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E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
E Mktg & Customer Relationships
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E Mktg & Customer Relationships

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    • 1. 6 E-Marketing and Customer Relationship Management
    • 2. Objectives <ul><li>To define electronic marketing &amp; recognize it’s marketing characteristics - addressability, interactivity, memory, control, accessibility, and digitalization - and their influence on marketing strategy. </li></ul><ul><li>To understand how information technology can facilitate customer relationship management (CRM) </li></ul><ul><li>To identify the legal and ethical considerations in electronic marketing </li></ul>
    • 3. Marketing on the Internet <ul><li>Electronic Commerce (E-Commerce) </li></ul><ul><ul><li>Sharing business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks </li></ul></ul><ul><li>Electronic Marketing (E-Marketing) </li></ul><ul><ul><li>The strategic process of creating, distributing, promoting, and pricing products for targeted customers in the virtual environment of the Internet </li></ul></ul>
    • 4. <ul><li>Benefits of E-Marketing </li></ul><ul><li>“ Real time” flows of information (speed) </li></ul><ul><li>Customer service efficiencies (interaction) </li></ul><ul><li>Worldwide reach at low costs. </li></ul><ul><li>Convenience, </li></ul><ul><li>Threats to E-Marketing - Privacy - Identity Theft - Virus - Computer Hackers </li></ul>
    • 5. Basic Characteristics of Electronic Marketing: Addressability <ul><li>Addressability is a marketer’s ability to identify customers before they make a purchase </li></ul><ul><li>How e-merchants attain addressability </li></ul><ul><ul><li>Limit access to areas of their website to encourage customer registration </li></ul></ul><ul><ul><li>Offer contests and prizes in exchange for consumer information </li></ul></ul><ul><ul><li>Place “cookies” on visitor’s computer to track visitor usage and preferences </li></ul></ul>
    • 6. Basic Characteristics of Electronic Marketing: Interactivity <ul><li>Interactivity is the ability for “Real-time” interaction with customers which allows for customizing a marketing offer &amp; a customer’s response to the firm’s marketing communications </li></ul><ul><li>Interactivity allows for Community - a sense of group membership or feeling of belonging </li></ul><ul><ul><li>Virtual communities on the Web </li></ul></ul>
    • 7. Basic Characteristics of Electronic Marketing: Memory <ul><li>Memory is the ability to access databases and to use the data in real-time to customize a marketing offer. </li></ul><ul><li>Memory is a tool to facilitate the marketing concept </li></ul><ul><li>A database (or data warehouse) is a collection of information such as customer profiles and past purchase histories arranged for easy access and retrieval. </li></ul>
    • 8. Basic Characteristics of Electronic Marketing: Control &amp; Digitalization <ul><li>Control refers to customers’ ability to regulate the information they view and the rate and sequence of their exposure to that information. </li></ul><ul><li>Digitalization is the ability to represent a product, or at least some of its benefits, as digital bits of information. </li></ul><ul><li>Cookies … </li></ul><ul><li>Search engines … </li></ul><ul><li>Portal … is a multi-service website that serves as a gateway to other websites. (Google, MSN.com) </li></ul>
    • 9. Basic Characteristics of Electronic Marketing: Accessibility <ul><li>Accessibility is the ability to obtain information available on the Internet. </li></ul><ul><ul><li>Informs and educates the inquiring consumer about competing products and prices </li></ul></ul><ul><ul><li>Creates competition for the consumer’s attention </li></ul></ul><ul><ul><li>Helps make information available to employees to service customers </li></ul></ul>
    • 10. E-Marketing Strategies E-Marketing Strategy Considerations Distribution Systems Target Markets Product Marketing Promotion Mediums Pricing
    • 11. Top Ten Activities for Wireless Web Device Users Source: “New Survey Indicates Wireless Web Penetration Highest Among Young Affluent Males,” TNS Intersearch, press release, Feb. 7, 2001, http://www.intersearch.tnsofres.com/.
    • 12. E-tailing E-tailing is one of the most dynamic areas of retailing, accounting for 20 billion dollars in 2000 and estimated to rise to over 100 billion by 2005. Bluefly, a leading on-line retailer launched in 1997, continues to find success in the on-line format.
