Electronic Marketing &

Internet Marketing

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Key Terms

• E-commerce:–B2B (business to business) –B2C (business to consumer) –C2B (consumer to business) –C2C (consumer to consumer)

• Intranet• Marketing Web site

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Key Terms

• Corporate Web site• Customer database• Data warehouse• Direct-mail marketing • Direct marketing• Disintermediation

• E-business• E-commerce • E-marketing • Extranet• Integrated direct

marketing• Internet

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Marketing Marketing Communications Communications

and and the Internetthe Internet

“Computers in the future may weigh no more than 1.5 tons.”

- Popular Mechanics, 1949

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Marketing Communications and Marketing Communications and the Internetthe Internet

• It can be accessed from almost anywhere in the world

• It is the simplest form of international market entry available

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“The firm cannot avoid creating interest in its offerings outside its local or national market”

Christian GrönroosChristian Grönroos

Chapter Objectives

• Describe the relationship between Internet marketing, database Internet marketing, database marketing, and direct marketingmarketing, and direct marketing

• Evaluate a company’s or destination Web site and comment on its marketing potential

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Chapter Objectives

• Describe how to set up an effective effective databasedatabase

• Discuss the growth of e-mail marketinge-mail marketing • Understand how databases can be

used to develop direct marketing campaigns

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Major Forces Shapingthe Internet Age

• Digitalization and Connectivity

• The Internet Explosion

• New Types of IntermediariesIntermediaries

• Customization

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Digitalization and Connectivity

• Digitalization consists of converting text, data, text, data, sound, and imagesound, and image into a stream of bits that can be dispatched at incredible speeds from one location to another

• Connectivity involves building networks and expresses the fact that much of the world’s business is carried over networks connecting people and companies

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Types of NetworksTypes of Networks

• Intranets connect peoplepeople within a company

• Extranets connect a company with its suppliers and customerssuppliers and customers

• The Internet connect users to an amazingly large “information information superhighwaysuperhighway”

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The Internet Explosion

• Useful as a sales outlet and it provides a medium for communication between a company and its customers

• The number of Web surfers worldwide has reached 2,72,7 billion billion (2013) and is expected to approach 33.5 billion .5 billion by 2015.

• It was only 1.041.04 billion in 2005.

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New Types of Intermediaries

• With the birth of dot-com sites such as Booking.com, tripsta.com, Booking.com, tripsta.com, tripadviser.com, tripadviser.com, Expedia.com, Expedia.com, Priceline.com, and Travelocity.comPriceline.com, and Travelocity.com,, the hospitality % tourism industry has had to change how they do business

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Customization

• Technology has been useful in assisting companies in understanding understanding their customers their customers and potential potential customers customers on an individual level and developing marketing to their specific their specific needs & needs & wants.wants.

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E-Business, E-Commerce& E-Marketing

• E-business involves the use of electronic platforms to conduct a company‘s or organisations’ business

• E-commerce involves buying and selling processes supported by electronic meanselectronic means, primarily the Internet

• E-marketing is company efforts to communicate about, promote, and sell products and other services over the Intranet

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E-CommerceE-commerce can be divided into:•E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall"•Buying or Selling on various websites•The gathering and use of demographic data through Web contacts and social media•Electronic Data Interchange (EDI), the business-to-business exchange of data•E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters)•Business-to-business buying and selling•The security of business transactions

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Benefits to Buyers

• Convenient• Easy and private• Greater product access and

selection• Offers comparative information• Immediate and interactive

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Benefits to Sellers

• Builds customer relationships• Reduces costs• Quick and efficient• Reduces communication costs

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E-Commerce Domains

• B2C (business to consumer)• B2B (business to business)• C2B (consumer to business)• C2C (consumer to consumer)

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Types of Web Sites

• Corporate Web Sites are designed to build customer goodwill and to supplement other sales channels

• Marketing Web Sites engage consumers in an interaction that will move them closer to a direct purchase or other marketing outcome

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Designing Attractive Web Sites

• The key is to create enough valuevalue and excitementexcitement to get consumers to come to the site, stick around, and come back again

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ContentContent• Convey what the company is and what the

company has to offeroffer • Project brand image brand image • Easy to navigatenavigate• AttractiveAttractive• Have a “contact uscontact us” page• Ask permission to send information on

specials• Able to purchasepurchase products online

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Website Design Considerations (1)Website Design Considerations (1)

• Contain useful, interesting information for target customers

• Facilitate self-service in information gathering

• Users friendly• Firms must set explicit communication goals

for websites

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Website Design Considerations (2)Website Design Considerations (2)

• Design should address attributes that affect website “stickinessstickiness”–Content quality–Speed of download–Frequency of update

• Memorable web address helps attract visitors to a site–Ensure that people are aware of/can guess

firm’s web address

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EasyJet Paints Its Website Address on Each of Its More than 200 Aircraft

