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Consumer Behavior People in the Marketplace
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2-1Copyright © 2003 Prentice-Hall, Inc.
Adapting Marketing To The Adapting Marketing To The New EconomyNew Economy byby
Yohan WismantoroYohan Wismantoro
Management DepartmentManagement Department
Dian Nuswantoro UniversityDian Nuswantoro University
Retailing in E-Commerce :
Product and Service
2-2Copyright © 2003 Prentice-Hall, Inc.
The Internet will The Internet will create new winners create new winners and bury the and bury the laggards.laggards.
Kotler on Marketing
2-3Copyright © 2003 Prentice-Hall, Inc.
Adapting Marketing to the New Economy
Four Major Drivers of the Four Major Drivers of the New EconomyNew Economy:: Digitization and ConnectivityDigitization and Connectivity Disintermediation and ReintermediationDisintermediation and Reintermediation Customization and CustomerizationCustomization and Customerization Industry ConvergenceIndustry Convergence
2-4Copyright © 2003 Prentice-Hall, Inc.
Procter & Gamble’s Reflect.com site allows customers Procter & Gamble’s Reflect.com site allows customers to design their own beauty productsto design their own beauty products
2-5Copyright © 2003 Prentice-Hall, Inc.
“How Business Practices are Changing”Table 2-1: Old Economy vs. New Economy
Old EconomyOld Economy New EconomyNew Economy
Organize by product unitsOrganize by product units
Focus on profitable transactionsFocus on profitable transactions
Look primarily at financial Look primarily at financial scorecardscorecard
Focus on shareholdersFocus on shareholders
Marketing does the marketingMarketing does the marketing
Build brands through advertisingBuild brands through advertising
Focus on customer acquisitionFocus on customer acquisition
No customer satisfaction No customer satisfaction measurementmeasurement
Overpromise, underdeliverOverpromise, underdeliver
Organize by customer segmentsOrganize by customer segments
Focus on customer lifetime valueFocus on customer lifetime value
Look also at marketing scorecardLook also at marketing scorecard
Focus on stakeholdersFocus on stakeholders
Everyone does the marketingEveryone does the marketing
Build brands through behaviorBuild brands through behavior
Focus on customer retention and Focus on customer retention and growthgrowth
Measure customer satisfaction and Measure customer satisfaction and retention rateretention rate
Underpromise, overdeliverUnderpromise, overdeliver
2-6Copyright © 2003 Prentice-Hall, Inc.
E-Business and E-Commerce (B2C, B2B, C2C, C2B, pure click or dot-E-Business and E-Commerce (B2C, B2B, C2C, C2B, pure click or dot-coms, click and brick: channel conflicts?)coms, click and brick: channel conflicts?)
Why did so many dot-coms fail??Why did so many dot-coms fail??(see p. 46) (see p. 46)
Web Sites (setting up/attractiveness;Web Sites (setting up/attractiveness;online advertising and measurement; online advertising and measurement; revenue and profit model)revenue and profit model)
Customer RelationshipCustomer RelationshipMarketing (CRM): databaseMarketing (CRM): databasemarketing, data warehouses,marketing, data warehouses,data mining, problems withdata mining, problems withdatabase marketing?database marketing?
How Marketing Practices are Changing:
2-7Copyright © 2003 Prentice-Hall, Inc.
B2C: Customers can shop online at Calyx and B2C: Customers can shop online at Calyx and Corolla or ask for a catalog and shop by phoneCorolla or ask for a catalog and shop by phone
2-8Copyright © 2003 Prentice-Hall, Inc.
B2B: www.transora.com: global online B2B: www.transora.com: global online marketplace for the consumer packaged goods marketplace for the consumer packaged goods
industryindustry
2-9Copyright © 2003 Prentice-Hall, Inc.
A “Pure Click” company: CarPoint, the leading A “Pure Click” company: CarPoint, the leading metamediary for car buying, exists only on the Web.metamediary for car buying, exists only on the Web.
2-10Copyright © 2003 Prentice-Hall, Inc.
Which is more important for Which is more important for developing an e-presence: the agility developing an e-presence: the agility of a pure click company, or the well of a pure click company, or the well defined and readily identifiable defined and readily identifiable resources of a traditional resources of a traditional brick and mortar brick and mortar company?company?
2-11Copyright © 2003 Prentice-Hall, Inc.
Attracting and Keeping VisitorsAttracting and Keeping Visitors
How can we get more prospects to know and visit our site?How can we get more prospects to know and visit our site?
How can we use marketing to spread word-of-mouth?How can we use marketing to spread word-of-mouth?
How can we convert visitors into repeaters?How can we convert visitors into repeaters?
How do we make our site more experiential and real?How do we make our site more experiential and real?
How can we build a strong relationship with our customers?How can we build a strong relationship with our customers?
