Chapter Objectives E-Business in Contemporary Marketing CHAPTER 4 1 2 3 4 7 8 Define e-business and discuss how marketers use the Internet to achieve business

Chapter Objectives

E-Business in Contemporary Marketing

CHAPTER 4

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Define e-business and discuss how marketers use the Internet to achieve business success.

Distinguish between a corporate Web site and a marketing Web site.

List the major forms of B2B marketing.

Explain business-to-consumer (B2C) e-marketing.

Identify online buyers and sellers.

Describe some of the challenges associated with online marketing and e-business.

Discuss how marketers use the communication function of the Web as part of their online marketing strategies.

Outline the steps involved in developing successful e-business Web sites and identify methods for measuring Web site effectiveness.

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CHAPTER 4 E-Business in Contemporary Marketing

WHAT IS E-BUSINESS?• E-business Firm that targets customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers.

• E-marketing Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools.


CAPABILITIES AND BENEFITS OF E-MARKETING

Global Reach

Personalization

Interactive Marketing

Right-time Marketing

Integrated Marketing


TYPES OF BUSINESS WEB SITES

• Corporate Web site Site designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties.

• Purpose is to build customer goodwill and assist

channel members in their marketing efforts.

• Marketing Web site Site whose main purpose is to increase purchases by visitors.

• Many try to engage visitors in interactions that

move them closer to a desired marketing outcome.


B2B E-MARKETING• Business-to-business (B2B) e-marketing Use of the Internet for business transactions between organizations.

• Accounts for 90 percent of all e-business activity.

• Accounts for 10 percent of all B2B transactions.

• Increases efficiency of business transactions, which typically involve more steps than consumer transactions.

• Electronic data interchange—computer-to-computer exchanges of price quotations, purchase orders, invoices, and other sales information between buyers and sellers.

• Web services—Internet-based systems that allow parties to communicate electronically with one another regardless of the computer operating system they use.


• Extranets—secure networks used for e-marketing and accessible through the firm’s Web site by external customers, suppliers, or other authorized users.

• Private exchanges—secure Web site at which a company and its suppliers share all types of data related to e-marketing, from product design through delivery of orders.

• Electronic exchanges—online marketplaces that bring buyers and sellers together in one electronic marketplace and cater to a specific industry’s needs.

• E-procurement—Web-based systems that enable all types of organizations to improve the efficiency of their bidding and purchasing processes.


ONLINE SHOPPING AND B2C E-MARKETING• Business-to-consumer (B2C) e-marketing Selling directly to consumers over the Internet. Also called e-tailing.

• Service providers such as banks are an important segment of e-tailing.

• Two types of B2C Web sites

• Shopping sites

• Information sites


ELECTRONIC STOREFRONTS

• Electronic storefront Company Web site that sells products to customers.

• Growth anticipated with the increase in broadband connections.

• Broadband shoppers typically spend 34 percent more online than

narrowband shoppers.

BENEFITS OF B2C E-MARKETING

• Lower prices.

• Convenience.

• Personalization.


ONLINE BUYERS AND SELLERS

• Demographics of customers are changing as Internet penetration grows.


E-BUSINESS AND E-MARKETING CHALLENGES

ONLINE PAYMENT SYSTEMS

• Companies have developed secure payment systems to protect customer information.

• Encryption, Secure Sockets Layer, and electronic wallets.

PRIVACY ISSUES

• Protection of personal information is customers’ top security concern.

• Cookies and spyware allow companies to personalize Internet experience but also invade computer users’ privacy.

• To reassure customers, many online merchants have signed on with online privacy organizations such as TRUSTe.

• Companies install firewalls to protect private corporate data.


INTERNET FRAUD

• Internet Crime Complaint Center logged more than 231,000 complaints in a recent year.• Phishing High-tech scam that uses authentic-looking e-mail or pop-up messages to get unsuspecting victims to reveal personal information.

• Payment fraud is also growing.

WEB SITE DESIGN AND SERVICE

• As many as 70 percent of Internet shopping carts are abandoned before any purchase is made.

• Companies that have brick-and-mortar experience often have more experience satisfying customers than Internet-only retailers.

CHANNEL CONFLICTS

• Direct sales to customers can compete with business partners such as retailers and distributors, disputes called channel conflicts.


USING THE WEB’S COMMUNICATION FUNCTION• Web has four main functions: e-business, entertainment, information, and communication.

• Communication is Web’s most popular function.

• Firms use e-mail to communicate with customers, suppliers, and other partners.

• Spam Popular name for junk e-mail.

ONLINE COMMUNITIES

• Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests.


BLOGS• Blog Short for Web log, an online journal written by a blogger.

• Some incorporate wikis and podcasts.

• Corporate blogs can help build brand trust.

• Employee blogs can humanize a company, but negative comments can harm it.

WEB-BASED PROMOTIONS• Banner and pop-up ads on Web sites, and online coupons.

• Search marketing Paying search engines, such as Google, a fee to make sure that the company’s listing appears toward the top of the search results.


• Planning and preparation—company’s goal for its Web site determines scope, content, and design.

• Will the site be maintained in-house or by a contractor?

• What will the site be named?

• Content and connections—important factor for whether visitors return to a site.

• Relevant to viewers, easy to access and understand, updated regularly, and compelling and entertaining.

• Most small businesses are better off outsourcing to meet their hosting and maintenance needs.

• Costs and maintenance—development, placing the site on a Web server, and maintaining, updating, and promoting the site.


MEASURING WEB SITE EFFECTIVENESS

Click-through rate Percentage of people presented with a banner ad who click on it.

Conversion rate Percentage of visitors to a Web site who make a purchase.

Documents

Chapter Objectives E-Business in Contemporary Marketing CHAPTER 4 1 2 3 4 7 8 Define e-business and discuss how marketers use the Internet to achieve business