Transcript Economie Semestre 3 - IIS-RU

Bachelor of Business
Administration Program
©Mathieu CHAUVET – 2014/2015
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MARKETING ON THE WEB
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Learning objectives
In this part, we will address aspects related to:
 When to use product-based and customer-based marketing
strategies
 Communicating with different market segments
 Customer relationship intensity and the customer
relationship life cycle
 Using advertising on the Web
 Reviewing technology-enabled customer relationship
management
 Creating and maintaining brands on the Web
 Search engine positioning and domain name selection
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1) Web strategy mix
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As a reminder…
 Marketing mix
 Element combination to achieve the following goals: Selling
and promoting products and services
Developing a Marketing strategy through the Four Ps
 Product
 Price
 Promotion
 Place (distribution)
 Two possibilities of designing your website
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a) Product-Based Marketing Strategies
 Web presence must integrate with image and brand
 Customers will use product categories to order and
identify their own shopping paths

Web site examples: Home Depot, Staples, Sears
Not a useful Web site design when customers look to
fulfill a specific need
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b) Customer-Based Marketing Strategies
 Web sites to meet various types of customers’ specific
needs
 First step: identify customer groups sharing common
characteristics
 Second step: identify subgroups
 Strategy pioneered first on B2B sites, before B2C sites
adding customer-based marketing elements
 Example: university Web sites
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2) Communication with
different market segments
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Products with few
characteristics and
easy to understand
Highly complex
People now resistant to mass media messages:
products
and
Successful mass media campaigns relied on
services
passive nature of media consumption
But Web users are more likely to be in an active state
 Market segmentation
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Market Segmentation
 Divides potential customer pool into segments
 Emergence of Micromarketing
 Practice of targeting very small market segments
 Three categories to identify market segments
 Geographic segmentation
 Demographic segmentation
 Psychographic segmentation (social class, personality, etc.)
 Television advertisers use all three categories: Companies
try to match advertising messages to market segments
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Offering Customers a Choice on the Web
 One-to-one marketing
 Offering products, services matched to needs of a particular
customer
 Example: Dell
 Offers several different ways to do business
 Home page links for each major customer group

Specific products, product categories links available
 Dell Premier accounts

High level of customer-based market segmentation
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3) Beyond Market Segmentation:
Customer Behavior and Relationship
Intensity
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a) Segmentation Using Customer Behavior
 Same person but needs different combinations of products
and services depending on the occasion
Behavioral segmentation: Creation of separate customer
experiences based on their behavior
 Websites will then try to propose features for each type of
profiles:
 Browser
 Buyer
 Shopper
 Other alternative modes
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 Browsers: Visitors just surfing or browsing
Web site: must offer something to pique visitors’ interest
 Trigger words: Prompt visitor to stay and investigate
products or services
 Links to site explanations, instructions
 Include extra content related to product, service
Aim: Leading them to favorable impression (bookmark)
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 Buyers: Ready to make a purchase right away
Websites have to Offer direct route into purchase transaction
 Shopping cart
 Parts of the Web site that keep tracks of selected items for
purchase and automate purchasing process
 Page offers link back into shopping area
 Aim: getting buyer to shopping cart as quickly as possible
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 Shoppers: Motivated to buy and looking for more
information before purchase
Websites have then to:
 Offer comparison tools, product reviews, and features lists
 Aim: convincing customers to buy now or on future visits
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Alternative models
 McKinsey & Company’s six behavior-based categories
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Simplifiers (convenience)
Surfers (find information, explore new ideas, shop)
Bargainers (search for good deal)
Connectors (stay in touch with other people)
Routiners (return to same sites over and over)
Sportsters (spend time on sports, entertainment sites)
 People do not retain behavioral categories from one visit
to the next, even for the same Web site
 Must identify groups and formulate ways of generating
revenue
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b) Customer Relationship Intensity and
Life-Cycle Segmentation
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 Awareness

