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MARK 430 Online Marketing Introduction The impact of the internet on marketing

MARK 430 Online Marketing Introduction The impact of the internet on marketing

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MARK 430 Online Marketing Introduction The impact of the internet on marketing

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  1. MARK 430Online MarketingIntroductionThe impact of the internet on marketing Week 1

  2. What is internet marketing? • Online marketing/ eMarketing / digital marketing / web marketing / internet marketing? • The application of the internet and related digital technologies in conjunction with traditional communications to achieve marketing objectives ……Dave Chaffey

  3. Why study internet marketing? • Over the past 20 years traditional marketing practices have been transformed • October 27, 1994 – first banner ad • Digital marketing continues to grow and attract marketing dollars (Gartner: US Digital Marketing Spending Report 2013) • The influence of Web 2.0 in the late 90s and early 2000s, product digitization, and now the impact of mobile computing • Continuing strong growth in business-to-consumer and business-to-business eCommerce • New skills, knowledge and strategies in high demand in the business world – very strong demand in this area • Marketers need to understand technology and collaborate with IT colleagues

  4. Course outline and resources Course website: and

  5. What are your expectations from this class? • How much do you know about internet marketing? • What do you hope to learn? • How do you plan to use what you learn in the future? • What kind of online activities do you participate in? • Short survey using Google Docs form Please fill this out as soon as possible • There is no need to include your name on this survey. I am interested in the profile of the class as a whole, and won't be able to identify individual responses. Knowing a little bit about your interests and activities online and your expectations for the course helps me to provide a better learning environment.

  6. The 4Ps in transition

  7. The impact of the Internet on the traditional marketing mix framework • Product – new products, the rise of the “prosumer” • Price – dynamic pricing, comparison pricing, bidding……..FREE! • Place– direct distribution of digital products, supply chain management, channel integration • Promotion – new social and communications media, measurable advertising • Strong trend towards personalization and away from the mass (undifferentiated) market affecting all the elements of this framework • The Six “I”s Framework • Interactivity • Intelligence (market) • Individualization • Integration • Industry restructuring • Independence of location MacDonald and Wilson. The New Marketing, 2002 Source: eMarketingeXcellence. 2012. Smith &Chaffey

  8. Interactivity • The internet is not TV • Conversation, not broadcast • Pull, not push • Active rather than passive (lean-forward medium) • Social Networking / User Generated Content / Web 2.0 Source: eMarketingeXcellence. 2012. Smith &Chaffey

  9. [Market] Intelligence • By the very act of using the internet, we are “telling” marketers what we want: • Passively • Clickstream data • Web analytics • Actively • Social network updates, photos, videos, reviews, forum postings etc Source: eMarketingeXcellence. 2012. Smith &Chaffey

  10. Individualization Same message to all customers or segments • The market of one: based on the information about customers that we provide, and that is collected automatically and monitored constantly • Amazon for example Traditional media Message tailored to each customer or micro-segment New media Source: eMarketingeXcellence. 2012. Smith &Chaffey

  11. Integration • Online marketing is very readily integrated into a marketing communications strategy • Web channels complement and integrate with offline marketing channels • EXAMPLES? • Call a customer service rep for assistance • Movie trailers on YouTube Source: eMarketingeXcellence. 2012. Smith &Chaffey

  12. Industry restructuring and Independence of location INDUSTRY RESTRUCTURING • Disintermediation – traditional intermediaries used by marketers disappearing • Re-intermediation new intermediaries (eg. PayPal) • Business models challenged LOCATION INDEPENDENCE • Increased reach to global markets • Increased exposure • Increased competition Source: eMarketingeXcellence. 2012. Smith &Chaffey

  13. Product Product trends online • Digital value – adding value to products through online means • Digitization – product or place? • Personalization – individualized products and the “prosumer” Source: eMarketingeXcellence. 2012. Smith &Chaffey

  14. Place Digital goods distribution • Any product that can be digitized can be delivered over the Internet • Online distribution costs are significantly lower • No inventory problems • No product depletion • Completely new business models based on digital distribution methods • Internet becomes a direct substitute for an offline distribution channel eg. online banking Source: eMarketingeXcellence. 2012. Smith &Chaffey

  15. Some industries that are undergoing rapid change due to Internet forces affecting product and place Place • Recorded Music industry • Video/DVD rental industry • Newspaper and magazine publishing • Banking • Book publishing • Textbook publishing • Forces for change: • Digitizable product • Self service • Direct to consumer shift • Personalization Product

  16. Price Pricing • Internet influences – buyer and seller perspectives of price • Moving from free to fee (and freemium) • Price comparisons / transparency • Dynamic pricing Source: eMarketingeXcellence. 2012. Smith &Chaffey

  17. Price Going from free to paid • Big issue now is persuading people to pay for something they used to get for “free” or finding some other strategy to monetize • Some strategies • Freemium: provide basic service at no cost, with upgraded or enhanced service being charged for eg. • Flickr • LinkedIn • (casual games) • Chris Anderson talking about “Free” Source: eMarketingeXcellence. 2012. Smith &Chaffey

  18. Online promotion Promotion • We will look at the many new techniques available to marketers to promote goods and services online • Permission marketing • Online PR and the new transparency • The big value of internet marketing – ability to measure results and therefore performance based Source: eMarketingeXcellence. 2012. Smith &Chaffey

  19. Owned, earned and paid media • Definitions from Dave Chaffey • Paid media: “media where there is investment to pay for visitors, reach or conversions through search, display ad networks or affiliate marketing.” (online and offline) •  Earned media: “publicity generated through PR invested in targeting influencers to increase awareness about a brand. Of course, it’s still an investment. Earned media also includes word-of-mouth that can be stimulated through viral and social media marketing and includes conversations in social networks, blogs and other communities.” • Owned media: “media owned by the brand. Online this includes a company’s own websites, blogs, mobile apps or their social presence on Facebook, LinkedIn or Twitter. Offline owned media may include brochures or retails stores.”

  20. Owned, earned & paid media (Chaffey)

  21. Owned, earned and paid media: role, benefits & challenges