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Introduction: Marketing and The Internet

WINTER TERM, 2011Lecture 1

evaluate the relevance of the Internet to the modern marketing concept;

identify the key differences between Internet marketing and traditional marketing;

distinguish between Internet marketing, e-marketing, digital marketing, e-commerce and e-business;

assess how the Internet can be used in different marketing functions

What is Marketing (again)?

What’s the difference between e-Business, e-Commerce, and e-Marketing?

What is Internet Marketing?

What are the benefits of e-Marketing?

What are the differences between Internet Marketing and Traditional MarketingCommunications?

Revisiting the Marketing definition:

• The identification, stimulation, and satisfaction of customer requirements, at a profit

Stephen Page

• A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others

Kotler, et al

To make customers happy by satisfying needs and wants

Through provision of goods and services (4Ps)

To increase profitability

http://www.emarketer.com/newsletters/

A business philosophy that encompasses all organizational functions and processes

Guides management philosophy within organizations

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e-Marketing

Internet marketing

Digital marketing

e-Commerce

e-Business

Achieving marketing objectives through use of electronic communications technology

Chaffey et al, 2003

E-Marketing involves using the Internet and other ICT to:

• Identify needs – ie. marketing research to find out needs and wants

• Anticipate demand - allow customers to access information and make purchases

• Satisfying needs – deliver customer satisfaction

transform marketing strategies to create more customer value

plan and execute more efficiently the marketing mix (4Ps)

create exchanges that satisfy individual consumer and organizational customers’ objectives

e-Marketing means applying a broad range of information technology to:

Digital marketing is another term for e-Marketing.

It means “… management and execution of marketing processes using electronic media like the Web, e-mail, interactive TV, and wireless media…” Chaffey 2006

Applying Internet and other digital technology (Web, e-mail, wireless, databases)

to acquire and retain customers

By improving customer knowledge, targeting, service delivery and satisfaction

All electronically mediated information exchanges, within an organization and with external stakeholders supporting the range of business processes Chaffey et al, 2003

The transformation of key business processes through the use of Internet technologies.

IBM / www.ibm.com/ebusiness

An e-Business is a company that

• integrates information and communication technologies (ICT) into its operations

• redesigns its business processes around ICT

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Changes in business environment, especially technological advances, have caused businesses to change

Vast and rapid reconfiguration of business models

Changes in cost structure, and links among buyers, sellers, and everyone in between.

The sharing of business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks. Zwas, 1998

e-Commerce means buying and selling over a digital medium

• Sell side e-commerce: Transactions involved with selling products to customers

• Buy side e-commerce: B2B transactions to procure resources from suppliers

e-Business

• Processes and functional units at the center of an organization

• includes e-Commerce, front office applications and back-end applications to form an engine for modern business

What’s the difference between e-Commerce and e-Business?

The distinction between buy-side and sell-side e-commerce

Three alternative definitions of the relationship between e-commerce and e-business

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The Internet enables the transfer of messages and transactions between connected computers worldwide.

Chaffey et al, 2003

Definition:The physical network that links computers across the globe… the infrastructure of network servers and communication links between them, … to hold and transport the vast amount of information on the Internet.

gathering linking processing searching delivery

of multimedia information resources fromanywhere to anywhere in the world

The “borderless” Web allows free interaction with customers

Costs

Capability

Competitive advantage

Communications

Customer engagement

Control

Customer service Sales

Smith and Chaffey, 2005

The relationship between access to intranets, extranets and the Internet

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1. Interactivity2. Intelligence3. Individualization4. Integration5. Industry Restructuring6. Independence of location

Differences between Internet Marketing Communications and Traditional Marketing Communications :

McDonald and Wilson, 1999

1. Customer initiates contact

2. Customer seeks information (pull)

3. Marketer have 100% of individual’s attention

4. Company gather and store data

5. Needs of customers addressed and taken into consideration in future dialogs.

Deighton, 1996

The Internet is a low cost method of collecting marketing research information

• E-mails

• Website

• Transaction log files

• Analysis software tools like Webtrends (www.webtrends.com)

Summary of communication models for: (a) traditional media, (b) new media

The Internet allows marketing communications to be tailored to the individual

Personalization

Delivering individualized content thru web pages or e-mail

Mass customization

Delivering customized content to groups of users thru web pages or e-mail

Example: Amazon.com use mass customization to sell different types of books to different groups, like gardeners, photographers, etc.

Summary of degree of individualisation for: (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)

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The Internet combines with other marketing communication tools to form an integrated marketing communications strategy

Example: Complementing traditional offline communications media with online tools

Mixed Mode Buying

The process where the customer switches between online and offline channels during the buying process

Channel requiring integration as part of integrated e-marketing strategy The role of mixed-mode buying in Internet marketing

Due to industry restructuring in the new economy, companies have to reconsider their

marketing communications strategy

use of intermediaries

competitive positions – product and price

The Internet allows companies to reach global markets:

Easier entry into international markets

Increased opportunities for small and medium-sized companies

Potential for channel conflicts