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chapter
1
Introduction to Internet
Marketing
HUA Ying
University of International Business and Economics
Introduction to Internet Marketing —
Today’s Objectives

Objectives will be to:

Define the scope of Internet marketing

Explore the stages of Internet marketing

Discuss the relationship stages and the Marketspace Matrix

Examine guidelines for success

Outline the progression of the book
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Definition and Scope of Internet
Marketing
Definition and Scope of Internet
Marketing

What is Marketing?
Marketing is the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods and services to
create exchanges that satisfy individual and organizational goals.
---AMA

What is Internet Marketing?
Internet Marketing is the process of building and maintaining customer
relationships through online activities to facilitate the exchange of
ideas, products, and services that satisfy the goals of both parties.
Source: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.
Exhibit 1.1: Assessing the Impact of
Internet Marketing
Online
Cell
Cell 44
Cell
Cell 22
Im
pa
ct
Offline
In
te
rn
et
M
ar
ke
tin
g
Bricks-and- Mortar
Online
Location of Revenue Stream
Marketing Resource Allocation
Cell
Cell 33
Cell
Cell 11
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Exhibit 1.2: The Seven-Stage Cycle of
Internet Marketing
Step 2
Formulating the
Marketing Strategy
Step 3
Designing the
Customer
Experience
Step 1
Framing the
Market
Opportunity
Step 4
Crafting the
Customer
Interface
Step 7
Evaluating
the
Marketing
Program
Step 6
Leveraging Customer
Information Through
Technology
Step 5
Designing the
Marketing Program
Exhibit 1.3: Framework for Market
Opportunity
Seed
SeedOpportunity
Opportunityin
in Existing
Existing New
New Value
Value System
System
Identify
IdentifyUnmet
Unmet and
and Underserved
Underserved Need(s)
Need(s)
Identify
IdentifyTarget
Target Segment(s)
Segment(s)
Declare
Declare Company’s
Company’s Resource-Based
Resource-Based
Opportunity
for
Opportunity for Advantage
Advantage
Assess
AssessCompetitive,
Competitive,Technological,
Technological, and
and Financial
Financial
Opportunity
OpportunityAttractiveness
Attractiveness
Make
Make “Go
“Go // No-Go”
No-Go” Assessment
Assessment
Framework for Market Opportunity
Microsoft CarPoint Example
Leverage
Leverage the
the Internet
Internet to
to Improve
Improve the
the
Consumer
Consumer Car-Buying
Car-Buying Process
Process
Car
Car Buyers
Buyers Are
Are Dissatisfied
Dissatisfied With
With Current
Current
Retail
Retail Car-Buying
Car-Buying Process
Process
Shoppers
Shoppers Who
Who Feel
Feel Intimidated
Intimidated by
by Sales
Sales
People
and
Look
for
More
Efficient
People and Look for More Efficient Way
Way
Microsoft’s
Microsoft’s Software
Software and
and Free
Free Placement
Placement on
on
All
Its
Websites
All Its Websites
How
How Big
Big Is
Is the
the Online
Online Car-Buying
Car-Buying Market?
Market?
Who
Are
CarPoint’s
Main
Competitors?
Who Are CarPoint’s Main Competitors?
Make
Make “Go
“Go // No-Go”
No-Go” Assessment
Assessment
• MSN CarPoint identified an opportunity to leverage the
Internet to deliver customer value in the car industry
• The retail car-buying process was frustrating and
inefficient:
• Little information available to the consumer
• Bargaining with salesperson viewed as an hassle
• Long process overall
• MSN CarPoint selected two primary target
segments for its service:
• “The intimidated by the process”
• “The information seekers”
• MSN CarPoint could leverage Microsoft’s
expertise in software development, its brand name
and its multitude of online properties
• Competition was getting fierce with more and more
online car services entering the market…
• But the financial opportunity was large: 66% of
new car buyers were estimated to use online
services in 2000
• In 1996, the first version of CarPoint was shipped
• By 1998, CarPoint was driving $5 million in car
sales a day
Exhibit 1.4: Corporate, Business-Unit
and Marketing Strategy
Linkages
Example
Corporate
Corporate Strategy
Strategy
Amazon
Amazon
Business
Business Unit
Unit Strategy
Strategy
Tools
Tools and
and Hardware
Hardware
Integrated
Integrated Marketing
Marketing
Strategy
Strategy for
for Unit
Unit
Integrated
Integrated Marketing
Marketing
Strategy
Strategy for
for Tools
Tools and
and
Hardware
Hardware Unit
Unit
Internet
Internet
Marketing
Marketing
Traditional
Traditional
Marketing
Marketing
Online
Online
Marketing
Marketing Mix
Mix
Offline
Offline
Marketing
Marketing
Mix
Mix
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Exhibit 1.5: The Four Key Stages of
Customer Relationship
Four Key Stages of Customer Relationship
Awareness
Awareness
Exploration
Exploration //
Expansion
Expansion
Commitment
Commitment
Dissolution
Dissolution
Level of
Intensity
Exhibit 1.6: Four Key Stages of Customer
Relationship by Level of Intensity
Intensity
Awareness
Exploration
Commitment
Dissolution
Stages of Customer Relationships
Exhibit 1.7: Internet Marketing Mix
Branding
Product
Pricing
Communication
Community
Distribution
Exhibit 1.8: Impact of the 2Is on the
Internet Marketing Mix
Interactivity
Branding
Product
Pricing
Communication
Individual
Community
Distribution
Exhibit 1.9: The Marketspace Matrix
Relationship Stages
Awareness
Exploration
Commitment
Dissolution
Categories of Levers
Product
Price
The
The2Is
2Isshould
shouldinfluence
influence
the
design
of
each
the design of eachcell
cell
in
inthe
thematrix
matrix
Communication
Community
Distribution
Branding
Branding
Brandingcan
canalso
also
accentuate
(or
lessen)
accentuate (or lessen)
the
theimpact
impactof
ofthe
thelevers
levers
in
each
cell
in each cell
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Critical Success Factors for Internet
Marketing Executives

