1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. LO2 Identify the demographic and lifestyle profile of online consumers. Explain why certain types of products and services are particularly suited for interactive marketing. LO3 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 21, YOU SHOULD BE ABLE TO: Describe what interactive marketing is and how it creates customer value, customer relationships, and customer experiences. LO1 21-2

3. LO5 Define cross-channel shoppers and the role of transactional and promotional websites in reaching these shoppers. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 21, YOU SHOULD BE ABLE TO: Describe why consumers shop and buy online and how marketers influence online purchasing behavior. LO4 21-3

4. SEVEN CYCLES: ONE BIKE, YOURS 21-4

5. CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CUSTOMER VALUE CREATION IN MARKETSPACE LO1  Marketplace  Marketspace Form Utility Possession Utility 21-5

6. FIGURE 21-1 FIGURE 21-1 Trend in online shoppers and online retail sales revenue in the U.S. 21-6

7. FIGURE 21-1A FIGURE 21-1A Trend in online shoppers in the U.S. 21-7

8. FIGURE 21-1B FIGURE 21-1B Trend in online retail sales revenue in the U.S. 21-8

9. CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE INTERACTIVITY AND INDIVIDUALITY IN MARKETSPACE LO1  Interactivity  Individuality Collaborative Filtering  Interactive Marketing Interactive Marketing  Choiceboard Choiceboard 21-9

10. CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE INTERACTIVITY AND INDIVIDUALITY IN MARKETSPACE LO1  Personalization Personalization  Permission Marketing Permission Marketing Opt-Out Opt-In 21-10

11. FIGURE 21-2 FIGURE 21-2 Seven website design elements that drive customer experience 21-11

12. CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CREATING AN ONLINE EXPERIENCE LO1  Customer Experience Content Context  Functional  Aesthetic Customization 21-12

13. CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE CREATING AN ONLINE EXPERIENCE LO1  Customer Experience Communication Connection Commerce Community 21-13

14. USING MARKETING DASHBOARDS Sizing Up Site Stickiness at Sewell Automotive Companies Average Time Spent per Unique Visitor = × 21-14

15. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO2  Online Consumer Profile Online Consumer Profile  Online Consumer Lifestyle Segmentation Click-and-Mortar Hunter-Gatherers Brand Loyalists Time-Sensitive Materialists Hooked, Online, and Single Ebivalent Newbies 21-15

16. FIGURE 21-3 FIGURE 21-3 Internet usage in the U.S. varies by age, racial/ethnic group, education, and household income 21-16

17. FIGURE 21-3A FIGURE 21-3A Internet usage in the U.S.: age 21-17

18. FIGURE 21-3B FIGURE 21-3B Internet usage in the U.S.: racial/ethnic group 21-18

19. FIGURE 21-3C FIGURE 21-3C Internet usage in the U.S.: education 21-19

20. FIGURE 21-3D FIGURE 21-3D Internet usage in the U.S.: household income 21-20

21. MARKETING MATTERS Meet Today’s Internet Mom—All 31 Million! 21-21

22. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO3  What Online Consumers Buy Product Information Audio/Video Demos Digital Items Unique Items Convenience Items Standardized Items 21-22

23. FIGURE 21-4 FIGURE 21-4 Estimated percentage of online retail sales by product/service category: 2007 and 2012 21-23

24. FIGURE 21-5 FIGURE 21-5 Why consumers shop and buy online 21-24

25. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  Why Consumers Shop and Buy Online Convenience  Bots Bots  Eight-Second Rule Eight-Second Rule Choice  Product/Service Selection  Assistance 21-25

26. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  Why Consumers Shop and Buy Online Customization  Customerization Customerization 21-26

27. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  Why Consumers Shop and Buy Online Communication  Marketer-to-Consumer E-mails  Consumer-to-Marketer Requests  Consumer-to-Consumer Chat Rooms and Instant Messaging 21-27

28. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  Why Consumers Shop and Buy Online Communication  Web Communities Web Communities  Blog Blog  Spam Spam  Buzz  Viral Marketing Viral Marketing  Spam Spam 21-28

29. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  Why Consumers Shop and Buy Online Cost  Dynamic Pricing Dynamic Pricing  Cost of Offering  Cost of Time Searching Control  Cookies Cookies 21-29

