Transcript File - Md. Mahbubul Alam, PhD

MGT 3225: E-Business
Lecture 5:
E-Marketing
Md Mahbubul Alam, PhD
Associate Professor
Intended Learning Outcomes (ILOs)
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Assess the need for separate e-business and e-marketing strategies,
Create an outline e-marketing plan intended to implement the e-marketing strategy,
Integrate traditional marketing approaches with e-marketing,
Distinguish between marketing communication characteristics of traditional and new
media,
Redefine marketing and communication mixed to incorporate new media.
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What is e-marketing?
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What is marketing?
 Marketing is the management process responsible for identifying, anticipating and satisfying
customer requirements profitability.
Key objectives
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 Identifying: find out customers, their needs and wants.
 Anticipating: Anticipate the demand for efficient resource allocation.
 Satisfying: Outcome of marketing campaign leads to customer retention.
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What is e-marketing?
 The application of marketing principles and techniques to achieve marketing goals via ecommunication technology.
 An external perspective of how the Internet can be used in conjunction with traditional media to
acquire and deliver services to customers.
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Operational Process of e-marketing
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Management Process of e-marketing
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E-Marketing Plan: SOSTAC™
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Strategy Setting: Target Market Strategies
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Target Marketing Strategy
Evaluation and selection of
appropriate segments and the
development of appropriate offers.
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Segmentation
Identification of different groups
within a target market in order to
develop different product offerings
and communications for the groups.
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Example OVPs
• ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com)
• ‘Earth’s biggest selection’. Amazon (www.amazon.com)
• ‘Search the largest inventory of cars and trucks on the Internet. More than 1.5
million listings, updated daily’ (www.autotrader.com)
• The Citibank site design (www.citibank.com) uses a range of techniques to
illustrate its core proposition and OVP. The main messages are
o Welcome to Citibank: The one-stop solution for all your financial needs
o Look for a product or service; Learn about a financial product; Find a location
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New Media Marketing: Characteristics
1. Interactivity: Push vs. pull media, two-way interaction. See, slide 33
2. Intelligence: Low-cost method for marketing research, customer profiling,
e.g., www.egg.com, www.hsbc.co.uk, www.lloydstsb.co.uk
3. Individualization: Broadcast same message vs. personalized message, e.g.,
Dell Premier (www.dell.com/premier). See, slide 34.
4. Integration: ‘Customer-to-organization’ and ‘organization-to-customer’
communication. See, slide 35-36.
5. Industry restructuring: Disintermediation, reintermediation and
Countermediation.
6. Independent of location: Reach of company communication to the global
market.
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Communication models: Traditional media vs. New media
• Traditional media
o Push media
o Company->customer
• New media
o Pull media
o Customer seek
information on a web
site.
o e.g., FMCG brand like
Nestle
(www.nescafe.co.uk)
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Degree of Individualization: Traditional media vs. New media
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Channels Integration Strategy
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Channel Integration: e-marketing and mixed-mode buying
Mixed-mode buying:
The process by which
customer changes
between online and
offline channels during
the buying process.
e.g., www.easyjet.com
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Tactics: Product
• Core product: Fundamental features of a product the meet users’ needs.
• Extended product: Additional features and benefits beyond the core product.
• Mass customization: Tailored versions of products to individual customers or
groups of customers.
• Bundling: multiple products are offered as individual items or groups at a
reduce price.
• Versioning
• Subscription
• Pay-per-view
• Ad-supported content
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Tactics: Price
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Commoditization: Selection of product is more dependent on price than on differentiating features,
benefits and value-added services.
Dynamic pricing: Prices can be update in real time according to the type of customer of current
market conditions, e.g., auctions, yield management, flash marketing, free & freemium
Aggregated buying: A form of customer union where buyers collectively purchase a number of
items at the same price and receive a volume discount.
Satisficing behavior: Customer do not behave entirely rationally. They compare alternatives but
may make choice given imperfect information.
Price elasticity of demand: Measure of consumer behavior that indicated the change in demand for
a product/service in response to changes in prices. It assess the extent to which a change in price
will influence demand for a product.
o Elastic: A small change in price increases or reduces the demand substantially.
o Inelastic: A large change in price is accompanied by a small amount of change in demand.
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Tipping Point
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The principle that describe the underpinning of the rapid spread of ideas, products and behaviors
through a population.
o Science of social epidemics
o Word-of-mouth impact on the rate of adoption of new products.
• Principles: Three
1. The law of the few: word-of-mouth and copycat behavior
2. The stickiness factor: attachment of the characteristics and attributes of a product or a
brand.
3. The power of context: Products and behavior spread far and wide only when they fit the
physical, social and mental context.
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Read the Box 8.3 on pp. 452-453
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Traditional Online Marketing and Advertising Tools
• Search engine marketing and advertising
Search engine marketing (SEM) Use of search engines for branding
Search engine advertising  Use of search engines to support direct sales
Types of search engine advertising  Sponsored links (keyword paid inclusion), Keyword advertising
(Google’s AdWords), Network keyword advertising (context advertising, e.g., Google’s AdSense).
Search engine optimization (SEO) techniques to improve the ranking of Web pages generated by
search engine algorithms.
Social search Utilizes social graph (friend’s recommendations, past Web visits, Facebook Likes, Google
+1’s) to provide fewer and more relevant & trust-worthy results.
• Display ad marketing, e.g., Banner ads, Rich media ads, Video ads, Sponsorships,
• E-mail marketing  inexpensive & personalize; BUT Spam, poorly targeted e-mail list.
• Affiliate marketing  paid commission fee
• Viral marketing inspired customers to pass messages to others
• Lead generation marketing services and tools for collecting, managing & converting leads.
• Social, mobile, and local marketing and advertising
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Customer Retention Strategies
• Customer retention strategies
Personalization and one-to-one marketing
• Retargeting showing the same ad to individuals across multiple Websites
• Behavioral targeting
Based on data from search engine queries, clickstream history, social network data,
and integration of offline personal data and records
Effectiveness still inconclusive
Privacy issues
• Customization: Changing the product
Information goods ideal for differentiation
• Customer co-production: Customers help create product
• Customer service
FAQs, Real-time customer chat systems, Automated response systems
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Acknowledgement:
“E-Business and E-Commerce Management: Strategy, Implementation and Practice” by Dave Chaffey