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Marketing: An Introduction Second Canadian Edition
Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter ThirteenMarketing and the Internet
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Looking Ahead• Define the three areas of e-commerce and explain
the benefits of e-commerce• Describe the different ways a company can use its
website to support its marketing communications program
• Differentiate between Web publishers and Web advertisers and define the major forms of online advertising
• Outline how email can be used for marketing and list the rules of email etiquette for online marketers
• Describe the new forms of Internet marketing• Outline the legal and ethical issues involved in
Internet marketing
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E-Business Defined
• E-business: the use of electronic platforms to conduct a company’s business.
• E-commerce: buying and selling processes supported by electronic means.
• Business-to-Consumer – retail, banking.
• Business-to-Business – trading networks.
• Consumer-to-Consumer – e-Bay, Napster.
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B2C (Business to Consumer)
• The online selling of goods and services to final consumers.
• 25% increase in online buying since 2002.
• Increasing diversity in buyers.– This provides increasing opportunities for
targeting markets.
• Customer initiated and controlled.
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B2B (Business to Business)• Most major B2B marketers offer product
information, purchasing and support services online.
• Most business buying today takes place on the Internet.
• Open trading exchanges—huge specialty e-marketspaces to conduct transactions.
• Constant increases in private trading networks.
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E-Commerce Networks• Private Internet commerce networks
geared toward the business-to-business market.
• Most Internet buying now occurs over the web.
• Global eXchange Services (GXS) consists of more than 100,000 trading partners in 58 countries at a value of some 1 billion transactions each year, equal to $1 trillion worth of goods and services.
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C2C (Consumer to Consumer)
• Occurs on the Web and includes a wide range of products and services.
• Forums: discussion groups located on commercial online services.
• Newsgroups: the Internet version of forums.
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Benefits to Buyers
• Convenience.
• Ease of use.
• Privacy.
• Greater product access and selection.
• Information gathering.
• Interactive shopping.
• Immediate.
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Benefits to Sellers
• Customer relationship building.
• Cost savings.
• Increased speed.
• Increased efficiency.
• Improved cash flow.
• Flexibility.
• Global reach.
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Marketing and the Website
• Early websites were largely brochure-ware.
• Today, every business and organization has its own website.
• Performs a wide variety of marketing functions.
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7 Cs of Effective Design
• Context: layout and design elements.
• Content: text, pictures, sound and video.
• Community: user-to-user communication.
• Customization: personalizing for each user.
• Communication: two-way communication.
• Connection: links to other relevant sites.
• Commerce: commercial transactions.
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Functions of a Website
• Sales channel – buying and selling online.
• Marketing communications vehicle – part of the integrated communications mix.
• Customer service channel – self-service, product enquiries, after market service.
• Delivering content – portal sites, publishing sites.
• Service provider – subscriptions, information provider, search engine.
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Online Advertising
• Worldwide spending on online advertising topped $9 billion US in 2004.
• Increasingly popular form of promotion.
• Highly measurable and manageable.
• Can be modified quickly.
• Can dynamically targeted.
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Online Promotion Methods
• Online advertising: Banners, text links, interstitials, sponsorships, micro sites.
• Email direct response: permission-based.
• Viral marketing: word-of-mouth based.
• Online Movies: Mini-movies as ads.
• Podcasting: Sending information to wireless devices.
• Blogging: Two way dialogue.
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Types of Online Advertising
• Banner ads (squares or rectangles) and tickers (move across the screen).
• Textlinks (hypertext that takes the user to a new webpage or website).
• Content sponsorships (sponsoring special content).
• Interstitials (pop ups). • Microsites (limited website with detailed
information).
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Buying Online Advertising
• Three pricing models for online advertising.– CPM – rate paid per thousand impressions
of an online ad.– Cost-per-click – Advertiser pays only when
the advertisement is clicked on.– Sponsorships – sold in blocks of time rather
than per impression basis.
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Email Marketing
• Increasingly common form of direct marketing.
• Permission-based email most effective.
• Non-permission-based email known as spam.
• Spamming the biggest detriment to legitimizing email marketing.
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Using Email Marketing• Well-designed email campaigns typically
achieve 10%-15% response rates compared to .5% - 2% for traditional direct mail.
• Uses include– Information and education.– Couponing.– Special offers.– Newsletters.– Targeted content delivery.
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Viral Email Marketing• Internet version of word-of-mouth
advertising.• Infectious, interesting email that people
will pass along.• Inexpensive way to create brand “buzz.”• Encouraged by textlinks “Forward to a
friend or colleague.”• Used successfully in B2B marketing.
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Rules for Email Marketing
• Send email only by permission.
• Clearly identify the sender.
• Remind the recipient why they’re receiving the email.
• Provide an easy way to unsubscribe.
• The default is always opt-in, not opt-out.
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Online Movies
• Extended advertising segments that take the form of short movies.
• Generally directed and acted by main movie and TV figures.
• Can be viewed on websites.
• Trend started by BMW in 2001.
• Growing in popularity.
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Podcasting
• Delivery of content and advertising to iPoDs and other personal wireless listening devices.
• Users download shows and music at their convenience.
• Similar to broadcasting.
• Early stage but shows promise as an advertising and promotion medium.
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Blogging
• Website that consists of regular date-stamped compositions written by an individual or group and published online for general viewing.
• Tend to be topical.
• Excellent tool for building thought leadership and market education.
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Legal and Ethical Issues
• Online privacy and security.– Consumer knowledge and consent.– Limitations.– Accuracy.– Right to access.– Hacking.– Internet fraud.
• Segmentation and discrimination.
• Digital divide.
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Legal and Ethical Issues
• Online privacy.
• Online security.
• Internet fraud.
• Segmentation and discrimination.
• Access by vulnerable or unauthorized groups.
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Looking Back• Define the three areas of e-commerce and explain
the benefits of e-commerce• Describe the different ways a company can use its
website to support its marketing communications program
• Differentiate between Web publishers and Web advertisers and define the major forms of online advertising
• Outline how email can be used for marketing and list the rules of email etiquette for online marketers
• Describe the new forms of Internet marketing• Outline the legal and ethical issues involved in
Internet marketing