electronic commerce
Second edition
Marilyn Greenstein
Miklos Vasarhelyi
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-2
Chapter 14
Web-Based Marketing
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-3
Web-Based Marketing
•
•
•
•
•
•
•
•
Scope of Marketing
Business, Marketing, and IT Strategy Congruence
Product, Pricing, Place, and Promotion
Personalization, the Fifth “P”
Internet Marketing Techniques
Online Advertising Mechanisms
Website Design Issues
Intelligent Agents and Their Effect on Marketing
Techniques
• Implications for the Accounting Profession
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-4
What is marketing?
Marketing is the process of planning and executing
the conception, pricing, promotion, distribution,
and post-sale services related to business ideas,
goods, and services to create exchanges that
satisfy individual and organizational goals.
Is web-based marketing evolutionary or
revolutionary? When should the evolutionary or
revolutionary aspects be utilized to create
customer value and sustainable competitive
advantage?
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-5
Figure 14-1 Top 10 gaining retail sites for 2000 holiday
season
Average Daily Unique Visitors
Year-over-Year
% Increase
for the
5-week average
Site
Weeks 1-5
1999
Weeks 1-5
2000
1
WALMART.COM
50,000
370,000
640.0%
2
MYSIMON.COM
88,000
283,000
222.0%
3
BESTBUY.COM
82,000
249,000
203.2%
4
AMERICANGREETINGS
216,000
538,000
149.1%
5
DEALTIME.COM
74,000
175,000
137.0%
6
STAPLES.COM
50,000
117,000
134.8%
7
HALLMARK.COM
97,000
218,000
124.3%
8
SEARS.COM
107,000
210,000
95.9%
9
800.COM
68,000
114,000
67.1%
10
BIZRATE.COM
310,000
510,000
64.6%
Rank
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-6
Figure 14-2 World Wide Wireless and World Wide Web
Web Sites
& ISPs
Broadcast
Stations
Popular
Fascination
Popular
Fascination
Radio
Purchases
The Euphoria of the 1922 Cycle
by Ward Hanson
World Wide Wireless
McGraw-Hill/Irwin
WWW
Subscribers
The Euphoria of the 1990s Cycle
World Wide Web
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-7
Figure 14-3 B2C versus B2B
Web - based
infomediaries
Web Sites
& ISPs
Popular
Fascination
Business
Interest
WWW
Subscribers
Business
Uses
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-8
Why has B2B online business
lagged behind B2C?
• Initial views of the World Wide Web as a
recreational device or merely as a fancy e-mail
device.
• Security concerns over access to information
and data transmission.
• Legal concerns surrounding internationally
inconsistent laws.
• Uncertainty regarding how to best utilize the
World Wide Web to help achieve its corporate
mission.
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-9
Do Web-Based technologies change
company mission statements?
Environmental
Changes
Corporate mission
and goals
IS/Technology
mission and goals
Environmental
Changes
Marketing mission
and goals
Web-based commerce
mission and goals
Web-based
e-commerce plan
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-10
Sales and
Marketing
Promotion
Information
System
Service
Product
Promotion
Outbound
Logistics
Place
McGraw-Hill/Irwin
Procurement
CUSTOMER
Personalization
Promotion
Production
Product
Pricing
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-11
What are the NEW five
“Ps” of Marketing?
•
•
•
•
•
McGraw-Hill/Irwin
Product
Price
Place (distribution)
Promotion
Personalization
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-12
What is Promotion?
Promotion involves bringing a positive image of
your product/service to the awareness of your
customers through:
• Paid advertising channels
• News stories and press releases
• Word of mouth
• Consumers’ personal preferences
• Packaging
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-13
Figure 14-6 Alternative paid marketing channels
2w
ay
Radio Ads
1 way
way
2
d
n
a
1
Television
Commercials
Roadside
& Infomercials
Boards
y
wa
2
nd
a
1
2 way
1w
ay
Magazines
Newspaper 1
1 way
wa
Ads
Telemarketing
y
2w
ay
2
wa
y
Direct Mail Ads
& Catalogues
What prompted the purchase?
McGraw-Hill/Irwin
Web Site
Advertising
Internet
Banners
E-mail
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-14
Treading on Sacred Ground
A Fifth “P” - Personalization
• Allowing consumers design their product
• A paradigm shift from mass customization to
mass personalization
– Toffler’s Powershift- Knowledge as Power
• A power shift from the corporation to the
consumer due to their power of knowledge and
increased choice of suppliers.
• The individual assumes the initiative for the bulk
of information, communication, transaction, and
distribution activities.
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-15
Marketing Implications of the
Consumer Power Shift
• Building relationships through database
marketing
• Customer-oriented marketing: emergence
of the personalized transaction domain
• Customer-oriented marketing – the
relentless search for value
– The access to information has changed the
value sphere, the nature of consumer power
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-16
Customer-oriented value sphere
characteristics
• Consumers are not limited to existing
assortments, but can now configure custom
products
• Consumers increasingly have the ability to
choose their level of participation in value
creation
• Consumers have become increasingly
proactive in initiating transactions.
– Absolute time has the most inelastic demand curve
of all commodities.
These characteristics were motivated by Barker’s Paradigm shift,
Toffler’s powershift and the personalized transaction domain.
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-17
Questions to ask about Internet
marketing techniques:
• Is marketing an integral component of sales?
