Internet Marketing

What is Marketing? n The strategies and actions firms take to establish a relationship with a consumer and encourage purchases of its products or services –Brand –Branding –Brand Strategy –Brand Equity

The Online Consumer Profile n 2001: 60% of the US online n 2005: 75% of US predicted to be online n Intensity: Although internet population is growing rather slowly, existing users are spending more time online. n Scope: 7.2

Demographics n Ethnicity n Education n Gender n Income n Age n See Table 7.3

Market Research n How can you predict consumer behavior? –Demographics –Psychographics –Culture –Reference Groups –Opinion Leaders

Psychology of Purchasing n 1. Awareness of need n 2. Search for more information n 3. Evaluation of alternatives n 4. Purchase Decision n 5. Post Purchase Contact

Online vs. Offline Consumer Behavior? n Decision making behavior close to the same n However, there are two variables added to a traditional marketing model. –Web site capabilities –Consumer Clickstream Behavior (7.4)

Online Shopping Implications n 80% of Internet Users Shop Online –40% Browsers –40% Buyers –Significance? –What do consumers buy on the Web? 7.7 –How do shoppers find vendors online? 7.8 –Why don’t people shop online?

Segmenting, Targeting & Positioning

Internet Marketing Technologies n Web Transaction Logs (p363) –What can you learn from them? –Cookies! –Web Bugs!

Advertising Network n p374

Market Entry Strategies n First Mover n Fast Follower n Alliances n Brand Extender

Establishing Customer Relationships n Permission Marketing n Affiliate Marketing n Viral Marketing n Brand Leveraging

Customer Retention n Personalization n Customization n Transactive Content n Customer Service

Net Pricing Strategies n It’s Free n Versioning n Bundling n Dynamic Pricing

Online Marketing Communications n Advertising –Banner and Rich Media Ads –Paid Search Engine Inclusion and Placement –Sponsorships –Affiliate Relationships

n Online Catalogs n Public Relations n Direct Marketing –Spam

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