Download Chapter 4: Marketing on the Web

Chapter 4:
Marketing on the Web
Objectives
In this chapter, you will learn about:
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When to use product-based and customer-based marketing strategies
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Communicating with different market segments
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Customer relationship intensity and the customer relationship life cycle
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Using advertising on the Web
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E-mail marketing
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Technology-enabled customer relationship management
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Creating and maintaining brands on the Web
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Search engine positioning and domain name selection
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Web Marketing Strategies
• Four Ps of marketing
– Product
• Physical item or service that the company is selling
– Price
• Amount a customer pays for the product
– Promotion
• Any means of spreading the word about the product
– Place
• Need to have products or services available in
different locations
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How do you reach customers?
• Identify groups of potential customers
• Select the appropriate media
• Build the right message (write to your reader)
– Content (e.g., product presentation)
– Context (e.g., trust)
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Customer-Based Marketing
Strategies
• How do you build a customer-based
marketing strategy?
– Rudimentary approaches start by identifying
groups of customers who share common
characteristics
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Market Segmentation
• Market segmentation is dividing the pool of
potential customers into segments and
targeting specific portions of the market with
advertising messages
– Segments are usually defined in terms of
demographic characteristics
– Micromarketing is a term suggesting that we can
target very small market segments
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Market Segmentation
• Geographic segmentation: Where are they?
• Demographic segmentation: Income, race,
education, etc.
• Psychographic segmentation: variables
such as social class, personality, or lifestyle
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Geographic Segmentation
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Trust and Media Choice
• The Web is an intermediate step between mass
media and personal, FTF, contact
– Companies can use the Web to capture some of the
benefits of personal contact, yet avoid some of the
costs inherent in FTF customer management
– Trust is often related to proximity
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Product-Based Marketing Strategies
• The product-based strategy views the world from
the perspective of the firm and its products
– For example, stores such as Staples and Sears
believe customers organize their needs into product
categories and they organize their sites accordingly
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Beyond Market Segmentation:
Customer Behavior and Relationship Intensity
• Behavioral segmentation: Creation of separate
experiences for customers based on their behavior
• Occasion segmentation: Behavioral segmentation based
on things that happen at a specific time
• Usage-based market segmentation: Customizing visitor
experiences to match the site usage behavior patterns of
each visitor
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Beyond Market Segmentation:
Customer Behavior and Relationship Intensity
• Behavior-based categories include:
– Simplifiers like convenience
– Surfers use the Web to find information and explore
new ideas
– Bargainers are in search of a good deal
– Connectors use the Web to stay in touch with other
people
– Routiners return to the same sites over and over
again
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Customer Relationship Intensity
and Life-Cycle Segmentation
• One goal of marketing is to create strong
relationships between a company and its
customers
– Good customer experiences can help create an
intense feeling of loyalty
– Touchpoints
• Online and offline customer contact points
– Touchpoint consistency: provide similar levels and
quality of service at all touchpoints
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Acquisition, Conversion, and
Retention of Customers
• Acquisition cost
– Money a site spends to draw one visitor to the site
• Conversion
– Converting a first-time visitor into a customer
– Conversion cost: the cost of inducing one visitor to
make a purchase, sign up for a subscription, or
register
• Retained customers
– Customers who return to the site one or more times
after making their first purchases
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Customer Acquisition, Conversion,
and Retention: The Funnel Model
• Funnel model: Used as a conceptual tool to understand the
overall nature of a marketing strategy that is similar to the
customer life-cycle model
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Advertising on the Web
Terms and Concepts
• Banner ad
– Small rectangular ad
• Interactive marketing unit (IMU) ad formats
– Standard banner sizes
• Banner exchange network
– Coordinates ad sharing
• Banner advertising network
– Acts as a broker between advertisers and Web sites
that carry ads
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Advertising on the Web
Terms and Concepts
• Cost per thousand (CPM)
– Pricing metric used when a company purchases mass
media advertising
• Trial visit
– First time a visitor loads a Web site page
• Page view
– Each page loaded by a visitor
• Impression
– Each time the banner ad loads
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Advertising on the Web
Terms and Concepts
• Pop-up ad
– Appears in its own window when the user opens or closes a
Web page
• Ad-blocking software
– Prevents banner ads and pop-up ads from loading
• Interstitial ad
– When a user clicks a link to load a page, the interstitial ad opens
in its own browser window
• Clickstream
– Information (e.g., page visits, duration, etc.) that a Web site can
gather about its visitors
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Site Sponsorships
• Advertisers are given an opportunity to
sponsor all or part of a website.
