Marketing in the Digital Age 10a. 10a-2 Professor Takada ROAD MAP: Previewing the Concepts The major...

Marketing in the Digital AgeMarketing in the Digital Age

10a

Professor TakadaProfessor Takada 10a-2

ROAD MAP: Previewing the Concepts

• The major forces shaping the new digital The major forces shaping the new digital age.age.

• Marketing strategies in the digital age.Marketing strategies in the digital age.

• The four major e-commerce domains.The four major e-commerce domains.

• How to conduct e-commerce to profitably How to conduct e-commerce to profitably deliver more value to customers?deliver more value to customers?

• Overview of the promise and challenges Overview of the promise and challenges that e-commerce presents for the future.that e-commerce presents for the future.


ROAD MAP:



• The four major e-commerce domains.The four major e-commerce domains.

• How to conduct e-commerce to profitably How to conduct e-commerce to profitably deliver more value to customers?deliver more value to customers?



Forces Shaping the Digital AgeIntranets – Intranets – connect people within a connect people within a

company.company.

Extranets – Extranets – connect a company with its connect a company with its suppliers, distributors, and outside suppliers, distributors, and outside partners.partners.

Internet – Internet – connects users around the connects users around the world.world. The heart of the New The heart of the New

Economy.Economy.

Increasing numbers Increasing numbers of users.of users.

Companies must Companies must adopt Internet adopt Internet technology or risk technology or risk being left behind.being left behind.

Direct selling via the Internet bypassing Direct selling via the Internet bypassing existing intermediaries existing intermediaries (disintermediation).(disintermediation).

““Brick-and-mortar” firms became “click-Brick-and-mortar” firms became “click-and-mortar” companies.and-mortar” companies.

Failure of some “click-only” companies.Failure of some “click-only” companies.

Customization: the Customization: the company custom company custom designs the market designs the market offering for the offering for the customer.customer.

Customerization: the Customerization: the customer designs customer designs the market offering the market offering and the company and the company makes it. makes it.


ROAD MAP:

• The major forces shaping the new digital age.The major forces shaping the new digital age.


How have companies responded to the Internet How have companies responded to the Internet and other powerful new technologies with e-and other powerful new technologies with e-business strategies?business strategies?

How have these strategies resulted in benefits to How have these strategies resulted in benefits to both buyers and sellers?both buyers and sellers?

• The four major e-commerce domains.The four major e-commerce domains.• How to conduct e-commerce to profitably deliver more value to customers?How to conduct e-commerce to profitably deliver more value to customers?• Overview of the promise and challenges that e-commerce presents for the Overview of the promise and challenges that e-commerce presents for the

future.future.


Marketing Strategy in the Digital Age

Requires a new model for marketing strategy and practice

Some suggest that all buying and selling will eventually be done electronically

Companies need to retain old skills and practices but add new competencies


E-Business• Use of electronic platforms to conduct Use of electronic platforms to conduct

company business.company business.– Web sites: for selling and customer Web sites: for selling and customer

relationsrelations– Intranets: for within-company Intranets: for within-company

communicationcommunication– Extranets: connecting with major suppliers Extranets: connecting with major suppliers

and distributorsand distributors

E-Commerce• More specific than e-business.More specific than e-business.

• Buying and selling processes Buying and selling processes supported by the Internet.supported by the Internet.

• Includes: e-marketing and e-Includes: e-marketing and e-purchasing (e-procurement)purchasing (e-procurement)

E-Marketing• The marketing side of e-commerce.The marketing side of e-commerce.• Includes efforts to communicate about, promote, and sell Includes efforts to communicate about, promote, and sell

products and services over the Internet.products and services over the Internet.• E-purchasing: the buying side of e-commerce.E-purchasing: the buying side of e-commerce.

– Consists of companies purchasing goods, services, and Consists of companies purchasing goods, services, and information from online suppliers.information from online suppliers.