Customers recognize company name, product
 Exploration

Customers learn more about company, products
 Familiarity
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Customers have completed several transactions
Customers aware of returns and credits policies
Customers aware of pricing flexibility
 Commitment
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Customer experiences highly satisfactory encounters
Customer develops fierce loyalty or strong preference
 Separation
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Conditions that made relationship valuable change
Parties enter separation stage
 Leads to manage acquisition, conversion, and retention of customers
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c) Acquisition, Conversion, and Retention
of Customers
 Goal: Attract new visitors to a Web site
 Necessitates to take into consideration:
 Acquisition cost: Total amount of money site spends
drawing one visitor to site (average)
 Conversion cost: Total amount of money site spends
(average) to induce one visitor to make a purchase, sign up
for a subscription, or register
 Retention costs: Costs of inducing customers to return and
buy again
 Importance of measuring these costs?
Indicates successful advertising, promotion strategies
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4) Advertising on the web
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Advertising on the web
 Effective advertising involves communication
 Five-stage customer loyalty model: helpful in creating
devoted advertising messages
 Online advertising always coordinates with existing
advertising efforts
 Advertising on the web can be done thanks to various
models:
 Banner ads
 Text ads
 Site sponsorships
 Affiliation
 Viral Marketing
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a) Banner Ads
 Banner ad
 Small rectangular object on Web page
 Displays stationary or moving graphic
 Includes hyperlink to advertiser’s Web site
 Versatile advertising vehicle
 Attention-grabbing banner ads
 Use animated GIFs and rich media objects created using
Shockwave, Java, Flash
 Companies can make their own banner ads or work with
advertising agencies
 Price range: $100 to more than $5000
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b) Text ads
 Short promotional message with no graphic elements

Usually placed along Web page top or right side
Deceptively simple but very effective
 Inline text ad
 Text in stories displayed as hyperlinks
 Example: Google
 Initially criticized for including unobtrusive ads on its pages
 Now clearly labels ads (to prevent confusion)
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Other web-ad formats
 Pop-up ad
 Appears in its own window
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When user opens or closes Web page
 Considered to be extremely annoying
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Must click close button (small) in window of ad
 Pop-behind ad
 Pop-up ad followed by a quick command
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Returns focus to original browser window
 Emergence of Ad-blocking software
 Prevents banner ads and pop-up ads from loading
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c) Sites sponsorship
 Web sites offer advertisers opportunity to sponsor all (or
parts) of their sites
 More subtle way of doing advertising
 Goals similar to sporting event sponsors, television
program sponsors: Tie company (product) name to an
event (set of information)
 Increased revenues for the website
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Cost Per Thousand
(CPM):
Dollar amount paid for
every thousand people
in
the
estimated
audience
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d) Affiliate marketing
 Affiliate marketing
 One firm’s Web site (affiliate site)
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Includes descriptions, reviews, ratings, other information about a
product linked to another firm’s site (offers item for sale)
 Affiliate commissions:
 Pay-per-click model
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Affiliate earns commission each time site visitor clicks link, loads
the seller’s page
 Pay-per-conversion model
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Affiliate earns a commission each time site visitor converted from
visitor into qualified prospect or customer
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e) Viral marketing strategies
 Viral marketing relies on existing customers
 Tell other people (prospective customers) about products or
service
 Use individual customers to spread the word about a
company
 Example: Tippex
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The hunter and the bear
Huge success on social networks
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 Online advertising will have the aim to:
 Increase the revenues of the company
 Foster the brand image of the company through
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Product differentiation
Relevance
Perceived value (key element)
 Online advertising effectiveness remains difficult to
measure by yourself
 Use of specific software and analytics (Google, etc.)
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5) Technology-Enabled
Customer Relationship
Management
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Technology-Enabled Customer
Relationship Management
 Technology-enabled relationship management
 Relates to the information gathered about visitors
 Firm obtains information on customer behavior to:

