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 consumers
Soliciting the information from the individual directly, using cookies or other methods to observe online behavior
Performing market research
Extrapolating from previous purchasing patterns
Matching 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 customer
Cookie
A 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

3. 4.2: The New Marketing Model

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 profiles
Variations 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 filtering
Invasion-of-privacy issues
Permission-based personalisation tools to request customer permission.

5. 4.2: Loyalty and Trust in E-Commerce
Customer Loyalty
Customer loyalty is the degree to which a customer will stay with a specific vendor or brand for repeat purchase
Customer loyalty is expected to produce more sales and increased profits over time
E-Loyalty:
Customer loyalty or commitment to an online retailer

7. 4.2: Loyalty and Trust in E-Commerce
Satisfaction in EC
Customer satisfaction (including customer service) is one of the most important consumer reactions in the B2C online environment
Recent statistics show:
80% of highly satisfied online consumers would shop again within 2 months
90% would recommend the Internet retailers to others
However, 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 EC
Brand recognition
EC security mechanisms can help solidify trust
Disclose and update latest business status and practices to potential customers and to build transaction integrity into the system
Guarantee information and protection privacy through various communication channels

9. 4.3: Market Research for EC
The Goal of Market Research
To 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 Research
To 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 modeling
Data warehousing

11. 4.3: Market Research for EC
Online market research methods
Implementing Web-based surveys
Online focus groups
Hearing directly from customers
Customer scenarios
Tracking customer movements
Analysis 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 years
In 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 data
Internet created a product awareness of 35 percent before shipments were made to stores
Revolutionised process of studying the product concept, segmenting the market, and expediting product development

13. 4.3: Market Research for EC
Tracking Customer Movements
Web Transaction log: A record of user activities at a company’s Web site
Clickstream behavior: Customer movements on the Internet; and, what the customer is doing there
Web Bugs: Tiny graphics files embedded on messages and in Web sites that transmit information about the user and their movements to a Web server
Cookie: 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 Analytics
Enable retailers to make site adjustments on the fly, manage online marketing campaigns and EC initiatives, and track customer satisfaction
If a company redesigns its Web site, it can gain almost-instant feedback on how the new site is performing
Web 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 Research
Too much data may be available
To use data properly, it should be organised, edited, condensed, and summarised
Solution: 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 responses
Loss of respondents because of equipment problems
The ethics and legality of Web tracking

16. 4.4 Internet Marketing in B2B
Organisational Buyer Behavior
Number of organisational buyers (purchasing for their organisations) is much smaller than the number of individual buyers
Transaction volumes are far larger
Terms of negotiations and purchasing are more complex
Marketing and Advertising Processes in B2B
Uses 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 Marketing
Targeting customers
Electronic wholesalers
Other B2B marketing services. Examples:
Digital Cement
Provides corporate marketing portals that help companies market their products to business customers
National Systems
Tracks what is going on in an industry
Affiliate programs
Placing banners on another vendor’s Web site, for a commission
Content alliance program in which content is exchanged so that all can obtain some free content
Infomediaries and online data mining services

18. 4.5: Web Advertising Overview of Web Advertising
Interactive marketing
Web advertising, enabled by the Internet, allows advertising to groups
Advertisers can interact directly with customers and consumers can interact with advertisers/vendors
More complex and personalised than off-line advertising
Two major business models for advertising online:
Using the Web as a channel to advertise a firm’s own products and services
Making 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 views
Button: A small banner links to a Web site
Page: An HTML document
Click (click-through or ad click): A count made each time a visitor clicks on an advertising banner to access the advertiser ’s Web site
CPM (cost per thousand impressions): The fee an advertiser pays for each 1,000 times a page with a banner ad is shown
Conversion 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 it
Click-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 file
Visit: 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 media
Advertisers are limited in the amount of information they can gather about the television and print ads
Other reasons why Web advertising is growing rapidly:
Lower cost
Increased Richness of format
Ability to personalise
Timeliness (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 Advertising
Advertising networks are specialised firms that offer customised Web advertising.
Examples:
Brokering ads
Targeting 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 page
Keyword banners
Banner ads that appear when a predetermined word is queried from a search engine
Random banners
Banner 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 site
The ability to customise them for individual surfers or a market segment of surfers
Viewing of banners is fairly high because “forced advertising” is used
Banners 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 banner
Viewers 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 site
Banner exchanges
Markets in which companies can trade or exchange placement of banner ads on each other’s Web sites
Pop-up ad
An ad that appears in a separate window before, during, or after Internet surfing or when reading
Pop-under ad
An ad that appears underneath the current browser window, so when the user closes the active window, he or she sees the ad
Interstitial
An 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 groups
Advertising 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; and
Measuring 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 inclusion
Advertising in chat rooms
Beneficial 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 detection
Use cloaking, they strip away clues (name and address) about where spam originates
Server substitutes fake addresses
Many spam messages are sent undetected through unregulated asian routes
Spamming is done from outside the U. S.

31. 4.6: Uunsolicited Commercial E-mail (UCE)
Solutions to Spamming
Antispam legislation is underway in many countries
ISPs and providers (yahoo, MSN, AOL)
Junk-mail filters
Automatic junk-mail deleters
Blockers of certain URLs and addresses
Spam-filtering site for a country

32. 4.7: Advertising Strategies and Promotions Online
Associated ad strategy
An advertising strategy that displays a banner ad related to a term entered into a search engine
Affiliate marketing
Marketing arrangement by which an organisation refers consumers to the selling company’s Website for a commission
Most effective in generating a user base for a new site.
Viral marketing
Word-of-mouth marketing by which customers promote a product or service by telling others about it
Ads-as-a-commodity trategy
Customers are paid to read ads by advertisers
Webcasting
Free Internet news service that broadcasts personalised news and information, in categories selected by the user

33. 4.7: Advertising Strategies and Promotions Online
Customising Ads
Advertisements 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 Attractions
Major consideration when implementing an online ad campaign
Target audience of online surfers clearly understood
A powerful enough server used to handle the expected traffic volume
Assessment of results is needed to evaluate the budget and promotion strategy (such give-aways and discounts)
Consider co-branding
Admediation
Third-party vendors that conduct (usually large-scale) promotion.

34. 4.7: Framework for Admediation

35. 4.8: Special Advertising Topics
Permission Marketing
Advertising (marketing) strategy in which customers agree to accept advertising and marketing materials
Ad Management
Methodology and software that enable organisations to perform a variety of activities involved in Web advertising (e.g., tracking viewers, rotating ads)
Localisation
The 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 radio
A Web site that provides music, talk, and other entertainment, both live and stored, from a variety of radio stations.
Wireless advertising
Wireless advertising uses m-commerce and l-commerce technologies to advertise to people using mobile devices.
Ad Content
The 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 media
Content 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 comparisons
Buyer-seller negotiation
Purchase and delivery
After-sale service and evaluation
Software 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:
Avatars
Animated computer characters that exhibit human-like movements and behaviors
Social Computing
An approach aimed at making the human-computer interface more natural.
Chatterbots
Animation 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?