© 2004 Detlev Zwick Success in the Networked Economy: Conceptual and Theoretical Frameworks for Marketers

© 2004 Detlev Zwick© 2004 Detlev Zwick

Success in the Networked Success in the Networked Economy:Economy:

Conceptual and Theoretical Conceptual and Theoretical Frameworks for MarketersFrameworks for Marketers


What is an Internet Company?

Yahoo?

Amazon.com?

Neopets.com?

FTD.com (Flowers)?

ebay?

But these companies were established years before the Web?!

Carrier?

Time Warner?

CanadianTire?

Etc.


Interactive Marketing is the Process of Building and Maintaining Relationships Relationships Through Building and Maintaining Electronic Networks Electronic Networks by Facilitating the Production, Communication, and Exchange of Ideas, Services, and Products that Satisfy the Goals of all Parties. Its Fundamental Currency is INFORMATIONINFORMATION.


Interactive Marketing creates VALUEVALUE by using Electronic Networks (including the Internet)

to create Customer Relationships

throughNetworked Exchanges.

Value Creation in the Networked Economy:Value Creation in the Networked Economy:


Best Practices have short life Best Practices have short life spans:spans:

Remember…Remember… Banner ads (big, flashy, interactive, pop-up,… read, totally ignored Banner ads (big, flashy, interactive, pop-up,… read, totally ignored

and annoying)and annoying) direct e-mail (Every marketer direct e-mail (Every marketer hadhad to capture email addresses; to capture email addresses;

every marketer every marketer hadhad to build their email lists; every marketer to build their email lists; every marketer hadhad to to have a daily, weekly or monthly newsletter…have a daily, weekly or monthly newsletter…

Brands no longer matter online, so let’s focus on financing and Brands no longer matter online, so let’s focus on financing and selling.selling.

Brands are ALL that matters online, so let’s spend $2 million on a Brands are ALL that matters online, so let’s spend $2 million on a 30 second Superbowl ad.30 second Superbowl ad.

Communities are the killer app.Communities are the killer app. Communities are a waste of money.Communities are a waste of money. Etc.Etc.


Working with THEORETICAL and Working with THEORETICAL and CONCEPTUAL TOOLS:CONCEPTUAL TOOLS:

Information

Reconceptualization

Relationship/Community

Network


““network marketing”network marketing”

The scope of marketing is limited by the The scope of marketing is limited by the speed with which information, messages, speed with which information, messages, and products/services can be transported.and products/services can be transported.When inbound and outbound messages are When inbound and outbound messages are transported at network speed, transported at network speed, andand production is decentralized, the result is:production is decentralized, the result is: MICROSCOPIC VISIBILITY (individualization)MICROSCOPIC VISIBILITY (individualization) FLEXIBILITY W/O TIME (versioning in FLEXIBILITY W/O TIME (versioning in

communication, production, pricing, communication, production, pricing, distribution)distribution)


Cbs.MarketWatch.comCbs.MarketWatch.com Marketing Network Marketing Network

=Customer Value

=Flexible Network Nodes

Credible Credible Analysis and Analysis and

Personal Personal Finance Finance ToolsTools

Up-to-the-Up-to-the-Minute Minute

InformationInformation

Multiple Multiple Points of Points of AccessAccess

Distribution Partnerships

Association with CBS

Experienced Editorial Staff

Partnerships with Content Providers

Available Infrastructure

International Presence

Third-Party SourcesMarket GuideHoover’s OnlineMultexAnnual Reports ClubINVESToolsOver 250,000 Investment Research Reports

CommunityPrivate e-mailPeople WatchHot DiscussionsOccasional Polls

Media: Web/PhoneNews WatchE-mail AlertsReal-time HeadlinesHotstock TrackerMarketwatch LiveeSignal

RadioContribution to Westwood One

TVCBS MarketWatch WeekendContributions To:

