Copyright © 2007 Pearson Education Canada13-1 Marketing: An Introduction Second Canadian Edition...

Copyright © 2007 Pearson Education Canada13-1

Marketing: An Introduction Second Canadian Edition

Armstrong, Kotler, Cunningham, Mitchell and Buchwitz

Chapter ThirteenMarketing and the Internet


Looking Ahead• Define the three areas of e-commerce and explain

the benefits of e-commerce• Describe the different ways a company can use its

website to support its marketing communications program

• Differentiate between Web publishers and Web advertisers and define the major forms of online advertising

• Outline how email can be used for marketing and list the rules of email etiquette for online marketers

• Describe the new forms of Internet marketing• Outline the legal and ethical issues involved in

Internet marketing


E-Business Defined

• E-business: the use of electronic platforms to conduct a company’s business.

• E-commerce: buying and selling processes supported by electronic means.

• Business-to-Consumer – retail, banking.

• Business-to-Business – trading networks.

• Consumer-to-Consumer – e-Bay, Napster.


B2C (Business to Consumer)

• The online selling of goods and services to final consumers.

• 25% increase in online buying since 2002.

• Increasing diversity in buyers.– This provides increasing opportunities for

targeting markets.

• Customer initiated and controlled.


B2B (Business to Business)• Most major B2B marketers offer product

information, purchasing and support services online.

• Most business buying today takes place on the Internet.

• Open trading exchanges—huge specialty e-marketspaces to conduct transactions.

• Constant increases in private trading networks.


E-Commerce Networks• Private Internet commerce networks

geared toward the business-to-business market.

• Most Internet buying now occurs over the web.

• Global eXchange Services (GXS) consists of more than 100,000 trading partners in 58 countries at a value of some 1 billion transactions each year, equal to $1 trillion worth of goods and services.


C2C (Consumer to Consumer)

• Occurs on the Web and includes a wide range of products and services.

• Forums: discussion groups located on commercial online services.

• Newsgroups: the Internet version of forums.


Benefits to Buyers

• Convenience.

• Ease of use.

• Privacy.

• Greater product access and selection.

• Information gathering.

• Interactive shopping.

• Immediate.


Benefits to Sellers

• Customer relationship building.

• Cost savings.

• Increased speed.

• Increased efficiency.

• Improved cash flow.

• Flexibility.

• Global reach.


Marketing and the Website

• Early websites were largely brochure-ware.

• Today, every business and organization has its own website.

• Performs a wide variety of marketing functions.


7 Cs of Effective Design

• Context: layout and design elements.

• Content: text, pictures, sound and video.

• Community: user-to-user communication.

• Customization: personalizing for each user.

• Communication: two-way communication.

• Connection: links to other relevant sites.

• Commerce: commercial transactions.


Functions of a Website

• Sales channel – buying and selling online.

• Marketing communications vehicle – part of the integrated communications mix.

• Customer service channel – self-service, product enquiries, after market service.

• Delivering content – portal sites, publishing sites.

• Service provider – subscriptions, information provider, search engine.


Online Advertising

• Worldwide spending on online advertising topped $9 billion US in 2004.

• Increasingly popular form of promotion.

• Highly measurable and manageable.

• Can be modified quickly.

• Can dynamically targeted.


Online Promotion Methods

• Online advertising: Banners, text links, interstitials, sponsorships, micro sites.

• Email direct response: permission-based.

• Viral marketing: word-of-mouth based.

• Online Movies: Mini-movies as ads.

• Podcasting: Sending information to wireless devices.

• Blogging: Two way dialogue.


Types of Online Advertising

• Banner ads (squares or rectangles) and tickers (move across the screen).

• Textlinks (hypertext that takes the user to a new webpage or website).

• Content sponsorships (sponsoring special content).

• Interstitials (pop ups). • Microsites (limited website with detailed

information).


Buying Online Advertising

• Three pricing models for online advertising.– CPM – rate paid per thousand impressions

of an online ad.– Cost-per-click – Advertiser pays only when

the advertisement is clicked on.– Sponsorships – sold in blocks of time rather

than per impression basis.


Email Marketing

• Increasingly common form of direct marketing.

• Permission-based email most effective.

• Non-permission-based email known as spam.

• Spamming the biggest detriment to legitimizing email marketing.


Using Email Marketing• Well-designed email campaigns typically

achieve 10%-15% response rates compared to .5% - 2% for traditional direct mail.

• Uses include– Information and education.– Couponing.– Special offers.– Newsletters.– Targeted content delivery.


Viral Email Marketing• Internet version of word-of-mouth

advertising.• Infectious, interesting email that people

will pass along.• Inexpensive way to create brand “buzz.”• Encouraged by textlinks “Forward to a

friend or colleague.”• Used successfully in B2B marketing.


Rules for Email Marketing

• Send email only by permission.

• Clearly identify the sender.

• Remind the recipient why they’re receiving the email.

• Provide an easy way to unsubscribe.

• The default is always opt-in, not opt-out.


Online Movies

• Extended advertising segments that take the form of short movies.

• Generally directed and acted by main movie and TV figures.

• Can be viewed on websites.

• Trend started by BMW in 2001.

• Growing in popularity.


Podcasting

• Delivery of content and advertising to iPoDs and other personal wireless listening devices.

• Users download shows and music at their convenience.

• Similar to broadcasting.

• Early stage but shows promise as an advertising and promotion medium.

http://www.apple.com/itunes/podcasts/


Blogging

• Website that consists of regular date-stamped compositions written by an individual or group and published online for general viewing.

• Tend to be topical.

• Excellent tool for building thought leadership and market education.


Legal and Ethical Issues

• Online privacy and security.– Consumer knowledge and consent.– Limitations.– Accuracy.– Right to access.– Hacking.– Internet fraud.

• Segmentation and discrimination.

• Digital divide.


Legal and Ethical Issues

• Online privacy.

• Online security.

• Internet fraud.

• Segmentation and discrimination.

• Access by vulnerable or unauthorized groups.


Looking Back• Define the three areas of e-commerce and explain

the benefits of e-commerce• Describe the different ways a company can use its

website to support its marketing communications program

• Differentiate between Web publishers and Web advertisers and define the major forms of online advertising

• Outline how email can be used for marketing and list the rules of email etiquette for online marketers

• Describe the new forms of Internet marketing• Outline the legal and ethical issues involved in

Internet marketing

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