Introduction to Internet Marketing key characteristics: Internet Marketing is founded largely on components of: Database Marketing Direct Marketing Customer Relationship Management (CRM) the Internet allows the firm to actively engage customers by creating marketing levers that allow for interactivity and individualization. (the 2Is) Individualization means that the Internet helps the firm build committed, customer-centric relationships with its clients. one-to-one vs. traditional one-to-many targeting the firm leverages the Internet in its marketing strategy by integrating it with offline marketing levers. online marketing levers can be leveraged, when appropriate, to decrease or replace the use of offline levers

American Marketing Association definition: Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. Internet Marketing definition: Internet Marketing is the process of building and maintaining customer relationships through online activities to facilitate the exchange of ideas, products and services that satisfy the goals of both parties.

Introduction to Internet Marketing During weekdays, Internet consumption exceeds all other media consumption for at-work users. This is Prime Time for the internet. weather.com How does this company make money? How does it build and maintain customer relationships?

Cases 62% of new car buyers research cars on the internet before purchasing. As high as 85% for manufacturers with more affluent customers. What did BMW do to capitalize on this trend? Produced short films featuring their cars at bmwfilms.com mid-2001, 11 million views with more per day What did Volvo do? Partnered with AOL and launched the S60 sedan exclusively online at revolvolution.com 2 million+ visitors; added to database; more to showrooms

Microsoft CarPoint Example MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry The retail car-buying process was frustrating and inefficient: Little information available to the consumer Bargaining with salesperson viewed as an hassle Long process overall MSN CarPoint selected two primary target segments for its service: “The intimidated by the process” “The information seekers” MSN CarPoint could leverage Microsoft’s expertise in software development, its brand name and its multitude of online properties Competition was getting fierce with more and more online car services entering the market… But the financial opportunity was large: 66% of new car buyers were estimated to use online services in 2000 In 1996, the first version of CarPoint was shipped By 1998, CarPoint was driving $5 million in car sales a day

Beyond the 4Ps Devise a combination of marketing actions (levers) Product Pricing Communication CommunityDistribution

Focus on CRM (Customer Relationship Management) Awareness (no communication) Awareness (no communication) Exploration / Expansion Exploration / Expansion Commitment (states-of-mind (preference) and patterns of behaviour (regular purchasing)) Commitment (states-of-mind (preference) and patterns of behaviour (regular purchasing)) Dissolution Four Key Stages of Customer Relationship Build and nurture customer relationships Commitment to brand (ex. Harley Davidson “HOG Club”) Commitment to function (ex. weather.com) Observe and determine who to nurture further and who to terminate

Level of Intensity Stages of Customer Relationships AwarenessExplorationCommitmentDissolution Intensity The relationship can become more intense as it progresses The level of intensity can be measured in different ways: Frequency of connection (# of site visits) Scope of connection (# of points of contact) Depth of contact (thoroughness of site use)

The 2Is and Branding affect the different Marketing actions Branding Product Pricing (tiered loyalty; dynamic price) Individual Communication (viral and permission) Distribution Community (user groups) Interactivity