Marketing in the Digital Age

10a

ROAD MAP: Previewing the Concepts

• The major forces shaping the new digital age.

• Marketing strategies in the digital age.

• The four major e-commerce domains.

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

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

Professor Takada 10a-2

ROAD MAP:

• The major forces shaping the new digital age.

• Marketing strategies in the digital age.

• The four major e-commerce domains.

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

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

Professor Takada 10a-3

Forces Shaping the Digital Age

Intranets – connect people within a company.

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

Internet – connects users around the world.

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

Customerization: the customer designs the market offering and the company makes it. The heart of the New Economy.

Increasing numbers of users.

Companies must adopt Internet technology or risk being left behind.

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

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

Failure of some “click-only” companies.

Professor Takada 10a-4

ROAD MAP:

• The major forces shaping the new digital age.

• Marketing strategies in the digital age.

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

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

• • • The four major e-commerce domains.

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

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

Professor Takada 10a-5

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 Professor Takada 10a-6

•

E-Business

Use of electronic platforms to conduct company business.

– Web sites: for selling and customer relations – Intranets: for within-company communication – Extranets: connecting with major suppliers and distributors • • •

E-Commerce

More specific than e-business.

Buying and selling processes supported by the Internet.

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

E-Marketing

The marketing side of e-commerce.

Includes efforts to communicate about, promote, and sell products and services over the Internet.

E-purchasing: the buying side of e-commerce.

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

Professor Takada 10a-7

Benefits to Buyers Benefits to Sellers

Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate Professor Takada Powerful tool for building customer relationships Can reduce costs Can increase speed and efficiency Offers greater flexibility in offers and programs Is a truly global medium 10a-8

ROAD MAP:

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

Marketing strategies in the digital age: How have companies responded to the Internet and other powerful new technologies with e-business strategies?

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

The four major e-commerce domains: B2C, B2B, C2C, C2B • • How do companies go about conducting e-commerce to profitably deliver more value to customers?

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

Professor Takada 10a-9

E-Marketing Domains

Professor Takada 10a-10

• • • •

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

$428 billion in 2004.

Online consumers vs. offline consumers.

Increasing diversity in buyers.

– Increasing opportunities for targeting markets.

Customer initiated and controlled.

• • •

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

• More than 500,000 enterprises participate.

Offer product info, purchasing, and support services.

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

• • •

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

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

Newsgroups: forums.

the Internet version of word of Web (vs. word of mouth) •

C2B (Consumer to Business) Priceline.com

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

Professor Takada 10a-11

ROAD MAP: Previewing the Concepts

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

Marketing strategies in the digital age.

The four major e-commerce domains.

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

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

Professor Takada 10a-12

Types of e-Marketers

Professor Takada 10a-13

Click-Only Companies

Enabler Sites hardware/soft ware providers Content Sites NYTimes,ESPN E-tailers Amazon, Expedia

Types of Sites

Search Engines and Portals Google, Yahoo Internet Service Providers AOL Transaction Sites eBay Professor Takada 10a-14

Reasons for dot.com Failures

• • • • Poor research or planning.

Relied on spin and hype instead of marketing strategies.

Spent too heavily on brand identities.

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

Professor Takada 10a-15

Click-and-Mortar Companies

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

Many are now doing better than click-only companies.

Reasons: – Trusted brand names and more resources – Large customer bases – More knowledge and experience – Good relationships with suppliers – Can offer customers more options Professor Takada 10a-16

Setting Up for E-Marketing

Professor Takada 10a-17

Types of Web Sites

Corporate 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.

Professor Takada 10a-18

Designing Attractive Web Sites

Context Commerce Content Connection • The 7 Cs of Effective Web Site Design Community Communication Professor Takada Customization 10a-19

Online Ads and Promotion

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

Professor Takada 10a-20

ROAD MAP:

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

Marketing strategies in the digital age.

The four major e-commerce domains.

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

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

Professor Takada 10a-21

The Future of Online Advertising

• • Web communities: – Allows members to congregate online and exchange views on issues of common interest – iVillage.com, a Web community for women E-mail: – Use of “enriched” e-mail messages – Backlash against spam can be problem – Allow people to opt-out of promotions Professor Takada 10a-22

Legal and Ethical Issues

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

Online security: Social Security data Internet fraud: online auction fraud Segmentation and discrimination: digital divide Access by vulnerable or unauthorized groups: children’s access to adult sites, eBay.

Professor Takada 10a-23

Rest Stop: Reviewing the Concepts

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Identify the major forces shaping the Digital Age.

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

Describe the four major e-commerce domains.

Discuss how companies go about conducting e commerce to profitably deliver more value to customers.

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

Professor Takada 10a-24