Marketing in the Digital Age 1224053752015685 9

8/2/2019 Marketing in the Digital Age 1224053752015685 9

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Chapter FourteenMarketing in the

Digital Age


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Roadmap:Previewing the Concepts

Copyright 2007, Prentice Hall, Inc. 14-2

1. Discuss how the digital age is affecting bothconsumers and the marketers who serve them.

2. Explain how companies have responded to theInternet and other powerful new technologies

with e-business strategies, and how thesestrategies have resulted in benefits to bothbuyers and sellers.

3. Describe the four major e-marketing domains.

4. Discuss how companies go about conductinge-marketing to profitably deliver more value tocustomers.

5. Overview the promise and challenges that

e-commerce presents for the future.


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Background

Began selling books; now

markets many othermerchandise lines.

One of the best knownnames on the Web.

Sales have been strongbut firm did not turn aprofit until 2003.

Skeptics predict tougher

times in years to come.

Amazon.com Online Pioneer

Case Study

Marketing Efforts

Customer-driven: strives to

design the best customerexperience on the Web.

Personalized sign-on pagesand recommendations,

huge selection, good value,and convenience result instrong buyer relationships.

Will Amazon become theWal-Mart of the Web?


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Forces Shaping the Digital Age

Digitalization andConnectivity

Intranets

connect people within a company. Extranets

connect a company with its suppliers,

distributors, and outside partners. Internet

connects users around the world.


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Forces Shaping the Digital Age

Internet Explosion

Explosive worldwide growth forms the

heart of the New Economy. Increasing numbers of users worldwide,

and broadband users in the U.S.

Greater numbers of consumers areaccessing information on the Internet.

Companies must adopt Internettechnology or risk being left behind.


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Marketing Strategy in theDigital Age

Requires a new model for marketingstrategy and practice.

Companies need to retain old skills andpractices but add new competencies.


7/29Copyright 2007, Prentice Hall, Inc. 14-7

E-Business in the Digital Age

Involves the use of electronic platformsto conduct company business.

Web sites for selling and customerrelations.

Intranets for within-companycommunication.

Extranets connecting with major suppliersand distributors.



E-Commerce in the Digital Age

More specific than e-business.

Involves buying and selling processes

supported by electronic means,primarily the Internet.

Includes:

e-marketing e-purchasing (e-procurement)



E-Marketing in the Digital Age

The marketing side of e-commerce.

Includes efforts to communicate about,

promote, and sell products andservices over the Internet.

E-purchasing is the buying side of

e-commerce. It consists of companies purchasing

goods.



Benefits to Buyers

Convenience.

Buying is easy and private.

Provides greater product access andselection.

Provides access to comparative

information.

Buying is interactive and immediate.



Benefits to Sellers

Powerful tool for building customerrelationships.

Can reduce costs. Can increase speed and efficiency.

Offers greater flexibility in offers and

programs.

Is a truly global medium.



E-Marketing Domains

Business to consumer (B2C)

Business to business (B2B)

Consumer to consumer (C2C)

Consumer to business (C2B)



Business to Consumer (B2C)

The online selling of goods andservices to final consumers.

Expected to generate $316 billion in 2010,or 13% of retail sales.

There is increasing diversity in buyers.

This provides increasing opportunitiesfor targeting markets.

Is customer initiated and controlled,requiring new marketing approaches.



Business to Business (B2B)

B2B sales dwarf B2C sales: B2B e-commerce was nearly $4 trillion in 2003.

Uses trading networks, auction & barter sites, spot

exchanges, online product catalogs, and more.

Most major B2B marketers offer onlineproduct information, purchasing, and support.

Open trading exchanges: huge specialty e-marketspaces to conduct

transactions.

More private trading exchanges are beingdeveloped for B2B transactions.



Consumer to Consumer (C2C)

Occurs on the Web and includes a widerange of products and services.

Auction sitessuch as eBay offermarketplaces to buy or exchange goods.

Blogs and forumsfacilitate informationinterchanges.

Blog: online journals where people postthoughts on a narrowly defined topic.

Forums:discussion groups located oncommercial online services.



Consumer to Business (C2B)

Consumers can search out sellers,view offers, initiate purchases, and give

feedback. Example: on priceline.com, one can bid for

airline tickets, hotel rooms, etc., anddecide whether to accept company offers.



Click-Only Companies

E-tailers

Search engines and portals

Shopping comparison sites

Internet service providers

Transaction sites

Content sites



Reasons for dot.com Failures

Poor research or planning.

Relied on spin and hype instead of

marketing strategies. Spent too heavily on brand identities.

Devoted too much effort to acquiring

new customers instead of buildingloyalty.



Click-and-Mortar Companies

Established firms initially resisted addingWeb sites because of channel conflictandcannibalizationconcerns.

Risk of online competition forced firms tobecome click-and-mortar companies. Mostare now doing better than click-onlycompanies because of: Trusted brand names and more resources Large customer bases More knowledge and experience Good relationships with suppliers Can offer customers more options



Online Marketing

Creating a Web site

Placing ads and promotions online

Setting up and participating in Webcommunities

Using e-mail



Types of Web Sites

Corporate Web Site:

Designed to build customer goodwill

and supplement other sales channels. Offers information to customers.

Builds closer customer relationships.

Generates excitement about the company.



Types of Web Sites

Marketing Web Site:

Engages consumers in an interaction

that moves them closer to a directpurchase or other marketing outcome.

May include catalogs, shopping tips,

promotional features, and more.



Designing Attractive Web Sites

The 7 Cs of Effective Web Site Design: Context

Content Community

Customization

Communication

Connection

Commerce

Constant change helps encourage repeatvisits.


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Online Ads

Forms of online advertising: Banner ads:

Tickers (move across the screen)

Skyscrapers (tall, skinny ads at the side of apage)

Rectangles (boxes that are larger than abanner)

Interstitials (pop up OR pop under betweenchanges on Web site)

Search-related ads (contextual advertising)

Rich media ads (incorporate animation, video,

sound, and interactivity).


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Online Promotion

Forms of online promotion:

Content sponsorships (sponsoring special

content) Microsites (limited areas paid for by an

external company)

Alliances and affiliate programs (work withfirms to promote each other)

Viral marketing (Internet version of word-of-mouth)


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The Future of Online Advertising

May grow to 10-15% of media mix forlow-involvement product categories.

Web communities: Allow members to congregate online and

exchange views on issues of interest.

E-mail: Use of enriched e-mail messages.

Backlash against spam can be problem.

Allow people to opt-out of promotions.


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E-Commerce Problems andChallenges

Likely that online marketing will remaina technique working with full IMC mix.

Internet profitability remainsproblematic for B2C firms.

Navigation difficulties continue as thenumber of Web sites grows.

Dot.com retailers are facing growingcompetition.

Legal and ethical issues also exist.


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Legal and Ethical Issues

Online privacy

Online security

Internet fraud

Segmentation and discrimination

Access by vulnerable or unauthorizedgroups


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Rest Stop:Reviewing the Concepts

1. Discuss how the digital age is affecting bothconsumers and the marketers who serve them.

2. Explain how companies have responded to theInternet and other powerful new technologies

with e-business strategies, and how thesestrategies have resulted in benefits to bothbuyers and sellers.

3. Describe the four major e-marketing domains.

4. Discuss how companies go about conductinge-marketing to profitably deliver more value tocustomers.

5. Overview the promise and challenges that

e-commerce presents for the future

Documents

Marketing in the Digital Age 1224053752015685 9