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Marketing: An Introduction
Second Canadian Edition
Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter Thirteen
Marketing and the Internet
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Looking Ahead
• Define the three areas of e-commerce and explain
the benefits of e-commerce
• Describe the different ways a company can use its
website to support its marketing communications
program
• Differentiate between Web publishers and Web
advertisers and define the major forms of online
advertising
• Outline how email can be used for marketing and list
the rules of email etiquette for online marketers
• Describe the new forms of Internet marketing
• Outline the legal and ethical issues involved in
Internet marketing
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E-Business Defined
• E-business: the use of electronic platforms
to conduct a company’s business.
• E-commerce: buying and selling processes
supported by electronic means.
• Business-to-Consumer – retail, banking.
• Business-to-Business – trading networks.
• Consumer-to-Consumer – e-Bay, Napster.
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B2C (Business to Consumer)
• The online selling of goods and services
to final consumers.
• 25% increase in online buying since
2002.
• Increasing diversity in buyers.
– This provides increasing opportunities for
targeting markets.
• Customer initiated and controlled.
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B2B (Business to Business)
• Most major B2B marketers offer product
information, purchasing and support
services online.
• Most business buying today takes place on
the Internet.
• Open trading exchanges—huge specialty
e-marketspaces to conduct transactions.
• Constant increases in private trading
networks.
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E-Commerce Networks
• Private Internet commerce networks geared
toward the business-to-business market.
• Most Internet buying now occurs over the
web.
• Global eXchange Services (GXS) consists of
more than 100,000 trading partners in 58
countries at a value of some 1 billion
transactions each year, equal to $1 trillion
worth of goods and services.
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C2C (Consumer to Consumer)
• Occurs on the Web and includes a wide
range of products and services.
• Forums: discussion groups located on
commercial online services.
• Newsgroups: the Internet version
of forums.
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Benefits to Buyers
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Convenience.
Ease of use.
Privacy.
Greater product access and selection.
Information gathering.
Interactive shopping.
Immediate.
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Benefits to Sellers
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Customer relationship building.
Cost savings.
Increased speed.
Increased efficiency.
Improved cash flow.
Flexibility.
Global reach.
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Marketing and the Website
• Early websites were largely brochureware.
• Today, every business and organization
has its own website.
• Performs a wide variety of marketing
functions.
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7 Cs of Effective Design
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Context: layout and design elements.
Content: text, pictures, sound and video.
Community: user-to-user communication.
Customization: personalizing for each user.
Communication: two-way communication.
Connection: links to other relevant sites.
Commerce: commercial transactions.
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Functions of a Website
• Sales channel – buying and selling online.
• Marketing communications vehicle – part
of the integrated communications mix.
• Customer service channel – self-service,
product enquiries, after market service.
• Delivering content – portal sites, publishing
sites.
• Service provider – subscriptions, information
provider, search engine.
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Online Advertising
• Worldwide spending on online
advertising topped $9 billion US in 2004.
• Increasingly popular form of promotion.
• Highly measurable and manageable.
• Can be modified quickly.
• Can dynamically targeted.
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Online Promotion Methods
• Online advertising: Banners, text links,
interstitials, sponsorships, micro sites.
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Email direct response: permission-based.
Viral marketing: word-of-mouth based.
Online Movies: Mini-movies as ads.
Podcasting: Sending information to wireless
devices.
• Blogging: Two way dialogue.
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Types of Online Advertising
• Banner ads (squares or rectangles) and
tickers (move across the screen).
• Textlinks (hypertext that takes the user to
a new webpage or website).
• Content sponsorships (sponsoring
special content).
• Interstitials (pop ups).
• Microsites (limited website with detailed
information).
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Buying Online Advertising
• Three pricing models for online
advertising.
– CPM – rate paid per thousand impressions
of an online ad.
– Cost-per-click – Advertiser pays only when
the advertisement is clicked on.
– Sponsorships – sold in blocks of time rather
than per impression basis.
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Email Marketing
• Increasingly common form of direct
marketing.
• Permission-based email most effective.
• Non-permission-based email known as
spam.
• Spamming the biggest detriment to
legitimizing email marketing.
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Using Email Marketing
• Well-designed email campaigns typically
achieve 10%-15% response rates
compared to .5% - 2% for traditional
direct mail.
• Uses include
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Information and education.
Couponing.
Special offers.
Newsletters.
Targeted content delivery.
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Viral Email Marketing
• Internet version of word-of-mouth
advertising.
• Infectious, interesting email that people
will pass along.
• Inexpensive way to create brand “buzz.”
• Encouraged by textlinks “Forward to a
friend or colleague.”
• Used successfully in B2B marketing.
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Rules for Email Marketing
• Send email only by permission.
• Clearly identify the sender.
• Remind the recipient why they’re
receiving the email.
• Provide an easy way to unsubscribe.
• The default is always opt-in, not opt-out.
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Online Movies
• Extended advertising segments that
take the form of short movies.
• Generally directed and acted by main
movie and TV figures.
• Can be viewed on websites.
• Trend started by BMW in 2001.
• Growing in popularity.
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Podcasting
• Delivery of content and advertising to
iPoDs and other personal wireless
listening devices.
• Users download shows and music at
their convenience.
• Similar to broadcasting.
• Early stage but shows promise as an
advertising and promotion medium.
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Blogging
• Website that consists of regular datestamped compositions written by an
individual or group and published online
for general viewing.
• Tend to be topical.
• Excellent tool for building thought
leadership and market education.
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Legal and Ethical Issues
• Online privacy and security.
– Consumer knowledge and consent.
– Limitations.
– Accuracy.
– Right to access.
– Hacking.
– Internet fraud.
• Segmentation and discrimination.
• Digital divide.
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Legal and Ethical Issues
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Online privacy.
Online security.
Internet fraud.
Segmentation and discrimination.
Access by vulnerable or unauthorized
groups.
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Looking Back
• Define the three areas of e-commerce and explain
the benefits of e-commerce
• Describe the different ways a company can use its
website to support its marketing communications
program
• Differentiate between Web publishers and Web
advertisers and define the major forms of online
advertising
• Outline how email can be used for marketing and list
the rules of email etiquette for online marketers
• Describe the new forms of Internet marketing
• Outline the legal and ethical issues involved in
Internet marketing
13-26
Copyright © 2007 Pearson Education Canada