1 8 Chapter 8 Strategies for Marketing, Sales, and Promotion Electronic Commerce

2 8 Objectives u Establishing an effective business presence on the Web u Web promotion techniques u Meeting the needs of web site visitors u Web site design usability testing u Identifying and reaching customers on the web

3 8 Objectives u Effective Web marketing approaches u Elements, strategies, and costs of branding u Web business models for selling

4 8 Creating an Effective Web Presence u Presence l Public image it conveys to stakeholders u Stakeholders l Include customers, suppliers, employees, stockholders, neighbors, and the general public u Internet increases importance of presence l Only contact a customer might have with company is with the company web site l Can be critical even for the smallest and newest company

5 8 Identifying Web Presence Goals u A firm’s physical location rarely is image-driven l Physical location must satisfy many other business goals unrelated to image and presence l Web sites can perform many image- enhancing tasks effectively l Businesses must decide which tasks their Web site must accomplish and which tasks are the most important to include

6 8 Achieving Web Presence Goals u Goals associated with effective web sites include: l Attracting visitors l Making the site interesting to explore l Creating a positive image consistent with the company’s desires l Reinforcing already held positive images regarding the company

7 8 Toyota Web Presence Figure 8-1

8 8 Quaker Oats Web Presence Figure 8-2

9 8 ACLU Web Presence Figure 8-3

10 8 MoMA Web Presence Figure 8-4

11 8 How the Web is Different u Companies early in Web history failed to recognize what visitors wanted from Web sites l Often failed to include addresses or adequate staffing to answer customers’ messages u Web presence should include: l History l Mission statement l Financial and product information l Method of contacting the organization

12 8 How the Web is Different u Christopher Locke l E-zine (electronic magazine) publisher on the Web l Argues for unrestricted online dialog with a firm’s customers, suppliers, and other stakeholders u David Weinberger l Cluetrain Manifesto- 95 theses aimed at major businesses or organizations that use the Web l Firms must use the Web for meaningful, two-way communication with their customers

13 8 Meeting the Needs of Web Site Visitors u Why visitors come to Web sites l To learn about or buy a company’s products or services l Get product support for products already bought l Obtain financial or general product information about a company l Communicate with the company or identify who manages it

14 8 Meeting the Needs of Web Site Visitors u Web site interface flexibility l Versions with and without frames, graphics l Multiple information formats l Allows users to easily access multiple levels of information detail

15 8 Usability Testing u How users navigate through a series of web site test designs u T. Rowe Price redesigned their web site so no more than 2 page clicks were required to get to desired information

16 8 Kodak’s Redesigned Home Page Figure 8-5

17 8 Usability Hints u Design the site around how visitors navigate, rather than around the company’s organizational structure u Allow quick information access u Avoid exaggerated marketing claims

18 8 Usability Hints u Build a site using the oldest browser software on the oldest computer, using the slowest connection, even if that means making multiple versions u Be consistent and clear with design and navigation controls u Test text and color combinations

19 8 Nature of Communication on the Web u Two methods of reaching customers: l Personal contact model u Also called prospecting u Firm’s employees individually search for, qualify, and contact potential customers l Mass media model u Firm delivers message and broadcasts it through billboards, newspaper, television, etc. u Addressable media is sometimes distinguished from mass media v Addressable media is directed to known addresses, and includes direct mail, telephone calls, and

20 8 Mass Media, Personal Contact, and the Web Figure 8-6

21 8 Measuring Web Site Effectiveness u Different from measuring mass media l Mass media effectiveness determined by estimates of audience size, called cost per thousand (CPM) u CPM is a dollar amount for each thousand people in the estimated audience

22 8 Web Terms Used in Marketing u A Visit occurs when a visitor requests a page from a web l Further page loads counted as part of the visit for a time period chosen by the site administrator u Trial visit l First time a visitor loads a web site- after that, it is called a repeat visit u Page view l Each time a visitor loads a page- if the page has an ad, this is called an ad view u Impression -- each time a banner ad loads l If a visitor clicks the ad to open it, it is called a click or click-through

23 8 Information Acquisition Approaches: Levels of Trust Figure 8-7

24 8 New Marketing Approaches for the Web u Traditional mass-market advertising has decreased in effectiveness l Advertisers respond through market segmentation u Divides the pool of potential customers into common demographic characteristics, such as age, gender, income level, etc. called segments u Targets specific messages to these groups u Micromarketing- targeting very small market segments

25 8 Technology-Enabled Relationship Management u Occurs when a firm obtains detailed information about a customer’s behavior, preferences, needs, and buying patterns and uses that information to customize its relationship with that customer l Can use this information to set prices, determine needs and desires, and negotiate terms

26 8 Customer Relationship Management Figure 8-8

27 8 Cdnow Marketspace Features Figure 8-9

28 8 Creating and Maintaining Brands on the Web u Elements of branding l Differentiation l Relevance u Degree the product offers utility to the customer l Perceived value

29 8 Elements of a Brand Figure 8-10

30 8 Emotional vs. Rational Branding u Emotional appeals work well in mass media because ad targets are passive l Do not work well on Web, however, because Web is active medium u Rational branding l Gives people valuable service in exchange for viewing ads u Examples include free and secure shopping services

31 8 Other Web Marketing Methods u Market leaders can take their dominant positions and extend them to other products and services u Affiliate marketing l Web site gives product reviews, description, or other information on a product for sale on another site l Affiliate site gets commission and has no risk

32 8 Dell Home Page Figure 8-11

33 8 Harry and David Home Page Figure 8-12

34 8 Advertising-Supported Model u Used by network television to provide free programming u Problems with this method on the Web: l No consensus on how to measure audiences l Very few web sites have sufficient visitors to attract large advertisers

35 8 Monster.com Mid-Career Page Figure 8-13

36 8 Other Market Models on the Web u Advertising-subscription mixed model l Revenue derived from fee and it also accepts some level of advertising l Used by newspapers and magazines l Successful web models include New York Times, the Wall Street Journal, ESPN, Reuters, and Northern Light u Fee for transaction Model l Online travel agents and car-buying services can remove an intermediary from a value chain u Called disintermediation

37 8 Northern Light Search Results Page Figure 8-14