Success in the Networked Economy: Conceptual and Theoretical Frameworks for Marketers

1. Success in the Networked Economy:Conceptual and Theoretical Frameworks for Marketers

2. What is an Internet Company? Yahoo? Amazon.com? Neopets.com? FTD.com (Flowers)? ebay? Carrier? Time Warner? CanadianTire? Etc. But these companies were established years before the Web?!

3. Interactive Marketing is the Process of Building and Maintaining Relationships Through Building and MaintainingElectronic Networks by Facilitating the Production, Communication, and Exchange of Ideas, Services, and Products that Satisfy the Goals of all Parties. Its Fundamental Currency is INFORMATION.

4. Value Creation in the Networked Economy: Interactive Marketing creates VALUE by using Electronic Networks (including the Internet) to create Customer Relationships through Networked Exchanges.

5. Best Practices have short life spans: • Remember… • Banner ads (big, flashy, interactive, pop-up,… read, totally ignored and annoying) • direct e-mail (Every marketer had to capture email addresses; every marketer had to build their email lists; every marketer had to have a daily, weekly or monthly newsletter… • Brands no longer matter online, so let’s focus on financing and selling. • Brands are ALL that matters online, so let’s spend $2 million on a 30 second Superbowl ad. • Communities are the killer app. • Communities are a waste of money. • Etc.

6. Working with THEORETICAL and CONCEPTUAL TOOLS: Reconceptualization Information Network Relationship/Community

7. “network marketing” • The scope of marketing is limited by the speed with which information, messages, and products/services can be transported. • When inbound and outbound messages are transported at network speed, and production is decentralized, the result is: • MICROSCOPIC VISIBILITY (individualization) • FLEXIBILITY W/O TIME (versioning in communication, production, pricing, distribution)

8. Cbs.MarketWatch.com Marketing Network International Presence Tools Sharebuilder Payment Calculator Home Price Check Best Credit Card Rates Insurance QuickQuote • Third-Party Sources • Market Guide • Hoover’s Online • Multex • Annual Reports Club • INVESTools • Over 250,000 Investment Research Reports • Community • Private e-mail • People Watch • Hot Discussions • Occasional Polls • Media: Web/Phone • News Watch • E-mail Alerts • Real-time Headlines • Hotstock Tracker • Marketwatch Live • eSignal • Radio • Contribution to Westwood One • TV • CBS MarketWatch Weekend • Contributions To: • CBS Early Show • CBS Evening News • CBS NewsPath Distribution Partnerships Up-to-the-Minute Information Partnerships with Content Providers Multiple Points of Access Marketwatch Radio on AOL Available Infrastructure Credible Analysis and Personal Finance Tools Experienced Editorial Staff Association with CBS =Customer Value =Flexible Network Nodes

9. 1-800-Flowers.com Marketing Network Strong Distribution Network Online Gift Center Broad Assortment of Gifts High Quality of Flowers PopularWebsite Core Benefits Integrated Partner Offers Customer Service Widespread, Easy Access Multiple Contact Points Technology Strong Brand Name Wide Reach to Customers = Customer Value =Resources

10. Doing Networked Marketing: • Customization: Change the organization on the fly • Community-building: Bridge silos, bring in the customer • Multi-channel solutions: real-time click and brick sales pitch.

11. Community: AOL Time Warner • Built a virtual private community to deal with the problem of decentralized commercial printing need for its many divisions.

12. Consolidate by networking. • Lowers coordination costs while maintaining freedom of divisions. • Create a Virtual Community of Printing” – CFO Joseph Ripp • AOL installed a printing software (Printcafe) accessible over the Web. • Brings together 50 vendors of printing services with all printing officers. • AOL employees across about 500 divisions can exchange their experiences using a vendor. • Cost savings for AOL: $150 Million in first 12 months.

13. Convergent Channels • The Idea – combine physical and virtual interactions with customers strategically in ways that meet relational and information needs of the customer, reduce internal costs and offer insights into the future of markets.

14. Example: Trintech • Electronic payment and commerce business in B2B market. • Sales Process: • Usually send out a team consisting of one sales rep and engineer to talk to clients (about 30 engineers supported 30 sales reps). • upon return, they write proposal, and submit it for further engineering, legal, or other reviews (takes about 2 weeks).

15. Now… • …engineer (called the “product evangelist”) is connected to sales rep and client virtually (video conferencing or Laptop through software called NetMeeting). • While the product evangelist is conferencing, a support team is listening in, beginning to draw out the solution and shortly after that the formal proposal. • As this team is busy with that proposal, another team comes in supporting the product evangelist for the next call. • When done, the proposal enters the eRoom, where legal, engineering, and product managers can populate the document. The sales expert puts a pricing matrix on it and gives it back to the product evangelist. • Proposal is emailed to sales rep who prints it out and hands it to client usually the next morning. • Advantages: • Every client gets the best engineer in a specific product area. • Client gets immediate solution => customer satisfaction • The arrangement saves Trintech an estimated 60% over the old model.

16. Relationships via Networked Communication • Internet has reduced the information asymmetry between consumer and company. • Companies must work hard to add value by developing even more powerful information and decision systems (Siebel, Oracle, Microsoft). • Develop multi-channel marketing tools: buy a pair of shoes in The Bay and receive via email a coupon for a matching purse. • Send out a personal discount offer to customer’s wireless device while still in the store.

17. Information Interpretation in the Data Network: • Have a centralized database but different data lenses for different managers. • Zoom from summary reports to specific data spots. • Create customizable corporate portals to deliver viewer-tailored reports on the data (Plumtree, Datachannel).

18. Why does a company like Carrier do E-Marketing?

19. Because it supports one or more of these efforts: Enhance Customer Relationships Improve Profitability E-Business Increase Market Share Increase Product Cycle Times

20. does a company like Carrier do E-Marketing? How

21. carrier.com, totaline.com, hvacpartners.com, myappliance.com Carrier: Smart Products Do We Need “Central Internet Air Conditioning and Heating”?

22. The Product: A Internet-Enabled Comfort Choice Thermostat What are the Benefits for Consumers? 1) Web-Enabled Micromanagement of Temperature. 2) Added-Value Through Cost Saving. And for Carrier? 1) Bundling Smart Services allows to Maintain Prices in Competitive Market. 2) Carrier, a B2B Company, is now VERY Close to the Customer (User Data). 3) Last but not Least: Image of Being Cutting-Edge

23. Does Carrier Make Anyone Else Happy? Yes, Connecticut Light & Power (Northeast Utilities system) with 1.1 million customers Get 45,000 customers into the Carrier program and it'll conserve the equivalent of a small power plant…

24. Based on Carriers Competitive Advantages – Network and Relationship – What Should Come Next? Wireless Remote Control Etc.??

25. Lessons to be learned from Carrier? • Network your product. • Form a relationship to network partners. • Reconceptualize your product. • What is the value proposition Carrier is trying to sell? • How can the Internet add value? • What need(s) does a car satisfy? • Now, reconceptualize the car for the Network Society!