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E-MARKETING, 6TH
EDITION
JUDY STRAUSS AND RAYMOND FROST
Chapter 9: Product – The Online Offer
What Is a Product?
Promotion
Place (Distribution)
Price
ProductProduct is the
“heart” of
Marketing Mix
Many Products Capitalize on Internet
Properties
 A product is a bundle of benefits that satisfies needs of
organizations or consumers.
 Includes tangible goods, services, ideas, people, and
places.
 Products such as search engines are unique to the
internet while others simply use the internet as a new
distribution channel.
 Organizations use research to determine what is
important to customers when creating new products.
 The marketing mix and CRM work together to produce
relational and transactional outcomes with consumers.
 In 1998, co-founders Brin and Page delivered an innovative
new search strategy that ranked results on popularity as well
as keywords.
 Today, Google performs 1 billion searches per day, speaks 345
languages and is the most-visited U.S. Web site.
 Innovative products and strong customer focus are driving its
success and profitability.
 Generates revenue from several B2B markets:
 Licensing of its search services; Sales of advertising to Web advertisers.
 Google pays close attention to user value, keeps costs low,
and delivers eyeballs to advertisers.
 Google’s product mix includes 24 search products, 3
advertising products, 20 applications.
The Google Story
Types of Products
Unsought
Products
Specialty
Products
Shopping
Products
Convenience
Products
Consumer
Products
Business
Products
PRODUCTS
6
Define the terms
Product item,
Product line,
Product width,
Product depth, and
Product mix.
7
Gillette’s Product Lines and Mix
Blades and Writing
razors Toiletries instruments Lighters
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni
Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
Width of the product mix
Depthoftheproductlines
8
Benefits of Product Lines
Equivalent Quality
Efficient Sales and
Distribution
Standardized
Components
Package Uniformity
Advertising Economies
Product Mix Width
 Diversifies risk
 Capitalizes on established
reputations
The number of product lines
an organization offers.
10
Product Line Depth
 Attracts buyers with different
preferences
 Increases sales/profits by further
market segmentation
 Capitalizes on economies of scale
 Evens out seasonal sales patterns
The number of product items
in a product line.
Creating Customer Value
Online
 Customer value = benefits – costs
 Value means entire product experience
 Product awareness to product disposition
 Product decisions must be made that deliver
benefits to customers.
 Attributes
 Branding
 Support Services
 Labeling
 packaging
 Attributes include overall quality and specific
features.
 Notion: “You get what you pay for”
 Benefits are the same features from a user
perspective.
 The internet increases customer benefits in many
ways.
 “Broadening” and “Deepening” of product features
 Mass customization
 User personalization of the shopping experience can be
achieved
Product Benefits: Attributes
Product Benefits: Branding
 A name, term, symbol, design, or combination thereof
that identifies a seller’s products and differentiates
them from competitors’ products.
 When a firm registers that information with the U.S.
Patent Office, it becomes a trademark.
 History of Branding
 What is Branding?
 Brand Awareness, Brand Recall, Brand Recognition
A brand represents a promise or value
proposition to its customers.
Brand Equity
 Brand equity is the intangible financial value of a
brand.
 A great brand taps into popular culture and touches
consumers.
Now look
at Exhibit
9.3 of
your
textbook
2006
2006
Rank Brand Value Industry
1 Microsoft 62039 Software
2 GE 55834 Technology
3 Coca-Cola 41406 F/D/T*
4 China Mobile 39168 Telecom
5 Marlboro 38510 F/D/T
6 Wal-Mart 37567 Retail
7 Google 37445 Software
8 IBM 36084 Technology
9 Citibank 31028 Bank
10 Toyota 30201 Cars
Ran
k
Brand Value Industry
1 Apple Inc. 153285
Technolog
y
2 Google 111498
Technolog
y
3 IBM 100849
Technolog
y
4 McDonald's 81016 F/D/T*
5 Microsoft 78243
Technolog
y
6 Coca-Cola 73752 F/D/T
7 AT&T 69916 Telecom
8 Marlboro 67522 F/D/T
9
China
57326 Telecom
Ran
k
Brand Value Industry
1 Google 114260
Technolog
y
2 IBM 86383
Technolog
y
3 Apple 83153
Technolog
y
4 Microsoft 76344
Technolog
y
5 Coca Cola 67983 F/D/T*
6 McDonald's 66005 F/D/T
7 Marlboro 57047 F/D/T
8
China
Mobile
52616 Telecom
2011 2010
Levels of Brand Relationship
Intensity
Advocacy
Community
Connection
Identity
Awareness
Tell others about the brand
Communicate with each other
Communicate with company
between purchases
Display the brand proudly
Is on the list of
possibilities
Highest
intensity
 Firms can use existing brand names (i.e. online
extensions) or create new brands on the internet.
 Some firms may use different names offline and
online to avoid risk if the new product or channel
should fail.
 Sports Illustrated created thriveonline.com.
 Wired Magazine changed its online version name to
Hotwired.
