CHAPTER 14 WITH DUANE WEAVER
Most common products researched online and
Cars, computers, travel, electronics, books appliances,
music, sporting goods and clothing.
25% of all business-business purchases are done
54% of email users have responded to e-mail
Internet retail is 2.5% of all retail sales
Impact of Internet on Marketing
The following 3 functions can cost up to 30% of COGS, expectations are
that these costs can be reduced to 10-20% via e-commerce.
Albeit, operating costs can be substantially lowered, the business must
Infrastructure (perhaps vested technology as a fixed cost or leased as an added
operating expense (can void net gain))
Focus and design of company (bricks and mortar vs. virtual?)
Design of Website must be conducive to the IMC plan and established to
the benefits of the target audience:
Excellent for psychographic segmentation
Multiple portals tailored to each segment (vs. one face for all)
Use flashy where needed (affective buyers) and avoid it where frivolous
Integrate cookies and path traveled information with purchase habits
Requires constant modification to be on top of consumer needs
Must have multiple Trust Cues
Success with E-Commerce
E-Commerce: selling of goods or services
Three Incentives must exist for customers to
Financial: currently first time consumers require
financial incentive (price reduction) in addition to
Convenience: ability to order anytime from anywhere
without having to visit a store. Delivered to your door.
Value Added: needed to induce long term repeat
business such as:
Personalization (Lands End, Amazon.com)
Permission based marketing based on profiles
Reduced information search (find it all in once place –
Insurance companies, E-bay)
Works well for repeat purchasing of low cost items with
strong brand recognition.
Can help to speed time to market, as well as reduce
inventory and transaction costs.
Increase in online brokerage services for business to
business…facilitating exchange of goods. (e.g.:
Websites can serve as alternate media to drive visits to
bricks and mortar
Nature of goods needs to be conducive to world-wide
shipping when considering world wide web store front for
Must be designed to handle such an enterprise (structure
and function, marketing, aligned to meet expectations)
IMC and the Internet
In addition to using the Internet as part of the IMC plan for
communications and marketing…
Fundamental to integrated the entire company from IT through to human
resources, production and shipping.
The ability to meet the demands of online marketing is as important to
survivability as having web presence.
Technology does not solve business problems…it expedites those that
already exist! What once was broke and took attention once a week…will still be broken,
however, it may take attention once an hour. Fix the business processes, align the
companies resources, plan, build and then engage with a vengeance!
Brand Spiraling: using traditional media to drive customers to the
online website to enhance brand recognition.
Halo Effect: offline brand recognition induces online willingness to try
new products and services from the same brand on the net.
Please get into groups of 3-5 and discuss the
following three questions, be prepared to share
some of your answers with the class:
P. 459-460 (blue book) and P. 431 (white book)
1. (Only in blue book):
What age group is most likely to use the Internet? Which is the
least? Does this have implications for IMC programs (explain)?
5. (Both books):
Name and describe the three main incentives used to attract
shoppers to e-commerce Web sites.
What is cyberbait? How must it be used over time to maintain it
as an effective marketing tactic?