SAP's Internet Marketing Strategy: A Comprehensive Analysis
This paper evaluates SAP's Internet marketing strategy as part of the company's broader global integrated marketing approach. It examines how SAP uses go-to-market architectures to coordinate multi-channel campaigns across regions, how the company segments its target markets—including large enterprise verticals and small-to-medium-sized businesses—and how it executes customer acquisition, retention, and service strategies. The paper also explores the technical infrastructure underpinning these efforts, including SAP's Services-Oriented Architecture and Enterprise Content Management framework, and reviews the metrics used to evaluate Internet marketing performance. A SWOT analysis and discussion of social and regulatory issues, particularly the Sarbanes-Oxley Act, round out the assessment.
- Introduction: Overview of SAP's global Internet marketing approach
- Target Customer Segments: Enterprise verticals and SMB segmentation strategies
- Customer Acquisition Strategies: Reference programs and multi-channel acquisition tactics
- Customer Retention and Service Strategies: Global surveys, CRM integration, and 360-degree customer view
- Integration into Overall Marketing Strategy and Technical Infrastructure: Campaign architectures, SOA, and content management systems
- Evaluation of Goals and Metrics: Key performance metrics for Internet marketing campaigns
- Social and Regulatory Issues: Sarbanes-Oxley compliance and global regulatory challenges
- SWOT Analysis: SAP's strengths, weaknesses, opportunities, and threats
- Conclusion: Synthesis of SAP's integrated marketing strategy effectiveness
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What makes this paper effective
- The paper integrates multiple analytical frameworks—market segmentation, SWOT analysis, and technical architecture review—into a single coherent evaluation of SAP's Internet marketing strategy.
- It grounds abstract marketing concepts in concrete data, such as SAP's Total Addressable Market projections, CRM market share figures, and specific performance metrics from the evaluation table.
- The inclusion of regulatory compliance analysis (Sarbanes-Oxley) alongside marketing strategy demonstrates awareness that enterprise software companies operate within complex legal and governance environments.
Key academic technique demonstrated
The paper demonstrates the technique of multi-level strategic analysis: it moves systematically from market segmentation and customer-facing strategies through technical infrastructure and performance measurement to broader competitive and regulatory context. This layered approach allows the author to show how individual marketing tactics connect to enterprise-wide systems and global business goals, rather than treating Internet marketing as an isolated discipline.
Structure breakdown
The paper opens with an introduction that frames SAP's Internet strategy within its global marketing goals. It then proceeds through customer segmentation (enterprise verticals and SMBs), acquisition and retention strategies, service strategies, campaign integration, and technical infrastructure. A metrics table evaluates performance outcomes, followed by sections on regulatory compliance and a full SWOT analysis. The conclusion synthesizes the findings and affirms the value of SAP's multi-segment, architecture-driven approach. This structure mirrors a professional marketing audit format, making it useful as a business analysis template.
Introduction
SAP's ability to execute on and compete using an Internet-based market strategy is a central part of the company's global approach to defining integrated marketing strategies, establishing go-to-market architectures that support core messaging, and identifying key target markets. SAP is distinctive in its approach to building entire architectures that support a multi-market, multi-channel planning and measurement framework for Internet campaigns.
This paper reviews SAP's use of go-to-market architectures to support its Internet marketing strategies, taking into account customer target segments, customer acquisition strategies, and customer retention strategies. It also addresses customer service strategies, the integration of Internet-based strategies with overall marketing strategies, the technical architecture SAP employs, and the company's approach to content management. Finally, the paper discusses the use of dashboards for measuring Internet strategy performance, an overview of the social and regulatory issues SAP faces in its global operations, and a concluding analysis of the company's integrated marketing campaign.
Target Customer Segments
SAP's core business applications generated $30 billion in worldwide revenue in 2004. By 2010, an additional $40 billion in Total Addressable Market (TAM) was anticipated through the organic growth of SAP NetWeaver, mid-market expansion, industry vertical marketing, and Small and Medium Business (SMB) programs. Figure 1 illustrates the growth projection of TAM as defined by SAP's senior management at the Annual Shareholder's Meeting.
Figure 1: Global Available Market Sizing (SAP, AMR Research)
Source: SAP Annual Shareholder's Conference, 2006.
At the center of SAP's global growth is its coverage of key vertical markets. SAP's vertical market penetration, shown in Figure 2, maps the total count of companies in the Global 500 against SAP's customer penetration by vertical.
Figure 2: SAP Penetration by Vertical Market
Source: SAP Annual Shareholder's Conference, 2006.
SAP's approach to defining vertical markets constitutes a segmentation criterion the company has consistently applied with success to its product strategies. Figure 3 illustrates how SAP's vertical market segmentation directly drives its product differentiation strategies.
