Chapter One Introduction The goal is to move from the current situation of complexity and frustration to one where technology serves human needs invisibly, unobtrusively: the human-centered, customer- centered way. ~Donald Norman

What is Marketing? Role (or focus) –it’s the champion for the customer and the function that is most externally-oriented

What is Marketing? Role (or focus) –it’s the champion for the customer and the function that is most externally-oriented Definition* –Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. (Lusch and Marshall 2004) –Competition for a differential advantage (Alderson 1957)

What is the Marketing Concept? A management philosophy which advocates that a business organization:

What is the Marketing Concept? A management philosophy which advocates that a business organization: –Exists to identify and satisfy the needs of its customers – (customer orientation) –That a customer orientation is accomplished through an integrative effort throughout the firm – (integrated effort) –That the firm’s focus should be long-term and seek to provide a satisfactory return on owner’s investment (ROI) – (long-term profit orientation)

Origins of the Internet Initially a research and communications tool – strictly noncommercial. –Researchers began work in 1960s

Origins of the Internet Initially a research and communications tool – strictly noncommercial. –Researchers began work in 1960s Two key early adopters: –The United States military and later, –University instructors and researchers

The Internet Goes Mainstream propelled the Internet off campus and outside the military Government regulation dissolved in early 1990s By 1994, the Internet had gone commercial

The Virtuous Cycle and The Internet Boom

Booms and Busts Fascination with the web also led to an infusion of investment capital. Why?

Booms and Busts Fascination with the web also led to an infusion of investment capital. Why? –Net offers greater discipline and more cost- effective marketing plans –Co-creation fueled consumers to participate and the potential pushed firms to aggressively expand and compete *

The “End Result” (initially) Bust and a large shakeout of websites Consumers, much less customers, became expensive (e.g., free shipping, free merchandise, etc.) Consumers, as well as investors, began to finally ask the question, “What’s your differential advantage?”

What’s the Differential Advantage? For the most part, “what’s true offline is what’s true online…” The bust was due to an overstored Net * –Too much money & too many firms chasing too many similar “opportunities” –The Internet must solve a business problem or it’s not necessary for investment.

What Lies Ahead Just 15 percent of the world’s 6.3 billion population is online

What Lies Ahead Just 15 percent of the world’s 6.3 billion population is online And the dominance of American users is steadily shrinking

Growth Potential in Developing Countries Top countries for Internet use, 2004 *New to list in 2004 Source: CIA Factbook

New Technologies, New Opportunity Advanced Connection Devices – from cell phones to home wireless systems – increase the potential online consumer audience

New Technologies, New Opportunity Advanced Connection Devices – from cell phones to home wireless systems – increase the potential online consumer audience Faster Internet Connections bring marketing messages to the audience more swiftly and in richer media forms (e.g., Cooliris1 & 2)12

New Technologies, New Opportunity Advanced Connection Devices – from cell phones to home wireless systems – increase the potential online consumer audience Faster Internet Connections bring marketing messages to the audience more swiftly and in richer media forms (e.g., Cooliris1 & 2)12 New Information Appliances, such as Apple’s iPod, integrate technology advances with specific consumer demands

A Shift for Marketing From “Selling the Brand” – The old model emphasized on mass production and a promoting a distinct brand To “Managing the Consumer” and “Co- Creation of the Value Proposition” – Online marketing puts focus on the customer’s individualized interests and demands

Rethinking Marketing Strategy Three General Purposes Technologies form the foundation of Internet marketing and pave the way for greater innovation:

The Digital Revolution

Rethinking Marketing Strategy Three General Purposes Technologies form the foundation of Internet marketing and pave the way for greater innovation: The Digital Revolution Networking

Rethinking Marketing Strategy Three General Purposes Technologies form the foundation of Internet marketing and pave the way for greater innovation: The Digital Revolution Networking Individualization