1. INTRODUCTION Internet Marketing 15.823 Professor Glen L. Urban Spring 2001

2. WELCOME EXCITING TIME -- New Technology LIFE CYCLE -- State of the Art WHAT’S NOT WORKING -- WHAT IS LESSONS OF BIRTH PHASE EXPECTATIONS OUTLINE OF COURSE

3. Life Cycle of Technology BirthGrowthMaturity

4. BIRTH PHASE High Expectations Gold Rush Claim the High Ground -- Grow Big Fast Get Sales then Worry About Profit Ready Venture Capital Natural Experimentation

5. BIRTH PHASE (continued) Substitution with Technology –Information (search engines) –Catalogues –Self service Early Innovation –Shopping malls –Supply chain –Aggregation –Price

6. WHAT’S NOT WORKING Pure Play B2C –High acquisition cost –Low Conversion, Repeat, Repurchase, Margins Advertising Model –Small Audience –Click Through and cost/000 down Exchanges –Not Include channel Players –Little Solution/Decision Content Technology Play Only Buzz

7. WHAT’S WORKING Large Volume Branded Sites –Portals –2nd generation eTailers Reverse and Commodity Auctions Transaction Fee Models Clicks and Mortar Infrastructure -- software, computers, networks

8. INDUSTRIES REVOLUTIONIZED Stock Trading Autos Travel Telecom/Computers Games

9. LESSONS Fundamentals –Value to customer –Technology Link to Customer Need –Business Model - ROI Operations –Reliability/Scalability –fulfillment/service Finance –Do not Be Over Influenced by $$$ –Realism -- Contingency Plan

10. MORE LESSONS Marketing –Core Benefit Proposition –Selling is Tough Job –Allocate Resources Here Innovation –Internet Speed is High Risk –Adoption May be Slow –Need Structured Process

11. EXPECTATIONS Birth Growth Mature

12. EXPECTATIONS GROWTH PER YEAR B2B +B2C 0-10% 10-25% 25-50% 50-75% 75-100% Over 100%

13. VIEWS OF THE INTERNET Direct Mail / Catalog Substitute Advertising Enhancement Magazine/Newspaper Substitute New Information Source An Additional Store New Channel / Relationship New World

14. GROWTH DRIVERS Customer Experience -- Recommendations and Personalization Profit -- ROI Community Established Firms eMarketing -- Sales Productivity and CRM Technology -- wireless/broadband Trust

15. SUMMARY Bright Future for Growth Profit Opportunities Good Fundamental Management Required

16. COURSE REVIEW Outline Cases Projects

17. Understanding Customers Consumer Behavior B2C vs B2B Strategy Formulation Trust vs. Push Product Design Segmentation Positioning Customer Acquisition Advertising / PR/Selling Pricing & Promotion Distribution Channel Logistics Relationship Building Fulfillment Service

18. STRATEGIC QUESTIONS Why are people buying on the Internet/why is conversion rate so low? Trust Based Marketing-- When to use it? Are there any opportunities left? How do you find them? Is personalization and one to one marketing the ultimate segmentation? How do we compete if we are not the first entrant?

19. STRATEGIC QUESTIONS (CONT.) What are the roles of Advertising and Selling in eMarketing success? Is Internet Marketing going to be a price game only? Is a separate company the only way to solve the Internet channel conflict? Will single sources (portals/mega retailers) own the customer relationship? What is the next wave in Internet Marketing and how do you ride it?

20. ADMINISTRATION TA’s –Ben Gibbon –Sebastian Periera –Shyan Wen –Srinath Narayanan URL

21. FEEDBACK Evaluation –project (group) -- 40% –class participation -- 20% –case discussion -- 40% Student Feedback –To TA’s –Mid Course Input –Final Course Evaluation