30. MAKING RESPONSIBLE DECISIONS Let the E-Buyer Beware 21-30

31. ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE WHO IS THE ONLINE CONSUMER? LO4  When and Where Online Consumers Shop and Buy Monday - Friday 8:00 AM - 5:00 PM 21-31

32. CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING WHO IS THE CROSS-CHANNEL SHOPPER? LO5  Cross-Channel Shopper Cross-Channel Shopper Compare Products Among Retailers Obtain Information Not in Stores Reduce Trips to Multiple Retail Locations 21-32

33. CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING IMPLEMENTING MULTICHANNEL MARKETING LO5  Transactional Websites Cannibalization Channel Conflict 21-33

34. CROSS-CHANNEL SHOPPERS AND MULTICHANNEL MARKETING IMPLEMENTING MULTICHANNEL MARKETING LO5 Interactive Experiences  Promotional Websites Separate Websites for Each Brand Support Traditional Marketing Channel 21-34

35. FIGURE 21-6 FIGURE 21-6 Implementing multichannel marketing with promotional websites 21-35

36. MCFARLANE TOYS: THE BEST OF INTERACTIVE MARKETING VIDEO CASE 21 FIGURE 1 FIGURE 1 Toy category sales in the U.S. 21-36

37. VIDEO CASE 21 MCFARLANE TOYS 1. Describe the channels of distribution McFarlane Toys uses to reach its action figure customers. 21-37

38. VIDEO CASE 21 MCFARLANE TOYS 2. Why have interactive marketing strategies been successful for McFarlane Toys? What unique elements are part of its online experience? 21-38

39. VIDEO CASE 21 MCFARLANE TOYS 3. How does McFarlane Toys address each of the six C’s consumers consider when shopping and buying online? 21-39

40. JUST LOOKING, THANKS: WHY E-SHOPPERS ABANDON THEIR SHOPPING CARTS SUPPLEMENTAL LECTURE NOTE 21-1 21-40

41. CLICK AND DRIVE: LEVERAGING MULTICHANNEL MARKETING SUPPLEMENTAL LECTURE NOTE 21-2 21-41

42. BUYING AN AUTOMOBILE: MARKETPLACE VS. MARKETSPACE (PART 1) IN-CLASS ACTIVITY 21-1 21-42

43. BMW Z4 Roadster TV Ad 21-43

44. 21-44

45. BUILDING YOUR AUTOMOBILE (PART 2) IN-CLASS ACTIVITY 21-2 21-45

46. 21-46

47. Interactive Marketing Interactive Marketing is the two-way buyer-seller electronic communication in a computer- mediated environment in which the buyer controls the kind and amount of information received from the seller. 21-47

48. Choiceboard A choiceboard is an interactive, Internet-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing from a menu of product or service attributes (or components), prices, and delivery options. 21-48

49. Collaborative Filtering Collaborative filtering is a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases. 21-49

50. Personalization Personalization is the consumer- initiated practice of generating content on a marketer’s website that is custom tailored to an individual’s specific needs and preferences. 21-50

51. Permission Marketing Permission marketing is the solicitation of a consumer’s consent (called “opt-in”) to receive e-mail and advertising based on personal data supplied by the consumer. 21-51

52. Online Consumers Online consumers are the subsegment of all Internet users who employ Internet-enabled technology to research products and services and make purchases. 21-52

53. Bots Bots are electronic shopping agents or robots that comb websites to compare prices and product or service features. 21-53

54. Eight-Second Rule The eight-second rule is a view that customers will abandon their efforts to enter and navigate a website if download time exceeds eight seconds. 21-54

55. Customerization Customerization is the growing practice of not only customizing a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer. 21-55

56. Web Communities Web communities are websites that allow people to congregate online and exchange views on topics of common interest. 21-56

57. Blog A blog is a webpage that serves as a publicly accessible personal journal for an individual or organization. 21-57

58. Spam Spam consists of communications that take the form of electronic junk mail or unsolicited e-mail. 21-58

59. Viral Marketing Viral marketing is an Internet- enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail. 21-59

60. Dynamic Pricing Dynamic pricing is the practice of changing prices for products and services in real time in response to supply and demand conditions. 21-60

61. Cookies Cookies are computer files that a marketer can download onto the computer of an online shopper who visits the marketer’s website. 21-61

62. Cross-Channel Shopper A cross-channel shopper is a consumer who researches offerings online and then purchases them at retail stores. 21-62