Chapter 1: Introducing Internet Marketing




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Chapter 1: Introducing Internet Marketing


  • How significant the Internet as a Marketing tool?

  • How does Internet Marketing relate to e-Marketing, e-commerce and e-business?

  • What are the key benefits of Internet Marketing?

  • What differences does the Internet Introduce in relation to existing marketing communications models?


To conduct Internet Marketing, we need to build and create databases in which they could be used to support Internet Marketing activities. These Databases could be:

  • Customer Databases

  • Competitors Databases

  • Suppliers Databases

  • Intermediary Databases

  • Agents & Brokers Databases


Introducing the Scope of Internet Marketing


  • "Achieving marketing objectives through applying digital technologies"

    • How?




  • Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.

    • How?



A More in-depth definition:


  • Customer-Centric Digital Marketing Involves:




  • Applying…

  • Digital Technologies which form online channels… (Web, E-mail, Databases, mobile, IDTV)




  • To…

  • Contribute to marketing activities aimed at achieving profitable acquisition and retention of customers (within a multi-channel buying process and customer lifecycle)




  • Through…

  • Improving customer knowledge (or their profiles, behavior, value and loyalty drivers), then delivering integrated targeted communications and online service that match their individual needs)


How does the Internet contribute to marketing?

  • How the Internet achieves marketing goals?

Clue: (Web and E-mail)

How the Internet Supports Marketing


  • Identifying: the Internet can used for marketing research to find out customers' needs and wants.




  • Anticipating: the Internet provides an additional channel by which customers can access information and make purchase-evaluating this demand is key to governing resource allocation to e-marketing.



  • Satisfying: A key success factor in e-marketing customer satisfaction through the electronic channel raises issues such as:

    • Is the site easy to use?

    • Does it perform adequately?

    • What is the standard of associated customer service?

    • Are physical products dispatched?


E-Business and E-Commerce

- You are attending an interview for a job in an E-Commerce department. You are asked to:




  • Define e-commerce

  • Explain the relationship between e-commerce and e-business?


E-business Vs. E-Commerce

  • E-commerce involves money exchange in the transactions.

  • E-Business, as it is broader, all aspects in business are included like marketing, product design, supply management, etc.


E-business: Is the broadest concept, refers to how technology can benefit all internal processes & external exchanges & Interactions, supporting the range of business processes.
E-Commerce: All financial & Information electronically mediated exchanges between organization and its external stakeholders.

E-Commerce is subdivided into:

  • Sell-Side E-Commerce

  • Buy-Side E-Commerce


Note: Distinguish between Intranet, Extranet and Internet

Why is a Digital Strategy needed?

Simply to be better by (Competitive Advantage)

  • To set clear goals for digital channels

  • To align with business strategy (avoid ad-hoc approaches)

  • Create a specific online value proposition (OVP)

  • Specify communications tools to drive visitors

  • Integrate digital and traditional channels

  • Manage customer lifecycle (e.g. through email marketing)

Applications of Digital Marketing

  • An advertising medium

  • A direct-response medium

  • A platform for sales transactions

  • A lead-generation method

  • A distribution channel

  • A Customer service mechanism

  • A relationship-building medium


Typical types of Goals for Digital Marketing

The 5S's of Internet Marketing



Benefit of e-marketing

How benefit is involved

Typical objectives

Sell – Grow sales

Includes direct online sales and sales from offline channels influenced online. Achieves through wider distribution to customers you cannot readily service offline or perhaps through a wider product range than in-store, or lower prices compared to other channels

- Achieve 10% of sales online in market

- Increase online sales for product by 20% in year.


Serve – Add value

Achieved through giving customers extra benefits online or inform product development through online dialogue and feedback



- Increase interaction with different content on site

- Increase dwell-time duration on site by 10% (sometimes known as "stickiness")



- Increasing number of customers actively using online services (at least once per month) to 30%

Speak – Get closer to customers

Creating a Two-Way dialogue through web interactions like famous and surveys and conducing online market research through formal surveys and informally monitoring chat rooms…

  • Grow e-mail coverage to 50% of current customer database

  • Survey 1000 customers online each month

  • Increase visitors to site section by 5%

Save- Save costs

Achieved through online e-mail communications, sales and service transactions to reduce staff, prints and postage costs. Savings also accrue through web self-service where customers answers queries through online content

  • Generate 10% more sales for same communications budget

  • Reduce costs of direct marketing by 15%

Sizzle – Extend the brand online

Achieved through providing new propositions, new offers and new experiences online while at the same time appearing familiar.

