14 Marketing in the Digital Age

14
Marketing in the Digital Age
ROAD MAP: Previewing the Concepts
• Identify the major forces shaping the new
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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 ecommerce presents for the future.
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Forces Shaping the Digital Age
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Forces Shaping the Digital Age
• Digitalization &
Connectivity
– Intranets – connect
people within a company.
– Extranets – connect a
company with its
suppliers, distributors,
and outside partners.
– Internet – connects users
around the world.
• Internet Explosion
– Explosive worldwide
growth forms the heart
of the New Economy.
– Increasing numbers of
users each month.
– Companies must adopt
Internet technology or
risk being left behind.
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Forces Shaping the Digital Age
• New Types of Intermediaries:
– Direct selling via the Internet bypassed
existing intermediaries (disintermediation).
– “Brick-and-mortar” firms became “click-andmortar” companies.
– As a result, some “click-only” companies have
failed.
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Forces Shaping the Digital Age
• Customization and Customerization:
– With customization, the company custom
designs the market offering for the customer.
– With customerization, the customer designs
the market offering and the company makes
it.
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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
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E-Business in the Digital Age
• Involves the 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
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E-Commerce in the Digital Age
• More specific than e-business.
• Involves buying and selling processes
supported by electronic means, primarily
the Internet.
• Includes:
– e-marketing
– e-purchasing (e-procurement)
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E-Commerce Networks
Global eXchange Services (GXS) consists of more than 100,000 trading
partners in 58 countries. GXS completes some 1 billion transactions each
year, accounting for $1 trillion worth of goods and services.
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E-Marketing in the Digital Age
• The marketing side of e-commerce.
• Includes efforts to communicate about,
promote, and sell products and services
over the Internet.
• E-purchasing is the buying side of ecommerce.
– It consists of companies purchasing goods,
services, and information from online
suppliers.
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Benefits to Buyers
Convenience
Buying is easy and private
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate
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Benefits to Sellers
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
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E-Marketing Domains
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B2C (Business to Consumer)
• The online selling of goods and services to
final consumers.
• Expected to generate $428 billion in 2004.
• There is increasing diversity in buyers.
– This provides increasing opportunities for
targeting markets.
• Is customer initiated and controlled.
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B2B (Business to Business)
• By 2005, more than 500,000 enterprises
will participate as buyers, sellers, or both.
• Most major B2B marketers offer product
information, purchasing, and support
services online.
• Open trading exchanges—huge specialty
e-marketspaces to conduct transactions.
– Click Here to Visit Covisint's Web Site
• More private trading networks being
developed.
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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.
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C2B (Consumer to Business)
• Consumers can search out sellers, view
offers, initiate purchases, and give
feedback.
– Example: on priceline.com, one can bid for
airline tickets, hotel rooms, etc. and decide
whether to accept company offers.
• Click Here to Visit priceline.com
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Interactive Student
Assignment
• Choose a partner and talk about the types
of online purchases you have made.
– What are your major concerns about making
online purchases?
– What types of things can an online retailer do
to create a more secure buying environment?
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Types of e-Marketers
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Click-Only Companies
E-tailers
Enabler
Sites
Content
Sites
Types of
Sites
Transaction
Sites
Search
Engines and
Portals
Internet
Service
Providers
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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.
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Click-and-Mortar Companies
• Most established companies resisted adding Web
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sites because of the potential for channel conflict
and cannibalization.
Many are now doing better than click-only
companies.
Reasons:
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Trusted brand names and more resources
Large customer bases
More knowledge and experience
Good relationships with suppliers
Can offer customers more options
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Setting Up for E-Marketing
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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.
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Designing Attractive Web Sites
Context
Commerce
Content
• The 7 Cs of Effective
Web Site Design
Connection
Communication
Community
Customization
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Discussion Question
• What features do you look for on a
Web site that you feel make the site
appealing?
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Online Ads and Promotion
• Forms of online advertising & promotion:
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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)
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Viral Marketing
Gillette used viral marketing to
introduce the 3-bladed Venus
razor for women, greatly
expanding the audience
reached by its “Reveal the
Goddess in You” truck tour and
beach-site promotions.
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The Future of Online Advertising
• Web communities:
– Allows members to congregate online and
exchange views on issues of common interest
• E-mail:
– Use of “enriched” e-mail messages
– Backlash against spam can be problem
– Allow people to opt-out of promotions
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Legal and Ethical Issues
• Online privacy
• Online security
• Internet fraud
• Segmentation and discrimination
• Access by vulnerable or unauthorized
groups
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Rest Stop: Reviewing the Concepts
1. Identify the major forces shaping the Digital Age.
2. 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.
3. Describe the four major e-commerce domains.
4. Discuss how companies go about conducting ecommerce to profitably deliver more value to
customers.
5. Overview the promise and challenges that e-commerce
presents for the future.
14-32