E Marketing Week06


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The role of product in internet marketing

Week 6 of 13 of the 2007 Internet Marketing Course. Content is based in part on Dann, S and Dann S 2004 Strategic Internet Marketing 2.0, Milton: Wiley. Diagrams taken from the Dann and Dann text are copyright to their respective copyright holders.

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E Marketing Week06

  1. 1. MKTG7037 / MKTG2032 E-marketing Week 6
  2. 2. Course Structure Chapter 15 International marketing 21 May 12 Chapter 14 Relationship marketing 28 May 13 Chapter 13 Services marketing online 14 May 11 Chapter 12 Distribution 7 May 10 Chapter 11 Pricing strategies 30 April 9 Chapter 10 Promotion 2: the internet as a promotional medium 23 April 8 Chapter 9 Promotion: the internet in the promotional mix 2 April 7 Chapter 8 The role of product in internet marketing 26 March 6 Chapter 7 The internet in marketing strategy 19 March* 5 Chapter 6 Applications for business and non-business 12 March 4 Chapter 5 Creating cybercommunities 5 March 3 Chapter 4 Consumer behaviour 26 February 2 Chapter 3 Unique features of internet-based marketing 19 February 1 Topic(s)/Task(s) Week beginning Week No
  3. 3. Assessment Due Dates <ul><li>Task Weighting Due </li></ul><ul><li>Essay Registration 01 March 16 </li></ul><ul><li>Solo Assignment 20 March 26 </li></ul><ul><li>Group-Optional Essay 29 May 21 </li></ul><ul><li>Final Examination 30 June </li></ul><ul><li>Online Forum 20 During semester </li></ul>
  4. 4. Playing with some new toys
  5. 5. Technorati <ul><li>http://www.technorati.com/ </li></ul><ul><li>(Not that new though) </li></ul><ul><ul><li>Technorati is the recognized authority on what's happening on the World Live Web, right now. The Live Web is the dynamic and always-updating portion of the Web. We search, surface, and organize blogs and the other forms of independent, user-generated content (photos, videos, voting, etc.) increasingly referred to as “citizen media.” </li></ul></ul>
  6. 6. Fetchwire <ul><li>http://www.fetchwire.com/fw/ </li></ul><ul><li>FetchWire makes it easy to spread your news.  Just write your blog post and then use the word &quot;news&quot; as a post category or tag. </li></ul>
  7. 7. PRX Builder <ul><li>PRX Builder has teamed up with PR Newswire , the world leader in news distribution, to help you reach all of your critical audiences, including consumers, b2b audiences, media, and investors. </li></ul><ul><ul><li>http://www.prxbuilder.com/x2/ </li></ul></ul>
  8. 8. Microformats <ul><li>http://microformats.org/code/ </li></ul><ul><ul><li>Designed for humans first and machines second, microformats are a set of simple, open data formats built upon existing and widely adopted standards. Instead of throwing away what works today, microformats intend to solve simpler problems first by adapting to current behaviors and usage patterns (e.g. XHTML, blogging). </li></ul></ul>
  9. 9. XFN <ul><li>I have no idea, but hey, that’s the point. </li></ul><ul><li>XFN™ ( X HTML F riends N etwork) is a simple way to represent human relationships using hyperlinks. In recent years, blogs and blogrolls have become the fastest growing area of the Web. XFN enables web authors to indicate their relationship(s) to the people in their blogrolls simply by adding a 'rel' attribute to their <a href> tags, e.g.: </li></ul><ul><li><a href=&quot;http://jeff.example.org&quot; rel=&quot;friend met&quot; >... </li></ul><ul><li>http://gmpg.org/xfn/creator </li></ul>
  10. 10. Content stuff
  11. 11. What is the product? <ul><li>Product is variously defined in the literature: </li></ul><ul><ul><li>A product is the total bundle of benefits that a seller offers the consumer. </li></ul></ul><ul><ul><li>Consumers buy the function they believe the product will perform, rather than the product per se. </li></ul></ul>
  12. 12. The Multilevel Product Concept <ul><li>Core product </li></ul><ul><ul><li>the benefits that the product will provide </li></ul></ul><ul><li>Actual product </li></ul><ul><ul><li>the tangible product including style and accessories </li></ul></ul><ul><li>Augmented product </li></ul><ul><ul><li>any additional benefits or services attached to the purchase of the actual product, such as social prestige or service warranty </li></ul></ul>
  13. 13. This used to be so much more simple… *sigh*
  14. 14. Creation, communication, delivery <ul><li>Customer utility: providing value to the customer </li></ul><ul><ul><li>features should be based on the needs of the consumer </li></ul></ul><ul><ul><li>provided within a cost or price framework that is acceptable to the consumer. </li></ul></ul><ul><li>Kaplan and Norton’s (1996) </li></ul><ul><ul><li>Value = Actual product or service attributes + Perceived image + Relationship with the organisation </li></ul></ul>
  15. 15. Product Service Attributes <ul><li>current capacity of the organisation’s product or service to meet a customer’s need or want </li></ul><ul><ul><li>Functionality </li></ul></ul><ul><ul><ul><li>extent to which the product actually performs the task required to meet the needs </li></ul></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><ul><li>subjective level of satisfaction with the intangible elements of the performance, and the worth or value level of the component elements of the product </li></ul></ul></ul><ul><ul><li>Time </li></ul></ul><ul><ul><ul><li>incorporating the amount of effort, energy and forgone opportunities required to have the need satisfied by the organisation’s product </li></ul></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><ul><li>the financial cost of the product to the consumer, plus the non-financial costs of social influence or pride. </li></ul></ul></ul>
