Chapter 9 Interactive Marketing and Electronic Commerce

2 Electronic Commerce …any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services.

3 Marketing Opportunities in Marketspace Products best suited for e-commerce:  product information important, but not pre-purchase trial  audio or video demonstration  digitally deliverable items  unique items  routine purchases, convenience important  highly standardized products, price information important

4 E-Commerce Models: Sales Revenue Model involves marketing products and services through the Internet companies seek to earn a margin on actual sales or a fee charged for rendering a service few companies that market consumer products actually make an operating profit using this model exclusively Examples – CDNow.com and Cisco Systems

5 E-Commerce Models: Advertising Support Model emphasizes the selling of advertising on a company’s Web site often prices are listed at or below their cost often used to complement the selling model, but sometimes used alone to generate revenue Examples – Buy.com and Yahoo.com

6 E-Commerce Models: Cost Elimination Model used when delivery of the product, service, or information through the Internet significantly lowers costs Examples – banks and airlines

7 E-Commerce Models: Subscription Support Model generates revenue from users in the form of monthly or annual subscriptions based on the value of the content or service provided Examples – aol.com and wsj.com

8 E-Commerce Models: Information Trading Model company gathers information about consumer interests or purchase intentions, and sells the information to a retailer or manufacturer for a fee Example – Popular Demand, Inc.

9 E-Commerce Models: Infomediary Model sells information about a market and creates a platform on which buyer and sellers can do business in marketspace Three Types :  aggregators – e.g., chemdex.com  auctioneers – e.g., eBay.com  exchanges – e.g., nte.net

10 Customer Value Proposition in Marketspace Value Proposition ChoiceConvenience CoordinationCustomization Cost Customer Service

11 Types of Marketing Web Sites  Transactional sites e.g., L.L.Bean and gap.com  Promotional sites e.g., saturn.com and cathay-usa.com

12 Transactional Websites  are essentially electronic storefronts  focus on turning online browsers into online buyers

13 Promotional Websites  promote a company’s products  provide information on how product can be used and where it can be purchased  often engage the visitor in an interactive experience  can be effective in generating interest in and trial of a company’s products

14 Marketing Websites and IMC  Web sites complement direct selling and supplement advertising  play a cost-effective role in the communication mix  cost-effective in providing feedback on product performance

15 Managing Product-Market Convergence  increasing number of companies maintaining presence in both marketplace and marketspace. This necessitates: coordinating marketing efforts managing trade relations