Marketing In The Digital Age

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Marketing In The Digital Age

  1. 1. Chapter Fourteen Marketing in the Digital Age
  2. 2. <ul><li>Discuss how the digital age is affecting both consumers and the marketers who serve them. </li></ul><ul><li>Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers. </li></ul><ul><li>Describe the four major e-marketing domains. </li></ul><ul><li>Discuss how companies go about conducting e-marketing to profitably deliver more value to customers. </li></ul><ul><li>Overview the promise and challenges that e-commerce presents for the future. </li></ul>
  3. 3. <ul><li>Background </li></ul><ul><li>Began selling books; now markets many other merchandise lines. </li></ul><ul><li>One of the best known names on the Web. </li></ul><ul><li>Sales have been strong but firm did not turn a profit until 2003. </li></ul><ul><li>Skeptics predict tougher times in years to come. </li></ul>Case Study <ul><li>Marketing Efforts </li></ul><ul><li>Customer-driven: strives to design the best customer experience on the Web. </li></ul><ul><li>Personalized sign-on pages and recommendations, huge selection, good value, and convenience result in strong buyer relationships. </li></ul><ul><li>Will Amazon become the Wal-Mart of the Web? </li></ul>Amazon.com – Online Pioneer
  4. 4. Forces Shaping the Digital Age <ul><li>Digitalization andConnectivity </li></ul><ul><ul><li>Intranets </li></ul></ul><ul><ul><ul><li>connect people within a company. </li></ul></ul></ul><ul><ul><li>Extranets </li></ul></ul><ul><ul><ul><li>connect a company with its suppliers, distributors, and outside partners. </li></ul></ul></ul><ul><ul><li>Internet </li></ul></ul><ul><ul><ul><li>connects users around the world. </li></ul></ul></ul>
  5. 5. Forces Shaping the Digital Age <ul><li>Internet Explosion </li></ul><ul><ul><li>Explosive worldwide growth forms the heart of the New Economy. </li></ul></ul><ul><ul><li>Increasing numbers of users worldwide, and broadband users in the U.S. </li></ul></ul><ul><ul><li>Greater numbers of consumers are accessing information on the Internet. </li></ul></ul><ul><ul><li>Companies must adopt Internet technology or risk being left behind. </li></ul></ul>
  6. 6. Marketing Strategy in the Digital Age <ul><li>Requires a new model for marketing strategy and practice. </li></ul><ul><li>Companies need to retain old skills and practices but add new competencies. </li></ul>
  7. 7. E-Business in the Digital Age <ul><li>Involves the use of electronic platforms to conduct company business. </li></ul><ul><ul><li>Web sites for selling and customer relations. </li></ul></ul><ul><ul><li>Intranets for within-company communication. </li></ul></ul><ul><ul><li>Extranets connecting with major suppliers and distributors. </li></ul></ul>
  8. 8. E-Commerce in the Digital Age <ul><li>More specific than e-business. </li></ul><ul><li>Involves buying and selling processes supported by electronic means, primarily the Internet. </li></ul><ul><li>Includes: </li></ul><ul><ul><li>e-marketing </li></ul></ul><ul><ul><li>e-purchasing (e-procurement) </li></ul></ul>
  9. 9. E-Marketing in the Digital Age <ul><li>The marketing side of e-commerce. </li></ul><ul><li>Includes efforts to communicate about, promote, and sell products and services over the Internet. </li></ul><ul><li>E-purchasing is the buying side of e-commerce. </li></ul><ul><ul><li>It consists of companies purchasing goods. </li></ul></ul>
  10. 10. Benefits to Buyers <ul><li>Convenience. </li></ul><ul><li>Buying is easy and private. </li></ul><ul><li>Provides greater product access and selection. </li></ul><ul><li>Provides access to comparative information. </li></ul><ul><li>Buying is interactive and immediate. </li></ul>
