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LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO: Describe what interactive marketing is and how it creates customer value, customer relationships, and customer experiences. LO1 Explain why certain types of products and services are particularly suited for interactive marketing. LO2 18-2

LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO: Describe why consumers shop and buy online and how marketers influence online purchasing behavior. LO3 Define cross-channel shoppers and the role of transactional and promotional websites in reaching these shoppers. LO4 18-3

SEVEN CYCLES. ONE BIKE. YOURS. 18-4

Marketplace Marketspace Time Utility Possession Utility Form Utility CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CUSTOMER VALUE IN MARKETSPACE LO1 Marketplace Marketspace Time Utility Possession Utility Form Utility 18-5

FIGURE 18-1 Trend in online shoppers and online retail sales revenue in the U.S. 18-6

FIGURE 18-1A Trend in online shoppers in the U.S. 18-7

FIGURE 18-1B Trend in online retail sales revenue in the U.S. 18-8

Interactive Marketing CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE INTERACTIVITY AND INDIVIDUALITY IN MARKETSPACE LO1 Interactivity M&Ms Individuality Interactive Marketing Choiceboard Collaborative Filtering 18-9

Personalization Permission Marketing Opt-In Opt-Out CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE INTERACTIVITY AND INDIVIDUALITY IN MARKETSPACE LO1 Personalization Permission Marketing Opt-In Opt-Out 18-10

FIGURE 18-2 Seven website design elements that drive customer experience 18-11

Customer Experience Context Content Customization CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CREATING AN ONLINE EXPERIENCE LO1 Customer Experience Context Functional Aesthetic Content Customization 18-12

Customer Experience Connection Communication Community Commerce CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CREATING AN ONLINE EXPERIENCE LO1 Customer Experience Connection Communication Community Commerce 18-13

USING MARKETING DASHBOARDS Sizing Up Site Stickiness at Sewell Automotive Companies LO1 Average Time Spent per Unique Monthly Visitor = × Average Time Spent per Unique Monthly Visitor (minutes) Average Visits per Unique Monthly Visitor Average Time Spent per Visit (minutes) 18-14

Seek Product Information ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO2 Online Consumers Seek Product Information Educated Affluent Young Diverse 20% of Those Who Spend $1,000+ per Year Online = 87% of Sales! 18-15

MARKETING MATTERS Meet Today’s Internet Mom on a Mission LO2 18-16

Product Information Audio/Video Demos Digital Items Unique Items ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHAT ONLINE CONSUMERS BUY LO3 Product Information Audio/Video Demos Digital Items Unique Items Convenience Items Standardized Items 18-17

FIGURE 18-3 Why consumers shop and buy online 18-18

ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHY CONSUMERS SHOP AND BUY ONLINE LO4 Convenience Bots Eight-Second Rule Choice Offering Selection Choice Assistance 18-19

Customization Communication ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHY CONSUMERS SHOP AND BUY ONLINE LO4 Customization Customerization Communication Marketer-to-Consumer E-mails Consumer-to-Marketer Requests Chat Rooms, Messaging, Social Networks 18-20

ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHY CONSUMERS SHOP AND BUY ONLINE LO4 Communication Web Communities Blog Spam CAN-SPAM Act 18-21

ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHY CONSUMERS SHOP AND BUY ONLINE LO4 Communication Buzz Viral Marketing Frito-Lay Embed a Message Create Compelling Content Offer Incentives 18-22

ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHY CONSUMERS SHOP AND BUY ONLINE LO4 Cost Dynamic Pricing Control Cookies Behavioral Targeting 18-23

MAKING RESPONSIBLE DECISIONS Who is Responsible for Internet Privacy and Security? LO4 Truste 18-24

Monday - Friday 8:00 AM to 5:00 PM ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHEN ONLINE CONSUMERS SHOP AND BUY LO4 Monday - Friday 8:00 AM to 5:00 PM 18-25

CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING WHO IS THE CROSS-CHANNEL SHOPPER? LO4 Cross-Channel Shopper Compare Products Among Retailers Obtain Information Not in Stores Reduce Trips to Multiple Retail Locations 18-26

CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING IMPLEMENTING MULTICHANNEL MARKETING LO4 Multichannel Marketing Transactional Websites Cannibalization Channel Conflict 18-27

CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING IMPLEMENTING MULTICHANNEL MARKETING LO4 Promotional Websites Pampers Interactive Experiences Separate Websites for Each Brand Support Traditional Marketing Channel 18-28

FIGURE 18-4 Implementing multichannel marketing with promotional websites 18-29

PIZZA HUT AND IMC2: BECOMING A MULTICHANNEL MARKETER VIDEO CASE 18 18-30

PIZZA HUT AND IMC2: BECOMING A MULTICHANNEL MARKETER VIDEO CASE 18 FIGURE 1 IMC2 Brand Sustainability Map™ 18-31

1. What kind of website is PizzaHut.com? VIDEO CASE 18 PIZZA HUT & IMC2 1. What kind of website is PizzaHut.com? 18-32

VIDEO CASE 18 PIZZA HUT & IMC2 2. How does PizzaHut.com incorporate the seven website design elements? 18-33

VIDEO CASE 18 PIZZA HUT & IMC2 3. How are choiceboard and personalization systems used in the PizzaHut.com website? 18-34

Interactive Marketing Interactive marketing is the two-way buyer-seller electronic communication in a computer-mediated environment in which the buyer controls the kind and amount of information received from the seller. 18-35

Choiceboard A choiceboard is an interactive, Internet-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing from a menu of product or service attributes (or components), prices, and delivery options. 18-36

Collaborative Filtering Collaborative filtering is a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases. 18-37

Personalization Personalization is the consumer-initiated practice of generating content on a marketer’s website that is custom tailored to an individual’s specific needs and preferences. 18-38

Permission Marketing Permission marketing is the solicitation of a consumer’s consent (called “opt-in”) to receive e-mail and advertising based on personal data supplied by the consumer. 18-39

Bots Bots are electronic shopping agents or robots that comb websites to compare prices and product or service features. 18-40

Eight-Second Rule The eight-second rule is a view that customers will abandon their efforts to enter and navigate a website if download time exceeds eight seconds. 18-41

Customerization Customerization is the growing practice of not only customizing a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer. 18-42

Web Communities Web communities are websites that allow people to congregate online and exchange views on topics of common interest. 18-43

Spam Spam consists of communications that take the form of electronic junk mail or unsolicited e-mail. 18-44

Viral Marketing Viral marketing is an Internet-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail, social networking websites, and blogs. 18-45

Dynamic Pricing Dynamic pricing is the practice of changing prices for products and services in real time in response to supply and demand conditions. 18-46

Cookies Cookies are computer files that a marketer can download onto the computer or mobile phone of an online shopper who visits the marketer’s website. 18-47

Behavioral Targeting Behavioral targeting uses information provided by cookies for directing online advertising from marketers to those online shoppers whose behavioral profiles suggest they would be interested in such advertising. 18-48

Cross-Channel Shopper A cross-channel shopper is an online consumer who researches offerings online and then purchases them at a retail store. 18-49