Chapter 6: E-Marketing

Introduction

• E-Marketing is a subset of e-Business that utilizes electronic medium to perform marketing activities and achieve desired marketing objectives for an organization. Internet Marketing, Interactive Marketing and Mobile Marketing for example, are all a form of e-Marketing.

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Advantages of E-Marketing

• Reduction in costs through automation and use of electronic media

• Faster response to both marketers and the end user

• Increased ability to measure and collect data• Opens the possibility to a market of one

through personalization• Increased interactivity

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Disadvantages of E-Marketing

• Lack of personal approach• Dependability on technology• Security, privacy issues • Maintenance costs due to a constantly

evolving environment• Higher transparency of pricing and increased

price competition• Worldwide competition through globalization

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Accelerated Marketing

• E-Business offers the ability to accelerate all the processes involved in buying, selling, manufacturing and distribution. Linking of processes can be :– Between companies– Between companies and customers

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E-Marketing Tools• The Internet has a number of tools to offer to the marketer. – A company can distribute via the Internet e.g. Amazon.com.– A company can use the Internet as a way of building and

maintaining a customer relationship e.g. Dell.com. (Build to order)

– The money collection part of a transaction could be done online e.g. electricity and telephone bills.

– Leads can be generated by attracting potential customers to sign-up for short periods of time, before signing up for the long-term e.g. which.co.uk.

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E-Marketing Tools (Cont’d)

– The Internet could be used for advertising • Banner Advertisement• Sponsorship• Classified Listing• Email Marketing• Search Engine Marketing

– Finally, the web can be used as a way of collecting direct responses e.g. as part of a voting system for a game show.

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Build-To-Order

• Improving manufacturing efficiency through better coordination of activities

• E.g Dell Computers– Dell sells computers directly to customers – Dell receives order on the net, assemble the PCs

and ship the PCs in just 4 hours– PCs are built or assembled in respect to an order– Enables Dell to significantly reduce inventories,

saves warehousing costs.

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New Product Development• Use of an information acceleration system to create

virtual worlds, which capture several of the most important aspects of the new product purchase decision.

• Allows behaviours of consumers to be studied in a test environment

• Benefits if using information acceleration systems are that if marketers can create realistic systems that measure consumer demand of artificial products they can replace expensive prototypes and dramatically reduce design time.

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Virtual Marketplace

• Can be categorised into 4 virtual marketplaces:– A virtual Information Space– A virtual Communication Space– A virtual Distribution Space– A virtual Transaction Space

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Virtual Information Space

• Consists of new internet based channels through which economic agents can display information about themselves, their products and services they offer.

• Includes sites providing information such as catalogues of products, information services providing financial information and bulletin boards advertising, employment opportunities

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Virtual Communication Space

• Includes new opportunities in which economic agents can exchange ideas and experiences, influence opinions or negotiate.

• E.g. Chat rooms and video conferencing

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Virtual Distribution Space

• Consists of new distribution channels for a variety if products and services.

• The first category includes those products that can efficiently be distributed by means of the internet (e.g. software, digital music, etc.)

• The second category includes services such as text, voice or video based consulting and training.

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Virtual Transaction Space

• Consists of new internet based channels through which economic agents can exchange formal business transactions such as orders, invoices, and payments

• This can range from simple email and online order forms to online ordering using credit cards

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Virtual Marketing Activities

Advertising Retailing Distribution Payment

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Online Advertising

• The most popular form of web advertising is banner ads

• Interstitial advertisements pops up a separate window

• Superstitial advertisement, adverts appear during ‘dead time’ e.g. while a page is being loaded

• Rich Media expanding banners

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Online Retail

• Mimics aspects of real store• E.g. webcam can be used to provide live video

images of the store and the staff

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Online Distribution

• The internet is ideally suited for distribution of digital products and services

• Many software companies are now using the internet for software distribution, particularly for updates

• Increasingly more and more entertainment product will be distributed online

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Online Payment

• Credit cards• Electronic Bill payment services– Offer facilities to users to have online bills form

websites access to their telephone bill using special software

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Database and Customer Relationship Marketing

• Database marketing uses data collected and held in customer databases to better serve the customer

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Customer Relationship Management

• Customer relationship management (CRM) focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships.– A focus on CRM is possible in e-marketing because of

marketers’ ability to target individual customers.– The ability to identify individual customers allows

marketers to shift their focus from increase share of market to increasing share of customer.

– CRM is often based on the use of information technology.

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Digital Marketing Cycle

1 •Attract Visitors

2 •Engage Them

3 •Retain Them

4 •Learn From Them

5 •Relate to them

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Digital CRM Technologies

• Cookies– They are small data files that are written to the

user’s hard drive when the user browses a website or fills in a registration form

– Once stored it can be re-accessed the next time the user visits the relevant websites, e.g. to show previous orders or the last page visited

– E.g. can be used to greet a user

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Digital CRM Technologies Cont’d

• Mailing List and Push Technology– Cookies allow for targeted but unsolicited

advertising– Another way is to advertise by request • This can be done using mailing list and push software

– E.g. link news story to a client profile

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Personalisation Systems

• Products with a few simple attributes compete primarily on price and value, so personalisation system is one that allows customers to find the best deal that meet their requirements

• Products with complex and qualitative attributes will need to take into account factors such as lifestyles and perceptions

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Personalisation Systems Cont’d

Endorsement

Collaborative Filtering

Rule Based

CASE (Computer

Assisted Self Explication)

Prod

ucts

Att

ribut

es

Quantitative, Few

Qualitative, Complex

Customer Needs

UniformHighly

Differentiated

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Personalisation Systems Cont’d

• Rule based systems use information that the company develops about its customers to make educated guesses about special offers, promotions and information that the company provides to visitors.

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Personalisation Systems Cont’d

• Computer-assisted self explication systems work by asking visitors a series of questions about what they like in order to narrow down choices

• E.g. IBM Advisor Software that helps users select appropriate PC’s

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Personalisation Systems Cont’d

• Endorsement systems are used when the products needs of consumers do not differ greatly and quantifying attributes of available products is difficult. E.g. all consumers wants a plumber to be honest and offer a good service

• E.g. Looking for financial advisers

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Personalisation Systems Cont’d

• Collaborative filtering is used when the product space is complicated and preferences are highly subjective, qualitative and complex

• The system works by matching different users who seem to have similar profile on the basis that people who share similar tastes

• Collaborative filtering relies on statistical methods based on correlation between users preferences to develop recommendations

• Process for collaborative filtering 1. query, 2. define profile, 3. rank, 4. present items