Lecture E-Commerce - Chapter 15: E-commerce marketing (part III)

In this chapter students will be able to: The revolution in internet marketing technologies, web transaction logs, tracking files, databases, data warehouses and data mining, customer relationship management (CRM) systems,...

CSC 330 E-Commerce

Teacher

Ahmed Mumtaz Mustehsan

GM-IT CIIT Islamabad

COMSATS Institute of Information Technology

T1-Lecture-15

The Revolution in Internet Marketing

Technologies

Internet marketing technologies:

1.Web Transaction logs

2.Tracking files

3.Databases, Data warehouses, Data mining

4.Customer Relationship Management systems (CRM)

1 Web Transaction Logs

Webtrends: Leading log analysis tool

with:

◦Registration forms: Gather personal data on name, address, phone, zip, e-mail, and other optional

information on interest and tastes

◦Shopping cart database: captures all the item

selection, purchase and payment data)

1 Web Transaction Logs

Transaction log coupled with Registration Forms and

shopping cart provides treasure of marketing information leads to answer some interesting questions such as:

attractive design encourage visitors to purchase?

2 Tracking Files

Under this technique user’s browsing activities are

tracked as they move from site to site

Different types of tracking files

Causing misleading analysis, wastage of efforts

2 Tracking Files

Flash Cookies set to never expire (5 MB)

web profiles

the e-mail messages

opened by the users i.e the user was at least

interested in subject message

other that one served the page

3 Databases

Database:

Database management system (DBMS):

maintain, and access databases

SQL (Structured Query Language):

language used in a relational database

Relational database:

organized in rows and attributes in columns; data within different tables can be flexibly related as long as the

tables share a common data element

Relational Database View of E-commerce Customer

In RDB the data generated from an e-commerce site is stored on the

HD and presented to the managers of the site in the form of

interrelated tables

3 Data Warehouses and Data Mining

Data warehouse:

transactional/operational and customer data in single

location for offline analysis by marketers and site

managers

Data mining:

Four types of Data mining are:

◦Query-driven data mining

◦Model-driven data mining

◦Rule-based data mining

◦Collaborative filtering

1-3 Data Warehouses and Data Mining

Customer Profile: A description of a typical behavior of a customer or a group of customers at a web site

Query-driven data mining: Simplest; hunch of marketers who suspect a relationship in DB

the relationship between time of day and purchase of various products? Or rank top 10 products! Sold in ever hour

Model-driven data mining

decision makers

Example: Based upon financial model of profitability,

remove unprofitable items from inventory to save

archiving cost

1-3 Data Warehouses and Data Mining

Rule-based data mining

groups and individuals at a website and attempts to

derive general rules of behavior for visitors

Example:

Marketers propose filters for different segments for example travelling plans during vocational periods Female who spend on average $50 per visit at website and also viewed travel article might be shown vocational travel advertisement

1-Data Warehouses and 1-Data Mining

Collaborative filtering

characterized by common interests; products are

then recommended based on what other people in

the group have recently purchased

Example:

Marketers make filters on the basis of their own rule

of thumb; example query all people of the same

demographic group who purchase same products in

almost the same time period

Extract lifestyle; opinion leaders or influencers

1-Data Mining and Personalization

SOURCE: Adomavicius and Tuzhilin, 2001b ©2001 IEEE.

4 Customer Relationship Management (CRM)

Systems

with need to “know the customer”

1-4.A Customer Relationship Management System

An example of CRM system for a financial services institution System capture customer info from all customer touch points and from other data sources merge the data into a single aggregated database system Applying OLAP analyze the customer activities and behavior to determine profitable

1-Generic Market Entry Strategies

Both new and traditional firms face a basic choice of click and bricks and

clicks when entering e-commerce marketplace

1-Generic Market Entry Strategies

New Firms ; Quardent 1 & 2;

(Amazo eBay etc.)

resources, lack of experience;

competition 2 increased their audience

most of the firms survived by establishing their joint

venture and alliance with already established big

traditional players offering them on-line presence

1-Generic Market Entry Strategies

Existing Firms ; Quardent 3 & 4;

cash flow and funds to support their e-commerce

venture (Barnes & Noble, Rite Aid)

establishing their websites as independent firms making use of their existing resources and experience

extend their business online in addition to the traditional

Wal-Mart)

bricks-and-clicks strategy with a hope of success

1-Establishing the Customer Relationship

Firm chooses a market entry; needs marketing strategy for establishing relationship with customers:

Advertising networks

Web bugs, backend user profile databases, user profile, user behavior Best known advertising network is

DoubleClick.com

these companies for further establishing their online

advertisement business (Google purchased double click

$ 3.1 Billion

Advertising exchanges

sharing the revenue with web sites usually called web

publishers (Google, yahoo, eBay)

1-How an Advertising Network

Such as DoubleClick Works

1-Establishing the Customer Relationship

Permission marketing:

from customers before sending them information or

promotional messages

Affiliate marketing:

commission for new business opportunities it refers to the site

associates which receive around 15% on sales their

referral generate

1-Establishing the Customer Relationship

Viral marketing

company’s marketing messages to friends, family and colleagues

Blog marketing

are ideal for viral marketing Google AdSense is a

major Blog Marketers

Social network marketing

1-Establishing the Customer Relationship

Social marketing and wisdom of crowds

new customers for a new product or service

1-Customer Retention

Mass marketing:

national audience with a single national price

Direct marketing:

and aimed at the segment of the market with little

price variations (special offer to loyal customers)

Micromarketing :

cities) or specialized market segment with the first

form of true database marketing

1-Customer Retention

Personalized, one-to-one marketing

understanding of individual’s needs

individuals

unique

Personalization

anonymity

1-The Mass Market-Personalization Continuum

1-Other Customer Retention Marketing

1-Chapter 12

B2B E-commerce: Supply Chain

Management and Collaborative

Commerce