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E Marketing Lecture Part 2


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Dr. Marwan Khammash at Summer School in TU Braunschweig, Institut für Wirtschaftsinformatik (wi2). 2009/07/31.

E Marketing Lecture Part 2

  1. 1. 1-1 Welcome to E-MARKETING 2009 Lecture 4: A WORLD OF E-MARKETING OPPORTUNITIES E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Chapter 4 Bangor Business Dr. Marwan Khammash School/Wi2
  2. 2. Lecture 4 Objectives 4-2   After lecture 4, you will be able to:   Discuss overall trends in Internet access, usage, and purchasing around the world.   Define emerging economies and explain the vital role of information technology in economic development.   Outline how e-marketers apply market similarity and analyze online purchase and payment behaviors in planning market entry opportunities.
  3. 3. Lecture 4 Objectives, cont. 4-3   Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward internet use, slow connection speeds, Web site design, and electricity problems.   Review the special challenges of e-marketing on the wireless internet in the context of emerging economies.   Discuss the controversy related to the Digital Divide.   Explain why China is becoming a major market for e- marketing innovation and competition.
  4. 4. Idol Goes Global 4-4   American Idol is broadcast in over 100 countries.   Its popularity has spawned 39 national versions in countries such as Ethiopia, the Philippines, and Russia.   The sharing of popular culture has been enhanced by the convergence of TV, internet, mobile phones, and messaging services.
  5. 5. Idol Goes Global, cont. 4-5   Check out international versions that are streamed over the internet:   Music Idol in Bulgaria:   Ethiopian Idol:   Indian Idol:
  6. 6. Overview of Global E-Marketing Issues 4-6   The globe is literally a world of opportunities.   Exhibit 4.1 shows that worldwide internet usage increased more than 58% from 2004 to 2007.   Asia has the most internet users.   Africa saw the greatest growth in internet use.   North America has the highest penetration as a percent of the population.
  7. 7. Worldwide Internet Usage 4-7 Ex 4.1
  8. 8. Internet Use Varies by Country 4-8   The world’s largest online markets are the U.S. (215 million users) and China (162 million users).   The top 10 countries account for 70% of all global users.   Some smaller countries, such as Norway, Netherlands and Iceland, have the highest penetration, over 85% of their populations.
  9. 9. Top Ten Internet Usage Countries Ex.4.2 4-9
  10. 10. Developed Economies 4-10   Developed countries are highly industrialized, use technology to increase efficiency, and have a high GDP per capita.   Western Europe   North America   Japan   Australia & New Zealand   Developed countries are ideal for the e-marketing activities discussed in the text.
  11. 11. Emerging Economies 4-11   Have low levels of GDP per capita and are experiencing rapid economic growth.   Emerging economies can be found on every continent.   Mexico, Central & South America   Baltic States & Eastern Europe   Russia, Belarus & Ukraine   Africa   Central & Southeast Asia   China
  12. 12. Importance of Information Technology 4-12   The internet accelerates the process of economic growth through diffusion of new technologies.   Bangalore, India is the center of India’s explosive growth in software and IT.   Internet marketing differences in emerging economies include:   Fewer computer users   Limited credit card use   Lack of secure online payment methods   Unexpected power failures
  13. 13. Market Approaches Ex 4.4 4-13
  14. 14. E-Commerce Payment and Trust 4-14 Issues   E-commerce in emerging markets is often hampered by limited use of credit cards and lack of trust in safely conducting online transactions.   Nepal,for example, is a cash-based economy and credit cards are scarce.   For local Nepalis, only Visa, MasterCard, and Himalayan Bank cards are accepted.   InBolivia, only 2.3 percent of the population has a credit card.   Credit card use is virtually non-existent in Ethiopia.
  15. 15. E-Commerce Payment and Trust Issues, cont. 4-15   In addition to credit card usage, e-marketers working in emerging economies should understand attitudes toward online purchasing.   A 2007 study in Lithuania found that 51% of internet users had not made an online purchase because they thought it was too risky.   To overcome trust issues, eBanka, an internet bank, was established in the Czech Republic in 1998 to handle secure online purchases.
