E-MARKETING 5/EJUDY STRAUSS AND RAYMOND FROST

Part IV: E-Marketing ManagementChapter 10: Product: The Online Offer

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Publishing as Prentice Hall

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Chapter 10 Objectives

After reading Chapter 10, you will be able to: Define product and describe how it

contributes to customer value. Discuss how attributes, branding, support

services, and labeling apply to online products.

Outline some of the key factors in e-marketing enhanced product development.

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In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords.

Today, Google performs 7 billion searches a month, speaks 100 languages and is the most-visited U.S. Web site.

Innovative products and strong customer focus are driving its success and profitability.

The Google Story10-3

The Google Story, cont.

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Generates revenue from several B2B markets: Licensing of its search services. Sales of advertising to Web advertisers.

Google pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers.

Google’s product mix includes 15 search products, 3 advertising products, 21 applications, 5 enterprise products, and 2 mobile applications. What types of products do you think Google will

launch next?

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Many Products Capitalize on Internet Properties

A product is a bundle of benefits that satisfies needs of organizations or consumers. Includes tangible goods, services, ideas, people, and

places. Products such as search engines are unique to the

internet while others simply use the internet as a new distribution channel.

Organizations use research to determine what is important to customers when creating new products.

The marketing mix and CRM work together to produce relational and transactional outcomes with consumers.

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Creating Customer Value Online Customer value = benefits - costs Product decisions must be made that

deliver benefits to customers. Attributes Branding Support Services Labeling

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Attributes include overall quality and specific features.

Benefits are the same features from a user perspective.

The internet increases customer benefits in many ways. Media, music, software, and other digital

products can be presented on the Web. Mass customization is possible. User personalization of the shopping

experience can be achieved.

Product Benefits: Attributes10-7

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Product Benefits: Branding

A brand includes a name, symbol, or other information. When a firm registers that information with

the U.S. Patent Office, it becomes a trademark.

A brand represents a promise or value proposition to its customers.

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Brand Equity

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Brand equity is the intangible value of a brand, measured in dollars.

A great brand taps into popular culture and touches consumers.

Exhibit 10.3 displays rankings for some of the top U.S. brands.

Highest Value Global Brands

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Exhibit 10.3

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Exhibit 10.6 displays 5 levels of brand relationship intensity.

Levels of Brand Relationship Intensity

Advocacy

Community

Connection

Identity

Awareness

Tell others about the brand Communicate with each other

Communicate with company between purchases Display the brand proudly Is on the list of possibilities

Highest intensity

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Firms can use existing brand names or create new brands on the internet.

Some firms may use different names offline and online to avoid risk if the new product or channel should fail. Sports Illustrated created thriveonline.com. Wired Magazine changed its online version

name to Hotwired.

Branding Decisions for Web Products

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Creating New Brands for Internet Marketing Good brand names should:

Suggest something about the product. Differentiate the product from competitors. Be capable of legal protection. On the internet, a good brand name should be short,

memorable, easy to spell, and translate well into other languages.

Cobranding occurs when two companies form an alliance and put their brand names on a product: Sports Illustrated co-brands with CNN as CNNSI Yahoo! Visa shopping pages EarthLink-Sprint

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Internet Domain Names

A URL (Uniform Resource Locator) is a Web site address. Also called an IP address and domain name.

Domain names contain several levels. http:// indicates that the browser should expect

data using the hypertext protocol. The second-level is often the name of the

company. The top-level may be .com or a country name, such

as .mx for Mexico or .uk for the United Kingdom. There are at least 40 top level names available

including .biz, .info, .pro, etc.

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Internet Domain Names, cont.

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The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit corporation that makes decisions about protocol and domain name assignment, registration, etc.

GoDaddy and other sites provide domain registration services at low cost.

More than 97% of words in the dictionary have already been registered as domain names.

Internet Domain Names, cont.

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Organizations should purchase related names and spellings.

Picking the right domain name can make a huge difference. Directing people correctly to a site. Building consistency in marketing

communications.

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Largest Top-Level Domain Names Ex. 10.7

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Product Benefits: Support Services Customer support is a critical component

in the value proposition. Customer service reps help customers

with installation, maintenance, product guarantees, etc. to increase customer satisfaction.

CompUSA combines online and offline channels to increase customer support.

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Product Benefits: Labeling

Labeling has digital equivalents in the online world. Online “labels” provide information about

product usage, features, and installing software.

Online “labels” also provide extensive legal information about the software product.

Online firms may add the Better Business logo or TRUSTe privacy shield to their sites.

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Microsoft’s Terms of Use Label

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Exhibit 10.8

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Customer Codesign

Business and consumer collaboration are possible on the Internet.

Software developers often seek customer input about new products. They often allow users to download new

products, test them, and provide feedback. Customer interaction has been found to

increase product success. Amazon seeks customers’ product

reviews.

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New-Product Strategies: Product Mix Strategies

Many new products, YouTube, Yahoo!, and Twitter, were introduced by “one-pony” firms.

Other firms have added products to an already successful product mix.

Companies can choose among six categories of new-product strategies.

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Product Mix Strategies, cont. Firms will select one of the following

strategies, based on marketing objectives, risk tolerance, resource availability, etc.

1. Discontinuous innovations are new-to-the-world products.

2. New-product lines are new products in a different category for an existing brand name.

3. Additions to existing product lines.4. Improvements or revisions of existing

products.5. Repositioned products can be targeted to

different markets or promoted for new uses.6. Me-too lower-cost products.

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