Chapter 1 Introduction to Internet Marketing

Learning objectives Evaluate the relevance of the Internet to the modern marketing concept; distinguish between Internet marketing, e-marketing, e-commerce and e-business; identify the key differences between Internet marketing and traditional marketing; assess how the Internet can be used in different marketing functions

Questions for marketers How significant is the Internet as a marketing tool? How does Internet marketing relate to e-marketing, e-commerce and e-business? What are the key benefits of Internet marketing? What differences does the Internet introduce in relation to existing marketing communications models?

The impact of the Internet Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet. He says: Is the Internet a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business? (Grove, 1996)

The impact of the Internet Organisation Sector Online contribution Overall turnover Cisco B2B Networking hardware 90% $19bn Easyjet B2C Air travel 85% £264m Dell B2B, B2C Computers 48% $25bn Lands End Clothing B2C Clothing 11% $1.3bn Book Club Associates B2C Books 10% £100m Electrocomponents B2B Electronics 7% £761m Group Domino’s Pizza B2C Food 3.4% £76m Tesco B2C Grocery 1.4% £18.4bn Thomas Cook B2C Travel <1% £1.8bn

The Internet’s impact on you? How many of you have purchased something on the Internet in the last 6 months? How many times have you used the Internet as an information source, before buying offline?

Demand – Internet access Figure 2.13 Global variation in number of PCs per hundred population and percent Internet access in 2000 Source: ITU (www.itu.int)

How does the Internet contribute to marketing? The definition of marketing by the Chartered Institute of Marketing (http://www.cim.co.uk/) is: Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability Give examples of how the Internet (web and e-mail) contributes to marketing

What is e-marketing? E-marketing is: Applying… Internet and other digital technology… (web, e-mail, wireless, iTV, databases) to… acquire and retain customers (through a multi-channel buying process and customer lifecycle) by… Improving customer knowledge, targeting, service delivery and satisfaction

Example – you’ve been tangoed

E-business and e-commerce Define e-commerce What is the relationship between e-commerce and e-business?

E-business and e-commerce Figure 1.2 The distinction between buy-side and sell-side e-commerce

Relationship between e-commerce and e-business Figure 1.3 Three alternative definitions of the relationship between e-commerce and e-business

Internet marketing contexts Figure 1.4 Summary of transaction alternatives between businesses and consumers

Internet applications Figure 1.5 Market and product strategic grid

Example - Guinness

Drivers Cost/efficiency drivers Competitiveness drivers Increase speed of dispatch Reduce sales cost Reduce operating costs Competitiveness drivers Customer demand Range and quality of services offered Avoid losing market share Exploit new markets

Example rswww.com

Technology - addressing Common gTLDs are: .com represents an international or American company such as http://www.travelagency.com .co.uk represents a company based in the UK such as http://www.thomascook.co.uk/. .ac.uk a UK based University (e.g. http://www.derby.ac.uk) .org.uk or .org are not for profit organisations (e.g. www.greenpeace.org) .net a network provider such as www.freeserve.net.

How it works - components Figure 1.9 Infrastructure components of the Internet

How it works – client/server Figure 1.10 Information exchange between a web browser and a web server

How it works - HTML Figure 1.11 Home page index.html for The B2B Company in a web browser showing HTML source in text editor

Internet, intranet and extranet Figure 1.12 The relationship between access to intranets, extranets and the Internet

Interactivity and intelligence Figure 1.13 Summary of communication models for: (a) traditional media, (b) new media

Individualisation Figure 1.14 Summary of degree of individualisation for: (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)

Integration Figure 1.15 Channel requiring integration as part of integrated e-marketing strategy

Mixed-mode buying Figure 1.16 The role of mixed-mode buying in Internet marketing

Conversion marketing Figure 1.17 A model of the Internet marketing conversion process

Conversion marketing - example Figure 1.18 An example of the conversion process