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Part 1: Designing CustomerOriented Marketing Strategies
1. Marketing: Creating Satisfaction
through Customer Relationships
2. Strategic Planning and the
Marketing Process
3. The Marketing Environment,
Ethics, and Social Responsibility
4. E-Commerce: Marketing in the
Digital Age
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter 4
E-Commerce:
Marketing in the
Digital Age
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter Objectives
1. Define e-commerce and give examples of each function
of the Internet.
2. Describe how marketers use the Internet to achieve
their firms’ objectives.
3. Explain how online marketing benefits organizations,
marketers, and consumers.
4. Identify the goods and services marketed most often on
the Internet and the demographic characteristics of the
typical online shopper.
5. Identify the primary online marketing channels.
6. Explain how marketers use interactive tools as part of
their online marketing strategies.
7. Discuss how an effective Web site can enhance
customer relationships.
8. Describe how to measure the effectiveness of online
marketing efforts.
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What is E-Commerce?
 Electronic commerce (e-commerce): Targeting
customers by collecting and analyzing business
information, conducting customer transactions,
and maintaining online relationships with
customers by means of computer networks.
 Electronic marketing (e-marketing): Strategic
process of creating, distributing, promoting, and
pricing goods and services to a target market
over the Internet or through digital tools.
 Digital tools: Fax machines, PDAs, smart
phones, and DVDs.
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Capability
Description
Example
Global reach The ability to reach anyone
connected to a PC
anywhere in the world
eBay—the online auction
site—links buyers and sellers
throughout the world
One-to-one
marketing
Creating products to meet
customer specifications,
also called personalization
Lands’ End offers online
shoppers custom-made
shirts, slacks, and jeans.
Interactive
marketing
Buyer–seller
communications through
such channels as the
Internet and interactive
kiosks
Best Buy stores have a
“Computer Creation Station”
that lets customers design
and order custom-made
personal computers.
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Capability
Description
Example
Right-time
marketing
The ability to provide a
product at the exact time
needed
UPS customers can place
service orders online and
track shipments 24/7.
Integrated
marketing
Coordination of all
promotional activities to
produce a unified,
customer-focused
promotional message
Southwest Airlines use the
slogans “A Symbol of
Freedom” and You’re Now
Free to Move around the
Country” in both online and
offline promotions.
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Interactivity and E-Commerce
 Interactive Marketing
Buyer-seller communications in which the
customer controls the amount and type of
information received from a marketer
through such channels as the Internet, and
virtual reality kiosks.
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 The Internet
Over 132 million active users in the USA
Intranets
Internal corporate network that allows
employees within an organization to
communicate with each other and gain
access to organizational information
Extranets
Secure network accessible through a
Website by external customers or
organization for electronic commerce. It
provides more customer-specific
information than a public site.
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 Four Web Functions
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 Four Web Functions
Communication
E-mail; Instant messaging; Chat rooms
and bulletin boards; Online communities
Information
Search engines; Online publications;
Newsgroups; Internet forums; Electronic
bulletin boards; Web communities
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 Four Web Functions
Entertainment
Games; Radio and TV programming,
including music; Streaming video of live
news reports, sports, and musical
performances; Electronic books
E-Commerce
Online auctions
B2B: electronic exchanges; Extranets
and private exchanges
B2C: Electronic storefronts and
cybermalls; Web kiosks, Online ticketing;
Matchmaking
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Accessing the Internet
 Internet Service Provider (ISP):
Organization that provides access to the
Internet via a telephone, satellite TV service,
or cable TV network.
Wi-Fi
Search engines
Portals
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E-Commerce and the Economy
 Business-to-Business Online Marketing
Involves professional buyers and sellers
Requires less glitz and glamour
Much more money involved than businessto-consumer online marketing
Electronic exchanges
Search marketing
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 Benefits of Business-to-Business
Online Marketing
Finding new markets and customers
Cost savings in every area of the
marketing mix
Time reduced in reaching markets
Easy commerce
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 Online Consumer Marketing
Lower Prices
Bots (short for robots): programs that
check hundreds of sites, gather and
assemble information, and bring it back
to the sender
Convenience
Worldwide access, Day or night,
Customized products and information
Personalization
Improves the quality of the shopping
experience
Improves customer satisfaction
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 Benefits of Online Consumer Marketing
Relationship Building
Crucial to success
Online’s personalization helps
Easier for small businesses with small
budgets
Customer service is the key
Increased Efficiency
Greater profit margins
Educating customers online frees
salespeople from answering routine
questions
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Cost Reductions
Reduced start-up costs
Reduced operating costs
Frees funds for new marketing efforts
A More Level Playing Field
Even small firms with small budgets can
compete in the global marketplace
Helps eliminate discrimination and allow
minority businesses to succeed on their
own merits
AutoNetwork.com
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 Online Marketing is International Marketing
 Examples of Global Web Sites
 Netsprint.pl
 Polish version of infoseek
 Us.starmedia.com
 Spanish- and Portuguese-language Star Media
Network
 Homeuol.com.br
 Universo Online, the largest Internet portal serving
Brazil
 Sify.com
 Offering users of Indian ancestry “all the India you
want to know.”
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 Security and Privacy Issues
Critical factors in building a relationship online
Electronic signature
Credit card security
Authenticity of item offered
Payment guarantees
Fraud protection
Truste: Ensuring Internet Privacy
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Who Are the Online Buyer and Sellers?
 Online buyers
Annual household income of $30K-$75K
Demographic continue to change
The next generation of online shoppers will be
more representative of offline consumers
 Online sellers
At first, offered familiar products like books
and computer hardware
Now offering a wider variety of goods including
toys, groceries, consumer electronics and
prescription drugs
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 Interactive Online Marketing
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 Company Web Sites
Corporate Web sites and Marketing Web sites
 Electronic Storefronts and Cybermalls
 Advertising on Other Web sites
Banner ads; Pop-up ads; Search ads
 Online Communities
Electronic bulletin boards
 Other Interactive Marketing Links
Web kiosks
Smart cards
Virtual coupon and online sample
Blogs
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Creating an Effective Web Presence
Measuring
Effectiveness
Managing a
Web Site
Building an
Effective Web Site
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 Building an Effective Web Site
Establish a Mission for the company’s site
Identify the purpose of the site
Satisfy customer needs and wants through a
clear site design
 Managing a Web Site
Update the site frequently
Flag new merchandise and services
Ensure that site appears to be current
Update software as needed
Track costs and revenues
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 Measuring Effectiveness of Online Marketing
An elusive task
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