    • 13. On Line Retail Sales Forrester Research, Cambridge, Mass., cited in Marketing News,15July2006,pg 37
    • 14. Fashion Tip: Get Online WSJ, October 31, 2003 <ul><li>Yoox.com sells discount designer apparel </li></ul><ul><li>Net-A-Porter.com sells designer clothes such as Marc Jacobs and Chloea (their shoppers spend an average of $850 per visit). </li></ul><ul><li>Nieman Marcus.com </li></ul>
    • 15. Missed Sales Opportunities <ul><li>Burberry Group </li></ul><ul><li>Prada Group </li></ul><ul><li>Gucci </li></ul>Prada Gucci Why some designers do not get involved with e-commerce? <ul><li>Lack the foundation to handle single-order sales </li></ul><ul><li>Shopping “experience” is halted </li></ul><ul><li>E-commerce sites are very costly </li></ul>
    • 16. U.S. Ad Spending (in billions) Source: Veronis Suhler Stevenson Commuincation Industry Forecast, 2005,cited in Marketing News, 15July2006, pg.32 Medium 2004 2006 2005 2007 $20.0 $48.2 $26.8 $58.1 $22.1 $14.4 $13.5 $12.7 $12.1 Consumer Magazines $21.2 $20.53 $20.0 Cable &amp; Satellite Radio $56.2 $54.0 $52.1 Newspapers $24.3 $21.7 $18.9 Cable &amp; Satellite TV 47.2 $43.9 $43.1 Broadcast TV $16.0 $12.6 $9.6 Internet
    • 17. &nbsp;
    • 18. <ul><li>Google Inc. ,an internet search engine, sells search related ads targeted at internet users. </li></ul><ul><li>Google sells ads on behalf of thousands of web sites other than its own to attract more big-name advertisers. Advertisers specify websites &amp; can run animated display ads. </li></ul><ul><li>Delaney, Kevin J. “Google to Target Brands in Revenue Push.” </li></ul><ul><li>WSJ , 25 April 2005: B1 and B4. </li></ul>Example: Applied Marketing
    • 19. Reactions <ul><li>The new ad features “provide more control to us” are effectively cheaper with cost-per-impression pricing. (Julie Roehm, Dir. of Mktg. Communications, DaimlerChrysler). </li></ul><ul><li>(Less waste of ad budget) </li></ul>Google will begin auctioning ad placements for its partner sites based on Cost Per Impression (based on how many people see the ad), as well as its traditional cost-per-click method.
    • 20. Online Ad Monitoring <ul><li>Online advertisers are monitoring web surfing to better target their advertisements towards potential buyers. </li></ul>Marketers Push Online Ads Based on Your Surfing Habits, WSJ, April 6, 2005 <ul><li>Current: auto advertisers place ads on auto related sites. </li></ul><ul><li>Using behavioral targeting, advertisers are able to place more ads to target audiences (auto enthusiasts) based on their surfing behavior. </li></ul>Example: Applied Marketing
    • 21. “ Improved” Ad Strategy <ul><li>For example, someone who reads personal finance articles on a news site could be served ads for a stock broker when he visits an automotive web site </li></ul><ul><li>Ad companies are trying to get website owners to form an advertising network to serve ads based on the content that the surfer reads on another company’s website. </li></ul>
    • 22. <ul><li>Formed a network of websites that participate in delivering ads to viewers surfing the network </li></ul><ul><li>Information is collected when surfers register at websites </li></ul><ul><li>Website clients are provided ads on their sites based on what users are reading (surfing behavior) </li></ul><ul><li>Motivation: web site owners could get more advertising than normal </li></ul><ul><li>Hurdles : individual sites have to share data about their customers which web owners are reluctant to do </li></ul>
    • 23. Who’s using the Ads <ul><li>Starwood Hotels &amp; Resorts utilizes behavioral targeting by delivering ads to people who might have browsed related articles on the internet, or surfed the website of any Starwood branded hotel. </li></ul><ul><li>Ford likes the chance to reach customers who appear from their web surfing to be interested in “a certain type of vehicle, and even down to a certain model” </li></ul>
