MGT 3225: E-Business Lecture 5: E-Marketing

1. MGT 3225: E-BusinessLecture 5: E-Marketing Md Mahbubul Alam, PhD Associate Professor

2. Intended Learning Outcomes (ILOs) • Assess the need for separate e-business and e-marketing strategies, • Create an outline e-marketing plan intended to implement the e-marketing strategy, • Integrate traditional marketing approaches with e-marketing, • Distinguish between marketing communication characteristics of traditional and new media, • Redefine marketing and communication mixed to incorporate new media. Prepared & Presented by Md. Mahbubul Alam, PhD

3. What is e-marketing? • What is marketing? • Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability. • Key objectives • Identifying: find out customers, their needs and wants. • Anticipating: Anticipate the demand for efficient resource allocation. • Satisfying: Outcome of marketing campaign leads to customer retention. • What is e-marketing? • The application of marketing principles and techniques to achieve marketing goals via e-communication technology. • An external perspective of how the Internet can be used in conjunction with traditional media to acquire and deliver services to customers. Prepared & Presented by Md. MahbubulAlam, PhD

4. Operational Process of e-marketing Prepared & Presented by Md. Mahbubul Alam, PhD

5. Management Process of e-marketing Prepared & Presented by Md. Mahbubul Alam, PhD

6. E-Marketing Plan: SOSTAC™ Prepared & Presented by Md. MahbubulAlam, PhD

7. Strategy Setting: Target Market Strategies • Target Marketing Strategy • Evaluation and selection of appropriate segments and the development of appropriate offers. • Segmentation • Identification of different groups within a target market in order to develop different product offerings and communications for the groups. Prepared & Presented by Md. Mahbubul Alam, PhD

8. Example OVPs • ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com) • ‘Earth’s biggest selection’. Amazon (www.amazon.com) • ‘Search the largest inventory of cars and trucks on the Internet. More than 1.5 million listings, updated daily’ (www.autotrader.com) • The Citibank site design (www.citibank.com) uses a range of techniques to illustrate its core proposition and OVP. The main messages are • Welcome to Citibank: The one-stop solution for all your financial needs • Look for a product or service; Learn about a financial product; Find a location Prepared & Presented by Md. Mahbubul Alam, PhD

9. New Media Marketing: Characteristics • Interactivity: Push vs. pull media, two-way interaction. See, slide 33 • Intelligence: Low-cost method for marketing research, customer profiling, e.g., www.egg.com, www.hsbc.co.uk, www.lloydstsb.co.uk • Individualization: Broadcast same message vs. personalized message, e.g., Dell Premier (www.dell.com/premier). See, slide 34. • Integration: ‘Customer-to-organization’ and ‘organization-to-customer’ communication. See, slide 35-36. • Industry restructuring: Disintermediation, reintermediation and Countermediation. • Independent of location: Reach of company communication to the global market. Prepared & Presented by Md. Mahbubul Alam, PhD

10. Communication models: Traditional media vs. New media • Traditional media • Push media • Company->customer • New media • Pull media • Customer seek information on a web site. • e.g., FMCG brand like Nestle (www.nescafe.co.uk) Prepared & Presented by Md. Mahbubul Alam, PhD

11. Degree of Individualization: Traditional media vs. New media Prepared & Presented by Md. Mahbubul Alam, PhD

12. Channels Integration Strategy Prepared & Presented by Md. Mahbubul Alam, PhD

13. Channel Integration: e-marketing and mixed-mode buying Mixed-mode buying: The process by which customer changes between online and offline channels during the buying process. e.g., www.easyjet.com Prepared & Presented by Md. Mahbubul Alam, PhD

14. Tactics: Product • Core product: Fundamental features of a product the meet users’ needs. • Extended product: Additional features and benefits beyond the core product. • Mass customization: Tailored versions of products to individual customers or groups of customers. • Bundling: multiple products are offered as individual items or groups at a reduce price. • Versioning • Subscription • Pay-per-view • Ad-supported content Prepared & Presented by Md. Mahbubul Alam, PhD

15. Tactics: Price • Commoditization: Selection of product is more dependent on price than on differentiating features, benefits and value-added services. • Dynamic pricing: Prices can be update in real time according to the type of customer of current market conditions, e.g., auctions, yield management, flash marketing, free & freemium • Aggregated buying: A form of customer union where buyers collectively purchase a number of items at the same price and receive a volume discount. • Satisficing behavior: Customer do not behave entirely rationally. They compare alternatives but may make choice given imperfect information. • Price elasticity of demand: Measure of consumer behavior that indicated the change in demand for a product/service in response to changes in prices. It assess the extent to which a change in price will influence demand for a product. • Elastic: A small change in price increases or reduces the demand substantially. • Inelastic: A large change in price is accompanied by a small amount of change in demand. Prepared & Presented by Md. Mahbubul Alam, PhD

16. Tipping Point • The principle that describe the underpinning of the rapid spread of ideas, products and behaviors through a population. • Science of social epidemics • Word-of-mouth impact on the rate of adoption of new products. • Principles: Three • The law of the few: word-of-mouth and copycat behavior • The stickiness factor: attachment of the characteristics and attributes of a product or a brand. • The power of context: Products and behavior spread far and wide only when they fit the physical, social and mental context. • Read the Box 8.3 on pp. 452-453 Prepared & Presented by Md. MahbubulAlam, PhD

17. Traditional Online Marketing and Advertising Tools • Search engine marketing and advertising • Search engine marketing (SEM) Use of search engines for branding • Search engine advertising Use of search engines to support direct sales • Types of search engine advertising Sponsored links (keyword paid inclusion), Keyword advertising (Google’s AdWords), Network keyword advertising (context advertising, e.g., Google’s AdSense). • Search engine optimization (SEO) techniques to improve the ranking of Web pages generated by search engine algorithms. • Social searchUtilizes social graph (friend’s recommendations, past Web visits, Facebook Likes, Google +1’s) to provide fewer and more relevant & trust-worthy results. • Display ad marketing, e.g., Banner ads, Rich media ads, Video ads, Sponsorships, • E-mail marketing  inexpensive & personalize; BUT Spam, poorly targeted e-mail list. • Affiliate marketing  paid commission fee • Viral marketing inspired customers to pass messages to others • Lead generation marketing services and tools for collecting, managing & converting leads. • Social, mobile, and local marketing and advertising Prepared & Presented by Md. Mahbubul Alam, PhD

18. Customer Retention Strategies • Customer retention strategies • Personalization and one-to-one marketing • Retargeting showing the same ad to individuals across multiple Websites • Behavioral targeting • Based on data from search engine queries, clickstream history, social network data, and integration of offline personal data and records • Effectiveness still inconclusive • Privacy issues • Customization: Changing the product • Information goods ideal for differentiation • Customer co-production: Customers help create product • Customer service • FAQs, Real-time customer chat systems, Automated response systems Prepared & Presented by Md. Mahbubul Alam, PhD

19. Question Please ? Acknowledgement: “E-Business and E-Commerce Management: Strategy, Implementation and Practice” by Dave Chaffey