C HAPTER 14 Marketing in the Digital Age. Copyright 2007, Prentice-Hall Inc.14-2 Discuss how the digital age is affecting both consumers and the marketers

CCHAPTER HAPTER 1414

Marketing Marketing in the in the

Digital AgeDigital Age

Copyright 2007, Prentice-Hall Inc. 14-2

Discuss how the digital age is affecting both consumers and the marketers who serve them.

Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers.

Describe the four major e-marketing domains. Discuss how companies go about conducting

e-marketing to profitably deliver more value to customers.

Overview the promise and challenges that e-commerce presents for the future.

Roadmap: Previewing the Concepts


Background Began selling books; now

markets many other merchandise lines.

One of the best-known names on the Web.

Sales have been strong but firm did not turn a profit until 2003.

Skeptics predict tougher times in years to come.

Marketing Efforts Customer-driven: strives to

design the best customer experience on the Web.

Personalized sign-on pages and recommendations, huge selection, good value, and convenience result in strong buyer relationships.

Will Amazon become the Wal-Mart of the Web?

AMAZON.COMAMAZON.COM – Online Pioneer – Online Pioneer


Digitalization and Connectivity– Intranets

connect people within a company. – Extranets

connect a company with its suppliers, distributors, and outside partners.

– Internet connects users around the world.

Forces Shaping the Digital Age


Requires a new model for marketing strategy and practice, as the Internet offers new opportunities for creating value and building relationships.

The digital age has changed consumers’ ideas of convenience, speed, price, product information, and service.

Companies need to retain old skills and practices but add new competencies.

Marketing Strategy in the Digital Age


Involves the use of electronic platforms to conduct company business.– Web sites for selling and customer

relations.– Intranets for within-company

communication.– Extranets connecting with major suppliers

and distributors.

E-Business in the Digital Age


E-Commerce in the Digital Age

More specific than e-business. Involves buying and selling processes

supported by electronic means, primarily the Internet.

Includes:– e-marketing– e-purchasing (e-procurement)


E-Commerce Network

Rusbiz.com is a global B2B portal offering trade leads, a marketplace, e-catalog, and more.

Marketing in Action

www.rusbiz.com/


The marketing side of e-commerce. Includes efforts to communicate about,

promote, and sell products and services over the Internet.

E-purchasing is the buying side of e-commerce.– It consists of companies purchasing

goods.

E-Marketing in the Digital Age


Benefits to Buyers

Convenience. Buying is easy and private. Provides greater product access and

selection. Provides access to comparative

information. Buying is interactive and immediate.


Benefits to Sellers

Powerful tool for building customer relationships.

Can reduce costs. Can increase speed and efficiency. Offers greater flexibility in offers and

programs. Is a truly global medium.


Figure 14-1E-Marketing Domains


The online selling of goods and services to final consumers.– Expected to generate $316 billion in 2010,

or 13 percent of retail sales.– There is increasing diversity in buyers.

This provides increasing opportunities for targeting markets.

– Is customer initiated and controlled, requiring new marketing approaches.

Business to Consumer (B2C)


B2B sales dwarf B2C sales:– B2B e-commerce was nearly $4 trillion in 2003.– Uses trading networks, auction & barter sites, spot

exchanges, online product catalogues, and more.

Most major B2B marketers offer online product information, purchasing, and support.

Open trading exchanges:– huge specialty e-marketspaces to conduct

transactions.

More private trading exchanges are being developed for B2B transactions.

Business to Business (B2B)


B2B Open Trading Exchange

Plasticsnet.com is an Internet marketplace that connects more than 200 suppliers with over 90,000 buyers monthly.

Marketing in Action

www.plasticsnet.com


Occurs on the Web and includes a wide range of products and services.– Auction sites such as eBay offer

marketplaces to buy or exchange goods.– Blogs and forums facilitate information

interchanges. Blog: online journals where people

post thoughts on a specific topic. Forums: discussion groups located on

commercial online services.

Consumer to Consumer (C2C)


iPoditude.com Blog

Some blogs such as iPoditude offer saavy marketers advertising opportunities.

Marketing in Action

www.ipoditude.com


Consumer to Business (C2B)

Consumers can search out sellers, view offers, initiate purchases, and give feedback.– At Priceline.com,

consumers can name their own price for a flight.

www.priceline.com


Movietickets.com sells movie theatre tickets over the Internet.

Why do or don’t you use this service to buy movie tickets? If you don’t use the Web site, what could it do to earn your business?

Let’s Talk!

www.movietickets.com


Figure 14-2Types of E-Marketers


Click-Only Companies

E-tailers Search engines and portals Shopping comparison sites Internet service

providers Transaction

sites Content sites

What type of click-only company is iWon.com?

How likely are you to use their services in the future? Why?

