Transcript here - Pearson Canada

Chapter 17
Marketing in the
Digital Age
Copyright © 2008 Pearson Education Canada
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Canadian Tire
• Founded in 1922 by two
brothers, A.J. Biles and J.W.
Biles
• Started off repairing vehicles,
moved in automotive parts
• Introduced catalogue in 1928
• National institution; 462 stores,
259 gas stations across Canada.
• Total retail sales: $9 billion
• Canadiantire.ca offers more
than 15,500 products
• 1930’s: offered first tire
guarantee
• 1958: Canadian Tire money
• Waited until 2002 to launch
online store
Copyright © 2008 Pearson Education Canada
• 2003: Cross-promotion with
Budget Canada daily rental
company
• More than 1000 items are
available only online
• Recently, Canadiantire.ca was
completely redesigned to
make shopping faster, better,
and easier.
• eFlyer is fully integrated into
the webstore
• By melding its online and
traditional retail worlds
Canadian Tire has created a
powerful new model of
retailing
17-3
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-4
Principles of Marketing, Seventh Canadian Edition
Major Forces Shaping
the Digital Age
• Digitalization and Connectivity
– Text, data, sound, and images can be
converted into bitstreams
– Today’s computers, appliances, automobiles,
and communication devices all operate using
bits of digital information
– Connecting these devices creates huge
potential for convenience and new services
– Intranet, Extranet, Internet
Copyright © 2008 Pearson Education Canada
17-5
Principles of Marketing, Seventh Canadian Edition
Major Forces Shaping
the Digital Age
• The Internet Explosion
– World wide web and browsers created in early 1990’s
– Dot.com crash of 2000 did not slowed down usage
growth
– End of 20th century: 400 million web surfers
– Estimated 2007: 1.5 billion web surfers world wide
– Internet penetration in Canada has reached 78%
– The Internet has become the primary source of
information
– Empowers customers when making decisions
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Major Forces Shaping
the Digital Age
• New Types of Intermediaries
– Internet-only companies such as AOL, Amazon.com,
Dell, eBay
– Traditional companies feared disintermediation by
new e-tailers
– New channel relationships developing
– Many click-only companies failed to develop a
profitable business
– Late entry click-and-mortar companies emerge as
stronger competitors than click-only
– Not all goods and services suitable for virtual
purchasing
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Major Forces Shaping
the Digital Age
• Customization:
– Old economy was built on standardization of goods
and services
– New economy runs on information; easier to
differentiate, customize, personalize, and
communicate
– Today’s customer wants the product “their way”
– Firms let the customers design the product offering
– Companies become facilitators
– Consumers become pro(active)sumers
Copyright © 2008 Pearson Education Canada
17-8
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-9
Principles of Marketing, Seventh Canadian Edition
Marketing Strategy
in the Digital Age
• Ebusiness:
– Uses electronic means and platforms to
conduct business
• Ecommerce:
– Buying and selling processes supported by
electronic means
Copyright © 2008 Pearson Education Canada
17-10
Principles of Marketing, Seventh Canadian Edition
Marketing Strategy
in the Digital Age
• Emarketing:
– Includes efforts that inform, communicate,
promote, and sell products and services over
the Internet
• Ecommerce and the Internet benefit both
buyers and sellers
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Marketing Strategy
in the Digital Age
• Benefits to Buyers
–
–
–
–
–
Convenience
Buying is easy and private
Greater product access/selection
Access to comparative information
Online buying is interactive and immediate
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Marketing Strategy
in the Digital Age
• Benefits to Sellers
– Powerful tool for customer relationship
building
– Reduce costs
– Increase speed and efficiency
– Offers great flexibility
– Global access, global reach
Copyright © 2008 Pearson Education Canada
17-13
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-14
Principles of Marketing, Seventh Canadian Edition
E-Commerce Domains
•
•
•
•
B2C
B2B
C2C
C2B
• Online selling of goods and services to
consumers
• Travel services, clothing, computer
hardware/software, electronics, books, music,
and video Online consumers
• Online consumers
– Now more mainstream and diverse
• Has created new e-commerce targeting
opportunities
• Online behavior differs by age
– Online consumers differ from traditional offline consumers
• They initiate and control the exchange process
• Value information highly
Copyright © 2008 Pearson Education Canada
17-15
Principles of Marketing, Seventh Canadian Edition
E-Commerce Domains
•
•
•
•
B2C
B2B
C2C
C2B
• Using trading networks, auction sites, spot
exchanges, online catalogues, and barter sites
to reach organizational customers
• B2B volume is much larger than B2C; $28.3
billion
• Used to provide better service, increased
efficiencies, and more competitive pricing
• Open trading exchanges
– E-marketspace bringing sellers and buyers
together
• Private trading exchanges
– Links sellers with their own trading partners
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
E-Commerce Domains
•
•
•
•
B2C
B2B
C2C
C2B
• Online exchanges of goods and
information between consumers
• These exchanges are the electronic