How can we build a customer community?How can we build a customer community?
How can we capture and exploit customer data for up-selling How can we capture and exploit customer data for up-selling and cross-selling?and cross-selling?
How much should we spend on building and marketing our How much should we spend on building and marketing our site?site?
Advertising on the InternetAdvertising on the Internet
What are the various ways that we can advertise on the What are the various ways that we can advertise on the Internet?Internet?
How do we choose the right sites for placing our ads or How do we choose the right sites for placing our ads or sponsorship?sponsorship?
Table 2-Table 2-2: Setting 2: Setting
Up a Up a Dot-com Dot-com PresencePresence
(p. 49)(p. 49)
See text for more info. on retailers, site organization, profits …
2-12Copyright © 2003 Prentice-Hall, Inc.
Placing Ads and Promotions Online (p. 50)
Banner ads (53% of ad expenditures online; click-Banner ads (53% of ad expenditures online; click-through rates only .5%)through rates only .5%)
Sponsorships (30% of ad expend. online)Sponsorships (30% of ad expend. online) Microsite (small area paid for by ext. co.)Microsite (small area paid for by ext. co.) Interstitials/pop-upsInterstitials/pop-ups Browser ads (viewer is paid to watch ads)Browser ads (viewer is paid to watch ads) Alliances and affiliate Alliances and affiliate
programs (e.g., AOL and Amazon)programs (e.g., AOL and Amazon) Push technology (e.g., Real Video; Push technology (e.g., Real Video;
Infogate)Infogate)
See Belch and Belch (2004) See Belch and Belch (2004) Advertising and Promotion and IMCAdvertising and Promotion and IMC, , Chapter 15 for strengths and weaknesses of Internet advertising.Chapter 15 for strengths and weaknesses of Internet advertising.
2-13Copyright © 2003 Prentice-Hall, Inc.
Infogate.com “pushes” targeted content and ads to those Infogate.com “pushes” targeted content and ads to those who are interested in a product or product categorywho are interested in a product or product category
2-14Copyright © 2003 Prentice-Hall, Inc.
Measures of Effectiveness for Internet Advertising:
ViewersViewers (stay on site/page): number of viewers to a (stay on site/page): number of viewers to a site (and unique viewers)site (and unique viewers) Ad views/page views/impressionsAd views/page views/impressions: the number of times : the number of times
viewers see a Web page with an ad. (used to calculate viewers see a Web page with an ad. (used to calculate cost per thousand or CPM).cost per thousand or CPM).
HitsHits (leave the site or home page): number of times (leave the site or home page): number of times a specific component of a site is requested/clicked a specific component of a site is requested/clicked on.on. Clicks/click throughsClicks/click throughs: the number of visitors to a site : the number of visitors to a site
that click on an ad to retrieve information.that click on an ad to retrieve information. Click through rateClick through rate: % of ad views that result in an ad : % of ad views that result in an ad
click. (Cost per click can be calculated)click. (Cost per click can be calculated) Cost per thousand (CPM) example for “go.com”Cost per thousand (CPM) example for “go.com”::
CPM = $10,000 per mo. x 1000 / 500,000 views per mo. = $20CPM = $10,000 per mo. x 1000 / 500,000 views per mo. = $20
2-15Copyright © 2003 Prentice-Hall, Inc.
Adapting Marketing to the New Economy (pp. 51-52)
Building a Revenue and Profit Model Building a Revenue and Profit Model Advertising incomeAdvertising income Sponsorship incomeSponsorship income Membership and Membership and
subscriptions (e.g., WSJ)subscriptions (e.g., WSJ) Profile income (privacy?)Profile income (privacy?) Product and service Product and service
salessales Transaction commission Transaction commission
and fees (other parties; eBay)and fees (other parties; eBay) Market research/informationMarket research/information Referral income (Edmund’s finders fee)Referral income (Edmund’s finders fee)
2-16Copyright © 2003 Prentice-Hall, Inc.
Customer Relationship Marketing (CRM)Table 2-3: Mass Marketing vs.
One-to-One Marketing (CRM) (p. 53)
Mass MarketingMass Marketing One-to-One MarketingOne-to-One Marketing
Average customerAverage customer
Customer anonymityCustomer anonymity
Standard productStandard product
Mass productionMass production
Mass distributionMass distribution
Mass advertisingMass advertising
Mass promotionMass promotion
One-way messageOne-way message
Economies of scaleEconomies of scale
Share of marketShare of market
All customersAll customers
Customer attractionCustomer attraction
Individual customerIndividual customer
Customer profileCustomer profile
Customized market Customized market offeringoffering
Customized productionCustomized production
Individualized distributionIndividualized distribution
Individualized messageIndividualized message
Individualized incentivesIndividualized incentives
Two-way messagesTwo-way messages
Economies of scopeEconomies of scope
Share of customerShare of customer
Profitable customersProfitable customers
Customer retentionCustomer retention
2-17Copyright © 2003 Prentice-Hall, Inc.
