1. 1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Internet Marketing Prepared by Deborah Baker Texas Christian University 19

2. 2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Learning Objectives 1.Explain how the Internet affects the traditional marketing mix 2. Describe how marketers are leveraging the power of online technology 3. Discuss the legal and privacy issues affecting Internet-based companies

3. 3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Learning Objectives 4.Measure the effectiveness of an online marketing campaign 5.Discuss the effects of the Internet on marketing objectives and strategy

4. 4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Product Strategies on the Web 1 Commodities Mass customization Branding

5. 5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Branded Commodities On Line http://www.despair.com 1 Principle of equivalent quality is applied to branded products, creating downward price pressure Camera A at Retailer ACamera A at Retailer B

6. 6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19Place Corporate Web sites Resellers’ Web sites Affiliate programs Clicks and mortar On Line http://www.ideavirus.com 1

7. 7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Promotion Methods Spam Viral marketing (Buzz) Instant messaging Interactive ads Search engine listings Sales promotion 1

8. 8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Search Engine Listings Gets you to the top of the list High price Low price No or low fee gets you at the bottom of the list 1

9. 9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Shopping bots and comparison sites Auction pricing Demand pricing Causes of Pricing Pressure On Line http://www.fedex.com http://www.ups.com http://www.usps.com 1

10. 10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Basic Forms of Virtual Business Business-to-Business B2B Business-to-Business B2B Business-to-Consumer B2C Business-to-Consumer B2C Consumer-to-Consumer C2C Consumer-to-Consumer C2C 2

11. 11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Maximizing Customer Relationship Marketing on the Internet Data tracking Needed for personalized content Needed for personalized content Keep ad content fresh Controversial because of privacy concerns Controversial because of privacy concerns 2

12. 12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Major Issues in Online Privacy Cookies Not-so-private email Spam Identity theft Conflicting laws Cyberstalking Branded trust On Line http://www.fbi.gov/hq/lab/carnivore/carnivore.htm 3

13. 13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Conflicting Legislation M Marketers (M) responsible for every law in every country 3 Not all countries have the same laws regulating Internet commerce

14. 14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Creating Trust Online 3 Better Business Bureau “Reliability Seal” ScanAlert “Hacker Safe” Verisign “Secure Seal” Third-Party Seals

15. 15 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Stickiness as the New Metric Stickiness = Frequency Duration Site Reach 4

16. 16 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 19 Porter’s Five Industry Forces Applying Five Forces in Internet Environment Barriers of entry Threat of substitutes Bargaining power of buyers Bargaining power of suppliers Rivalry among existing competitors 5