very clear that the competitors are each other and the organization are themselves and the customers are the same throughout the industry. (Chaffey et. al., 2003)

VII. Part - B

The fourth virtual player in the industry is assumed to be X-Teleservices' and the online marketing strategy is as follows. In short X-teleservices is called as X' just for the convenience for the completion of this report.

Developing a successful internet marketing strategy is an essential part of an online business success. In order to succeed, X-Teleservices must develop and implement a strategic plan that includes all of the following:

A great product/Services

A website specifically designed to sell

A killer marketing strategy

Each step plays an important role in X-Teleservices' overall strategy and must be developed to its fullest potential. If even one step fails, the chances of success will be minimal.

Developing the Product

First step will be to develop a great product. The absolute best product is one that can be developed by X and deliver over the Internet. With today's technology, there is absolutely no reason why can't X create its own product. The knowledge X has within the mind is extremely valuable. Everybody is good at

something, has a special talent or some specialized knowledge. Use this knowledge to create a product.

The key to developing a great product is exclusiveness. The product should be unique and not be in competition with hundreds of other similar products such as Telstra and Optus. X must give its potential customers exactly what they want. X should develop a high-quality product that fills a void to increase its chance of success.(Shelly, 2005)

Another consideration of great importance is its target market. The Internet is a global marketplace. So X' should develop a product with a large geographic target and a wide appeal. A great product will fulfill a need or desire and provide instant gratification.

The most important consideration when developing the product is quality. The product should not only deliver what X promises, but should go above and beyond the expected and over deliver. The customer's satisfaction is of the utmost importance.

Developing the Website

Once X have developed a great product, the next step will be to develop a great website. The website must be specifically designed to sell X's product/service.

Everything within the website should have one purpose -- getting the visitor to take action. Words are the most powerful marketing tool everyone(players) have. The right words will turn the visitors into customers. The wrong words will cause them to click away and never return.

The words are the entire foundation of X's business. The product, website and marketing strategies all depend upon the words. Fancy graphics don't make sales -- words do.

Every word, sentence and headline should have one specific purpose -- to lead the potential customer to the order page. Write the website copy as

if you are talking to just one person. Identify a problem and validate that one visitor's need for a solution. Continue to write and explain why the product is the solution to their problem. Tell them exactly what the product will do for them -- why it will solve their problems and how. Pack the copy with benefits and more benefits.

Developing the online Marketing strategies

The marketing strategy is the final process of the plan. The plan must include both short-term and long-term strategies in order to succeed.

Short term marketing strategies are those that bring a temporary boost in traffic. Although these techniques are very important to over-all plan, they are only a temporary traffic source and must not be solely relied upon.

Short term marketing strategies include:

Purchasing advertising

Bulletin Boards

Search Engines

Long term marketing strategies are those that bring you a steady stream of targeted traffic over time. These strategies will continue to produce results even years down the road.

Long term marketing strategies include:

Opt-in Lists

Freebies

Content

By creating and implementing a balanced marketing strategy, using both short-term and long-term strategies, X will drive a steady stream of targeted traffic to the website.

Ezine Advertising

Ezine Advertising is one of the most effective forms of advertising on the Internet. Not only is it effective, but it can also be very inexpensive depending upon the size of the publication.

The key to using ezine advertising effectively is to target your audience and track your response. You must test the effectiveness of both your ad and the publication in which you're advertising. This will enable you to determine which ads are pulling the most response and which publications are providing you with a high

response rate. (Shelly, 2005)

Pay-Per Programs

Pay-per programs include, pay-per-click, pay-per-lead and pay-per-sale.

Pay-per-click programs will enable you to advertise to your target audience and only pay for results -- you pay a set amount for each visitor that is sent to your website. The most popular pay-per-click program is the pay-per-click Search Engines.

Opt-In Email Marketing

Another powerful advertising method is opt-in email marketing. There are many Internet companies that will allow you to purchase targeted lists of individuals who have chosen to receive commercial email messages. Although this form of advertising can produce a good response, it can be rather expensive. Make sure you have fully tested your sales copy and have a good response rate prior to purchasing this type of advertising. In addition, make sure you only deal with a reputable company, as there is a very thin line between "opt-in" and "spam." Some of these companies may use unethical means of obtaining email addresses. The only company I can recommend is PostMasterDirect.com.

