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Internet Marketing

Internet Marketing. Introduction. Your Text . Internet Marketing Ward Hanson Stories, Audio Clips, Tours, & Tutorials www.swcollege.com/marketing/hanson/introduction.html. Topics. The original WWW Commercial beginnings A .com world Marketing and technology Our approach in the book.

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Internet Marketing

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  1. Internet Marketing Introduction

  2. Your Text ... • Internet Marketing • Ward Hanson • Stories, Audio Clips, Tours, & Tutorials • www.swcollege.com/marketing/hanson/introduction.html

  3. Topics • The original WWW • Commercial beginnings • A .com world • Marketing and technology • Our approach in the book

  4. The Original WWW • It’s 1922 • Radio suddenly transitions from a technology used primarily by the military and the shipping industry to a consumer and business phenomenon • At the end of 1921, there are 5 radio stations • A year later, there are 575 • Starting radio stations is the height of entrepreneurship • Listening to radio is a runaway consumer fad • “Combing the ether” is the hit of the day

  5. The Original WWW • Radio’s impact on 1920s society • It changes the way people think about distance and time • Simultaneity no longer requires proximity • Global events are experienced as they happen • Performances in different cities can be heard in the neighbor’s living room • Fast-breaking world stories and even the local weather are available at the flip of a switch and the turn of the dial

  6. The Original WWW • Radio changed business, especially marketing • It accelerated the economy’s transition to a mass market • It facilitated the creation of national brands • Firms could launch national marketing campaigns simultaneously • New product store introductions could be synchronized with ad campaigns to build consumer interest • Product positioning became more flexible • Businesses learned to use this new, powerful method of reaching customers

  7. The Original WWW • As an industry, radio struggled with generating a self-sustaining revenue base • In 1926, radio stations were failing at a rate of 15% per month • Consumers still rushed to buy radios • Ultimately, national networks of stations emerged • A combination of national and local advertising made radio profitable • Internet marketing shows many of these same uncertainties

  8. The Original WWW • The Internet changes the way companies connect to their customers • It expands the opportunities for branding, innovation, pricing, and selling • It leads to new ways of thinking about time and distance • It opens up new distribution channels and markets

  9. Huh? Virtuous Web Cycle • Is a business system with positive feedback • Each element in the business system feeds off another element in the system and feeds into yet another element in the system • If the cycle is strong enough, it can actually be a self-fulfilling expectation

  10. It starts with user fascination Consumer and Business Internet Access Popular Fascination • Providers see the developing opportunity and rush to create new brands & services, which creates more hype Web Sites and Web Content • The buzz feeds back into consumers’ interest and desire to experiment with the new technology Virtuous Cycle for Net Growth Let’s look at how it works

  11. A Dot Com World • The virtuous Web cycle leads to rapid growth of • Consumer access • Internet usage • Content online

  12. Figure 1.4 46% growth in 1998 Online Access Growth in Net Hosts Consumer Access • The past five years have seen rapid growth in • Network size • Users on networks • Network activity • Between January 1994 and January 1999, Internet hosts grew from 2.2 million to over 43 million • A 46% growth rate in 1998

  13. Figure 1.5 HOW MANY ONLINE? The art of estimating the number of people online throughout the world is inexact. An “educated guess” as of May 1999 is 165 million. Source: NUA Worldwide Online Population – Continuing Fascination Consumer Access • The Internet user base has grown rapidly as well • Worldwide, the number of users was estimated to be > 160 million in March, 1999 • Over 90% of the users on the Net have joined in the last 5 years • More growth is possible, as < 4% of the world’s adult population is online • 50% of users think the Net is a “necessity”

  14. Figure 1.6 Rapid Growth in Web Content Consumer Access • Spring 1998, the size of the Web was estimated at 300 million pages • Growth rates in content exceed growth rates in Web access and the number of users • From June 1997 to March 1998, Web content grew at 120% • More importantly, the types and creativity of Web site content have blossomed

  15. Innovative Applications • Stage I: Publishing sites • Stage II: Databases and Forms • Stage III: Personalization

  16. Info Links Pictures/Information http://www.france98.com/french/index.html Stage I: Publishing Site Figure 1.7

  17. Stage I What makes this aStage I Website? BroadcastsDisseminates Information

  18. Stage II: Databases and Forms Figure 1.8 To find out the travel distances between the host cities: Select your starting point Select your destination Bordeaux Paris Toulouse Marseilles Toulouse Marseille – 404km

  19. Stage II What Makes this aStage II Website? Ability to retrieve information to respond to user requests

  20. Stage III: Personalization Figure 1.11 If you area team WC98 member and are using a computer other than the one you originally joined WC98, enter your nickname and password now.

  21. Stage III What Makes this aStage III Website? More than ask-respondAnticipatesSuggests

  22. Consumer-to-Consumer Commerce • Businesses deploy chat room technology • Enables consumers to interact directly with each other • Accelerates word of mouth • Facilitates consumer-to-consumer commerce • eBay • Yahoo! Auctions

  23. Consumer-to-Consumer Commerce • Consumer-to-consumer sites must build trust • Systems that rate seller credibility • Verify identities of buyers and sellers • Insurance against fraud • Escrow accounts to ensure products are shipped • Bans on sellers who bid on their own products • Bans on buyers who win, but don’t complete the sale • Successful auction sites blur the distinction between business and fun

  24. Business-to-Business Commerce • $ volume much larger than e-tailing, and more rapidly growing • Intra & extranets provide a seamless link between businesses and their suppliers • Companies create in-depth Web sites for their main customers • Special pricing • Special configurations • Dedicated support • This builds loyalty and repeat purchases

  25. Marketing Evolves as Technology Changes • Technological innovation brought about the factory system & enabled mass production • Marketing emphasis was on logistics & supply chain management • Radio enabled national roll-out of brands • Marketing emphasis was on selling • Television coincided with the product & brand management system of marketing • Mainframe computers enabled new methods of segmentation & customer management • The Internet enables mass customization

  26. Digital Networked Individuals Marketing Internet Marketing Technology Economics An Internet Framework Figure 1.15 The Web is fundamentally about individuals using a networkto access digitalproducts

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