Download 11_Marketing - University of Central Florida

IMS 6485: Marketing On the Web
Topics
•
•
•
•
•
•
•
•
•
•
The Role of Marketing and the Marketing Mix
Marketing & the Internet
Who and What on the Internet
The Buying Decision
Market Segmentation
Product Features
Branding
Internet Marketing Technologies
Marketing Strategies & Consumer Relationships
Pricing
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
1
IMS 6485: Marketing On the Web
Marketing in the Value Chain?
INTERMEDIATE
GOODS
INVENTORY
Where do these topics fall?
Animal
INVENTORY
WHOLESALER
FACTORY
Vegetable
INVENTORY
Mineral
INFORMATION FLOWS
(SELLERS TO BUYERS)
ADVERTISING .
TRANSPORTATION
COMPANY
INVOICE .
WHOLESALER
RETAILER
ORDER INFORMATION .
FLOW OF GOODS
INFORMATION FLOWS
(BUYERS TO SELLERS)
BROKER
REQUEST INFORMATION .
PLACE ORDER .
MAKE PAYMENTS .
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
2
IMS 6485: Marketing On the Web
The Role of Marketing
• In a purely competitive industry all firms face the same
market situation and have the same cost structures
P
P
P
MC
p0
qi
qi
MC
AC
p0
Q
(a)
qi
(a)
P
MC
AC
p0
Q
P
MC
AC
p0
(a)
P
MC
AC
AC
p0
Q
qi
(a)
p0
Q
qi
Q
qi
(a)
• Marketing directly addresses the
competitive situation of industries and
firms. Marketing seeks to create
unique, highly differentiated products
or services that are produced or
supplied by one trusted firm
("little monopolies") p. 360
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
MC
AC
Q
(a)
P
MC
AC
p0
qi
Q
(a)
3
IMS 6485: Marketing On the Web
The Marketing Mix—The 4 P's
• Product: The product aspects of marketing deal with
the specifications of the actual goods or services, and
how it relates to the end-user's needs and wants. The
scope of a product generally includes supporting
elements such as warranties, guarantees, and support.
• Pricing: This refers to the process of setting a price for
a product, including discounts. The price need not be
monetary - it can simply be what is exchanged for the
product or services, e.g. time, energy, psychology or
attention.
Source: Wikipedia
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
4
IMS 6485: Marketing On the Web
The Marketing Mix—The 4 P's (cont.)
• Promotion: This includes advertising, sales promotion,
publicity, and personal selling, branding and refers to
the various methods of promoting the product, brand,
or company.
• Placement: refers to how the product gets to the
customer; for example, point of sale placement or
retailing. This fourth P has also sometimes been called
Place, referring to the channel by which a product or
services is sold (e.g. online vs. retail), which geographic
region or industry, to which segment (young adults,
families, business people), etc.
Source: Wikipedia
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
5
IMS 6485: Marketing On the Web
The Marketing Mix—3 More P's for Services Marketing
• People: Any person coming into contact with customers can have
an impact on overall satisfaction. Whether as part of a supporting
service to a product or involved in a total service, people are
particularly important because, in the customer's eyes, they are
generally inseparable from the total service . As a result of this,
they must be appropriately trained, well motivated and the right
type of person. Fellow customers are also sometimes referred to
under 'people', as they too can affect the customer's service
experience, (e.g., at a sporting event).
• Process: This is the process(es) involved in providing a service and
the behavior of people, which can be crucial to customer
satisfaction.
Source: Wikipedia
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
6
IMS 6485: Marketing On the Web
The Marketing Mix—Services Marketing (cont.)
• Physical evidence: Unlike a product, a service cannot be
experienced before it is delivered, which makes it intangible. This,
therefore, means that potential customers could perceive greater
risk when deciding whether to use a service. To reduce the feeling
of risk, thus improving the chance for success, it is often vital to
offer potential customers the chance to see what a service would be
like. This is done by providing physical evidence, such as case
studies, testimonials or demonstrations.
