Internet Marketing
Chapter 14 with Duane Weaver
Internet Uses
• Most common products researched online and
bought offline:
– Cars, computers, travel, electronics, books
appliances, music, sporting goods and clothing.
• 25% of all business-business purchases are
done online
• 54% of email users have responded to e-mail
advertisements (2004)
• Internet retail is 2.5% of all retail sales
Impact of Internet on Marketing
•
The following 3 functions can cost up to 30% of COGS, expectations are
that these costs can be reduced to 10-20% via e-commerce.
– Sales
– Marketing
– Distribution Systems
•
Albeit, operating costs can be substantially lowered, the business must
have:
– Infrastructure (perhaps vested technology as a fixed cost or leased as an added
operating expense (can void net gain))
– Focus and design of company (bricks and mortar vs. virtual?)
•
Design of Website must be conducive to the IMC plan and established to
the benefits of the target audience:
– Excellent for psychographic segmentation
– Multiple portals tailored to each segment (vs. one face for all)
– Use flashy where needed (affective buyers) and avoid it where frivolous
(cognitive buyers)
– Integrate cookies and path traveled information with purchase habits
– Requires constant modification to be on top of consumer needs
– Must have multiple Trust Cues
Success with E-Commerce
• E-Commerce: selling of goods or services
online.
• Three Incentives must exist for customers to buy
online:
– Financial: currently first time consumers require
financial incentive (price reduction) in addition to trust
cues.
– Convenience: ability to order anytime from anywhere
without having to visit a store. Delivered to your door.
– Value Added: needed to induce long term repeat
business such as:
• Personalization (Lands End, Amazon.com)
• Permission based marketing based on profiles
• Reduced information search (find it all in once place –
Insurance companies, E-bay)
Business-Business E-Commerce
• Works well for repeat purchasing of low cost items with
strong brand recognition.
• Can help to speed time to market, as well as reduce
inventory and transaction costs.
• Increase in online brokerage services for business to
business…facilitating exchange of goods. (e.g.:
PaperExchange.com)
• Websites can serve as alternate media to drive visits to
bricks and mortar
• Nature of goods needs to be conducive to world-wide
shipping when considering world wide web store front for
international business
• Must be designed to handle such an enterprise
(structure and function, marketing, aligned to meet
expectations)
IMC and the Internet
• In addition to using the Internet as part of the IMC plan for
communications and marketing…
– Fundamental to integrated the entire company from IT through to
human resources, production and shipping.
– The ability to meet the demands of online marketing is as important to
survivability as having web presence.
– Technology does not solve business problems…it expedites those that
already exist! What once was broke and took attention once a week…will still be broken,
however, it may take attention once an hour. Fix the business processes, align the
companies resources, plan, build and then engage with a vengeance!
• Brand Spiraling: using traditional media to drive customers to the
online website to enhance brand recognition.
• Halo Effect: offline brand recognition induces online willingness to
try new products and services from the same brand on the net.
Discussion Questions
• Please get into groups of 3-5 and discuss the
following three questions, be prepared to share
some of your answers with the class:
– P. 459-460 (blue book) and P. 431 (white book)
Questions:
• 1. (Only in blue book):
What age group is most likely to use the Internet? Which is
the least? Does this have implications for IMC programs
(explain)?
• 5. (Both books):
Name and describe the three main incentives used to attract
shoppers to e-commerce Web sites.
• 6.(Both books):
What is cyberbait? How must it be used over time to maintain
it as an effective marketing tactic?
Thank You