Transcript 4 - U of L Class Index

Chapter 4
Marketing on the Web
Understanding the Opportunities
for Doing Business on the Web
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Opportunity
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Opportunity
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Branch Office
World Market
Direct Sales
Networking
Segmented Market
Competitive Advantage
Understanding the Opportunities
for Doing Business on the Web
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Opportunity 1: Branch Office
Read the brochures in the rack by the door,
 Pick up a copy of your "Common Questions People Ask About our
Business,"
 Solve their own problems with your detailed Troubleshooting
Guide,
 Scribble messages on the pad of question forms you've provided,
 Look at detailed information and specs about each product you
offer, and, if you have a vending machine in your lobby,
 Make purchases day or night.
How much is rent for the branch office?
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Understanding the Opportunities
for Doing Business on the Web
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Opportunity 2: World Market
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Canada 30 million
USA 300 Million
Europe 377 Million
Asia ??
Middle East ???
Margin * Volume
On the Internet, geography has ceased to be
a barrier
Understanding the Opportunities
for Doing Business on the Web
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Opportunity 3: Direct Sales
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Disintermediation
 Catch 22
 Agony! What do you do when the Dell
Computer equivalent in your industry sells
directly over the Web, pulls in $14 million per
day in revenue, and grows faster than any
other competitor?
Understanding the Opportunities
for Doing Business on the Web
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Opportunity 4: Networking
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Why does a company network its desktop
computers?
Bern, Switzerland, is closer to Abu Dhabi, United
Arab Emirates
Affiliate networks
Understanding the Opportunities
for Doing Business on the Web
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Opportunity 5: Segmented Market
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this vast network automatically segments the
market into demographic units
Want to market only to those searching for your
particular product or service?
#3 on an Excite search for the phrase "body
surfing" or "sand candles.“
(http://www.dejanews.com) for an industry
keyword
 a fellow learner rather than a salesman
Understanding the Opportunities
for Doing Business on the Web
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Opportunity 6: Competitive Advantage
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Small business to compete with larger
business
Web Marketing Strategies
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The essential issues of marketing are
also referred to as the four Ps of
marketing.
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Product
Price
Promotion
Place
Market Segmentation
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Geographic segmentation – location
Demographic segmentation – information, such as
age, gender, family size, income, education,
religion, or ethnicity
Psychographic segmentation – variables, such as
social class, personality or their approach to life
Communicating with Different
Market Segments
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Identifying a group of potential customers is just the
first step in selling to those customers.
Equally important is the selection of the
communication media to carry the marketing
message.
Media selection can be critical for an online firm
because it does not have a physical presence.
Trust and Media Choice
Segmentation Using Behavior
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In the physical world, businesses can sometimes create
different experiences for customers in response to their
needs.
The creation of a separate experience for customers based
on their behavior is called behavioral segmentation.
Customizing visitor experiences to match the site usage
behavior patterns of each visitor or type of visitor is called
usage-based segmentation.
Segmentation Using Behavior
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Researchers have begun to identify common patterns
of behavior and to categorize those behavior patterns.
One set of categories that marketers use today
includes browsers, buyers, and shoppers.
A person might visit a Web site one day as a browser,
and then return later as a shopper or buyer.
Segmentation Using Behavior
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Recent study conducted in 2000 by a major consulting
firm examined the behavior of 50,000 users and
identified six different groups of active internet users
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Simplifiers
Surfers
Bargainers
Connectors
Routiners
Sportsters
Choosing a Targeting Strategy
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Undifferentiated Marketing
Differentiated Marketing
Concentrated Marketing
Customized Marketing
Market Segmentation on the
Web
http://www.oldnavy.com/asp/home.html?wdid=0
http://www.eddiebauer.com/eb/default.asp
Customer-based Marketing
Strategies
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Web sites can be created that are flexible enough to
meet the need of many different users.
Instead of thinking of their Web sites as a collection
of products, companies can build their Web sites to
meet the specific needs of various types of
customers.
Dell
Product-based Marketing
Strategies
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Managers at many companies think of their
businesses in terms of the products and
services they sell
When customers are likely to buy items from
particular product categories, this type of
product-based organization makes sense
Staples
Offering Customers a Choice
on the Web
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Dell Computer has done many things well in its
online business.
Dell offers customers a number of different ways
to do business with the company.
Dell has links for each of the major groups of
customers it has identified and also includes links
to specific product categories.
Customer Relationship Intensity
and Life-cycle Segmentation
Customer Relationship Intensity
and Life-cycle Segmentation
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Five stages of loyalty:
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Awareness
Exploration
Familiarity
Commitment
Separation
Advertising on the Web
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Advertising is all about communication
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Communication between a company and its
current customers
Communication between a company and
potential customers
Communication between a company and its
former customers
To be effective, firms should send different messages
to each of these audiences.
Advertising on the Web
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Most companies that launch an electronic
commerce initiative will already have an
advertising program.
Online advertising should always be
coordinated with existing advertising efforts.
For example, print ads should include the
company’s URL.
Banner Ads
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Most advertising on the Web uses banner ads.
A banner ad is a small rectangular object on a Web
page that displays a stationary or moving graphic and
includes a hyperlink to the advertisers Web site.
