Academic journal article Journal of Business Strategies

Do Traditional Strategic Concepts Apply in the E-Marketing Context?

Academic journal article Journal of Business Strategies

Do Traditional Strategic Concepts Apply in the E-Marketing Context?

Article excerpt

Abstract

This paper explores generic marketing strategies and competitive market positioning in the context of the Australian online book industry. The key research question is the extent to which traditional strategic concepts, like competitive market position and sustainable competitive advantage (SCA), apply in the new world of e-marketing. The most important issue that emerges from the study is that the tools and concepts that are relevant for offline firms are equally applicable for online firms. Different generic strategies call for a different market position and this is borne out in our case study. Special attention is given to the importance of a channel management generic strategy in the e-marketing context. Firms contemplating this option need to have a high level of competency in relationship marketing skills.

Introduction

The diffusion of the Internet has revolutionized the business landscape. Not only has the Internet reconfigured the way companies do business and the way consumers buy goods and services, it has been instrumental in transforming the value chain from manufacturers to retailers to consumers, creating a new retail distribution channel (Donthu & Garcia, 1999). The initial wave of research has investigated piecemeal components of e-marketing, notably banner advertisements and consumer information search processes (Ducoffe, 1996; Hoffman & Novak, 1996; Novak, Hoffman & Yung, 2000; Rowley, 2000). What is missing from this research platform are papers that address the organizationally broader, more strategic aspect of e-marketing. From this point of view, the current special issue of the Journal of Business Strategies is very timely. The agenda of the current paper is deliberately broad. The emergence of a new marketing channel requires testing of the traditional strategic tools to see if they are still applicable.

There is now a well-established kit of concepts that can be used to evaluate and/or develop a marketing strategy for a firm. The tool-kit includes:

* Overall marketing strategy, with an emphasis on distinctiveness

* Generic marketing strategy

* Competitive market position

* Key strengths and weaknesses

* Sustainable competitive advantage (SCA)

* Supporting capabilities

* The marketing mix, including the Four-Ps and overall branding of the company.

Cravens, Merrilees and Walker (2000) provide an exposition of the importance of these components of a marketing strategy. Of course, it is essential that each component is coordinated and integrated in a holistic way. The central proposition in the current paper is that the same tools and concepts are equally applicable to online firms.

There is some urgency to test our central proposition because most of the recent papers in both the e-commerce and e-marketing literature seem to be relatively piecemeal and not strategic. This is not a criticism of the literature; far from it, there is a need to answer many detailed questions, such as the impact of banner advertisements and whether rich media banner advertisements are more effective. Relatively few of these papers have adopted an overall strategic framework. Strictly speaking, we are in an agnostic position as to whether firms have acted in a strategic way. However there is a superficial impression that many of the new e-retail sites have adopted a "me too" approach, in that they do not seem to be highly differentiated from competitive sites.

There are two research questions. Firstly, can the standard strategic marketing management concepts and tools be used as a framework to analyze online strategies? Secondly, to what extent have the three key firms in the Australian online book industry adopted a strategic approach in the way they have done business? These questions are important because there are now dozens of books about Internet marketing that emphasize that it is different to conventional marketing, suggesting that the answer to the first question is no. …

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