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Copyright © 2002 Pearson Education, Inc.
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CHAPTER 7
E-commerce Marketing
Concepts
Created by, David Zolzer, Northwestern State University—Louisiana
Copyright © 2002 Pearson Education, Inc.
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Internet Marketing Technologies
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Web transactions logs
Cookies
Web bugs
Databases, data warehouses, data mining,
and profiling
Advertising networks
Internet Marketing Technologies
Customer Relationship Management
(CRM) systems
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Impact of Unique Features of Ecommerce Technology on Marketing
Page 361, Table 7.6
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Web Transaction Logs
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Records user activity at a Web site
 Registration forms gather personal data
on name, address, phone, zip code, e-mail
address, and other optional selfconfessed information on interests and
tastes
 Shopping cart database captures all the
item selection, purchase, and payment
data
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A Web Transaction Log From
Azimuth-Interactive.com
Page 362,
Figure 7.12
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Marketing Uses of Data From Web
Transaction Logs
Page 363, Table 7.7
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Questions That Can Be Answered by Web
Transactions Logs
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What are the major patterns of interest
and purchase for groups and individuals?
 After the home page, where do most users
go first, and then second and third?
 What are the interests of specific
individuals (those we can identify)?
 How can we make it easier for people to
use our site so the can find what they
want?
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Questions That Can Be Answered by Web
Transactions Logs
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How can we change the design of the site
to encourage visitors to purchase our high
margin products?
 Where are visitors coming from (and how
can we optimize our presence on these
referral sites)?
 How can we personalize our messages,
offerings, and products to individual
users?
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Cookies
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Cookie is a small text file that Web sites
place on visitor’s client computers every
time they visit, and during the visit, as
specific pages are visited.
 Cookies provide Web marketers with a
very quick means of identifying the
customer and understanding his or her
prior behavior
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Cookies Placed by Amazon.com
Page 365,
Figure 7.13
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Web Bugs
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Web bugs are tiny (1 pixel) graphic files
hidden in e-mail messages and on Web
sites
 Web bugs are used to automatically
transmit information about the user and
the page being viewed to a monitoring
server
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Databases, Data Warehouses, and Data
Mining
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Database is a software application that
store records and attributes
 Database management system (DBMS) is
a software application used by
organizations to create, maintain, and
access databases
 SQL is an industry standard database
query and manipulation language used in
relational databases
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Databases, Data Warehouses, and Data
Mining
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Relational databases represent data as
two-dimensional tables with records
organized in rows and attributes in
columns; data within different tables can
be flexibly related so long as the tables
share a common data element
 Data warehouse is a database that
collects a firm’s transactional and
customer data in a single location for
offline analysis
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A Relational Database View of Ecommerce Customers
Page 369, Figure 7.14
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Databases, Data Warehouses, and Data
Mining
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Data mining is a ser of analytical
techniques that look for patterns in the
data of a database or data warehouse, or
seek to model the behavior of customers
 Customer profile is simply a description of
the typical behavior of a customer or a
group of customers at a Web site
 Query-driven data mining is data mining
based on specific queries
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Databases, Data Warehouses, and Data
Mining
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Model-drive data mining involves the use of a
model that analyzes the key variables of interest
to decision makers
Role-based data mining examines demographic
and transactional data of groups and individuals
at a Web site and attempts to derive general rules
of behavior for visitors
Collaborative filtering is where site visitors
classify themselves into affinity groups
characterized by common interests; products are
then recommended based on what other people
in the group have recently purchased
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Advertising Networks
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Present users with banner advertisements
based on a database of user behavioral
data
 Ad server selects an appropriate banner
ad based on the user’s previous
purchases, interests, demographics, or
other data in the profile
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How an Advertising Network
such as DoubleClick Works
Page 374, Figure 7.15
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Customer Relationship
Management Systems
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A repository of customer information that
records all of the contacts that a customer
has with a firm and generates a customer
profile available to everyone in the firm
with a need to “know the customer”
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Customer Relationship
Management Systems
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Customer profiles can contain