Source: Wikipedia
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
7
IMS 6485: Marketing On the Web
The Marketing Mix—4 New P's
• Personalization: It is here referred customization of products and
services through the use of the Internet. Early examples include
Dell on-line and Amazon.com, but this concept is further extended
with emerging social media and advanced algorithms. Emerging
technologies will continue to push this idea forward.
• Participation: This is to allow customer to participate in what the
brand should stand for; what should be the product directions and
even which ads to run. This concept is laying the foundation for
disruptive change through democratization of information.
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
8
IMS 6485: Marketing On the Web
The Marketing Mix—4 New P's (cont.)
• Peer-to-Peer: This refers to customer networks and communities
where advocacy happens. The historical problem with marketing
is that it is “interruptive” in nature, trying to impose a brand on
the customer. This is most apparent in TV advertising. These
“passive customer bases” will ultimately be replaced by the “active
customer communities”. Brand engagement happens within those
conversations. P2P is now being referred as Social Computing and
will likely to be the most disruptive force in the future of
marketing.
• Predictive modeling: This refers to algorithms that are being
successfully applied in marketing problems (both a regression as
well as a classification problem).
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
9
IMS 6485: Marketing On the Web
The Marketing Mix Summary Sheet
• The 4 Original P's
– Product
– Pricing
– Promotion
– Placement
• The 3 Services P's
– People
– Process
– Physical evidence
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
• 4 New P's
– Personalization
– Participation
– Peer-to-peer
– Predictive modeling
10
IMS 6485: Marketing On the Web
Marketing & The Internet
• Companies make decisions that pertain to various
elements of the marketing mix
• We want to know:
– How does the Internet change the way marketing can be
conducted?
• Effectiveness
• Cost
– How is marketing affected when the product or service
is delivered on the Internet
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
11
IMS 6485: Marketing On the Web
Internet Usage—Who and What
• What are the implications of the demographic
information and the Internet user activity information
in Section 6.1 on the elements of the Marketing Mix
– Activities (Table 6.1)
– Demographics (Table 6.2)
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
12
IMS 6485: Marketing On the Web
The Buying Decision
• Consumers go through predictable stages in buying
– Needs recognition
– Search for products to satisfy the need
– Evaluation of alternatives
– Purchase
– Post purchase experience—loyalty
• How do companies attempt to affect this process?
• Where can the Internet affect this process?
• What are the cost and effectiveness differences between
traditional means and the web?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
13
IMS 6485: Marketing On the Web
Market Segmentation
• Market segmentation is the process of dividing the total
market into segments with identifiable characteristics
• Elements of the marketing mix are tuned to
characteristics of each segment
– Examples?
• What kind of data is needed to conduct segmentation?
• How is this data gathered traditionally?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
14
IMS 6485: Marketing On the Web
Market Segmentation vs. the Clickstream
• The clickstream is the record of activities that
consumers perform at a web site
– Logs
– Cookies
• A number of researchers have argued that understanding
the background demographics of Internet users is no
longer necessary, and not predictive in any event…
background demographics usually account for less than
5% of the observed behavior. (p. 354)
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
15
IMS 6485: Marketing On the Web
Product Features
• Core Product: The core characteristics of the product
– Automobile gets you from point A to B on demand
• Actual Product: The differentiated features of a
specific product that deliver the core characteristics
– BMW Z4
– Ford Taurus
• Augmented Product: Additional benefits beyond the
core
– Warranty
− Reliability
– Financing
− Customer service
• How can the Internet affect any of these elements?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
16
IMS 6485: Marketing On the Web
Branding
• The Brand is a set of expectations that a consumer has
when consuming, or thinking about consuming a product
or service from a specific company (p. 361)
• What expectations do you have for
– McDonalds
− Outback Steakhouse
– UCF
− Harvard
• Brand strategy is the plans for differentiating a product
or company—creating the brand image
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
17
IMS 6485: Marketing On the Web
Branding (cont.)
