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Tactical and operational Advertising/promotions Direct marketing Public relations Distribution/logistics Workgroups Marketing research Publishing Electronic mail Data warehousing Relatio[r]

Introducing Internet Marketing

Lecture 1

• 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

• 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

• 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

Market

Market

Product

Conservative Approach Innovative Approach

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 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

One-to many

communication

model

One-to-one or many-to-many 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

Internet marketing application in UK

Facilitating customer feedback 20

Detailed product information 18

Distribution of paid-for reports 10

Avoiding Marketing Myopia

• Traps that should be avoided when embarking on Internet marketing:

– Wrongly defining which business they are in

– Focusing on:

• 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