  16. 16. Technological Readiness Influences Marketing 4-16   E-marketers must deal with daunting issues of basic technology:   Limited access to and use of computers and telephones   High internet connection costs   Slow internet connections speeds   Unpredictable power supplies
  17. 17. Computers & Telephones 4-17   Computer access is unevenly distributed throughout the world.   Exhibit 4.6 shows computer ownership data for selected countries.   Ownership ranges from 84% in Kuwait to 2% in Bangladesh and Uganda.   Telephones (and connectivity) can be scarce and expensive.   Many consumers in countries with emerging economies access the internet from free-standing shops rather than homes.
  18. 18. Internet Connection Costs 4-18   Countries with emerging economies often have higher internet-related business costs.   Dial-up connection costs can vary considerably.   Broadband connections are developing quickly.   In 2002, 88 countries had broadband vs. 166 countries in 2006.   Broadband connections are still expensive in most countries.
  19. 19. Wireless Internet Access 4-19   At the end of 2007, there were 3.25 billion mobile phone subscriptions worldwide.   Countries with emerging economies have leapfrogged industrial countries in terms of usage.   Challenges of wireless e-marketing:   Modification of Web site content for small screens   Text entry using tiny keypads   Content development   Pricing and secure payments
  20. 20. The Digital Divide 4-20   E-marketers must consider the social environment in which e-business operates.   Disparities with regard to technology access can create a digital divide between countries or populations.   The digital divide raises challenging questions for global policy, international business, and entrepreneurship.
  21. 21. China: A View of the Future 4-21   China is expected to be the largest economy in the world by 2015.   China represents both the promise and challenge of e-marketing in emerging market economies.   70% of all Chinese internet users are under the age of 30.   China’s vibrant, growing online market requires adaption to success.
  22. 22. Popular Web Sites in China Ex.4.16 4-22
  23. 23. 1-23 Welcome to E-MARKETING 2009 CHAPTER 6: E-MARKETING RESEARCH E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Chapter 6 Bangor Business Dr. Marwan Khammash School/Wi2
  24. 24. Lecture 5 Objectives 5-2   After attending lecture 5, you will be able to:   Identify the three main sources of data that e- marketers use to address research problems.   Discuss how and why e-marketers need to check the quality of research data gathered online.   Explain why the internet is used as a contact method for primary research and describe the main internet-based approaches to primary research.
  25. 25. Lecture 5 Objectives, cont. 5-25   Describe several ways to monitor the Web for gathering desired information.   Contrast client-side, server-side, and real-space approaches to data collection.   Highlight four important methods of analysis that e- marketers can apply to data warehouse information.
  26. 26. The Purina Story 5-26   Nestle Purina PetCare wanted to know whether their Web sites and online advertising increased off-line behavior.   Nestle Purina developed 3 research questions:   Are our buyers using our branded Web sites?   Should we invest in other Web sites?   If so, where should we place the advertising?
  27. 27. The Purina Story, cont. 5-27   They combined online and off-line shopping panel data and found that:   Banner click-through rate was low (0.06%).   31% of subjects who were exposed to both online and off- line advertising mentioned Purina.   The high exposure group mentioned Purina more than the low exposure group.   Home/health and living sites received the most visits from their customers.   Can you think of other Web sites besides and that would be appropriate for Purina PetCare ads?
  28. 28. Data Drive Strategy 5-28   Organizations are drowning in data.   E-marketers must determine how to glean insights from billions of bytes of data.   Marketing insight occurs somewhere between information and knowledge.   Purina, for example, sorts through hundreds of millions of pieces of data about 21.5 million consumers to make decisions.
  29. 29. From Data to Decision: Purina 5-29
  30. 30. Marketing Knowledge Management 5-30   Knowledge management is the process of managing the creation, use, and dissemination of knowledge.   Data, information, and knowledge are shared with internal decision makers, partners, channel members, and sometimes customers.   Examples of the uses of knowledge management can be found in Exhibit 6.3.
