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Chapter 16
Electronic Marketing: Internet
Marketing, Database Marketing,
and Direct Marketing
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
1
Electronic Marketing
• Electronic marketing is normally associated with
Internet marketing.
• In practice, Internet marketing is integrated with
database marketing and direct marketing.
• Internet marketing captures data which feeds into
the firm’s database, the database is used to
generate profiles and lists which enable the firm to
have effective direct marketing campaigns.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
2
Benefits of Internet Marketing
Convenience
Information
Price
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
3
Activities of the uses of a web-site
• Selling: hotel, cruise, and airline companies
are using the Internet to distribute their
products directly to the customer.
• Communication: the Internet is an excellent
medium to communicate what products are
offered and the benefits of those products.
• Providing Content: the companies should
design the content which will drive customers
back to the web site.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
4
Web Site Development
• Build brand image, convey who the company is
and what the company has to offer
• Easy to navigate
• Provide “contact us” access and respond quickly
• Provide online purchase availability
• Keep on the top of the search engines
• Communicate with other devices.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
5
Business-to-Business
E-commerce
•
•
Business to business commerce
accounts for the majority of
Internet commerce. This is in
part due to the size of businessto-business transactions and
the efficiencies the Internet
offers businesses.
These Internet marketplaces
match multiple purchasers with
multiple sellers. The buyer
receives the benefit of receiving
offers from multiple companies
and the seller has the
advantage of being linked with
multiple buyers.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
6
Database Marketing
Database Marketing is the Process of Building, Maintaining,
and Using Customer Databases and Other Databases for the
Purposes of Contacting and Transacting With Customers. How
Companies Use Their Databases:
Identifying Prospects
Deciding Which Customers Should
Receive a Particular Offer
Deepening Customer Loyalty
Reactivating Customer Purchases
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
7
Uses for Databases
1. Identify Prospects
2. Match Customers
& Offers
3. Deepen Customer Loyalty
4. Reactivate Customers
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
8
Developing a Marketing Database
System
• Databases should be relational, talk to each other, and
integrate with each other. The system should be user
friendly and available to various departments.
• The data warehouse stores the information the
company receives in a central repository of customer
data.
• Data mining is the exploration and analysis of a
database by automatic or semiautomatic means to
discover patterns or rules.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
9
Developing a Marketing Database
System (cont.)
• Managers need to make sure the data in the
databases is clean and accurate which has no
entry errors or duplication.
• The information in the database should be more
than names or addresses. Companies should
inquire some information on person’s lifestyle or
purchase information.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
10
Customer Databases
• Customer Databases are an
Organized Collection of
Comprehensive Data About
Individual Customers or
Prospects Including:
– Geographic,
– Demographic,
– Psychographic, and
– Behavioral Data.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
11
Using a database to create a
competitive advantage
Companies can utilize the database to create
a competitive advantage based on the
knowledge of their customers.
• The database will provide information regarding
customers’ likes and dislikes and which
messages will be relevant to the customers.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
12
Using a database to create a
competitive advantage (cont.)
• The customer list generated from the
database is critical component of a success.
• Companies can utilize the database to
provide better service to customers
• Companies can utilize the database for
service recovery
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
13
Direct Marketing
Direct marketing is an interactive system of
marketing which uses one or more advertising
media to effect a measurable response and/or
transaction at any location.
Interactive
Respond
Measurable
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
14
Mass Marketing and Direct
Marketing
Most Mass Marketing
Involves One-Way
Communications
Aimed At Consumers.
Direct Marketing
Involves Two-Way
Interactions With
Customers.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
15
The New Direct Marketing Model
• Some firms use direct marketing as a supplemental
medium.
• For many companies, direct marketing - especially
Internet and e-commerce companies - constitutes a new
and complete model for doing business.
• Some firms use the new direct model as their only
approach.
• Experts envision a day when all buying and selling will
involve direct connections between companies and their
customers.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
16
Reasons for Growth of Direct
Marketing
Precision targeting
Personalization
Privacy
Measurability
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
17
Forms of Direct Marketing
Face-to-Face
Selling
Online
Marketing
Telemarketing
Kiosk
Marketing
Direct-Response
TV Marketing
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Direct
Mail
Catalog
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
18
E-Mail
• One of the problems with e-mail is the low cost of
sending e-mails, which results in e-mail users
receiving a lot of unwanted e-mails. The result is that
more and more e-mail goes unopened and gaining
permission to send someone an e-mail is becoming
more important.
• E-mail needs to provide detailed, useful, even driven
information, and interaction with customers.
• E-mail needs to integrate with web marketing.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
19
Integrated Direct Marketing
• Direct marketing campaigns that use multiple
vehicles and multiple stages to improve
response rates and profits.
• Marketers seek to improve response rates and
profits by adding media and stages that
contribute more to additional sales than to
additional costs.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
20
An Integrated Direct-Marketing
Campaign
Paid ad with a
response channel
Direct Mail
Outbound
Telemarketing
Face-to-face
sales call
Continuing
Communication
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
21
Objectives of Direct Marketing
•
•
•
•
Sale of a product
Lead generation
Lead qualification
Maintenance of customer relationships
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
22
Through cluster analysis, multiple
regression analysis and other
techniques one can develop helpful
models to form a list and purge lists.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
23
Relationship Between Direct
Marketing and Database Marketing
Direct marketing
can be more
effective when
you have your
own database.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Importance of an
Integrated
Database
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
24
Database and Relationship Marketing
• Customers like to deal with someone they know and
trust
• Customers like to be recognized and appreciated
• It takes 4-7 times as much effort to create a customer as
it does maintain a customer
• Research has shown a positive correlation between
repeat business and profitability.
• Most businesses are in the mature stage of the product
lifestyle.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
25