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Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-1 ©2004 Pearson Education Canada Inc.
E-Commerce
The transaction of business and related activities in a virtual environment. It embraces:
Buying and selling online
Digital value creation
Virtual marketplaces and storefronts
New intermediaries
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-2 ©2004 Pearson Education Canada Inc.
Internet User Profile
The Internet reaches a desirable target market.
• Male and female
• 15 to 44 years
• College or university
• $40,000 household income
• Urban skew
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-3 ©2004 Pearson Education Canada Inc.
Culture and Behaviour
Canadians spend 15+ hours online each week.
Download software
Research: travel, products, companies
Chat/ Discussion Groups
Buy online
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-4 ©2004 Pearson Education Canada Inc.
Primary Market Segments
B2BB2B
B2CB2C
$8.1 billion in 2001
$2.3 billion in 2001
B2B accounts for 78% of online transactions.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-5 ©2004 Pearson Education Canada Inc.
Internet and Opportunity
The Internet presents three significant opportunities:
1. Medium of choice for details
2. Conducting transactions online
3. Mass customization
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-6 ©2004 Pearson Education Canada Inc.
Internet Marketing Model
Traditional forms of communication drives traffic to a Web site. The Internet can: Create company/brand awareness Build image Offer incentives Generate leads Provide customer service Provide database input Transact business
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-7 ©2004 Pearson Education Canada Inc.
Customer Relationship Management
Partnerships are enhanced when information among partners is communicated online.
Lower purchasing costs
Efficient JIT inventory planning
Shorter time for product development
Cost of a making a sale is lower
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-8 ©2004 Pearson Education Canada Inc.
Mass Customization
“Creating systems that can personalize messages and ultimately products to a target audience of one.”
Actions of individuals are observed by cookies.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-9 ©2004 Pearson Education Canada Inc.
Research Applications
Focus GroupsFocus Groups
OnlineObservations
OnlineObservations
Online Surveys
Online Surveys
Qualitative assessments in a speedy manner; can’t observe respondent.
Electronic surveillance; data available for e-mail lists.
Quantitative assessments in a fast, inexpensive manner; can’t draw a probability sample.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-10 ©2004 Pearson Education Canada Inc.
Integrating Online Marketing
E-marketing is the future of marketing. A bold statement but a true one.
Bricks and mortar companies must find a way to enter the new economy.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-11 ©2004 Pearson Education Canada Inc.
Product Strategy
Thus far, successful online products have the following characteristics. They are:
Non-perishable
Of high relative value
Information intensive
High-tech in nature
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-12 ©2004 Pearson Education Canada Inc.
Branding Considerations
The right domain name can influence traffic at a Web site.
Length of Name
Length of Name
ImageImage
If too long they are misspelled or people won’t remember them; they won’t find the site.
Offline image and online image should be identical.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-13 ©2004 Pearson Education Canada Inc.
Branding Alternatives
Some options for domain names include: Company Name: Nike.ca
Brand Name: Tide.com
Acronym: cbc.ca
Unique Name: savingyoumoney.com
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-14 ©2004 Pearson Education Canada Inc.
Upward Influences on Price
New intermediaries have replaced traditional intermediaries so online prices are not much lower. Upward influences on price include:
Shipping costs
Auctions
Web site development
Marketing costs
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-15 ©2004 Pearson Education Canada Inc.
Downward Influences on Price
The rapid pace of technology puts pressure on prices. Downward influences on price include:
Competition
Product Life Cycles
Streamlined Order Processing
Inventory Management
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-16 ©2004 Pearson Education Canada Inc.
Pricing Strategy
Consumers tend to search for value so penetration strategies are effective.
1. Offering additional perceived value provides some leeway to increase price (convenience).
2. Small firms can compete with big firms on price.
The price leader has the lowest price.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-17 ©2004 Pearson Education Canada Inc.
Distribution Strategy
The Internet performs all functions differently.
Market Intelligence Customer Communications Buyer Contact Matching Products to Needs Physical Distribution Financing Price Negotiation
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-18 ©2004 Pearson Education Canada Inc.
Disintermediation and Reintermediation
ManufacturerManufacturerDistributor
GM and FordDistributor
GM and FordConsumerConsumer
ManufacturerManufacturerDistributorAutobytelDistributorAutobytel
ConsumerConsumer
Traditional Channel
Online Channel
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-19 ©2004 Pearson Education Canada Inc.
Marketing Communications
Online communications supplement traditional forms of communications.
High reach in cost-efficient manner
Builds awareness and image
Drives traffic to Web sitesThe effectiveness of online advertising is yet to be determined.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-20 ©2004 Pearson Education Canada Inc.
Communications Strategy
AdvertisingAdvertising
SponsorshipsSponsorships
E-mailE-mail
Sales PromotionSales Promotion
Public RelationsPublic Relations
Company or Product Web Site
Company or Product Web Site
Detailed information
Online transaction
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
17-21 ©2004 Pearson Education Canada Inc.
Online Customer Service
Effective customer relationship management programs are essential.
1. Predict changing needs and expectations of e-consumers.
2. Pursue unique strategies relevant to each e-customer.
3. Focus on high value e-customers and serve them better than competitors.
