Transcript Week 3

Chapter 4
Marketing on the Web
Web Marketing Strategies
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Companies use the term “marketing mix” to
describe the combination of elements that they
use to achieve their goals for selling and
promoting their products or services.
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A company calls its particular “marketing mix” its
marketing strategy.
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Companies use the Web in their marketing
strategies :
To advertise their products and services, and
 To promote their reputations.
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Basic principles of marketing can be applied to
Web marketing : 4 Ps
 Product - physical item or service that a
company is selling.
 Price - the amount the customer pays for
the product.
 Promotion - spreading the word about the
product.
 Place - need to have the product in
different locations.
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To create a market strategy – companies need
to consider
 nature of their product
 nature of their customers
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Many business think in terms of the products or
services they sell = product-based marketing
strategy
 Examples : Staples' , Service Merchandise
 Organized their Web sites from an internal
viewpoint – according to their product design
and manufacturing process.
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Companies can also organize their sites to meet
the needs of various types of customers =
customer-based marketing strategy = build their
Web sites to meet the specific needs of various
types of customers.
Communicating with Different
Market Segments
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First step in selling to customers
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identify groups of potential customers
Identify communications media to carry the marketing
message - media selection - critical for online firm since it
does not have a physical presence.
Challenge for online businesses - to convince customers to
trust them even though they do not have a physical presence.
Image projected through media and Web site (intermediate
step between mass media and personal contact)
Companies use the Web to capture some of the benefits of
personal contact and avoid some of the cost.
Shows how these three information dissemination
models compare on another important dimension,
trust.
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Market segmentation = identification of specific
portions of a market and targeting them with
specific advertising messages
Divides the pool of potential customers into
segments.
Three variables to identify market segments
 Geographic segmentation - specific groups
based on their location
 Demographic segmentation - uses information
about age, gender, family size, income,
education, religion or ethnicity to group
customers.
 Psychographic segmentation - group
customers by variables, such as social class,
personality, or their approach to life.
Companies that advertise on television often
create messages designed to reach the likely
audiences of various types of programs.
Customer Behavior and
Relationship Intensity
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In the physical world, businesses can sometimes
create different experiences for customers in
response to their needs.
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The creation of a separate experience for customers
based on their behavior is called behavioral
segmentation.
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Customizing visitor experiences to match the site
usage behavior patterns of each visitor or type of
visitor is called usage-based segmentation.
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Categories that marketers use
 Browsers
 Buyers
 Shoppers.
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A person might visit a Web site one day as a
browser, and then return later as a shopper or
buyer.
One goal of marketing is to create strong
relationships between a company and its
customers.
One-to-one marketing and usage-based
segmentation are valuable because they help
strengthen relationships with customers.
Customer relationships also have a life cycle
whose stages are :
 awareness,
exploration, familiarity,
commitment, and separation.
Customer Relationship Intensity
and Life-cycle Segmentation
Advertising on the Web
Advertising is all about communication between a company and its current
customers, potential customers, or former
customers.
 Most companies that launch an electronic
commerce site - have an existing
advertising program – should coordinate
with online advertising - example, print ads
should include the company’s URL.
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Most advertising on the Web uses banner ads.
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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.
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The most common sizes of banner ads are:
Full banner
 Half banner
 Square button
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3 ways to place them
 A banner exchange network coordinates adsharing so that other sites run your ad while
your site runs other exchange members’ ads.
 Find Web sites that appeal to one of the
company’s market segments and then pay
them to carry the ads.
 Use a banner advertising network.
Decline in effectiveness of banner ads has prompted
advertisers to explore other formats for Web ads.
 pop-up ad - ad that appears in its own window
when the user opens or closes a Web page.
 pop-behind ad - 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 waiting to appear when the
browser is closed.
E-mail Marketing
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E-mail marketing - Web advertising.
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Businesses - send e-mail messages to their customers
and potential customers to announce new products, new
product features, or sales on existing products.
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E-mail advertising has its own special concerns
unsolicited e-mails are viewed as spam.
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Therefore, in any e-mail marketing strategy - get
customer’s approval
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Send email to customer’s who request them =
permission marketing
QUESTIONS
Q. What is a company's marketing mix?
Q. What are the four Ps of marketing?
Q. What is market segmentation?
Creating and Maintaining Brands
on the Web
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Branding - identity or reputation of a product makes it easier to advertise and sell.
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Used to make a statement about a product quality status of the user, application of the
product, or other desirable messages.
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Critical elements of branding strategy are
product differentiation, relevance to the user and
perceived value.
Differentiation - creating an image of your brand in
the mind of the consumer as somehow different in
nature from all the others in the industry.
 Relevance - the utility a consumer expects from
your brand, such as features, attributes, and
benefits.
 Perceived value - give the consumer a notion that
they are getting real value for their money, such as
quality, longevity, or convenience.
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Emotional branding - difficult to convey on the
Web because it is an interactive medium
controlled to a great extent by the customer.
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Rational branding - offers to help Web users in
some way in exchange for viewing their ad popular strategy for Web marketers to create
and maintain brands online.
Affiliate Marketing Strategies
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Affiliate marketing = affiliate marketer
provides information and promotional
services about another firm’s product in
exchange for a commission if the product
is sold through an affiliate link to the
selling firm.
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Amazon.com created one of the first and
most successful affiliate programs on the
Web with over 400,000 affiliate sites.
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Affiliate commissions - based on several
variables.
 pay-per-click
model - affiliate earns payment
each time a site visitor clicks the link and
loads the seller's page.
 pay-per-conversion
model - affiliate earns
payment each time a site visitor is converted
to a qualified prospect or a customer.
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.
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Viral marketing approaches use individual
customers to spread the words.
Search Engine Positioning and
Domain Names
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Visitors arrive at a site through many different means –
most are directed by a search engine.
Search engine - helps people find things on the Web.
A search engine has three major parts
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The first part = spider, a crawler or a robot - searches the
Web for pages that might interest the visitor and collects the
URL and other information contained in the page.
The second part = index or database - the spider returns this
information to be stored in an index.
The third part of the search engine is the search utility - a
visitor enters search terms and the utility takes those terms
and searches its index for pages that match the terms - the
search utility returns the results = a Web page of links to
URLs that match the search terms.
Web Site Naming Issues
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Companies with well-established brand name or
reputation - URL for their Web site that reflects that
name or reputation.
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Obtaining identifiable names to use on the Web is an
important part of establishing a Web presence that is
consistent with a company's image in the physical world.
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URL brokers sell or auction domain names.
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The Internet Corporation for Assigned Names and
Numbers (ICANN) maintains a list of accredited domain
name registrars.
Buying and Selling of Domain
Names : example
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Poster art and framing co
www.artuframe.com.
www.art.com - co in the
aerospace industry - drawing
approximately 150,000 visitors
per month who were looking
for something art related.
Artuframe purchased the
domain name from the
company Advanced Rotocraft
Technology (ART) and
experienced a 30% increase in
site traffic the day after
implementing the name
change.
QUESTIONS
Q. What is behavioral segmentation?
Q. What is usage-based segmentation?
Q. How many stages are there in the
customer life cycle?
EXERCISE
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Go to the Web and :
 Locate
a local website that uses product-based
marketing strategy
 Locate a local website that uses product-based
marketing strategy
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Visit the RedEnvelope Web site to examine how
that company implements occasion
segmentation. Describe two clear examples of
occasion segmentation on the site.