Introducing Internet Marketing
Lecture 1
Objectives
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Subject Overview
The Internet and the marketing concept
Benefits of the Internet for businesses
The new marketing medium
Internet marketing communications
Internet Marketing strategies
Subject Overview
• General Aim and Rationale – the utility of
the Internet as a tool for business to increase
efficiency, competitiveness, and
effectiveness.
• Objectives
• Content
• Assessment criteria
The Internet and the Marketing
Concept
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Two distinct meaning for marketing
1. The range of specialist marketing functions
carried out by the firm (marketing research,
public relations..)
2. An approach or concept that can be used as
the guiding philosophy for all functions and
activities
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The modern marketing concept unites
these two meanings.
The Internet and the Marketing
Concept
• The Internet can be applied by companies as an
integral part of the modern marketing concept
since:
– It can be used to support the full range of organizational
functions
– It is a powerful communication medium that integrates
the different parts of the organization
– It facilitates information management
– The future role of the Internet would form part of the
vision
Internet Marketing Defined
The use of the Internet and related digital
technologies to achieve marketing
objectives and support the modern
marketing concept.
Electronic commerce transactions are the
trading of goods and services conducted
using the Internet and other digital media
Business Benefits of the Internet
• Market penetration – sell more existing products
into existing markets
• Market development – Internet is used to sell into
new markets
• Product development – New products or services
developed which can be delivered over the
Internet
• Diversification – New products are developed
which are sold into new markets
Market and Product Strategic Grid
New
Existing
Market
Conservative
Approach
Innovative
Approach
Market
Development
Diversification
Market
penetration
Product
development
Existing
New
Product
Marketing Functions & The Internet
• Sales – achieve through increasing awareness of
brands and products, supporting buying decisions
and enabling online purchase
• Marketing communication – use of the web site
for a range of marketing communication
• Customer service – supplementing phone
operators with information available online
• Public relations – the Internet can be used as a
new channel for public relations (publish latest
news on products)
• Marketing research – techniques of finding a
range of marketing information
The 6 Cs’ of the Internet
• Cost reduction – reducing the need for sales and marketing
enquiries to be handled by telephone and producing printed
marketing communication material
• Capability – The internet provides new opportunities for
new products and services and for exploiting new markets
• Competitive advantage – First mover advantage
• Communications improvement – improved
communications with customers, staff, suppliers
• Control – Better marketing research through tracking
customer behavior
• Customer service improvements – Interactive queries of
databases containing stock availability or customer service
questions
The Internet – A New Marketing
Medium
• The Internet refers to the physical network that links
computers across the globe. It consists network servers and
wide-area communication links that are used to hold and
transport information.
• World Wide Web is a medium for publishing information
on the Internet.
• Intranet is a password protected network within a single
company which enables access to company information
using the familiar tools of the Internet such as web
browsers.
• Extranet is formed by extending the intranet beyond a
company to customers, suppliers, collaborators or even
competitors.
Level of management
Internet
Intranet and extranet
Strategic
Environmental scanning
Competitor analysis
Market analysis
Strategic decision making
Supply chain mgt
Internet data analysis
Management information
Marketing information
Database
Operations efficiency
Business planning
Monitoring and control
Simulation
Business intelligence (data
warehouses)
Tactical and operational
Advertising/promotions
Direct marketing
Public relations
Distribution/logistics
Workgroups
Marketing research
Publishing
Electronic mail
Data warehousing
Relationship marketing
Conference marketing
Conferencing
Training
Technology information
Product/service information
Customer service
Internet trading
Sponsorship
Internet Marketing Communications
• Characteristics inherent in digital medium:
– The customer initiates contact
– The customer is seeking information (pull)
– It is a high intensity medium – the marketer will have
100 per cent of the individual’s attention when he or
she is viewing a web site
– A company can gather and store the response of the
individual
– Individual needs of the customer can be addressed and
taken into account in future dialogues
Old and New Media
Old media
New media
Comment
One-to many
communication
model
One-to-one or many-tomany communication
model
Hoffmann & Novak (1996)states that Internet is a
many-to-many medium, but for company to customer
one-to-one
Mass marketing
Individualized
marketing or mass
customization
Personalization possible because of technology to
monitor preferences and tailor content (Deighton,
1996)
Monologue
Dialogue
Indicates the interactive nature of the WWW, with the
facility for feedback
Branding
Communication
Increased involvement of customer in defining brand
characteristics. Opportunities for adding value to brand
Supply-side thinking
Demand-side thinking
Customer pull becomes more important
Customer as target
Customer as partner
Customer has more input into products and services
Segmentation
Communities
Aggregation of like-minded consumers rather than
arbitrarily defined target segments
Internet marketing application in UK
Use
Percent
PR/marketing information
Product contacts
Customer contacts
Facilitating customer feedback
70
40
27
20
Detailed product information
Distribution of paid-for reports
Online orders
18
10
8
Paid-for advertisements
5
Source: Business Computer World/Spikes Cavell, February 1997
Avoiding Marketing Myopia
• Traps that should be avoided when embarking on Internet
marketing:
– Wrongly defining which business they are in
– Focusing on:
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Products rather than customer
Production
Technology (only an enabler, not an aim)
Selling (the culture of the Internet is based on customer seeking
information to make informed buying decisions)
• Customer needs (the need for market orientation is a critical aspect of
web site design and Internet marketing strategy)
• Market opportunities (new opportunity for adding value rather than
just another channel)
Avoiding Marketing Myopia
– Unwillingness to innovate and ‘creatively destruct’
existing product/service lines
– Shortsightedness in terms of strategic thinking
– The lack of a strong and visionary CEO (Baker (1998)
found that this was important to companies’ using the
Internet effectively)
– Giving marketing only ‘stepchild status’, behind
finance, production and technology.