Transcript e-Marketing
E-Marketing • Basics • Web Retailing • 1-1 Marketing • Web Customer Satisfaction 1 On-line Retailing Issues • Product – what products are suitable? • Software interface – ease of use, search time, help • Process – how can the process be re-engineered? • Pricing – willingness-to-pay • Payment – which methods? • Market penetration – build a loyal customer base 2 Product value Determinants of Customer Delivered Value Services value Total customer value Personnel value Image value Customer delivered value Monetary cost Time cost Total customer cost Effort cost Psychic cost 3 Individual Characteristics Environmental Characteristics … … … … Stimuli Marketing Others … … … … Consumer’s Decision Making Process Buyer’s Decision … … Vendor’s System Logistics Technical Customer Service … … … … … … 4 Consumer Evaluation of Products Most goods Easy to evaluate High in search quality Most services High in experience High in credence Product Type Product Evaluation Time High in search qualities Before purchase High in experience qualities After purchase Not even after purchase High in credence qualities Hard to evaluate 5 What sells on the Internet? • • • • • 6 Consumer Adoption Process Early adopters 13.5% Early majority 34% Innovators 2.5% Late majority 34% Laggards 16% Time of adoption Consumer type Key characteristic Innovators Risk takers Early adopters Opinion leaders Early majority Deliberate adopters Late majority Skeptical Laggards Tradition bound 7 Deterrents to B2C • Cost of delivery, receipt, return • Start-up and site maintenance costs • Differentiation and profitability achievement • Security / privacy / reliability / ease of use • Lack of hands-on experience / human contact • Shopping no longer a social experience • Consumer expectations / Speed / Bandwidth 8 Improvement Based Marketing Models Goal Examples Enhancement • Brand building • Category building • Quality • Disney (games, prizes) • Intel (games, tours, videos) • NPR (Images from Jazz shows) Efficiency • Cost reduction • Free trial • Cisco operating/staff/software distribution • Encyclopedia Britanica trial Effectiveness • Dealer support • Supplier support • Information collection • GM Buyer Power • GE TPN • DoubleClick custom ad 9 Revenue Based Marketing Models Method Examples Provider Pays • Sponsorship • Alliances • Spot advertising • Prospect fees • Sales commissions • ACO sponsors Dilbert on newspaper site • Excite linking to Amazon • TechWeb • Edmunds to Auto-by-tell • Amazon Associates User Pays • Product sales • Pay per use • Subscriptions • Bundle sales • Grainger • Wet Foot Press • Wall Street Journal • Science Magazine 10 E-Marketing • Basics • Web Retailing • 1-1 Marketing • Web Customer Satisfaction 11 Product/service search and discovery in the information space Comparison shopping and product selection based on various attributes Pre-purchase interaction Negotiation of terms, e.g., price, delivery times Placement of order Authorization of payment Purchase consummation Receipt of product Customer service and support (if not satisfied in X days, return product) Post-purchase interaction Consumer Mercantile Model 12 Marketing Communication Objectives Objectives Tasks 1. Generate awareness 2. Feature comprehension Prospecting Effectiveness Low High Open relationship 3. Lead generation Qualify prospect 4. Performance comprehension Present sales message 5. Negotiation, customization Close sales 6. Reassurance Account service Web? Mass ads Personal selling 13 Conversion Process on the Web Include web address in broadcast ads; on product packaging, etc. Surfers Aware Surfers Active Info Seekers Passive Info Seekers Passives: Hot links, sponsored sites Actives: Multiple sites, speed, bandwidth Web Site Hits Make it an interesting visit; visual appeal graphics, sound, video, ease of use Simplicity of establishing a dialogue, quality and speed of response Active Investigators More Dialogue Respond to dialogue; simplicity and security of ordering; order status. Exploit transaction database; purchase satisfaction and feedback. Purchase Re-purchase 14 Measuring Effectiveness Awareness efficiency = People aware of site / People with Web access Attractability efficiency = Hits on site / People with Web access Contact efficiency = Active visitors / Hits on site Conversion efficiency = Purchases / Active visitors Retention efficiency = Repurchases / Purchases Web site efficiency Caching and undercounting 15 Some E-Tailing Fallacies • Focus of competition away from quality, features and service to price • Dubious measures of sales (lower price inflates