Video Snippet


Poor research or planning. Relied on spin and hype instead of

marketing strategies. Spent too heavily on brand identities. Devoted too much effort to acquiring

new customers instead of building loyalty.

Reasons for dot.com Failures


Established firms initially resisted adding Web sites because of channel conflict and cannibalization concerns.

Risk of online competition forced firms to become click-and-mortar companies. Most are now doing better than click-only companies because of:– Trusted brand names and more resources– Large customer bases– More knowledge and experience– Good relationships with suppliers– Can offer customers more options

Click-and-Mortar Companies


Figure 14-3Setting Up for Online Marketing


Types of Web Sites

Corporate Web Site: Designed to build customer goodwill and supplement other sales channels.– Offers information to customers.– Builds closer customer relationships.– Generates excitement about the company.

Marketing Web Site: Engages consumers in an interaction that moves them closer to a direct purchase or other marketing outcome.– May include catalogues, shopping tips,

promotional features, and more.


Marketing Web Site

The MINI marketing Web site does more than just provide information or sell cars: it keeps customers engaged, from designing their very own MINI to tracking it from factory to delivery.

Marketing in Action

http://www.miniusa.com/link/home/


The 7 Cs of Effective Web Site Design:– Context: layout and design.– Content: text, picture, sounds, etc.– Community: the ways the site enables user-to-

user communication.– Customization: ability of site to personalize or

tailor itself to various users.– Communication: how communication is enabled

between the user and the site.– Connection: the degree to which the site is linked

to others.– Commerce: site’s ability to conduct transactions.

Designing Attractive Web Sites


Using the criteria for good Web site design, evaluate the site shown at right.

Let’s Talk!

www.ragu.com/


Online Ads

Forms of online advertising:– Banner ads:

Tickers (move across the screen) Skyscrapers (tall, skinny ads at the side of a

page) Rectangles (boxes that are larger than a

banner)– Interstitials (pop up OR pop under between

changes on Web site)– Search-related ads (contextual advertising)– Rich media ads (incorporate animation, video,

sound and interactivity)


Forms of Online Ads

Pennlive.com takes the mystery out of buying online ads, by showing samples of common formats available for purchase.

Visit the Interactive Advertising Bureau for additional information.

Marketing in Action

http://www.iab.net


Search Engine Marketing

For an interactive example of search engine marketing, visit the search engine of your choice, and enter a term such as “pet” or “computer” and watch what pops up under the sponsored links.

Marketing in Action

Search engine marketing is one of the fastest growing forms of online advertising.


Online Promotion

Forms of online promotion:– Content sponsorships (sponsoring special

content)– Microsites (limited areas paid for by an

external company)– Alliances and affiliate programs (work

with firms to promote each other)– Viral marketing (Internet version of word-

of-mouth)


Viral Marketing

Marketing in Action

Got Milk? Apparently aliens didn’t until they started abducting our cows. The cowabduction.com Web site is an by the California Milk Processors Board to promote milk in a fun fashion, and to stimulate viral marketing. http://www.cowabduction.com/


May grow to 10-15% of media mix for low-involvement product categories.

Web communities:– Allow members to congregate online and

exchange views on issues of interest. E-mail:

– Use of “enriched” e-mail messages.– Backlash against spam can be problem.– Allow people to opt-out of promotions.

The Future of Online Advertising


Likely that online marketing will remain a technique working with full IMC mix.

Internet profitability remains problematic for B2C firms.

Navigation difficulties continue as the number of Web sites grows.

Dot.com retailers are facing growing competition.

Legal and ethical issues also exist.

E-Commerce Promises and Challenges


Online privacy is the number one e-commerce concern of consumers.– Consumers are worried about how their personal

information is being used.

Online security concerns are still common regarding credit card numbers.

Governmental responses have been limited to date: OPPA, COPPA.

TRUSTe is a private entity devoted to online privacy issues.

Legal and Ethical Issues


Internet fraud: – identity theft (phishing), investment fraud,

financial scams. Segmentation and discrimination due

to the digital divide. Access by vulnerable or unauthorized

groups– Bidding on eBay and access of adult

content by children.

Legal and Ethical Issues


Privacy Issues

Marketing in Action

The TRUSTe seal on Avis’s Web page and privacy statement verify the company’s privacy practices have

been reviewed by TRUSTe and meet their guidelines.


Discuss how the digital age is affecting both consumers and the marketers who serve them.

Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers.

Describe the four major e-marketing domains. Discuss how companies go about conducting

e-marketing to profitably deliver more value to customers.

Overview the promise and challenges that e-commerce presents for the future.

Rest Area: Reviewing the Concepts

Documents

C HAPTER 14 Marketing in the Digital Age. Copyright 2007, Prentice-Hall Inc.14-2 Discuss how the digital age is affecting both consumers and the marketers