EMarketing

E-Marketing



Introduction to E-Marketing



Learning Objectives

 Marketing Review

– Describe the marketing planning process – Define the marketing concept – Explain the value proposition



 Describe the new rules for e-marketing.  Discuss the components of e-business.  Compare and contrast marketing and e-marketing.



Learning Objectives

 Define Internet, Web, intranet, extranet, and corporate portal, portal, and hub.  Identify several e-marketing challenges and opportunities.  Discuss the characteristics of the Net’s two generations.  Name and describe e-marketing models for each of the 4P strategies.



Ten Rules of E-Marketing

1. Power Shift from sellers to buyers 6. Knowledge management is key



2. Increasing Velocity

3. Death of Distance 4. Global reach



7. Market deconstruction

8. Interoperability 9. Interdisciplinary focus



5. Time compression



10. Intellectual capital rules (Digital City)



Its’ Bigger Than the Internet

 Electronic marketing reaches far beyond the web.



 Examples:

– – – –



Email and Newsgroups Web TV, Cell Phones, and text-only browsers Bar Code Scanners Cable Modem and DSL connections



What is E-Business (EB)?

 Defined as the continuous optimization of a firm’s business through digital technology



[EB = EC + BI + CRM + SCM + ERP]

Where,

• • • • • EC = e-commerce BI = business intelligence CRM = customer relationship management SCM = supply chain management ERP = enterprise resource planning



E-Business continued

 EC - uses digital technologies to enable buying/selling  BI - collecting primary/secondary information  CRM - strategy to satisfy customers and build longlasting relationships; high interaction with customers



 SCM – delivery of products efficiently and effectively;

high interaction with distributors



 ERP – optimize business processes and lowering costs

– Order entry and purchasing – Invoicing and inventory control



What is E-Marketing?

 Marketing:

– Use of 4 ―P’s‖ to meet customer’s needs



 E-Marketing:

– Use of technology to increase efficiency of



marketing – Increases company profitability and adds customer value



The Big Picture

 Too much digital technology creates:

– Decreasing cultural/language differences – Workaholism; less family time – Social class divisions because of high literacy requirements



 Digital economies are interdisciplinary

– Marketing, MIS/CIS, Finance, Strategists – Human Resources, Production/Operations



Networks

 In order of its relative size:

– – – – –



Intranet Corporate portal Extranet Hub Portal

• Lycos • Excite



smallest



– Web – Internet



largest



The Internet

 Computer Industry Almanac estimates that worldwide users will reach 570 million by 2003; and the US is estimated to reach 165 million users

 In 2003, consumer online advertising will grow only 25%, while email and promotions will grow 100% and 38%, respectively.



 By 2003, E-Commerce may exceed $1.9 trillion  15 million virtual grocery shoppers predicted by 2007



E-Marketing Challenges and Opportunities

 Markets



 Revenge of the Consumer

 Businesses



 Technology



Five Markets

 Business-to-Consumer (B2C)

– Example: www.iGo.com



 Business-to-Business (B2B)

– Example: www.amazon.com



 Consumer-to-Consumer (C2C)

– Example: www.eBay.com



 Business-to-Government (B2G)  Government-to-Consumer (G2C)



Revenge of the Consumer

 1930s:

– Caveat emptor (―let the buyer beware‖)



 2000s:

– Consumers have control



 What consumers want:

– Privacy – To safeguard their children – Permission before being sent commercial email



Businesses

 Challenges:

– Quality customer service



– Information overload



 Opportunities:

– Ways of generating revenue

– Greater interdependence in their value chain



Technology

 Can lower costs on staff and paperwork  Can be a costly investment  Security issues  New payment instruments



 Low bandwidth



E-Marketing Delivers

Value = Benefits – Costs  Value - customer perceptions of the product’s benefits  Benefits - attributes, brand name, etc…

– Add benefits through mass customization and



personalization



 Costs - time, money, energy, and psychic

– Lower costs through 24/7 convenience and one-stop



shopping



E-Business Model

 A method of doing business that contributes to the firm’s profitability whether by increasing revenue or decreasing costs



