Download Marketing 12e - Pride and Ferrell

Chapter Outline
• Marketing on the Internet
–Basic Characteristics of Electronic Marketing
–E-Marketing Strategies
• Customer Relationship Management
–Technology Drives CRM
–Customer Satisfaction Is the End Result of CRM
• Legal and Ethical Issues in E-Marketing
Copyright © Houghton Mifflin Company. All rights reserved.
4–1
Marketing on the Internet
• Electronic Commerce (E-Commerce)
–Sharing business information, maintaining business
relationships, and conducting business transactions by
means of telecommunications networks
• Electronic Marketing (E-Marketing)
–The strategic process of creating, distributing,
promoting, and pricing products for targeted customers
in the virtual environment of the Internet
Copyright © Houghton Mifflin Company. All rights reserved.
4–2
Benefits of E-Marketing
• Open and Instantaneous Flows of Information
–Marketers and customers share information in real-time
on prices, specifications, and product availability.
• Enhanced Customer Service Efficiencies
–Rapid response and always-on availability (e.g., 24/7
customer support)
• Worldwide Scope of the Electronic Market
–Opens markets to firms of all sizes
Copyright © Houghton Mifflin Company. All rights reserved.
4–3
Basic Characteristics of Electronic
Marketing: Addressability
• Addressability is a marketer’s ability to identify
customers before they make a purchase
• How E-Merchants Attain Addressability
–Limit access to areas of their web site to encourage
customer registration
–Offer contests and prizes in exchange for consumer
information
–Place “cookies” on visitor’s computer to track visitor
usage and preferences
Copyright © Houghton Mifflin Company. All rights reserved.
4–4
Basic Characteristics of Electronic
Marketing: Interactivity
• Interactivity is the ability to allow customers
express their needs and wants directly to the firm
in response to the firm’s marketing
communications
–Real-time interaction with customers
–Broader market coverage at a lower cost
• Community refers to a sense of group
membership or feeling of belonging
–Virtual communities on the Web
Copyright © Houghton Mifflin Company. All rights reserved.
4–5
Basic Characteristics of Electronic
Marketing: Memory
• Memory is the ability to access databases or data
warehouses containing individual customer
profiles and past purchase histories and to use
these data in real-time to customize a marketing
offer.
• A database is a collection
of information arranged
for easy access and
retrieval.
Copyright © Houghton Mifflin Company. All rights reserved.
4–6
Basic Characteristics of Electronic
Marketing: Control
• Control refers to customers’ ability to regulate the
information they view and the rate and sequence
of their exposure to that information.
• A portal is a multiservice web site that serves as
a gateway to other web sites.
Copyright © Houghton Mifflin Company. All rights reserved.
4–7
Basic Characteristics of Electronic
Marketing: Accessibility
• Accessibility is the ability to obtain information
available on the Internet.
–Informs and educates the inquiring consumer about
competing products and prices
–Creates competition for the consumer’s attention
–Increases the importance of having an easily
recognized uniform resource locator (URL), or web site
address
Copyright © Houghton Mifflin Company. All rights reserved.
4–8
Basic Characteristics of Electronic
Marketing: Digitalization
• Digitalization is the ability to represent a product,
or at least some of its benefits, as digital bits of
information.
Copyright © Houghton Mifflin Company. All rights reserved.
4–9
E-Marketing Strategies
E-Marketing
Strategy Considerations
Target
Markets
Product
Marketing
Copyright © Houghton Mifflin Company. All rights reserved.
Distribution
Systems
Promotion
Mediums
Pricing
4–10
Types of Advertising on Web Sites
Copyright © Houghton Mifflin Company. All rights reserved.
4–11
Customer Relationship Management
• Customer relationship management (CRM)
focuses on using information about customers to
create marketing strategies that develop and
sustain desirable long-term relationships.
–A focus on CRM is possible in e-marketing because of
marketers’ ability to target individual customers.
–The ability to identify individual customers allows
marketers to shift their focus from increase share of
market to increasing share of customer.
–CRM is often based on the use of information
technology.
Copyright © Houghton Mifflin Company. All rights reserved.
4–12
The 80/20 Rule
• 80 percent of business profits come from 20
percent of customers.
