Internet Marketing, 2nd Ed
Mohammed, Fisher, Jaworski, Paddison
Chapter 10 Lecture Slides
Community
Exhibits and Tables
Copyright © 2003 by Marketspace LLC
Online Community — Today’s Objectives
Objectives will be to:

Develop a clear definition of community

Discuss 10 criteria for assessing a successful community

Explore how communities function and create value

Discuss the benefits of commercial communities

Examine the ways in which effective communities can be created
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–1: Community Criteria
What is community?
A set of interwoven relationships built upon shared interests that satisfies individual needs
that would otherwise be unattainable
What are the criteria for defining community?
People Criteria
Process Criteria
Culture Criteria
 Membership is a
conscious choice
 Member base has
achieved critical mass
and sustainability
 Members feel a great
sense of trust
 Members achieve
benefits of scale
 Roles are not
hierarchical or
imposed
 Effective facilitation
and site structure keep
activities on track
 A spirit of participation
and feedback is
clearly cultivated
 A sense of affiliation is
achieved through
ownership of equity in
the community
Technology Criteria
 Efficiency in
interaction is
maximized
 The community is
easily navigable
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–2: How the 2Is Affect Online Community
Individualization and interactivity are at the core of relationships, and hence community
Individualization
 Less accountability
Punishing an
individual’s
inappropriate behavior
becomes more difficult
on the Internet.
 More anonymity User
identity can be easily
disguised by logging on
with aliases.
Interactivity
Online Community
 Convenience
Communication and
resource sharing can
take place anytime.
 Reach Elimination of
geographical boundaries
allows for the creation of
both large and effective
communities.
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 10–A: How Communities Function
How Communities Function
Real-Time Systems
Immediate communication,
where messages are sent,
read and replied to
immediately
Examples:
– Internet Relay Chat (IRC)
– Web-based chat
– Virtual worlds and MUDs
(multi-user dimensions) /
MOOs (MUDs objectoriented)

Asynchronous Systems
Delayed communication,
where the time between a
message being sent, read and
replied to can vary greatly
Examples:
– Mailing lists
– Newsgroups (Usenet
groups)
– Web-based message
boards (bulletin board
systems [BBS])

Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–3: The Foundations of Community
The three
foundations
of shared
interests
Community
Shared Interests in
Information
Members’ primary interest
is the sharing of
information. Examples
include:
Shared Interests in Activity
Shared activities forms the
main glue in these
communities. Examples
include:
Shared Interests Arising out of
Commonality
Community members
share a common attribute
or characteristic. Examples
include:
 Motley Fool
 eBay
 MaMaMedia.com (kids)
 VintageBus.com
 Station.com’s
EverQuest boards
 Physicians’ Online
(doctors)
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 10–B: Open vs. Closed Communities
Communities can be described as either open or closed in regard to their membership
policies, and it can be useful to know the distinction between the two
Open Communities
Membership policy:
 Open to all regardless of
individual profile
Used typically for:
 Communities based on a more
general and highly accessible
topic of interest
Examples:
 Yahoo.com
 Talk.com
 Launchcast.com
Closed Communities
Membership policy:
 Outsiders generally not allowed
inside community
 Members must fit specific
qualifications
Used typically for:
 Extranets or intranets between
well-known parties and sources,
dealing with highly specific and / or
sensitive data exchange
Examples:
 Corporate intranets or extranets
(e.g., Ford Motor Company and its
suppliers)
 Physicians Online
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–4: Transfer of Value Triangle
User to User:
Examples of Types of Value Created and Shared
 User-generated content (e.g., information,
opinions, advice)
 Distribution of digitizeable goods (e.g., MP3s,
shareware)
 Transactions for goods
 Relationships / support / conversation
User to Administrator:
Examples of Types of Value
Created and Shared
 Community subscription fees
 Content fees
 Fees to engage in an activity
(e.g., online video-game
participation)
 Commission fees (e.g., for
goods sold through the
community)
 Increased value for selling
online advertising space
User
User
Transfer of
Value in
Communitie
s
Administrator to User:
Examples of Types of Value Created and Shared
Administrator
 Administrator-generated
content / proprietary
content (e.g., articles,
editorials)
 Mailing lists
 Newsletters
 Webcasts (e.g., of guest
speakers)
 Supervised chats (e.g., chats
featuring guest Q&A)
 Offline events (e.g.,
gatherings of members within
geographic proximity)
 Rewards points (e.g., to use
on goods or services traded
within the community)
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 10–C: Community Benefits to Parent Firms
A community can create the benefits that transcend community boundaries and benefit the
parent firm that sponsors a community
Community Benefits to Parent Firms
Cost Benefits
Reduced customer service
costs
Reduced customer acquisition
costs
Reduced costs from
decreased product flaws and
market mistakes
Reduced marketing costs

