e marketing ch1 convergence

E-Marketing 4/EJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 1: Convergence

©2006 Prentice Hall 1-2

Chapter 1 Objectives

After reading Chapter 1 you will be able to: Explain how the Internet and information

technology offers benefits and challenges to consumers, businesses, marketers, and society.

Distinguish between e-business and e-marketing.

Describe the Internet and the use of intranets, extranets and the Web.


Chapter 1 Objectives, cont.

Explain how increasing buyer control is changing the marketing landscape.

Understand the distinction between information or entertainment as data, and the information receiving appliance used to view or hear it.


The Music Industry

File sharing programs, such as KaZaA, enable consumers to illegally download music.

The Recording Industry Association of America has sued over 400 consumers for piracy.

14% U.S. consumers still download illegal files CD sales plunged to $13 million in 1999; $10.6

billion in 2003 Apple Computer introduced iTunes at .99 each.


What will happen to the music industry?

The actual cost of producing a CD is $10.17.

Only $1.29 goes to the artist.Online distribution makes sense.What do you think will happen to the music

industry?What do you think will happen to the

movie industry?


E-marketing Defined

The use of information technology to create, communicate, and deliver value to

customers. for managing customer relationships to benefit

the organization.

The result of information technology applied to traditional marketing.


E-Business, E-Commerce, andE-Marketing

E-business is the continuous optimization of a firm’s business activities through digital technology.

E-commerce is the subset of e-business focused on transactions.

E-marketing is one part of an organization’s e-business activities.


The Internet

A global network of interconnected networks. E-mail and data files move over phone lines,

cables and satellites. Three types of networks form part of the

Internet: Intranet: network that runs internally in an organization. Extranet: two joined networks that share information. Web: how most people refer to the Internet.


The Web Is One Aspect of E-Marketing

E-mail

Internet

UPC Scanner

PDA

Cell Phone

Web

PC

Television Refrigerator

Database

Automobile


Past, Present, and Future

The first generation of e-business was like a gold rush.

From 2000-2002, over 500 Internet firms shut down in the U.S.

Almost 60% of dot-coms were profitable in the fourth quarter of 2003.

Today, the Internet is mainstream in industrialized nations. 20 nations comprise 90% of all Internet users.


Technology Peak of Trough of Slope of Plateau of Trigger Inflated Disillusionment Enlightenment Profitability Expectation 1990-1996 1999 2000 2001 2002 2003 2004 2005 2006 Equity Times Debt Times Positive Cash Flow

Visibility

Dot-Com Peak

U.S. Recession

E-Business Becomes “Just

Business”

E-Business Recovery Is Sweet


E-Marketing Today

Power shift from sellers to buyersMarketing fragmentation: mass market to one

customerDeath of distanceTime compressionKnowledge/database management is keyMarketing and technology: an interdisciplinary

focusIntellectual capital is important resource


Consumer Control

New technologies such as personal video recorders (PVRs) and Akimo will increase consumer control. Convergence of television, radio, print, etc. Customer-controlled entertainment, and

shopping on demand.


Improved Internet Strategy Integration

Organizations will integrate information technology seamlessly into marketing strategy. Multichannel marketing: Web site, retail store,

and catalog Integration of inventory databases Integration of customer service across channels


Refined Metrics

Internet provides great deal of data, not all of which is very useful.

Tracking customer acquisition cost (CAC) and other key metrics is a critical marketing function still in its infancy.

Future metrics will provide better measures of performance, return on investment, etc.


Wireless Networking Increases

Cell phones, PDAs and laptops connect to the Internet via wireless modem worldwide. Starbucks Hotels and airports Queen Mary II luxury liner Amtrak train stations

Customers will have information, entertainment and communication when, where and how they want it.


WiFi at Train Station in France


Appliance Convergence

The receiving appliance is separate from the media type. Computers can receive digital radio and TV. TV sets can receive the Web.

New types of “smart” receiving appliances will emerge. Internet refrigerator is many digital appliances in

one. Global position systems (GPS) allow in-car

communication and entertainment.


Semantic Web

The Semantic Web will utilize a standard definition protocol that will allow users to find information based on its type, such as: The next available appointment for a doctor Details about an upcoming concert Menu at the local restaurant

Represents the next huge advance: providing worldwide access to data on demand without effort.


Internet-Time Analogy

1949 Atomic1929 Quartz Crystal 1600’s Mechanical1583 AD Pendulum3500 BC Sundial

Web is here in 2004

e marketing ch1 convergence

Education