CBS Early ShowCBS Evening NewsCBS NewsPath

ToolsSharebuilderPayment CalculatorHome Price CheckBest Credit Card RatesInsurance QuickQuote

Marketwatch Radio on AOL


1-800-Flowers.com1-800-Flowers.com Marketing Network Marketing Network

Online Gift Center

Online Gift Center

Integrated Partner Offers

Integrated Partner Offers

Broad Assortment

of Gifts

Broad Assortment

of Gifts

Customer Service

Customer Service

Wide Reach to Customers

Wide Reach to Customers

Widespread, Easy Access

Widespread, Easy Access

Multiple Contact Points

Multiple Contact Points

Popular WebsitePopular Website

High Quality of Flowers

High Quality of Flowers

TechnologyTechnologyStrong Brand

NameStrong Brand

Name

Strong Distribution

Network

Strong Distribution

Network

=Resources

= Customer Value

Core Benefits


Doing Networked Marketing:Doing Networked Marketing:

Customization: Change the organization Customization: Change the organization on the flyon the fly

Community-building: Bridge silos, bring in Community-building: Bridge silos, bring in the customerthe customer

Multi-channel solutions: real-time click and Multi-channel solutions: real-time click and brick sales pitch.brick sales pitch.


Community: AOL Time WarnerCommunity: AOL Time Warner

Built a virtual private community to deal Built a virtual private community to deal with the problem of decentralized with the problem of decentralized commercial printing need for its many commercial printing need for its many divisions.divisions.


Consolidate by networking.Consolidate by networking. Lowers coordination costs while maintaining freedom Lowers coordination costs while maintaining freedom

of divisions. of divisions.

Create a Virtual Community of Printing” – Create a Virtual Community of Printing” – CFO CFO Joseph RippJoseph Ripp AOL installed a printing software (Printcafe) AOL installed a printing software (Printcafe)

accessible over the Web. accessible over the Web. Brings together 50 vendors of printing services with all Brings together 50 vendors of printing services with all

printing officers.printing officers. AOL employees across about 500 divisions can AOL employees across about 500 divisions can

exchange their experiences using a vendor.exchange their experiences using a vendor. Cost savings for AOL: $150 Million in first 12 months.Cost savings for AOL: $150 Million in first 12 months.


Convergent ChannelsConvergent Channels

The Idea – combine physical and virtual The Idea – combine physical and virtual interactions with customers strategically in interactions with customers strategically in ways that meet relational and information ways that meet relational and information needs of the customer, reduce internal needs of the customer, reduce internal costs and offer insights into the future of costs and offer insights into the future of markets.markets.


Example: TrintechExample: Trintech

Electronic payment and commerce Electronic payment and commerce business in B2B market. business in B2B market.

Sales Process:Sales Process: Usually send out a team consisting of one Usually send out a team consisting of one

sales rep and engineer to talk to clients (about sales rep and engineer to talk to clients (about 30 engineers supported 30 sales reps).30 engineers supported 30 sales reps).

upon return, they write proposal, and submit it upon return, they write proposal, and submit it for further engineering, legal, or other reviews for further engineering, legal, or other reviews (takes about 2 weeks).(takes about 2 weeks).


Now…Now………engineer (called the “product evangelist”) is connected to sales rep and engineer (called the “product evangelist”) is connected to sales rep and client virtually (video conferencing or Laptop through software called client virtually (video conferencing or Laptop through software called NetMeeting).NetMeeting).While the product evangelist is conferencing, a support team is listening in, While the product evangelist is conferencing, a support team is listening in, beginning to draw out the solution and shortly after that the formal proposal. beginning to draw out the solution and shortly after that the formal proposal. As this team is busy with that proposal, another team comes in supporting As this team is busy with that proposal, another team comes in supporting the product evangelist for the next call.the product evangelist for the next call.When done, the proposal enters the eRoom, where legal, engineering, and When done, the proposal enters the eRoom, where legal, engineering, and product managers can populate the document. The sales expert puts a product managers can populate the document. The sales expert puts a pricing matrix on it and gives it back to the product evangelist.pricing matrix on it and gives it back to the product evangelist.Proposal is emailed to sales rep who prints it out and hands it to client Proposal is emailed to sales rep who prints it out and hands it to client usually the next morning.usually the next morning.Advantages:Advantages:

