Differentiation
Tier 1
tasks
Tier 2
tasks
Segmentation
Positioning
Targeting
E-Marketing
Strategy
Offer
CRM/PRM
Communication
Value
Distribution
Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers
©2006 Prentice Hall
E-Marketing 4/E
Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 10: Product
©2006 Prentice Hall
10-1
Chapter 10 Objectives
• After reading Chapter 10 you will be able to:
• Define product and describe how it contributes to
customer value.
• Discuss how attributes, branding, support services,
and labeling apply to online products.
• Outline some of the key factors in e-marketing
enhanced product development.
• Identify the six categories of new-product strategies
and the six classifications for a suggested Internet
product taxonomy.
©2006 Prentice Hall
10-2
The Google Story
• In 1998, co-founders Brin and Page delivered
an innovative new search strategy that ranked
results on popularity as well as keywords.
• Generates revenue from two B2B markets:
• Licensing of its search services.
• Sales of keyword banners to advertisers.
• Innovative products and strong customer focus
are driving its success and profitability.
• Go to Google.com and explore Products, GMail
Google Apps and the Tool Bar. Do you agree
that they are highly innovative products?
©2006 Prentice Hall
10-3
Many Products Capitalize on
Internet Properties
• A product is a bundle of benefits that satisfies
needs of organizations or consumers.
• Includes tangible goods, services, ideas, people
and places.
• Products such as search engines are unique to the
Internet while others simply use the Internet as a
new distribution channel.
©2006 Prentice Hall
10-4
Integrated Marketing
Communication (IMC)
Product:
The Offer
Distribution Channels
Relational
Outcomes
Consumers
CRM
Price:
The Value
Transactional
Outcomes
Marketing Mix and CRM Strategies and Tactics for Relational and Transactional Outcomes
©2006 Prentice Hall
Creating Customer Value Online
•
•
Customer value = benefits - costs
Product decisions must be made that deliver
benefits to customers:
1.
2.
3.
4.
5.
©2006 Prentice Hall
Attributes
Branding
Support Services
Labeling
Packaging
10-5
1. Attributes
• Attributes include quality and features.
• The Internet increases customer benefits in
many ways.
• Media, music, software and other digital products
can be presented on the Web.
• Mass customization is possible.
• User personalization of the shopping experience
can be achieved.
©2006 Prentice Hall
10-6
2. Branding
• A brand includes a name, symbol or other
information.
• A brand represents a promise or value proposition
to its customers.
• Brand equity is the intangible value of a brand,
measured in dollars.
• eBay, Yahoo! and Amazon rank among the top
100 brands in the U.S.
• A great brand taps into popular culture and
touches consumers.
©2006 Prentice Hall
10-7
Brand Relationships
• Exhibit 10.4 displays 5 levels of brand
relationship intensity.
Highest
intensity
Tell others about the brand
Advocacy
Communicate with each other
Community
Communicate with company
between purchases
Connection
©2006 Prentice Hall
Identity
Display the brand proudly
Awareness
Is on the list of
possibilities
10-8
Branding Decisions for Web Products
• Firms can use existing brand names or create
new brands on the Internet.
• Some firms may use different names offline and
online to avoid risk if the new product or
channel should fail.
• Sports Illustrated created thriveonline.com.
• Wired Magazine changed its online version name to
Hotwired.
©2006 Prentice Hall
10-9
Creating New Brands for Internet
Marketing
• Good brand names should:
•
•
•
•
Suggest something about the product.
Differentiate the product from competitors.
Be capable of legal protection.
Be short, memorable, easy to spell and translate
well into other languages.
• Cobranding occurs when two companies put
their brand names on a product:
• Yahoo! Visa shopping pages
• EarthLink-Sprint
©2006 Prentice Hall
10-10
Internet Domain Names
• A URL (Uniform Resource Locator) is a Web
site address.
• Also called an address or domain name.
• www.umfk.maine.edu
• Domain names contain several levels.
• The second-level is often the name of the company.
• The top-level may be .com or a country name, such
as .mx for Mexico.
• ICANN is a nonprofit corporation that makes
decisions about protocol and domain name
assignment, registration, etc.
