Module 5: Market Communication E-COMMERCE

Integrating Communications and Branding Branding is about consumer’s perception of the offering Market communications represent customers’ interaction with the brand and, more generally, mass-marketing approaches. – In the offline world, market communications tend to be one-way, from the firm to the customer. – In the online world, market communications become much more interactive (two-way)

Decision stages of the buying process: – Brand awareness and product consideration can be communicated through television ads, general interest magazines, web banners. – Product preference can be fostered through niche magazines and company websites – Purchase decisions can be triggered by point-of- sale promotions, direct marketing, daily specials, sweepstakes, and first-time order incentives – Brand loyalty can be developed through product experience, buyer’s clubs, alerts, newsletters

Evolution of Customer Buying Process

Market communications refers to all the points of contact that the firm has with its customers: – General online communications – Personalized online communications – Traditional mass media communications – Direct communications

Market for Marketing Communications DirectPersonalized Traditional Mass Marketing General Online Approaches Individualized Broad Offline Online AUDIENCE FOCUS COMMUNICATION MEDIA

4 Categories of Communication (1/5) DIRECT 1.Sales force 2.Direct mail 3.Telemarketing 4.Customer service reps DIRECT 1.Sales force 2.Direct mail 3.Telemarketing 4.Customer service reps PERSONALIZED 1.Personalized permission 2.Personalized recommendations 3.Personalized advertisements 4.Personalized web pages 5.Personalized e-commerce PERSONALIZED 1.Personalized permission 2.Personalized recommendations 3.Personalized advertisements 4.Personalized web pages 5.Personalized e-commerce TRADITIONAL MASS MARKETING 1.Television 2.Radio 3.Print 4.Billboards TRADITIONAL MASS MARKETING 1.Television 2.Radio 3.Print 4.Billboards GENERAL ONLINE APPROACHED 1.Banner ads 2. 3.Viral Marketing/exclusive agreements 4.Associate programs 5.Online and Offline partnerships 6.Customer information 7.Online transactions GENERAL ONLINE APPROACHED 1.Banner ads 2. 3.Viral Marketing/exclusive agreements 4.Associate programs 5.Online and Offline partnerships 6.Customer information 7.Online transactions

4 Categories of Communication (2/5) General online communications – Banner ads – Unsolicited advertising – Viral marketing – Sponsorship and exclusive partner agreements – Affiliate programs

The four categories of communication (3/5) Personalized online communications – Personalized Permission – Personalized recommendations – Personalized advertisements – Personalized web pages

The four categories of communication (4/5) Traditional mass media communications 1.Television. Many online companies find that television, while expensive, can provide a critical exposure to large audiences and generate explosive growth in customer base (Monster.com) 2.Radio. In 1999, Priceline.com management allocated two-thirds of its $60 million marketing budget to radio and claimed that it was the most effective medium for reaching potential customers

The four categories of communication (5/5) Direct communications 1.Sales representatives. When properly managed, the Web can lead to the increased effectiveness of sales representatives, rather than making them obsolete 2.Direct marketing. With the new information gained online, e-commerce companies are able to better target and customize conventional direct marketing mailings

What is a “Good” brand? According to the American Marketing Association, a brand is: – Name – Term – Sign – Symbol or Design – Combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those competition.

A good brand provides positive consumer responses and benefits both target customers and the firm

What is a “Good” brand Marketing Communications Mix online and Offline Advertisement Emphasis on the advantages “Wrap-Arounds” Superior Service Advantage of frequent flyer club Award winning admiral club lounges Comfortable chairs Core Products/Services Safe on Transportation BRAND PRESTIGE

A Simple Model of Brand Equity (1/4) Brand equity is “a set of assets (and liabilities) linked to a brand’s name and symbol that add to the value provided by a product or service to a firm and/or that firm’s customers”

A Simple Model of Brand Equity (2/4) A brand has three components: 1.Core product/service 2.“Wrap-around” 3.Marketing communications Consumer responses can take two broad forms: 1.Brand awareness (depth, breadth) 2.Brand associations (strength, valence, uniqueness)

A Simple Model of Brand Equity (3/4) Consumer benefits may include the increased confidence in the purchase decision, loyalty to the brand, and satisfaction with the experience Firm benefits translate into top-line revenue growth, increased margins, and lower marketing costs

A Simple Model of Brand Equity (4/4)

Types of Brands (1/4) 1.Pure offline and online brands Classic offline brands include the Gap, UPS, and Disney New online brands include Amazon, Yahoo, and Priceline

Types of Brands (2/4) 2.Blurring of the distinction o Brands such as Yahoo were established online but use offline promotional activities to grow brand awareness o Brands such as E*Trade are traditional brands, but they are extensions of the online brands and thus a mixture of the two o Brands such as Egghead.com have completely shifted from an offline brand to a purely online brand

Types of Brands (3/4) o Brands such as Wingspan Bank were established in the virtual world but by a traditional brand o Brands such as Schwab have successfully bridged the gap between online and offline activities o Brands such as Ragu were established offline but use online promotion to grow brand awareness

Types of Brands (4/4)

Building an Online Brand 1.Clearly define the brand audience 2.Understand the customer 3.Identify the key leverage points in the customer experience 4.Continually monitor competitors 5.Design compelling brands and complete brand intent. 6.Execute with integrity. 7.Be consistent over time. 8.Establish feedback systems. 9.Be opportunistic. 10.Invest and be patient. Integrated campaign Value cluster