Copyright © 2002 Pearson Education, Inc. Slide 7-1

Copyright © 2002 Pearson Education, Inc. Slide 7-1


CHAPTER 7

Created by, David Zolzer, Northwestern State University—Louisiana

E-commerce Marketing Concepts


Internet Marketing Technologies

Web transactions logs Cookies Web bugs Databases, data warehouses, data mining,

and profiling Advertising networks Internet Marketing Technologies Customer Relationship Management

(CRM) systems


Impact of Unique Features of E-commerce Technology on Marketing

Page 361, Table 7.6


Web Transaction Logs

Records user activity at a Web site Registration forms gather personal data

on name, address, phone, zip code, e-mail address, and other optional self-confessed information on interests and tastes

Shopping cart database captures all the item selection, purchase, and payment data


A Web Transaction Log From Azimuth-Interactive.com

Page 362,

Figure 7.12


Marketing Uses of Data From Web Transaction Logs

Page 363, Table 7.7


Questions That Can Be Answered by Web Transactions Logs

What are the major patterns of interest and purchase for groups and individuals?

After the home page, where do most users go first, and then second and third?

What are the interests of specific individuals (those we can identify)?

How can we make it easier for people to use our site so the can find what they want?


Questions That Can Be Answered by Web Transactions Logs

How can we change the design of the site to encourage visitors to purchase our high margin products?

Where are visitors coming from (and how can we optimize our presence on these referral sites)?

How can we personalize our messages, offerings, and products to individual users?


Cookies

Cookie is a small text file that Web sites place on visitor’s client computers every time they visit, and during the visit, as specific pages are visited.

Cookies provide Web marketers with a very quick means of identifying the customer and understanding his or her prior behavior


Cookies Placed by Amazon.comPage 365,

Figure 7.13


Web Bugs

Web bugs are tiny (1 pixel) graphic files hidden in e-mail messages and on Web sites

Web bugs are used to automatically transmit information about the user and the page being viewed to a monitoring server


Databases, Data Warehouses, and Data Mining

Database is a software application that store records and attributes

Database management system (DBMS) is a software application used by organizations to create, maintain, and access databases

SQL is an industry standard database query and manipulation language used in relational databases



Relational databases represent data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be flexibly related so long as the tables share a common data element

Data warehouse is a database that collects a firm’s transactional and customer data in a single location for offline analysis


A Relational Database View of E-commerce Customers

Page 369, Figure 7.14



Data mining is a ser of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers

Customer profile is simply a description of the typical behavior of a customer or a group of customers at a Web site

Query-driven data mining is data mining based on specific queries



Model-drive data mining involves the use of a model that analyzes the key variables of interest to decision makers

Role-based data mining examines demographic and transactional data of groups and individuals at a Web site and attempts to derive general rules of behavior for visitors

Collaborative filtering is where site visitors classify themselves into affinity groups characterized by common interests; products are then recommended based on what other people in the group have recently purchased


Advertising Networks

Present users with banner advertisements based on a database of user behavioral data

Ad server selects an appropriate banner ad based on the user’s previous purchases, interests, demographics, or other data in the profile


How an Advertising Network such as DoubleClick Works



Customer Relationship Management Systems

A repository of customer information that records all of the contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to “know the customer”


Customer Relationship Management Systems

Customer profiles can contain map of customer’s relationship with the institution Product and usage summary data Demographic and psychographic data Profitability measures Contact history summarizing the customers

contacts with the institution across most delivery channels

Marketing and sales information containing programs received by the customer and the customer’s responses


A Customer Relationship Management System



E-commerce Marketing & Branding Strategies

Internet marketing strategies for market entry for new firms include:

pure clicks/first movermixed “clicks and bricks”/alliances

for existing firmspure clicks/fast followermixed “clicks and bricks”/brand

extender


Generic Market Entry StrategiesPage 378, Figure 7.17


Establishing the Customer Relationship

Permission marketing is a marketing strategy in which companies obtain permission from consumers before sending them information or promotional messages

Affiliate marketing is where one Web site agrees to pay another Web site a commission for new business opportunities it refers to the site


Establishing the Customer Relationship

Viral marketing is the process of getting customers to pass along a company’s marketing message to friends, family, and colleagues

Leveraging brands refers to the process of using the power of an existing brand to acquire new customers for a new product or service


Customer Retention

One-to-one marketing means segmenting the market based on a precise and timely understanding of an individual’s needs, targeting specific marketing messages to these individuals, and then positioning the product vis-à-vis competitors to be truly unique


The Mass Market Personalization Continuum



Customer Retention

Customization means changing the product, not just the marketing message, according to user preferences

Customer co-production in the Web environment, takes customization one step further by allowing the customer interactively create the product


Customer Retention

Transactive content results from the combination of traditional content, such as articles and product descriptions, with dynamic information culled from product databases, tailored to each user’s profile


Customer Service tools:

Frequently asked questions (FAQ) is a text-based listing of common questions and answers, provide an inexpensive way to anticipate and address customer concerns

Real-time customer service chat systems, in which a company’s customer service representatives interactively exchange text-based messages with one or more customers on a real-time basis


Customer Service Tools

Automated response systems send e-mail order confirmations and acknowledgements of e-mail inquiries


Net Pricing Strategies

Pricing, putting a value on goods and services, is an integral part of marketing strategy

Demand curve is the quantity of goods that can be sold at various prices Fixed costs are the costs of building the

production facility Variable costs are the costs involved in

running the production facility



Price discrimination is selling products to different people and groups based on their willingness to pay


A Demand CurvePage 390, Figure 7.19



It’s Free! -- can be used to build market awareness

Versioning is creating multiple versions of the good and selling essentially the same product to different market segments at different prices

Bundling offers consumers two or more goods for one price


The Demand for Bundles of 1 - 20 Goods




Dynamic pricing Auctions establish the instant market

price for goods Yield management -- managers set

prices in different markets, appealing to different segments, in order to sell excess capacity


Channel Strategies

Channel refers to different method by which goods can be distributed and sold

Channel conflict occurs when a new venue for selling products or services threatens to destroy existing venues for selling goods


Online Market Research

Market research involves gathering information that will help a firm identify potential products and customers

Primary research involves gathering first-hand information using techniques such as surveys, personal interviews, and focus groups

Secondary research relies on existing, published information as the basis for analyzing the market


Types of Survey QuestionsPage 396, Table 7.8


Some Popular Secondary Research Tools

Page 399, Table 7.9

Documents

Copyright © 2002 Pearson Education, Inc. Slide 7-1