E-Marketing

1. E-Marketing

2. Q: ask students how to sell (promote) a new product. Then try to direct the answers cover this 4P�s Summary Overview (Exhibit 2-8) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it. Q: ask students how to sell (promote) a new product. Then try to direct the answers cover this 4P�s Summary Overview (Exhibit 2-8) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it.

3. Marketing Strategies/Decisions Target market: a defined group of consumers or organizations with whom a firm wants to create marketing exchanges. -- segmentation, positioning etc. A marketing mix is the overall marketing offer to appeal to the target market. -- 4P�s Target market: a defined group of consumers or organizations with whom a firm wants to create marketing exchanges. -- segmentation, positioning etc. A marketing mix is the overall marketing offer to appeal to the target market. -- 4P�s

4. Marketing Strategies Ch1 (Bearden)Ch1 (Bearden)

5. Five categories according to type of customer benefits that e-Business technology makes possible: (p.101) Accelerated marketing � with previous IT by integrating and accelerating business processes, e-business technologies make it possible to speed up response and delivery times. Virtual marketspace - electronic networks create new business opportunities for exploiting information-based products and services Personalized marketing � websites can be integrated with customer databases, making it possible to more fully exploit customer information and more fully identify customer needs Interactive marketing � the interactive nature of computer-based systems allows marketers to interact with customers in a two-way dialogue online and not only speed up response but also more fully address requests. Community marketing - the Internet is distinctive in that it allows customers not only to communicate directly with suppliers but also among themselves. Viral marketing: Word-of-mouth marketing in which customers promote a product or service to friends or other people.Five categories according to type of customer benefits that e-Business technology makes possible: (p.101) Accelerated marketing � with previous IT by integrating and accelerating business processes, e-business technologies make it possible to speed up response and delivery times. Virtual marketspace - electronic networks create new business opportunities for exploiting information-based products and services Personalized marketing � websites can be integrated with customer databases, making it possible to more fully exploit customer information and more fully identify customer needs Interactive marketing � the interactive nature of computer-based systems allows marketers to interact with customers in a two-way dialogue online and not only speed up response but also more fully address requests. Community marketing - the Internet is distinctive in that it allows customers not only to communicate directly with suppliers but also among themselves. Viral marketing: Word-of-mouth marketing in which customers promote a product or service to friends or other people.

6. The new virtual business opportunities created by e-commerce can be categorized into four �virtual marketspaces� using the information communication distribution transaction (ICDT) model a. Virtual information space It consists of new Internet-based channels through which economic agents can display information about themselves and the products and service they offer (and financial information and bulletin boards advertising employment opportunities). In addition to creating new opportunities in virtual information, the Internet may also create new opportunities to offer related services, such as Internet marketing and advertising, consulting services and information search, gathering and filtering agents b. Virtual communications space It includes new opportunities in which economic agents can exchange ideas and experiences, influence, opinions or negotiate (e.g., bulletin boards, chat rooms and videoconferencing) c. Virtual distribution space It consists of new distribution channels for a variety of products and services. products can be efficiently distributed by means of the Internet (can be digitized and transmitted through computer networks, e.g., text, pictures, digital music and video, software and computer games) services such as text, voice or video-based consulting and training d. Virtual transaction space It consists of new Internet-based channels through which economic agents can exchange formal business transactions, such as orders, invoices and payments (online order forms to online credit card ordering)The new virtual business opportunities created by e-commerce can be categorized into four �virtual marketspaces� using the information communication distribution transaction (ICDT) model a. Virtual information space It consists of new Internet-based channels through which economic agents can display information about themselves and the products and service they offer (and financial information and bulletin boards advertising employment opportunities). In addition to creating new opportunities in virtual information, the Internet may also create new opportunities to offer related services, such as Internet marketing and advertising, consulting services and information search, gathering and filtering agents b. Virtual communications space It includes new opportunities in which economic agents can exchange ideas and experiences, influence, opinions or negotiate (e.g., bulletin boards, chat rooms and videoconferencing) c. Virtual distribution space It consists of new distribution channels for a variety of products and services. products can be efficiently distributed by means of the Internet (can be digitized and transmitted through computer networks, e.g., text, pictures, digital music and video, software and computer games) services such as text, voice or video-based consulting and training d. Virtual transaction space It consists of new Internet-based channels through which economic agents can exchange formal business transactions, such as orders, invoices and payments (online order forms to online credit card ordering)

