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Transcript
Module 1 – Fall 2008 What Is Electronic Marketing Professor Charles Hofacker MAR 4721-01 Fall 2008 Welcome to MAR 4721 Electronic Marketing. The course is divided into modules, with each module representing a single lecture. The modules will be on the course Web site in time for you to read them before class. Do so! Note that at the end of each module you will see a set of class discussion questions. These are designed to create active verbal class participation. From time to time, this participation will be graded. Preliminary Definitions We need to start with some definitions of key concepts that pertain to the subject matter of this course. The popular press often refers to ecommerce, but typically the word “commerce” refers to transactions. As you have learned in Basic Marketing, transactions are only a small part of marketing. In marketing we focus on relationships rather than transactions. Nevertheless, let’s define ecommerce as The marketing, buying and selling of goods and services on the Internet. Now we turn our attention to the phrase electronic marketing. There are two pieces to the phrase: electronic and marketing. I have no problem with the word marketing – there are lots of good definitions to fit the bill here and any one of them could be mashed together with the word electronic to create a good definition of electronic marketing. But why electronic? To pick just one problem with this word, fiber optic cables are not electronic at all. So do we need a new word for marketing over fiber networks as compared to marketing over copper networks? That would be silly. A second problem is that the word electronic focuses on hardware. But what makes electronic marketing work, is software not hardware. In any case, here is my definition of electronic marketing: Electronic marketing is the use of networks created from hardware and software in the process of marketing. Electronic marketing happens over a network, and the network is built from both hardware and software. So now let’s move on and talk about networks and software. The Internet is a network and it based on software protocols. The full name of the Internet is actually Internetwork. Whatever we call it, the Internet is the sum total of devices interconnected using the Internet Protocol. So now we have to define the Internet Protocol, often referred to as IP. The Internet Protocol is a set of arbitrary rules for how devices interconnect. It is useful to understand some basic information about IP, and what it implies for the process of marketing. The Internet Protocol is an open protocol, meaning that it is not controlled by any company. As such, it is the opposite of a proprietary protocol. As a network, the Internet is an open network. This means that anyone can attach anything to the network. The only requirement is that the attached device "speak" IP. Otherwise the device will not be able to communicate with any other device. But now you can see why I want to de-emphasize hardware and to emphasize software. The key is the protocol. The actual hardware used is irrelevant, as long as it uses IP. We can also say that the Internet creates an interactive medium that is user-driven. We might contrast this with television or radio, for example. The user-driven nature of the Internet implies that it tends to work best as a pull medium rather than a push medium. Three Contexts for Electronic Marketing The Internet and other electronic networks are largely “built” from software, which means that it can be made to do almost anything. We might describe it as almost chameleon like. We can think of it as a communications medium or a distribution channel. In addition, it is a network, so that means it is ideal for connecting businesses to consumers, businesses to businesses, but also consumers to consumers. The ease with which the net creates complex connections, including C2C connections, makes the Internet different than mass media like TV or radio. When we think of the Internet as a communications medium, we can make an analogy with advertising that is done on other media. However, the existence of more complex communications patterns online as compared to television and the mass media, means that the Internet is ideal for establishing and enhancing relationships between us and our customers. Beyond communication, we can use the Internet to provide various supplementary services to our customers. When we think of the Internet as a distribution channel, we might consider examples where there is a physical good involved, like Amazon, that ships books or maybe an example where the good or service being sold is purely digital. For example, AVG provides virus protection for computers. You can buy the AVG product directly online and it is "shipped" to your computer over the Internet. Finally, the Internet allows us to create a new category of business. The network can be used to create platforms by which different users can connect to each other. There are platforms that connect buyers and sellers (eBay, B2B hubs), there are platforms that connect email users and advertisers (Yahoo! Mail). We can connect friends, and also advertisers (Facebook). There are lots of examples where we connect readers, writers and advertisers (Blogspot.com, Slate). History of the Internet Here are some key years in the development of one important electronic network used in marketing – the Internet (Hobbes Internet Timeline 2008). 1945 Vannevar Bush contemplates linked documents 1965 Ted Nelson coins expression hypertext 1965 The Pentagon’s DARPA studies cooperative networks 1969 First packetized message sent: UCLA to Stanford 1970’s Net adopted by computer science departments at larger US universities 1973 Bob Metcalf’s thesis on Ethernet 1977 The Apple II is introduced 1984 Apple’s Hypercard program is introduced 1986 NSF takes over from DARPA 1988 NSF begins to privatize the net 1980’s Net diffuses through more American universities 1989 Tim Berners-Lee proposes HTTP early 1990’s Net adopted by more non computer science departments 1991 WWW invented by Tim Berners-Lee 1993 Mosiac written by Marc Andreasen 1995 NSF privatizes net backbone Late 1990’s Net goes world wide late 90’s – 2001 Speculative financial bubble centered on Internet companies grows and bursts 2000 – the present Many social networking sites garner huge success An interesting side note on the development of electronic networks is the role played by Xerox’s Palo Alto Research Center, known as Xerox PARC. Researchers there invented many of the key technologies used by Internet adopters including the graphical interface, the mouse, and Ethernet. Xerox did not commercialize these products. The classic computer based graphical user interface is becoming more prevalent on a variety of devices and has changed how television programs are broadcast as well. We finish this section with a quote from economist George Gilder, who proclaimed in 1994 that: The computer industry is converging with the television industry in the same sense that the automobile converged with the horse. Class Discussion Questions 1. What is your preferred definition of marketing? 2. What is a network? 3. What is a protocol? 4. Do a competitive analysis of presidential candidates John McCain’s and Barack Obama’s Web sites*. References Gilder, George (1994), Life After Television, Updated Forbes ASAP, February 23, 1994 Hobbes Internet Timeline v8.2 (2008), http://www.zakon.org/robert/internet/timeline/. Accessed on 18 Aug 2008 *Written homework assignment. See syllabus for due date.