Marketing on the Internet
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Marketing on the Internet Marketing on the Internet Presentation Transcript

  • E-Marketing, 3rd edition Judy Strauss, Adel I. El-Ansary, and Raymond Frost Chapter 1: The Big Picture © Prentice Hall 2003
  • Overview
    • The Emergence of E-Marketing: The Google Story
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • The Google story shows:
    • Markets always welcome an innovative new product providing customer value.
    • Customers trust good brands.
    • Well-crafted marketing mix strategies can be effective in helping newcomers enter crowded markets.
  • Key questions for corporations:
    • How to use information technology profitably ?
    • How to understand what technology means for their business strategies?
    • How time-tested concepts by marketers can be enhanced by the Internet, databases, wireless mobile devices, and other technologies?
    • What’s next after the rapid growth of the Internet and the dot-com bubble has marketers wondering ?
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • What is E-Marketing?
      • E-Marketing is the application of a broad range of information technologies for:
      • Transforming marketing strategies to create more customer value (more effective segmentation, targeting, differentiation, and positioning strategies),
      • More efficiently planning and executing the conception, distribution, promotion and pricing of goods, services, and ideas,
      • Creating exchanges that satisfy individual consumer and organizational customers’ objectives.
  • What is E-Marketing?
      • Alternative definition: E-marketing is the result of information technology applied to traditional marketing.
      • E-marketing affects traditional marketing in two ways:
        • Increases efficiency in traditional marketing functions,
        • The technology of e-marketing transforms many marketing strategies.
    • Results: new business models that add customer value and/or increase company profitability.
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • What Is E-Business?
      • E-business “is the continuous optimization of a firm’s business activities through digital technology”
      • Digital technologies = information technology are things like computers and the Internet, that allow the storage and transmission of data in digital formats (1’s and 0’s)
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • The Big Picture
    • Easy, inexpensive, and quick access to digital information transforms:
    • economies, - societies,
    • governments, - businesses.
    • Digital information enhances economies through:
      • more efficient markets,
      • more jobs,
      • information access,
      • communication globalization,
      • lower barriers to foreign trade and investment, and more.
  • Uneven impact of the Internet across the globe:
    • 530 million users connected to the Internet worldwide = 8.5% of the global population,
    • Developed nations = 15% of the world’s population = 88% of all Internet users,
    • U.S. Internet users = 182 million = 64% of the population,
    • Indigenous peoples in remote locations gaining health, legal, and other advice, or selling native products using the Internet.
  • Undesirable changes created by a networked world
    • Societies change as global communities based on interests form,
    • Worldwide information access slowly decreases cultural and language differences,
    • Easy computer networking = work and home boundaries are blurring = more convenient work = encourage more workaholism and less time with family.
  • Undesirable changes created by a networked world
    • Class divisions will grow, preventing the upward mobility of people on lower socioeconomic levels and even entire developing countries,
    • Digital divide: Internet adoption occurs when folks have:
      • Enough money to buy a computer,
      • The literacy to read what is on Web pages,
      • The education to be motivated to do it.
  • The digital environment is enhancing processes and activities across the entire organization:
    • Cross-functional teams using computer networks to share and apply knowledge for increased efficiency and profitability,
    • Financial experts communicate shareholder information online, file required government statements, and invent new ways to value risk, etc.,
    • Human resources personnel use the Net for electronic recruiting and training; an increasing number are managing organizational knowledge and workflow through corporate Web portals.
  • The digital environment is enhancing processes and activities across the entire organization:
    • Production and operation managers can adjust manufacturing based on the Internet’s ability to give immediate sales feedback resulting in truly just-in-time inventory and building products to order,
    • Strategists are leveraging the Net to apply the firm’s knowledge in building and maintaining a competitive edge (easy access to data).
  • Important e-business benefits according to U.S. top executives:
    • Building better quality customer relationships,
    • Finding more business partners and other development opportunities,
    • Building better brand visibility.
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • Tough Times
    • The first generation of e-business was like a gold rush = creation of a Web presence and experimentation.
    • Results:
      • Huge sales and market share,
      • BUT little was brought to the bottom line and profit was negative,
      • Since January 2000, however, over 500 Internet firms have shut down in the U.S. alone.
    • E.g: CDNow , Lycos , DoubleClick , E*Trade , and Amazon.com
    • The “ trough of disillusion” is based 30% on the technology recession and 70% on disappointment with e-business results.
  • Tough Times
    • Marketers return to their traditional roots and rely on well-grounded strategy and sound marketing practices.
    • During the dot-com shakeout from 2000-2002, there was much industry consolidation:
      • Some firms, such as Levi Strauss, stopped selling online = not efficient + created channel conflict .
      • Other firms merged,
      • E.g. e-business firm took over a traditional firm = AOL purchased Time-Warner.
  • The Most Important Benefits of E-Business to U.S. Executives Source : “Key Business and Marketing...” (2002)
    • Benefit % Mentioning
    • Better quality customer relationships 61
    • More business development opportunities 50
    • Better brand visibility 50
    • Drive fat from supply chain 42
    • Reduce time-to-market 33
    • Increase customer quantity 25
  • What will the future be?
