Download Forces Shaping the Digital Age

14
Marketing in the Digital Age
Forces Shaping the Digital Age
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Forces Shaping the Digital Age
• Digitalization &
Connectivity
– Intranets – connect
people within a company.
– Extranets – connect a
company with its
suppliers, distributors,
and outside partners.
– Internet – connects users
around the world.
• Internet Explosion
– Explosive worldwide
growth forms the heart
of the New Economy.
– Increasing numbers of
users each month.
– Companies must adopt
Internet technology or
risk being left behind.
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Forces Shaping the Digital Age
• New Types of Intermediaries:
– Direct selling via the Internet bypassed
existing intermediaries
– “Brick-and-mortar” firms became “click-andmortar” companies.
– As a result, some “click-only” companies have
failed.
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Forces Shaping the Digital Age
• Customization and Customerization:
– With ___________, the company custom
designs the market offering for the customer.
Levi’s creating jeans for each individual
– With customerization, the customer designs
the market offering and the company makes
it. You creating a pair of Levis’ jeans for
yourself
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Marketing Strategy in the Digital Age
Requires a new model for marketing strategy
and practice
Some suggest that all buying and selling will
eventually be done electronically
Companies need to retain old skills and
practices but add new competencies
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e-Business, e-Commerce, and
e-Marketing in the Internet
Age
e-Business
Involves the Use of Intranets, Extranets
& the Internet to Conduct a Company’s
Business
Involves Buying & Selling Processes
Supported by Electronic Means
E-Marketing
“e-selling” side of
e-commerce
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E-Business in the Digital Age
• Involves the use of electronic platforms to
conduct company business.
– Web sites for selling and customer relations
– Extranets connecting with major suppliers and
distributors
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E-Commerce in the Digital Age
• More specific than e-business.
• Involves buying and selling processes
supported by electronic means, primarily
the Internet.
• Includes:
– e-marketing
– e-purchasing (e-procurement)
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E-Marketing in the Digital Age
• The marketing side of e-commerce.
• Includes efforts to communicate about,
promote, and sell products and services
over the Internet.
• E-purchasing is the buying side of ecommerce.
– It consists of companies purchasing goods,
services, and information from online
suppliers.
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Benefits to Buyers
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate
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Benefits to Sellers
Powerful tool for building customer relationships
Can increase speed and efficiency
Offers greater flexibility in offers and programs
Is a truly global medium
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E-Marketing Domains
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B2C (Business to Consumer)
• The online selling of goods and services to
final consumers.
• Expected to generate $428 billion in 2004.
• There is increasing diversity in buyers.
– This provides increasing opportunities for
targeting markets.
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Who is the Online Customer?
• They used to be younger, more affluent,
better educated, and more male than the
general population; BUT has shifted
towards becoming more mainstream.
• Other characteristic of net users:
– Differ psychographically, in approaches to
buying and responses to marketing.
– “Word of Web”
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B2B (Business to Business)
• By 2005, more than 500,000 enterprises
will participate as buyers, sellers, or both.
• Most major B2B marketers offer product
information, purchasing, and support
services online.
• Open trading exchanges—huge specialty
e-marketspaces to conduct transactions.
• More private trading networks being
developed.
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C2C (Consumer to Consumer)
• Occurs on the Web and includes a wide
range of products and services.
• Forums: discussion groups located on
commercial online services.
• Newsgroups: the Internet version of
forums.
• Word of Web: advantages & disadvantages
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C2B (Consumer to Business)
• Consumers can search out sellers, view
offers, initiate purchases, and give
feedback.
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Types of e-Marketers
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Click-Only Companies
E-tailers
Enabler
Sites
Content
Sites
Types of
Sites
Transaction
Sites
Search
Engines and
Portals
Internet
Service
Providers
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E-Marketing in Context: Where does e-marketing fit into this picture?
Visibility
U.S.
Recesssion
Dot-com
peak
Technology Peak of
Trigger
Inflated
Expectation
1990-1996 1999
Equity times
2000
Trough of
Disillusion
2001 2002
Debt Times
E-Business
becomes “just
business”
Slope of
Enlightnment
2003
Plateau of
Profitability
2004 2005 2006
Positive Cash Flow
There is Hope After the Trough of Disillusion
Source: Adapted from Raskino and Andren of Gartner Research (2001)
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Reasons for Dot.com Failures
Failure to research or plan
Spin & hype instead of marketing strategies
Spending offline to establish brand identities
Attention on gathering new customers
instead of building brand loyalty
Lack of good distribution delivery processes
Prices and margins were often very low
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Click-and-Mortar Companies
• Many resisted adding e-commerce because of
•
potential for channel conflict and
cannibalization.
Many are doing better than brick or click-only
operations
–
–
–
–
–
–
Trusted brand names & financial resources,
Large customer bases,
Knowledge & experience,
Good relationships with key suppliers,
Ability to offer customers more options,
Buy online & return unwanted merchandise to store.
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Setting Up for E-Marketing
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Types of Web Sites
Corporate Web Site:
Designed to build customer goodwill and
supplement other sales channels.
Offers information to customers.
Builds closer customer relationships.
Generates excitement about the company.
Marketing Web Site:
Engages consumers in an interaction that
moves them closer to a direct purchase.
Provides information about the products.
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Designing Attractive Web Sites
Context
Commerce
• The 7 Cs of Effective
Content
Web Site Design
Create value and excitement
Community
Connection
Communication
Customization
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Online Ads and Promotion
• Forms of online advertising & promotion:
–
–
–
–
–
–
Banner ads & tickers (move across the screen)
Skyscrapers (tall, skinny ads at the side of a page)
Rectangles (boxes that are larger than a banner)
Interstitials (pop up between changes on Web site)
Content sponsorships (sponsoring special content)
Microsites (limited areas paid for by an external
company)
– Viral marketing (Internet version of word-of-mouth)
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The Future of Online Advertising
• Web communities:
– Allows members to congregate online and
exchange views on issues of common interest
• E-mail:
– Use of “enriched” e-mail messages
– Backlash against spam can be problem
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Promise and Challenge of eCommerce
• Limited exposure and buying
• Skewed demographics and psychographics
• Chaos and clutter
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Legal and Ethical Issues
• Online privacy
• Online security
• Internet fraud
• Segmentation and discrimination
• Access by vulnerable or unauthorized
groups
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