  31. 31. Uses of Knowledge Management 5-9 Use in the Telecom Industry Representative Firm Scanner Check-Out Data Analysis AT&T Call Volume Analysis Ameritech Equipment Sales Analysis Belgacom Customer Profitability Analysis British Telecom Cost and Inventory Analysis Telestra Australia Purchasing Leverage with Suppliers Telecom Ireland Frequent-Buyer Program Management Telecom Italia Use in the Retail Industry Representative Firm Scanner Check-Out Data Analysis Wal-Mart Sales Promotion Tracking Kmart Inventory Analysis and Deployment Sears Price Reduction Modeling Osco/Savon Drugs Negotiating Leverage with Suppliers Casino Supermarkets Frequent-Buyer Program Management W. H. Smith Books Profitability Analysis Otto Versand Mail Order Product Selection for Markets
  32. 32. The Electronic Marketing Information System 5-32   Marketers manage knowledge through a marketing information system (MIS).   Many firms store data in databases and data warehouses.   The internet and other technologies have facilitated data collection.   Secondary data provides information about competitors, consumers, economic environment, etc.   Marketers use the Net and other technologies to collect primary data about consumers.
  33. 33. Source 1: Internal Records 5-33   Accounting, finance, production, and marketing personnel collect and analyze data.   Salesdata   Customer characteristics and behavior   Universal product codes   Tracking of user movements through web pages
  34. 34. Source 2: Secondary Data 5-34   Can be collected more quickly and less expensively than primary data.   Secondary data may not meet e-marketer’s information needs.   Data was gathered for a different purpose.   Quality of secondary data may be unknown.   Data may be old.   Marketers continually gather business intelligence by scanning the macroenvironment.
  35. 35. Public and Private Data Sources 5-35   Publicly generated data   U.S.Patent Office   CIA World Factbook   American Marketing Association   Wikipedia   Privately generated data   comScore   ForresterResearch   Nielsen/NetRatings   Commercial online databases
  36. 36. Source 3: Primary Data 5-36   Primary data are information gathered for the first time to solve a particular problem.   Primary data collection enhanced by the internet:   Experiments   Focusgroups   Observation   Survey research
  37. 37. Primary Research Steps 5-15   Exhibit 6.10
  38. 38. Advantages & Disadvantages of Online Research 5-38   Exhibit 6.15
  39. 39. Ethics of Online Research 5-39   Companies conducting research on the Web often give respondents a gift or fee for participating.   Other ethical concerns include:   Respondents are increasingly upset at getting unsolicited e- mail requests for survey participation.   “Harvesting” of e-mail addresses from newsgroups without permission.   “Surveys” for the sole purpose of building a database.   Privacy of user data.
  40. 40. Monitoring the Social Media 5-40   Companies must now monitor numerous web pages, blogs, and photo sites in order to learn what is being said about their brands or executives.   Companies can hire public relations firms or online reputation management firms to help.   They can also set up automated monitoring systems using e-mail, RSS feeds, or special software.
  41. 41. Other Technology-Enabled Approaches 5-41   Client-side Data Collection   Cookies   Use PC meter with panel of users to track the user clickstream.   Server-side Data Collection   Sitelog software   Real-time profiling tracks users’ movements through a Web site.
  42. 42. Real-Space Approaches 5-42   Data collection occurs at off-line points of purchase.   Real-space techniques include bar code scanners and credit card terminals.   Catalina Marketing uses the UPC for promotional purposes at grocery stores.
  43. 43. Marketing Databases & Data Warehouses 5-43   Product databases hold information about product features, prices, and inventory levels; customer databases hold information about customer characteristics.   Data warehouses are repositories for the entire organization’s historical data, not just for marketing data.   Data are stored in the data warehouse system and used for analysis by marketing decision makers.
  44. 44. Data Analysis and Distribution 5-44   Four important types of analysis for marketing decision making include:   Data mining   Customer profiling   RFM (recency, frequency, monetary value) analysis   Report generating
  45. 45. Knowledge Management Metrics 5-45   Two metrics are currently in widespread use:   ROI: total cost savings divided by total cost of the installation.   Total Cost of Ownership (TCO): includes cost of hardware, software, labor, and cost savings.