–Advances in technology allow marketers to profile
customers in real-time and thereby assess their lifetime
value (LTV) to the firm.
–Some customers may be too expensive to retain given
the low level of profits they generate.
–Firms should focus instead on developing and
managing long-term relationships with more profitable
customers.
Copyright © Houghton Mifflin Company. All rights reserved.
4–13
Legal and Ethical Issues in E-Marketing
• Personal Privacy Issues
–Unauthorized placement of “cookies” on personal
computers
–Web site information requirements for registration
–Collection of information from children
–Use of “spyware” in software
• Spam
–Unsolicited commercial e-mail (UCE)
• Misappropriation of Intellectual Property
–Illegal copying of copyrighted software, movies, CDs,
and other creative materials
Copyright © Houghton Mifflin Company. All rights reserved.
4–14
The BBBOnLine Privacy Seal and Program Explanation
[figure 4.1 here]
Source: Reprinted with permission from BBBOnLine, Council of Better Business Bureaus, Arlington, VA.
Copyright © Houghton Mifflin Company. All rights reserved.
FIGURE 4.1
4–15
Code of Ethics
Source: Reprinted by permission of the American Marketing Association.
Copyright © Houghton Mifflin Company. All rights reserved.
4–16
Source: Reprinted by permission of the American Marketing Association.
Copyright © Houghton Mifflin Company. All rights reserved.
4–17
Source: Reprinted by permission of the American Marketing Association.
Copyright © Houghton Mifflin Company. All rights reserved.
4–18
Important Terms
• Electronic Commerce (E-Commerce)
–Sharing business information, maintaining business
relationships, and conducting business transactions by
means of telecommunications networks
• Electronic Marketing (E-Marketing)
–The strategic process of creating, distributing,
promoting, and pricing products for targeted customers
in the virtual environment of the Internet
• Addressability
–A marketer’s ability to identify customers before they
make a purchase
• Cookie
–An identifying string of text store on a web site visitor’s
computer
Copyright © Houghton Mifflin Company. All rights reserved.
4–19
Important Terms
• Interactivity
–The ability to allow customers express their needs and
wants directly to the firm in response to the firm’s
marketing communications
• Community
–A sense of group membership or feeling of belonging
• Memory
–The ability to access databases or data warehouses
containing individual customer profiles and past
purchase histories and to use these data in real-time to
customize a marketing offer
• Database
–A collection of information arranged for easy access
and retrieval
Copyright © Houghton Mifflin Company. All rights reserved.
4–20
Important Terms
• Control
–Customers’ ability to regulate the information they view
and the rate and sequence of their exposure to that
information
• Portal
–A multiservice web site that serves as a gateway to
other web sites
• Accessibility
–The ability to obtain information available on the
Internet
• Uniform Resource Locator (URL)
–A web site address
Copyright © Houghton Mifflin Company. All rights reserved.
4–21
Important Terms
• Digitalization
–The ability to represent a product, or at least some of its
benefits, as digital bits of information
• Customer Relationship Management (CRM)
–Using customer information to build long-term
relationships
• Spam
–Unsolicited commercial e-mail (UCE)
Copyright © Houghton Mifflin Company. All rights reserved.
4–22
The Relationship Between Web Sites and
Retail Stores
Source: American Demographics, December 2000, p. 42. Adapted with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
4–23
Technology Drives CRM
• Customer Support and Call Center Software
– Provides customer interaction and improved service
– Captures information about all interactions
• Sales Automation
– Links sales force to applications that facilitate selling and providing
service
– Provides information to determine the best solution for customers
– Determines order status, tracks deliveries, and identifies service
problems
• Technology
– Should not be used just as a cost-reduction tactic
– Should not be overwhelmed by gathering unnecessary data
– Should be used as a tool to sustain long-term relationships
Copyright © Houghton Mifflin Company. All rights reserved.
4–24
Internet Users Comfortable Giving Out Personal
Information
While Internet users don’t mind giving out their e-mail addresses,
they’re far less comfortable giving out more personal information.
What users are most comfortable giving out:
Source: USA Today, September 28, 2001, p. A1. Used with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
4–25