 Necessary for models to identify value for the customer



Marketing Mix Components

 Product  Price  Distribution  Marketing Communication



 Relationship Marketing



Product

 Through E-Marketing numerous new products emerged



 Breakthrough software, hardware, and services that created digital value



Price

 Efficiencies have been manifested through E-Marketing



 No need for a sales force with all order processing, billing and payments are transacted between customer and Website

– Cost savings return a larger profit margin and



lower prices



Distribution

 A primary E-Marketing application that creates customer value  New ways for selling and distributing products  Affects all manufacturers, service providers and intermediaries  Models:

– – – –



Content Sponsorship Model Direct Selling Model Infomediary Model Intermediaries Model



Content Sponsorship Model

 Companies create valuable content or services on their Websites



 Self-advertising

– Examples:

• Yahoo!



Direct-Selling Model

 Manufacturers eliminating channel intermediaries and sell directly to consumers



 Known as ―Disintermediation‖  Dell Computers



Infomediary Model

 An organization that collects and sells information about consumers or businesses



 Similar to a Market Research firm  Hoover’s



Intermediary Model

 Brokers and agents bring buyers and sellers together but neither purchase nor take possession of the actual products

– Brokerage firms

• E-Trade, E-Bay, Metalsite



– Agent firms

• Travelocity



 E-tailers are firms that buy products and resell them online

– ―Click and mortar‖ stores – Example: E-Toys



E-Marketing Communication

 Accomplished through promotion mix elements:

– – – –



Advertising Sales Promotion Direct Marketing Public Relations



 Models:

– – – –



Online Advertising Model Online Sales Promotion Model Content Publishing Model Email Model



Online Advertising Model

 Firms purchase advertising space on Websites owned by other firms



 Does not include a firm’s own Website  Dogpile



Online Sales and Promotion Model

 Sampling digital products



 Allows consumer to view products before purchasing  E-Music



Content Publishing Model

 A company’s Website  The displaying of a firm’s information about their product offerings on the Website to Internet users

 Brochureware  Does not involve transactions



 Directed towards stakeholders  Pure Fishing



 Three types:



E-Mail Model



– Target Promotions

• Companies target users through research and data mining to send e-mail • Bulk Email Software Marketing



– Reverse Channel

• User to firm • Customer service • Bass Pro Shops



– Consumer-to-Consumer

• Word of mouth



Relationship Marketing

 Customer Relationship Marketing (CRM)  E-Marketing is able to build long-term relationships due to:

– – – – –



Online FAQs Automatic e-mail responders Customized Websites Fax-on-demand Supply chains integrated with the firm’s functions



 Model:

– Community Building Model



Community Building Model

 Website developed to create a special interest community  Users may provide information for products or services  Bring consumer to concise location, making them more available for communication by a firm  Creates social bonds and enhances customer relationships

 Ivillage



Marketing Plan Tasks

 Situation Analysis

– Environmental Factors – Marketers collect and



analyze external elements that include economic analysis, social and demographic trends, and more – Market opportunity analysis – This entails a supply and demand analysis along with a SWOT analysis. The SWOT analysis determines the strengths, weaknesses, opportunities, and threats.



 Selecting Target Market – marketers select the type of customer they are looking to attract.



Marketing Plan Tasks continued

 Setting objectives – marketers set the objectives according to the firm’s mission and resources.  Designing marketing mix strategies – Develop product, pricing, distribution, and promotion strategies  Action Plan – Plan the actual marketing plan implementation  Budget – Set a budget for the marketing plan  Evaluation Plan – Continuously evaluate the plan to make sure objectives are met.



1.



Situation analysis —Environmental factors —Market opportunity analysis (demand, supply, and SWOT: strengths, weaknesses opportunities, threats)



2.



Select target market(s)



3. Environmental Scan



Set objectives



4. Select marketing mix: Product, price, distribution promotion



5.



Action plan (tactics)



6.



Budget



7.



Evaluation plan



Exhibit 1 - 7 Marketing Plan Tasks



The End.