Branding Decisions for Web
Products
Creating New Brands for Internet
Marketing
 Good brand names should:
 Suggest something about the product.
 Differentiate the product from competitors.
 Be capable of legal protection.
 On the internet, a good brand name should be short,
memorable, easy to spell, and translate well into other
languages.
 Cobranding occurs when two companies form an
alliance and put their brand names on a product:
 Sports Illustrated co-brands with CNN as CNNSI
 Yahoo! Visa shopping pages
Internet Domain Names
 A URL (Uniform Resource Locator) is a Web site
address.
 Also called an IP address and domain name.
 Domain names contain several levels.
 http:// indicates that the browser should expect data
using the hypertext protocol.
 The second-level is often the name of the company.
 The top-level may be .com or a country name, such as
.mx for Mexico or .uk for the United Kingdom.
 There are at least 40 top level names available
including .biz, .info, .pro, etc.
Internet Domain Names, cont.
 The Internet Corporation for Assigned Names and
Numbers (ICANN) is a nonprofit corporation that
makes decisions about protocol and domain name
assignment, registration, etc.
 GoDaddy and other sites provide domain registration
services at low cost.
 More than 97% of words in the dictionary have
already been registered as domain names.
Internet Domain Names, cont.
 Organizations should purchase related names and
spellings.
 Picking the right domain name can make a huge
difference.
 Directing people correctly to a site.
 Building consistency in marketing communications.
Product Benefits: Support
Services
 Customer support is a critical component in the
value proposition.
 Customer service reps help customers with
installation, maintenance, product guarantees, etc.
to increase customer satisfaction.
 Good companies combine online and offline
channels to increase their customer support.
Product Benefits: Labeling
 Labeling has digital equivalents in the online world.
 Online “labels” provide information about product usage,
features, and installing software.
 Online “labels” also provide extensive legal information
about the software product.
 Online firms may add the Better Business logo or
TRUSTe privacy shield to their sites.
Customer Codesign
 Business and consumer collaboration are possible
on the Internet.
 Software developers often seek customer input
about new products.
 They often allow users to download new products, test
them, and provide feedback.
 Customer interaction has been found to increase
product success.
 Amazon seeks customers’ product reviews.
 CNN encourges citizen generalists to upload videos
of breaking news.
New-Product Strategies: Product Mix
Strategies
 Many new products, YouTube, Yahoo!, and Twitter,
were introduced by “one-pony” firms.
 Other firms have added products to an already
successful product mix.
 Companies can choose among six categories of
new-product strategies.
Product Mix Strategies, cont.
1. Discontinuous innovations are new-to-the-
world products.
2. New-product lines are new products in a
different category for an existing brand
name.
3. Additions to existing product lines.
4. Improvements or revisions of existing
products.
5. Repositioned products can be targeted to

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Chapter 9 product - the online offer

  • 1. E-MARKETING, 6TH EDITION JUDY STRAUSS AND RAYMOND FROST Chapter 9: Product – The Online Offer
  • 2. What Is a Product? Promotion Place (Distribution) Price ProductProduct is the “heart” of Marketing Mix
  • 3. Many Products Capitalize on Internet Properties  A product is a bundle of benefits that satisfies needs of organizations or consumers.  Includes tangible goods, services, ideas, people, and places.  Products such as search engines are unique to the internet while others simply use the internet as a new distribution channel.  Organizations use research to determine what is important to customers when creating new products.  The marketing mix and CRM work together to produce relational and transactional outcomes with consumers.
  • 4.  In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords.  Today, Google performs 1 billion searches per day, speaks 345 languages and is the most-visited U.S. Web site.  Innovative products and strong customer focus are driving its success and profitability.  Generates revenue from several B2B markets:  Licensing of its search services; Sales of advertising to Web advertisers.  Google pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers.  Google’s product mix includes 24 search products, 3 advertising products, 20 applications. The Google Story
  • 6. 6 Define the terms Product item, Product line, Product width, Product depth, and Product mix.
  • 7. 7 Gillette’s Product Lines and Mix Blades and Writing razors Toiletries instruments Lighters Mach 3 Series Paper Mate Cricket Sensor Adorn Flair S.T. Dupont Trac II Toni Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus Width of the product mix Depthoftheproductlines
  • 8. 8 Benefits of Product Lines Equivalent Quality Efficient Sales and Distribution Standardized Components Package Uniformity Advertising Economies
  • 9. Product Mix Width  Diversifies risk  Capitalizes on established reputations The number of product lines an organization offers.
  • 10. 10 Product Line Depth  Attracts buyers with different preferences  Increases sales/profits by further market segmentation  Capitalizes on economies of scale  Evens out seasonal sales patterns The number of product items in a product line.
