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Chapter 4: Marketing on the Web
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Chapter 4: Marketing on the Web

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  1. Chapter 4:Marketing on the Web

  2. Objectives In this chapter, you will learn about: • When to use product-based and customer-based marketing strategies • Communicating with different market segments • Customer relationship intensity and the customer relationship life cycle • Using advertising on the Web • E-mail marketing • Technology-enabled customer relationship management • Creating and maintaining brands on the Web • Search engine positioning and domain name selection

  3. Web Marketing Strategies • Four Ps of marketing • Product • Physical item or service that the company is selling • Price • Amount a customer pays for the product • Promotion • Any means of spreading the word about the product • Place • Need to have products or services available in different locations

  4. How do you reach customers? • Identify groups of potential customers • Select the appropriate media • Build the right message (write to your reader) • Content (e.g., product presentation) • Context (e.g., trust)

  5. Customer-Based Marketing Strategies • How do you build a customer-based marketing strategy? • Rudimentary approaches start by identifying groups of customers who share common characteristics

  6. Market Segmentation • Market segmentation is dividing the pool of potential customers into segments and targeting specific portions of the market with advertising messages • Segments are usually defined in terms of demographic characteristics • Micromarketing is a term suggesting that we can target very small market segments

  7. Market Segmentation • Geographic segmentation: Where are they? • Demographic segmentation: Income, race, education, etc. • Psychographic segmentation: variables such as social class, personality, or lifestyle

  8. Geographic Segmentation

  9. Trust and Media Choice • The Web is an intermediate step between mass media and personal, FTF, contact • Companies can use the Web to capture some of the benefits of personal contact, yet avoid some of the costs inherent in FTF customer management • Trust is often related to proximity

  10. Product-Based Marketing Strategies • The product-based strategy views the world from the perspective of the firm and its products • For example, stores such as Staples and Sears believe customers organize their needs into product categories and they organize their sites accordingly

  11. Beyond Market Segmentation: Customer Behavior and Relationship Intensity • Behavioral segmentation: Creation of separate experiences for customers based on their behavior • Occasion segmentation: Behavioral segmentation based on things that happen at a specific time • Usage-based market segmentation: Customizing visitor experiences to match the site usage behavior patterns of each visitor

  12. Beyond Market Segmentation: Customer Behavior and Relationship Intensity • Behavior-based categories include: • Simplifiers like convenience • Surfers use the Web to find information and explore new ideas • Bargainers are in search of a good deal • Connectors use the Web to stay in touch with other people • Routiners return to the same sites over and over again

  13. Customer Relationship Intensity and Life-Cycle Segmentation • One goal of marketing is to create strong relationships between a company and its customers • Good customer experiences can help create an intense feeling of loyalty • Touchpoints • Online and offline customer contact points • Touchpoint consistency: provide similar levels and quality of service at all touchpoints

  14. Acquisition, Conversion, and Retention of Customers • Acquisition cost • Money a site spends to draw one visitor to the site • Conversion • Converting a first-time visitor into a customer • Conversion cost: the cost of inducing one visitor to make a purchase, sign up for a subscription, or register • Retained customers • Customers who return to the site one or more times after making their first purchases

  15. Customer Acquisition, Conversion, and Retention: The Funnel Model • Funnel model: Used as a conceptual tool to understand the overall nature of a marketing strategy that is similar to the customer life-cycle model

  16. Advertising on the WebTerms and Concepts • Banner ad • Small rectangular ad • Interactive marketing unit (IMU) ad formats • Standard banner sizes • Banner exchange network • Coordinates ad sharing • Banner advertising network • Acts as a broker between advertisers and Web sites that carry ads

  17. Advertising on the WebTerms and Concepts • Cost per thousand (CPM) • Pricing metric used when a company purchases mass media advertising • Trial visit • First time a visitor loads a Web site page • Page view • Each page loaded by a visitor • Impression • Each time the banner ad loads

  18. Advertising on the WebTerms and Concepts • Pop-up ad • Appears in its own window when the user opens or closes a Web page • Ad-blocking software • Prevents banner ads and pop-up ads from loading • Interstitial ad • When a user clicks a link to load a page, the interstitial ad opens in its own browser window • Clickstream • Information (e.g., page visits, duration, etc.) that a Web site can gather about its visitors

  19. Site Sponsorships • Advertisers are given an opportunity to sponsor all or part of a website. •

  20. E-Mail Marketing • Dangerous Territory or Priceless Opportunity? • Email is cheap! But, customers hate spam • How should a firm use email? • Opt-in e-mail is should be the rule. • Conversion rates are higher and complaints are fewer • Combine email content with appropriate, targeted ads

  21. Technology-Enabled Customer Relationship Management • Customer relationship management (CRM): processes and technologies used to manage relationships with clients • Relationship management: collecting, managing, and analyzing information about a customer’s behavior, buying patterns, etc., andusing it to customize the interactions with the customers

  22. Creating and Maintaining Brands on the Web • Elements of branding include: • Differentiation: How is our product unique? • Relevance: How does our product fit into our customers’ lives? • Perceived value: What is value of our product to a potential customer?

  23. Emotional Branding vs. Rational Branding • Emotional branding is the norm; let’s make customers feel good about our product, themselves as users of our product, or others affective paths to persuasion • Coca Cola video game ad (1st QTR) • Rational branding relies on the cognitive appeal of the specific service offered, not purely on a broad emotional appeal • Toyota Tundra truck ad (1st QTR) • Brand Leveraging is done to extend the image or value of a successful brand to other product offerings • Sprint Broadband ad (2nd QTR) • Nationwide Insurance ad (3rd QTR)

  24. Affiliate Marketing Strategies • Affiliate marketing • One firm’s Web site includes descriptions, reviews, ratings, or other information about a product that is linked to another firm’s site • Affiliates receive compensation from the selling site’s brand in exchange for the referral • Cause marketing is a type of affiliate marketing program that benefits a charitable organization

  25. Viral Marketing Strategies • Relies on existing customers to tell other people about products or services they have enjoyed using • Example: • Blue Mountain Arts • Woot • gmail

  26. Search Engine Positioning and Domain Names • Search engines have 3 major parts: • Spiders, crawlers, or robots • Programs that automatically searches the Web • Index or database • Storage element of a search engine • Search utility • Uses terms provided to find Web pages that match

  27. Search Engine Positioning and Domain Names • Search engine positioning or search engine optimization is the process of tuning a site so that it is listed in the top 10 of results

  28. Paid Search Engine Inclusion and Placement • Paid placements involve purchasing a top listing on the results pages for a particular set of search terms • e.g., Google Adwords • Search engine placement brokers are companies that aggregate inclusion and placement rights on multiple search engines

  29. Web Site Naming Issues • Domain names • An important part of selling online can be the domain name for the site. • If you want a car, might you give a try?

  30. URL Brokers and Registrars • URL brokers • Sell, lease, or auction domain names • ICANN • Maintains a list of accredited registrars • Domain name parking • Permits the purchaser of a domain name to maintain a simple Web site so that the domain name remains in use

  31. Summary • Four Ps of marketing • Product, price, promotion, and place • Market segmentation • Using geographic, demographic, and psychographic information can work well on the Web • Types of online ads • Pop-ups, pop-behinds, and interstitials

  32. Summary • Technology-enabled customer relationship management can provide better returns for Web businesses • Firms on the Web can use rational branding instead of emotional branding techniques • Critical for many businesses is successful search engine positioning and domain name selection