Transcript Ch14

Internet Marketing
Organizing for the Net
Topics
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Why worry about organization
Organizational goals
Legal issues for Net marketers
What will the future hold?
Internet Marketing Matures
“As our investments get bigger and
bigger, there’s more of a need to
show an ROI. It’s less and less a thing
where we’re just learning and more an
issue of moving into the mainstream
and trying to create value.”
– Financial Company
Internet Marketing Matures
Aligning Structure and Strategy
• Crossing the “imitation barrier” requires a
commitment of money, training and time
– Challenge for Stage I sites is timely information
– Challenge for Stage II sites is developing an
information access policy: must find a balance
between information sharing and protecting
competitive secrets
– Challenge for Stage III sites is to reorganize
around individual customer information and orders
Internet Marketing Matures
Adopting Internet Technologies Forces
Change in Corporate Organizations
Operational Design
Increasing Dispersion of Information and Decision
Making
Increasing Dialogue and Collaboration
Figure 14.2
Strategy
Internet Marketing Matures
Adopting Internet Technologies Forces
Change in Corporate Organizations
Organization
Design
Mass
Transformed
Customization
Virtual
Customer &
Database
Grafted
Components
Channel Linking
Mktg
Tele-mktg
Stores
Collaborative
Micro
Learning
Mktg
Continuity and
Traditional
retention prgms
Broadcast
Interactive
Mktg
Media
Traditional
Augmented
Interactive
Strategy
Figure 14.2 Cont.
Internet Marketing Matures
Avoiding Legal Pitfalls
• Digital Environments and Intellectual
Property
– Digital content and network connections make it
easy to copy the features, design and content
of other online sites
– Imitation can lead to violations of trademark
and copyright laws.
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Internet Marketing Matures
Avoiding Legal Pitfalls
• Network Connections and Legal Geography
– Most laws apply only within the borders of the
government creating the law
– The Internet complicates this factor because a
single Web transaction can involve multiple
states, countries and/or continents in less than
a second
– Marketers must be aware of the commitments
they are making when they use a marketing
channel with a global, instantaneous reach
Internet Marketing Matures
Avoiding Legal Pitfalls
• Interactivity, Performance and Privacy
– Marketers need info about consumer choices,
tastes and purchases
HOWEVER. . .
– They also need to be careful about how they
use the information to avoid accusations of
libel, defamation and transmittal of sensitive
data that could result in losses of millions of
dollars
Internet Marketing Departments
Real Time Marketing
• Rising Customer Expectations
– Consumers use Web performance to evaluate
corporate performance
– Customers demand around-the-clock service
and support: online material can replace costly
staffing
– Customers want high quality, widespread access
for portable devices such as phones, pagers
and PDAs
– Customers are demanding frequent updates and
access to relevant information
Internet Marketing Departments
Customers expect a fully-connected world
Internet Marketing Departments
Real Time Marketing
• Rising Performance Expectations
– Independent firms are measuring online
commerce performance and reporting results to
consumers
– Marketing managers are forced to think about
their technology and Web site design and the
impact it has on performance
Internet Marketing Departments
Table 14.1 – Independent Performance Measures
Keynote Performance Index
Homepage Performance
(in seconds)
Availability
9.39
95.90%
Monday
10.93
96.00%
Tuesday
8.68
95.40%
Wednesday
8.60
96.60%
Thursday
8.96
96.90%
Friday
9.80
94.50%
DLJ Direct
4.32
99.40%
Waterhouse
4.63
99.20%
Ameritrade
5.22
96.20%
E*Trade
7.44
97.30%
Fidelity
12.73
95.30%
Charles Schwab
17.97
98.40%
Average Online Brokerage
Avg. Week 3, Jan 99
Internet Marketing Departments
Real Time Marketing
• Timeliness
– The Internet allows for instantaneous two-way
communication
– But marketers must create an organization and
system capable of handling communication
effectively
• Requires sophisticated technology, financial
resources and a trained staff
• Turnaround time should be an established
goal, with resources necessary to achieve
that goal
Internet Marketing Departments
Figure 14.7 – Company Difficulty with E-mail
Did not respond
Responded within
13%
same biz day
Did not respond
within 24 hours
39%
22%
9%
Did not respond
until 2nd message
13%
4%
Did not respond
until 2nd day
Auto acknowledgement only
Internet Marketing Departments
Real Time Marketing
• The Unique Response Cycle
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Requests requiring a response can come from email, Web forms, threaded discussions, etc.