Figure 3: SAP's Vertical Market Segmentation Directly Drives Their Product Strategies
Source: Friedman, Billings, Ramsey (13).
Recognizing the recent growth of technology spending among SMB customers — a 41% increase between 2001 and 2004 — SAP sought to segment small- and medium-sized businesses according to their software needs in order to better serve this customer group. SAP now divides SMB customers into two segments: "sophisticated," for the most technologically equipped, and "advanced," for those with less technological sophistication.
Based on this segmentation initiative, SAP launched a program called "Smart Business Solutions," which addresses the distinct SMB segments according to their degree of technological sophistication. SAP identified a need for product individualization and industry-specific functionality among the sophisticated customer segment, and developed a product offering based on its flagship mySAP.com suite. The mySAP.com SMB product assists small- and medium-sized manufacturers seeking to extend and maximize their supply chains. For the advanced customer segment, SAP recommends its BusinessOne product — a less complex offering that assists with core operations such as accounting, customer and vendor management, purchasing, selling, reporting, and analysis. BusinessOne also offers analytical tools that can track events online and generate customizable reports.
In 2002 — one year after introducing its two-tiered SMB segmentation strategy — SAP reported strong global support for the initiative, citing increases in new customers obtained, geographic markets reached, and distribution partners utilized. Today, this growth continues with the development and refinement of SAP's approach to hosted and on-premise application solutions in the SMB arena.
Customer Acquisition Strategies
SAP's approach to customer acquisition centers first on mining its existing customer base for follow-on sales, in addition to extensive reliance on all forms of digital and electronic media. At the core of SAP's customer acquisition strategy is a heavy emphasis on its world-class base of referenceable customers. The following are the key lessons learned from SAP in creating customer references as the basis of its acquisition strategy:
Approach references through multiple channels. SAP relies on approaching customers through multiple channels, including mailings, web announcements, and sales representatives who are incentivized for bringing on references. Once accepted as a reference, participants receive a welcome call and a "fun box" filled with branded goodies such as bobblehead figures and a retro-style radio.
Maintain privacy of references. SAP maintains the exclusivity and privacy of its reference community. To become a member, a potential reference must apply and be accepted by moderators, with the option to remain anonymous. Only customers and potential clients may access the community; extraneous SAP staff and sales representatives may not participate.
Ensure full disclosure of the reference program. Once a customer agrees to participate, an SAP representative contacts the reference to explain the exact role and obligations of serving as a reference. Together they examine availability and determine how the reference would like to interact with potential clients — via email, telephone, or at trade shows.
Cultivate relationships with references. SAP's program is designed around one core purpose: cultivating relationships with customer references, thereby narrowing and maximizing the efforts of the group.
Provide a rewards system. SAP maintains a compelling rewards system based on a point accrual model. Because many corporations have strict rules about employees receiving gifts from vendors, SAP carefully selects its reference incentives — including hats, T-shirts, free SAP technology training, free tickets to SAP conferences, and significant charitable donations. References who accrue a high number of points receive guest speaker invitations at lectures and conferences, positioning them as experts among their peers.
Make the Internet site enjoyable. SAP deliberately made its Customer Reference Internet site engaging and fun, resulting in a major increase in traffic and a high rate of adoption among companies wishing to become references.
Conclusion
SAP's dominance in the enterprise software arena is understandable given the many internal systems designed to streamline and expedite all customer-facing strategies. The Internet strategy SAP employs is specifically designed to be part of a broader, globally integrated marketing strategy coordinated across the company's many regions and divisions. Using a go-to-market architecture, SAP has created a solid platform for ensuring a high level of coordination across all strategies.
What makes SAP's execution exemplary is its multi-segment approach to selling into the market — first defining segments from a product perspective, and then focusing strongly on the SMB market. SAP demonstrates best practices in integrating product strategies with marketing execution. The central finding of this analysis is that when an organization has a clear vision of its marketing and Internet-based strategy objectives, the selective application of technology to those objectives can deliver exceptionally strong results.
Works Cited
Columbus. "The Sell-Side E-Commerce Market: It's All About Integration." AMR Research Report. April 1, 2002.
Friedman, Billings, Ramsey. "Technology, Media and Telecom: Enterprise Software — SAP Overview Initiating Coverage." Arlington, VA. November 8, 2006.
Murphy, Jim. "Introducing the Active Knowledge Framework: Putting Knowledge Management to Work." AMR Research Report. January 2005.
SAP Annual Shareholder's Conference, 2006. Dr. Henning Kagermann. Accessed May 9, 2007.
Swanton, Bill. "Planning for ERP Consolidation: Making a Smooth Transition and Convincing Users." AMR Research Report. Boston, MA. July 17, 2003.
Paules and Pletschke. "SAP R/3 Enterprise Technology Facts." Accessed May 9, 2007.
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