Internet marketiing

chapter

11

Introduction to Internet MarketingIntroduction to Internet Marketing

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Introduction to Internet Marketing — Today’s Objectives

Objectives will be to:

Define the scope of Internet marketing

Explore the stages of Internet marketing

Discuss the relationship stages and the Marketspace Matrix

Examine guidelines for success

Outline the progression of the book

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion







Conclusion


Cell 4 Cell 2

Cell 3 Cell 1

Loca

tion

of R

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ue S

trea

m

Bric

ks-a

nd- M

orta

rO

nlin

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Marketing Resource Allocation

Offline Online

Internet

Marketi

ng Impac

t

Exhibit 1.1: Assessing the Impact of Internet Marketing







Conclusion

Exhibit 1.2: The Seven-Stage Cycle of Internet Marketing

Step 2

Formulating the Marketing Strategy

Step 3

Designing the Customer

Experience

Step 4

Crafting the Customer Interface

Step 5

Designing the Marketing Program

Step 6

Leveraging Customer Information Through

Technology

Step 7

Evaluating the

Marketing Program

Step 1

Framing the Market

Opportunity

Exhibit 1.3: Framework for Market Opportunity

Seed Opportunity in Existing New Value System

Identify Unmet and Underserved Need(s)

Identify Target Segment(s)

Declare Company’s Resource-Based Opportunity for Advantage

Assess Competitive, Technological, and Financial Opportunity Attractiveness

Make “Go / No-Go” Assessment

Framework for Market OpportunityMicrosoft CarPoint Example

Leverage the Internet to Improve the Consumer Car-Buying Process

Car Buyers Are Dissatisfied With Current Retail Car-Buying Process

Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way

Microsoft’s Software and Free Placement on All Its Websites

How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors?

Make “Go / No-Go” Assessment

• MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry

• The retail car-buying process was frustrating and inefficient:

• Little information available to the consumer• Bargaining with salesperson viewed as an hassle• Long process overall

• MSN CarPoint selected two primary target segments for its service:

• “The intimidated by the process”• “The information seekers”

• MSN CarPoint could leverage Microsoft’s expertise in software development, its brand name and its multitude of online properties

• Competition was getting fierce with more and more online car services entering the market…• But the financial opportunity was large: 66% of new car buyers were estimated to use online services in 2000

• In 1996, the first version of CarPoint was shipped• By 1998, CarPoint was driving $5 million in car sales a day

Exhibit 1.4: Corporate, Business-Unit and Marketing Strategy

Corporate Strategy

Business Unit Strategy

Amazon

Tools and Hardware

Integrated Marketing Strategy for Tools and

Hardware Unit

Linkages Example

Integrated Marketing Strategy for Unit

Internet Marketing

Traditional Marketing

Online Marketing Mix

Offline Marketing Mix







Conclusion

Awareness Exploration /Expansion Commitment Dissolution

Four Key Stages of Customer Relationship

Exhibit 1.5: The Four Key Stages of Customer Relationship

Exhibit 1.6: Four Key Stages of Customer Relationship by Level of Intensity

Leve

l of

Inte

nsity

Stages of Customer Relationships

Awareness Exploration Commitment Dissolution

IntensityIntensity

Exhibit 1.7: Internet Marketing Mix

Branding

Product Pricing Communication Community Distribution

Exhibit 1.8: Impact of the 2Is on the Internet Marketing Mix

Branding

Product Pricing

Individual

Communication DistributionCommunity

Interactivity

Exhibit 1.9: The Marketspace Matrix Relationship Stages

Awareness Exploration Commitment Dissolution

Product

Price

Communication

Community

Distribution

Cat

egor

ies

of L

ever

s

BrandingBranding can also

accentuate (or lessen) the impact of the levers

in each cell

The 2Is should influence the design of each cell

in the matrix







Conclusion

Critical Success Factors for Internet Marketing ExecutivesCustomer Advocacy and Insight

Integration

Balanced Thinking

Passion and Entrepreneurial Spirit

Willingness to Accept Risk and Ambiguity

The willingness to understand customer needs and provide added value to each customer interaction

The ability to manage marketing campaigns in a more uncertain, dynamic environment, with a new set of tools that often have few records of successes, failures or best-practices

The ability to have a holistic view of the customer and the enterprise in order to create a uniquely advantaged strategic plan

Being able to understand the dynamic tension between one-to-one marketing and mass marketing and being able to strike a strategic balance between them

The willingness to change the status quo, take chances and use “bleeding edge” tools to lead teams to success

Exhibit 1.10: The New Rules of Marketing for the Global Digital World

The New Rules1. Target segments of one, and create virtual communities

2. Design for customer-led positioning

3. Expand the role of branding in the global portfolio

4. Leverage consumers as coproducers through customization

5. Use creative pricing in the Priceline.com world

6. Create anytime/anyplace distribution and integrated supply chains

7. Redesign advertising as interactive and integrated marketing, communication, education and entertainment

8. Reinvent marketing research and modeling as knowledge creation and dissemination

9. Use adaptive experimentation

10. Redesign the strategy process and supporting organizational architectureSource: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.

Point-Counterpoint: New Rules or Old Rules of Marketing

New Rules Old Rules

Several basic conceptual and process changes occur in online marketing

One such change is the increased ability to deliver on the promise of one-to-one marketing

There is also a fundamental shift to a more consumer-driven and controlled world — for example, a shift towards pull-marketing and the use of more “pull” levers, such as online community

Differences in the online marketing world are overstated

Segmentation is still at the core of marketing — “clusters” of consumers will emerge that share behavior

From the supply side, it is most efficient to aggregate these consumers to reduce costs

Successful marketing programs include mixing different marketing levers, both new and old: the “master-mixer” concept still remains

Point-Counterpoint







Conclusion

4. Crafting the Customer Interface

1. Framing the Market

Opportunity

2. Formulating the Market Strategy

3. Designing the Customer

Experience

Exhibit 1.11: Overview of the Chapters

5. Designing the Marketing Program

6. Leveraging Customer

Information through

Technology

7. Evaluating the Marketing

Program

Customer Relationships Product Pricing Communication Community Distribution Branding Designing the

Marketspace Matrix Illustration: Marketing

Campaign for The Lord of the Rings: The Fellowship of the Ring







Conclusion

Traditional marketing methods are still highly relevant in the networked economy, though firms must now consider a host of new and innovative marketing methods available online (e.g., dynamic pricing, online community)

In contrast to the one-way mass promotion that characterizes modern marketing, Internet marketing enables firms to engage the individual in personalized dialogues

Individualization and Interactivity are two forces that make online marketing different

Marketing, and the relationships it creates, should be considered in the context of particular processes and stages

Introduction to Internet Marketing — Conclusion