  11. 11. Benefits to Sellers <ul><li>Powerful tool for building customer relationships. </li></ul><ul><li>Can reduce costs. </li></ul><ul><li>Can increase speed and efficiency. </li></ul><ul><li>Offers greater flexibility in offers and programs. </li></ul><ul><li>Is a truly global medium. </li></ul>
  12. 12. E-Marketing Domains <ul><li>Business to consumer (B2C) </li></ul><ul><li>Business to business (B2B) </li></ul><ul><li>Consumer to consumer (C2C) </li></ul><ul><li>Consumer to business (C2B) </li></ul>
  13. 13. Business to Consumer (B2C) <ul><li>The online selling of goods and services to final consumers. </li></ul><ul><ul><li>Expected to generate $316 billion in 2010, or 13% of retail sales. </li></ul></ul><ul><ul><li>There is increasing diversity in buyers. </li></ul></ul><ul><ul><ul><li>This provides increasing opportunities for targeting markets. </li></ul></ul></ul><ul><ul><li>Is customer initiated and controlled, requiring new marketing approaches. </li></ul></ul>
  14. 14. Business to Business (B2B) <ul><li>B2B sales dwarf B2C sales: </li></ul><ul><ul><li>B2B e-commerce was nearly $4 trillion in 2003. </li></ul></ul><ul><ul><li>Uses trading networks, auction & barter sites, spot exchanges, online product catalogs, and more. </li></ul></ul><ul><li>Most major B2B marketers offer online product information, purchasing, and support. </li></ul><ul><li>Open trading exchanges: </li></ul><ul><ul><li>huge specialty e-marketspaces to conduct transactions. </li></ul></ul><ul><li>More private trading exchanges are being developed for B2B transactions. </li></ul>
  15. 15. Consumer to Consumer (C2C) <ul><li>Occurs on the Web and includes a wide range of products and services. </li></ul><ul><ul><li>Auction sites such as eBay offer marketplaces to buy or exchange goods. </li></ul></ul><ul><ul><li>Blogs and forums facilitate information interchanges. </li></ul></ul><ul><ul><ul><li>Blog : online journals where people post thoughts on a narrowly defined topic. </li></ul></ul></ul><ul><ul><ul><li>Forums: discussion groups located on commercial online services. </li></ul></ul></ul>
  16. 16. Consumer to Business (C2B) <ul><li>Consumers can search out sellers, view offers, initiate purchases, and give feedback. </li></ul><ul><ul><li>Example: on priceline.com, one can bid for airline tickets, hotel rooms, etc., and decide whether to accept company offers. </li></ul></ul>
  17. 17. Click-Only Companies <ul><li>E-tailers </li></ul><ul><li>Search engines and portals </li></ul><ul><li>Shopping comparison sites </li></ul><ul><li>Internet service providers </li></ul><ul><li>Transaction sites </li></ul><ul><li>Content sites </li></ul>
  18. 18. Reasons for dot.com Failures <ul><li>Poor research or planning. </li></ul><ul><li>Relied on spin and hype instead of marketing strategies. </li></ul><ul><li>Spent too heavily on brand identities. </li></ul><ul><li>Devoted too much effort to acquiring new customers instead of building loyalty. </li></ul>
  19. 19. Click-and-Mortar Companies <ul><li>Established firms initially resisted adding Web sites because of channel conflict and cannibalization concerns. </li></ul><ul><li>Risk of online competition forced firms to become click-and-mortar companies. Most are now doing better than click-only companies because of: </li></ul><ul><ul><li>Trusted brand names and more resources </li></ul></ul><ul><ul><li>Large customer bases </li></ul></ul><ul><ul><li>More knowledge and experience </li></ul></ul><ul><ul><li>Good relationships with suppliers </li></ul></ul><ul><ul><li>Can offer customers more options </li></ul></ul>
  20. 20. Online Marketing <ul><li>Creating a Web site </li></ul><ul><li>Placing ads and promotions online </li></ul><ul><li>Setting up and participating in Web communities </li></ul><ul><li>Using e-mail </li></ul>
