Published on February 15, 2013
E-MARKETING COURSE SESSION Two Lecturer: Bahman Moghimi Doctor of Business Administration M.Sc. Of “Industrial Marketing & e-Commerce” University of Georgia
What is Paradigm Shift? Information Age Buy-Side Market Place CompetitorsB.Moghimi@yahoo.co.uk High Expectations High Rate of Change in Cultures & Behaviors E-Life !!!!
Old Economy V.S. New Economy Old Economy New Economy Organize by product units Organize by customer segments Focus on profitable transactions Focus on customer lifetime value Look primarily at financial scorecard Look also at marketing scorecardB.Moghimi@yahoo.co.uk Focus on shareholders Focus on stakeholders Marketing does the marketing Everyone does the marketing Build brands through advertising Build brands through behavior Focus on customer acquisition Focus on customer retention and growth No customer satisfaction measurement Measure customer satisfaction & retention Over-promise, under-deliver Under-promise, over-deliver 5
Meeting Increasing Customer NeedsB.Moghimi@yahoo.co.uk 6
What is Marketing? … ... a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.B.Moghimi@yahoo.co.uk It involves building profitable, value exchange relationship with customers……. 7
Simple Model of Marketing Process B.Moghimi@yahoo.co.uk 8
Customer-Driven Marketing Strategy What’s the target Market? – Market Segmentation… – Target Marketing…B.Moghimi@yahoo.co.uk What’s the value proposition? – Set of benefits & values to satisfy needs… – Differentiation & Positioning… 9
Integrated Marketing PlanThe company’s marketing strategy should develop an integrated marketing program that actually deliver the intended- value to target customers B.Moghimi@yahoo.co.uk 10
Building Customer Relationships ? CRM is the overall process of building and maintaining profitable customers relationships byB.Moghimi@yahoo.co.uk delivering superior customer value and satisfaction Customer (Perceived) VLUE (customers evaluation of differentiation) Customer SATISFACTION (Product Perceived Performance) 11
The Changing Nature of Customer Relationships More Carefully selected Customers Long-Term Relationships Connecting DirectlyB.Moghimi@yahoo.co.uk 12
Functions of markets Three main functions of markets – Matching buyers and sellers Facilitating the exchange of information, goods,B.Moghimi@yahoo.co.uk – services, and payments associated with market transactions – Providing an institutional infrastructure, such as a legal and regulatory framework, that enables the 14 efficient functioning of the market
Definition of e-CommerceB.Moghimi@yahoo.co.uk 15
THE GROWTH OF E-COMMERCEB.Moghimi@yahoo.co.uk Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed measurably. In 2010, e-commerce revenues are growing again at an estimated 12 percent annually. 17
Why e-commerce is different – 8 unique features 1. Ubiquity Internet/Web technology available everywhere: work, home, etc., anytime. Effect:B.Moghimi@yahoo.co.uk – Marketplace removed from temporal, geographic locations to become “marketspace” – Enhanced customer convenience and reduced shopping costs 18
Why e-commerce is different – 8 unique features 2. Global reach The technology reaches across national boundaries, around Earth Effect:B.Moghimi@yahoo.co.uk – Commerce enabled across cultural and national boundaries seamlessly and without modification – Marketspace includes, potentially, billions of consumers and millions of businesses worldwide 19
Why e-commerce is different – 8 unique features 3. Universal standards One set of technology standards: Internet standards Effect: – Disparate computer systems easily communicate with eachB.Moghimi@yahoo.co.uk other – Lower market entry costs—costs merchants must pay to bring goods to market – Lower consumers’ search costs—effort required to find suitable products 20
Why e-commerce is different – 8 unique features 4.Richness Supports video, audio, and text messages Effect:B.Moghimi@yahoo.co.uk – Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people – Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience 21
Why e-commerce is different – 8 unique features 5. Interactivity The technology works through interaction with the user Effect:B.Moghimi@yahoo.co.uk – Consumers engaged in dialog that dynamically adjusts experience to the individual – Consumer becomes co-participant in process of delivering goods to market 22
Why e-commerce is different – 8 unique features 6. Information density Large increases in information density—the total amount and quality of information available to all market participantsB.Moghimi@yahoo.co.uk Effect: – Greater price transparency – Greater cost transparency – Enables merchants to engage in price discrimination 23
Why e-commerce is different – 8 unique features 7. Personalization/Customization Technology permits modification of messages, goods EffectB.Moghimi@yahoo.co.uk – Personalized messages can be sent to individuals as well as groups – Products and services can be customized to individual preferences 24
Why e-commerce is different – 8 unique features 8. Social technology The technology promotes user content generation and social networkingB.Moghimi@yahoo.co.uk Effect – New Internet social and business models enable user content creation and distribution, and support social networks 25
Types of e-commerce • Business-to-consumer (B2C) • Business-to-business (B2B)B.Moghimi@yahoo.co.uk • Consumer-to-consumer (C2C) • Mobile commerce (m-commerce) 26