    • 24. Customer Relationship Management (CRM) <ul><li>Focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships </li></ul><ul><ul><li>Information technology provides the ability to identify &amp; target individual customers &amp; allows marketers to shift their focus from increasing share of market to increasing share of customer. </li></ul></ul><ul><ul><li>Is not just a cost-reduction tactic </li></ul></ul><ul><ul><li>Is not information overload - overwhelmed by gathering unnecessary data </li></ul></ul>
    • 25. Information Sources &amp; Database Marketing <ul><li>External data </li></ul><ul><ul><li>Commercial organizations </li></ul></ul><ul><ul><li>Governments </li></ul></ul><ul><ul><li>Trade associations </li></ul></ul><ul><li>Internal data </li></ul><ul><ul><li>Accounting data </li></ul></ul><ul><ul><li>Transaction data </li></ul></ul>1994 56% of manufacturers use or are building a customer database 2000 85% of manufacturers use database marketing to compete Database Marketing
    • 26. CRM &amp; The 80/20 Rule <ul><li>80 percent of business profits come from 20 percent of customers. </li></ul><ul><ul><li>Information technology can profile customers in real-time and assess their lifetime value (LTV) to the firm. </li></ul></ul><ul><ul><li>Some customers may generate a low level of profit &amp; be too expensive to retain. </li></ul></ul><ul><ul><li>Firms can focus on developing and managing long-term relationships with more profitable customers. </li></ul></ul><ul><ul><li>Department stores such as Nordstrom &amp; Saks can increase members spending by 25% (WSJ B1, 3August 1995) </li></ul></ul>
    • 27. Information Technology Supports CRM <ul><li>Customer support software </li></ul><ul><ul><li>Provides real time customer interaction to capture information and to improve service </li></ul></ul><ul><li>Sales Support software </li></ul><ul><ul><li>Links sales force to information that facilitates the selling process to determine the best solution for customers </li></ul></ul><ul><ul><li>Determines order status, tracks deliveries, and identifies service problems </li></ul></ul>
    • 28. CRM is based on Information Systems that provide a Decision Support System (DSS) Process Software Database
    • 29. Legal and Ethical Issues in E-Marketing <ul><li>Liability for lax security (identity theft &amp; data breaches) </li></ul><ul><li>Personal privacy issues </li></ul><ul><ul><li>Unauthorized use of cookies on computers </li></ul></ul><ul><ul><li>Website requirements for registration </li></ul></ul><ul><ul><li>Collection of information from children </li></ul></ul><ul><ul><li>Use of spyware in software </li></ul></ul><ul><li>Spam </li></ul><ul><ul><li>Unsolicited commercial e-mail (UCE) </li></ul></ul><ul><li>Misappropriation of intellectual property </li></ul><ul><ul><li>Illegal copying of copyrighted software, movies, CDs, and other creative materials </li></ul></ul>
    • 30. Examples of Spam <ul><li>[email_address] ...  Apple Cider Weight Loss Feb 261k  </li></ul><ul><li>ZLand Business Solut ...  Convert Your Leads Into Lifetime Clients  </li></ul><ul><li>[email_address]  Live From My Bedroom  </li></ul><ul><li>Spam are direct response/commercial e-mails </li></ul><ul><li>Deceptive solicitations are growing with them. </li></ul>Spam Tactics Escalate <ul><li>Laws do not work because they rely on district attorneys to prosecute spammers (&amp; vagueness). </li></ul><ul><li>A law with an “unsubscribe” provision has not cut the volume of spam. </li></ul>Controlling the Attack of Unsolicited Pornography &amp; Spam Law
    • 31. What to look for? <ul><li>FTC warns consumers: </li></ul><ul><ul><li>Chain letters that involve money or valuable items and promise big returns are illegal. </li></ul></ul><ul><ul><li>Some chain letters win your confidence by claiming they are legal but chances are you will receive little or no money back on your “investment.” </li></ul></ul><ul><ul><li>If targeted, contact your ISP or email the FTC at: uce@ftc.gov </li></ul></ul>
    • 32. The BBBOnLine Privacy Seal and Program Explanation Reprinted by permission of the Council of Better Business, Inc.