7. Virtual marketspace competencies (p. 108) An e-business may utilize more than one of these virtual marketpaces, and �pure� Internet companies will typically utilize all four, using the Internet to 1) provide company product information, 2) communicate with customers, 3) make the transaction and 4) distribute the product or service to customer. However, each markespace requires specific competencies and that it may be useful to plot the extent of company�s activities in each marketspace in order to determine the required mix of competencies. For example, establishing presence in the VIS or VCS will directly affect eh company�s front office operations; this requires competencies in the design of appropriate webpages, the harmonization of the VIS presence with the current marketing and PR strategy of the company and knowledge of the regulations on direct marketing on the Internet. Establishing VCS presence requires, in addition, training of company employees in how to use the Internet effectively as a communication medium and how to establish electronic relationships with customers. On the other hand, strategies aimed at establishing a presence in the VDS or VTS will more directly affect the company�s back office operations and require competencies in distribut Generic issues/competencies; Virtual marketing activities (p.109) It is possible to run a completely virtual business where all the normal marketing activities are done online. The include: 1) advertising, 2) retailing, 3) distribution, and 4) payment According to AdAge.com (September 27, 2005), INTERNET REVENUE HITS NEW HIGH six-month totals ($5.8 billion) show 26% increase over 2004. Virtual marketspace competencies (p. 108) An e-business may utilize more than one of these virtual marketpaces, and �pure� Internet companies will typically utilize all four, using the Internet to 1) provide company product information, 2) communicate with customers, 3) make the transaction and 4) distribute the product or service to customer. However, each markespace requires specific competencies and that it may be useful to plot the extent of company�s activities in each marketspace in order to determine the required mix of competencies. For example, establishing presence in the VIS or VCS will directly affect eh company�s front office operations; this requires competencies in the design of appropriate webpages, the harmonization of the VIS presence with the current marketing and PR strategy of the company and knowledge of the regulations on direct marketing on the Internet. Establishing VCS presence requires, in addition, training of company employees in how to use the Internet effectively as a communication medium and how to establish electronic relationships with customers. On the other hand, strategies aimed at establishing a presence in the VDS or VTS will more directly affect the company�s back office operations and require competencies in distribut Generic issues/competencies; Virtual marketing activities (p.109) It is possible to run a completely virtual business where all the normal marketing activities are done online. The include: 1) advertising, 2) retailing, 3) distribution, and 4) payment According to AdAge.com (September 27, 2005), INTERNET REVENUE HITS NEW HIGH six-month totals ($5.8 billion) show 26% increase over 2004.