  16. 16. Perceived image <ul><li>perceived quality </li></ul><ul><ul><li>subjective opinion of the consumer regarding the quality of the product </li></ul></ul><ul><li>organisational reputation </li></ul><ul><ul><li>Sum total of the organisation’s behaviour including any negative publicity or corporate scandals </li></ul></ul><ul><li>branding strategies </li></ul><ul><ul><li>how the specific product is sold to the market, which include: </li></ul></ul><ul><ul><ul><li>marketing communications </li></ul></ul></ul><ul><ul><ul><li>positioning strategies </li></ul></ul></ul>
  17. 17. Relationship with the organisation <ul><li>Satisfaction </li></ul><ul><ul><li>consumer’s experience of the delivery of the value offering and whether it met, failed or exceeded the consumer’s needs </li></ul></ul><ul><li>Interaction with the organisation </li></ul><ul><ul><li>consumer’s experience of dealing with the organisation during the sales process, and any after-sales service interactions </li></ul></ul><ul><li>Intention to continue the ongoing relationship </li></ul><ul><ul><li>how the customer feels about buying from the organisation in the future. </li></ul></ul>
  18. 18. The online/offline continuum iTunes
  19. 19. Where does the web site fit in? <ul><li>determine the role of the web site in the product offering </li></ul><ul><ul><li>Actual product or service attributes? </li></ul></ul><ul><ul><li>Perceived image? </li></ul></ul><ul><ul><li>Relationship with the organisation? </li></ul></ul><ul><li>Focus on the primary purpose of the site </li></ul><ul><ul><li>Dissemination of information </li></ul></ul><ul><ul><li>Interactions with the organisation and consumers </li></ul></ul><ul><ul><li>Ordering mechanisms and distribution channels </li></ul></ul>
  20. 20. Successful Internet products <ul><li>Three broad categories </li></ul><ul><ul><li>Products that require a traditional distribution system to operate in conjunction with online activities (physical products) </li></ul></ul><ul><ul><li>Products that don’t require a complementary physical distribution system (services and digitised products) </li></ul></ul><ul><ul><li>Products that are electronic/digital/non physical </li></ul></ul>
  21. 21. Traditional product classification <ul><li>Convenience: purchased regularly with little thought at low cost, e.g. shampoo </li></ul><ul><li>Shopping products: purchased less frequently and with a degree of comparison, e.g. perfumes </li></ul><ul><li>Specialty products: highly specialised, sparsely distributed </li></ul>
  22. 22. Alternative classification <ul><li>Classification by Peterson et al. (1997) </li></ul><ul><ul><li>Cost and frequency of purchase </li></ul></ul><ul><ul><li>Value proposition </li></ul></ul><ul><ul><li>Degree of differentiation </li></ul></ul>
  23. 23. Services and Internet <ul><li>Services are suited to online delivery </li></ul><ul><li>The Internet can contribute to greater service quality by: </li></ul><ul><ul><li>Allowing for bookings online </li></ul></ul><ul><ul><li>Providing additional information or service </li></ul></ul><ul><ul><li>Enhancing the communication process between providers and clients </li></ul></ul>
  24. 24. Characteristics of services <ul><li>There are four unique characteristics which can be applied to the Internet: </li></ul><ul><ul><li>Intangibility </li></ul></ul><ul><ul><li>Inseparability </li></ul></ul><ul><ul><li>Inconsistency </li></ul></ul><ul><ul><li>Perishability </li></ul></ul>
  25. 25. Information as product <ul><li>Information has a mathematical form </li></ul><ul><li>Information exists as words, pictures, numbers or sounds </li></ul><ul><li>The medium refers to the physical means by which information is delivered </li></ul><ul><li>Can be consumed by more than one person at different locations </li></ul><ul><li>While information is the same for all customers, individuals may choose to use it differently. </li></ul><ul><li>There is no theoretical limit to the supply of information from any single producer. </li></ul><ul><li>Consuming information does not deplete or distort it. </li></ul>
  26. 26. Key success factors for information-based products <ul><li>Key success factors include the following: </li></ul><ul><ul><li>Form: the mode and medium through which the information is available </li></ul></ul><ul><ul><li>Accuracy: how well the information represents the phenomena it purports to describe </li></ul></ul><ul><ul><li>Completeness: how much the information describes </li></ul></ul><ul><ul><li>Timeliness: up to date and current </li></ul></ul>
  27. 27. Discussion Questions for the Board <ul><li>What types of products do you believe will be most successful in terms of online purchasing over the next few years? </li></ul><ul><ul><li>Justify your choice and give examples where appropriate. </li></ul></ul><ul><li>Why is the process of product definition so important to the development of successful marketing strategies? What are some of the difficulties encountered in trying to define the online product? </li></ul>