The most common sizes of banner ads are:
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Full banner
Half banner
Square button
Banner Ad Placement
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There are three different ways to arrange for other Web sites to
display your banner ads.
A banner exchange network coordinates ad-sharing so that
other sites run your ad while your site runs other exchange
members’ ads.
The second way is to find Web sites that appeal to one of the
company’s market segments and then pay them to carry the
ads.
A third way is to use a banner advertising network.
Other Web Ad Formats
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Another format of Web advertising is the pop-up
ad.
A pop-up ad is an ad that appears in its own
window when the user opens or closes a Web
page.
Another type of pop-up ad is called the popbehind ad.
A pop-behind ad is a popular ad that is followed
very quickly by a command that returns focus to
the original window
 The window is parked behind the user browser
E-Mail Marketing
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Since advertising is a process of communication, it is easy to
see that e-mail can be a very powerful element in any
company’s advertising.
Many businesses would like to send e-mail messages to their
customers and potential customers about new or existing
products.
However, industry analysts have severely criticized some
companies for sending e-mail messages to customers or
potential customers.
Some companies have faced legal action after sending out
mass e-mailings.
E-Mail Marketing
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Unsolicited e-mail is often considered to be Spam.
Sending e-mail messages to Web site visitors who
have expressly requested the e-mail messages is a
completely different story.
A key element in any e-mail marketing strategy is
to obtain customer’s approval before sending any
them any e-mail that includes a marketing or
promotional message.
Permission Marketing
Strategies
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Many businesses may send e-mail messages
to their customers and potential customers.
The practice of sending e-mail messages to
people who have requested them is a part of
marketing strategy called permission
marketing.
One Web site that offers opt-in e-mail
services is yesmail.com.
Customer Relationship
Management
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The nature of the Web allows firms to gather more
information about customers’ behavior and
preferences than they can gather using
micromarketing approaches.
Technology-enabled relationship management
occurs when a firm obtains detailed information
about a customer’s behavior, preferences, needs,
and buying patterns, and uses that information to
set prices, negotiate terms, tailor promotions, add
product features, and otherwise customize its
entire relationship with that customer.
Customer Relationship
Management
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Although companies can use technology-enabled
relationship management concepts to help
manage relationships with vendors, employees,
and other stakeholders, most currently use these
concepts to manage customer relationships
Technology-enabled relationship management is
often called
 Customer relationship management (CRM)
 Technology-enabled customer relationship
management
 Electronic customer-relationship management
(eCRM)
Creating and Maintaining Brands
on the Web
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A known and respected brand name can present
to potential customers a powerful statement of
quality and value.
Branded products are easier to advertise and
promote, because each product carries the
reputation of the brand name.
Companies have nurtured and developed their
branding program in the physical marketplace for
many years.
Cost of Branding
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Transferring existing brands to the Web or using
the Web to maintain an existing brand is much
easier and less expensive than creating an entirely
new brand on the Web.
Promoting the company’s Web presence should be
an integral part of brand development and
maintenance.
Integrating the URL with the company logo on
brochures can also be helpful.
Brand-Leveraging Strategies
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Rational branding is not the only way to
build brands on the Web.
One method that is working for wellestablished Web sites is to extend their
dominant positions to other products and
services.
Yahoo! is an excellent example of this
strategy.
Brand Consolidation Strategies
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Another way to leverage the established
brands of existing Web sites was devised by
Della & James, an online bridal registry.
Della & James offers a single registry that
connects to several local and national
department and gift stores, including Crate &
Barrel, Dillard’s, Gump’s, Neiman Marcus, and
Williams-Sonoma.
Affiliate Marketing Strategies
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In affiliate marketing, the affiliate firm’s Web site
includes descriptions, reviews, ratings, or other
information about a product that is linked to
another firm’s site that actually offers the item for
sale.
The affiliate site receives a commission.
The affiliate site also obtains the benefit of the
selling site’s brand in exchange for the referral.
Viral Marketing Strategies
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Viral marketing relies on existing customers to
tell other persons about the products or
services that they have enjoyed using.
Viral marketing approaches use individual
customers to spread the words.
Search Engine Positioning
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Potential customers find Web sites in many
different ways.
Some site visitors will be referred by a friend,
others by affiliates, some will see the site’s
URL in a print advertisement or on television.
Many site visitors will be directed to the site
by a search engine.
Search Engine Positioning
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A search engine helps people find things on the
Web.
A search engine has three major parts
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The first part called a spider, a crawler or a robot
The second part called its index or database
The third part of the search engine is the search
utility
Search Engine Positioning
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Marketers want to make sure that when a
potential customer enters search items that relate
to their products or services, their companies’ Web
site URLs appears among the first 10 returned
listings.
The combined art and science of having a
particular URL listed near the top of a search
engine results is called search engine positioning.
Search engine positioning is also called:
 Search engine optimization
 Search engine placement
Web Site Naming Issues
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The legal and marketing aspects of Web site
naming can be complicated.
Obtaining identifiable names to use for
branded products on the Web is important.
URL brokers sell or auction domain names.
The Internet Corporation for Assigned Names
and Numbers (ICANN) maintains a list of
accredited domain name registrars.