8. The importance of considering customer lifetime value (is the total discounted expected profit from a new customer over their lifetime) that will influence the degree of personalization. It studies the relationship between personalization and customer profitability. The horizontal dimension � differentiation (or wide variety) of customer needs or wide variety. The vertical dimension � differences in the customer lifetime value (profitability) Q1 � uniform consumer needs and few differences in profitability, e.g., basic products like gasoline and electricity. Personalization is not very useful in this Q. The main challenge for firms selling these products is competitive switching and mass-marketing methods that are commonly used to get customers to use their brand product when the purchase occasion occurs. Q2 - customers profitability does not differ much (Similar), but they have a wide variety of needs that are met by a wide variety of products. E.g., products that cater to different lifestyles, such as pensions, individual tastes, such as house purchases and furniture. The key marketing challenge is helping customers find the best purchase choice and a personalization system that creates effective choice which may concievably add value for customers. Q3 � important features of the product (needs) do not vary much across customers, although the intensity of use (profitability) may vary a great deal. E.g., airline travel, hotels, rental cars and share trading (RM). One of the most common approaches to accomplish this is the use of frequency marketing and continuity programs. E.g., frequent flyer programs of airlines, gold service plans of hotels and rental car agencies, and discounts for shopping at supermarkets. The major marketing challenge in Q3 is identifying, acquiring and retaining highly profitable customers. A personalization system for tracking customer use may be very profitable if it allows lifetime-profitable customers to be identified. In B2B marketing this information may be used to identify key accounts that get special attention (help and support) from sales staff. Some companies (computer suppliers and consultants) may even keep some dedicated sales and support staff at the key account site, so they are available when needed. Customer retention is a fundamental concern, so online services that support and inform key accounts is also highly valuable. E.g., extranets may be used to provide confidential or expensive materials that is not appropriate for the general public. Q4 �each account needs to be treated separately, with the customers being rewarded for increasing the business and being supported in their use of the product. The greatest opportunities for personalization are available in this Q. As customer tastes vary widely, uncertainty and confusion about the best product to choose may appear. There may be a need to collaborate and design personalized products as well as possibilities for personal after-sales support.The importance of considering customer lifetime value (is the total discounted expected profit from a new customer over their lifetime) that will influence the degree of personalization. It studies the relationship between personalization and customer profitability. The horizontal dimension � differentiation (or wide variety) of customer needs or wide variety. The vertical dimension � differences in the customer lifetime value (profitability) Q1 � uniform consumer needs and few differences in profitability, e.g., basic products like gasoline and electricity. Personalization is not very useful in this Q. The main challenge for firms selling these products is competitive switching and mass-marketing methods that are commonly used to get customers to use their brand product when the purchase occasion occurs. Q2 - customers profitability does not differ much (Similar), but they have a wide variety of needs that are met by a wide variety of products. E.g., products that cater to different lifestyles, such as pensions, individual tastes, such as house purchases and furniture. The key marketing challenge is helping customers find the best purchase choice and a personalization system that creates effective choice which may concievably add value for customers. Q3 � important features of the product (needs) do not vary much across customers, although the intensity of use (profitability) may vary a great deal. E.g., airline travel, hotels, rental cars and share trading (RM). One of the most common approaches to accomplish this is the use of frequency marketing and continuity programs. E.g., frequent flyer programs of airlines, gold service plans of hotels and rental car agencies, and discounts for shopping at supermarkets. The major marketing challenge in Q3 is identifying, acquiring and retaining highly profitable customers. A personalization system for tracking customer use may be very profitable if it allows lifetime-profitable customers to be identified. In B2B marketing this information may be used to identify key accounts that get special attention (help and support) from sales staff. Some companies (computer suppliers and consultants) may even keep some dedicated sales and support staff at the key account site, so they are available when needed. Customer retention is a fundamental concern, so online services that support and inform key accounts is also highly valuable. E.g., extranets may be used to provide confidential or expensive materials that is not appropriate for the general public. Q4 �each account needs to be treated separately, with the customers being rewarded for increasing the business and being supported in their use of the product. The greatest opportunities for personalization are available in this Q. As customer tastes vary widely, uncertainty and confusion about the best product to choose may appear. There may be a need to collaborate and design personalized products as well as possibilities for personal after-sales support.

