Marketing in the Digital Age 10a

10a-2 Professor Takada ROAD MAP: Previewing the Concepts The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age. Marketing strategies in the digital age. The four major e-commerce domains. The four major e-commerce domains. How to conduct e-commerce to profitably deliver more value to customers? How to conduct e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-3 Professor Takada ROAD MAP: The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age. Marketing strategies in the digital age. The four major e-commerce domains. The four major e-commerce domains. How to conduct e-commerce to profitably deliver more value to customers? How to conduct e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-4 Professor Takada Forces Shaping the Digital Age Intranets – connect people within a company. Extranets – connect a company with its suppliers, distributors, and outside partners. Internet – connects users around the world. The heart of the New Economy. Increasing numbers of users. Companies must adopt Internet technology or risk being left behind. Direct selling via the Internet bypassing existing intermediaries (disintermediation). “Brick-and-mortar” firms became “click-and- mortar” companies. Failure of some “click-only” companies. Customization: the company custom designs the market offering for the customer. Customerization: the customer designs the market offering and the company makes it.

10a-5 Professor Takada ROAD MAP: The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age. Marketing strategies in the digital age. How have companies responded to the Internet and other powerful new technologies with e-business strategies? How have these strategies resulted in benefits to both buyers and sellers? The four major e-commerce domains. The four major e-commerce domains. How to conduct e-commerce to profitably deliver more value to customers? How to conduct e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-6 Professor Takada Marketing Strategy in the Digital Age Requires a new model for marketing strategy and practice Some suggest that all buying and selling will eventually be done electronically Companies need to retain old skills and practices but add new competencies

10a-7 Professor Takada E-Business Use of electronic platforms to conduct company business. Use of electronic platforms to conduct company business. –Web sites: for selling and customer relations –Intranets: for within-company communication –Extranets: connecting with major suppliers and distributors E-Commerce More specific than e-business. More specific than e-business. Buying and selling processes supported by the Internet. Buying and selling processes supported by the Internet. Includes: e-marketing and e-purchasing (e-procurement) Includes: e-marketing and e-purchasing (e-procurement) E-Marketing The marketing side of e-commerce. The marketing side of e-commerce. Includes efforts to communicate about, promote, and sell products and services over the Internet. Includes efforts to communicate about, promote, and sell products and services over the Internet. E-purchasing: the buying side of e-commerce. E-purchasing: the buying side of e-commerce. –Consists of companies purchasing goods, services, and information from online suppliers.

10a-8 Professor Takada Benefits to Buyers Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate Benefits to Sellers Powerful tool for building customer relationships Can reduce costs Can increase speed and efficiency Offers greater flexibility in offers and programs Is a truly global medium

10a-9 Professor Takada ROAD MAP: The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age: Marketing strategies in the digital age: How have companies responded to the Internet and other powerful new technologies with e-business strategies? How have these strategies resulted in benefits to both buyers and sellers? The four major e-commerce domains: The four major e-commerce domains: B2C, B2B, C2C, C2B How do companies go about conducting e-commerce to profitably deliver more value to customers? How do companies go about conducting e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-10 Professor Takada E-Marketing Domains

10a-11 Professor Takada B2C (Business to Consumer) Amazon, Expedia, Gap, L.L. Bean $428 billion in $428 billion in Online consumers vs. offline consumers. Online consumers vs. offline consumers. Increasing diversity in buyers. Increasing diversity in buyers. –Increasing opportunities for targeting markets. Customer initiated and controlled. Customer initiated and controlled. B2B (Business to Business) Covisint-auto industry “open trading exchange” Trane Co.-air conditioning private trading network (PTN). More than 500,000 enterprises participate. More than 500,000 enterprises participate. Offer product info, purchasing, and support services. Offer product info, purchasing, and support services. Huge, $4 trillion in Huge, $4 trillion in Specialty e-marketspaces to conduct transactions. Specialty e-marketspaces to conduct transactions. C2C (Consumer to Consumer) eBay, Amazon Auctions, AOL Forums: chat room, discussion groups located on commercial online services. Forums: chat room, discussion groups located on commercial online services. Newsgroups: the Internet version of forums. Newsgroups: the Internet version of forums. word of Web (vs. word of mouth) word of Web (vs. word of mouth) C2B (Consumer to Business) Priceline.com Consumers can search out sellers, view offers, initiate purchases, and give feedback. Consumers can search out sellers, view offers, initiate purchases, and give feedback.

