# mis-677-e-commerce-summer-2015-assignment-2-10-points

MIS 677 – E-Commerce – Summer 2015

Assignment 2 – 10 Points

Reference Chapter for Assignment 2: Chapter 6:
E-Commerce Marketing and Advertising Concepts

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Use
the above Online Consumer Purchasing Model and information provided to assess
the effectiveness of an e-mail marketing campaign for a small-sized e-commerce
company focused on sales of trendy apparel to the ages 18-26 young adult market
in the United States.

For
this e-mail marketing campaign:

The
company purchased and used 100,000 e-mails @ 25 cents cost per e-mail address.

The
expected click through rate is 15%

The
conversion to customer rate is 10%

The
loyal customer retention rate is 25% (for the purpose of this e-mail marketing
campaign assume that a loyal customer makes two purchases).

The
average sale is \$60.00

The
profit margin is 50%

Answer/Respond to the following:

1. Does this e-mail
marketing campaign produce a profit? (Must show all work to support answer to

 Total Email = \$100,000.00 Total cost= \$ 25,000.00 (Total email X .25) The expected click through rate= \$ 15,000.00 (Total click through X .15) The conversion to customer rate= \$ 1,500.00 (Conversion to customer X .10) Number of Loyal customer = \$ 375.00 (No of total customer who bought at least once X .25) Total Number Of Purchase= \$ 1,875.00 (1500 + 375) Total Sales amount = \$112,500.00 (Total Number of Purchase X \$60) Total profit from the sales amount = \$ 56,250.00 (Total Sales amount X .5 ) Total Net Profit = \$ 31,250.00 (Total profit from the sales amount – Total cost) Yes, the e-mail marketing campaign produced \$31,250.00 worth of profit from the e-commerce company.

2. Suggest
some specific ways to increase the response rate to this e-mail marketing
campaign.

The marketing potential of e-mail is
evident in the way it is competing other media as a form of direct
communication. E-mail has been adopted by both consumers and businesses
globally. Email marketing is geared towards developing relationships over time.
Enhancing this process can be achieved through email personalization. Various
studies have found out that the more the number of personalization elements in
an email, the better the response rate. Its starts by addressing(Kaushik,
2011) the recipient by their name. Genuine
personalization is a situation whereby emails are customized to the particular
profile, preferences and interests of every recipient. Personalized emails give
the impression that time has been taken to write to the individual making them
feel good and obliged to respond(Pavlov,
Melville, & Plice, 2008).

The time of the day or year affects
the response rate received through email marketing. There are many times when
things are more sensitive. The sooner the email is sent, the higher the chances
of getting more response. The time of the year also matters, for example
offering a

tropical vacation on summer might not be as effective as
offering the same in winter time. Sending emails on holidays might go unnoticed
as opposed to working days(Kaushik,
2011).

Organizations spend a lot of money
and time on the creative part of email marketing development leaving out fewer
resources on call to action. Creating a great call to action entails telling
your audience exactly what you intend to do and by when. This has demonstrated
to enhance and increase the response of email marketing by convincing the email
recipients to take action right away (Stein
& Devaney, 2013).

To enhance response, the design
element must be put into consideration. Graphics should not be overdone or
underdone. Too much graphics take more time to load on a webpage leaving the
user frustrated. This has been proved to increase response to emails. In addition,
message should contain tangible benefits that the user can derive from
responding to the email such as saving time, money and convenience. A user
should be given an option of opt out or as popularly known as unsubscribe. This
eliminates the number of uninterested users helping the company to focus on
only the interested market segment (Stein &
Devaney, 2013).

3. Are e-mail
marketing campaigns effective? If not, why not? If yes, why are they effective
and which specific types of e-mail marketing campaigns are most effective?

The effectiveness of email marketing
strategy is determined by the strategy put in place by the organization. A
study conducted by Custora, a predictive analytics firm found out that customer
acquirement through email has quadrupled in the past four years and currently
accounts for approximately seven percent of customer acquisitions. Customers
who go to a business through email have shown a tendency of shopping more in
addition to spending more. The study

conducted by Custora demonstrated that email customers are
eleven percent more valuable than average (Stein
& Devaney, 2013).

Email is still effective due to the
fact that it is permission based. The people in an organizations email list
have given the organization the green light to send them messages. With the
advancement in technology such as smart phones and tablets, customers are
always listening. For emails to be effective, they should not annoy. This can
be achieved through giving your audience the power to decide when they can
receive emails. Emails require a different tone compared to social media. The
same message utilized in social media cannot be replicated in email(Kaushik,
2011).

Mobile devices have made email
marketing the most powerful customer acquisition mode. They enable better email
marketing in a variety of ways. For instance, some brands place messages at
their checkout counters telling clients to leave their email address and they
will get five percent discount in their next purchase. In such a manner, they
create their email lists. Mobile gives birth to an array of challenges to
marketers. This means that they must be coded to be attractive on smart phones.
Seventy percent of consumers will unsubscribe from emails in a case where they
look bad. With the right email strategies, email marketing will drive up sales (Stein & Devaney, 2013).

References

Kaushik, A. (2011). Email Marketing: Campaign
http://www.kaushik.net/avinash/email-marketing-campaign-analysis-metrics-practices/

Pavlov, O. V., Melville, N., & Plice, R. K.
(2008). Toward a sustainable email marketing infrastructure. Journal of Business
Research
, 61(11), 1191–1199.
http://doi.org/10.1016/j.jbusres.2007.11.010

Stein, T., &
Devaney, T. (2013). Why Email Is Still More Effective Than Social Media
Marketing.
Retrieved July 1, 2015, from Forbes :
http://www.forbes.com/sites/capitalonespark/2013/10/01/why-email-is-still-more-effective-than-social-media-marketing/

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