Every client gets the best engineer in a specific product area.Every client gets the best engineer in a specific product area. Client gets immediate solution => customer satisfactionClient gets immediate solution => customer satisfaction The arrangement saves Trintech an estimated 60% over the old model.The arrangement saves Trintech an estimated 60% over the old model.


Relationships via Networked Relationships via Networked CommunicationCommunication

Internet has reduced the information asymmetry Internet has reduced the information asymmetry between consumer and company.between consumer and company. Companies must work hard to add value by Companies must work hard to add value by

developing even more powerful information and developing even more powerful information and decision systems (Siebel, Oracle, Microsoft).decision systems (Siebel, Oracle, Microsoft). Develop multi-channel marketing tools: buy a pair of shoes Develop multi-channel marketing tools: buy a pair of shoes

in The Bay and receive via email a coupon for a matching in The Bay and receive via email a coupon for a matching purse.purse.

Send out a personal discount offer to customer’s wireless Send out a personal discount offer to customer’s wireless device while still in the store.device while still in the store.


Information Interpretation in the Information Interpretation in the Data Network:Data Network:

Have a centralized database but Have a centralized database but different data lenses for different different data lenses for different managers.managers.

Zoom from summary reports to specific Zoom from summary reports to specific data spots.data spots.

Create customizable corporate portals Create customizable corporate portals to deliver viewer-tailored reports on the to deliver viewer-tailored reports on the data (Plumtree, Datachannel). data (Plumtree, Datachannel).


Why does a company like Carrier Why does a company like Carrier do E-Marketing?do E-Marketing?


E-BusinessE-Business

Enhance Customer Enhance Customer RelationshipsRelationships

Increase Product Cycle Times

Improve Profitability

Increase Market Share

Because it supports one or more of these efforts:


does a company like Carrier does a company like Carrier do E-Marketing?do E-Marketing?


Carrier: Smart Products carrier.com, totaline.com, hvacpartners.com, myappliance.com

Do We Need “Central Internet Air Conditioning and Heating”?


The Product:The Product: A Internet-Enabled Comfort Choice Thermostat

What are the Benefits for Consumers?

1) Web-Enabled Micromanagement of Temperature.

2) Added-Value Through Cost Saving.

And for Carrier?

1) Bundling Smart Services allowsto Maintain Prices in CompetitiveMarket.

2) Carrier, a B2B Company, is now VERY Close tothe Customer (User Data).

3) Last but not Least: Image of Being Cutting-Edge


Does Carrier Make Anyone Else Happy?

Yes, Connecticut Light & Power (Northeast Utilities system) with 1.1 million customers

Get 45,000 customers into the Carrier program and it'll conserve the equivalent of a small power plant…


Based on Carriers Competitive Advantages – Based on Carriers Competitive Advantages – Network and RelationshipNetwork and Relationship – –What Should Come Next?What Should Come Next?

Wireless Remote ControlEtc.??


Lessons to be learned from Lessons to be learned from Carrier?Carrier?

Network your product.Network your product.Form a relationship to network partners.Form a relationship to network partners.Reconceptualize your product.Reconceptualize your product. What is the value proposition Carrier is trying to What is the value proposition Carrier is trying to

sell?sell? How can the Internet add value?How can the Internet add value?

What need(s) does a car satisfy?What need(s) does a car satisfy? Now, reconceptualize the car for the Network Now, reconceptualize the car for the Network

Society!Society!

Documents

© 2004 Detlev Zwick Success in the Networked Economy: Conceptual and Theoretical Frameworks for Marketers