Benefits to Buyers

Convenience

Buying is easy and private

Provides greater product access and

selectionProvides access to

comparative information

Buying is interactive and immediate

Benefits to Sellers

Powerful tool for building customer

relationships

Can reduce costs

Can increase speed and efficiency

Offers greater flexibility in offers and

programsIs a truly global

medium


ROAD MAP:

• The major forces shaping the new digital age.The major forces shaping the new digital age.• Marketing strategies in the digital age:Marketing strategies in the digital age:

How have companies responded to the Internet and How have companies responded to the Internet and other powerful new technologies with e-business other powerful new technologies with e-business strategies?strategies?How have these strategies resulted in benefits to How have these strategies resulted in benefits to both buyers and sellers?both buyers and sellers?

• The four major e-commerce domains:The four major e-commerce domains:

B2C, B2B, C2C, C2BB2C, B2B, C2C, C2B

• How do companies go about conducting e-commerce to How do companies go about conducting e-commerce to profitably deliver more value to customers?profitably deliver more value to customers?

• Overview of the promise and challenges that e-commerce Overview of the promise and challenges that e-commerce presents for the future.presents for the future.


E-Marketing Domains


B2C (Business to Consumer) Amazon, Expedia, Gap, L.L. Bean

• $428 billion in 2004.$428 billion in 2004.

• Online consumers vs. offline Online consumers vs. offline consumers.consumers.

• Increasing diversity in buyers.Increasing diversity in buyers.– Increasing opportunities for Increasing opportunities for

targeting markets.targeting markets.

• Customer initiated and Customer initiated and controlled.controlled.

B2B (Business to Business)Covisint-auto industry “open trading exchange” Trane Co.-air conditioning private trading network (PTN).

• More than 500,000 enterprises More than 500,000 enterprises participate.participate.

• Offer product info, purchasing, Offer product info, purchasing, and support services.and support services.

• Huge, $4 trillion in 2003. Huge, $4 trillion in 2003. • Specialty e-marketspaces to Specialty e-marketspaces to

conduct transactions.conduct transactions.

C2C (Consumer to Consumer) eBay, Amazon Auctions, AOL

• Forums:Forums: chat room, discussion chat room, discussion groups located on commercial groups located on commercial online services.online services.

• Newsgroups:Newsgroups: the Internet version the Internet version of forums.of forums.

• word of Web (vs. word of mouth)word of Web (vs. word of mouth)

C2B (Consumer to Business) Priceline.com

• Consumers can search out sellers, Consumers can search out sellers, view offers, initiate purchases, view offers, initiate purchases, and give feedback.and give feedback.


ROAD MAP: Previewing the Concepts


• Marketing strategies in the digital age.Marketing strategies in the digital age.• The four major e-commerce domains.The four major e-commerce domains.

• How to conduct e-commerce to How to conduct e-commerce to profitably deliver more value to profitably deliver more value to customers?customers?



Types of e-Marketers


Click-Only Companies

E-tailersAmazon, Expedia

Search Engines and

PortalsGoogle, Yahoo

Internet Service

ProvidersAOLTransaction

SiteseBay

Content Sites

NYTimes,ESPN

Enabler Siteshardware/software providers Types of

Sites


Reasons for dot.com Failures

• Poor research or planning.Poor research or planning.

• Relied on spin and hype instead of Relied on spin and hype instead of marketing strategies.marketing strategies.

• Spent too heavily on brand identities.Spent too heavily on brand identities.

• Devoted too much effort to acquiring Devoted too much effort to acquiring new customers instead of building new customers instead of building loyalty.loyalty.


Click-and-Mortar Companies

• Most established companies resisted Most established companies resisted adding Web sites because of the potential adding Web sites because of the potential for channel conflict and cannibalization.for channel conflict and cannibalization.

• Many are now doing better than click-only Many are now doing better than click-only companies.companies.