    • Gartner Group predicts that a true e-business model will emerge, and by 2008 the “e” will be dropped, making electronic business just part of the way things are done.
    • Some say that “E-business has become just business. E-commerce has become just commerce. The new economy has become just the economy (Aronica and Fingar 2001).
    • ” Others say that this is far from the truth—for them, e-business will always have its own models, concepts, and practices.
    • Charles Schwab has already gone through the entire cycle allowing e.Schwab.com to cannibalize the larger brick-and-mortar securities firm in 1998.
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • There is Hope After the Trough of Disillusion Source: Adapted from Raskino and Andren of Gartner Research (2001) E-Marketing in Context: W here does e-marketing fit into this picture?
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • Environment, Strategy, and Performance (ESP)
    • Business environment: legal, technological, competitive, market-related, and other environmental factors external to the firm = Opportunities and Threats ,
    • SWOT analyses = Strengths and Weaknesses,
    • E-business strategies + e-business models + e-marketing plans = Help the firm accomplish its overall goals,
    • Determine the success of the strategies and plans by measuring results.
        • = Performance metrics, specific measures designed to evaluate the effectiveness and efficiency of the e-business and e-marketing operations.
  •  
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • Key environmental factors affecting e-marketing
    • 1. Legal,
    • 2. Technological
    • 3. Market-related factors
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • Legal Factors
    • Current and pending legislation can greatly influence e-marketing strategies:
    • Privacy: Difficult to legislate + Critical because consumers yield personal information over the Internet
    • Opt-out e-mail: when users must uncheck a Web page box to avoid being put on a company’s e-mail list,
    • Difficult for governments to balance freedom of expression against consumer needs,
    • New technology brings new opportunities for fraud: enforcement is difficult in a networked world.
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • Technology
    • Technological developments influence:
    • The composition of Internet audiences,
    • The quality of material that can be delivered to them.
    • E-marketing is evolving through software advances: Technologies can target consumers according to their online behavior to give a firm a distinct competitive advantage.
  • Technology
    • Technology lowers costs: Many firms have saved money on staff and paperwork via electronic order processing, billing, and e-mail.
    • Technology requires costly investments:
    • Web page development costs millions of dollars,
    • E-commerce operations require expensive hardware and software,
    • New technologies continue to emerge, which make current investments obsolete,
    • Putting technology to use entails a steep learning curve.
  • What is the Internet?
    • The Internet is a global network of interconnected networks:
    • Millions of corporate, government, organizational, and private networks,
    • The Internet consists of computers with data, users who send and receive the data files, and a technology infrastructure to move, create, and view or listen to the content.
  • What is the Internet?
    • Three important types of networks form part of the Internet:
      • Intranet = A network running internally in a corporation + using Internet standards (HTML and browsers) = a mini-Internet but only for internal corporate consumption,
      • Extranet = An intranet with value chain partners + the access is normally only partial,
      • Web = The portion of the Internet that supports a graphical user interface for hypertext navigation with a browser (Netscape / Internet Explorer). The Web is what most people think about when they think of the Internet.
  • It’s Bigger Than the Internet
    • Electronic marketing reaches far beyond the Web:
      • Many e-marketing technologies exist
      • = Customer relationship management, supply chain management, and electronic data interchange arrangements predating the Web,
      • Non-Web Internet services such as e-mail and newsgroups
      • = Effective avenues for marketing.
  • It’s Bigger Than the Internet
    • The Internet holds more than one Web:
      • The Web that most users access from PCs,
      • Subsets of the Web with content specially formatted for the unique display properties:
        • Web TV,
        • Personal digital assistants,
        • Cell phones,
        • Text-only browsers.
  • It’s Bigger Than the Internet
    • Offline electronic data-collection devices such as bar code scanners.
    • Portion of the Web containing high-bandwidth content for users who have either cable modems or digital subscriber loop (DSL) connections.
  • Internet Properties and Marketing Implications
    • Marketers who grasp what Internet technologies can do will be better poised to capitalize on information technology.
    • Internet properties:
        • Create opportunities beyond those possible with the telephone, television, postal mail, or other communication media,
        • More effective and efficient marketing strategy + tactical implementation + change the way marketing is conducted.
    • E.g. The idea of digitizing data (bits not atoms) has transformed media and software delivery methods + created a new transaction channel.
  • Internet Properties and Marketing Implications
    • Internet technologies have changed traditional marketing in a number of critical ways:
      • Power shift from sellers to buyers,
      • Death of distance,
      • Time compression,
      • Knowledge management is key,
      • Interdisciplinary focus,
      • Intellectual capital rules.
  •  
  •  
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • E-Business Markets
    • Once marketers identify appropriate markets, information technology facilitates relationships before and after the transaction with:
      • Prospects,
      • Customers,
    • There are three important markets that both sell and buy to each other:
      • Businesses,
      • Consumers,
      • Governments.
