E-Marketing 5/E Judy Strauss and Raymond Frost Part I: E-Marketing in Context Chapter 1: Past, Present, and Future ©2009 Pearson Education, Inc. Publishing as Prentice Hall

©2009 Pearson Education, Inc. Publishing as Prentice Hall

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 1 Objectives After reading Chapter 1, you will be able to: Explain how the internet and information technology advances offer benefits and challenges to consumers, businesses, marketers, and society. Distinguish between e-business and e-marketing. Explain how increasing buyer control is changing the marketing landscape. Understand the distinction between information or entertainment as data. Identify several trends that may shape the future of e- marketing. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Dell Starts Listening In 2004, Dell held 28.2% of U.S. computer market share. To reduce costs, Dell Computer began outsourcing customer service to a firm in India. Market share increased to 28.8% but complaints and consumer dissatisfaction rose. Dell digital media manager initiated blogs in several languages to improve communication. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Dell Starts Listening, cont. Dell’s blogs became mechanisms for handling consumer complaints and ideas. Blog usage resulted in over 20 changes to the company. What are the opportunities and risks in utilizing blogs for improving customer service? ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Internet 101 The internet is a global network of interconnected networks. E-mail and data files move over phone lines, cables, and satellites from sender to receiver. There are two special uses of the internet: Intranet: network that runs internally in an organization. Extranet: two joined networks that share information. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

WHAT IS E-BUSINESS? E-Business means utilizing electronic medium in every day business activities. E-Business is about using Internet technologies to provide superior customer service, streamline business processes, increase sales, and reduce costs. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Even small businesses that provide personal services. WHAT IS E-COMMERCE? Electronic commerce, or e-commerce, refers to economic activity that occurs online. E-commerce includes all types of business activity, such as retail shopping, banking, investing and rentals. Even small businesses that provide personal services. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

WHAT IS E-MARKETING? E-Marketing is a subset of E- Business that utilizes electronic medium to perform marketing activities and achieve desired marketing objectives for an organization. E-Marketing is a broader term that describes any marketing activity performed via electronic medium ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Internet 101, cont. E-business is the continuous optimization of a firm’s business activities through digital technology. E-commerce is the subset of e-business focused on transactions. E-marketing is one part of an organization’s e- business activities. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Advantages of E-Marketing Lower costs Trackabe, measurable results: obtain detailed data about customer response to marketing campaigns. Global reach Personalization: connecting a database to a web site allows for individually targeted offers. One to one marketing More interesting campaigns: Use creative multimedia to engage customers. Better conversion rates (increased purchases): Online customers are only a few clicks from a purchase, whereas when offline they must make a phone call or visit a store. Twenty four hour marketing ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Limitations of E-Marketing Since E-marketing requires customers to use newer technologies than traditional media, not all people may get the message. Low speed Internet connections can cause difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information on dial up connections or mobile devices. E-marketing does not allow shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. Some e-commerce vendors have implemented liberal return policies and in store pick up services to reassure customers. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Disadvantages of e-Marketing · Lack of personal approach · Dependence on technology · Security, privacy issues · Maintenance costs due to a constantly evolving environment · Higher transparency of pricing and increased price competition · Worldwide competition through globalization ©2009 Pearson Education, Inc. Publishing as Prentice Hall

E-Marketing is Bigger than the Web The Web is the portion of the internet that supports a graphical user interface for hypertext navigation with a browser. The Web is what most people think about when they think of the Internet. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

The Web Is One Aspect of E-Marketing Exhibit 1.1 personal digital assistant (PDA) ©2009 Pearson Education, Inc. Publishing as Prentice Hall

E-Marketing is Bigger than Technology A brief overview of the big picture is useful for understanding e-marketing’s impact one: Individuals Communities Business Societies ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Individuals :The internet provides individual users with convenient and continuous access to information, entertainment, and communication. If ‘information is power’ individuals have more power than ever before. Consumers compare product features and prices using search engines and read product reviews from other consumers at www.epinions.com ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Communities form around shared photos, videos, and online profiles. Communities: Strangers in countries world wide form online communities to discuss a variety of things because of the internet. Communities form around shared photos, videos, and online profiles. Business: The digital environment enhances business processes and activities across the entire organization. The digital environment enhances processes and activities for businesses. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Societies: digital information enhances economies through more efficient markets, more jobs, and information access, communication globalization, lower barriers to foreign trade and investment, and more. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Global Internet Users in 2009 Exhibit 1.3 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Global Internet Users in 2014 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

E-Marketing’s Past: Web 1.0 The Internet started in 1969 as the ARPANET (Advanced Research Projects Agency Network), a network for academic and military use. Web pages and browsers appeared in 1993. 1995 Amazon.com and eBay go live. 1998 Google began in March 1998 as a research project by Larry Page and Sergey Brin, Ph.D. students at Stanford University. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

The first generation of e-business was like a gold rush. Between 2000 and 2002, more than 500 internet firms shut down in the U.S. By Q4 2003, almost 60% of public dot-coms were profitable. 2004: 16% of the world’s population uses the internet. Facebook goes online and the era of social networking begins. Mozilla unveils the Mozilla Firefox browser. 2005: YouTube.com launches 2009: The Internet marks its 40th anniversary. 2010: 27% of the world’s population is online. Facebook reaches 400 million active users. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

E-Business to Just Business Exhibit 1.5 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

E-Marketing Today: Web 2.0 Web 1.0 connected people to networks. Web 2.0 connected people with machines and each other. Web 2.0 is the second generation of internet technology and includes: Blogs Social networking Photo, video, and bookmark sharing ©2009 Pearson Education, Inc. Publishing as Prentice Hall

The Future: Web 3.0 The newest technologies allow marketers to focus on user: Engagement Participation Co-creation Online gaming represented over $1 billion in revenue and 15 million players in 2006. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

©2009 Pearson Education, Inc. Publishing as Prentice Hall

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Consumers Have More Control The internet provides a communication platform for individual comments, both positive and negative. Comments can spread quickly and rapidly. New technologies such as digital video recorders (DVRs) will increase consumer control. New service Akimbo maintains a library of over 10,000 programs with access via the internet, television, or other appliance. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Power Shift from Companies to Individuals Exhibit 1.7 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Wireless Networking Increases Cell phones, PDAs, and laptops connect to the internet via wireless modem worldwide. Starbucks Hotels and airports Queen Mary II luxury liner Amtrak train stations Customers will have information, entertainment, and communication when, where, and how they want it. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

WiFi at Train Station in France ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Appliance Convergence (meeting) The receiving appliance is separate from the media type. Computers can receive digital radio and TV. TV sets can receive the Web. New types of “smart” receiving appliances will emerge. Internet refrigerator is many digital appliances in one. Global positioning systems (GPS) allow in-car communication and entertainment. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Semantic Web The Semantic Web will utilize a standard definition protocol that will allow users to find information based on its type, such as: The next available appointment for a doctor. Details about an upcoming concert. Menu at the local restaurant. Represents the next huge advance: providing worldwide access to data on demand without effort. ©2009 Pearson Education, Inc. Publishing as Prentice Hall

©2009 Pearson Education, Inc. Publishing as Prentice Hall