Adapting Marketing to the New Economy (pp. 53-56)
Database MarketingDatabase Marketing: A process by which companies : A process by which companies collect information on consumers, analyze to predict who collect information on consumers, analyze to predict who will buy, and then develop tailored messages to those will buy, and then develop tailored messages to those consumers. consumers. ((Bus. WeekBus. Week 1994) The ideal consumer = high volume user 1994) The ideal consumer = high volume user
Data WarehouseData Warehouse: storage files for data collected by the : storage files for data collected by the company’s contact center from customer purchases, company’s contact center from customer purchases, customer service calls, online inquiries, mail-in rebate customer service calls, online inquiries, mail-in rebate cards, etc.cards, etc.
Data MiningData Mining: extracting useful information about : extracting useful information about individuals, trends, and segments from the data.individuals, trends, and segments from the data.
Any problems with database marketing??Any problems with database marketing??
2-18Copyright © 2003 Prentice-Hall, Inc.
Marketing Knowledge Management
Marketing knowledge Marketing knowledge
= the digitized “group mind” = the digitized “group mind” = “collective memory” of the marketing personnel and = “collective memory” of the marketing personnel and sometimes of consultants, partners, and former employees. sometimes of consultants, partners, and former employees.
Sometimes the knowledge management technology even Sometimes the knowledge management technology even allows marketing staff to chat in real time for problem allows marketing staff to chat in real time for problem solving, which is why the system also includes contact solving, which is why the system also includes contact information. information.
2-19Copyright © 2003 Prentice-Hall, Inc.
Use in the Telecom IndustryUse in the Telecom Industry Representative FirmRepresentative Firm
Scanner Check-Out Data AnalysisScanner Check-Out Data AnalysisCall Volume AnalysisCall Volume AnalysisEquipment Sales AnalysisEquipment Sales AnalysisCustomer Profitability AnalysisCustomer Profitability AnalysisCost and Inventory AnalysisCost and Inventory AnalysisPurchasing Leverage with SuppliersPurchasing Leverage with SuppliersFrequent-Buyer Program ManagementFrequent-Buyer Program Management
AT&TAT&TAmeritechAmeritechBelgacomBelgacomBritish TelecomBritish TelecomTelestra AustraliaTelestra AustraliaTelecom IrelandTelecom IrelandTelecom ItaliaTelecom Italia
Use in the Retail IndustryUse in the Retail Industry Representative FirmRepresentative Firm
Scanner Check-Out Data AnalysisScanner Check-Out Data AnalysisSales Promotion TrackingSales Promotion TrackingInventory Analysis and DeploymentInventory Analysis and DeploymentPrice Reduction ModelingPrice Reduction ModelingNegotiating Leverage with SuppliersNegotiating Leverage with SuppliersFrequent-Buyer Program Management. Frequent-Buyer Program Management. Profitability AnalysisProfitability AnalysisProduct Selection for MarketsProduct Selection for Markets
Wal-MartWal-MartKmartKmartSearsSearsOsco/Savon DrugsOsco/Savon DrugsCasino SupermarketsCasino SupermarketsW. H. Smith BooksW. H. Smith BooksOtto Versand Mail OrderOtto Versand Mail OrderAmazon.comAmazon.com
Uses of Knowledge Management in Two Industries Source: Adapted from Kalakota and Robinson (1999)
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2-20Copyright © 2003 Prentice-Hall, Inc.
NEW ECONOMY
Don Tapscott (1997) : “Don Tapscott (1997) : “Digital EconomyDigital Economy: : Promise Promise And Peril In The Age Of Networked IntellegencyAnd Peril In The Age Of Networked Intellegency“, “, memaparkan bagaimana perekonomian bergeser memaparkan bagaimana perekonomian bergeser menuju pada perekonomian baru yang disebut menuju pada perekonomian baru yang disebut sebagai sebagai digital economy digital economy
Perekonomian baru (Perekonomian baru (digital economydigital economy) ) adalah adalah perekonomian yang didasarkan pada ilmu perekonomian yang didasarkan pada ilmu pengetahuan, sehingga disebut juga dengan pengetahuan, sehingga disebut juga dengan knowledge economyknowledge economy
2-21Copyright © 2003 Prentice-Hall, Inc.
Digital Convergence
Computing
Content
Communications
Interactive Multimedia
Experience• Hal penting dalam perubahan
teknologi terhadap tata kehidupan manusia adalah dapat disatukannya tiga kegiatan pokok yaitu computing, communication dan content dalam satu sistem yaitu multimedia.
2-22Copyright © 2003 Prentice-Hall, Inc.
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