9. Different personalization systems can be used depending on customer needs and product attributes. Products with a few simple attributes compete primarily on price and value, so a good personalization system is one that allows customers to find the best deal that meets their requirements. On the other hand, products with complex and qualitative attributes compete primarily through branding, so a good personalization system will need to take compete primarily through branding, so a good personalization system will need to take into account other factors, such as customers ifestyle and perceptions. Rule-based systems rely on observing behavior to predict preferences, they are best used where the product space is not too complicated and where attributes are quantifiable. e.e., activity tracking and push software. CASE work by asking visitors a series of questions about what they like in order to narrow down the choices. E.g., Hotels.com that helps users select appropriate hotel accommodation by city, location, budget etc. Endorsements systems are used when the product needs of consumers do not differ greatly and quantifying attributes of available products is difficult, e.g, book recommendation (Amazon.com) and computer games (Jungle.com) Collaborative filtering is used when the product space is complicated and preferences are highly subjective, qualitative and complex. The system works by matching different users who seem to have similar profiles on the basis that people who share similar tastes in one area are likely to share similar tastes in another (e.g., lifestyle segmentation). E.g., Amazon identifies cross-selling opportunities by deploying highly sophisticated CRM technologies that track and record every single customer click. CF relies on statistical methods that are based on correlation between user preferences to develop recommendations for other users with similar between user preferences to develop recommendation for other users with similar personal profiles. It has three parts: 1) to query the user about various items; 2) to develop user profiles; 3) to rank and present new items. Different personalization systems can be used depending on customer needs and product attributes. Products with a few simple attributes compete primarily on price and value, so a good personalization system is one that allows customers to find the best deal that meets their requirements. On the other hand, products with complex and qualitative attributes compete primarily through branding, so a good personalization system will need to take compete primarily through branding, so a good personalization system will need to take into account other factors, such as customers ifestyle and perceptions. Rule-based systems rely on observing behavior to predict preferences, they are best used where the product space is not too complicated and where attributes are quantifiable. e.e., activity tracking and push software. CASE work by asking visitors a series of questions about what they like in order to narrow down the choices. E.g., Hotels.com that helps users select appropriate hotel accommodation by city, location, budget etc. Endorsements systems are used when the product needs of consumers do not differ greatly and quantifying attributes of available products is difficult, e.g, book recommendation (Amazon.com) and computer games (Jungle.com) Collaborative filtering is used when the product space is complicated and preferences are highly subjective, qualitative and complex. The system works by matching different users who seem to have similar profiles on the basis that people who share similar tastes in one area are likely to share similar tastes in another (e.g., lifestyle segmentation). E.g., Amazon identifies cross-selling opportunities by deploying highly sophisticated CRM technologies that track and record every single customer click. CF relies on statistical methods that are based on correlation between user preferences to develop recommendations for other users with similar between user preferences to develop recommendation for other users with similar personal profiles. It has three parts: 1) to query the user about various items; 2) to develop user profiles; 3) to rank and present new items.

10. Fig. 4.16 Typical pattern of website usage (p.127) Xerox example Site �stickiness� Fig. 4.16 shows the importance of understanding how users will use a site. X axis � the length of user visit to a site measured in the number of pages viewed. Y axis � shows the cumulative percentage of visitors with that number of views or less. Features from marketing perspective: there is strong bias toward visits of 4 pages or less, which account for nearly 70% of visits a few visitors make extensive visits, the maximum for the Xerox site being 110 pages This pattern can be explained by a simple model in which the user is constantly making judgements about the value of continuing or stopping a visit to a website, depending on the value of the current page and uncertainly about the value of pages not yet seen.Fig. 4.16 Typical pattern of website usage (p.127) Xerox example Site �stickiness� Fig. 4.16 shows the importance of understanding how users will use a site. X axis � the length of user visit to a site measured in the number of pages viewed. Y axis � shows the cumulative percentage of visitors with that number of views or less. Features from marketing perspective: there is strong bias toward visits of 4 pages or less, which account for nearly 70% of visits a few visitors make extensive visits, the maximum for the Xerox site being 110 pages This pattern can be explained by a simple model in which the user is constantly making judgements about the value of continuing or stopping a visit to a website, depending on the value of the current page and uncertainly about the value of pages not yet seen.

11. Fig. 4.17 Model of Website usage (p.128)- the value of the current page increases as the number of pages visited increases Implications: the higher the value of a site, the longer the duration of visits it is important to guide visitors to the relevant pages quickly, otherwise they will leave pages must be of increasing value in order for visits to continue, It emphasizes the importance of marketers engaging in discussion early on with website designers. Although customers may be willing to wander around a supermarket in order to locate an item of grocery, they may not be willing to do so on a website. Fig. 4.17 Model of Website usage (p.128)- the value of the current page increases as the number of pages visited increases Implications: the higher the value of a site, the longer the duration of visits it is important to guide visitors to the relevant pages quickly, otherwise they will leave pages must be of increasing value in order for visits to continue, It emphasizes the importance of marketers engaging in discussion early on with website designers. Although customers may be willing to wander around a supermarket in order to locate an item of grocery, they may not be willing to do so on a website.

12. Methods to Encourage Users to � Methods that can be used to encourage users to stay longer sponsorship of an event, team or personality regularly updated information monthly product discount competition Methods that can be used to encourage repeat visits regular newsletters regular promotions discounts or special deals rewards or loyalty schemes