Download Internet Marketing Chapter 1 Lecture Slides

Introduction to Internet Marketing
key characteristics:
 Internet Marketing is founded largely on components of:
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Database Marketing
Direct Marketing
Customer Relationship Management (CRM)
the Internet allows the firm to actively engage customers by creating
marketing levers that allow for interactivity and individualization.
(the 2Is)
Individualization means that the Internet helps the firm build
committed, customer-centric relationships with its clients.
one-to-one vs. traditional one-to-many targeting
the firm leverages the Internet in its marketing strategy by integrating
it with offline marketing levers.
online marketing levers can be leveraged, when appropriate, to
decrease or replace the use of offline levers
American Marketing Association definition:
 Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of ideas,
goods and services to create exchanges that satisfy
individual and organizational goals.
Internet Marketing definition:
 Internet Marketing is the process of building and maintaining
customer relationships through online activities to facilitate
the exchange of ideas, products and services that satisfy the
goals of both parties.
Introduction to Internet Marketing
During weekdays, Internet consumption exceeds all other
media consumption for at-work users.
 This is Prime Time for the internet.
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weather.com
 How does this company make money?
 How does it build and maintain customer relationships?
Cases
62% of new car buyers research cars on the internet before
purchasing.
 As high as 85% for manufacturers with more affluent
customers.
 What did BMW do to capitalize on this trend?
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Produced short films featuring their cars at bmwfilms.com
mid-2001, 11 million views with 15 000 more per day
What did Volvo do?
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Partnered with AOL and launched the S60 sedan exclusively
online at revolvolution.com
2 million+ visitors; 250 000 added to email database; 27 000
more to showrooms
Microsoft CarPoint Example
• MSN CarPoint identified an opportunity to leverage the
Internet to deliver customer value in the car industry
• The retail car-buying process was frustrating and
inefficient:
• Little information available to the consumer
• Bargaining with salesperson viewed as an hassle
• Long process overall
• MSN CarPoint selected two primary target
segments for its service:
• “The intimidated by the process”
• “The information seekers”
• MSN CarPoint could leverage Microsoft’s expertise
in software development, its brand name and its
multitude of online properties
• Competition was getting fierce with more and more
online car services entering the market…
• But the financial opportunity was large: 66% of
new car buyers were estimated to use online
services in 2000
• In 1996, the first version of CarPoint was shipped
• By 1998, CarPoint was driving $5 million in car
sales a day
Beyond the 4Ps
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Devise a combination of marketing actions (levers)
Product
Pricing
Communication
Community
Distribution
Focus on CRM (Customer Relationship Management)
Four Key Stages of Customer Relationship
Commitment
Awareness
(no communication)
Build
Exploration /
Expansion
(states-of-mind
(preference) and
patterns of behaviour
(regular purchasing))
Dissolution
and nurture customer relationships
Commitment
to brand (ex. Harley Davidson “HOG Club”)
Commitment to function (ex. weather.com)
Observe and determine who to nurture further and who to terminate
The
relationship can become more intense as it progresses
The level of intensity can be measured in different ways:
of connection (# of site visits)
Scope of connection (# of points of contact)
Depth of contact (thoroughness of site use)
Level of
Intensity
Frequency
Intensity
Awareness
Exploration
Commitment
Dissolution
Stages of Customer Relationships
The 2Is and Branding affect the
different Marketing actions
Interactivity
Branding
Product
Pricing
(tiered loyalty;
dynamic price)
Communication
(viral and
permission)
Individual
Community
(user groups)
Distribution