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Part 2 Strategy and applications
●
Customers who are brand- loyal – services to appeal to brand loyalists can be pro-
vided to support them in their role as advocates of a brand as suggested by Aaker and
Joachimsthaler (2000).
●
Customers who are not brand- loyal – conversely, incentives, promotion and a good level
of service quality could be provided by the website to try to retain such customers.
Decision 3: Positioning and differentiation strategies
Once segments to target have been identified, organisations need to define how to best posi-
tion their online services relative to competitors according to four main variables: product
quality, service quality, price and fulfilment time.
Chaston (2000) argued that there are four options for strategic focus to position a com-
pany in the online marketplace which remain relevant today. He says that these should
build on existing strengths, but can use the online facilities to enhance the positioning as
follows:
●
Product performance excellence. Enhance by providing online product customisation or
incorporating reviews and detailed product information as with the example of Appliances
Online site (
www.appliancesonline.com
).
●
Price performance excellence. Offer competitive pricing, of which Amazon is the best-
known example. With its buying power and lack of store network, Amazon aims to be
price competitive. However, it doesn’t aim to deliver this across its whole product range,
rather the best- selling products. It has greater productivity on less popular ‘ long- tail’
products.
●
Transactional excellence. A site such as software and hardware e-tailer Dabs.com (
www.
dabs.com
) offers transactional excellence through combining personalisation and pricing
information with dynamic availability information on products.
●
Relationship excellence. This is related to the creation of an exceptional brand experience
(which is described by Figure 11.8). It comprises emotional, design- influenced factors
and rational factors based on ease of use, content quality and performance. For example,
personalisation features enable customers to review sales order history and place repeat
orders such as on the B2B Euroffice (
www.euroffice.co.uk
) and RS Components site (
www.
rswww.com
). The complexity of the interplay between these factors means that it is impor-
tant to use the user research and feedback techniques covered in Chapters 11 and 12 to
understand the quality of the experience as perceived by customers.
These positioning options remain relevant since they share much in common with Porter’s
competitive strategies of cost leadership, product differentiation and innovation (Porter,
1980). Porter has been criticised, since many commentators believe that to remain competi-
tive it is necessary to combine excellence in all of these areas. It can be suggested that the
same is true for sell- side e-commerce and that the experience of the brand is particularly
important. These are not mutually exclusive strategic options, rather they are prerequisites
for success.
The type of criteria on which customers judge performance can be used to benchmark the
proposition. Table 5.10 summarises criteria typically used for benchmarking. Significantly,
the retailers with the best overall score at the time of writing, such as Tesco (grocery retail),
smile (online banking) and Amazon (books), are also perceived as the market leaders and are
strong in each of the scorecard categories. These ratings have resulted from strategies that
enable the investment and restructuring to deliver customer performance.
Plant (2000) also identified four different positional e-strategic directions which he refers
to as technology leadership, service leadership, market leadership and brand leadership. The
author acknowledges that these are not exclusive. It is interesting that this author does not
see price differentiation as important, rather he sees brand and service as important to suc-
cess online.
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