Copyright © 2007 Pearson Education Canada13-1 Marketing: An Introduction Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and Buchwitz Chapter Thirteen Marketing and the Internet

Copyright © 2007 Pearson Education Canada13-2 Looking Ahead Define the three areas of e-commerce and explain the benefits of e-commerce Describe the different ways a company can use its website to support its marketing communications program Differentiate between Web publishers and Web advertisers and define the major forms of online advertising Outline how can be used for marketing and list the rules of etiquette for online marketers Describe the new forms of Internet marketing Outline the legal and ethical issues involved in Internet marketing

Copyright © 2007 Pearson Education Canada13-3 E-Business Defined E-business: the use of electronic platforms to conduct a company’s business. E-commerce: buying and selling processes supported by electronic means. Business-to-Consumer – retail, banking. Business-to-Business – trading networks. Consumer-to-Consumer – e-Bay, Napster.

Copyright © 2007 Pearson Education Canada13-4 B2C (Business to Consumer) The online selling of goods and services to final consumers. 25% increase in online buying since Increasing diversity in buyers. –This provides increasing opportunities for targeting markets. Customer initiated and controlled.

Copyright © 2007 Pearson Education Canada13-5 B2B (Business to Business) Most major B2B marketers offer product information, purchasing and support services online. Most business buying today takes place on the Internet. Open trading exchanges—huge specialty e-marketspaces to conduct transactions. Constant increases in private trading networks.

Copyright © 2007 Pearson Education Canada13-6 E-Commerce Networks Private Internet commerce networks geared toward the business-to-business market. Most Internet buying now occurs over the web. Global eXchange Services (GXS) consists of more than 100,000 trading partners in 58 countries at a value of some 1 billion transactions each year, equal to $1 trillion worth of goods and services.

Copyright © 2007 Pearson Education Canada13-7 C2C (Consumer to Consumer) Occurs on the Web and includes a wide range of products and services. Forums: discussion groups located on commercial online services. Newsgroups: the Internet version of forums.

Copyright © 2007 Pearson Education Canada13-8 Benefits to Buyers Convenience. Ease of use. Privacy. Greater product access and selection. Information gathering. Interactive shopping. Immediate.

Copyright © 2007 Pearson Education Canada13-9 Benefits to Sellers Customer relationship building. Cost savings. Increased speed. Increased efficiency. Improved cash flow. Flexibility. Global reach.

Copyright © 2007 Pearson Education Canada13-10 Marketing and the Website Early websites were largely brochure- ware. Today, every business and organization has its own website. Performs a wide variety of marketing functions.

Copyright © 2007 Pearson Education Canada Cs of Effective Design Context: layout and design elements. Content: text, pictures, sound and video. Community: user-to-user communication. Customization: personalizing for each user. Communication: two-way communication. Connection: links to other relevant sites. Commerce: commercial transactions.

Copyright © 2007 Pearson Education Canada13-12 Functions of a Website Sales channel – buying and selling online. Marketing communications vehicle – part of the integrated communications mix. Customer service channel – self-service, product enquiries, after market service. Delivering content – portal sites, publishing sites. Service provider – subscriptions, information provider, search engine.

Copyright © 2007 Pearson Education Canada13-13 Online Advertising Worldwide spending on online advertising topped $9 billion US in Increasingly popular form of promotion. Highly measurable and manageable. Can be modified quickly. Can dynamically targeted.

Copyright © 2007 Pearson Education Canada13-14 Online Promotion Methods Online advertising: Banners, text links, interstitials, sponsorships, micro sites. direct response: permission-based. Viral marketing: word-of-mouth based. Online Movies: Mini-movies as ads. Podcasting: Sending information to wireless devices. Blogging: T wo way dialogue.

Copyright © 2007 Pearson Education Canada13-15 Types of Online Advertising Banner ads (squares or rectangles) and tickers (move across the screen). Textlinks (hypertext that takes the user to a new webpage or website). Content sponsorships (sponsoring special content). Interstitials (pop ups). Microsites (limited website with detailed information).

Copyright © 2007 Pearson Education Canada13-16 Buying Online Advertising Three pricing models for online advertising. –CPM – rate paid per thousand impressions of an online ad. –Cost-per-click – Advertiser pays only when the advertisement is clicked on. –Sponsorships – sold in blocks of time rather than per impression basis.

Copyright © 2007 Pearson Education Canada Marketing Increasingly common form of direct marketing. Permission-based most effective. Non-permission-based known as spam. Spamming the biggest detriment to legitimizing marketing.

Copyright © 2007 Pearson Education Canada13-18 Using Marketing Well-designed campaigns typically achieve 10%-15% response rates compared to.5% - 2% for traditional direct mail. Uses include –Information and education. –Couponing. –Special offers. –Newsletters. –Targeted content delivery.

Copyright © 2007 Pearson Education Canada13-19 Viral Marketing Internet version of word-of-mouth advertising. Infectious, interesting that people will pass along. Inexpensive way to create brand “buzz.” Encouraged by textlinks “Forward to a friend or colleague.” Used successfully in B2B marketing.

Copyright © 2007 Pearson Education Canada13-20 Rules for Marketing Send only by permission. Clearly identify the sender. Remind the recipient why they’re receiving the . Provide an easy way to unsubscribe. The default is always opt-in, not opt-out.

Copyright © 2007 Pearson Education Canada13-21 Online Movies Extended advertising segments that take the form of short movies. Generally directed and acted by main movie and TV figures. Can be viewed on websites. Trend started by BMW in Growing in popularity.

Copyright © 2007 Pearson Education Canada13-22 Podcasting Delivery of content and advertising to iPoDs and other personal wireless listening devices. Users download shows and music at their convenience. Similar to broadcasting. Early stage but shows promise as an advertising and promotion medium.

Copyright © 2007 Pearson Education Canada13-23 Blogging Website that consists of regular date- stamped compositions written by an individual or group and published online for general viewing. Tend to be topical. Excellent tool for building thought leadership and market education.

Copyright © 2007 Pearson Education Canada13-24 Legal and Ethical Issues Online privacy and security. –Consumer knowledge and consent. –Limitations. –Accuracy. –Right to access. –Hacking. –Internet fraud. Segmentation and discrimination. Digital divide.

Copyright © 2007 Pearson Education Canada13-25 Legal and Ethical Issues Online privacy. Online security. Internet fraud. Segmentation and discrimination. Access by vulnerable or unauthorized groups.

Copyright © 2007 Pearson Education Canada13-26 Looking Back Define the three areas of e-commerce and explain the benefits of e-commerce Describe the different ways a company can use its website to support its marketing communications program Differentiate between Web publishers and Web advertisers and define the major forms of online advertising Outline how can be used for marketing and list the rules of etiquette for online marketers Describe the new forms of Internet marketing Outline the legal and ethical issues involved in Internet marketing