 map of customer’s relationship with the
institution
 Product and usage summary data
 Demographic and psychographic data
 Profitability measures
 Contact history summarizing the customers
contacts with the institution across most
delivery channels
 Marketing and sales information containing
programs received by the customer and the
customer’s responses
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A Customer Relationship
Management System
Page 376, Figure 7.16
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E-commerce Marketing &
Branding Strategies
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Internet marketing strategies for market
entry
 for new firms include:
 pure clicks/first mover
 mixed “clicks and bricks”/alliances
 for existing firms
 pure clicks/fast follower
 mixed “clicks and bricks”/brand
extender
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Generic Market Entry Strategies
Page 378, Figure 7.17
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Establishing the Customer
Relationship
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Permission marketing is a marketing
strategy in which companies obtain
permission from consumers before
sending them information or promotional
messages
 Affiliate marketing is where one Web site
agrees to pay another Web site a
commission for new business
opportunities it refers to the site
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Establishing the Customer
Relationship
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Viral marketing is the process of getting
customers to pass along a company’s
marketing message to friends, family, and
colleagues
 Leveraging brands refers to the process of
using the power of an existing brand to
acquire new customers for a new product
or service
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Customer Retention
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One-to-one marketing means segmenting
the market based on a precise and timely
understanding of an individual’s needs,
targeting specific marketing messages to
these individuals, and then positioning the
product vis-à-vis competitors to be truly
unique
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The Mass Market Personalization
Continuum
Page 384, Figure 7.18
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Customer Retention
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Customization means changing the
product, not just the marketing message,
according to user preferences
 Customer co-production in the Web
environment, takes customization one
step further by allowing the customer
interactively create the product
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Customer Retention
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Transactive content results from the
combination of traditional content, such
as articles and product descriptions, with
dynamic information culled from product
databases, tailored to each user’s profile
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Customer Service tools:
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Frequently asked questions (FAQ) is a
text-based listing of common questions
and answers, provide an inexpensive way
to anticipate and address customer
concerns
 Real-time customer service chat systems,
in which a company’s customer service
representatives interactively exchange
text-based messages with one or more
customers on a real-time basis
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Customer Service Tools
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Automated response systems send e-mail
order confirmations and
acknowledgements of e-mail inquiries
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Net Pricing Strategies
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Pricing, putting a value on goods and
services, is an integral part of marketing
strategy
 Demand curve is the quantity of goods
that can be sold at various prices
 Fixed costs are the costs of building the
production facility
 Variable costs are the costs involved in
running the production facility
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Net Pricing Strategies
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Price discrimination is selling products to
different people and groups based on their
willingness to pay
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A Demand Curve
Page 390, Figure 7.19
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Net Pricing Strategies
It’s Free! -- can be used to build market
awareness
 Versioning is creating multiple versions of
the good and selling essentially the same
product to different market segments at
different prices
 Bundling offers consumers two or more
goods for one price
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The Demand for Bundles of 1 - 20
Goods
Page 392, Figure 7.20
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Net Pricing Strategies
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Dynamic pricing
 Auctions establish the instant market
price for goods
 Yield management -- managers set
prices in different markets, appealing to
different segments, in order to sell
excess capacity
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Channel Strategies
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Channel refers to different method by
which goods can be distributed and sold
 Channel conflict occurs when a new
venue for selling products or services
threatens to destroy existing venues for
selling goods
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Online Market Research
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Market research involves gathering
information that will help a firm identify
potential products and customers
 Primary research involves gathering firsthand information using techniques such
as surveys, personal interviews, and focus
groups
 Secondary research relies on existing,
published information as the basis for
analyzing the market
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Types of Survey Questions
Page 396, Table 7.8
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Some Popular Secondary
Research Tools
Page 399, Table 7.9
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