• Brands as a customer convenience
– How do brands create convenience for the customer?
– Can this convenience translate into higher prices?
– Can brand image translate to higher prices?
– (Can higher prices translate to brand image?)
• How many of you have ever had the best restaurant
meal of your life at:
– A big national chain restaurant?
– A one-of-a-kind restaurant?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
18
IMS 6485: Marketing On the Web
Branding (cont.)
•
•
•
•
Can brands move onto the Internet?
Can brands be established on the Internet?
How does the Internet affect branding?
How has branding affected Internet sales?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
19
IMS 6485: Marketing On the Web
Branding and Library Effects
• Brands can extend to cover more products than the
company's core product
• More products create convenience for customers (the
library effect)
• Both trends argue toward growing ownership
concentraton among Internet merchants as they pursue
scale economies and library effects that derive from size
(p. 368)
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
20
IMS 6485: Marketing On the Web
Internet Marketing Technologies
•
•
•
•
What is different now?
Transaction logs
Cookies
Web bugs/images
– Tracking from site to site—how is this done?
• Spyware
• Adware
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
21
IMS 6485: Marketing On the Web
Internet Marketing Technologies (cont)
• Data warehouses and data mining
– What kind of data is out there?
– What can we do with it?
• Rule-based data mining—observed data is used to
classify users into groups (segments)
• Collaborative data mining—users classify themselves
into affinity groups based on behavior
– Amazon's recommendations
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
22
IMS 6485: Marketing On the Web
Customer Relationship Management (CRM)
• Can a customer be unprofitable?
• Can some customers be more profitable than others
– In the short run?
– In the long run?
– Is there a company you will never deal with again
because of some problem you had?
• What is the cost to the company of their action that
resulted in your attitude
• Can actions on the Internet affect customer
attitudes?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
23
IMS 6485: Marketing On the Web
CRM (cont.)
• Companies would like to identify the customers that
are the most profitable
• What is a customer with high lifetime value?
• CRM also seeks to reduce marketing costs
• CRM can also help to develop new products
• What information is needed in order to implement this
type of targeted marketing?
– How can the Internet change the dynamics of acquiring
and managing this information?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
24
IMS 6485: Marketing On the Web
Marketing Strategies
• Four strategies identified
– First mover
– Fast follower
– Alliances
– Brand extender
• Market entry strategy (especially for online) is a
deliberate marketing strategy
• What are the advantages/disadvantages of each?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
25
IMS 6485: Marketing On the Web
Establishing the Customer Relationship
•
•
•
•
•
•
•
Advertising Networks
Permission marketing
Affiliate marketing
Viral marketing
Blog marketing
Social network marketing
Brand leveraging
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
26
IMS 6485: Marketing On the Web
Advertising Networks
• "Advertising networks represent the most sophisticated
application of Internet database capabilities to date, and
illustrate just how different Internet marketing is from
traditional marketing" (p. 388)
• What do advertising networks do?
• Double-Click serves about 60 billion ads per month!!!
• Maintains over 100 million user profiles
• Are you as anonymous as you thought you were?
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
27
IMS 6485: Marketing On the Web
Customer Retention
• Personalization and One-on-One marketing
– What is it and how can the web facilitate this?
• Customization and customer co-production
• Customer service
– FAQ
− Real-time-chat
– Rapid eMail
− Automated response systems
– Phone support − Knowledge bases
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
28
IMS 6485: Marketing On the Web
Pricing
• The ultimate goal in pricing is complete price
discrimination—charging each customer exactly what
they are willing to pay
• Market segmentation helps to price discriminate
– Business travelers vs vacation travelers
– MS MIS program vs. PMIS program
• Versioning—charging different prices for different
versions of a product
• Bundling—charging a bundled price to gain more
revenue than from selling products separately
Dr. Lawrence West, MIS Dept., University of Central Florida
[email protected]
29