- Improve the branding metrics as: brand awareness, reach, brand favorability and purchase intent

Summary and example of transaction alternatives between businesses, consumers and governmental organizations:


  1. C2C: eBay, Skype, Blogs, Social Networks: Facebook, MySpace

  2. C2B: Priceline, Consumer-feedback, communities or campaigns

  3. C2G: Feedback to government through pressure groups or individual sites




  1. B2C: Transactional: Amazon, Relationship-building: BP, Brand Building: Unilever, Media owner: News Corp, Comparison intermediary: Kelkoo, Pricerunner

  2. B2B: Transactional: Euroffice, Relationship: BP, Media owned: Emap, B2B marketplaces: EC21, Social network: Linkedin, Plaxo.

  3. B2G: Feedback to government businesses and non-government orgs.




  1. G2C: Tax, Government Information, E-Visa

  2. G2B: Tax, Legal regulations

  3. G2G: Inter-government services, exchange of information



Basics forms of websites: Informational, Communicational, and Transactional.
Different forms of web presence:


  1. Transactional e-commerce site: Enable Purchase Online, Ex: Amazon, Dell

  2. Service-oriented/relationship building: Provides information to stimulate purchase & build relationships, but products are not available for online purchases. (Ex, Accenture, British Gas)

  3. Brand Building Site: Provides an experience to support the brand. (Tango, Guinness)

  4. Portal or Media Site: Gateway of information that provides news and range of topics. Related to other sites, revenue through ads, commissions, sales of customers data. (Yahoo!, Silicon.com)

    • Horizontal Portals: Information about different sectors! Yahoo!

    • Vertical Portals: Information about specific sector! Edmunds.com

  5. Social Networks: Enable community interaction C2C (Facebook, MySpace)


NOTE: THESE FORMS COULD OVERLAP

Challenges in Developing & Managing an Internet Marketing Strategy:

  1. Unclear responsibility for many marketing activities.

  2. Lack of skilled people and lack of resources.

  3. No specific objectives are set for internet marketing. & results are not measured.

  4. No development for new (OVP) BECAUSE Internet is adopted just as an additional channel.

  5. An experimental rather than planned approach is taken in using e-communication with poor integration between online-offline marketing.

  6. Marketing Myopia (Shortsightedness)

The 7S's to overcome e-marketing challenges:

Element of 7 S Model

Application to strategy

Key issues from practice

Strategy

The significance of digital marketing in influencing and supporting organization strategy

CHECK BOOK

Structure

CHECK BOOK



Systems

Staff

Style

Skills

Superordinate Goals

The guiding concepts of the digital marketing organization which are also part of shared values and culture.

The internal and external perception of these may vary.




Key Marketing Communications Concepts:

Term

Definition

Examples

Medium

Anything that coveys a message. The carrier of the message or method or transmission. Can be conceived as the touch point with the customer.


BOOK

Discipline


BOOK

Channel

Vehicle


Six Categories of e-communications tools or media channels:

  • Search Marketing

  • Online PR

  • Online Partnership

  • Interactive Ads

  • Opt-in e-mail

  • Viral Marketing


Offline Communication Tools:

  • Advertising

  • Personal Selling

  • Sales Promotion

  • PR

  • Sponsorship

  • Direct Mail

  • Exhibitions

  • Merchandising

  • Packaging

  • Word of Mouth


Integrating Online and Offline Communications:

Communication initiated by customer

Communication initiated by company

Phone call to company

Advert to generate awareness. Places in newspaper or PC Magazine

Visit to website to review prices and specification

Phone call or e-mail by courier company to arrange delivery of PC

Phone call or e-commerce purchase of PC

Traditional mail-out or e-mail after 1 year to describe upgrade service

Support call to solve problems

Traditional mail-out or e-mail after 3 years to describe new product offers

Complaints about repair

Call to arrange visit (from sub-contracted company)



What benefits do digital media provide for marketers?

  • Interactivity – not solely a push medium (e-mail), but also pull (customers search for information). Information can be collected from customers via web pages (direct response).

  • Intelligence – Can monitor customers' interests and profile them.

  • Individualization – It is possible to tailor e-mail and web communications (personalization)

  • Integration – of offline and online channels

  • Intermediation – new intermediaries can be used as a route to market and there is also the opportunity to sell direct

  • Independence of Location – Possible to reach a wider market place


Chapter 2: The Internet micro-environment

Situation Analysis
Questions for Marketers

  • How do I complete a situation analysis as part of planning for digital marketing?

  • How are the competitive forces and value chain changed by the Internet?

  • How do I assess the demand for Internet services and customer behavior?

  • How do I compare our online marketing with that of competitors?

  • What is the relevance of the new intermediaries?



The Internet Marketing Environment:
Macro Elements:

  • Technology: Innovation, Trends.

  • International: Economic Factors, Legal Constraints, Cultural Factors

  • Society: Public Reaction, Moral Constraints, Ethical Constraints

  • Country specific: Regulations, Policies…


Micro Elements:

  • Suppliers

  • Competitors

  • Intermediaries

  • Customers



An Online Marketplace Map:


  1. Customer Segments: identify different target segments by understanding their online behavior, media consumption, styles & characteristics.

