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INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 1 Internet Marketing Enters the Mainstream ! Is

3 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. THE INTERNET IS CHANGING THE WAY WE LIVE AND WORK In What Ways?

4 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. ‘DEMOCRATIZATION’ OF INTERNET According to Pew, 24% of Americans Have No Internet Access

5 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. HUGE CHANGES

6 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. VARIETY OF CONTENT– B2B as well as B2C

7 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. MEDIA USE CHANGING

8 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. Newspaper Readership Declining Since 1990s TV Still Dominant News Source (Pew) Usage Patterns Differ by Age— Why?

9 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. EVOLUTION OF THE INTERNET Slow Growth from 1957 Through s: The Cold War spawns the ARPAnet 1960s and 70s: Slow growth—limited to scientists and researchers around the world 1980s: TCP/IP; National Science Foundation operated the backbone, banned commercial traffic

10 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. EVOLUTION OF THE INTERNET 1990s Through Present: Boom to Bust to Stable Growth 1991: Gopher and HTML 1993: Mosiac 1995: Yahoo! Throughout the 1990s: Venture Capital Dollars Chasing Untried Business Models 2000 and 2001: Business Failures and Disappearance of Market and Venture Capital 2004 On: Rapid Growth in Users, Content, and Sales (B2C and B2B); Emergence of New Players Like Google

11 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. CONTINUED EVOLUTION – WEB 2.0 The Web As Common Platform Collaborative Knowledge Creation, Sharing  Links, Mashups, Blogs, Podcasts, Social Networks And Many Others Rich User Experiences New Segments Emerging  eg., Age, Activity -“Gamma Moms” Center of Social Nets/ Influence Others

12 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. SABRE From An Efficient Internal System To A Successful Information Product 1950s and 60s - Used to Support American Airlines Operations 1970s - Deployed Into Travel Agencies 1980s - Customers Allowed Network Access 1990s - Travelocity and GetThere Spun Off As Independent Company

13 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. INTERNET PLAYS A ROLE IN THE LIVES OF A MAJORITY OFAMERICANS

14 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. Consumers Use The Internet For Many Reasons. The Primary Ones Are Communication Information

15 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. HOW ARE TRADITIONAL BUSINESSES USING THE INTERNET?

16 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. NET PLAYS INCREASINGLY LARGE, STRATEGIC ROLE IN MARKETING

17 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. CMO OUTLOOK FOR

18 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. MARKETERS TRY TO FOLLOW AUDIENCES

19 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. e/marketers-top-10-wish-list-for-agencies- of-the-future-5904/sapient-marketers- digital-channel-use-now-futurejpg/ AND USE MOST EFFICIENT MEDIA IN ECONOMIC DOWNTURN

20 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. Internet Marketing Is Increasing Because It Can Be Precisely Targeted Cost is Low Relative To Other Channels It Is Measurable And Can Be Held Accountable For ROPI

21 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. UNIQUE CHARACTERISTICS/BENEFITS Common Platform Perfect Information Global Interactive Distance Is No Longer Relevant  Size Is Relevant To Brand Strength and Resources Always On Many-to-Many

22 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. EFFECT ON BUSINESS PROCESSES Cost Quality Customer Access/Community Choice Collaboration?

23 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. TRANSFORMATIONAL CHANGE The Overall Effect of the Unique Characteristics of the Internet is an Important Shift of Power/Control TO THE CUSTOMER.

24 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. THE INTERNET MARKETING PARADIGM

25 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. THE GENERIC OBJECTIVES Customer Acquisition Customer Conversion Customer Retention Customer Value Growth

26 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. THE MARKETING INPUTS Internet Business Models Interactive Channels  Websites, , Wireless, Misc. Offline Channels  Mass Media, Events, Sponsorships, PR Social and Regulatory Issues

27 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. THE MARKETING ACTIONS Advertising and Promotion  Direct Response  Brand Development E-Commerce Customer Service and Support

28 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. INTERNET INFRASTRUCTURE STACK

29 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. INCREASED PRODUCTIVITY Moore’s Law Metcalfe’s Law Computing Power Doubles; Cost is Cut in Half Power of the Network Increases Geometrically With Each New Connection

30 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. STRATEGIC DRIVERS OF THE INTERNET ECONOMY 1.Information Gives Greatest Value Added 2.Distance No Longer Matters 3.Speed Is Of The Essence 4.People Are The Key Assets 5.Growth Is Accelerated By The Network 6.Marketers Can Deal with Customers 1 to 1 7.Demand Can Be Predicted More Accurately 8.Transaction & Coordination Costs Decrease 9.Customers Have Power 10.Economy Characterized by Choice, Abundance

31 Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation. SUMMARY Growth and Innovation Continue Businesses are Taking Advantage of the Unique Characteristics of the Internet Key Marketing Objectives  Customer Acquisition, Conversion Retention, Value Growth Complex Technological Infrastructure Strategic Drivers Of The New Information-Driven Economy Internet Has Re-Written Many Economic Rules-BUT  Good Business Processes Essential  Profitability/ROI Required Integral Part of Marketing Activities  Traditional/New Economy  Large/Small  Global/National/and increasingly Local