E-commerce business models Portal E-tailer Content ProviderB.Moghimi@yahoo.co.uk Transaction Broker Market Creator Service Provider 27 Community Provider
E-Market-space A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do soB.Moghimi@yahoo.co.uk electronically. 28
E-Commerce Website selling products/info is a useful service to customers Serves 2 purposes: Marketing Allowing consumers to shop when on their own timeB.Moghimi@yahoo.co.uk – If you don’t sell online, you might be missing an opportunity to serve your customers Some E-Commerce sites are replacing high-street shops 29
What is E-Marketing & E-Business? 1 EB=EC+BI+CRM+SCM+ERP – EB = E-Business – EC = E-Commerce – BI = Business IntelligenceB.Moghimi@yahoo.co.uk – CRM = Customer Relationship Mgmt – SCM = Supply Chain Management – ERP = Enterprise Resource Planning (SAP)
What is E-Marketing & E-Business? 2 E-Marketing – Increases efficiency in traditional marketing Pure Pure dot-com (E*Trade) Level of business impact Business transformation (competitive advantage, Play industry redefinition) functions. Enterprise Click and Mortar (eSchwab) – Technology of e- Effectiveness Customer (Incremental sales, Business Process relationship marketing transforms customer retention) managementB.Moghimi@yahoo.co.uk Efficiency Brochureware, Activity marketing strategies. (Cost reduction) Order processing This results in new business models that add value and profits.
What is E-Marketing & E-Business? 3 Level of commitment to E-Biz can vary – Individual Business Activity - aim for efficiency (cost reduction) Ex. Website for brochure-ware – Business process - aim for effectivenessB.Moghimi@yahoo.co.uk (incremental sales, retention) (ex. CRM) – Enterprise - the firm automates many business processes in a unified system(ex. Click+Mortar) – Pure Play-business transformation (dot.com) (competitive advantage, industry redefinition) 32
The challenges/ opportunities with E-Marketing Consumers Empowered – Consumers now have more control. They want: Speed (ex. answer emails quick) Privacy, safeguards, permission to contact and use informationB.Moghimi@yahoo.co.uk Low prices, convenience, self-service Service, personal attention/personalization (treat customers important) Value (exceed expectations) Mass customization (adds value and can be 33 automated).
The challenges/ opportunities with E-Marketing Consumers want in a website: – 1 stop shopping with integrated solutions. – Effective web navigation – Quick downloadsB.Moghimi@yahoo.co.uk – Clear site organization – Attractive/useful site design – Secure and private transactions – Free information/services - consumers used to online culture of getting something for free. 34
The challenges/ opportunities with E-Marketing Businesses must address: – Competition, changing value chain structures, conflict, and coordinating the front/back end. Technology – Costly and changing, but may offer LR savingsB.Moghimi@yahoo.co.uk But can offer value to both firms and consumers if done right: – Benefits of customization, personalization – Decrease Costs - 24/7 convenience, self-service ordering and tracking, one stop shopping. 35
E-Bay an example of E-Marketing success Still successful despite slowing E-Bay on track for $8 billion in economy as both consumers revenues in 2008 and 70% and firm searching for stuff to earnings growth in next 2-3 sell. years. E-Bay takes a cut of every Has 85% of online consumer transaction - low risk as they auction market. Firms also setB.Moghimi@yahoo.co.uk don’t have to address up shops to sell at fixed prices. inventory, warehousing, or fulfillment issues. 37.6 million users in 200 countries. 1/2 of users referred to by other users. 36
Size of the Internet? The Internet is a big place. How big? Try gigantic. The attempts to visually representing some of the mind-boggling numbers that defined the Internet circa 2010 , still not very easy to wrap your head around. How, for example, does one simply imagine the 2 billion videos being watched on YouTube each and every day? How is itB.Moghimi@yahoo.co.uk possible that 35 hours of video can be uploaded to the site every minute? What do 36 billion photos look like? Ask Facebook; thats how many photos are uploaded to the site each year. 107 trillion e-mails (!) are sent on year 2010! 39
E-Marketing Primary Strategies The essential issues of marketing are also referred to as the four Ps of marketing mix: Product: Physical item or service that a company is sellingB.Moghimi@yahoo.co.uk Pricing: Amount the customer pays for the product Placement: How the product/service gets to the customer, sometimes called “place” referring to “where” a product/service is sold Promotion: Any means of spreading the word about the product 40
E-Marketing Primary Strategies (Cont) There are extra 3Ps as the extended marketing mix: People: Right person, trained well, motivatedB.Moghimi@yahoo.co.uk Process: Providing services to customers Physical evidence: Case studies, testimonials 41
Revision – Rules for Success Rule #1 – Selling Anywhere #1 Anywhere Means technologically (on wired and portable wireless devices) and geographically (selling anywhere inB.Moghimi@yahoo.co.uk the world). With Internet this is a reality. Your local market is the global market. If you are not selling everywhere, you are selling nowhere.