  2. Search Intermediaries: Companies must know which sites of search engines are effective in connecting traffic with them.

  3. Intermediaries & Media Sites: (Affiliates & Aggregators), successfully attracting visitors via search.

Such As: (Portals, Price Comparison, Super-Affiliates, Niche Affiliates, and Niche/Vertical Media Sites)

  1. Destination Sites: Sites that marketer is trying to generate traffic to. Because (DS) is owned by merchant (retailer or product manufacturer) who provides information and products.



Customer Behavior Analysis:

Is very important to estimate for online customer volume & developing propositions accordingly




  • Demand Analysis

  • Customer needs, characteristics, and behaviors.


Demand Analysis & Conversion Modeling

  1. Is important to understand the internet usage for different purposes, and determine factors that affecting how many people actively using it.




  1. Demand analysis aims at identifying opportunities for online sales, discover motives, and barriers.




  1. We must motivate for online channel adoption, through:

    1. Access Cost

    2. Perceived ease of use

    3. Perceived Risk and Security level

    4. Perceived Value proposition


Conversion Modeling:

  • ­Is a model used to assess the efficiency of the web marketing.

  • Purpose is to identify opportunities, estimate demand, prepare plans, and make a decision.

  • Measures defines in the model are:

(Awareness Efficiency, Attractability, Engagement, and Conversion Efficiency)

A Model of the Internet Marketing Conversion Process

Q0: Internet Universe, Q1: Target Audience, Q2: Visitors, Q3: Active Visitors, Q4: Convert


Performance Drivers:

  • Awareness Efficiency: Q1 / Q0

  • Attraction Efficiency: Q2/Q1

  • Engagement Efficiency: Q3/2

  • Conversion Efficient: Q4/Q3



Evaluating Demand Level Through the following factors:


  1. Level of Internet Access

  2. The Consumers Influenced by using online channel

  3. The number of people who Transact Online

Consumer Characteristics:




  • Demographics: Age, gender, education, income, occupation, & social group.

  • Webograhpcis: Access methods and times, Usage location, and Connection Speed.

  • Personas: Thumbnail of characteristics, needs, motivations, & environment of typical website users. (e.g. Samba Bank)


Ideas to Develop Web Personas:


    1. Build personal attributes into persona:

      • (demographics, psychographics, webographics)

    2. Understand that personas are just models of characteristics & environment:

      • (Design targets, Stereotypes, Select primary influence persona)

    3. Develop each persona scenario

      • Information: Leads to site registration

      • Purchase Scenario: (New Customer, Existing Customer) – Leads to purchase.



Business Consumer Characteristics:


  • Variation in Organization Characteristics

    • Size of Company (Employees or Turnover)

    • Industry sector and products

    • Organization type (private, public, government, not-for-profit)

    • Application of service (which business activities do purchases products and services support?)

    • Country and region

  • Individual Role

    • Role and responsibility from job title, function or number of staff managed

    • Role in buying decision (purchasing influence)

    • Department

    • Product interest

    • Demographics: age, gender and possibly social group.



Consumer Behavior Models

    1. Information / experience seeking behavior models

    2. Hierarchy of response buying process models

    3. Multi-channel buying models

    4. Trust-based models

    5. Community participation models



1 – Information / experience seeking behavior models:


  • Directed Information-seekers: These users will be looking for product, market or leisure information such as details of their football club's fixtures. They are not typically planning to buy online.




  • Undirected Information-seekers: These are the users, usually referred to as "surfers", who like to browse and change sites by following hyperlinks. Members of this group tend to be beginners and they may be more likely to click on a banner or an ad.




  • Directed Buyers: These buyers are online to purchase specific products online. For such users, brokers or cyber-me diaries that compare product features and prices will be important locations to visit.




  • Bargain hunters: These users sometimes known as "compers" want to find the offers available from sales promotions such as free samples or competitions.




  • Entertainment seekers: These are users looking to interact with the web for enjoyment through entering contests such as quizzes, puzzles, or interactive multi-player games.



2 – Hierarchy of response buying models


Stage in buying process

Communication Objectives

Internet Marketing techniques

1. Unaware

Generate awareness

Display and PPC ads, E-PR, social recommendations

2. Aware of product need, develop specification

Position features, benefits and brand.

Search engine marketing (SEO and PPC), affiliate marketing

3. Supplier search

Lead generation (from range of customers)

Aggregators, directories, and other intermediaries

4. Evaluate and select

Assist purchase decision

Faceted search, buyers' guides, detailed product info, user reviews and ratings

5. Purchase

Facilitate purchase

Automated e-mail reminders, one-page payment systems, and offline options.

6. Post-purchase evaluation and feedback

Support use and retain business

Personalized website content and interaction


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Chapter 1: Introducing Internet Marketing

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