1. Chapter Eighteen Internet Marketing

2. Chapter Objectives  Identify the primary users of the Internet.  Discuss the functions and benefits of Internet marketing.  Examine Internet branding and viral marketing.  List the steps in developing an Internet marketing strategy.

3. Internet Users  The Internet has impacted personal lives and how business is conducted.  Every website category is growing, as more and more people are using the Internet. Active Home Internet Users (Millions) Internet Activities (Within the Past 12 Months)

4. Functions of Internet Marketing  Projecting an image  Multi-channel marketing  E-commerce  Advertising  Sales promotions  Public relations Benefits of Internet Marketing  Sales  Interactivity  Multimedia capabilities  Global reach  Flexibility  Cost efficiencies  Real time  Information  Communications  Database warehousing

5. E-Commerce  Definition: Selling of goods & services over the Internet  Works for both the consumer and the B-to-B market  Has gone through three stages:  Traditional “pre- Internet” era  Firms that do not engage in e- commerce at all  Small firms with regional markets  Developed countries: decreasing percentage of total firms  Dot.com companies that sell only over the Internet  Have an office, but no brick-and- mortar store for customers to go to  Huge burst in the 1990s  But recently have faced some problems  Firms that operate both brick-and- mortar stores and Internet e- commerce site  The new face of business  Provide customers with a different channel and more product information. Bricks and MortarClicks OnlyBricks and Clicks

6. E-Commerce Components Catalog Catalog Shopping Cart Shopping Cart Payment System Payment System Store Locator Store Locator

7. Why Consumers Shop Online  24-hour operation  Merchandise shipped to customer  Speed  More production information  Wide product variety  No salespeople  Ease of comparison shopping  No crowds  Saves time  Convenient Ease Selection Prices How to Encourage Purchases  To increase Internet sales, provide incentives: Financial—reduced price, sales promotion, etc.Financial—reduced price, sales promotion, etc. Convenience—speedy transaction anytime, anywhereConvenience—speedy transaction anytime, anywhere Value-Added—best incentive—interactive marketingValue-Added—best incentive—interactive marketing Concerns: Security Fulfillment*

8. Internet Branding Brand spiraling: Use of media to promote an online websiteBrand spiraling: Use of media to promote an online website Halo effect: Selling over Internet after establishing strong off-line brandHalo effect: Selling over Internet after establishing strong off-line brand Examples of Success: Adobe, Amazon, Graffiti Viral Marketing  An advertisement tied to an email  Characteristics: -Low cost, Rapid brand development, Greater credibility -But will become less effective with time Viral Marketing Case Beer.com's Virtual Bartender Discussion

9. Internet Marketing Strategy Assessment of the website How well is the firm meeting its objectives and functions? Should be a continuous process Website Design Meet the functions identified Website security Database develop- ment For firms and manufacturers that sell to business, need to define the B- to-B functions Also: Consumer functions E-commerce may or may not be included in the Internet functions. Determine site functions: multi-channel marketing selling advertising and promotions public relations database development information gathering and sharing inventory management sales support customer service Define the target audience of the website. Create objectives to match the needs of the target audience. Foundation for the development of the website Affects the functions and the content of the website