©2006 Prentice Hall
10-11
Largest Top-Level Domain Names
Domain Designation
Top Level Domain Name
net
Networks
103.0
com
Commercial
94.7
jp
Japan
13.1
edu
Educational
7.8
it
Italy
5.5
uk
United Kingdom
4.3
ca
Canada
3.6
de
Germany
3.5
nl
Netherlands
3.5
©2006 Prentice Hall
10-12
Number of Hosts
(millions)
Registering a New Domain Name
• Sites such as VeriSign provide domain
registration services.
• More than 97% of words in the dictionary have
already been registered as domain names.
• Picking the right domain name can make a
huge difference.
• Directing people correctly to a site.
• Building consistency in marketing communications.
©2006 Prentice Hall
10-13
Registering a New Domain Name
• What happens if the firm name has been registered by
someone else?
• Come up with alternative names: DeltaComm, a
software developer was the first to register
www.delta.com before Delta Airlines (originally
www.delta-air.com),
• Buy the name from the currently registered holder.
• Bob.com
• Many creative Netizens register lots of popular names
and offer them for sale at prices of up to millions of
dollars:
• GreatDomains.com allows users to buy and sell
popular domain names.
• Name squatters
©2006 Prentice Hall
Have an Extra $1.5 Million to Spare? Buy www.ad.com.
Source: GreatDomains.com
©2006 Prentice Hall
©2006 Prentice Hall
3. Support Services
• Customer support is a critical component in the
value proposition.
• Customer service reps help customers with
installation, maintenance, product guarantees,
etc. to increase customer satisfaction.
• CompUSA combines online and offline
channels to increase customer support.
©2006 Prentice Hall
10-14
4. Labeling
• Labeling has digital equivalents in the online
world.
• Online “labels” provide information about installing
and using software.
• Online “labels” also provide extensive legal
information about the software product.
• Online firms may add the Better Business logo
or TRUSTe privacy shield to their sites.
• SSL Certificates
©2006 Prentice Hall
10-15
Microsoft’s Terms of Use Label
©2006 Prentice Hall
10-16
Customer Codesign
• Business and consumer collaborations are possible on
the Internet.
• Software developers often seek customer input about
new products.
• They often allow users to download new products, test them,
and provide feedback.
• Customer interaction has been found to increase product
success.
• Amazon seeks customers’ product reviews.
• Latest Internet C0-design product
• Skins
• http://www.skinit.com/
• http://www.designerskins.com/?gclid=CIa83OCsgIgCFRyPFQodXwb
z9A
©2006 Prentice Hall
10-17
Product Mix Strategies
•
•
Companies can choose among six categories
of new-product strategies.
Firms will select one of the following
strategies, based on marketing objectives, risk
tolerance, resource availability, etc.
1. Discontinuous innovations: new-to-the-world
products.
1. TV, CD’s
2. New-product lines: new products in a different
category for an existing brand name.
1. Microsoft IE’s, Honda’s Ridgeline Truck
©2006 Prentice Hall
10-18
Product Mix Strategies, cont.
3. New variation of a current product line.
On-line stock trading
4. Improvements or revisions that replace an old
product.
“new and improved” Ford hybrid Escape
5. Current products targeted to different markets or
promoted for new uses.
Yahoo! (search->Portal->Life Engine)
http://www.clickz.com/news/article.php/3335951
6. Me-too lower-cost products.
Apple iPod Clones
©2006 Prentice Hall
10-19
Taxonomy of Internet Products
• Products can
be classified
according
to the
customers to
whom they
appeal.
©2006 Prentice Hall
Content Provider
B2B Market
Internet
Infrastructure
B2B Market
End User
B2C and C2C
Markets
Hardware
Server farm, highspeed switch
Router, satellite,
fiber-optic
backbone
Modem, PC,
WebTV,
PDA,
assistive
technologies
convergence
products
Software
Web authoring,
encryption,
audio/video
digitizing
enabling software
Protocols, TCP/IP,
DNS
Web browser, email client,
decryption,
audio/video
player
software
Services
E-commerce
consulting,
Web
development,
Web design,
application
service
providers
ISP, backbone
service
provider, Web
hosting
Web-based virus
scan, auto
updates,
calendaring,
e-mail
10-20