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Effective Advertising on Internet:Banner Advertising (1)Banner Advertising (1)

• Placing advertising banners and buttons on portals such as Yahoo!, Netscape and other firms’ websites

• Draw online traffic to the advertiser’s own site• Websites often include advertisements of other

related, but non-competing services–Advertisements for financial service providers on

Yahoo!’s stock quotes page–Small messages from Amazon.com on web pages

devoted to a specific topic–Links relevant to e-mail content on GMail

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Effective Advertising on Internet:Banner Advertising Banner Advertising (2)

• Easy for advertisers to measure how many visits to its own website are generated by click-throughs

• LimitationsLimitations–Obtaining many exposures “eyeballs” to a banner

does not necessarily lead to increase in awareness, preference, or sales

–Problem of fraudulent click-throughs designed to boost apparent effectiveness

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Effective Advertising on Internet:Search Engine AdvertisingSearch Engine Advertising (1)

• Reverse broadcast networkReverse broadcast network—search engines let advertisers know exactly what consumer wants through their keyword search

• Can target relevant messages target relevant messages directly to desired consumers

• Several advertising optionsSeveral advertising options– Pay for targeted placement of ads to relevant keyword

searches– Sponsor a short text message with a click-through link– Buy top rankings in the display of search results

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Effective Advertising on Internet:Search Engine Advertising Search Engine Advertising (2)

• Google – The New Online Marketing PowerhouseGoogle – The New Online Marketing Powerhouse–Google AdWords Google AdWords - allows businesses to connect

with potential customers at the precise moment when they are looking at related topics; advertisers can display their ads at websites that are part of the Google content network

–Google AdSense Google AdSense - In return for displaying relevant Google ads on their websites, publishers receive a share of advertising revenue generated

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Internet Marketing Offers Powerful Opportunities for Internet Marketing Offers Powerful Opportunities for Interactivity (1)Interactivity (1)

• Internet used for a variety of communications Internet used for a variety of communications taskstasks–Promoting consumer awareness–Providing information and consultation–Facilitating two-way communications–Enabling customers to place orders

• Can market through firm’s own websites or Can market through firm’s own websites or advertise on other sitesadvertise on other sites–Supplement conventional communications channels

at reasonable cost30

Internet Marketing Offers Powerful Opportunities for Internet Marketing Offers Powerful Opportunities for Interactivity (2)Interactivity (2)

• Must be part of integrated, well-designed Must be part of integrated, well-designed communications strategycommunications strategy

• Able to establish Able to establish harmony harmony with individual customerswith individual customers– Interactive nature of the Internet can increase

customer involvement–Facilitates permission marketing permission marketing and “self-service”

marketing• Banks allow customers to pay bills electronically,

apply for loans over the Internet, and check account balances online

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Legal and Ethical Issues

• Online Privacy and Security–Online privacyprivacy is perhaps the

number-one e-commerce concern–Identification thefttheft and commercial

espionageespionage are security fears of consumers and companies alike

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Marketing Database System

• A marketing database is an organized collection of data about individual customers, prospects, or suspects that is accessibleaccessible and actionableactionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships

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Using a Database to Create a Using a Database to Create a Competitive AdvantageCompetitive Advantage

• Provide the guest with a better experienceProvide the guest with a better experience– If on a prior visit a guest requests a certain

type of mineral water, the mineral water is placed in the guest’s refrigerator on returning visits

– If a guest had a problem, all departments in the hotel are notified, and everyone works to regain the guest’s confidence and loyalty

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Direct Marketing

• Direct marketing is an interactive system of marketing that uses one or more advertising media to affect a measurable response measurable response and/or transaction at any location

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Reasons for Growth of Direct Marketing

• Precision targeting• Personalization • Privacy • Immediate results• Measurability

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E-mail• The greeting should be personalizedpersonalized and

other persons being sent the same message should not be listed

• The namename of the company should be identified

• The subject needs to be relevantrelevant to the reader

• E-mails need to be shortshort • Text message is the preferred formatformat

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Direct Marketing Builds Relationships

• Direct marketing allows companies to develop a strong relationship strong relationship with their customers, which helps prevent them from switching to competitors

• It costs four to seven times as much to bring in a new customer as it does to maintain an existing one

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Integrated Direct Marketing

• A more powerful approach: execute a multiple-vehicle, multiple-stage campaign

Paid Ad Paid Ad with a with a Response Response ChannelChannel

DirectDirectMailMailMechanismMechanism

OutboundOutboundTele-Tele-marketingmarketing

Face-to-Face Face-to-Face Sales CallSales Call

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Discussion QuestionsDiscussion Questions• Go to two internet sites for the same

type of tourism organisation (Hotel, Airline, Destination marketing organisation, Restaurant, Travel Agency, Tour Operator or Theme park like Disneyland).

• Based on the information provided so far in this lecture, critique the web sites.

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End of Chapter End of Chapter SlidesSlides

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