– Helpdesk.com
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E-Mail Marketing
• Dangerous Territory or Priceless Opportunity?
– Email is cheap! But, customers hate spam
• How should a firm use email?
– Opt-in e-mail is should be the rule.
• Conversion rates are higher and complaints are fewer
– Combine email content with appropriate, targeted
ads
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Technology-Enabled Customer
Relationship Management
• Customer relationship management (CRM):
processes and technologies used to manage
relationships with clients
– Relationship management: collecting, managing, and
analyzing information about a customer’s behavior,
buying patterns, etc., and using it to customize the
interactions with the customers
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Creating and Maintaining
Brands on the Web
• Elements of branding include:
– Differentiation: How is our product unique?
– Relevance: How does our product fit into our
customers’ lives?
– Perceived value: What is value of our product to a
potential customer?
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Emotional Branding vs.
Rational Branding
• Emotional branding is the norm; let’s make customers feel good
about our product, themselves as users of our product, or others
affective paths to persuasion
– Coca Cola video game ad (1st QTR)
• Rational branding relies on the cognitive appeal of the specific
service offered, not purely on a broad emotional appeal
– Toyota Tundra truck ad (1st QTR)
• Brand Leveraging is done to extend the image or value of a
successful brand to other product offerings
– Sprint Broadband ad (2nd QTR)
– Nationwide Insurance ad (3rd QTR)
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Affiliate Marketing Strategies
• Affiliate marketing
– One firm’s Web site includes descriptions, reviews,
ratings, or other information about a product that is
linked to another firm’s site
– Affiliates receive compensation from the selling site’s
brand in exchange for the referral
• Cause marketing is a type of affiliate marketing program that
benefits a charitable organization
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Viral Marketing Strategies
• Relies on existing customers to tell other
people about products or services they
have enjoyed using
• Example:
– Blue Mountain Arts
– Woot
– gmail
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Search Engine Positioning and
Domain Names
• Search engines have 3 major parts:
– Spiders, crawlers, or robots
• Programs that automatically searches the Web
– Index or database
• Storage element of a search engine
– Search utility
• Uses terms provided to find Web pages that match
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Search Engine Positioning and
Domain Names
• Search engine positioning or search
engine optimization is the process of
tuning a site so that it is listed in the top 10
of results
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Paid Search Engine Inclusion
and Placement
• Paid placements involve purchasing a top listing
on the results pages for a particular set of
search terms
– e.g., Google Adwords
• Search engine placement brokers are
companies that aggregate inclusion and
placement rights on multiple search engines
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Web Site Naming Issues
• Domain names
– An important part of selling online can be the
domain name for the site.
• If you want a car, might you give cars.com a try?
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URL Brokers and Registrars
• URL brokers
– Sell, lease, or auction domain names
• ICANN
– Maintains a list of accredited registrars
• Domain name parking
– Permits the purchaser of a domain name to maintain
a simple Web site so that the domain name remains
in use
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Summary
• Four Ps of marketing
– Product, price, promotion, and place
• Market segmentation
– Using geographic, demographic, and
psychographic information can work well on
the Web
• Types of online ads
– Pop-ups, pop-behinds, and interstitials
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Summary
• Technology-enabled customer relationship
management can provide better returns for
Web businesses
• Firms on the Web can use rational branding
instead of emotional branding techniques
• Critical for many businesses is successful
search engine positioning and domain name
selection
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