Presentation on theme: "4.2: One-to-One Marketing and Personalisation in EC"— Presentation transcript:
1 4.2: One-to-One Marketing and Personalisation in EC Marketing that treats each customer in an unique way, facilitated by the use of Internet technologies.Personalisation:The matching of services, products, and advertising content to individual consumers.Several different ways to obtain information from consumersSoliciting the information from the individual directly, using cookies or other methods to observe online behaviorPerforming market researchExtrapolating from previous purchasing patternsMatching an individual’s preferences (via a software system) to available products and services.
2 4.2: One-to-One Marketing and Personalisation in EC User profile:The requirements, preferences, behaviors, and demographic traits of a particular customerCookieA data file that is placed on a user’s hard drive by a Web server, frequently without disclosure or the user’s consent, that collects information about the user’s activities at a site
4 4.2: One-to-One Marketing and Personalisation in EC Collaborative filtering:A personalisation method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profilesVariations of collaborative filtering:Rule-based filtering (prediction based on behavioral patterns)Content-based filtering (recommendation based on user preferences)Activity-based filtering (by watching user’s activities on the Web)Legal and ethical issues in collaborative filteringInvasion-of-privacy issuesPermission-based personalisation tools to request customer permission.
5 4.2: Loyalty and Trust in E-Commerce Customer LoyaltyCustomer loyalty is the degree to which a customer will stay with a specific vendor or brand for repeat purchaseCustomer loyalty is expected to produce more sales and increased profits over timeE-Loyalty:Customer loyalty or commitment to an online retailer
7 4.2: Loyalty and Trust in E-Commerce Satisfaction in ECCustomer satisfaction (including customer service) is one of the most important consumer reactions in the B2C online environmentRecent statistics show:80% of highly satisfied online consumers would shop again within 2 months90% would recommend the Internet retailers to othersHowever, 87% of dissatisfied consumers would permanently leave their Internet retailers without any complaints, thereby leading to decreased sales.
8 4.2: Loyalty and Trust in E-Commerce The psychological status of involved parties who are willing to pursue further interaction to achieve a planned goal.Trust is very important in EC because of lack of direct interaction between buyer and seller.How to Increase Trust in ECBrand recognitionEC security mechanisms can help solidify trustDisclose and update latest business status and practices to potential customers and to build transaction integrity into the systemGuarantee information and protection privacy through various communication channels
9 4.3: Market Research for EC The Goal of Market ResearchTo find information and knowledge that describes the relationships among consumers, products, marketing methods, and marketers.To assist a firm in both marketing and product mix decision.The Aim of Market ResearchTo discover marketing opportunities and issues,To establish marketing plans,To better understand the purchasing process,To evaluate marketing performance
10 4.3: Market Research for EC Market segmentation:The process of dividing a consumer market into logical groups for conducting marketing research, advertising, and sales.Makes markets more easier to managed and so marketing strategies can be applied to specific subsets of the population.Segmentation is done with the aid of tools:Data modelingData warehousing
11 4.3: Market Research for EC Online market research methodsImplementing Web-based surveysOnline focus groupsHearing directly from customersCustomer scenariosTracking customer movementsAnalysis of clickstream data
12 Example: Internet Market Research Expedites Time-to-Market for Procter & Gamble In the past, developing a major new product, from concept to market launch, took P&G over 5 yearsIn September 2000, P&G introduced Whitestrips on the Internet, offering the product for sale on its Web site.Online research was facilitated by data mining conducted on P&G’s huge historical data and the new Internet dataInternet created a product awareness of 35 percent before shipments were made to storesRevolutionised process of studying the product concept, segmenting the market, and expediting product development
13 4.3: Market Research for EC Tracking Customer MovementsWeb Transaction log: A record of user activities at a company’s Web siteClickstream behavior: Customer movements on the Internet; and, what the customer is doing thereWeb Bugs: Tiny graphics files embedded on messages and in Web sites that transmit information about the user and their movements to a Web serverCookie: Frequently used with Web bugs.Spyware: Software that gathers user information, through an Internet connection, without the user’s knowledge
14 4.3: Market Research for EC Web AnalyticsEnable retailers to make site adjustments on the fly, manage online marketing campaigns and EC initiatives, and track customer satisfactionIf a company redesigns its Web site, it can gain almost-instant feedback on how the new site is performingWeb analytics help marketers decide which products to promote and merchandisers achieve a better understanding of the nature of demand
15 4.3: Market Research for EC Limitations of Online Market ResearchToo much data may be availableTo use data properly, it should be organised, edited, condensed, and summarisedSolution: Automate the process by data warehousing and data mining (use of a variety of data sources to better understand customer behavior and preferences)Some of the limitations of online research methods are:Lack of representativeness in samples of online users. May not typify the population at large or the demographics.Accuracy of responsesLoss of respondents because of equipment problemsThe ethics and legality of Web tracking
16 4.4 Internet Marketing in B2B Organisational Buyer BehaviorNumber of organisational buyers (purchasing for their organisations) is much smaller than the number of individual buyersTransaction volumes are far largerTerms of negotiations and purchasing are more complexMarketing and Advertising Processes in B2BUses a variety of marketing methods online and off-line.Online they may use directory services or try to target specific customers.Off-line they may make sales calls or attend events.
17 4.4 Internet Marketing in B2B Methods for B2B Online MarketingTargeting customersElectronic wholesalersOther B2B marketing services. Examples:Digital CementProvides corporate marketing portals that help companies market their products to business customersNational SystemsTracks what is going on in an industryAffiliate programsPlacing banners on another vendor’s Web site, for a commissionContent alliance program in which content is exchanged so that all can obtain some free contentInfomediaries and online data mining services
18 4.5: Web Advertising Overview of Web Advertising Interactive marketingWeb advertising, enabled by the Internet, allows advertising to groupsAdvertisers can interact directly with customers and consumers can interact with advertisers/vendorsMore complex and personalised than off-line advertisingTwo major business models for advertising online:Using the Web as a channel to advertise a firm’s own products and servicesMaking a firm’s site a public portal site and using captive audiences to advertise products offered by other firms
19 4.5: Some Web Advertising Terminology Ad views: The number of times users call up a page that has a banner on it during a specific time period; known as page viewsButton: A small banner links to a Web sitePage: An HTML documentClick (click-through or ad click): A count made each time a visitor clicks on an advertising banner to access the advertiser ’s Web siteCPM (cost per thousand impressions): The fee an advertiser pays for each 1,000 times a page with a banner ad is shownConversion rate: The percentage of visitors who actually make a purchase
20 4.5: Some Web Advertising Terminology Click-through rate (or ratio): The percentage of visitors that are exposed to a banner ad and click on itClick-through ratio: The ratio between the number of clicks on a banner ad and the number of times it is seen by viewers; measures the success of a banner in attracting visitors to click on the ad.Hit: A request for data from a Web page or fileVisit: A series of requests during one navigation of a Web site; a pause of a certain length of time ends a visit.Stickiness: Characteristic that influences the average length of time a visitor stays in a site
21 4.5: Web Advertising Why Internet Advertising? Lower cost Television viewers are migrating to the Internet as a viable mediaAdvertisers are limited in the amount of information they can gather about the television and print adsOther reasons why Web advertising is growing rapidly:Lower costIncreased Richness of formatAbility to personaliseTimeliness (fresh and up-to-the-minute)Location-basis (by the use of wireless tech and GPS)Digital branding (e.g., Amazon, British Airways)
22 4.5: Advertising Networks Role of Ad Networks in Web AdvertisingAdvertising networks are specialised firms that offer customised Web advertising.Examples:Brokering adsTargeting ads to select groups of consumers.
23 4.6: Web Methods Banners Banner Keyword banners Random banners On a Web page, a graphic advertising display linked to the advertiser’s Web pageKeyword bannersBanner ads that appear when a predetermined word is queried from a search engineRandom bannersBanner ads that appear at random, not as the result of the user’s action
24 4.6: Web Methods Benefits of Banner Ads By clicking on them, users are transferred to an advertiser’s site, and frequently directly to the shopping page of that siteThe ability to customise them for individual surfers or a market segment of surfersViewing of banners is fairly high because “forced advertising” is usedBanners may include attention-grabbing multimedia
25 4.6: Web Methods Limitations of Banner Ads Cost A limited amount of information can be placed on the bannerViewers have become somewhat immune to banners and simply do not notice them as they once did
26 4.6: Web Methods Banner swapping Banner exchanges Pop-up ad An agreement between two companies to each display the other’s banner ad on its Web siteBanner exchangesMarkets in which companies can trade or exchange placement of banner ads on each other’s Web sitesPop-up adAn ad that appears in a separate window before, during, or after Internet surfing or when readingPop-under adAn ad that appears underneath the current browser window, so when the user closes the active window, he or she sees the adInterstitialAn initial Web page or a portion of it that is used to capture the user’s attention for a short time while other content is loading
27 4.6: Web Methods E-Mail Advertising Possible for advertisers to send out large volumes of advertisement contained inside messages.Effective method of advertising to large groupsAdvertising Management—Four guidelines that marketers should consider to leverage customer insights:Thinking about customer experience;Making privacy protection a part of their brand promise;Ensuring their recipients know about their privacy protection; andMeasuring impact.
28 4.6: Web Methods Search Engine Advertisement Advertising in chat rooms (The major advantage of using URLs as an advertising tool is that it is free and remembered “home”.Improving a company’s search-engine ranking (optimisation)Paid search-engine inclusionAdvertising in chat roomsBeneficial if merchant is sponsoring a room.Advertising in newsletters
29 4.6: Uunsolicited Commercial E-mail (UCE) Spamming:Using to send unwanted ads (sometimes floods of ads)What drives UCE?80 percent of spammers are just trying to get people’s financial information - credit card or bank account numbers - to defraud them
30 4.6: Uunsolicited Commercial E-mail (UCE) Why is it difficult to control Spamming?Spammers send millions of s, shifting internet accounts to avoid detectionUse cloaking, they strip away clues (name and address) about where spam originatesServer substitutes fake addressesMany spam messages are sent undetected through unregulated asian routesSpamming is done from outside the U. S.
31 4.6: Uunsolicited Commercial E-mail (UCE) Solutions to SpammingAntispam legislation is underway in many countriesISPs and providers (yahoo, MSN, AOL)Junk-mail filtersAutomatic junk-mail deletersBlockers of certain URLs and addressesSpam-filtering site for a country
32 4.7: Advertising Strategies and Promotions Online Associated ad strategyAn advertising strategy that displays a banner ad related to a term entered into a search engineAffiliate marketingMarketing arrangement by which an organisation refers consumers to the selling company’s Website for a commissionMost effective in generating a user base for a new site.Viral marketingWord-of-mouth marketing by which customers promote a product or service by telling others about itAds-as-a-commodity trategyCustomers are paid to read ads by advertisersWebcastingFree Internet news service that broadcasts personalised news and information, in categories selected by the user
33 4.7: Advertising Strategies and Promotions Online Customising AdsAdvertisements are customised by comparing users’ preferences to available products or services. Products or services that fit a user’s preference are then used as the ad is displayed/sent.Online Events, Promotions, and AttractionsMajor consideration when implementing an online ad campaignTarget audience of online surfers clearly understoodA powerful enough server used to handle the expected traffic volumeAssessment of results is needed to evaluate the budget and promotion strategy (such give-aways and discounts)Consider co-brandingAdmediationThird-party vendors that conduct (usually large-scale) promotion.
35 4.8: Special Advertising Topics Permission MarketingAdvertising (marketing) strategy in which customers agree to accept advertising and marketing materialsAd ManagementMethodology and software that enable organisations to perform a variety of activities involved in Web advertising (e.g., tracking viewers, rotating ads)LocalisationThe process of converting media products developed in one environment (e.g., country) to a form culturally and linguistically acceptable in countries outside the original target market.The major issue with localisation is the ability to perform it correctly.
36 4.8: Special Advertising Topics Internet radioA Web site that provides music, talk, and other entertainment, both live and stored, from a variety of radio stations.Wireless advertisingWireless advertising uses m-commerce and l-commerce technologies to advertise to people using mobile devices.Ad ContentThe content of ads is extremely important, and companies use ad agencies to help in content creation for the Web just as they do for other advertising mediaContent is especially important to increase stickiness
37 4.9: S/W Agents in Marketing & Advertising Applications Major Issues of EC Agents: Agents that Support:Need identification (what to buy)Product brokering (from whom to buy)Merchant brokering and comparisonsBuyer-seller negotiationPurchase and deliveryAfter-sale service and evaluationSoftware agents can be used to help customers recognise their need for a product by providing product stimuli and information. For example, agents can be used to identify different merchants that can supply specific products.
38 4.9: S/W Agents in Marketing & Advertising Applications Character-Based Animated Interactive Agents:AvatarsAnimated computer characters that exhibit human-like movements and behaviorsSocial ComputingAn approach aimed at making the human-computer interface more natural.ChatterbotsAnimation characters that can talk (chat).These agents are used to provide a friendly interface and communication method with the merchant.
39 Managerial Issues 1. Do we understand our customers? 2. Should we use intelligent agents?3. Who will conduct the market research?4. Are customers satisfied with our Web site?5. Can we use B2C marketing methods and research in B2B?6. How do we decide where to advertise?7. What is our commitment to Web advertising, and how will we coordinate Web and traditional advertising?8. Should we integrate our Internet and non-Internet marketing campaigns?9. What ethical issues should we consider?10. Are any metrics available to guide advertisers?