How Internet Reshapes Business Paradigm

Internet & Business Paradigm

Janghyuk Lee

Associate Professor of Marketing

Korea University, Business School

http://biz.korea.ac.kr/professor/janglee

http://www.facebook.com/jangleeMKT

© 2014, All rights reserved. Janghyuk Lee 2 2

Paradigm Shift by Fixed Internet

Unlike traditional media fixed Internet provides following advantages:

Two-way communication

Multiple contents (text, voice, video)

User participation (e.g., community, forum)

Easy transfer of information (e.g., post scrap)

New ventures on the Internet

Replacement & innovation

$ 298.58B

$ 137.41B

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Duality of Business

Value for Customer Value of Customer

Targeting

Criteria

Size

Benefit Cost

Functional

Symbolic

Experiential

Price

Opportunity

- Revenue Cost

Price

Volume

Retention rate

Acquisition

Retention

-

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Duality of Business

Value for Customer Value of Customer

Benefit Cost

Functional

Symbolic

Experiential

Price

Opportunity

Revenue Cost

Price

Volume

Retention rate

Acquisition

Retention

Targeting

Criteria

Size

- -

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Why Internet? Finding Key Attributes: Gas price & MPG

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Why Internet? Enhancing Symbolic Benefit

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Why Internet? Enhancing Experiential Benefit

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Why Internet? Enhancing Experiential Benefit

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Why Internet? Enhancing Experiential Benefit

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Why Internet? Enhancing Experiential Benefit

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Gucci on the Internet Experiential Benefit vs. Opportunity Cost

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Duality of Business

Value for Customer Value of Customer

Targeting

Criteria

Size

Benefit Cost

Functional

Symbolic

Experiential

Price

Opportunity

- Revenue Cost

Price

Volume

Retention rate

Acquisition

Retention

-

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Capturing Eyeballs YouTube

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Capturing Eyeballs: On & Off-line Integration Off-line Campaign + YouTube: Coca-Cola

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Capturing Eyeballs: On & Off-line Integration New Beetle campaign: Facebook + Billboard

Description If people click ‘Like’ and upload their photos on VW Facebook page, then photos are displayed on

the Billboard in Time Square with the big picture of the all-new Beetle

Objective VW launched their all-new Beetle, but, new car is far different from the original one. They needed

a marketing strategy to stimulate interest in the new vehicle

Results Over 26,700 people “Liked” Volkswagen USA on Facebook

Over 1,000 postings on Facebook a day

Over 3,000 Postings on blogs through viral marketing

Created a good relationship with their customers

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Capturing Eyeballs: On & Off-line Integration Social TV: Bluefin Labs

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Customer Engagement Georgia Japan: Weekly Mobile Magazine

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Duality of Business

Value for Customer Value of Customer

Targeting

Criteria

Size

Benefit Cost

Functional

Symbolic

Experiential

Price

Opportunity

- Revenue Cost

Price

Volume

Retention rate

Acquisition

Retention

-

© 2014, All rights reserved. Janghyuk Lee 19

Targeting: Interest Base Keyword Advertising

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Targeting: Interest Base Search & Sales Share

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Targeting: Location Base AT&T Alerts (Mobile Coupon)

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Targeting: Network Base Facebook Advertising

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Evolution of Purchase & Impact of Mobile Internet

Search & purchase

Before fixed Internet

Search: off-line → Purchase: off-line

After fixed Internet

Search: on-line → Purchase: off-line

Search: on-line → Purchase: on-line

After mobile Internet

Search: off-line → Purchase: on-line

Mobile Internet vs. Fixed Internet

Instantaneous

Context specific

Ubiquitous

(source: Google Think)