sales volume, some revenue in form of stocks of partner dot-coms) • Wrong metrics (number of customers or site visitors) • Lower estimation of costs (infrastructure needs, customer acquisition, employee compensation schemes) • Business model not sustainable 16 E-Marketing • Basics • Web Retailing • 1-1 Marketing • Web Customer Satisfaction 17 Evolution of 1-1 Marketing • Mass Marketing: One price for all • Direct Marketing: Target market segments • Micro Marketing: Variable pricing for micro-segments • One-to-one Marketing: Unique pricing for individuals 18 MASS MARKETING ONE-TO-ONE MARKETING Average customer Individual customer Customer anonymity Customer profile Standard product Customized market offering Mass production Customized production Mass distribution Individualized distribution Mass advertising Individualized message Mass promotion Individualized incentives One-way message Two-way messages Economies of scale Economies of scope Share of market Share of customer All Customer Profitable customers Customer attraction Customer retention 19 Customer Relationship Management Integrated sales, service and marketing intelligence Benefits Challenges 20 One-to-one Marketing: Steps • Identify customers – Collect more customer names – Collect more customer information – Verify and update customer data • Differentiate customers – Who are the top customers? Who’s unhappy? Who’s buying less? Who’s missing in the list? – Which customers drain your resources? – Rank customers into A, B and C categories 21 One-to-one Marketing: Steps (continued) • Interact meaningfully – Just call top 2-3 people at 5% customers – Call your company / competitor posing as a customer – Evaluate paper / voice / email communication • Customize your behavior – Customize / personalize communication – Find what / how often customers want to hear from you – Ask top ten customers what they want 22 Using Web Data • Registration Forms • Shopping Cart Data • Transaction logs • Cookies • Web Bugs 23 Establishing Customer Relationship • Permission Marketing – Obtain customer’s permission to send messages • Affiliate Marketing – Paying another Web site for customer referral • Viral Marketing – Customers transmit message to friends and families • Brand Leveraging – Using an existing brand to promote another 24 E-Marketing • Basics • Web Retailing • 1-1 Marketing • Web Customer Satisfaction 25 Model of Internet Consumer Satisfaction 3rd Party Seal of Approval After-Sales Vendor Reputation Trust in Web-shopping Sales Activity Product Customer Satisfaction Web-site Store Front Repeat Web Purchase (Brand Loyalty) Security Privacy Transaction Safety System Reliability Speed of Operation Ease of Use Content, Quality Format Timeliness Authentication Integrity Non-repudiation Reliability Completeness 26 Product After Sales Customer Satisfaction Sources Sales Activity Vendor Reputation 27 Customer Satisfaction from Product Satisfaction Components Online Methods Design • Product information • Additional, related products • FAQs • Messages & quality signals • Sales & support effectiveness Feedback and Incentives • Early users • E-mail from users • Usenet groups Sourcing & Manufacturing • Customer contact • Quality • Cost • Collaborative design with suppliers • Intranets & Extranets 28 Customer Satisfaction from Sales Activity Satisfaction Components Online Methods Messages • Web site positioning • Information / editorial content • Personalization • Overt • Covert • Sales force training • Sales force rewards • Brand reinforcement by site • Ease of use • Responsiveness Intermediaries • Dealer support information • Incentives • Selection • Training • Monitoring • Advance support to dealers using extranets • On-line product / service information Attitudes 29 Customer Satisfaction from After-Sales Satisfaction Components Online Methods Support Services • Self-help problem solving • On-line tech support • User groups • Coverage • Quality & performance Feedback & Restitution • Coverage • Responsiveness • Customer service e-mail • Repair tracking • Warranty explanations 30 Customer Satisfaction from Vendor Reputation Satisfaction Components Online Methods Formal Symbols • Mission statement • Performance standards • Compensation • On-line image and branding • Performance measures on-line Informal Symbols • Beliefs • Values • Public work involvement • Social activities 31 Online Market Research for EC Advantages Problems 32 Key Points • Internet only approach may be limited • Web can cut costs, enhance customer satisfaction, may produce new revenue • On-line market research is one alternative 33