BA104 Chapter 14

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Implementing Interactive
and Multichannel
Marketing
Roger A. Kerin
Steven W. H artley
MARKETING
THE CORE
Eighth Edition
CHAPTER
14

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LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 14 YOU SHOULD BE ABLE TO:
1. Describe what interactive marketing is and how it
creates customer value, customer relationships,
and customer experiences.
2. Explain why certain types of products and services
are particularly suited for interactive marketing.
3. Describe why consumers shop and buy online and
how marketers influence online purchasing
behavior.
4. Define cross-channel consumers and the role of
multichannel marketing in reaching these
consumers.
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SEVEN CYCLES DELIVERS
JUST ONE BIKE. YOURS.
95% of seven’s bike frames are custom.
Business model includes the Internet.
Customers collaborate on bike design.
Customized process and continuous feedback.
Seven Cycles
Website
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CREATING CUSTOMER VALUE, RELATIONSHIPS, AND
EXPERIENCES IN MARKETSPACE
MARKETING CHALLENGES IN TWO ENVIRONMENTS
Traditional marketplace:
• Face-to-face exchanges
• Legacy companies
Internet companies
• 90% of U.S. Internet users aged 15+
shop online.
• $500 billion by 2022
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CREATING CUSTOMER VALUE
IN MARKETSPACE
Possibilities for customer value creation
are greatest in digital marketspace. Why?
• Place and time utility
• Example - REI: 35% of orders placed between
10:00 p.M. – 7:00 a.M.
• Possession utility is accelerated
• Form utility – communication between
customers and marketers; customization
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INTERACTIVITY, INDIVIDUALITY, AND CUSTOMER
RELATIONSHIPS IN MARKETSPACE (1 of 2)
Interactivity:
• Listen and respond to
customers.
Individuality:
• Treat customers as individuals.
Interactive marketing
Choiceboard
Collaborative filtering
My M&Ms
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INTERACTIVITY, INDIVIDUALITY, AND CUSTOMER
RELATIONSHIPS IN MARKETSPACE (2 of 2)
Personalization
• Consumer-initiated process
Permission marketing
• Consumer’s consent
• Opt-in
• Opt-out
Reebok Design
Your Own
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FIGURE 14-1 Seven website design elements that drive
customer experience.
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CREATING CUSTOMER VALUE, RELATIONSHIPS,
AND EXPERIENCES IN MARKETSPACE
CREATING AN ONLINE EXPERIENCE (1 of 2)
Customer experience – the total
interactions a customer has with a
company’s web site.
Seven key design elements:
1. Context – appeal and functional look
2. Content – all digital information
3. Customization – ability of site to modify for
individual customers
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CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES
IN MARKETSPACE
CREATING AN ONLINE EXPERIENCE (2 of 2)
4. Connection – Linkage Between Other Sites
5. Communication – Dialogue Between Site and
Consumer
6. Community – User-to-user Communications
7. Commerce – Conduct Sales Transactions

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APPLYING MARKETING METRICS
Sizing Up Site Stickiness at
Sewell Automotive Companies
Average Time Spent per Unique Monthly Visitor
= ×