Set prices, negotiate terms, tailor promotions, add product
features, customize customer relationship
 Also known as:
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Customer relationship management (CRM)
Electronic customer relationship management (eCRM)
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a) CRM as a Source of Value
 CRM efforts are relatively successful thanks to current
tools:
 Customer touchpoint: Any occurrence of contact between
customer and company
 Data warehouse (large database): Contains multiple
sources of information about customers, their preferences,
their behavior
 Data mining (analytical processing): Technique that
examines stored information, and looks for unknown,
unsuspected patterns in the data
 Statistical modeling: Technique that tests CRM analysts’
theories about relationships among customer and sales data
elements
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b) Search Engine Positioning and Domain
Names
 Search Engines and Web Directories
 Search engine helps people find things on the Web
 Web directories provide classified hierarchical lists of
categories
 Search engine ranking: Search engines use factors to
decide which URLs appear first on searches for a
particular search term
Became a critical aspect of Web Marketing
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 Development of Search Engine Optimization (SEO):
 The combined art and science of having a particular URL
listed near the top of search engine
 Development of Search Engine Marketing (SEM) : Paid
placement (sponsorship, search term sponsorship)
 Offer good ad placement on search results page for a certain
price
 Buy banner ad space at the top of search results pages that
include certain terms
 Example of Google:
The company sells services directly
(Google AdWords program)
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U.S. online advertising expenditures
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c) Websites names and issues
 URLs should reflect company name or reputation
 Troublesome domain names
 Companies sometimes purchase more suitable domain
names
 Examples:
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www.iflyswa.com changed to www.southwest.com
www.delta-air.com changed to www.delta.com
 Companies often buy more than one domain name
 In case user misspells URL, it stills redirects to intended site
 Processes regulated by Internet Corporation for Assigned
Names and Numbers (ICANN)
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 Buying, selling, and leasing domain names
Domain names that sold more than $1 million
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B2B ACTIVITIES:
IMPROVING EFFICIENCY
AND REDUCING COSTS
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Learning objectives
In this chapter, you will learn about:
 How businesses use the Internet to improve purchasing,
logistics, and other support activities
 Electronic data interchange and how it works
 Supply chain management and how businesses are using
Internet technologies to improve it
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1) Purchasing, Logistics, and
Support Activities
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a) Purchasing activities
 Procurement includes:
 All purchasing activities
 Monitoring all purchase transaction elements
 Managing and developing supplier relationships
 As such, procurement also called supply management
 Supply chain
 Part of industry value chain preceding a particular strategic
business unit
 Includes all activities undertaken by every predecessor in
the value chain to:
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Design, produce, promote, market, deliver, support each
individual component of a product or service
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b) Logistics activities
 Classic objective: Providing the right goods in the right
quantities in the right place at the right time
 Important support activity for sales and purchasing
 Includes managing the movements of:
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Inbound materials and supplies
Outbound finished goods and services
Web and the Internet provide increasing number of
opportunities to better manage activities
 Example: DHL, UPS, and their tracking systems
 Real-time shipment information: customers’ browsers
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c) Support Activities
 General categories for B2B organizations: Finance and
administration, human resources, technology development
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Network Model of Economic Organization
for B2B activities
 Trends in purchasing, logistics, and support activities:
 Shift from hierarchical structures toward network structures
 Procurement departments’ new tools (technology) in order
to negotiate with suppliers and form strategic alliances
 All these activities are enhanced thanks to the
development of Electronic Data Interchange (EDI)
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2) Electronic Data Interchange
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Electronic Data Interchange
 EDI: Computer-to-computer business information transfer
between two businesses using a standard format
 Firms EDI compatible: Firms exchanging data in specific
standard formats
 How does EDI work?
EDI purchasing process:
 Mail service replaced with EDI network data communications
 Paper flows within buyer’s and vendor’s organizations
replaced with computers running EDI translation software
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Going from this process…
Information flows in a paper-based purchasing process
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…To this type of process
Information flows in an EDI purchasing process
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Value-Added Networks
 EDI network: Businesses operate on-site EDI translator
computers, connected directly to each others
 Trading partners receive, store, forward electronic messages
containing EDI transaction sets
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3) Supply Chain Management Using
Internet Technologies
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a) Value Creation in the Supply Chain
 Supply chain management: Managing integration of
company supply management and logistics activities across
multiple participants in a particular product’s supply chain
Ultimate goal: Achieve higher-quality or lower-cost product
at the end of the chain
 Firms engaging in supply chain management want to:
 Reach beyond limits of their own hierarchical structure
 Create new network forms of organization among members
 Aim: originally developed to reduce costs, but today value-
added in the form of benefits to the ultimate consumer
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 Supply alliances: Long-term relationships among
participants in the supply chain
 Major barriers: Level of information sharing
 Example: Dell Computer, reduced supply-chain costs by
sharing information with suppliers
 Successful supply chain management key elements
 Clear communications
 Quick responses to those communications
 Benefits from Internet and Web technologies? Effective
communications enhancers
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b) Increasing Supply Chain Efficiencies
 Internet and Web technologies managing supply chains
can:
 Yield increases in efficiency throughout the chain
 Increase
process speed, reduce costs, increase
manufacturing flexibility
 Allows response to changes in quantity and nature of
ultimate consumer demand
 Example: Boeing
 Invested in new information systems increasing production
efficiency of the supply chain
 Also launched spare parts Web site
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Using Materials-Tracking Technologies
with EDI and E-Commerce
 Integration of bar coding and EDI in order to tracking materials
as they move from one company to another
 Integration of new types of tracking into Internet-based
materials-tracking systems:
 Optical scanners and bar codes: help track movement of materials
 Radio Frequency Identification Devices (RFIDs): Small chips
using radio transmissions to track inventory. RFIDs read much
more quickly, with higher degree of accuracy than bar codes
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Instructions for your Final
presentations
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