1. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-1 IMPLEMENTING INTERACTIVE AND MULTICHANNEL MARKETING C HAPTER

2. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Describe what interactive marketing is and how it creates customer value, customer relationships, and customer experiences. 2.Explain why certain types of products and services are particularly suited for interactive marketing.

3. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 3.Describe why consumers shop and buy online and how marketers influence online purchasing behavior. 4.Define multichannel marketing and the role of transactional and promotional websites in reaching online consumers.

4. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-4 ONE BIKE: YOURS

5. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-5 CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE Customer Value Creation in Marketspace Marketplace Marketspace

6. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-6 FIGURE 18-1 FIGURE 18-1 Trend in online shoppers and online retail sales revenue in the United States

7. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-7 FIGURE 18-1A FIGURE 18-1A Online shoppers in the United States

8. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-8 FIGURE 18-1B FIGURE 18-1B Online retail sales revenue in the United States

9. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-9 Godiva Chocolatier What utility is created by its website?

10. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-10 CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE Interactivity, Individuality, and Customer Relationships in Marketspace  Interactivity  Interactive Marketing Interactive Marketing  Choiceboards Choiceboards Collaborative Filtering Collaborative Filtering

11. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-11 Nike iD What is a choiceboard?

12. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-12 CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE Interactivity, Individuality, and Customer Relationships in Marketspace  Permission Marketing Permission Marketing  Personalization Personalization Opt-In Opt-Out

13. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-13 CREATING CUSTOMER VALUE, RELATIONSHIPS, AND EXPERIENCES IN MARKETSPACE  Content  Context Creating an Online Customer ExperienceCreating an Online Customer Experience  Connection  Customization  Community  Communication  Commerce

14. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-14 FIGURE 18-2 FIGURE 18-2 Website design elements that drive customer experience

15. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-15 Harley-Davidson What customer experience is created by its website?

16. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-16 Concept Check 1. The greatest marketspace opportunity for marketers lies in the creation of what kind of utility? A: form utility

17. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-17 Concept Check 2. Companies produce a customer experience through what seven website design elements? A: These design elements are: context, content, community, customization, communication, connection, and commerce.

18. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-18 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE Who is the Online Consumer  Product Information What Online Consumers Buy  Audio/Video Demos  Digital Items  Unique Items  Convenience Items  Standardized Items

19. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-19 FIGURE 18-3 FIGURE 18-3 Estimated online retail sales by product/service category: 2003 and 2008

20. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-20 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE  Convenience Bots Why Consumers Shop and Buy Online  Choice  Customization Customerization

21. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-21 FIGURE 18-4 FIGURE 18-4 Why consumers shop and buy online

22. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-22 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE  Communication Marketer-to-Consumer Why Consumers Shop and Buy Online Consumer-to-Marketer Consumer-to-Consumer

23. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-23 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE  Communication Web Communities Why Consumers Shop and Buy Online Blog Spam Buzz Viral Marketing

24. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-24 De Beers and Physique How did these firms apply viral marketing? PhysiqueDe Beers

25. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-25 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE  Cost Dynamic Pricing Why Consumers Shop and Buy Online Portals Cookies  Control

26. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-26 ONLINE CONSUMER BEHAVIOR AND MARKETING PRACTICE IN MARKETSPACE When and Where Online Consumers Shop and Buy  Monday - Friday  Normal Work Hours  Browse Rather Than Buy

27. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-27 Concept Check 1. What is viral marketing? A: Viral marketing is an Internet- enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail.

28. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-28 Concept Check 2. What are the six reasons consumers prefer to shop and buy online? A: convenience, choice, customization, communication, cost, and control

29. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-29 MULTICHANNEL MARKETING TO THE ONLINE CONSUMER  Dual Distribution Integrating and Leveraging Multiple Channels with Multichannel Marketing  Multichannel Retailers  Multichannel Marketing Multichannel Marketing

30. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-30 MULTICHANNEL MARKETING TO THE ONLINE CONSUMER Implementing Multichannel Marketing  Multichannel Marketing with Transactional Websites Channel Conflict  Multichannel Marketing with Promotional Websites

31. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-31 FIGURE 18-5 FIGURE 18-5 Implementing multichannel marketing with promotional websites

32. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-32 Concept Check 1. Multichannel marketing is _______. the blending of different communi- cation and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and marketspace

33. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-33 Concept Check 2. Channel conflict between manufacturers and retailers is likely to arise when manufacturers use __________ websites. transactional

34. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-34 TRACKING TRENDS IN INTERACTIVE MARKETING GOING ONLINE

35. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-35 1. Visit the Clickz website, then click the “Stats” link. Your assignment is as follows: Choose a topic covered in the chapter that interests you, such as the demographics of Internet users. Compare and contrast the most recent research published in Clickz.com with information contained in the chapter. Don’t be surprised if you find differences. Going Online

36. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-36 2. Choose two regions of the world, such as North America and Europe. How do Internet usage and interactive marketing differ between the two regions based on the most recent research? Going Online

37. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-37 McFARLANE TOYS: THE BEST OF INTERACTIVE MARKETING VIDEO CASE 18

38. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-38 VIDEO CASE 18 McFarlane Toys FIGURE 1 FIGURE 1 Toy category sales in the United States (listed alphabetically)

39. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-39 1. Describe the channels of distribution McFarlane Toys uses to reach its action figure customers. VIDEO CASE 18 McFarlane Toys

40. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-40 2. Why have interactive marketing strategies been successful for McFarlane Toys? What unique elements are part of its online experience? VIDEO CASE 18 McFarlane Toys

41. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-41 3. How does McFarlane Toys address each of the six C’s consumers consider when shopping and buying online? VIDEO CASE 18 McFarlane Toys

42. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-42 JUST LOOKING, THANKS: WHY E-SHOPPERS ABANDON THEIR SHOPPING CARTS SUPPLEMENTAL LECTURE NOTE 18-1

43. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-43 BUYING A BMW Z4 ROADSTER: MARKETPLACE VS. MARKETSPACE (PART 1) IN-CLASS ACTIVITY 18-1

44. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-44 BMW Z4 Roadster Views

45. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-45 BMW Z4 Roadster TV Ad

46. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-46

47. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-47 BMW Z4 Roadster Promotional E-Mail

48. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-48

49. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-49 BUYING A BMW Z4 ROADSTER: BUILD YOUR BMW (PART 2) IN-CLASS ACTIVITY 18-2

50. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-50 Interactive Marketing Interactive marketing involves 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.

51. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-51 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.

52. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-52 Collaborative Filtering Collaborative filtering is a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases.

53. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-53 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.

54. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-54 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.

55. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-55 Customer Experience Customer experience is the sum total of the interactions that a customer has with a company’s website, from the initial look at a home page through the entire purchase decision process.

56. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-56 Bots Bots are electronic shopping agents or robots that comb websites to compare prices and product or service features.

57. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-57 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.

58. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-58 Web Communities Web communities are websites that allow people to congregate online and exchange views on topics of common interest.

59. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-59 Spam Spam is communications that take the form of electronic junk mail or unsolicited e-mail.

60. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-60 Viral Marketing Viral marketing is an Internet-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail.

61. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-61 Dynamic Pricing Dynamic pricing is the practice of changing prices for products and services in real time in response to supply and demand conditions.

62. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-62 Portals Portals are electronic gateways to the Internet that supply a broad array of news and entertainment, information resources, and shopping services.

63. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-63 Cookies Cookies are computer files that a marketer can download onto the computer of an online shopper who visits the marketer’s website.

64. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 18-64 Multichannel Marketing Multichannel marketing consists of the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and marketspace.