Marketing Management
Adapting Marketing To The New Economy
Dr. Zafer Erdogan
2-1
Kotler on
Marketing
The Internet will
create new winners
and bury the
laggards.
2-2
Major Drivers of the New Economy
–Digitization and Connectivity
–Disintermediation and
Reintermediation
–Customization and
Customerization
–Industry Convergence
2-3
How Business Practices are Changing
– From organizing by product units to
organizing by customer segments
– Shift focus from profitable transactions to
customer lifetime value
– Shift focus from financial scorecard to also
focusing on the marketing scorecard
– Shift focus from shareholders to stakeholders
2-4
How Business Practices are
Changing
– Everyone does the marketing
– Build brands through performance,
not just advertising
– Customer retention rather than
customer acquisition
– From none to in-depth customer
satisfaction measurement
– From over-promise, under-deliver
to under-promise, over-deliver
The Fact is the New Hybrid!
2-5
How Marketing Practices are
Changing: E-business
– E-business
– E-commerce
– E-purchasing
– E-marketing
Some argue that ‘e’ will be dropped in time
2-6
Four Major Internet Domains
– B2C (Business to Customer)
– B2B (Business to Business)
– C2C (Consumer to Consumer)
– C2B (Customer to Business)
2-7
Pure Click vs. Brick and Click
• Pure-Click companies
– Search engines, Yahoo!, Google, Excite
– Internet service providers, AOL, CompuServe
– Commerce sites, Amazon, e-Toys
– Transaction sites, e-bay, e*trade
– Content sites, The Globe and Mail, E.Britannica
– Enabler sites, hardware and software companies
• Brick-and-Click companies
2-8
Which is more important for
developing an e-presence: the agility
of a pure-click company, or the well
defined and readily identifiable
resources of a traditional
brick and mortar
company?
2-9
How Marketing Practices are Changing:
Customer Relationship Marketing
– Reduce rate of customer defection
– Increase longevity of customer
relationship
– Enhance growth potential through crossselling and up-selling
– Make low profit customers more profitable
or terminate them
– Focus disproportionate effort on high value
customers
2-10
Table 2.3: Mass Marketing vs. One-to-One Marketing
Mass Marketing
One-to-One Marketing
Average customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
Mass promotion
One-way message
Economies of scale
Share of market
All customers
Customer attraction
Individual customer
Customer profile
Customized market offering
Customized production
Individualized distribution
Individualized message
Individualized incentives
Two-way messages
Economies of scope
Share of customer
Profitable customers
Customer retention
2-11
Four steps for CR Marketing
– Don’t go after everyone, identify
prospects.
– Differentiate customers by their needs
and their value to the company.
– Individual interaction with customers
builds stronger relationships.
– Customize messages, services, and
products for each customer.
2-12
Marketing Spotlight: Yahoo!
1.
2.
3.
If "point of destination" placed Yahoo! on the
Internet map, what marketing miscue caused
Yahoo!'s "point of departure" from the scene?
Discuss.
If Yahoo! was caught in the web of overconfidence
with the dot-corns in 2000, can you suggest
marketing management strategies that would help
it avoid this situation in 2005 and after? Is a
merger the only answer?
What changes would you suggest for Yahoo! to
give their marketing strategy a longer range
marketing perspective?
2-13