chapter 17: internet marketing copyright © 2010 pearson education canada e-business 1 e-business is...

Copyright © 2010 Pearson Education Canada

Chapter 17: Internet Marketing

E-Business

1

E-Business is more embracing than E-Commerce.

E-Business embraces:

Buying and selling online

Partner collaboration is a supply chain system

Electronic transfer of information and funds



Internet Usage

2

1. 68% or 21 million Canadians online regularly

2. 71% of urban households online regularly

3. Typical household: 18 – 44, children, post-secondary education, HH income $85K+.

Internet marketing initiatives have the potential to reach a desirable consumer audience.



Internet Behaviour

3

The Internet is changing behaviour:

1. Internet usage going up; traditional media usage going down

2. Internet is a popular research tool that influences online and offline buying decisions

3. Internet users are information-oriented and more demanding of companies



Internet Behaviour

4

An organization must react to behaviour changes.

1. Allocate more funds for online marketing communications (follow customers’ eyeballs).

2. Maintain informative and entertaining websites to meet demands of a tech-savvy consumer.

3. Offer e-commerce capabilities or risk losing business to new online competitors.



Online Marketing Opportunities

5

B2C PerspectiveB2B Perspective

•Lower costs

•Reach new customers

•Better coordination in supply chain

•Less time to market products

•Essential form of communications

•Sell goods online

•Mass customization capability



Mass Customization

6

“Creating systems that can personalize messages and develop products for an audience of one.”

1. Dell Computer uses a telephone and Internet ordering model and operates one of the highest volume e-commerce sites in the world.

2. Dell produces an individual’s computer after it has been ordered.

3. Dell established a standard for e-commerce / e-business practice; it is now adding traditional channels.



Internet Performs Marketing Roles

7

The internet is a supplement to traditional marketing strategies. It can:

Create company and brand awareness Establish and enhance brand image Offer incentives Generate leads Provide customer service and build relationships (CRM) Offer a means of ongoing customer communication Complete transactions



Marketing Research Applications

8

Secondary Data Collection

Some benefits of online data collection:

1.Quick access to information from public and private sources

2.A means of staying abreast of trends: demographic, social, lifestyle, technology, etc.

3.Research firms publish data of ongoing syndicated surveys



Marketing Research Applications

9

Primary Data Collection

Marketers can perform essential research tasks online:

1.Focus Group Interviews

2.Online Observations (electronic observations)

3.Structured Surveys



Marketing: Product Strategies

10

The Internet is ideal for marketing any type of good or service.

Leading sellers online include:

• Computer hardware / software• Music (downloads)• Toys and video games• Consumer electronics• Banking services• Travel services• Books

The Internet has changed how we access information:

• Newspapers (online)• Magazines (online)• Television shows (online)



Branding Strategies

11

Offline image and online image should be identical.

1. Effective brand integration via common themes and styles in all forms of marketing communications.

2. Keep site names simple; easy to remember and spell (typing errors discourage visits).

www.apple.com.



Marketing: Price Strategies

12

The impact of the Internet has had a three-fold impact on pricing strategies.

1. It is easier for customers to compare prices.

2. It is cheaper and easier for suppliers to change prices

3. It helps harmonize prices across the globe

The customers ability to compare prices in seconds puts pressure on marketers to keep prices competitive.




13

Online prices are not much lower than offline prices. Certain factors tend to increase online prices:

• Shipping costs

• Auctions

• Website development and maintenance costs

• Marketing costs




14

The rapid pace of technology puts pressure on prices. Certain factors help lower prices:

• Competition (comparison shopping behaviour)

• Product life cycles are shorter for many online products

• Streamlined order processing

• Improved inventory management programs



Pricing Options

15

In an era of value consciousness, consumers tend to shop for the best deals.

Price SkimmingStrategy

A high price may not be appropriate; even time-pressed online consumers can comparison shop.

Price PenetrationStrategy

A low price to gain acceptance and build market share quickly; price reductions are quickly matched online.

The objective is to be price competitive while offering value to potential customers.



Marketing: Distribution Strategy

16

All distribution functions can be performed online; but in a different way.

Market Intelligence Customer Communications (Channel Members) Buyer Contact Matching products to buyer needs Physical Distribution Financing (transfer of funds)



Channel Strategy

17

Traditional distributors have been replaced by online distributors; a process called disintermediation and re-intermediation.

Manufacturer Distributor(Travel Agent) Consumer

Traditional Channel

Manufacturer Distributor(Travelocity) Consumer

Online Channel



Marketing Communications Strategies

18

Organizations can utilize any combination of alternatives to attract customers and build relationships.

Online Advertising Sponsorships E-Mail Advertising Sales Promotion Public Relations Web Site



Customer Relationship Management

19

The Internet is an ideal medium for building a true CRM program. To make it work and organization must:

1. Predict the changing needs and expectation of e-customers (B2B and B2C).

2. Pursue e-marketing strategies relevant to individual customers.

3. Identify high-value customers and repeatedly satisfy them.

chapter 17: internet marketing copyright © 2010 pearson education canada e-business 1 e-business is...

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