flea market
• eBay is the most popular auction site
• Other uses:
– Forums
– Newsgroups
• Blogs
– Allows interchanges of information for
special interest groups
– Highly credible for advertisers
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
E-Commerce Domains
•
•
•
•
B2C
B2B
C2C
C2B
• Allow consumers to search out sellers,
learn about offers, initiate purchase,
or dictate purchase terms
– Ex: Priceline.com
• Consumers become more active in the
process; empowered
• Consumers have direct channel to
companies for suggestions and
complaints
• Some sites facilitate the feedback
process between customers and
companies
– Ex: Planetfeed.com
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Conducting ECommerce
• Pure-Play/Click-Only Companies
– E-tailers, search engines and portals, ISPs, transaction
sites, some content sites, enabler sites
– During the “dot.com gold rush” of the late 1990s
stocks prices reached dizzying heights
• Dot.coms failed for many reasons
– Lack of planning and research
– Did not develop marketing strategies and spent
lavishly off-line on mass marketing
– Overemphasis on acquisition vs. retention
– Low margins
Copyright © 2008 Pearson Education Canada
17-19
Principles of Marketing, Seventh Canadian Edition
Conducting ECommerce
• Click-and-Mortar Companies
– Combine traditional and online operations
– Channel conflict was initially a concern
– E-commerce often created new customers, rather than
cannibalizing existing ones
– Many firms now enjoy greater success than their
click-only competition
• Trusted brand names, greater financial resources, larger
customer base, industry knowledge, and strong supplier
relationships were key advantages
Copyright © 2008 Pearson Education Canada
17-20
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-21
Principles of Marketing, Seventh Canadian Edition
Setting up an Emarketing Presence
• Creating web sites
• Placing online ads and
promotions
• Creating or
participating in Web
communities
• Using E-mail
• Corporate websites
– Build goodwill and
relationships; generate
excitement
• Marketing websites
– Engage consumers
and attempt to
influence purchase
• Website design
– 7 C’s of effective
website design
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Setting up an Emarketing Presence
• Seven C’s of Website Design
–
–
–
–
Context
Content
Community
Customization
Copyright © 2008 Pearson Education Canada
– Communication
– Connection
– Commerce
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Principles of Marketing, Seventh Canadian Edition
Setting up an Emarketing Presence
• Creating web sites
• Placing online ads and
promotions
• Creating or
participating in Web
communities
• Using E-mail
• Online forms of ads
and promotions
–
–
–
–
–
–
Banner ads/tickers
Skyscrapers
Interstitials
Content sponsorships
Microsites
Viral marketing
• Future of online ads
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Discussion Question
• What is the consumer
response to Internet
advertising?
• When is it welcomed
by the consumer?
• What else can
advertisers do to
reach their targets?
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Setting up an Emarketing Presence
• Sites for members to
congregate online and
exchange views on
common interests
• Attraction is the strong
sense of community
generated
• Web communities allow
members with special
interests to exchange
views
• Creating web sites
• Placing online ads and
promotions
• Creating or participating in
Web communities
• Using E-mail
– Social communities
– Work-related communities
Copyright © 2008 Pearson Education Canada
17-26
Principles of Marketing, Seventh Canadian Edition
Setting up an Emarketing Presence
• Creating web sites
• Placing online ads and
promotions
• Creating or
participating in Web
communities
• Using Email and
Webcasting
Copyright © 2008 Pearson Education Canada
• E-mail marketing
– Key tool for B2B and
B2C marketing
– Clutter is a problem
– Enriched forms of
e-mail attempt to
break through clutter
– Spam is a problem
– Permission-based
marketing
17-27
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-28
Principles of Marketing, Seventh Canadian Edition
Promise and Challenges
of E-Commerce
• The Continuing Promise of E-Commerce
– Online marketing will become a successful
business model for some companies
– For others the Internet should be used as one
approach or tool in the fully integrated
marketing mix
– The question is “how,” not “whether,” to
deploy Internet technology
Copyright © 2008 Pearson Education Canada
17-29
Principles of Marketing, Seventh Canadian Edition
Promise and Challenges
of E-Commerce
• The Web’s Darker Side
– Internet Profitability
• Few B2C companies are profitable
• Limited exposure, skewed demographics
• Navigating the Web is often problematic
– Legal and Ethical Issues
• Online privacy and security concerns
• Internet fraud, the digital divide, access by vulnerable or
unauthorized groups
Copyright © 2008 Pearson Education Canada
17-30
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Identify the major forces shaping the new digital age
Explain how companies have responded to the
Internet and new technologies with e-business
strategies, resulting in benefits for both buyers and
sellers
Describe the four major e-commerce domains
Discuss how companies conduct e-commerce to
profitably deliver more value to customers
Overview the promise and challenges that e-commerce
presents for the future
Copyright © 2008 Pearson Education Canada
17-31
Principles of Marketing, Seventh Canadian Edition