      • Partners,
      • Supply chain members.
  •  
  • Business Market
    • It is huge: more businesses are connected to the internet than consumers.
    • It is transparent to consumers: it involves proprietary networks that allow information and database sharing.
    • E.g. FedEx , the package delivery firm:
      • Its customers can schedule a package pick-up using the Web site,
      • Track the package using a PC or handheld PalmPilot,
      • Pay the shipping bill online.
  • Consumer Market
    • E-marketers must understand consumers in potential geographic segments:
      • Iceland and Denmark = 2 of the most wired countries in the world = 60% Internet penetration,
      • Consumers in many countries pay by the minute for local phone access = determine the kind of casual surfing practiced by Internet users.
  • Consumer Market
    • The consumer market is huge and quite active online:
    • 28% of consumers said they have shopped online or plan to shop online in the next six months,
    • 15% purchased offline as a direct result of online information,
    • U.S. consumers are the biggest online shoppers, spending US$53 billion in 2001, an increase of nearly 20% from 2000.
  • Revenge of the Consumer
    • The rebellion started with television channel surfing using the remote control. Consumers did not seem to appreciate that commercials pay for broadcast TV programs.
    • At the start of the 21st century, consumers have control via the mouse. When television, radio, print media, entertainment, and shopping all converge seamlessly on a computer-like device, consumers will truly have information on demand.
    • Consumers are more demanding and more sophisticated, and marketers will have to become better at delivering customer value.
  • Consumer Needs
    • What do customers want in the information economy?
    • Privacy: Customers want marketers to keep their data confidential + don’t want to be bothered by sales calls at home during dinner,
    • To safeguard children from objectionable sites,
    • Want marketers to ask permission before sending commercial e-mail messages,
    • Want e-commerce to provide convenience, self-service, speed, good customer service, personal attention, and value.
  • Consumer Needs
    • Fortunately, e-marketing can meet all these needs:
    • With mass customization individuals can contact firms over the Internet and receive responses tailored to their needs,
    • Business can also customize and personalize products and communications to strengthen long-term relationships with customers.
    • E.g. Amazon.com presents personalized Web pages to users
  •  
  • Government Market
    • The U. S. government is the world’s largest buyer, purchasing over $200 billion in goods and services every year (see www.isbdcorp.org/gmag ).
    • Add to this the purchasing power of U.S. states, counties, cities, and other municipal agencies, and this makes for a huge market.
    • Small and large businesses usually have an equal chance of selling to governments + government Web sites announce their buying needs in advance of the bidding process.
  • Government Market
    • Businesses wishing to sell to governments face challenges unique to this market:
      • Follow rules regarding qualifications, paperwork, etc.,
      • Must compete to be on the government list of approved suppliers + compete for specific contracts through a bidding process,
      • Have to conform to very particular timely delivery of quality products at reasonable prices.
  • Overview
    • The Emergence of E-Marketing
    • What is E-Marketing?
    • What Is E-Business?
    • The Big Picture
    • Tough Times
    • E-Marketing in Context
      • Environment, Strategy, and Performance (ESP)
    • E-Marketing Environment
    • Legal Factors
    • Technology
    • E-Business Markets
    • What’s Next?
  • What’s Next?
    • Regardless of the current disillusion with e-business, many solid successes exist today and exciting new growth areas will soon emerge.
    • Seven trends that will help businesses move forward into e-marketing :
      • Integrating IT software,
      • Boom in Web services,
      • Collaboration software,
      • Dealing with too much data,
      • Data security,
      • Wireless is here to stay,
      • Growth in portable computing.
  • Key Terms
    • Business-to-Business (B2B)
    • Business-to-Consumer (B2C)
    • Business-to-Government (B2G)
    • Consumer-to-Consumer (C2C)
    • Digital technology
    • E-business
    • E-commerce
    • E-marketing Extranet
    • Information technology
    • Internet
    • Intranet
    • Mass customization
    • Performance metrics
    • Web
    • Web services
  • Review Questions
      • 1. Define e-business and e-marketing.
      • 2. What are performance metrics and why are they important?
      • 3. What are some of the key legal issues that affect e-marketing?
      • 4. How does technology both raise and lower costs for companies?
      • 5. As a technology, how does the Internet compare with the telephone?
      • 6. What are some of the marketing implications of Internet technologies?
      • 7. What are the three main markets of e-business, and how do they differ?
      • 8.In the context of e-marketing, what does “revenge of the consumer” mean?
  • Discussion Questions
      • 1. As a marketer, do you agree with the U.S. executives who say “better quality customer relationships” is one of the most important e-business benefits? Why?
      • 2. As a consumer, are you likely to benefit when e-business becomes “just business” in the near future? Explain your answer.
      • 3. Some economists suggest that the increase in e-commerce within the B2B market will lead to greater competition and more goods and services becoming commodities  that is, solely competing on price. How do you think this is likely to affect buyers within the B2B market? How would it affect sellers?
      • 4. What concerns about consumer privacy are raised by the increased use of wireless computing and handheld devices outside the home or workplace?