Revenue Benefits
Increased customer
segmentation and
customization
Increased branding
Deepened customer
relationships

Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Illustration–The Membership Life Cycle
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–5: Distinguishing Elders on Amazon.com
Top product reviewers
are able to create bio
pages with optional
pictures.
Special icons
accompany their
reviews, lending more
credibility to their
opinions.
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–6: Intensity Patterns During the Four Relationship
Stages
Relationship Stages
Awareness
Exploration /
Expansion
Commitment
Dissolution
Leaders
Elders
Regulars
Level of
Intensity
Novices
Visitors
Time
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–7: The Community Applicability Model
Consumer Attributes
Consumer attributes are behavioral
• Is the target group of your product or
service made up of active online users?
• Are members of your target group likely
or willing to share information with others?
• Are members of your target group
involved in the process of discovery?
• Do members of your target group value
interaction with like-minded people?
• Can the community grow organically?
Pursue
Community
Creation
The Community Applicability Model asks two sets of questions to help determine when to
pursue community building; marketers should consider developing online community if it is
determined that their product or service addresses an intersection of the two sets of attributes
Product Attributes
Product attributes are emotional
• Can the product generate critical mass?
• Does the product elicit passion?
• Does the product address or revolve
around a certain lifestyle?
• Do benefits of information aggregation
arise from product complexity?
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–8: Mapping Online Community
Applicability Questions
Lord of the
Rings*
eBay
Match.com
RootsWeb
Consumer Attributes
Active Online
Willing to Share
Process of Discovery
Value Interaction
Organic Growth
Product Attributes
Critical Mass
Elicit Passion
Lifestyle
Information Aggregation / Product Complexity
* (www.lordoftherings.net)
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–9: The Three Levels of Community
Level of Community
Nascent
Formative
Mature
People
Characteristics
 Small number of core
members, small number of
participants
 Small number of core
members, higher number of
participants
 Users begin to build equity
 Increased number of core
members, high number of
participants
 Users become operationally
entangled
Process
Characteristics
 Somewhat less defined and
focused processes of
communication
 Lack of segmentation of
users / little segmentation of
discussion topics
 Small number of core
members, higher number of
participants
 Users begin to build equity
 Efficient processes of
communication established
 Clear segmentation of
topics and users
Culture
Characteristics
 Momentum is jumpstarted
and driven by core group of
founders
 High on energy, low on
focus
 Community’s brand is
evolving
 Gains more momentum
 Refinement of missions /
goals (as defined by
members)
 Community is building a
solidified brand
 Achieves critical mass
 Mission close to fully
defined according to
members
 Membership alignment in
shaping of the community
 Leadership positions within
the community are
established
 Community establishes
brand
Technological
Characteristics
 Fewer technological options
for communications
 More options for
communication technology
explored
 Preferred technology used
for communication is
established
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–10: Community Building Strategy
Community Level
Nascent
Formative
Mature
General Strategy
and Operational
Objectives
 Aim for growth (in membership)
 Attract users by creating
administrator-user value, promote
administrator-generated content
 Seek feedback to determine where
the community is going
 Find and build upon one or a few
well-used methods of communication
 Foment relationships and vibrant
discussion within only a small
number of community groups
 Aim for change (in functionality and
mission)
 Leverage increasing size to create
user-to-user value and promote usergenerated content
 Seek feedback to further refine
community goals and mission
according to members
 Explore different processes of
communication (asynchronous vs.
real time, or both)
 Refine community facilitation
processes; establish roles that
members are chosen for or can
volunteer for (e.g., watchpeople,
guides)
 Leverage CRM to tailor site and
functionality to the member
 Allow for further segmentation of
discussion topics
 Aim for sustainability (in solidifying
branding and presence)
 Leverage size to increase useradministrator value (e.g.,
advertising)
 Establish reliable feedback loops to
ensure the recognition of member
needs
 Determine most appropriate
methods of community
communication
 Further develop community leaders
/ caretakers of the community to
create sustainability
 Incorporate offline events /
marketing to further solidify
community relationships, activities
and community presence
 Leverage processes of offline community (e.g., rituals and tradition)
Marketing
Objectives
 Increase member base
 Get the word out
