1. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH 45040 Phone: (800) 423-0563

2. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Part One: Chapter Four Individuals Online “I know you. You tell me what you want. I make it. I remember next time.” D. Peppers and M. Rogers, Tools for Competing in the Interactive Age

3. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualizing the Internet Changing the nature and quality of online interactions

4. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualizing the Internet Changing the nature and quality of online interactions Reacting to the user’s knowledge and level of technological sophistication

5. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualizing the Internet Changing the nature and quality of online interactions Reacting to the user’s knowledge and level of technological sophistication Tailoring a mass market message to an individual’s wants and needs

6. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualizing the Internet Changing the nature and quality of online interactions Reacting to the user’s knowledge and level of technological sophistication Tailoring a mass market message to an individual’s wants and needs Building intelligence into business systems and planning

7. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use Where we go online: Share of time among U.S. users

8. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Activity % Who Have Tried Online Online OnlyOffline Only Both Online and Offline Use Looking up Directions 87%56%14%31% Checking Weather 6931 39 Getting News63173845 Finding Phone Numbers 50195031 Checking Sports Scores 55264530 Paying Bills44205626 Buying Books, CDs, Groceries 3396819 Patterns of Internet Use What we do online: The tasks of everyday life Source: Pew Internet Project

9. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Dual Budget Time and Money Tradeoff – Online activities are time saving and time consuming – Efficiency enhancer and provides entertainment – Time saving in browsing is critical – Ultra speed of access and powerful search engines

10. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use About 60 percent of the population is online in advanced economies Who’s Online? The role of age, income and education

11. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use About 60 percent of the population is online in advanced economies Across the globe, people under 24 show highest Internet use rates Who’s Online? The role of age, income and education

12. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use About 60 percent of the population is online in advanced economies Across the globe, people under 24 show highest Internet use rates In the U.S., college education is key factor in likelihood of Internet use Who’s Online? The role of age, income and education

13. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use About 60 percent of the population is online in advanced economies Across the globe, people under 24 show highest Internet use rates In the U.S., college education is key factor in likelihood of Internet use 80% of U.S. households with income >$75,000 have Internet access; 40% of households with income <$25,000 Who’s Online? The role of age, income and education

14. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Patterns of Internet Use U.S. Net Use by Educational Attainment Education BackgroundSeptember 2001October 2003 Less than High School 13.715.5 High School Diploma High School GED 41.144.5 Some College 63.568.6 Bachelor’s Degree 82.284.9 Beyond Bachelor’s Degree 85.088.0 Who’s Online? The role of age, income and education Source: U.S. Census Bureau

15. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online User Activity Commerce – Sites designed for shopping online Communication – To facilitate the exchanges of thoughts and messages Content – To provide news, information and entertainment Search – To provide prioritized results based on user request

16. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online Behaviors and Biases Users treat machines and software much like they treat real people Researchers B. Reeves and C. Nass called this the media equation For marketers, judgments and assumptions made in real life campaigns are generally valid online

17. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online Behaviors and Biases Manners matter: Users prefer polite computers and respond favorably to flattery online

18. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online Behaviors and Biases Manners matter: Users prefer polite computers and respond favorably to flattery online Users react favorably to websites and online messages matching their own personality

19. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online Behaviors and Biases Manners matter: Users prefer polite computers and respond favorably to flattery online Users react favorably to websites and online messages matching their own personality Biases and stereotypes persist online just as they exist in the real world

20. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Online Behaviors and Biases Lack of social clues and quality clues online can change user interaction Absence of face-to-face interaction can change meeting structures and results Misunderstandings and email “flaming” Uncertainty about a website’s veracity or a brand’s authenticity makes consumers vulnerable to manipulation

21. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization Ability to link individuals to specific products, information and companies allows fundamental change in marketing strategy

22. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization Ability to link individuals to specific products, information and companies allows fundamental change in marketing strategy While digital computing and networking well-established technologies, individualization still emerging and more controversial

23. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization Ability to link individuals to specific products, information and companies allows fundamental change in marketing strategy While digital computing and networking well-established technologies, individualization still emerging and more controversial Concerns about invasion of privacy and government abuses

24. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization and Authentication Identifying a user or device online Tokens – such as passwords or other information – used to identify users Every authenticated system requires a proprietor; no universal system exists Breakdowns in authentication security often result of human, not technical, error or cunning

25. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization and Association Connecting observable online choices with a customer profile EXAMPLE: Amazon.com and suggestions for reading selections Precision matters – mistakes in inference and association can damage customer relationship

26. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization and Interaction Online activities should reflect the specific needs and wishes of individual users Each increase in interactivity should build and deepen customer relations Different communication modes employed for different customers

27. © Copyright 2006, Thomson South-Western, a division of the Thomson Corporation Individualization and Interaction Dell Computer’s Approach to Customer Interaction