MGT 3225: E-Business Lecture 5: E-Marketing Md Mahbubul Alam, PhD Associate Professor

Intended Learning Outcomes (ILOs) Assess the need for separate e-business and e-marketing strategies, Create an outline e-marketing plan intended to implement the e-marketing strategy, Integrate traditional marketing approaches with e-marketing, Distinguish between marketing communication characteristics of traditional and new media, Redefine marketing and communication mixed to incorporate new media. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Prepared & Presented by Md. Mahbubul Alam, PhD What is e-marketing? What is marketing? Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability. Key objectives Identifying: find out customers, their needs and wants. Anticipating: Anticipate the demand for efficient resource allocation. Satisfying: Outcome of marketing campaign leads to customer retention. What is e-marketing? The application of marketing principles and techniques to achieve marketing goals via e- communication technology. An external perspective of how the Internet can be used in conjunction with traditional media to acquire and deliver services to customers. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Operational Process of e-marketing 3 operational processes Acquisition: attract visitors or promote brand via search engine or ads. Conversion: Engaging site visitors to achieve the outcomes through leads, sales or browsing other content. Customer retention: Encouraging repeat usage of digital channels. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Management Process of e-marketing 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

E-Marketing Plan: SOSTAC™ 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Strategy Setting: Target Market Strategies Target Marketing Strategy Evaluation and selection of appropriate segments and the development of appropriate offers. Segmentation Identification of different groups within a target market in order to develop different product offerings and communications for the groups. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Prepared & Presented by Md. Mahbubul Alam, PhD Example OVPs ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com) ‘Earth’s biggest selection’. Amazon (www.amazon.com) ‘Search the largest inventory of cars and trucks on the Internet. More than 1.5 million listings, updated daily’ (www.autotrader.com) The Citibank site design (www.citibank.com) uses a range of techniques to illustrate its core proposition and OVP. The main messages are Welcome to Citibank: The one-stop solution for all your financial needs Look for a product or service; Learn about a financial product; Find a location 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

New Media Marketing: Characteristics Interactivity: Push vs. pull media, two-way interaction. See, slide 33 Intelligence: Low-cost method for marketing research, customer profiling, e.g., www.egg.com, www.hsbc.co.uk, www.lloydstsb.co.uk Individualization: Broadcast same message vs. personalized message, e.g., Dell Premier (www.dell.com/premier). See, slide 34. Integration: ‘Customer-to-organization’ and ‘organization-to-customer’ communication. See, slide 35-36. Industry restructuring: Disintermediation, reintermediation and Countermediation. Independent of location: Reach of company communication to the global market. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Communication models: Traditional media vs. New media Push media Company->customer New media Pull media Customer seek information on a web site. e.g., FMCG brand like Nestle (www.nescafe.co.uk) 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Degree of Individualization: Traditional media vs. New media 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Channels Integration Strategy 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Channel Integration: e-marketing and mixed-mode buying The process by which customer changes between online and offline channels during the buying process. e.g., www.easyjet.com 1. Mixed-mode buying: The process by which customer changes between online and offline channels during the buying process. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Prepared & Presented by Md. Mahbubul Alam, PhD Tactics: Product Core product: Fundamental features of a product the meet users’ needs. Extended product: Additional features and benefits beyond the core product. Mass customization: Tailored versions of products to individual customers or groups of customers. Bundling: multiple products are offered as individual items or groups at a reduce price. Versioning Subscription Pay-per-view Ad-supported content Tactics: 4Ps: product, price, place and promotion + 3Ps: people, processes, physical evidence. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Prepared & Presented by Md. Mahbubul Alam, PhD Tactics: Price Commoditization: Selection of product is more dependent on price than on differentiating features, benefits and value-added services. Dynamic pricing: Prices can be update in real time according to the type of customer of current market conditions, e.g., auctions, yield management, flash marketing, free & freemium Aggregated buying: A form of customer union where buyers collectively purchase a number of items at the same price and receive a volume discount. Satisficing behavior: Customer do not behave entirely rationally. They compare alternatives but may make choice given imperfect information. Price elasticity of demand: Measure of consumer behavior that indicated the change in demand for a product/service in response to changes in prices. It assess the extent to which a change in price will influence demand for a product. Elastic: A small change in price increases or reduces the demand substantially. Inelastic: A large change in price is accompanied by a small amount of change in demand. 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Prepared & Presented by Md. Mahbubul Alam, PhD Tipping Point The principle that describe the underpinning of the rapid spread of ideas, products and behaviors through a population. Science of social epidemics Word-of-mouth impact on the rate of adoption of new products. Principles: Three The law of the few: word-of-mouth and copycat behavior The stickiness factor: attachment of the characteristics and attributes of a product or a brand. The power of context: Products and behavior spread far and wide only when they fit the physical, social and mental context. Read the Box 8.3 on pp. 452-453 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Traditional Online Marketing and Advertising Tools Search engine marketing and advertising Search engine marketing (SEM) Use of search engines for branding Search engine advertising  Use of search engines to support direct sales Types of search engine advertising  Sponsored links (keyword paid inclusion), Keyword advertising (Google’s AdWords), Network keyword advertising (context advertising, e.g., Google’s AdSense). Search engine optimization (SEO) techniques to improve the ranking of Web pages generated by search engine algorithms. Social search Utilizes social graph (friend’s recommendations, past Web visits, Facebook Likes, Google +1’s) to provide fewer and more relevant & trust-worthy results. Display ad marketing, e.g., Banner ads, Rich media ads, Video ads, Sponsorships, E-mail marketing  inexpensive & personalize; BUT Spam, poorly targeted e-mail list. Affiliate marketing  paid commission fee Viral marketing inspired customers to pass messages to others Lead generation marketing services and tools for collecting, managing & converting leads. Social, mobile, and local marketing and advertising 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Customer Retention Strategies Personalization and one-to-one marketing Retargeting showing the same ad to individuals across multiple Websites Behavioral targeting Based on data from search engine queries, clickstream history, social network data, and integration of offline personal data and records Effectiveness still inconclusive Privacy issues Customization: Changing the product Information goods ideal for differentiation Customer co-production: Customers help create product Customer service FAQs, Real-time customer chat systems, Automated response systems 2/15/2018 Prepared & Presented by Md. Mahbubul Alam, PhD

Question Please ? Acknowledgement: “E-Business and E-Commerce Management: Strategy, Implementation and Practice” by Dave Chaffey