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Fundamentals
of Internet
Marketing
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Chapter 12
Fundamentals of
Internet Marketing
Section
Section
12-1
Marketing Basics
12-2
Fundamentals
Market Research of Internet
Marketing
2
Fundamentals of Internet Marketing
Section 12-1
Why It’s Important
Relationships between buyers and sellers are
more personalized and dynamic than ever before.
To reap the benefits—and avoid the risks—of
these advancements, both buyers and sellers must
recognize marketing fundamentals.
Section 12-1
3
Fundamentals of Internet Marketing
Section 12-1
Key Terms
marketing
marketing mix
market segments
cross selling
promotions
Section 12-1
virtual marketing
personalization
cookies
e-mail marketing
permission marketing
4
Fundamentals of Internet Marketing
Marketing
Marketing encompasses
countless business
decisions, from Web-site
designs to delivery options.
Section 12-1
marketing the process
of planning and carrying
out the production,
distribution, promotion,
and pricing of products
and services
5
Fundamentals of Internet Marketing
The Marketing Mix
To attract new customers
and keep old ones coming
back, you need to create a
customer-focused
marketing mix.
Section 12-1
marketing mix consists
of four critical elements,
collectively known as the
four Ps: product, price,
place, and promotion
6
The Marketing Mix
The Four Ps
Product
P
P
Price
P
Place
P
Promotion
Section 12-1
7
Fundamentals of Internet Marketing
The Marketing Mix
A product is any item manufactured for sale.
Services are not material goods, but rather work
done in exchange for payment.
Section 12-1
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Fundamentals of Internet Marketing
The Marketing Mix
In marketing a product, you need to consider the
level of product quality you intend to provide.
Decisions regarding product quality and service
levels will depend largely on your target market.
Section 12-1
9
Fundamentals of Internet Marketing
The Marketing Mix
Some target markets
include two or more
market segments.
Section 12-1
market segments
distinct groups of people
who share certain
characteristics
10
The Marketing Mix
Market Segment Identification
Demographics
Psychographics
Geographics
group people by
statistics such as
income, age, or
gender
define people by
their lifestyle
preferences
categorize
people by their
location
Section 12-1
Product benefits
identify people
according to the
satisfaction they
get from
products
11
Fundamentals of Internet Marketing
The Marketing Mix
Your product line is a group of related products
that complement one another.
Your product mix is the full set of products offered
for sale, including all product lines.
Section 12-1
12
Fundamentals of Internet Marketing
The Marketing Mix
A good product mix offers
opportunities for cross
selling.
Section 12-1
cross selling generating
another sale by offering
related items
13
Fundamentals of Internet Marketing
The Marketing Mix
Price is the amount of money a business receives
in exchange for a product or service.
When setting prices, consider costs, profits, your
target market, and image.
Section 12-1
14
Fundamentals of Internet Marketing
The Marketing Mix
When it comes to business, place means where
customers shop and how the product or service
will be delivered.
Section 12-1
15
Fundamentals of Internet Marketing
The Marketing Mix
You must inspire potential
customers to visit your site
and purchase your
products or services
through promotions.
Section 12-1
promotions
advertisements intended
to inform potential
customers about
products or services
16
Fundamentals of Internet Marketing
The Marketing Mix
You can enhance your
word-of-mouth promotion
with virtual marketing.
Section 12-1
virtual marketing a
cost-effective strategy
that uses customers to
help promote a business
17
Fundamentals of Internet Marketing
The Marketing Mix
To the four Ps of the
marketing mix, a fifth could
be added: personalization.
Section 12-1
personalization refers
to establishing one-to-one
relationships with your
customers, for example
greeting by name or
offering book and movie
recommendations based
on previous visits
18
Fundamentals of Internet Marketing
The Marketing Mix
Many online businesses use
cookies to personalize their
marketing.
Section 12-1
cookies small text files
written directly onto
visitors’ hard drives,
containing information
such as names, shoppingcart contents, user
preferences, or unique
identification codes; using
cookies, businesses can
collect data and analyze
the behavioral patterns of
their customers to market
personally to them
19
Fundamentals of Internet Marketing
The Marketing Mix
E-mail marketing is
another way in which you
can establish personal
relationships with your
customers.
Section 12-1
e-mail marketing
inexpensive advertising
method with high
response rate that allows
a business to establish
personal relationships with
customers, send
customized messages, tell
customers about new
products and sales, or
remind them to order gifts
for holidays or special
events in their profiles
20
Fundamentals of Internet Marketing
The Marketing Mix
Recently, many companies
have started using a new
marketing strategy called
permission marketing.
Section 12-1
permission marketing
when a potential
customer has consented
to receive marketing
messages and will only
receive advertisements
about products and
services they have
requested
21
Fundamentals of Internet Marketing
Section 12-1
Review
1.
What is marketing, and how can it impact an online
business?
2.
How can a good product mix create successful
marketing opportunities in e-commerce?
3.
Of the four Ps of the marketing mix, how can the
component place be best described?
4.
What is permission marketing?
Section 12-1
22
Fundamentals of Internet Marketing
Section 12-2
Why It’s Important
To develop a strong marketing mix, a company must
understand its customers’ needs, wants, and buying
patterns.
Researching the market enables businesses to cater
more accurately to their customers.
Section 12-2
23
Fundamentals of Internet Marketing
Section 12-2
Key Terms
market research
marketing research
Section 12-2
clickstream data
metrics
24
Fundamentals of Internet Marketing
Identifying Market
Opportunities
Traditional bricks-and-mortar retailers have
always collected and analyzed market data.
In the world of e-commerce, companies have
their own ways of collecting market data.
Section 12-2
25
Fundamentals of Internet Marketing
Market Research
Market research can help
a business to recognize
opportunities.
Section 12-2
market research
encompasses all of a
business’s efforts to
collect data regarding the
economic climate,
competitor prices or
strategies, governmental
regulations and policies,
consumer demographics,
and emerging
technologies; distinct
from marketing research
26
Fundamentals of Internet Marketing
Market Research
There are two main types of market research.
Primary research is data gathered directly
from people.
Secondary research is a summary of existing
data gathered from nonhuman sources.
Section 12-2
27
Fundamentals of Internet Marketing
Market Research
Marketing research is
conducted by all types of
businesses.
Section 12-2
marketing research
focuses specifically on
consumer behaviors and
the reasons behind buying
habits; it collects
information about
consumers, especially a
company’s target market,
and analyzes
demographics, buying
habits, product
preferences, and concerns
about technology; distinct
from market research
28
Fundamentals of Internet Marketing
Market Research
Clickstream data, or the
information recorded in
most server logs, is
another rich source of
information.
Section 12-2
clickstream data a Web
site visitor’s electronic
footprints, recorded in
most server logs,
including their unique IPs,
page views, downloaded
images, and URLs
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Fundamentals of Internet Marketing
Market Research
Metrics can be used to
improve site navigation,
create better privacy
policies, and determine
which pages generate the
most interest.
Section 12-2
metrics patterns found
in clickstream and other
data
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Fundamentals of Internet Marketing
Market Research
Internet and traditional shoppers want similar
things from their shopping experience:
easy navigation
quick and simple checkout
privacy and security
fair prices
quality products
Section 12-2
31
Fundamentals of Internet Marketing
Section 12-2
Review
1. How are Internet and traditional shoppers
similar?
2. Why will a business conduct research into its
distribution operations?
3. What is the difference between primary and
secondary research? Provide examples of
each.
Section 12-2
32
Fundamentals of Internet Marketing
33
End of
Fundamentals
of Internet
Marketing
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