10a
Marketing in the Digital Age
ROAD MAP: Previewing the Concepts
• The major forces shaping the new digital age.
• Marketing strategies in the digital age.
• The four major e-commerce domains.
• How to conduct e-commerce to profitably
deliver more value to customers?
• Overview of the promise and challenges that
e-commerce presents for the future.
Professor Takada
10a-2
ROAD MAP:
• The major forces shaping the new digital age.
• Marketing strategies in the digital age.
• The four major e-commerce domains.
• How to conduct e-commerce to profitably
deliver more value to customers?
• Overview of the promise and challenges that
e-commerce presents for the future.
Professor Takada
10a-3
Forces Shaping the Digital Age
Intranets – connect people within a company.
Extranets – connect a company with its
suppliers, distributors, and outside partners.
Internet – connects users around the world.
Customization: the
company custom
designs the market
offering for the
customer.
Customerization: the
customer designs the
market offering and
the company makes it.
The heart of the New
Economy.
Increasing numbers of
users.
Companies must adopt
Internet technology
or risk being left
behind.
Direct selling via the Internet bypassing existing
intermediaries (disintermediation).
“Brick-and-mortar” firms became “click-andmortar” companies.
Failure of some “click-only” companies.
Professor Takada
10a-4
ROAD MAP:
• The major forces shaping the new digital age.
• Marketing strategies in the digital age.
How have companies responded to the Internet and
other powerful new technologies with e-business
strategies?
How have these strategies resulted in benefits to
both buyers and sellers?
• The four major e-commerce domains.
• How to conduct e-commerce to profitably deliver more value to customers?
• Overview of the promise and challenges that e-commerce presents for the future.
Professor Takada
10a-5
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
Professor Takada
10a-6
E-Commerce
E-Business
• 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
• More specific than e-business.
• Buying and selling processes supported by
•
the Internet.
Includes: e-marketing and e-purchasing
(e-procurement)
E-Marketing
• The marketing side of e-commerce.
• Includes efforts to communicate about, promote, and sell products
and services over the Internet.
• E-purchasing: the buying side of e-commerce.
– Consists of companies purchasing goods, services, and information from
online suppliers.
Professor Takada
10a-7
Benefits to Buyers
Convenience
Benefits to Sellers
Powerful tool for building
customer relationships
Buying is easy and
private
Can reduce costs
Provides greater product
access and selection
Provides access to
comparative information
Buying is interactive and
immediate
Can increase speed and
efficiency
Offers greater flexibility
in offers and programs
Is a truly global medium
Professor Takada
10a-8
ROAD MAP:
• The major forces shaping the new digital age.
• Marketing strategies in the digital age:
How have companies responded to the Internet and other
powerful new technologies with e-business strategies?
How have these strategies resulted in benefits to both
buyers and sellers?
• The four major e-commerce domains:
B2C, B2B, C2C, C2B
• How do companies go about conducting e-commerce to profitably deliver
more value to customers?
• Overview of the promise and challenges that e-commerce presents for
the future.
Professor Takada
10a-9
E-Marketing Domains
Professor Takada
10a-10
B2C (Business to Consumer)
Amazon, Expedia, Gap, L.L. Bean
• $428 billion in 2004.
• Online consumers vs. offline
•
•
Increasing opportunities for
targeting markets.
• Customer initiated and controlled.
C2C (Consumer to Consumer)
• Forums: chat room, discussion groups
•
•
•
participate.
Offer product info, purchasing, and
support services.
Huge, $4 trillion in 2003.
Specialty e-marketspaces to conduct
transactions.
C2B (Consumer to Business)
Priceline.com
eBay, Amazon Auctions, AOL
•
Covisint-auto industry “open trading
exchange” Trane Co.-air conditioning
private trading network (PTN).
• More than 500,000 enterprises
consumers.
Increasing diversity in buyers.
–
B2B (Business to Business)
located on commercial online services.
Newsgroups: the Internet version of
forums.
word of Web (vs. word of mouth)
• Consumers can search out sellers,
view offers, initiate purchases, and
give feedback.
Professor Takada
10a-11
ROAD MAP: Previewing the Concepts
• The major forces shaping the new digital age.
• Marketing strategies in the digital age.
• The four major e-commerce domains.
• How to conduct e-commerce to profitably
deliver more value to customers?
• Overview of the promise and challenges that
e-commerce presents for the future.
Professor Takada
10a-12
Types of e-Marketers
Professor Takada
10a-13
Click-Only Companies
Enabler Sites
hardware/soft
ware providers
Content Sites
NYTimes,ESPN
E-tailers
Amazon,
Expedia
Types of
Sites
Transaction
Sites
eBay
Professor Takada
Search
Engines and
Portals
Google, Yahoo
Internet
Service
Providers
AOL
10a-14
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.
Professor Takada
10a-15
Click-and-Mortar Companies
• Most established companies resisted adding Web
•
•
sites because of the potential for channel conflict
and cannibalization.
Many are now doing better than click-only
companies.
Reasons:
–
–
–
–
–
Trusted brand names and more resources
Large customer bases
More knowledge and experience
Good relationships with suppliers
Can offer customers more options
Professor Takada
10a-16
Setting Up for E-Marketing
Professor Takada
10a-17
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.
Professor Takada
10a-18
Designing Attractive Web Sites
Context
Commerce
Content
• The 7 Cs of Effective
Web Site Design
Connection
Communication
Professor Takada
Community
Customization
10a-19
Online Ads and Promotion
• Forms of online advertising & promotion:
–
–
–
–
–
–
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):
Gillette 3-bladed Venus razor for women, “Reveal the Goddess in
You” truck tour and beach-site promotions.
Professor Takada
10a-20
ROAD MAP:
• The major forces shaping the new digital age.
• Marketing strategies in the digital age.
• The four major e-commerce domains.
• How to conduct e-commerce to profitably
deliver more value to customers?
• Overview of the promise and challenges that
e-commerce presents for the future.
Professor Takada
10a-21
The Future of Online Advertising
• Web communities:
– Allows members to congregate online and
exchange views on issues of common interest
– iVillage.com, a Web community for women
• E-mail:
– Use of “enriched” e-mail messages
– Backlash against spam can be problem
– Allow people to opt-out of promotions
Professor Takada
10a-22
Legal and Ethical Issues
• Online privacy: collection of consumer info.
• Online security: Social Security data
• Internet fraud: online auction fraud
• Segmentation and discrimination: digital
divide
• Access by vulnerable or unauthorized
groups: children’s access to adult sites,
eBay.
Professor Takada
10a-23
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.
Professor Takada
10a-24