Marketers and the Internet 1. Who markets online? 2. What are the effects of the Internet? 3. How do marketers respond?

A General Overview Constraints and opportunities Need to understand what consumers are doing To develop “products” that meet needs To leverage their interactions (even with third parties) to meet marketing objectives Need to understand opportunities for business Implications for marketing action

Describing Marketers Three different perspectives #1: A Company Focus .coms versus other companies Pure-players CAMS and BAMs Online marketing Selling Online transaction and delivery Online transaction and offline delivery Online referral for offline transaction Other marketing purposes Online e-commerce-but-not-really-what-we-would-call-marketing processes  e-commerce continuum, netcentricity

Moving Along the Continuum

Online Marketers #2: A Product Focus Who’s selling what?

Online Marketers #3 A Customer Focus To whom? B2C v. B2B B2B is big business

Marketing: More Than Sales Creating an opportunity for consumption Developing the product concept Guiding product dissemination Pricing, Promotion, Distribution Internet affects activity along the demand chain Opportunities and challenges The 5 C’s Things that can’t be controlled From least controllable to most controllable

Environmental Factors and Marketing Adaptivity: 5 C’s Conditions e.g., Shifts in regulation and capability Competition e.g., Shifts in structure (alliances) Customers e.g., Shifts in attitude and in behavior Channels e.g., Shifts in structure and in relational power Company e.g., Shifts in structure and in function responsibility

Adapting to Conditions Economic E.g., recession Social E.g., “digital divide” Political E.g., legislation Technological E.g., industry standards, not designed for commercial use

Adapting to Customers Ability to get product information  increased price transparency and quality Ability to find other sources Ability to spread information (w-o-m) Research online, but buy offline  create loyalty

Adapting to Competition Product Development Internet time Information acceleration Increase in pace of product introductions Power of Cooperation Strategic alliances Strategic networks  “Co-opetition” Novel Product Strategies Same product, different ways to consumer Trading stocks Reading newspapers and magazines Listening to music, watching movies New types of business models

Adapting to Channels New ways to move goods New channels of distribution Multichannel strategies (e.g., CAMs) Channel issues Disintermediation Reintermediation New functional opportunities for business Take over some channel activities?

Adapting the Company Two key effects: organization and culture Organization effects Where people work Telecommuting Tethered to technology: Laptops at home Decentralized structures How people work Platform approach Knowledge management Workflow

Adapting the Company, part 2 Company culture: why is it good? Managing a virtual company Where’s the culture? Decreased hierarchy… How do you create culture? Internet opportunities Instant messaging Intranets Corporate portals (also good for knowledge mgemt) Internet challenges E-mail abuse (amount, netiquette, dissemination)internalmemos Web-surfing  EIM software Hiring software fitability.com

Thriving in the Internet Environment Effects on business structures Decentralized processes Less hierarchical structure Effects on business performance/processes Doing more, faster and better (in theory) “Internet time” Increased information and communications Greater process transparency To consumers To competition