MarketingMarketing

InstructorAbdel Fatah Afifi

MA&T, MBA, ACPA, PCT

Chapter 11Chapter 11

E-Commerce:Marketing in the Digital Age

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Chapter ObjectivesChapter Objectives1. Define e-commerce and give examples of each

function of the Internet.2. Describe how marketers use the Internet to

achieve their firms’ objectives.3. Explain how online marketing benefits

organizations, marketers, and consumers.4. Identify the goods and services marketed most

often on the Internet and the demographic characteristics of the typical online shopper.

5. Identify the primary online marketing channels.6. Explain how marketers use interactive tools as

part of their online marketing strategies.7. Discuss how an effective Web site can enhance

customer relationships.8. Describe how to measure the effectiveness of

online marketing efforts.

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What is E-CommerceWhat is E-Commerce??Electronic commerceElectronic commerce (e-commerce):

Targeting customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers by means of computer networks.

Electronic marketingElectronic marketing (e-marketing): Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools.

Digital tools: Fax machines, PDAs, smart phones, and DVDs.

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Capability

DescriptionExample

Global reach

The ability to reach anyone connected to a PC anywhere in the world

eBay—the online auction site—links buyers and sellers throughout the world

One-to-one marketing

Creating products to meet customer specifications, also called personalization

Lands’ End offers online shoppers custom-made shirts, slacks, and jeans.

Interactive marketing

Buyer–seller communications through such channels as the Internet and interactive kiosks

Best Buy stores have a “Computer Creation Station” that lets customers design and order custom-made personal computers.

Capability

DescriptionExample

Right-time marketing

The ability to provide a product at the exact time needed

UPS customers can place service orders online and track shipments 24/7.

Integrated marketing

Coordination of all promotional activities to produce a unified, customer-focused promotional message

Southwest Airlines use the slogans “A Symbol of Freedom” and You’re Now Free to Move around the Country” in both online and offline promotions.

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Interactivity and E-Interactivity and E-CommerceCommerce

Interactive Marketing◦Buyer-seller communications in which the customer controls the amount and type of information received from a marketer through such channels as the Internet, and virtual reality kiosks.

The InternetThe InternetOver 132 million active users in the USA1. Intranets

1. Internal corporate network that allows employees within an organization to communicate with each other and gain access to organizational information

2. Extranets1. Secure network accessible through a

Website by external customers or organization for electronic commerce. It provides more customer-specific information than a public site.

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Four Web FunctionsFour Web Functions1. Communication

1. E-mail; Instant messaging; Chat rooms and bulletin boards; Online communities

2. Information1. Search engines; Online

publications; Newsgroups; Internet forums; Electronic bulletin boards; Web communities

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Four Web FunctionsFour Web Functions3. Entertainment

1. Games; Radio and TV programming, including music; Streaming video of live news reports, sports, and musical performances; Electronic books

4. E-Commerce1. Online auctions2. B2B: electronic exchanges; Extranets

and private exchanges3. B2C: Electronic storefronts and

cybermalls; Web kiosks, Online ticketing; Matchmaking

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Accessing the Accessing the InternetInternet

1. Internet Service Provider (ISP): Organization that provides access to the Internet via a telephone, satellite TV service, or cable TV network.1. Wi-Fi 2. Search engines3. Portals

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E-Commerce and the E-Commerce and the EconomyEconomy1.1. Business-to-Business Online Business-to-Business Online

MarketingMarketing1. Involves professional buyers and

sellers2. Requires less glitz and glamour3. Much more money involved than

business-to-consumer online marketing

2. Electronic exchanges3. Search marketing

Benefits of Business-to-Benefits of Business-to-Business Online Business Online MarketingMarketing

1.Finding new markets and customers

2.Cost savings in every area of the marketing mix

3.Time reduced in reaching markets

1.Easy commerce

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Online Consumer Online Consumer MarketingMarketing1. Lower Prices

1. Bots (short for robots): programs that check hundreds of sites, gather and assemble information, and bring it back to the sender

2. Convenience1. Worldwide access, Day or night,

Customized products and information3. Personalization

1. Improves the quality of the shopping experience

2. Improves customer satisfaction

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Benefits of Online Benefits of Online Consumer MarketingConsumer Marketing

1. Relationship Building1. Crucial to success2. On line's personalization helps3. Easier for small businesses with small

budgets4. Customer service is the key

2. Increased Efficiency1. Greater profit margins2. Educating customers online frees

salespeople from answering routine questions

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3. Cost Reductions1. Reduced start-up costs2. Reduced operating costs3. Frees funds for new marketing efforts

4. A More Level Playing Field1. Even small firms with small budgets

can compete in the global marketplace2. Helps eliminate discrimination and

allow minority businesses to succeed on their own merits

Online Marketing is Online Marketing is International MarketingInternational Marketing

1. Examples of Global Web Sites2. Netsprint.pl Polish version of info seek3. Us.starmedia.com Spanish- and

Portuguese-language Star Media Network

4. Homeuol.com.br Universal Online, the largest Internet portal serving Brazil

5. Sify.com Offering users of Indian ancestry “all the India you want to know.”

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Security and Privacy Security and Privacy IssuesIssues1. Critical factors in building a

relationship online

1. Electronic signature2. Credit card security3. Authenticity of item offered4. Payment guarantees5. Fraud protection

1. Trusts: Ensuring Internet Privacy

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1.1. Online buyersOnline buyers1. Annual household income of $30K-$75K2. Demographic continue to change3. The next generation of online shoppers

will be more representative of offline consumers

2.2. Online sellersOnline sellers1. At first, offered familiar products like

books and computer hardware2. Now offering a wider variety of goods

including toys, groceries, consumer electronics and prescription drugs

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1.1. Company Web SitesCompany Web Sites1. Corporate Web sites and Marketing Web

sites

2.2. Electronic Storefronts and Electronic Storefronts and CybermallsCybermalls

3.3. Advertising on Other Web sitesAdvertising on Other Web sites1. Banner ads; Pop-up ads; Search ads

4.4. Online CommunitiesOnline Communities1. Electronic bulletin boards

5.5. Other Interactive Marketing LinksOther Interactive Marketing Links1. Web kiosks2. Smart cards3. Virtual coupon and online sample4. Blogs

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Creating an Effective Web Creating an Effective Web PresencePresence

1.Includes the following ongoing elements:

1.Building an effective web site

2.Managing a web site

3.Measuring Effectiveness

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1.1. Building an Effective Web SiteBuilding an Effective Web Site1. Establish a Mission for the company’s

site 2. Identify the purpose of the site3. Satisfy customer needs and wants

through a clear site design

2.2. Managing a Web SiteManaging a Web Site1. Update the site frequently2. Flag new merchandise and services3. Ensure that site appears to be current4. Update software as needed5. Track costs and revenues

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3. Ways to Measure Web site Effectiveness:

1. Research Studies

2. Profitability

3. Web site traffic counts

4. Click-through rates

5. Conversion rates