• Is marketing cannibalizing sales in other channels?
• Do they cause a firm to rethink their management
of traditional outlets?
• Are you asking your customer to seek you out by
using passive marketing techniques?
• Are you actively pushing your products/services
to the customer or allowing your information to be
pulled to the customer when they request it (which
causes loss of control of timing)?
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-18
AGGRESSIVE
PASSIVE
Initiative
Providers of
information
Site registration with
multiple engines
Targeted e-mail
to users requesting
periodic sales and
information notices
Targeted services
to users requesting
such services
Interactive site
providing visitors
general, useful
information
McGraw-Hill/Irwin
Banner
advertising
Television,
magazine &
other off-line
advertising
Spam mail
Chain-mail
advertising, with
a potential reward
for perpetuating
the chain
Targeted e-mail
to past visitors
or customers
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-19
Internet Marketing Techniques
Will you be passive or aggressive or both?
• Passive Providers of Information
• Registering with search engines and directories:
searchenginewatch.com
• Solicited, targeted e-mails
• Interactive sites
• Banner Advertising
• Offline Advertising
• Unsolicited, targeted emails
• Spam mail
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-20
Online Advertising Mechanisms
How will you attract visitors?
• Directories
• Search engines
– Keyword tags
– Description tags
– Title tags
• Banners
– Click through advertisements
• # Impressions, click-through rates
•
•
•
•
Party lines
Sponsorships
Portals and infomediaries
Online coupons
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-21
A taste of marketing metrics
• Fulfillment tracks whether a product or
service was sold as a result of an
advertisement
• Fulfillment is difficult and noisy to
measure because:
– Individuals share computers
– Network servers and ISPs make it impossible
to count each individual user
– Users can disable their browser cookie
features
– Intelligent agents can trip up your counts
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-22
More web metrics
• Number of different visitors
• Number and frequency of repeat visitors
• Location of site prior to visit, including the search
engine used to locate the site, if applicable
• Length of time of visit
• Pages visited
• Items examined by visitors
• Domain names of visitors
• Country codes of visitors
• Purchases made, if applicable
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-23
Banner Suggestions
from DoubleClick
• DoubleClick.com describes effective banners as
those that:
– Target a specific industry, and appropriate region, and
appropriate user interests.
– Poses a question as a teaser for click-through
– Uses bright blue, green, and yellow
– Posted on the most appropriate page
– Uses animation (may increase click-through by 25%
– Uses an intriguing cryptic message
– Uses action phrases
– Changes banners before repeat visitors see it four times
– Is measured beyond the click-through, to things like
fulfillment
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
PULL Technologies FROM HOME
You read your electronic
6:30
newspaper personalized to have
AM
your favorite topics upfront
9:00
AM
14-24
PUSH Technologies
Your receive a list with
7:00 hypertext links to your favorite
AM web sites that have been changed
since yesterday morning
FROM YOUR WORK COMPUTER
Your on-line broker account automatically
opens a small window on your screen and
continuously displays the real-time quotes
of your favorite stocks.
XXX
You receive an e-mail reminding
9:40 you that it is your mother-in-law’s
AM birthday and notifies you that
flowers have been sent as
prearranged by you.
McGraw-Hill/Irwin
9:30
AM
Your personal electronic
news service sends a
competitor’s press release
9:50 You receive an alert from your
AM on-line stock broker that a specific
stock price has fallen and you
issue a buy order
XXX
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-25
11:00 Your personal news
service sends a news story
AM
about a major supplier
2:30
PM
The airline you are flying
tomorrow sends you gate
information and weather
details for your destination.
5:15 You visit your child’s favorite
PM TV show’s web site and print
out a coloring book page to bring
home this evening.
McGraw-Hill/Irwin
You are alerted that a new supplier
1:00 of a raw material has been located
PM on the Internet & company
background is forwarded to you.
3:30 You receive a message from your
PM spouse’s favorite department store that
one of his “wish list items” is now on
sale. You click on their web browser
form, purchase the item, and request
that it be shipped to your office.
BACK AT HOME
You receive a notice that your favorite
recording artist’s newest release is now
available for sale. You follow the link
7:30
in the message, pay for it, and download
PM
it to your recordable DVD drive.
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-26
What are some website design
issues?
• Page loading efficiency
– Text only option
•
•
•
•
•
•
•
•
Simplicity
Wise use of space
A reason to return
Framing
Tables and fonts
Graphics
Interlaced Graphics – sharper images
GIF vs. JPEG files
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-27
More website design issues
Customers should easily find information
about:
• Tax rates
• Shipping rates
• Shipping schedules
• Return policies
• Privacy of transaction
• Security of data that is transmitted
• Shopping cart items should be able to be
viewed at any time
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-28
Use of Intelligent Agents
Intelligent agents:
• Help customers find what they want on
the web in less time
• Can help customers become more brand
loyal by watching their behavior and
finding price comparisons for them
• Can help stores become more visible to
customers
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
14-29
Implications for the
Accounting Profession
• Customer value affects all aspects of the
value chain
• Marketing aspects and data should affect
all business processes if the customer is at
the center of the value sphere
• Accountants can test the reliability,
integrity and security of marketing
systems.
• Activity-based costing can be applied to
marketing and customer costs, which can
be used for better product/service pricing
McGraw-Hill/Irwin
© 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.