    • 33. &nbsp;
    • 34. &nbsp;
    • 35. Buzz marketing is an attempt to create a trend or acceptance of a product through word-of-mouth Viral marketing is a strategy to get users of the Internet to pass on ads and promotions to others. Case in Point: “ Complaints About iPod Nano” <ul><li>http://news.com.com/Problems+surfacing+with+iPod+Nano+screen/2100-35880307.html?tag=mainstry </li></ul>
    • 36. Cases in Point: Viral Marketing: Attempts by marketers to promote multiplier effect on the web <ul><li>Case 1: Hotmail &apos;s Hyper-Growth In its first 1.5 years, Hotmail acquired over 12 million subscribers. A traditional print publication would hope to reach 100,000 subscribers within a few years of launch, but Hotmail signs up more than 150,000 subscribers every day. </li></ul><ul><li>From company launch to 12 million users, Hotmail spent less than $0.5 million on advertising, marketing and promotion. This compares to over $20 million spent by Juno, one of Hotmail&apos;s close competitors with a fraction of membership. </li></ul><ul><li>Once the first member subscribed from India, 100,000 more followed within 3 weeks. Now Hotmail is the largest email provider in India, despite the fact that it has not had any marketing campaign in that country. </li></ul>
    • 37. Any Questions?
    • 38. Online Gambling Gets Head Start From Flood Of Play-For-Fun Games WSJ, June 11,2001,By Thomas Weber <ul><li>Gambling online is illegal in the U.S. </li></ul><ul><li>2001 -Nevada State Gaming Commission voted 17-4 to allow online gambling </li></ul>Case example: Applied Marketing
    • 39. “ For-Fun” sites <ul><li>Play for “points” not $$$ </li></ul><ul><li>Allows casino operators to move “gambling” on the web </li></ul><ul><li>Growing rapidly in popularity (Virtual reality) </li></ul><ul><li>“ Wager Works”--“the Microsoft of online gambling” </li></ul>
    • 40. Social &amp; Economic Issues <ul><li>Main concern- Minors, government wants reassurance </li></ul><ul><li>Debate on licensing/fees: Current plan is </li></ul><ul><li>$250,000 fee per year for 2 yrs. </li></ul>
    • 41. Opponents of Fee <ul><li>“ makes it impossible for small entrepreneurs to participate” </li></ul>Advocates of Fee <ul><li>“ ensures that only reputable companies undertake Internet gambling” </li></ul>
    • 42. Why So Important? <ul><li>Online gambling is close to real thing </li></ul><ul><li>Minor software changes will enable transition from “points” to $$$ “real gambling” </li></ul>Offshore internet gambling companies took in $1.5 bil in 2000 &amp; could reach $5 bil by 2003 Missing out
    • 43. Bellagio
    • 44. <ul><li>UK-- online gambling is legal </li></ul><ul><li>Harrah’s website is called “Lucky Me” &amp; hopes to operate the site legally in the USA </li></ul><ul><li>The site will offer games of skill, not games of chance </li></ul><ul><li>The internet gambling market is estimated at $5 billion in 2003. </li></ul>Harrah’s Places a Wager on the Web WSJ, 12 November 2003,By: Christina Binkley
    • 45. Harrah’s web site marketing strategy <ul><li>Primary target audience -- women </li></ul><ul><li>The site will not feature slot machines, vampy girls or shots of the Las Vegas Strip </li></ul><ul><li>To lure in the female audience, the site offers feminine colors, and games that appeal to women </li></ul><ul><li>A portion of “Lucky Me” revenue will be set aside to pay out cash winnings, much like the lottery. </li></ul><ul><li>No “high rollers” – everyone is equal </li></ul>
    • 46. Other Online Gambling Ventures <ul><li>MGM Mirage in Las Vegas launched their gambling site in 2001 &amp; closed in 2003 reporting a $5 million loss. </li></ul><ul><li>Issues: underage gamblers and customers from illegal jurisdictions . </li></ul><ul><li>Stations Casinos Inc. launched their internet gambling site in 2001, and shut it down shortly after, realizing that they didn’t have any customer support. </li></ul>
    • 47. Harrah’s Competitive Analysis <ul><li>Harrah’s believes that the other companies folded because of their style of gambling. </li></ul><ul><ul><li>The competitors offered games that you would see in a real casino. </li></ul></ul><ul><ul><li>Harrah’s believes that the customer doesn’t want to play the more traditional games, but are looking for something new. </li></ul></ul><ul><ul><li>Harrah’s is looking to meet the needs of the customer. </li></ul></ul>
    • 48. &nbsp;

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