The willingness to understand customer needs
and provide added value to each customer
interaction

The ability to have a holistic view of the
customer and the enterprise in order to create
a uniquely advantaged strategic plan

Being able to understand the dynamic tension
between one-to-one marketing and mass
marketing and being able to strike a strategic
balance between them

The willingness to change the status quo, take
chances and use “bleeding edge” tools to lead
teams to success

The ability to manage marketing campaigns in a
more uncertain, dynamic environment, with a
new set of tools that often have few records of
successes, failures or best-practices
Customer
Customer Advocacy
Advocacy and
and Insight
Insight
Integration
Integration
Balanced
Balanced Thinking
Thinking
Passion
Passion and
and
Entrepreneurial
Entrepreneurial Spirit
Spirit
Willingness
Willingness to
to Accept
Accept
Risk
Risk and
and Ambiguity
Ambiguity
Exhibit 1.10: The New Rules of
Marketing for the Global Digital World

The New Rules
1. Target segments of one, and create virtual communities
2. Design for customer-led positioning
3. Expand the role of branding in the global portfolio
4. Leverage consumers as coproducers through customization
5. Use creative pricing in the Priceline.com world
6. Create anytime/anyplace distribution and integrated supply chains
7. Redesign advertising as interactive and integrated marketing, communication,
education and entertainment
8. Reinvent marketing research and modeling as knowledge creation and
dissemination
9. Use adaptive experimentation
10. Redesign the strategy process and supporting organizational architecture
Source: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.
Point-Counterpoint: New Rules or Old
Rules of Marketing
Point-Counterpoint
New Rules
basic conceptual and process
changes occur in online marketing
Old Rules
Several
Differences
One
Segmentation
There
From
such change is the increased ability
to deliver on the promise of one-to-one
marketing
is also a fundamental shift to a
more consumer-driven and controlled
world — for example, a shift towards
pull-marketing and the use of more
“pull” levers, such as online community
in the online marketing world
are overstated
is still at the core of
marketing — “clusters” of consumers will
emerge that share behavior
the supply side, it is most efficient
to aggregate these consumers to reduce
costs
Successful
marketing programs include
mixing different marketing levers, both
new and old: the “master-mixer” concept
still remains
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Exhibit 1.11: Overview of the Chapters
1.
1. Framing
Framing the
the
Market
Market
Opportunity
Opportunity
4.
4. Crafting
Crafting the
the
Customer
Customer
Interface
Interface
2.
2. Formulating
Formulating
the
the Market
Market
Strategy
Strategy
5.
5. Designing
Designing the
the
Marketing
Marketing
Program
Program









Customer Relationships
Product
Pricing
Communication
Community
Distribution
Branding
Designing the
Marketspace Matrix
Illustration: Marketing
Campaign for The Lord of
the Rings: The Fellowship
of the Ring
3.
3. Designing
Designing the
the
Customer
Customer
Experience
Experience
6.
6. Leveraging
Leveraging
Customer
Customer
Information
Information
through
through
Technology
Technology
7.
7. Evaluating
Evaluating
the
the Marketing
Marketing
Program
Program
Chapter 1: Introduction to Internet
Marketing

Definition and Scope of Internet Marketing

Seven-Stage Cycle of Internet Marketing

Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book

Conclusion
Introduction to Internet Marketing —
Conclusion

Traditional marketing methods are still highly relevant in the
networked economy, though firms must now consider a host of
new and innovative marketing methods available online (e.g.,
dynamic pricing, online community)

In contrast to the one-way mass promotion that characterizes
modern marketing, Internet marketing enables firms to engage
the individual in personalized dialogues

Individualization and Interactivity are two forces that make
online marketing different

Marketing, and the relationships it creates, should be
considered in the context of particular processes and stages