Transcript GSB 582 High-Tech Marketing

Internet Marketing
Introduction
Your Text ...
• Principles of Internet Marketing, 2000,
South-Western College Publishing (華泰)
– Ward Hanson
Topics
•
•
•
•
•
The original WWW
Commercial beginnings
A .com world
Marketing and technology
Our approach in the book
The Original WWW
• It’s 1922
• Radio suddenly transitions from a technology
used primarily by the military and the shipping
industry to a consumer and business
phenomenon
• At the end of 1921, there are 5 radio stations
• A year later, there are 575
• Starting radio stations is the height of
entrepreneurship
• Listening to radio is a runaway consumer fad
• “Combing the ether” is the hit of the day
The Original WWW
• Radio’s impact on 1920s society
– It changes the way people think about distance and
time
– Simultaneity no longer requires proximity
– Global events are experienced as they happen
– Performances in different cities can be heard in
the neighbor’s living room
– Fast-breaking world stories and even the local
weather are available at the flip of a switch and
the turn of the dial
The Original WWW
• Radio changed business, especially marketing
– It accelerated the economy’s transition to a mass
market
– It facilitated the creation of national brands
– Firms could launch national marketing campaigns
simultaneously
– New product store introductions could be
synchronized with ad campaigns to build consumer
interest
– Product positioning became more flexible
• Businesses learned to use this new, powerful
method of reaching customers
The Original WWW
• As an industry, radio struggled with
generating a self-sustaining revenue base
– In 1926, radio stations were failing at a rate of
15% per month
– Consumers still rushed to buy radios
– Ultimately, national networks of stations emerged
– A combination of national and local advertising
made radio profitable
• Internet marketing shows many of these same
uncertainties
The Original WWW
• The Internet changes the way companies
connect to their customers
• It expands the opportunities for
branding, innovation, pricing, and selling
• It leads to new ways of thinking about
time and distance
• It opens up new distribution channels
and markets
Virtuous Web Cycle
• Is a business system with positive
feedback
• Each element in the business system
feeds off another element in the
system and feeds into yet another
element in the system
• If the cycle is strong enough, it can
actually be a self-fulfilling expectation
Huh?
Virtuous Cycle for Net Growth
Let’s look at how it works
Consumer
and
Business
Internet
Access
Web Sites
and Web
Content
Popular
Fascination
• It starts with user
fascination
• Providers see the
developing opportunity and
rush to create new brands
& services, which creates
more hype
• The buzz feeds back into
consumers’ interest and
desire to experiment with
the new technology
A Dot Com World
• The virtuous Web cycle leads to
rapid growth of
– Consumer access
– Internet usage
– Content online
Consumer Access
Figure 1.4
• The past five years
have seen rapid
growth in
40
46% growth in 1998
30
20
10
99
1/
98
1/
97
1/
96
1/
95
1/
94
1/
93
1/
92
0
1/
• Between January
1994 and January
1999, Internet hosts
grew from 2.2 million
to over 43 million
• A 46% growth rate in
1998
50
Millions
– Network size
– Users on networks
– Network activity
Growth of World Wide Web Domains
Online Access Growth in Net
Hosts
Consumer Access
• The Internet user base
has grown rapidly as well
• Worldwide, the number
of users was estimated
to be > 160 million in
March, 1999
• Over 90% of the users
on the Net have joined
in the last 5 years
• More growth is possible,
as < 4% of the world’s
adult population is online
• 50% of users think the
Net is a “necessity”
Figure 1.5
HOW MANY ONLINE?
The art of estimating the
number of people online
throughout the world is
inexact. An “educated
guess” as of May 1999 is
165 million.
Source: NUA
Worldwide Online Population
– Continuing Fascination
Consumer Access
• Spring 1998, the size of
the Web was estimated
at 300 million pages
• Growth rates in content
exceed growth rates in
Web access and the
number of users
• From June 1997 to
March 1998, Web
content grew at 120%
• More importantly, the
types and creativity of
Web site content have
blossomed
Figure 1.6
Size in millions of distinct static pages
0
Pages found in all 4
engines
50
100
150
200
250
300
1
2
2
Infoseek
16
25
35
Excite
28
30
33
1997
1998
1999
42
80
HotBot
100
35
Alta Vista
Pages found in at least
one of the four engines
100
110
90
160
195
125
Size of static web
200
Rapid Growth in Web
Content
275
Innovative Applications
• Stage I: Publishing sites
• Stage II: Databases and Forms
• Stage III: Personalization
Stage I: Publishing Site
Figure 1.7
Info Links
Pictures/Information
http://www.france98.com/french/index.html
Stage I
What makes this a Stage
I Website ?
Broadcasts
Disseminates Information
Stage II: Databases and Forms
Figure 1.8
To find out the travel distances between the host cities:
Select your starting point
Select your destination
Bordeaux
Paris
Toulouse
Marseilles
Toulouse
Marseille – 404km
Stage II
What Makes this a Stage
II Website?
Ability to retrieve
information to respond to
user requests
Stage III: Personalization
Figure 1.11
If you area team WC98
member and are using a
computer other than the
one you originally joined
WC98, enter your
nickname and password
now.
Stage III
What Makes this a Stage
III Website?
More than ask-respond
Anticipates
Suggests
Consumer-to-Consumer Commerce
• Businesses deploy chat room technology
– Enables consumers to interact directly with
each other
– Accelerates word of mouth
– Facilitates consumer-to-consumer commerce
• eBay
• Yahoo! Auctions
Consumer-to-Consumer Commerce
• Consumer-to-consumer sites must build trust
–
–
–
–
–
–
Systems that rate seller credibility
Verify identities of buyers and sellers
Insurance against fraud
Escrow accounts to ensure products are shipped
Bans on sellers who bid on their own products
Bans on buyers who win, but don’t complete the sale
• Successful auction sites blur the distinction
between business and fun
Internet Fraud
Business-to-Business Commerce
• $ volume much larger than retailing, and
more rapidly growing
• Intra & extranets provide a seamless link
between businesses and their suppliers
• Companies create in-depth Web sites for
their main customers
– Special pricing
– Special configurations
– Dedicated support
• This builds loyalty and repeat purchases
Marketing Evolves as Technology Changes
• Technological innovation brought about the
factory system & enabled mass production
– Marketing emphasis was on logistics & supply chain
management
• Radio enabled national roll-out of brands
– Marketing emphasis was on selling
• Television coincided with the product & brand
management system of marketing
• Mainframe computers enabled new methods of
segmentation & customer management
• The Internet enables mass customization
An Internet Framework
Figure 1.15
Digital
Networked
Individuals
Marketing
Internet
Marketing
Technology
Economics
The Web is
fundamentally
about individuals
using a network
to access digital
products