1. Attempt to match the inquiry with a known
category of question (content recognition
software, artificial intelligence)
2. Compare the question against previous answers
3. Send an automatic answer
4. Staff intervention may be required at any step
of the cycle
Internet Marketing Departments
Figure 14.8 – Flowchart for Automating Responses
Table 14.2
Matching Technology & Response Rates
Internet Marketing Departments
Desired Response
Rates
Feasible Technologies
Typical Settings
Instantaneous (<1
minute)
Web-based search or
browse
Automated e-mail
Dynamic Web pages
Standard questions
fitting FAQs, content
trees
Coded questions, FAQs
Server side AI
Urgent (<1 hour)
E-mail, e-mail
initiated voice,
custom Web links
Highly trained staff
High-value customers
and/or serious
problems, premium
support
Rapid (<1 day)
E-mail, discussion
group moderators
Efficient “call
center” structure
Expertise specific
questions, normal
priority
Casual (<1 week)
E-mail, Web links,
discussion groups
Pooled staff, crossfunctional teams
Baseline support, indepth technical research
Interruptible (as
capacity allows)
E-mail, personal visits
or calls
Highly unusual questions
requiring special
individuals or channels
No response
Content screening
Inappropriate questions
Internet Marketing Departments
Information Management
• Assign someone in the organization ongoing
responsibility for tracking and changing
information to keep it current (pricing
sheets, product descriptions, ongoing offers,
current designs, customer/tech support)
• Establish policies on information access
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How to share information
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How to access customer info quickly
Internet Marketing Departments
Information Management
• Announce your privacy policy
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Customers want to know how you plan to use their
personal information
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Inform customers what type of information you
are collecting and how it will be used
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The Federal Trade Commission enforces consumer
privacy protection
Internet Marketing Departments
Information Management
Five Core Principles of Privacy Protection
1. Notice/Awareness
2. Choice/Consent
3. Access/Participation
4. Integrity/Security
5. Enforcement/Redress
Internet Marketing Departments
Figure 14.11
Information Management
Percent of Web Sites
Collecting Personal Information
Do Not
Collect
8%
Collect
92%
Percent of Web Sites with an
Information Practice Disclosure
Disclosure
14%
No
Disclosure
86%
In 1998 Most Sites Collected Information But Didn’t Disclose
Internet Marketing Departments
Figure 14.10
80%
0.61
60%
0.44
40%
0.16
0.14
20%
0.02
0.02
0.15
0.13
0.02
0.02
0%
Comprehensive
Health (120
(621 sites)
Sites)
Retail (123 Sites)
Privacy Policy Notice
Financial (121
Most Popular
Sites)
(108 Sites)
Information Practice Statement
1998 Data Show Low Levels of Privacy Statement Use
Internet Marketing Departments
Information Management
• Privacy Statement Terminology
– Personal Information – Identifying info such as
name, mailing address, e-mail, phone number,
demographics, preferences
– Privacy Policy Notice – Description of site’s
information practices (what the site does with the
personal information it collects from visitors)
– Information Practice Statement – Describes a
particular use or practice regarding consumers’
personal information (confidentiality, mailing lists,
etc.)
Internet Marketing Departments
Customer Management
• The Net leads companies to question their
marketing organizational structures
• Closed-loop marketing is easier to achieve
with a management structure that’s different
from traditional marketing organizations
– Traditional ways of organizing include
• By geography
• By product
• By customer
– Net marketers find that organizations based on
customers make the most sense
Internet Marketing Departments
Customer Management
Figure 14.12 Alternative Organizational Emphasis
Internet Marketing Departments
Customer Management
• In a customer management view, specialization
occurs by customer portfolio
• Each manager
– “Owns” a group of customers
– Is responsible for them regardless of where
they’re located or what products they buy
• This allows the online marketer to offer a
consistent interface with the customer
• And it enables marketers to get to know their
customers better
Internet Marketing Departments
Customer Management
• The Net facilitates a customer management
type of organization because customers can be
served regardless of their physical location
• However, it requires customer managers to
know about a much broader range of product
and service solutions
• Customer management organizations work only
if managers can effectively draw on a wide
range of resources in a company
• Intranets, extranets, and the Internet make
this possible
Potential Legal Problems
• The pace of online competition creates
serious problems for online marketers and
their legal staffs. There is not time for
lengthy reviews of pre-published materials
SOLUTION. . .
