Marketing Instructor Abdel Fatah Afifi MA&T, MBA, ACPA, PCT

2 Chapter 11 E-Commerce: Marketing in the Digital Age

3 Chapter Objectives 1. Define e-commerce and give examples of each function of the Internet. 2. Describe how marketers use the Internet to achieve their firms’ objectives. 3. Explain how online marketing benefits organizations, marketers, and consumers. 4. Identify the goods and services marketed most often on the Internet and the demographic characteristics of the typical online shopper. 5. Identify the primary online marketing channels. 6. Explain how marketers use interactive tools as part of their online marketing strategies. 7. Discuss how an effective Web site can enhance customer relationships. 8. Describe how to measure the effectiveness of online marketing efforts.

4 What is E-Commerce? Electronic commerce Electronic commerce (e-commerce): Targeting customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers by means of computer networks. Electronic marketing Electronic marketing (e-marketing): Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools. Digital tools: Fax machines, PDAs, smart phones, and DVDs.

5 Capabi lity DescriptionExample Global reach The ability to reach anyone connected to a PC anywhere in the world eBay—the online auction site—links buyers and sellers throughout the world One-to- one marketing Creating products to meet customer specifications, also called personalization Lands’ End offers online shoppers custom-made shirts, slacks, and jeans. Interactive marketing Buyer–seller communications through such channels as the Internet and interactive kiosks Best Buy stores have a “Computer Creation Station” that lets customers design and order custom-made personal computers.

Capabil ity DescriptionExample Right-time marketing The ability to provide a product at the exact time needed UPS customers can place service orders online and track shipments 24/7. Integrated marketing Coordination of all promotional activities to produce a unified, customer-focused promotional message Southwest Airlines use the slogans “A Symbol of Freedom” and You’re Now Free to Move around the Country” in both online and offline promotions.

7 Interactivity and E-Commerce Interactive Marketing ◦ Buyer-seller communications in which the customer controls the amount and type of information received from a marketer through such channels as the Internet, and virtual reality kiosks.

The Internet Over 132 million active users in the USA 1.Intranets 1.Internal corporate network that allows employees within an organization to communicate with each other and gain access to organizational information 2.Extranets 1.Secure network accessible through a Website by external customers or organization for electronic commerce. It provides more customer-specific information than a public site. 8

Four Web Functions 1.Communication 1. ; Instant messaging; Chat rooms and bulletin boards; Online communities 2.Information 1.Search engines; Online publications; Newsgroups; Internet forums; Electronic bulletin boards; Web communities 9

Four Web Functions 3.Entertainment 1.Games; Radio and TV programming, including music; Streaming video of live news reports, sports, and musical performances; Electronic books 4.E-Commerce 1.Online auctions 2.B2B: electronic exchanges; Extranets and private exchanges 3.B2C: Electronic storefronts and cybermalls; Web kiosks, Online ticketing; Matchmaking 10

Accessing the Internet 1. Internet Service Provider (ISP): Organization that provides access to the Internet via a telephone, satellite TV service, or cable TV network. 1.Wi-Fi 2.Search engines 3.Portals 11

12 E-Commerce and the Economy 1. Business-to-Business Online Marketing 1.Involves professional buyers and sellers 2.Requires less glitz and glamour 3.Much more money involved than business-to-consumer online marketing 2. Electronic exchanges 3. Search marketing

Benefits of Business-to- Business Online Marketing 1.Finding new markets and customers 2.Cost savings in every area of the marketing mix 3.Time reduced in reaching markets 1.Easy commerce 13

Online Consumer Marketing 1.Lower Prices 1.Bots (short for robots): programs that check hundreds of sites, gather and assemble information, and bring it back to the sender 2.Convenience 1.Worldwide access, Day or night, Customized products and information 3.Personalization 1.Improves the quality of the shopping experience 2.Improves customer satisfaction 14

Benefits of Online Consumer Marketing 1.Relationship Building 1.Crucial to success 2.On line's personalization helps 3.Easier for small businesses with small budgets 4.Customer service is the key 2.Increased Efficiency 1.Greater profit margins 2.Educating customers online frees salespeople from answering routine questions 15

16 3.Cost Reductions 1.Reduced start-up costs 2.Reduced operating costs 3.Frees funds for new marketing efforts 4.A More Level Playing Field 1.Even small firms with small budgets can compete in the global marketplace 2.Helps eliminate discrimination and allow minority businesses to succeed on their own merits

Online Marketing is International Marketing 1.Examples of Global Web Sites 2.Netsprint.pl Polish version of info seek 3.Us.starmedia.com Spanish- and Portuguese- language Star Media Network 4.Homeuol.com.br Universal Online, the largest Internet portal serving Brazil 5.Sify.com Offering users of Indian ancestry “all the India you want to know.” 17

Security and Privacy Issues 1.Critical factors in building a relationship online 1.Electronic signature 2.Credit card security 3.Authenticity of item offered 4.Payment guarantees 5.Fraud protection 1.Trusts: Ensuring Internet Privacy 18

19 1. Online buyers 1.Annual household income of $30K-$75K 2.Demographic continue to change 3.The next generation of online shoppers will be more representative of offline consumers 2. Online sellers 1.At first, offered familiar products like books and computer hardware 2.Now offering a wider variety of goods including toys, groceries, consumer electronics and prescription drugs

20 1. Company Web Sites 1.Corporate Web sites and Marketing Web sites 2. Electronic Storefronts and Cybermalls 3. Advertising on Other Web sites 1.Banner ads; Pop-up ads; Search ads 4. Online Communities 1.Electronic bulletin boards 5. Other Interactive Marketing Links 1.Web kiosks 2.Smart cards 3.Virtual coupon and online sample 4.Blogs

21 Creating an Effective Web Presence 1.Includes the following ongoing elements: 1.Building an effective web site 2.Managing a web site 3.Measuring Effectiveness

22 1. Building an Effective Web Site 1.Establish a Mission for the company’s site 2.Identify the purpose of the site 3.Satisfy customer needs and wants through a clear site design 2. Managing a Web Site 1.Update the site frequently 2.Flag new merchandise and services 3.Ensure that site appears to be current 4.Update software as needed 5.Track costs and revenues

23 3.Ways to Measure Web site Effectiveness: 1.Research Studies 2.Profitability 3.Web site traffic counts 4.Click-through rates 5.Conversion rates