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ONLINE CONSUMER BEHAVIOR AND
MARKETING OPPORTUNITIES AND PRACTICE
WHO IS THE ONLINE CONSUMER?
Online consumers
Internet users who are likely to purchase:
• Equally female and male
• Better educated
• Younger
• More affluent
• 20% account for 69% online sales
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ONLINE CONSUMER BEHAVIOR AND MARKETING
PRACTICE IN MARKETSPACE
WHAT CONSUMERS BUY ONLINE
What do consumers buy online?
1. Items with important product information
2. Items that can be delivered digitally
3. Unique and specialty items
4. Regularly purchased items
5. Standardized items where price is
important
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FIGURE 14-2 Five product categories account for about 70% of online
retail sales today—a trend projected to continue in the future
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FIGURE 14-3 Why do consumers shop and buy
online?
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ONLINE CONSUMER BEHAVIOR AND MARKETING
PRACTICE IN MARKETSPACE
WHY CONSUMERS SHOP AND BUY ONLINE (1 of 4)
Convenience
Bots
Eight-second rule
Choice
Offering selection
Choice assistance
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ONLINE CONSUMER BEHAVIOR AND MARKETING
PRACTICE IN MARKETSPACE
WHY CONSUMERS SHOP AND BUY ONLINE (2 of 4)
Customization
Customerization
Communication
• Marketer-to-consumer e-mails
• Consumer-to-marketer requests
• Chat rooms, messaging, social networks
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ONLINE CONSUMER BEHAVIOR AND MARKETING
PRACTICE IN MARKETSPACE
WHY CONSUMERS SHOP AND BUY ONLINE (3 of 4)
Communication
• Web Communities
• Blog
• Spam
• CAN-SPAM Act
• Buzz
• Viral Marketing Frito-Lay
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ONLINE CONSUMER BEHAVIOR AND MARKETING
PRACTICE IN MARKETSPACE
WHY CONSUMERS SHOP AND BUY ONLINE (4 of 4)
Cost
• Often Lower Prices Online
• Dynamic Pricing
Control
• Cookies
• Behavioral Targeting
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MAKING RESPONSIBLE DECISIONS
Who is Responsible for Internet Privacy and Security?
76% of online consumers have privacy and security
concerns.
$30m in lost sales because of concerns.
46% of fraud complaints are Internet related.
Costs consumers $560m+ annually.
TRUSTe Web Site
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ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE
IN MARKETSPACE
WHEN AND WHERE CONSUMERS SHOP AND BUY ONLINE
Shopping & buying - online vs. stores:
• Online: Monday-Friday 80% of sales; busiest day
is Wednesday.
• Stores: 35% of sales on weekend; busiest day is
Saturday.
• 60% use laptops and desktops.
• 6% use tablets.
• 29% use multiple devices.
Social commerce
Subscription commerce
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CROSS-CHANNEL CONSUMERS AND MULTICHANNEL
MARKETING
WHO IS THE CROSS-CHANNEL CONSUMER?
Cross-channel consumer
• Shops online – buys offline
• Shops offline – buys online
Showrooming:
• Shops in stores but buys online
Webrooming:
• Shops online but buys in stores
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FIGURE 14-4 Cross-channel consumers engage in showrooming and
webrooming depending on how they shop and buy online and offline
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CROSS-CHANNEL SHOPPERS AND MULTICHANNEL
MARKETING
IMPLEMENTING MULTICHANNEL MARKETING (1 of 2)
Three steps in multichannel marketing:
1. Document cross-channel consumer
behavior.
2. Employ mutually reinforcing
communication and delivery channels.
3. Monitor and measure performance.
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FIGURE 14-5 Illustrative Cross-Channel Consumer Journey Map
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Interactive Marketing
Interactive marketing is the two-way buyer-
seller electronic communication in a
computer-mediated environment in which
the buyer controls the kind and amount of
information received from the seller.
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Choiceboard
A choiceboard is an interactive, Internet-
enabled system that allows individual
customers to design their own products and
services by answering a few questions and
choosing from a menu of product or service
attributes (or components), prices, and
delivery options.
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Collaborative Filtering
Collaborative filtering is a process that
automatically groups people with similar
buying intentions, preferences, and
behaviors and predicts future purchases.
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Personalization
Personalization is the consumer-initiated
practice of generating content on a
marketer’s website that is custom tailored to
an individual’s specific needs and
preferences.
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Permission Marketing
Permission marketing is the solicitation of
a consumer’s consent (called “opt-in”) to
receive e-mail and advertising based on
personal data supplied by the consumer.
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Online Consumers
Online consumers are the subsegment of
all Internet users who employ this
technology to research products and
services and make purchases.
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Bots
Bots are electronic shopping agents or
robots that comb websites to compare
prices and product or service features.
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Eight-Second Rule
The eight-second rule is a view that
customers will abandon their efforts to enter
and navigate a website if download time
exceeds eight seconds.
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Customerization
Customerization is the growing practice of
not only customizing a product or service but
also personalizing the marketing and overall
shopping and buying interaction for each
customer.
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Web Communities
Web communities are websites that allow
people to congregate online and exchange
views on topics of common interest.
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Spam
Spam consists of communications that take
the form of electronic junk mail or unsolicited
e-mail.
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Viral Marketing
Viral marketing is an Internet-enabled
promotional strategy that encourages
individuals to forward marketer-initiated
messages to others via e-mail, social
networking websites, and blogs.
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Showrooming
Showrooming occurs when a shopper visits
a retail store to inspect merchandise but
then goes online to compare prices from
other retail and online sellers to attempt to
make the best purchase.
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Dynamic Pricing
Dynamic pricing is the practice of changing
prices for products and services in real time
in response to supply and demand
conditions.
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Cookies
Cookies are computer files that a marketer
can download onto the computer and mobile
phone of an online shopper who visits the
marketer’s website.
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Behavioral Targeting
Behavioral targeting uses information
provided by cookies for directing online
advertising from marketers to those online
shoppers whose behavioral profiles suggest
they would be interested in such advertising.
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Cross-Channel Consumer
A cross-channel consumer is one who
shops online but buys offline, or shops
offline but buys online.
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Social Commerce
Social commerce is the use of social
networks for browsing and buying.
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Subscription Commerce
Subscription commerce involves the
payment of a fee to have products and
services delivered on a recurring schedule.
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