Transcript Lecture Presentation

Internet Marketing
Presented by:
Barbaros Ozdogan,MBA
Internet Business Systems Program
Mercy College,Dobbs Ferry, NY
What is Marketing?
 Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas,
goods, and services to create exchanges that satisfy
individual and organizational goals.
• American Marketing Association
The Central Role of Marketing
 Is it the production methods or our marketing skills?
 Why have we become so wealthy in the last two
centuries?
 Adam Smith pointed out in 1776 that mass production
was the product of division of labor
 But Adam Smith said something else:
“The division of labor is limited by the extent of the market”
 The larger the market the more efficiencies are
possible,the greater productivity,the greater profits, the
greater affluence
The American Market
 From 1900 to the present time America has had the
largest single market on earth.
 America has spent last 200 years breaking down barriers
building waterways,
Railroads,
Telegraph networks,
Telephone and electronic communication systems,
Superhighways,
Airports and massive delivery systems
that link all parts of our market together in a freely
competitive order.
The Result
 Greatest outpouring of production, affluence and
personal freedom ever known.
The Post WWII Transformation of
America
 Toward the summer of 1945 the whole America was very
much worried by the return of the “Great Depression”
 The hard times of the prewar days taught Americans the
importance of savings.
When the war ended the public had sucked away over $136
billion in savings.
WW II
 All these savings were unleashed on civilian goods once
the war ended to satisfy the publics pent-up demand for
good life.
 Advertising was about to enter a kind of golden age
 The postwar housing shortage was a direct consequence
of the baby boom and rapid Wanna-Go-Home
demobilization.
By December 1945 America needed at least 5 million
homes, NOW.
Post WW II
 In shaping post war society, William J Levitt’s Purchase
of 1,500 acre potato field in LI ranks with DuMont’s 7 inch
TV screen and Howard Aiken’s construction of the first
US computer at Harvard.
 The basic 4 room house was sold for $6990
 Every house was uniform.
Pre fabricated sidings at 8 am
Toilets 9:30 am
Sinks and tubs at 10:00
Sheetrock at 10:45
Flooring at 11: 00
 His imitators sprang up across the country.
Growth of Mass Marketing
 From 1950 to 1980 mass marketing predominated.
 Mass marketing came about because of combination of
circumstances.
The whole generation, deprive from a decade of depression,
followed by a decade of war was finally able to produce and
purchase in peace.
The growth of TV
National brands sold in Supermarkets, department stores
 Mass marketing assumed that everyone wanted the
same thing.
Mass Marketing
 In 1950 the average American family was spending 31%
of its household income on food.Today it is less than14%
on food.
The rest is ours…..
 One result of this productive system is that the middle
class has grown from being 15% of the population in 1920
to being 86% of the population in 2000.
 We have finally reached the point where most people
have acquired the minimum.
Today’s Customers seek:
 Recognition
 Personal attention
 Service
 Diversity
 Information
Will increase loyalty
History of the Internet
Who started it? - U.S. Military
Why? - To safeguard military data
When? - 1969
“…..the chain of networks that is generally the easiest and cheapest
way for businesses to communicate electronically with the outside
world.” - Wall Street Journal
Beginner’s guide to the Internet
Net timeline
Test your knowledge of the Internet
Database Marketing and Ecommerce
 During the last 30 years companies become so huge
that they have lost the ability to touch their
customers and learn their views.
 They need a way to accumulate and manipulate and
extract knowledge from the data on thousands or
millions of customers.
 In a small store this is easy.
Narrow Definition
Internet
Computer Technology
Database Marketing
Internet Marketing
The Ultimate Goal
In a Small Store
 The owner can find out about the customer preferences
by talking to customers on a daily basis.
 If the customer don’t like a product or a service the
owner will quickly sense this.
 These store owners were able to accumulate and
manipulate information about their customers intuitively
in their heads.
 Database Marketing and the web today provide the
requested result through computer technology.
What are Customers worth????
Dynamics of Loyalty
Database and Web site
 What can we do?
Change our acquisition methods to attempt to recruit loyal customers
Provide knowledgeable customer service
Fashion products and services tailored to individual preferences
Layout individualized targeted marketing programs
Open up our company to customers letting them rummage through
our warehouse check out our technical specs and place their orders
themselves
Conduct one on one dialogue with each customer
Classify customers by interests and profitability
Recognize customers by name when they enter the website.
Internet Marketing
Is the process of building and maintaining customer
relationships through online activities to facilitate the
exchange of ideas, products, and services that satisfy
the goals of both parties
A process:
 Like a traditional marketing program, an Internet
marketing program involves a “process”.
 The seven stages of of the Internet marketing program
process are
Setting corporate and business strategy,
 framing the market opportunity,
formulating the marketing strategy,
 designing the customer experience,
 designing the marketing program,
crafting the customer interface
and evaluating the results of marketing program.
Building and maintaining customer relationships:
 The goal of marketing is to build and create lasting
customer relationships.
 It is important to stress that the goal of Internet
marketing is not simply building relationships with online
customers.
Rather the goal is to build offline as well as online relationships.
Online:
 By definition, Internet marketing deals with levers that
are available in the world of the Internet. However as
noted before, the success of an Internet marketing
program may rest with traditional, offline marketing
vehicles.
 Effectiveness of Monster.com marketing strategy
TV advertising and ,
Super Bowl ads.
Exchange:
 At the core of both online and offline marketing
programs is the concept of exchange.
 In both the online and offline worlds, exchange is the
heart of marketing. In the new economy firms must be
very sensitive to cross channel exchanges.
Satisfaction of goals of both
parties:
 I am a loyal user of the web site CNN.com. Each day I
check global and local news. I am clearly satisfied and
loyal to the site.
 To the extent that CNN.com can monetize this loyalty –
most likely in the form of Advertising revenue- both
parties will be satisfied.
The Broadened Scope of Internet Marketing
Marketing Resource Allocation
Bricks-and-Mortar
Online
Location of Revenue Stream
Offline
Online
Cell 4
Cell 2
Online marketing
efforts bring revenue
to the store
Cell 3
Offline effort
online revenue stream
Cell 1
Marketing efforts are
online
Source: Internet Marketing: building advantage in a networked Economy
Internet Marketing Mix
Branding
Product
Price
Communication
Community
Distribution
Marketing Mix
 Product: The product is the service or the physical good that a firm
offers for exchange.
 Price: Price is the amount the firm charges customers for a
particular market transaction.
 Distribution: With respect to the role as a distribution channel the
Internet has the power to shift customers to a new channel-or to use
this channel in combination with other channels. (for example
search the internet and purchase at the retail store).
 Communication: Communication is activities that inform one or
more groups of target customers about the firm and its products.
 Community and Relationship: Community is defined as a set of
interwoven relationships built upon shared interests which satisfy
members needs otherwise unattainable individually..
Internet Marketing Mix
Interactivity
Branding
Product
Price
Communication
Individual
Community
Distribution
2 I’s
 Individiual: Customers expect to have a personal
experience with the firm. The Internet enables the firm to
engage in customer specific actions.
 Interactivity: The Internet enables a level of customer
dialogue that has not previously been experienced in the
history of the business.
Questions?