Before purchasing any "major" advertising, make sure you have fully tested your ad copy. Take your time and plan your advertising carefully for the best results. Your success depends upon it.

Security Requirements are also taken into consideration as mentioned earlier.

Authentication - are parties to the transaction who they claim to be?

Privacy and confidentiality - is transaction data protected? The consumer may want to make an anonymous purchase. Are all non-essential traces of a transaction removed from the public network and all intermediary records eliminated?

Integrity - checks that the message sent is complete i.e. that it isn't corrupted.

Non-repudiability - ensures sender cannot deny sending message.

Availability - how can threats to the continuity and

performance of the system be eliminated? (Chaffey et. al., 2003)

Building the Subscriber Base

There are many powerful ways to build the subscriber base. However, for this report, we will only focus on the "best" ways.

The Website

Place a subscription box on every page of the website. Make sure X don't overlook this powerful means of gaining new subscribers. X's visitors will enter the website from many other pages other than the actual main page. They may never even visit the main page, so make sure the subscription box is visible on every page of the website.

Incentive Subscriptions

This is a powerful means of obtaining subscribers entails offering the visitors a free gift in return for their subscription. This free gift may be a free e-book, software, or report. This method of obtaining new subscribers will increase the subscription rate immensely.

Writing Articles

Writing informative articles and allowing them to be freely published is the best way. By writing articles, X can significantly increase its subscriptions. The key to using this method effectively is to include the subscription information within the bylines.

Free Ebooks

Create a powerful free e-book and allow it to be freely distributed. Place the subscription box on each page. The e-book will have the potential to be viewed by millions of Internet users. (Shelly, 2005)

Customer Service

In order to develop a good relationship with the customers, X must provide them with quality customer service. Let them know that, should they have any questions or problems, they are free to contact X. Provide them with all of the contact information to make the process simple. Even if X can't personally assist them, make sure that X have a good customer support

group ready to help. Reply to their support requests as quickly as possible and assist them until the problem is resolved.

X's customer service is one of the most important factors in determining its customer's satisfaction. Even if X has a great product or service, if its customer support isn't good, its sales will suffer.

For every dissatisfied customer, you can expect to lose one hundred new customers. Why? When one customer has a bad experience with your company, you can be certain that they'll tell everyone they know about their bad experience. It will travel through the grapevine and ultimately cost you sales.

Follow-up with your customers and ask them how they like your product or if they have any questions. This is a great way to not only provide good customer service, but to also obtain feedback about your product. By listening to your customers, you will know exactly what they want, what they're having problems with and how you can develop a better product. (Shelly, 2005)

Mailing List

The best way to follow-up with your customers is to set up a mailing list. No matter what mailing program you use, make sure that it will allow you to send personalized messages. Your customers need that personal touch. They don't want to feel as if the message they received was sent to an entire list. They want to feel as if it was personally sent to them.

By following up with your customers and providing great customer service, you are creating a life-long relationship. Satisfied customers are more apt to purchase your new products in the future. Treat them with the utmost respect and go above

and beyond the expected. (Shelly, 2005)

VIII. Conclusion

A company's website is the most poplar e-business application across all the business sectors. Establishing and maintaining these sites is expensive. X has to take into consideration all the factors that have been explained in Part-B to succeed in the internet marketing strategy.

References

Aldridge, A., Forcht, K., Pierson, J., 1997, "Get linked or get lost: marketing strategy for the Internet", Internet Research: Electronic Networking Applications and Policy, Vol. 7, No. 3 pp. 161-169

Allun, S. & Chudry, F., 2000, "The internet - A fad or a fundamental for relationship marketing", Journal of database marketing, Vol.8, No.1, pp73-86

Chaffey, D. M., et. al., 2003, "Internet marketing, Strategy, implementation and practice", 2nd edn., Prentice hall.

Hof, R.D., Verity, J.W., 1994, "The Internet: how it will change the way you do business", Business Week, November 14, 80-83.

Johnson, J.H., 1995, "Realities of virtual enterprise", Internet Commerce, The Standish Group, New York, NY, 5-7.

Shelly, L., 2005 "Killer Internet Marketing Strategies" available online at: () accessed on 16/04/04