Elysium technologies |service companies |E-Commerce Development

1. Learning Objectives • Explain how the Internet affects the traditional marketing mix • 2. Describe how marketers are leveraging the power of online technology • 3. Discuss the legal and privacy issues affecting Internet-based companies

2. Learning Objectives • Measure the effectiveness of an online marketing campaign • Discuss the effects of the Internet on marketing objectives and strategy

3. Learning Objective 1 Explain how the Internet affects the traditional marketing mix

4. Progression of product strategies: Commodities Mass customization Product Strategies on the Web 1 Branding

5. Branded Commodities 1 Principle of equivalent quality is applied to branded products, creating downward price pressure Camera A at Retailer A Camera A at Retailer B

6. Corporate Web sites Resellers’ Web sites Affiliate programs Clicks and mortar Place 1

7. Affiliate Programs 1 Virtual Intermediaries: • Refer customers to online retailers • Receive a commission on resulting sales • Benefit from the goodwill consumers feel for the content sites they normally visit

8. Consumers don’t know the site Consumers don’t know the company Converting browsers to buyers Promotion Challenges 1

9. Promotion Methods 1 Online promotion techniques Spam Viral Marketing (Buzz) Instant Messaging Interactive Ads Search Engine Listings Sales Promotion

10. Low price High price Search Engine Listings 1 Gets you to the top of the list No or low fee gets you at the bottom of the list

11. Pricing Pressure 1 • Shopping bots and comparison sites • Auction pricing • Demand pricing Extreme price pressure on the Internet due to:

12. Come Back Soon! Pricing and Consumer Loyalty 1 75% of customers participate in a loyalty program Online customer service consistently rated as poor 72% say customer service is important 41% happy with service they received Profitability is less algorithm and more caring

13. How Technology Changes the 4Ps 1

14. Learning Objective 2 Describe how marketers are leveraging the power of online technology

15. 56% of Women Internet Demographics and Trends 2 60% of Men Online: By Gender in the U.S.

16. 60% of Whites Online: By race in the U.S. 45% of Blacks 54% of Hispanics Internet Demographics and Trends 2

17. 23% no high school Online: By education in the U.S. 45% of high school grads 82% of college grads and post-graduates Internet Demographics and Trends 2

18. Broadens and enhances access in developing nations Allows businesses to “leapfrog” into development Levels playing field for disadvantaged countries The Global Village 2

19. Wireless Access on Rise 2 • Wireless is growing in popularity • Will soon represent over half of all Internet users worldwide • A particular advantage for developing nations without suitable infrastructure

20. Business-to-business B2B Forms of Internet commerce Business-to-Consumer B2C Consumer-to-Consumer C2C Basic Forms of Virtual Business 2

21. Online trading floor Struggling to survive Over half out of business since 2002 B2B Exchanges 2

22. Using Cookies Data tracking Needed for personalized content Keep ad content fresh Controversial because of privacy concerns Maximizing Customer Relationship Marketing on the Internet 2

23. 1 – Choose the right words 2 – Put those words at top of page 3 – Use meta tags, like bold type 4 – Increase non-reciprocal links 5 – Incorporate graphics 6 – Incorporate video/audio 7 – Pay for a better link Improving Search Engine Results 2

24. Learning Objective 3 Discuss the legal and privacy issues affecting Internet-based commerce

25. Cookies Not-so-private email Spam Identity theft Conflicting laws Cyberstalking Branded trust Major Issues in Online Privacy 3

26. Are bits of data mapped to your hard drive Enable marketers to personalize Web sites Cookies: Cookies 3 Can trace where you’ve been on the Internet Are the subject of a controversial debate

27. Identity Theft 3 Stealing personal information to commit fraud or other crimes Sharply increasing In 2003, 27 million complaints filed with the FTC

28. Conflicting Legislation 3 Not all countries have the same laws regulating Internet commerce Marketers (M) responsible for every law in every country M

29. Online Predators 3 • Cyberstalking is on the rise. • Caution is declining (e.g., online dating is increasing) • Affects trust people have for legitimate marketing efforts

30. Better Business Bureau “Reliability Seal” ScanAlert “Hacker Safe” Verisign “Secure Seal” Creating Trust Online 3 3rd-party seals for creating trust

31. Learning Objective 4 Measure the effectiveness of an online marketing campaign

32. The server can tell: Who visited How many times (hits) And where (page views) The server can’t tell: Recency Frequency Monetary value Metrics 4

33. Hits Page views Click-through counts Out-of-Date Metrics 4

34. Stickiness as the New Metric 4 Duration Stickiness = Frequency Site Reach

35. Learning Objective 5 Discuss the effects of the Internet on marketing objectives and strategy

36. Porter’s Five Industry Forces 5 Rivalry among existing competitors Applying Five Forces in Internet Environ-ment Barriers of entry Threat of substitutes Bargaining power of suppliers Bargaining power of buyers

37. …low …high …extremely low …increasing Porter’s Five Industry Forces 5 Online… Rivalries are… …intensified Barriers are… Threat of substitutes is… Bargaining power suppliers Bargaining power buyers

38. Behavior changes quickly Old habits die hard; people more concerned about getting needs met than fractional costs savings Non-traditional pricing will be a success People perceive prices posted by sellers to be more convenient and fair. Debunking Myths of Re-Formed Market 5 Myths Truths 1st movers have the advantage 1st movers pay the costs of development; 2nd movers have the advantage.

39. Back to Basis 5 Distinctive competence Sustainable competitive advantage Attract loyal customers