Revision – Rules for Success Rule #1 – Selling Anywhere #1 Selling globally means that you have understand the culture of the customer you are selling to.B.Moghimi@yahoo.co.uk You have to face the challenges of language, regulatory challenges of import and export rules, taxation, social and political issues, fulfillment and customer services problems. Any of these items, If mishandled, can quickly torpedo your global marketing efforts and furthermore your investment.
Revision – Rules for Success Rule #2 – Selling Anything #2 The message is “Find a need and fill it”B.Moghimi@yahoo.co.uk Once a need is found, the Internet makes it easy to serve it. What is offered to consumers on the net is limited only by the company’s imagination and the Internet technology that you can create to deliver it.
Revision – Rules for Success Rule #2 – Selling Anything #2 Trying to have the next big thing for the net, keep three major human motivations in mind:B.Moghimi@yahoo.co.uk • Information • Economic • Entertainment If your idea can satisfy these motivation then Internet can translate the idea to money.
Revision – Rules for Success Rule #3 – Selling Anytime #3 One of the unique advantage of Internet: It allows companies to conduct business 24/7 But don’t forget:B.Moghimi@yahoo.co.uk Anytime, means that the user can use many different devices to access the Internet with different capabilities each one And secondly, your visibility on the Net is limited by having a single Web site, thus the marketing costs of driving qualified buyers to a Web site are a huge cash drain on dot-coms, leading to bankruptcy.
Revision – Rules for Success Rule #3 – Selling Anytime #3 One way to become known in the Internet and minimizing the marketing costs is through affiliate marketing This type of marketing rely on affiliate programs. These areB.Moghimi@yahoo.co.uk programs that a web site joins in which a merchant pays a commission to an affiliate for generating clicks, leads, or sales from a graphic or text link located on the affiliate’s site. Strongly introduced by Amazon.
Revision – Rules for Success Rule #4 – Selling Anyway #4 The new technological capabilities of the Internet are changing the face of EC. Customers will use personal shopping services These services will send their requests out for bidB.Moghimi@yahoo.co.uk Return with merchants offers in the form of multimedia “advertorials” on a product or service. www.geek.com www.respond.com www.radicalmail.com www.entrypoint.com
Revision – Rules for Success Rule #4 – Selling Anyway #4 Digital cash – or e-cash – will eventually become the dominant way of paying for products and services on the Internet. Although payment will come from consumer’s credit card orB.Moghimi@yahoo.co.uk bank account, how payment is made on the Net can take a variety of forms as: A prepaid payment option A person-to-person (P2P) service, or In the form of an Internet escrow service.
Revision – Rules for Success Rule #5 – Selling at Any Price #5 In e-commerce, The customer is in control.B.Moghimi@yahoo.co.uk The “One price fits all” model is obsolete. Pricing will get personal. Not just preferred pricing for repeat customers, but the delivery of customized price offers to each and every buyer. Schemes of dynamic pricing will be dominant.
Revision – Rules for Success Rule #5 – Selling at Any Price #5 Dynamic pricing is difficult in real world However on the Net prices can be changed in a second.B.Moghimi@yahoo.co.uk Dynamic pricing schemes contain factors as •Product selection •Convenience factors •Customer service and purchase guarantee information •Rebates •Personalized services