  • 11. Creating Customer Value Online  Customer value = benefits – costs  Value means entire product experience  Product awareness to product disposition  Product decisions must be made that deliver benefits to customers.  Attributes  Branding  Support Services  Labeling  packaging
  • 12.  Attributes include overall quality and specific features.  Notion: “You get what you pay for”  Benefits are the same features from a user perspective.  The internet increases customer benefits in many ways.  “Broadening” and “Deepening” of product features  Mass customization  User personalization of the shopping experience can be achieved Product Benefits: Attributes
  • 13. Product Benefits: Branding  A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.  When a firm registers that information with the U.S. Patent Office, it becomes a trademark.  History of Branding  What is Branding?  Brand Awareness, Brand Recall, Brand Recognition A brand represents a promise or value proposition to its customers.
  • 14. Brand Equity  Brand equity is the intangible financial value of a brand.  A great brand taps into popular culture and touches consumers. Now look at Exhibit 9.3 of your textbook
  • 15. 2006 2006 Rank Brand Value Industry 1 Microsoft 62039 Software 2 GE 55834 Technology 3 Coca-Cola 41406 F/D/T* 4 China Mobile 39168 Telecom 5 Marlboro 38510 F/D/T 6 Wal-Mart 37567 Retail 7 Google 37445 Software 8 IBM 36084 Technology 9 Citibank 31028 Bank 10 Toyota 30201 Cars
  • 16. Ran k Brand Value Industry 1 Apple Inc. 153285 Technolog y 2 Google 111498 Technolog y 3 IBM 100849 Technolog y 4 McDonald's 81016 F/D/T* 5 Microsoft 78243 Technolog y 6 Coca-Cola 73752 F/D/T 7 AT&T 69916 Telecom 8 Marlboro 67522 F/D/T 9 China 57326 Telecom Ran k Brand Value Industry 1 Google 114260 Technolog y 2 IBM 86383 Technolog y 3 Apple 83153 Technolog y 4 Microsoft 76344 Technolog y 5 Coca Cola 67983 F/D/T* 6 McDonald's 66005 F/D/T 7 Marlboro 57047 F/D/T 8 China Mobile 52616 Telecom 2011 2010
  • 17. Levels of Brand Relationship Intensity Advocacy Community Connection Identity Awareness Tell others about the brand Communicate with each other Communicate with company between purchases Display the brand proudly Is on the list of possibilities Highest intensity
  • 18.  Firms can use existing brand names (i.e. online extensions) or create new brands on the internet.  Some firms may use different names offline and online to avoid risk if the new product or channel should fail.  Sports Illustrated created thriveonline.com.  Wired Magazine changed its online version name to Hotwired. Branding Decisions for Web Products
  • 19. Creating New Brands for Internet Marketing  Good brand names should:  Suggest something about the product.  Differentiate the product from competitors.  Be capable of legal protection.  On the internet, a good brand name should be short, memorable, easy to spell, and translate well into other languages.  Cobranding occurs when two companies form an alliance and put their brand names on a product:  Sports Illustrated co-brands with CNN as CNNSI  Yahoo! Visa shopping pages
  • 20. Internet Domain Names  A URL (Uniform Resource Locator) is a Web site address.  Also called an IP address and domain name.  Domain names contain several levels.  http:// indicates that the browser should expect data using the hypertext protocol.  The second-level is often the name of the company.  The top-level may be .com or a country name, such as .mx for Mexico or .uk for the United Kingdom.  There are at least 40 top level names available including .biz, .info, .pro, etc.
  • 21. Internet Domain Names, cont.  The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit corporation that makes decisions about protocol and domain name assignment, registration, etc.  GoDaddy and other sites provide domain registration services at low cost.  More than 97% of words in the dictionary have already been registered as domain names.
  • 22. Internet Domain Names, cont.  Organizations should purchase related names and spellings.  Picking the right domain name can make a huge difference.  Directing people correctly to a site.  Building consistency in marketing communications.
  • 23. Product Benefits: Support Services  Customer support is a critical component in the value proposition.  Customer service reps help customers with installation, maintenance, product guarantees, etc. to increase customer satisfaction.  Good companies combine online and offline channels to increase their customer support.
  • 24. Product Benefits: Labeling  Labeling has digital equivalents in the online world.  Online “labels” provide information about product usage, features, and installing software.  Online “labels” also provide extensive legal information about the software product.  Online firms may add the Better Business logo or TRUSTe privacy shield to their sites.
  • 25. Customer Codesign  Business and consumer collaboration are possible on the Internet.  Software developers often seek customer input about new products.  They often allow users to download new products, test them, and provide feedback.  Customer interaction has been found to increase product success.  Amazon seeks customers’ product reviews.  CNN encourges citizen generalists to upload videos of breaking news.
  • 26. New-Product Strategies: Product Mix Strategies  Many new products, YouTube, Yahoo!, and Twitter, were introduced by “one-pony” firms.  Other firms have added products to an already successful product mix.  Companies can choose among six categories of new-product strategies.
  • 27. Product Mix Strategies, cont. 1. Discontinuous innovations are new-to-the- world products. 2. New-product lines are new products in a different category for an existing brand name. 3. Additions to existing product lines. 4. Improvements or revisions of existing products. 5. Repositioned products can be targeted to