EIM Lecture 2

1. EIM Lecture 2 New Ways of Doing Businesses

2. Electronic & Internet MarketingLecture 2 Introduction: biz environment Electronic Mktg Internet Mktg Website development Research Service Relationship Product Traditional 7P Advertising Price PR Sale Promotion Channel Audience development Commerce Future of marketing

3. New Ways of Doing Businesses • Understand the driving forces behind e-Marketing. • Learn the different types of business models arose due to the birth of Internet. • Realize how Web benefits to firms. • Recognize how e-Commerce influence ordering and buying process. • Appreciate the new business opportunities that spout from Internet technology. • Recognize how Internet affect the way of market segmentation.

4. Driving Forces Behind Electronic Marketing – Moore’s Law • Data density has doubled approximately every 18 months • The falling cost of digital technology one of the most powerful economic forces in modern society • Digitalization has resulted in a huge array of new products, computing by the masses, and a tremendous increase in the flow of information $390 in 2006 $390 for 4GB in 2007 $200 for 4GB in 2008

5. My prediction Comes True

6. Driving Forces Behind Electronic Marketing – Digital Environment • Entire digital world which can be very flexible and adaptable to changes (e.g. a classroom, a store front, or a simulated city street, etc) • Binary coding make digital products more flexible and adaptable to each other. • Integration of product functions become easy. Watch the video on iPhone

7. Driving Forces Behind Electronic Marketing – Convergence • Merging of industries, technologies, and content which used to be separate but now overlap • Convergence gives Internet marketers greater flexibility • Barriers between industries fall, marketers can rely on the medium that works the best Converging of Wifi, Google Talk, Gmail, YouTube, GPS

8. Content Interactive Multimedia Computing Communications Converging Digital Industries

9. The Long Tail At Amazon.com, they estimate that 40% of the sales are from relatively obscure books with a sales rank of more than 100,000.

10. Digital Terrestrial Television (DTTV or DTT) • TV signals are digitized and compressed for transmission in digital format • DTT offers an improved picture quality • new features and services such as high definition TV • interactive services and mobile reception, wide-screen pictures, surround sound audios, multiple viewing angles, multi-channeling, closed-captioning as well as electronic programme guides • DTT broadcasting was launched in Hong Kong by 2007 with over 75% coverage by summer in 2008

11. What is Business Model? • practitioners describe the Net in terms of business models • a business model is the method of doing business by which a company can sustain itself -- that is, generate revenue. • Brick and mortar - business operates in a physical building • Brick and click - business operates in both physical buildings as well as on Web

12. Types of Online Presence • Portal or media site • Gateway of information • Obtain revenue from ads, commission, sales of customer data. • Transactional e-Commerce site • Purchase online.

13. Types of Business Models • Branding Building • Products are not available for purchase. • Presence is to support the brand. • Most suitable for FMCG

14. Types of Business Models • Lead Generation E.g. www.alibaba.com • Customer Service e.g. www.kmb.com.hk – use its service effectively

15. Types of Business Models • Electronic Publishing - SCMP

16. Types of Business Models • Agent Service - www.lastminute.com • Manufacturer • Allow manufacturer to reach buyers directly and save cost on distribution and advertising.

17. Improvement Based Business Models Enhancement Efficiency Quality Provider Pays Pay the site owner for reaching the site’s audience. E.g. TDC User Pays Visitor pays for using the services of the site e.g SCMP viewers Web Benefits to Firms

18. New Business Opportunities

19. Current Product New Product Market Development -Sell into new market  . low cost of advertising internationally . without the necessity for a local sales supporting e.g. eloasia Diversification . New products are developed which are sold into new market Market Penetration . advertising products . increase awareness of products and profile of a company amongst potential customers e.g. Fergerson Funeral Home Product Development . New products or services are developed which can be delivered by the Internet, e.g. information products such as market reports  e.g. now TV Business benefits of the Internet New Market Current Market

20. Segmentation Market segmentation  identifying and profiling distinct groups of buyers who might require separate products and /or marketing mixes. It involves: • Identify segment variables (refer to your notes) • Segment the market • Develop profiles of resulting segments Source: Marketing Management (Kotler)

21. New Trends in Segmentation • Increased emphasis on segmentation criteria that represent softer data such as attitudes and needs • Increased awareness that the basis of segmentation depend on its purpose, e.g. the same bank accounts could be segmented by account profile ownership profiles, attitudes towards risk taking and socio-economic variables • Greater use of hybrid segmentation methods • A move towards letting the data speak for itself and finding segments through detection of patterns, i.e. data mining

22. Example of Behavioral Segmentation

23. End of Lecture 2

24. Example • Music industry in HK has been badly hit by pirating. http://www.eolasia.com/ changes the strategy by using internet.