• Reasons:Reasons:– Trusted brand names and more resourcesTrusted brand names and more resources– Large customer basesLarge customer bases– More knowledge and experienceMore knowledge and experience– Good relationships with suppliersGood relationships with suppliers– Can offer customers more optionsCan offer customers more options


Setting Up for E-Marketing


Types of Web SitesCorporate Web Site:Designed to build customer goodwill and supplement other sales channels.Offers information to customers.Builds closer customer relationships.Generates excitement about the company.Marketing Web Site:Engages consumers in an interaction that moves them closer to a direct purchase.Provides information about the products.


Designing Attractive Web Sites

• The 7 Cs of Effective The 7 Cs of Effective Web Site DesignWeb Site Design

Context

Content

Community

CustomizationCommunication

Connection

Commerce


Online Ads and Promotion• Forms of online advertising & promotion:Forms of online advertising & promotion:

– Banner ads & tickers (move across the screen)Banner ads & tickers (move across the screen)– Skyscrapers (tall, skinny ads at the side of a page)Skyscrapers (tall, skinny ads at the side of a page)– Rectangles (boxes that are larger than a banner)Rectangles (boxes that are larger than a banner)– Interstitials (pop up between changes on Web site)Interstitials (pop up between changes on Web site)– Content sponsorships (sponsoring special content)Content sponsorships (sponsoring special content)– Microsites (limited areas paid for by an external Microsites (limited areas paid for by an external

company)company)– Viral marketing (Internet version of word-of-mouth):Viral marketing (Internet version of word-of-mouth):

Gillette 3-bladed Venus razor for women, “Reveal the Goddess in You” truck tour and beach-site promotions.


ROAD MAP:

• The major forces shaping the new The major forces shaping the new digital age.digital age.

• Marketing strategies in the digital age.Marketing strategies in the digital age.• The four major e-commerce domains.The four major e-commerce domains.• How to conduct e-commerce to How to conduct e-commerce to

profitably deliver more value to profitably deliver more value to customers?customers?

• Overview of the promise and challenges Overview of the promise and challenges that e-commerce presents for the that e-commerce presents for the future.future.


The Future of Online Advertising

• Web communities:Web communities:– Allows members to congregate online and Allows members to congregate online and

exchange views on issues of common exchange views on issues of common interestinterest

– iVillage.com, a Web community for womeniVillage.com, a Web community for women

• E-mail:E-mail:– Use of “enriched” e-mail messagesUse of “enriched” e-mail messages– Backlash against spam can be problemBacklash against spam can be problem– Allow people to opt-out of promotionsAllow people to opt-out of promotions


Legal and Ethical Issues

• Online privacy: collection of consumer Online privacy: collection of consumer info.info.

• Online security: Social Security dataOnline security: Social Security data• Internet fraud: online auction fraudInternet fraud: online auction fraud• Segmentation and discrimination: Segmentation and discrimination:

digital dividedigital divide• Access by vulnerable or unauthorized Access by vulnerable or unauthorized

groups: children’s access to adult groups: children’s access to adult sites, eBay.sites, eBay.


Rest Stop: Reviewing the Concepts

1.1. Identify the major forces shaping the Digital Age.Identify the major forces shaping the Digital Age.2.2. Explain how companies have responded to the Explain how companies have responded to the

Internet and other powerful new technologies with Internet and other powerful new technologies with e-business strategies, and how these strategies e-business strategies, and how these strategies have resulted in benefits to both buyers and have resulted in benefits to both buyers and sellers.sellers.

3.3. Describe the four major e-commerce domains.Describe the four major e-commerce domains.4.4. Discuss how companies go about conducting e-Discuss how companies go about conducting e-

commerce to profitably deliver more value to commerce to profitably deliver more value to customers.customers.

5.5. Overview the promise and challenges that e-Overview the promise and challenges that e-commerce presents for the future.commerce presents for the future.

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Marketing in the Digital Age 10a. 10a-2 Professor Takada ROAD MAP: Previewing the Concepts The major...

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