Chapter 4 marketing on the web
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Chapter 4: Marketing on the Web 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

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Chapter 4 marketing on the web l.jpg

Chapter 4:Marketing on the Web

Objectives l.jpg

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

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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

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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)

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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

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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

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Market Segmentation

  • Geographic segmentation: Where are they?

  • Demographic segmentation: Income, race, education, etc.

  • Psychographic segmentation: variables such as social class, personality, or lifestyle

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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

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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

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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

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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

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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

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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

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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

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Advertising on the Web ModelTerms 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

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Advertising on the Web ModelTerms 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

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Advertising on the Web ModelTerms 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

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Site Sponsorships Model

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


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E-Mail Marketing Model

  • 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

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Technology-Enabled Customer Relationship Management Model

  • 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

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Creating and Maintaining Brands on the Web Model

  • 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?

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Emotional Branding vs. Rational Branding Model

  • 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)

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Affiliate Marketing Strategies Model

  • 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

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Viral Marketing Strategies Model

  • Relies on existing customers to tell other people about products or services they have enjoyed using

  • Example:

    • Blue Mountain Arts

    • Woot

    • gmail

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Search Engine Positioning and Domain Names Model

  • 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

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Search Engine Positioning and Domain Names Model

  • 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

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Paid Search Engine Inclusion and Placement Model

  • 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

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Web Site Naming Issues Model

  • 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?

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URL Brokers and Registrars Model

  • URL brokers

    • Sell, lease, or auction domain names


    • 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

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Summary Model

  • 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

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Summary Model

  • 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