 Use content to attract members
 Refine community vision (as defined
by members)
 Generate equity for members within
community
 Establish solid brand and clear
mission
 Establish community presence
 Expand possibilities for equity
generation
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–11: The Community Growth Path
Stages of the
Relationship
Objectives
Do:
Don’t:
Awareness
• Inform and invite
• Make it enticing; clearly define the benefits
• Anticipate questions and concerns; let individuals find
answers easily and quickly
• Provide a call to action; find methods that encourage
exploration
• Ask them for the world; individuals
will be reluctant to give information,
much less money
Exploration /
Expansion
• Encourage through
exploration
• Build a sense of trust
• Begin the process of
equity creation
• Provide an easily navigable interface
• Show support to members, and a desire for them to
participate
• Format equity creation (both tangible and intangible)
• Make the membership process
involuntary
• Carelessly attempt a hard sell for
products or contributions to the
community
Commitment
• Heighten equity
building
• Develop existing
members
• Harness individual momentum and passion
• Allow the individual to build non-transferable equity
(tangible or intangible) within the community (sink
“hooks” into the individual)
• Take commitment for granted
Dissolution
• Keep an eye out for
departing friends
• Make the process
easy
• Leave the door open
• Identify departing friends early through both
behavioral and subjective metrics
• Make an effort to reverse the process and provide
solutions (if they are feasible)
• Define the dissolution process and make it fair and
efficient
• Treat the departing friend with respect
• Ask and listen closely to feedback
• Leave the door open and encourage the possibility of
returning to the community
• Fail to make an effort to retain
members
• Make the dissolution process
vague and difficult
• Make the process cold and
impersonal
• Fail to ask for feedback
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–12: Community Levers
Community levers throughout the four relationship stages
Four Key Stages of Customer Relationships
Awareness
 Outline community
benefits clearly and
early on in the
process
 Anticipate and
readily answer
questions and
concerns, quickly
establishing a sense
of trust
 Establish a call for
action and further
exploration
Exploration /
Expansion
 Make community
exploration easy through
efficient site structure
 Show everyone individual
attention (e.g., welcoming
e-mails, guides for
novices, chat
conversations for new
members, use of CRM
marketing to tailor site
functionality)
 Begin the process of
equity creation (e.g.,
member points and loyalty
programs)
Commitment
Dissolution
 Increase equity
building (e.g.,
through tiered
loyalty programs,
increased rewards)
 Spot departing
friends early and
find solutions to
prevent dissolution
 Recognize
individuals’
contribution and
participation
 Develop members
(e.g., through
leadership
opportunities,
community roles,
guides or
watchpeople)
 Make the leaving
process fair and
efficient
 Seek and listen
closely to feedback
 Allow the option of
returning
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–13: EBay’s Community
EBay’s Needs
• Revenue growth
• Critical mass
• Solid reputation
Sellers’ Needs
 Trustworthy customers
 Selling infrastructure
 Commerce platform
Buyers’ Needs
• Broad selection of goods
• Ease of use
• Trustworthy sellers
eBay
Set of
interwoven
relationships
Sellers
Shared interests
Buyers
Antiques
Pottery
Cars
Collectibles
Commerce
Utility
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–14: The Power of EBay’s Network Effect
30,000
29,334
eBay
uBid.com
Monthly Unique
Visitors
(in thousands)
25,000
Yahoo Auctions
Andale Sites
20,000
Qool.com
15,000
10,000
5,000
3,153
2,904
2,778
905
0
Source: Jupiter Media Metrix (March 2002)
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Exhibit 10–15: Leveraging EBay’s Scale
EBay displays the
number of listings
in the category
being browsed.
EBay also displays
the number of
items in related
categories,
leveraging its
scale.
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Chapter 10:
Online Community

Defining Community and Assessing Successful Community

How Community Changes and Functions on the Internet

The Creation and Transfer of Value Within Communities

How Members Progress in Their Relationship With a Community

When to Develop Community

How to Create Successful Community

EBay Case Study

Conclusion
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC
Online Community — Conclusion


Real community is accomplished by meeting criteria along four dimensions:
people criteria, process criteria, culture criteria and technology criteria
Communities differ by their foundations — shared interests of information,
shared interests in activity and shared interests arising out of commonality

Within a community, value is created in three different ways: user-to-user,
administrator-to-user and user-to-administrator

Communities can generate significant benefits outside of themselves, such
as to a parent firm, through both cost and revenue benefits
Last Updated: 04/10/03
Copyright  2003 by Marketspace LLC