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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
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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
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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
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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
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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
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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 arrangedfor easy access and retrieval.
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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.
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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
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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.
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E-Marketing Strategies
DistributionDistributionSystemsSystems
TargetTargetMarketsMarkets
ProductProductMarketingMarketing
PromotionPromotionMediumsMediums PricingPricing
E-MarketingE-MarketingStrategy ConsiderationsStrategy Considerations
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Types of Advertising on Web Sites
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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.
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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.
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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
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The BBBOnLine Privacy Seal and Program Explanation
FIGURE 4.1Source: Reprinted with permission from BBBOnLine, Council of Better Business Bureaus, Arlington, VA.
[figure 4.1 here]
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Source: Reprinted by permission of the American Marketing Association.
Code of Ethics
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Source: Reprinted by permission of the American Marketing Association.
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Source: Reprinted by permission of the American Marketing Association.
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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
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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
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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
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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)
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The Relationship Between Web Sites and Retail Stores
Source: American Demographics, December 2000, p. 42. Adapted with permission.
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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
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Internet Users Comfortable Giving Out Personal Information
Source: USA Today, September 28, 2001, p. A1. Used with permission.
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: