1. Chapter 4
Marketing
on the Web

2. Learning Objectives Product vrs Consumer based marketing
Different market segments and how to approach them
Consumer relationship intensity
Consumer relationship life cycle
Advertising on the web
marketing
Consumer Relationship Management
Branding

3. Marketing Mix Elements responsible for
Selling
Promoting Of
Products
Services
Once the mix is decided, its called the marketing strategy

5. The Product No just physical product but also Manufacturing Packaging
Naming
After sales
Warranties
Servicing

6. The Promotion All types of communication Extremely complex area
Retailers, distributers, communication, purchase, end user
Extremely complex area
Promoters have to chose between
Several TV Channels
Various Radio Stations
Hundreds of newspapers and magazines
Millions of websites
Books
Cinemas
Video Games
Posters

7. The Promotion Mix Direct Marketing Sponsorships Public Relations
Involves direct communication Eg telephone, mail, etc
Sponsorships
Pay others often an NGO in return of positive PR
Helps raise awareness and position the brand
Public Relations
Creates mutual understanding between organisations and its stakeholders
Personal Selling
Direct face-to-face contact Eg in a shop
Advertising
Used mainly to build brand and raise awareness
Sales Promotions
Short-term incentives
Effective against competitors

8. The Price How much should we charge?
Some consumers purchase only on price
Others judge quality
High price = High quality
Price also effects demand
What about commissions to intermediaries?

9. Price Elasticity

10. The Place How to move goods from the producer to the consumer
Most goods are sold through intermediaries
Thus the training of retail staff is very important

11. Adding some more Ps? People Processes Physical Evidence
The staff that offer the service
Everyone has to work in line to the marketing strategy
Processes
Must be in place to support the marketing
Eg Recipes in a restaurant, are they always followed? What about quality of the meal?
Physical Evidence
Ambience and design of surrounding

12. Exercise: Write down the 4 Ps of Vodafone UK

13. Case Study: Vodafone’s Marketing Mix
Product
A product with many different features provides customers with opportunities to chat, play games, send and receive pictures, change ring tones, receive information about travel and sporting events, obtain billing information, view video clips and send video messages.
Vodafone live! provides on-the-move information services.

14. Case Study: Vodafone’s Marketing Mix
Place
Vodafone UK operates over 300 of its own stores.
It also sells through independent retailers e.g. Carphone Warehouse.
Customers are able to see and handle products they are considering buying.
People are on hand to ensure customers' needs are matched with the right product and to explain the different options available.

15. Case Study: Vodafone’s Marketing Mix
Price
Vodafone wants to make its services accessible to as many people as possible: from the young, through apprentices and high powered business executives, to the more mature users.
It offers various pricing structures to suit different customer groups.
Monthly price plans are available as well as prepay options. Phone users can top up their phone on line.
Vodafone UK gives reward points for every £1 spent on calls, text messages, picture messages and ring tones.

16. Case Study: Vodafone’s Marketing Mix
Promotion
Vodafone works with icons such as David Beckham to communicate its brand values.
Advertising on TV, on billboards, in magazines and in other media outlets reaches large audiences and spreads the brand image and the message very effectively.
Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy.
Vodafone's stores, its products and its staff all project the brand image.
Vodafone actively develops good public relations by sending press releases to national newspapers and magazines to explain new products and ideas.

17. Different marketing strategies
Media selection is especially important for online firms
The web offers many advantages
Personal contact selling
Cost savings
Best model
Trust-based model of personal contact when selling on the web rather than mass marketing

18. Changing Times Rising consumer expectations
Reduced product differentiation
Increasing competition
Splintering of mass markets
Resulting in ...
Reduction in the effectiveness of mass media
Internet took over providing consumer-focused marketing strategies

19. Market Segmentation

20. Market Segmentation Identify specific portions of the market
Target them with specific advertising
Divides potential customers into segments such as
Age
Gender
Marital status
Income level
Geographic location

21. Micromarketing Precise Focused on niche markets
Typically very small market segments

22. Geographic Segmentation
Divides groups by location

23. Demographic Segmentation
Make use of age, gender, family size, income, education, religion, ethnicity

24. Psychographic Segmentation
Use social class, personality, approach to life

25. Market segmentation on the Web: Steve Madden

26. Market segmentation on the Web: Talbots

27. Steve Madden Vs. Talbots
Both
Well designed
Functional
Steve Madden
Young
Fashion conscious buyers
Make high fashion exciting
Talbots
More conservative
Older established buyers
Emphasises stability, home life

28. Offering choice : Dell

29. Offering more choice: Dell

30. Segmentation using customer behaviour
Create experiences based upon behaviour
If it is related to an event or time it is called occasional segmentation
If it is related to how they use the site, it is called usage-based segmentation

31. Occasional segmentation

32. Usage based segmentation 1

33. Usage based segmentation 2

34. Consumer relationship
Strengthened through marketing
Good consumer experience will result in loyalty towards the company and its products/services

35. 5 stage model of consumer loyalty
Awareness
Customers recognise name/brand/products of company
Exploration
Customers learn more about the company/products
Familiarity
Customers completed several transactions and are aware of policies, pricing, flexibility, etc
Commitment
After a number of successful transactions, customers develop a strong preference
Separation
Over time the relationship might change, customer might be disappointed

36. 5 stage model of consumer loyalty

37. Acquisition, Conversion and Retention
Acquisition depends on the revenue model utilised
Advertising support
Aims to keep customers in the site as much as possible
Show them as many adverts as possible
Catalogue model, Fee for service or Subscription based
Attracting customers is just an initial step
The cost to attract just one visitor is the acquisition cost
Second step to convert the visitor to the customer is the conversion cost

38. The funnel model

39. Types of Web Advertisement (1)
1) Banner Ads
In the early stages of Internet, "advertising" on the Internet meant "banner ads"
2) Pop-up and Pop under Ads
A pop-up ad is an ad that "pops up" in its own window when you go to a page.

40. Types of Web Advertisement (2)
3) Floating Ads
These are ads that appear when you first go to a Web page, and they "float" or "fly" over the page for anywhere from five to 30 seconds.
4) Unicast ads are TV commercial that runs in a pop-up window. It is animated and it has sound. The ads can last anywhere from 10 to 30 seconds.

41. Types of Web Advertisement (3)
5) Streaming Sidebar Ads
A small video ad appears in the right sidebar on this CNN page, with sound, and plays for 30 seconds. The reader can control the ad with the three buttons (Play, Pause, Stop) underneath the ad.
6) Pull Down Banner Ads
Their operation varies depending on the site. On some, when you mouse over the banner ad, it expands to fill much of the page. On others, the banner ad is expanded-size initially, then shrinks to normal size after several seconds.
From:

42. Banner Ads Use banner exchange networks Find related websites
Use banner advertising network
Costs are normally a dollar per thousand people (Cost per mille OR CPM)
Type of ads
Pop-up vs. Pop-behind or under
Interstitial ad (displayed before the content)
Rich media ads or Active ads (floating on same page)

43. Site sponsorship
Allow advertisers to sponsor parts or all of their site in a more subtle way
Sport Site? Or are they selling water?

44. Effectiveness of online ads
Difficult to measure
No standard
A few rating companies are being considered
ComScore
NetRatings

45. E-mail and Permission marketing
Companies should obtain approval before sending promotion
Some of them use automated messages
Extremely cheap (less than 1c)
Purchase of target addresses cost between 1c and 1$
Conversion rates are high
10 to 30 %
Banner click through are just 0.5%

46. Better email Not just spam but combine something useful
Article
Coupon
News
To help out, several companies offer management
Cost between 1 and 2 c per valid
Take care of campaigns

47. Branding
Your brand is a vision, brought to life in each channel and at every touch point where your organization engages its audiences
Audiences can include customers, employees, prospects, vendors or any person your organization touches

48. What is a brand?
“A brand is a distinguishing name or symbol intended to identify goods or services of a seller and to differentiate those goods or services from competitors.” Clyde C. Tuggle Coca-Cola, Senior Vice President Worldwide Public Affairs & Communications

49. Purpose Inspire Motivate Connect Simplify Inform
Inject your organization with heart and soul
Motivate
Spur action
Connect
Unify departments and divisions for “global” presence. Link products and services to a “promise.”
Simplify
Clarify and crystallize your mission
Inform
Convey values, attributes, and advantages

50. Product Vs. Brand Diet Coke vs. Diet Pepsi in Blind Taste Test
Prefer Pepsi Sample 51%
Prefer Coke 47%
No preference 2%
Diet Coke vs. Diet Pepsi in Identified Taste Test (brand names revealed)
Prefer Pepsi Sample 23%
Prefer Coke 65%
No Preference 12%

51. Elements of Branding Product differentiation Relevance Perceived value
How is it different from other products?
Relevance
How useful is the product to the customer’s need?
Perceived value
How valuable is it?

52. Emotional Vs. Rational Branding
A brand is an emotional shortcut between the company and its consumer.
Works well on one way channels
Problematic on the internet
Not absorbing passively
Busy people
Quickly click away from emotional appeals
Rational Branding more effective
Goods given in exchange of viewing adverts

53. Brand leveraging strategies
When a company extends its dominant position to other products
Yahoo!
Directory to Search Engine to Businesses, etc.
Acquired GeoCities
Acquired Broadcast.com
Entered into a network with Fox Entertainment
These new features attract web users thus increasing advertisement value

55. Brand Consolidation 1 A step further than Brand Leveraging
Twins two or more companies together

56. Brand Consolidation 2
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57. Cost of Branding Creating a new brand is hard Easier to In 1998
Transfer an existing brand
Maintain it
In 1998
Top 100 e-commerce sites spent $8 million to create an online brand
Amazon spent $133
BarnesAndNoble spent $70
Most of the costs went to TV, Radio, Print

58. Exercise Think about your local bank.
Write 10 point on how it transferred its brand image to the internet?

59. Affiliate marketing strategies
Company A includes details of Company’s B
Or its products
Company A will receive a commission of whoever buys from company B through its site
Amazon.com
Toys R US
Research shows that click-through rates are much higher in these alliances

60. Viral Marketing
Uses satisfied customers to tell potential other customers
Similar to affiliate marketing where they use other websites, here they use other people
Called viral because it reaches potential customers like a virus

61. Positioning
Search Engines
Directories
Viral Marketing
Etc

62. Search Engines
A search engine is a special kind of Web page software that finds other Web pages that match a word or phrase you entered
A Web directory is a listing of hyperlinks to Web pages that is organized into hierarchical categories Eg:
Search engines contain three major parts: spider, index, and utility

63. Popular Search Engines

64. Spiders and Crawlers

65. Indexing

66. Paying search engines

67. Website naming issues URL must reflect the brand name Delta Air Lines
Southwest Airlines
Very common for companies to buy several URLS, even some misspelled ones!
Try yahow.com

68. Questions?