1. © 2004 Detlev Zwick Success in the Networked Economy: Conceptual and Theoretical Frameworks for Marketers

2. © 2004 Detlev Zwick What is an Internet Company? Yahoo? Amazon.com? Neopets.com? FTD.com (Flowers)? ebay? But these companies were established years before the Web?! Carrier? Time Warner? CanadianTire? Etc.

3. © 2004 Detlev Zwick Relationships Electronic Networks INFORMATION Interactive Marketing is the Process of Building and Maintaining Relationships Through Building and Maintaining Electronic Networks by Facilitating the Production, Communication, and Exchange of Ideas, Services, and Products that Satisfy the Goals of all Parties. Its Fundamental Currency is INFORMATION.

4. © 2004 Detlev Zwick VALUE Interactive Marketing creates VALUE by using Electronic Networks (including the Internet) to create Customer Relationships through Networked Exchanges. Value Creation in the Networked Economy:

5. © 2004 Detlev Zwick Best Practices have short life spans: Remember… Banner ads (big, flashy, interactive, pop-up,… read, totally ignored and annoying) Banner ads (big, flashy, interactive, pop-up,… read, totally ignored and annoying) direct e-mail (Every marketer had to capture email addresses; every marketer had to build their email lists; every marketer had to have a daily, weekly or monthly newsletter… direct e-mail (Every marketer had to capture email addresses; every marketer had to build their email lists; every marketer had to have a daily, weekly or monthly newsletter… Brands no longer matter online, so let’s focus on financing and selling. Brands no longer matter online, so let’s focus on financing and selling. Brands are ALL that matters online, so let’s spend $2 million on a 30 second Superbowl ad. Brands are ALL that matters online, so let’s spend $2 million on a 30 second Superbowl ad. Communities are the killer app. Communities are the killer app. Communities are a waste of money. Communities are a waste of money. Etc. Etc.

6. © 2004 Detlev Zwick Working with THEORETICAL and CONCEPTUAL TOOLS: Information Reconceptualization Relationship/Community Network

7. © 2004 Detlev Zwick “network marketing” The scope of marketing is limited by the speed with which information, messages, and products/services can be transported. When inbound and outbound messages are transported at network speed, and production is decentralized, the result is: MICROSCOPIC VISIBILITY (individualization) MICROSCOPIC VISIBILITY (individualization) FLEXIBILITY W/O TIME (versioning in communication, production, pricing, distribution) FLEXIBILITY W/O TIME (versioning in communication, production, pricing, distribution)

8. © 2004 Detlev Zwick Cbs.MarketWatch.comCbs.MarketWatch.com Marketing Network Cbs.MarketWatch.com =Customer Value =Flexible Network Nodes Credible Analysis and Personal Finance Tools Up-to-the- Minute Information Multiple Points of Access Distribution Partnerships Association with CBS Experienced Editorial Staff Partnerships with Content Providers Available Infrastructure International Presence Third-Party Sources Market Guide Hoover’s Online Multex Annual Reports Club INVESTools Over 250,000 Investment Research Reports Community Private e-mail People Watch Hot Discussions Occasional Polls Media: Web/Phone News Watch E-mail Alerts Real-time Headlines Hotstock Tracker Marketwatch Live eSignal Radio Contribution to Westwood One TV CBS MarketWatch Weekend Contributions To: CBS Early Show CBS Evening News CBS NewsPath Tools Sharebuilder Payment Calculator Home Price Check Best Credit Card Rates Insurance QuickQuote Marketwatch Radio on AOL

9. © 2004 Detlev Zwick 1-800-Flowers.com1-800-Flowers.com Marketing Network 1-800-Flowers.com Online Gift Center Integrated Partner Offers Broad Assortment of Gifts Customer Service Wide Reach to Customers Widespread, Easy Access Multiple Contact Points Popular Website High Quality of Flowers Technology Strong Brand Name Strong Distribution Network =Resources = Customer Value Core Benefits

10. © 2004 Detlev Zwick Doing Networked Marketing: Customization: Change the organization on the fly Community-building: Bridge silos, bring in the customer Multi-channel solutions: real-time click and brick sales pitch.

11. © 2004 Detlev Zwick Community: AOL Time Warner Built a virtual private community to deal with the problem of decentralized commercial printing need for its many divisions.

12. © 2004 Detlev Zwick Consolidate by networking. Lowers coordination costs while maintaining freedom of divisions. Lowers coordination costs while maintaining freedom of divisions. Create a Virtual Community of Printing” – CFO Joseph Ripp AOL installed a printing software (Printcafe) accessible over the Web. AOL installed a printing software (Printcafe) accessible over the Web. Brings together 50 vendors of printing services with all printing officers. Brings together 50 vendors of printing services with all printing officers. AOL employees across about 500 divisions can exchange their experiences using a vendor. AOL employees across about 500 divisions can exchange their experiences using a vendor. Cost savings for AOL: $150 Million in first 12 months. Cost savings for AOL: $150 Million in first 12 months.

13. © 2004 Detlev Zwick Convergent Channels The Idea – combine physical and virtual interactions with customers strategically in ways that meet relational and information needs of the customer, reduce internal costs and offer insights into the future of markets.

14. © 2004 Detlev Zwick Example: Trintech Electronic payment and commerce business in B2B market. Sales Process: Usually send out a team consisting of one sales rep and engineer to talk to clients (about 30 engineers supported 30 sales reps). Usually send out a team consisting of one sales rep and engineer to talk to clients (about 30 engineers supported 30 sales reps). upon return, they write proposal, and submit it for further engineering, legal, or other reviews (takes about 2 weeks). upon return, they write proposal, and submit it for further engineering, legal, or other reviews (takes about 2 weeks).

15. © 2004 Detlev Zwick Now… …engineer (called the “product evangelist”) is connected to sales rep and client virtually (video conferencing or Laptop through software called NetMeeting). While the product evangelist is conferencing, a support team is listening in, beginning to draw out the solution and shortly after that the formal proposal. As this team is busy with that proposal, another team comes in supporting the product evangelist for the next call. When done, the proposal enters the eRoom, where legal, engineering, and product managers can populate the document. The sales expert puts a pricing matrix on it and gives it back to the product evangelist. Proposal is emailed to sales rep who prints it out and hands it to client usually the next morning. Advantages: Every client gets the best engineer in a specific product area. Every client gets the best engineer in a specific product area. Client gets immediate solution => customer satisfaction Client gets immediate solution => customer satisfaction The arrangement saves Trintech an estimated 60% over the old model. The arrangement saves Trintech an estimated 60% over the old model.

16. © 2004 Detlev Zwick Relationships via Networked Communication Internet has reduced the information asymmetry between consumer and company.  Companies must work hard to add value by developing even more powerful information and decision systems (Siebel, Oracle, Microsoft).  Develop multi-channel marketing tools: buy a pair of shoes in The Bay and receive via email a coupon for a matching purse.  Send out a personal discount offer to customer’s wireless device while still in the store.

17. © 2004 Detlev Zwick Information Interpretation in the Data Network: Have a centralized database but different data lenses for different managers. Zoom from summary reports to specific data spots. Create customizable corporate portals to deliver viewer-tailored reports on the data (Plumtree, Datachannel).

18. © 2004 Detlev Zwick Why does a company like Carrier do E-Marketing?

19. © 2004 Detlev Zwick E-Business Enhance Customer Relationships Increase Product Cycle Times Improve Profitability Increase Market Share Because it supports one or more of these efforts:

20. © 2004 Detlev Zwick does a company like Carrier do E-Marketing?

21. © 2004 Detlev Zwick Carrier: Smart Products carrier.comcarrier.com, totaline.com, hvacpartners.com, myappliance.com totaline.com hvacpartners.com myappliance.com Do We Need “Central Internet Air Conditioning and Heating”?

22. © 2004 Detlev Zwick The Product: The Product: A Internet-Enabled Comfort Choice Thermostat What are the Benefits for Consumers? 1) Web-Enabled Micromanagement of Temperature. 2) Added-Value Through Cost Saving. And for Carrier? 1) Bundling Smart Services allows to Maintain Prices in Competitive Market. 2)Carrier, a B2B Company, is now VERY Close to the Customer (User Data). 3)Last but not Least: Image of Being Cutting-Edge

23. © 2004 Detlev Zwick Does Carrier Make Anyone Else Happy? Yes, Connecticut Light & Power (Northeast Utilities system) with 1.1 million customers Get 45,000 customers into the Carrier program and it'll conserve the equivalent of a small power plant…

24. © 2004 Detlev Zwick Based on Carriers Competitive Advantages – Network and Relationship – What Should Come Next? Wireless Remote Control Etc.??

25. © 2004 Detlev Zwick Lessons to be learned from Carrier? Network your product. Form a relationship to network partners. Reconceptualize your product. What is the value proposition Carrier is trying to sell? What is the value proposition Carrier is trying to sell? How can the Internet add value? How can the Internet add value? What need(s) does a car satisfy? Now, reconceptualize the car for the Network Society! Now, reconceptualize the car for the Network Society!