E-Marketing 5/E Judy Strauss and Raymond Frost Part IV: E-Marketing Management Chapter 10: Product: The Online Offer ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 10 Objectives After reading Chapter 10, you will be able to: Define product and describe how it contributes to customer value. Discuss how attributes, branding, support services, and labeling apply to online products. Outline some of the key factors in e-marketing enhanced product development. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

The Google Story In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords. Today, Google performs 7 billion searches a month, speaks 100 languages and is the most-visited U.S. Web site. Innovative products and strong customer focus are driving its success and profitability. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

The Google Story, cont. Generates revenue from several B2B markets: Licensing of its search services. Sales of advertising to Web advertisers. Google pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers. Google’s product mix includes 15 search products, 3 advertising products, 21 applications, 5 enterprise products, and 2 mobile applications. What types of products do you think Google will launch next? ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Many Products Capitalize on Internet Properties A product is a bundle of benefits that satisfies needs of organizations or consumers. Includes tangible goods, services, ideas, people, and places. Products such as search engines are unique to the internet while others simply use the internet as a new distribution channel. Organizations use research to determine what is important to customers when creating new products. The marketing mix and CRM work together to produce relational and transactional outcomes with consumers. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Creating Customer Value Online Customer value = benefits - costs Product decisions must be made that deliver benefits to customers. Attributes Branding Support Services Labeling ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Benefits: Attributes Attributes include overall quality and specific features. Benefits are the same features from a user perspective. The internet increases customer benefits in many ways. Media, music, software, and other digital products can be presented on the Web. Mass customization is possible. User personalization of the shopping experience can be achieved. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Benefits: Branding A brand includes a name, symbol, or other information. When a firm registers that information with the U.S. Patent Office, it becomes a trademark. A brand represents a promise or value proposition to its customers. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Brand Equity Brand equity（品牌资产） is the intangible value of a brand, measured in dollars. A great brand taps into popular culture and touches consumers. Exhibit 10.3 displays rankings for some of the top U.S. brands. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Highest Value Global Brands Exhibit 10.3 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Levels of Brand Relationship Intensity Exhibit 10.6 displays 5 levels of brand relationship intensity. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Branding Decisions for Web Products Firms can use existing brand names or create new brands on the internet. Some firms may use different names offline and online to avoid risk if the new product or channel should fail. Sports Illustrated created thriveonline.com. Wired Magazine changed its online version name to Hotwired. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Creating New Brands for Internet Marketing Good brand names should: Suggest something about the product. Differentiate the product from competitors. Be capable of legal protection. On the internet, a good brand name should be short, memorable, easy to spell, and translate well into other languages. Cobranding occurs when two companies form an alliance and put their brand names on a product: Sports Illustrated co-brands with CNN as CNNSI Yahoo! Visa shopping pages EarthLink-Sprint ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Internet Domain Names A URL (Uniform Resource Locator) is a Web site address. Also called an IP address and domain name. Domain names contain several levels. http:// indicates that the browser should expect data using the hypertext protocol. The second-level is often the name of the company. The top-level may be .com or a country name, such as .mx for Mexico or .uk for the United Kingdom. There are at least 40 top level names available including .biz, .info, .pro, etc. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Internet Domain Names, cont. The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit corporation that makes decisions about protocol and domain name assignment, registration, etc. GoDaddy and other sites provide domain registration services at low cost. More than 97% of words in the dictionary have already been registered as domain names. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Internet Domain Names, cont. Organizations should purchase related names and spellings. Picking the right domain name can make a huge difference. Directing people correctly to a site. Building consistency in marketing communications. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Largest Top-Level Domain Names Ex. 10.7 10-17 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Benefits: Support Services Customer support is a critical component in the value proposition. Customer service reps help customers with installation, maintenance, product guarantees, etc. to increase customer satisfaction. CompUSA combines online and offline channels to increase customer support. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Benefits: Labeling Labeling has digital equivalents in the online world. Online “labels” provide information about product usage, features, and installing software. Online “labels” also provide extensive legal information about the software product. Online firms may add the Better Business logo or TRUSTe privacy shield to their sites. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Microsoft’s Terms of Use Label Exhibit 10.8 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Customer Codesign Business and consumer collaboration are possible on the Internet. Software developers often seek customer input about new products. They often allow users to download new products, test them, and provide feedback. Customer interaction has been found to increase product success. Amazon seeks customers’ product reviews. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

New-Product Strategies: Product Mix Strategies Many new products, YouTube, Yahoo!, and Twitter, were introduced by “one-pony” firms. Other firms have added products to an already successful product mix. Companies can choose among six categories of new-product strategies. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Mix Strategies, cont. Firms will select one of the following strategies, based on marketing objectives, risk tolerance, resource availability, etc. Discontinuous innovations are new-to-the-world products. New-product lines are new products in a different category for an existing brand name. Additions to existing product lines. Improvements or revisions of existing products. Repositioned products can be targeted to different markets or promoted for new uses. Me-too lower-cost products. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

A Word About ROI Need for performance metrics: Payout = the R & D and other initial costs will be recovered at a particular date based on projected sales. Break-even date = when the product is projected to start making a profit. ROI and break-even are important metrics for selling new product ideas internally and for measuring their success in the market.

4 new-product trends in the B2B market, Value chain automation. Outsourcing. Information sharing. Centralizing information access.

New-Product Trends (Cont.) 3 new-product trends operate primarily in the B2C market Multimedia. Assistive technologies. Convergence of media.

©2009 Pearson Education, Inc. Publishing as Prentice Hall