  21. 21. Types of Web Sites <ul><li>Corporate Web Site: </li></ul><ul><li>Designed to build customer goodwill and supplement other sales channels. </li></ul><ul><ul><li>Offers information to customers. </li></ul></ul><ul><ul><li>Builds closer customer relationships. </li></ul></ul><ul><ul><li>Generates excitement about the company. </li></ul></ul>
  22. 22. Types of Web Sites <ul><li>Marketing Web Site: </li></ul><ul><li>Engages consumers in an interaction that moves them closer to a direct purchase or other marketing outcome. </li></ul><ul><ul><li>May include catalogs, shopping tips, promotional features, and more. </li></ul></ul>
  23. 23. Designing Attractive Web Sites <ul><li>The 7 Cs of Effective Web Site Design: </li></ul><ul><ul><li>Context </li></ul></ul><ul><ul><li>Content </li></ul></ul><ul><ul><li>Community </li></ul></ul><ul><ul><li>Customization </li></ul></ul><ul><ul><li>Communication </li></ul></ul><ul><ul><li>Connection </li></ul></ul><ul><ul><li>Commerce </li></ul></ul><ul><li>Constant change helps encourage repeat visits. </li></ul>
  24. 24. Online Ads <ul><li>Forms of online advertising: </li></ul><ul><ul><li>Banner ads: </li></ul></ul><ul><ul><ul><li>Tickers (move across the screen) </li></ul></ul></ul><ul><ul><ul><li>Skyscrapers (tall, skinny ads at the side of a page) </li></ul></ul></ul><ul><ul><ul><li>Rectangles (boxes that are larger than a banner) </li></ul></ul></ul><ul><ul><li>Interstitials (pop up OR pop under between changes on Web site) </li></ul></ul><ul><ul><li>Search-related ads (contextual advertising) </li></ul></ul><ul><ul><li>Rich media ads (incorporate animation, video, sound, and interactivity). </li></ul></ul>
  25. 25. Online Promotion <ul><li>Forms of online promotion: </li></ul><ul><ul><li>Content sponsorships (sponsoring special content) </li></ul></ul><ul><ul><li>Microsites (limited areas paid for by an external company) </li></ul></ul><ul><ul><li>Alliances and affiliate programs (work with firms to promote each other) </li></ul></ul><ul><ul><li>Viral marketing (Internet version of word-of-mouth) </li></ul></ul>
  26. 26. The Future of Online Advertising <ul><li>May grow to 10-15% of media mix for low-involvement product categories. </li></ul><ul><li>Web communities: </li></ul><ul><ul><li>Allow members to congregate online and exchange views on issues of interest. </li></ul></ul><ul><li>E-mail: </li></ul><ul><ul><li>Use of “enriched” e-mail messages. </li></ul></ul><ul><ul><li>Backlash against spam can be problem. </li></ul></ul><ul><ul><li>Allow people to opt-out of promotions. </li></ul></ul>
  27. 27. E-Commerce Problems and Challenges <ul><li>Likely that online marketing will remain a technique working with full IMC mix. </li></ul><ul><li>Internet profitability remains problematic for B2C firms. </li></ul><ul><li>Navigation difficulties continue as the number of Web sites grows. </li></ul><ul><li>Dot.com retailers are facing growing competition. </li></ul><ul><li>Legal and ethical issues also exist. </li></ul>
  28. 28. Legal and Ethical Issues <ul><li>Online privacy </li></ul><ul><li>Online security </li></ul><ul><li>Internet fraud </li></ul><ul><li>Segmentation and discrimination </li></ul><ul><li>Access by vulnerable or unauthorized groups </li></ul>
  29. 29. <ul><li>Discuss how the digital age is affecting both consumers and the marketers who serve them. </li></ul><ul><li>Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers. </li></ul><ul><li>Describe the four major e-marketing domains. </li></ul><ul><li>Discuss how companies go about conducting e-marketing to profitably deliver more value to customers. </li></ul><ul><li>Overview the promise and challenges that e-commerce presents for the future. </li></ul>

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