Chapter 7Marketing on the

WebOpenArc Campus BIT-UCSC 2015

Semester IV – Ebusiness Applications

Ref: ELECTRONIC COMMERCE, Ninth Edition, Gary P. Schneider

7.1 Product Based Marketing Strategies

Believes that customers organize their needs into product categories.So the focus is on the categories of products sold.

Most companies offer a variety of products that appeal to different groups.

When creating a marketing strategy, managers must consider both the nature of their products and the nature of their potential customers.

Product Based Marketing Strategies

Managers at many companies think of their businesses in terms of the products and services they sell.

This is a logical way to think of a business because companies spend a great deal of effort, time, and money to design and create those products and services.

Product Based Marketing Strategies

If you ask managers to describe what their companies are selling, they usually provide you with a detailed list of the physical objects they sell or use to create a service.

Product Based Marketing Strategies

When customers are likely to buy items from particular product categories, or are likely to think of their needs in terms of product categories, this type of product-based organization makes sense.

Most office supplies stores on the Web believe their customers think of their needs using a product category structure.

Product Based Marketing Strategies

Product Based Marketing Strategies - Concerns

Scenario 1 Scenario 2

If customers arrive at these Web sites looking for a specific type of product,

Customers who are looking to fulfill a specific need, such as outfitting a new sales office or choosing a graduation gift, rather than find a specific product,

Many marketing researchers and consultants advise companies to think as if they were their own customers and to design their Web sites so that customers find them to be enabling experiences that can help customers meet their individual needs.

Sometimes this requires the Web site to offer alternative shopping paths.

Product Based Marketing Strategies - Solutions

For example, an online florist’s Web site could allow customers to specify an arrangement that includes specific flowers (satisfying customers with a desire for a specific product), yet provide a separate shopping path for customers who want to buy an arrangement for a specific occasion (birthday, anniversary, Mother’s Day, and so on).

Product Based Marketing Strategies - Solutions

7.2 Customer-Based Marketing Strategies

Built to address the specific needs of various types of customers (customer groups).The first step is to identify customers who share common interest

Web creates an environment that allows buyers and sellers to engage in complex communications modes.

The communication structures on the Web can become much more complex than those in traditional mass media outlets such as broadcast and print advertising. When a company takes its business to the Web, it can create a Web site that is flexible enough to meet the needs of many different users.

Customer-Based Marketing Strategies

Instead of thinking of their Web sites as collections of products, companies can build their sites to meet the specific needs of various types of customers.

A good first step in building a customer-based marketing strategy is to identify groups of customers who share common characteristics.

Customer-Based Marketing Strategies

Breaking customers into main groups is a good first step, subgroups probably exist within each of those groups.

Marketers can use their experience with selling in their industries to identify those subgroups and then develop marketing strategies and tactics that will effectively reach customers in each subgroup.

Customer-Based Marketing Strategies

The use of customer-based marketing approaches was pioneered on B2B sites.

B2B sellers were more aware of the need to customize product and service offerings to match their customers’ needs than were the operators of B2C Web sites.

In recent years, B2C sites have increasingly added customer-based marketing elements to their Web sites.

Customer-Based Marketing Strategies

One of the most noticeable trends in this direction is in university Web sites.

Today, most university home pages include links to separate sections of the Web site designed for specific stakeholders, such as current students, prospective students, parents of students, potential donors, and faculty.

Customer-Based Marketing Strategies

7.3 Market Segmentation

Geographic segmentationDemographic segmentationPsychographic segmentation

The Web gives companies an opportunity to present different store environments online.

In the physical world, retail stores have limited floor and display space. These limitations often force physical stores to decide on one particular message to convey.

Market Segmentation

On the Web, retailers can provide separate virtual spaces for different market segments.

For example, Dell’s home page includes links to separate sections of its site for home users, small and medium businesses, public sector organizations, and large enterprises.

Market Segmentation

Commitment Stage

• Customers often willing to tell others about how happy they are with their interaction

Awareness

• Customers recognize the name of the company for one of its products

Separation

• Customers are costly to serve more than they are worth

Exploration

• Potential customers learn more about the company or its products

Customer Loyalty StagesExtra