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(1)Introducing Internet Marketing
(2)Objectives
• Subject Overview
• The Internet and the marketing concept • Benefits of the Internet for businesses • The new marketing medium
(3)Subject Overview
• General Aim and Rationale – the utility of the Internet as a tool for business to increase efficiency, competitiveness, and
effectiveness. • Objectives
• Content
(4)The Internet and the Marketing Concept
• Two distinct meaning for marketing
1 The range of specialist marketing functions carried out by the firm (marketing research, public relations )
2 An approach or concept that can be used as the guiding philosophy for all functions and activities
(5)The Internet and the Marketing Concept
• The Internet can be applied by companies as an integral part of the modern marketing concept since:
– It can be used to support the full range of organizational functions
– It is a powerful communication medium that integrates the different parts of the organization
– It facilitates information management
(6)Internet Marketing Defined
The use of the Internet and related digital technologies to achieve marketing objectives and support the modern
marketing concept.
(7)Business Benefits of the Internet
• Market penetration – sell more existing products into existing markets
• Market development – Internet is used to sell into new markets
• Product development – New products or services developed which can be delivered over the
Internet
(8)Market and Product Strategic Grid
Market
Development Diversification
Market
penetration developmentProduct
Existing New Product N ew E xi st in g M ar k et Conservative
(9)Marketing Functions & The Internet
• Sales – achieve through increasing awareness of brands and products, supporting buying decisions and enabling online purchase
• Marketing communication – use of the web site for a range of marketing communication
• Customer service – supplementing phone operators with information available online
• Public relations – the Internet can be used as a new channel for public relations (publish latest news on products)
(10)The Cs’ of the Internet
• Cost reduction – reducing the need for sales and marketing enquiries to be handled by telephone and producing printed marketing communication material
• Capability – The internet provides new opportunities for new products and services and for exploiting new markets
• Competitive advantage – First mover advantage
• Communications improvement – improved communications with customers, staff, suppliers
• Control – Better marketing research through tracking customer behavior
(11)The Internet – A New Marketing Medium
• The Internet refers to the physical network that links
computers across the globe It consists network servers and wide-area communication links that are used to hold and transport information
• World Wide Web is a medium for publishing information on the Internet
• Intranet is a password protected network within a single
company which enables access to company information using the familiar tools of the Internet such as web browsers
(12)Level of management Internet Intranet and extranet
Strategic Environmental scanning Competitor analysis Market analysis
Strategic decision making Supply chain mgt
Internet data analysis Management information Marketing information Database
Operations efficiency Business planning Monitoring and control Simulation
Business intelligence (data warehouses)
(13)Internet Marketing Communications
• Characteristics inherent in digital medium:
– The customer initiates contact
– The customer is seeking information (pull)
– It is a high intensity medium – the marketer will have 100 per cent of the individual’s attention when he or she is viewing a web site
– A company can gather and store the response of the individual
(14)Old and New Media
Old media New media Comment
One-to many communication model
One-to-one or many-to-many communication model
Hoffmann & Novak (1996)states that Internet is a many-to-many medium, but for company to customer one-to-one
Mass marketing Individualized marketing or mass customization
Personalization possible because of technology to monitor preferences and tailor content (Deighton, 1996)
Monologue Dialogue Indicates the interactive nature of the WWW, with the facility for feedback
Branding Communication Increased involvement of customer in defining brand characteristics Opportunities for adding value to brand
Supply-side thinking Demand-side thinking Customer pull becomes more important
(15)Internet marketing application in UK
Use Percent
PR/marketing information 70
Product contacts 40
Customer contacts 27
Facilitating customer feedback 20 Detailed product information 18 Distribution of paid-for reports 10
Online orders
(16)Avoiding Marketing Myopia
• Traps that should be avoided when embarking on Internet marketing:
– Wrongly defining which business they are in – Focusing on:
• Products rather than customer • Production
• Technology (only an enabler, not an aim)
• Selling (the culture of the Internet is based on customer seeking information to make informed buying decisions)
• Customer needs (the need for market orientation is a critical aspect of web site design and Internet marketing strategy)
(17)Avoiding Marketing Myopia
– Unwillingness to innovate and ‘creatively destruct’ existing product/service lines
– Shortsightedness in terms of strategic thinking
– The lack of a strong and visionary CEO (Baker (1998) found that this was important to companies’ using the Internet effectively)