• Marketers must have a better understanding
of society’s legal rules such as trademark
and copyright laws, impact of information
accuracy, and rules about unsolicited
communication
Potential Legal Problems
Domain Names
• As of January 1999, there were more
than 43.2 million domains registered
• Steps to ensure a domain name is legally
registered:
1. Obtain the domain name from an authorized
domain name registration organization
2. Make sure they domain name does not violate
existing trademark or copyright
Potential Legal Problems
Domain Names
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U.S. courts have consistently ruled that existing
businesses and organizations retain their domain
name rights even if they have not taken action to
secure the name
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This prevents exploitation by cyber squatters
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If two companies have conflicting claims, the first
person to secure the domain name wins
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It is recommended to register multiple domain
names for your site in order to accommodate user
typing errors, misspellings, etc.
Potential Legal Problems
Personal Jurisdiction
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Legal action may be brought against your company
either at your headquarters, where business was
transacted, where a harm occurs, or where a
contract was created. . . Virtually anywhere!
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International differences raise concerns because
of differing standards for freedom of speech,
criticism, and political debate
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There are also distinctions between civil and
criminal, commerce versus presence, and issues of
contract
Potential Legal Problems
Taxes
• You can avoid paying sales tax in an online
transaction two ways:
1. Purchase from a firm that has no presence in
your state
2. Purchase and download information from a
company in a state tax on downloaded info is
exempt
Real-Time Legal Issues
Copyright
Figure 14.14 – A Copyright Flowchart for Using Material
Real Time Legal Issues
Inaccurate Information
• These areas warrant caution:
– Web-site usage data could end up in credit
reports and used to judge a person’s credit
worthiness
– Community building tools (e-mail and chat)
provide consumers with a forum to criticize
specific individuals or companies
• The sponsoring site could be wholly or
partially liable
Real-Time Legal Issues
Push Techniques
• Includes e-mail, buddy lists, automatic
updates to software, and services such as
Pointcast and WebTV
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It is illegal in California to send unsolicited email without the true domain name of the email source
ISPs in California have the legal authority to
stop spammers from sending high volumes of
unsolicited mail
Looking Forward
Thirty More Years of Digital Power
2009 • A $1000 computer can perform a
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trillion operations per second
The majority of text will be entered
with continuous speech recognition
Most routine business transactions take
place between a human and a virtual
personality
There is high-speed wireless access to
the Web
Translating telephones will be common
(speech-to-speech translation)
Looking Forward
Thirty More Years of Digital Power
2019 • A $1000 computer has roughly the
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computing power of the human brain
Computers are largely invisible – and
embedded almost everywhere
Three-dimensional VR displays – using
glasses and contacts – are used
routinely
Most learning comes through simulated,
software-based teachers
The vast majority of transactions
include a simulated person
Looking Forward
Thirty More Years of Digital Power
2029 • A $1000 computer has the computing
capacity of the 1000 human brains
• Visual- and auditory-link implants permit
input and output between human users
and the worldwide computing network
• Direct neural pathways will be pioneered
for high-speed connection to the human
brain
• Automated agents are learning on their
own and have accessed all humanproduced information
Looking Forward
The 21st Century Consumer
• If these projections are close, marketers will
have to figure out how
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Marketing humans interact with human
customers
Marketing digital agents interact with human
customers
Marketing humans interact with customer
digital agents
Marketing digital agents interact with customer
digital agents
Looking Forward
The 21st Century Consumer
Lessons from the past
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Machines are evolving rapidly; humans are not
Software agents and digital tools won’t substitute
for social needs
Status, equity and experience, in addition to
efficiency, will continue to drive purchases in the
future
Competition is fierce during major transitions, and
companies will battle to to acquire new users while
holding on to the ones they have