Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. E-Commerce: Electronic Marketing and the Internet for Dot.com and Brick- and-Mortar Marketers Chapter 5

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Objectives 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.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. E-Commerce Capabilities Nike marketers use the familiar Swoosh logo and “Just Do It” slogan in both online and offline promotions. Coordination of all promotional activities to produce a unified, customer-focused promotional message. Integrated marketing FedEx customers can place service orders online and track shipments twenty-four hours a day. The ability to provide a good or service at the exact time needed. Right-time marketing Intouch Group’s iStations are interactive kiosks placed in retail music stores that allow customers to listen to thirty- second music clips before they purchase compact discs. Buyer-seller communications through such channels as the Internet, CD-ROMS, toll-free telephone numbers, and virtual reality kiosks. Interactive marketing Customers can order customized clothing—from jeans to shirts to shoes—online. Creating products to meet customer specifications; also called personalization. One-to-one marketing Major car makers, such as Ford, Nissan, and Volvo, use the Web to reach car buyers around the world. The ability to reach anyone connected to a PC anywhere in the world. Global reach EXAMPLEDESCRIPTIONCAPABILITY

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Mondera.com is designed as an online retailer targeting buyers of fine jewelry.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. E-Commerce Interactive marketing - Buyer-seller communications in which the customer controls the amount and type of information received. Internet (NET) - Worldwide network of interconnected computers. Intranets - Internal corporate network. Extranets - Secure network accessible through a web site by external customers or organizations for electronic commerce.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. A Typical Day on the Web

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Four Functions of the Internet Communication Instant messaging Chat rooms Online communities Information Search engines Online publications Newsgroups Portals E-Commerce Electronic exchanges Extranets and private exchanges Electronic storefronts Online ticketing Auctions Entertainment Games Radio and TV programming Music Electronic books Short movies

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. “The history of the Internet begins at the height of the cold war in the 1960's. People at the Rand Corporation, America's foremost military think tank, were trying to figure out an important strategic problem: how could US authorities talk to each other in the aftermath of a nuclear attack?” Source: the pbs home page The History of The Internet

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Benefits of B2B Online Marketing New markets and customers. Cost savings in every aspect of the marketing strategy. Greatly reduces the time involved in reaching target markets. Potential for increased profits.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Benefits of Business-to-Consumer Online Marketing

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Online Consumer Benefits 1.Lower Prices Ideal method for savvy shoppers to compare prices from dozens—even hundreds—of sellers. 2.Convenience Cybershoppers can order goods and services from around the world at any hour of the day or night. 3.Personalization One way is to welcome you back. A second way is to send you periodic s informing you of specials or new products. Three Categories

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. E-Commerce and Security Marketing research indicates that privacy is the top concern. Consumers want assurances that any information they provide won’t be sold to others without their permission. Prominently displaying privacy policy is an effective way to build customers’ trust.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. The European Union The bigger the company that uses the internet the more appealing the company seems to be to hackers. –Security is a serious issue, both personal and in the business arena.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Who is Online? 1.The heaviest Internet users make $75,000 or more a year. 2.Live in urban areas. 3.States with the highest percentage of Internet users include: Alaska New Hampshire Washington Utah Colorado 4.Racial group most likely to use the Internet: Americans of Asian and Pacific Island origin percent of employed people use the Internet at work percent of college graduates use the Internet. 7.Over half of all people currently looking for jobs go online.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Online Marketing Channels

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Company Web Sites Two types of company Web sites exist. 1.Corporate Web sites to increase their visibility, promote their goods and services. Often include information about company history, products, locations, and financial information. 2. Cybermalls which can link as many as 400 participating online retailers. Cybermalls typically feature a popular national retailer with high customer traffic as an anchor tenant. Stores included in the mall are selected to produce a good match of merchandise.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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. Three basic steps for hitting the bulls eye.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measures of Web Site Effectiveness ProfitabilityTraffic counts Click-through rates Conversion rates Research studies