10a-12 Professor Takada ROAD MAP: Previewing the Concepts The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age. Marketing strategies in the digital age. The four major e-commerce domains. The four major e-commerce domains. How to conduct e-commerce to profitably deliver more value to customers? How to conduct e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-13 Professor Takada Types of e-Marketers

10a-14 Professor Takada Click-Only Companies E-tailers Amazon, Expedia Search Engines and Portals Google, Yahoo Internet Service Providers AOL Transaction Sites eBay Content Sites NYTimes,ESPN Enabler Sites hardware/soft ware providers Types of Sites

10a-15 Professor Takada Reasons for dot.com Failures Poor research or planning. Poor research or planning. Relied on spin and hype instead of marketing strategies. Relied on spin and hype instead of marketing strategies. Spent too heavily on brand identities. Spent too heavily on brand identities. Devoted too much effort to acquiring new customers instead of building loyalty. Devoted too much effort to acquiring new customers instead of building loyalty.

10a-16 Professor Takada Click-and-Mortar Companies Most established companies resisted adding Web sites because of the potential for channel conflict and cannibalization. Most established companies resisted adding Web sites because of the potential for channel conflict and cannibalization. Many are now doing better than click-only companies. Many are now doing better than click-only companies. Reasons: Reasons: –Trusted brand names and more resources –Large customer bases –More knowledge and experience –Good relationships with suppliers –Can offer customers more options

10a-17 Professor Takada Setting Up for E-Marketing

10a-18 Professor Takada Types of Web Sites Corporate Web Site: Designed to build customer goodwill and supplement other sales channels. Offers information to customers. Builds closer customer relationships. Generates excitement about the company. Marketing Web Site: Engages consumers in an interaction that moves them closer to a direct purchase. Provides information about the products.

10a-19 Professor Takada Designing Attractive Web Sites The 7 Cs of Effective Web Site Design The 7 Cs of Effective Web Site Design Context Content Community Customization Communication Connection Commerce

10a-20 Professor Takada Online Ads and Promotion Forms of online advertising & promotion: Forms of online advertising & promotion: –Banner ads & tickers (move across the screen) –Skyscrapers (tall, skinny ads at the side of a page) –Rectangles (boxes that are larger than a banner) –Interstitials (pop up between changes on Web site) –Content sponsorships (sponsoring special content) –Microsites (limited areas paid for by an external company) –Viral marketing (Internet version of word-of-mouth): Gillette 3-bladed Venus razor for women, “Reveal the Goddess in You” truck tour and beach-site promotions.

10a-21 Professor Takada ROAD MAP: The major forces shaping the new digital age. The major forces shaping the new digital age. Marketing strategies in the digital age. Marketing strategies in the digital age. The four major e-commerce domains. The four major e-commerce domains. How to conduct e-commerce to profitably deliver more value to customers? How to conduct e-commerce to profitably deliver more value to customers? Overview of the promise and challenges that e-commerce presents for the future. Overview of the promise and challenges that e-commerce presents for the future.

10a-22 Professor Takada The Future of Online Advertising Web communities: Web communities: –Allows members to congregate online and exchange views on issues of common interest –iVillage.com, a Web community for women –Use of “enriched” messages –Backlash against spam can be problem –Allow people to opt-out of promotions

10a-23 Professor Takada Legal and Ethical Issues Online privacy: collection of consumer info. Online privacy: collection of consumer info. Online security: Social Security data Online security: Social Security data Internet fraud: online auction fraud Internet fraud: online auction fraud Segmentation and discrimination: digital divide Segmentation and discrimination: digital divide Access by vulnerable or unauthorized groups: children’s access to adult sites, eBay. Access by vulnerable or unauthorized groups: children’s access to adult sites, eBay.

10a-24 Professor Takada Rest Stop: Reviewing the Concepts 1. Identify the major forces shaping the Digital Age. 2. Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers. 3. Describe the four major e-commerce domains. 4. Discuss how companies go about conducting e- commerce to profitably deliver more value to customers. 5. Overview the promise and challenges that e-commerce presents for the future.