Internet Marketing

Presented by:

Barbaros Ozdogan,MBA

Internet Business Systems Program

Mercy College,Dobbs Ferry, NY

What is Marketing?

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.

• American Marketing Association

The Central Role of Marketing

Is it the production methods or our marketing skills? Why have we become so wealthy in the last two

centuries? Adam Smith pointed out in 1776 that mass production

was the product of division of labor But Adam Smith said something else:

“The division of labor is limited by the extent of the market”

The larger the market the more efficiencies are possible,the greater productivity,the greater profits, the greater affluence

The American Market

From 1900 to the present time America has had the largest single market on earth.

America has spent last 200 years breaking down barriers building waterways, Railroads, Telegraph networks, Telephone and electronic communication systems, Superhighways, Airports and massive delivery systems

that link all parts of our market together in a freely competitive order.

The Result

Greatest outpouring of production, affluence and personal freedom ever known.

The Post WWII Transformation of America

Toward the summer of 1945 the whole America was very much worried by the return of the “Great Depression”

The hard times of the prewar days taught Americans the importance of savings. When the war ended the public had sucked away over $136

billion in savings.

All these savings were unleashed on civilian goods once the war ended to satisfy the publics pent-up demand for good life.

Advertising was about to enter a kind of golden age The postwar housing shortage was a direct consequence

of the baby boom and rapid Wanna-Go-Home demobilization.

By December 1945 America needed at least 5 million homes, NOW.

WW II

In shaping post war society, William J Levitt’s Purchase of 1,500 acre potato field in LI ranks with DuMont’s 7 inch TV screen and Howard Aiken’s construction of the first US computer at Harvard.

The basic 4 room house was sold for $6990 Every house was uniform.

Pre fabricated sidings at 8 am Toilets 9:30 am Sinks and tubs at 10:00 Sheetrock at 10:45 Flooring at 11: 00

His imitators sprang up across the country.

Post WW II

Growth of Mass Marketing

From 1950 to 1980 mass marketing predominated. Mass marketing came about because of combination of

circumstances. The whole generation, deprive from a decade of depression,

followed by a decade of war was finally able to produce and purchase in peace.

The growth of TV National brands sold in Supermarkets, department stores

Mass marketing assumed that everyone wanted the same thing.

In 1950 the average American family was spending 31% of its household income on food.Today it is less than14% on food. The rest is ours…..

One result of this productive system is that the middle class has grown from being 15% of the population in 1920 to being 86% of the population in 2000.

We have finally reached the point where most people have acquired the minimum.

Mass Marketing

Recognition Personal attention Service Diversity Information

Today’s Customers seek:

Will increase loyalty

Who started it? - U.S. Military Why? - To safeguard military data When? - 1969

History of the Internet

“…..the chain of networks that is generally the easiest and cheapest way for businesses to communicate electronically with the outside

world.” - Wall Street Journal

Beginner’s guide to the Internet

Net timeline

Test your knowledge of the Internet

Database Marketing and Ecommerce

During the last 30 years companies become so huge that they have lost the ability to touch their customers and learn their views.

They need a way to accumulate and manipulate and extract knowledge from the data on thousands or millions of customers.

In a small store this is easy.

Internet Computer Technology Database Marketing

Narrow Definition

Internet Marketing

The Ultimate Goal

In a Small Store

The owner can find out about the customer preferences by talking to customers on a daily basis.

If the customer don’t like a product or a service the owner will quickly sense this.

These store owners were able to accumulate and manipulate information about their customers intuitively in their heads.

Database Marketing and the web today provide the requested result through computer technology.

What are Customers worth????

Dynamics of Loyalty

Database Marketing conference Orlando, 1999

Database and Web site

What can we do? Change our acquisition methods to attempt to recruit loyal customers Provide knowledgeable customer service Fashion products and services tailored to individual preferences Layout individualized targeted marketing programs Open up our company to customers letting them rummage through

our warehouse check out our technical specs and place their orders themselves

Conduct one on one dialogue with each customer Classify customers by interests and profitability Recognize customers by name when they enter the website.

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

A process:

Like a traditional marketing program, an Internet marketing program involves a “process”.

The seven stages of of the Internet marketing program process are Setting corporate and business strategy, framing the market opportunity, formulating the marketing strategy, designing the customer experience, designing the marketing program, crafting the customer interface and evaluating the results of marketing program.

Building and maintaining customer relationships:

The goal of marketing is to build and create lasting customer relationships.

It is important to stress that the goal of Internet marketing is not simply building relationships with online customers. Rather the goal is to build offline as well as online relationships.

Online:

By definition, Internet marketing deals with levers that are available in the world of the Internet. However as noted before, the success of an Internet marketing program may rest with traditional, offline marketing vehicles.

Effectiveness of Monster.com marketing strategy TV advertising and , Super Bowl ads.

Exchange:

At the core of both online and offline marketing programs is the concept of exchange.

In both the online and offline worlds, exchange is the heart of marketing. In the new economy firms must be very sensitive to cross channel exchanges.

Satisfaction of goals of both parties:

I am a loyal user of the web site CNN.com. Each day I check global and local news. I am clearly satisfied and loyal to the site.

To the extent that CNN.com can monetize this loyalty – most likely in the form of Advertising revenue- both parties will be satisfied.

The Broadened Scope of Internet Marketing

Cell 4 Cell 2

Online marketing efforts bring revenue

to the store

Cell 3

Offline effort

online revenue stream

Cell 1

Marketing efforts are online

Offline Online

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Source: Internet Marketing: building advantage in a networked Economy

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Marketing Resource Allocation

Internet Marketing Mix

PriceProduct Communication Community Distribution

Branding

Marketing Mix

Product: The product is the service or the physical good that a firm offers for exchange.  

Price: Price is the amount the firm charges customers for a particular market transaction.

Distribution: With respect to the role as a distribution channel the Internet has the power to shift customers to a new channel-or to use this channel in combination with other channels. (for example search the internet and purchase at the retail store).

 Communication: Communication is activities that inform one or more groups of target customers about the firm and its products.

Community and Relationship: Community is defined as a set of interwoven relationships built upon shared interests which satisfy members needs otherwise unattainable individually..

Internet Marketing Mix

PriceProduct Communication Community Distribution

Branding

Individual

Interactivity

2 I’s

Individiual: Customers expect to have a personal experience with the firm. The Internet enables the firm to engage in customer specific actions.

Interactivity: The Internet enables a level of customer dialogue that has not previously been experienced in the history of the business.

Questions?