1. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 1 Chapter 16 Electronic Marketing: Internet Marketing, Database Marketing, and Direct Marketing

2. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 2 Electronic Marketing Electronic marketing is normally associated with Internet marketing. In practice, Internet marketing is integrated with database marketing and direct marketing. Internet marketing captures data which feeds into the firm’s database, the database is used to generate profiles and lists which enable the firm to have effective direct marketing campaigns.

3. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 3 Convenience Information Price Benefits of Internet Marketing

4. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 4 Activities of the uses of a web-site Selling: hotel, cruise, and airline companies are using the Internet to distribute their products directly to the customer. Communication: the Internet is an excellent medium to communicate what products are offered and the benefits of those products. Providing Content: the companies should design the content which will drive customers back to the web site.

5. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 5 Web Site Development Build brand image, convey whom the company is and what the company has to offer Easy to navigate Provide “contact us” access and respond quickly Provide online purchase availability Keep on the top of the search engines Communicate with other devices.

6. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 6 Business-to-Business E-commerce Business to business commerce accounts for the majority of Internet commerce. This is in part due to the size of business- to-business transactions and the efficiencies the Internet offers businesses. These Internet marketplaces match multiple purchasers with multiple sellers. The buyer receives the benefit of receiving offers from multiple companies and the seller has the advantage of being linked with multiple buyers.

7. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 7 Identifying Prospects Deciding Which Customers Should Receive a Particular Offer Deciding Which Customers Should Receive a Particular Offer Deepening Customer Loyalty Reactivating Customer Purchases Database Marketing Database Marketing is the Process of Building, Maintaining, and Using Customer Databases and Other Databases for the Purposes of Contacting and Transacting With Customers. How Companies Use Their Databases:

8. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 8 Uses for Databases 1. Identify Prospects 2. Match Customers & Offers 3. Deepen Customer Loyalty 4. Reactivate Customers

9. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 9 Developing a Marketing Database System Databases should be relational, talk to each other, and integrate with each other. The system should be user friendly and available to various departments. The data warehouse stores the information the company receives in a central repository of customer data. Data mining is the exploration and analysis of a database by automatic or semiautomatic means to discover patterns or rules.

10. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 10 Developing a Marketing Database System (cont.) Managers need to make sure the data in the databases is clean and accurate which has no entry errors or duplication. The information in the database should be more than names or addresses. Companies should inquire some information on person’s lifestyle or purchase information.

11. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 11 Customer Databases Customer Databases are an Organized Collection of Comprehensive Data About Individual Customers or Prospects Including: –Geographic, –Demographic, –Psychographic, and –Behavioral Data.

12. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 12 Using a database to create a competitive advantage Companies can utilize the database to create a competitive advantage based on the knowledge of their customers. The database will provide information regarding customers’ likes and dislikes and which messages will be relevant to the customers.

13. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 13 Using a database to create a competitive advantage (cont.) The customer list generated from the database is critical component of a success. Companies can utilize the database to provide better service to customers Companies can utilize the database for service recovery

14. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 14 Direct Marketing Direct marketing is an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location. Interactive Respond Measurable

15. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 15 Most Mass Marketing Involves One-Way Communications Aimed At Consumers. Mass Marketing and Direct Marketing Direct Marketing Involves Two-Way Interactions With Customers.

16. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 16 The New Direct Marketing Model Some firms use direct marketing as a supplemental medium. For many companies, direct marketing - especially Internet and e-commerce companies - constitutes a new and complete model for doing business. Some firms use the new direct model as their only approach. Experts envision a day when all buying and selling will involve direct connections between companies and their customers.

17. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 17 Precision targeting Personalization Reasons for Growth of Direct Marketing Privacy Measurability

18. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 18 Direct Mail Kiosk Marketing Online Marketing Telemarketing Direct-Response TV Marketing Catalog Face-to-Face Selling Forms of Direct Marketing

19. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 19 E-Mail One of the problems with e-mail is the low cost of sending e-mails, which results in e-mail users receiving a lot of unwanted e-mails. The result is that more and more e-mail goes unopened and gaining permission to send someone an e-mail is becoming more important. E-mail needs to provide detailed, useful, even driven information, and interaction with customers. E-mail needs to integrate with web marketing.

20. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 20 Integrated Direct Marketing Direct marketing campaigns that use multiple vehicles and multiple stages to improve response rates and profits. Marketers seek to improve response rates and profits by adding media and stages that contribute more to additional sales than to additional costs.

21. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 21 An Integrated Direct-Marketing Campaign Paid ad with a response channel Direct Mail Outbound Telemarketing Face-to-face sales call Continuing Communication

22. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 22 Objectives of Direct Marketing Sale of a product Lead generation Lead qualification Maintenance of customer relationships

23. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 23 Through cluster analysis, multiple regression analysis and other techniques one can develop helpful models to form a list and purge lists.

24. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 24 Relationship Between Direct Marketing and Database Marketing Direct marketing can be more effective when you have your own database. Importance of an Integrated Database

25. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 25 Database and Relationship Marketing Customers like to deal with someone they know and trust Customers like to be recognized and appreciated It takes 4-7 times as much effort to create a customer as it does maintain a customer Research has shown a positive correlation between repeat business and profitability. Most businesses are in the mature stage of the product lifestyle.