1. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition Chapter 17 Marketing in the Digital Age

2. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-2 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

3. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-3 Founded in 1922 by two brothers, A.J. Biles and J.W. Biles Started off repairing vehicles, moved in automotive parts Introduced catalogue in 1928 National institution; 462 stores, 259 gas stations across Canada. Total retail sales: $9 billion Canadiantire.ca offers more than 15,500 products 1930’s: offered first tire guarantee 1958: Canadian Tire money Waited until 2002 to launch online store 2003: Cross-promotion with Budget Canada daily rental company More than 1000 items are available only online Recently, Canadiantire.ca was completely redesigned to make shopping faster, better, and easier. eFlyer is fully integrated into the webstore By melding its online and traditional retail worlds Canadian Tire has created a powerful new model of retailing Canadian Tire

4. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-4 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

5. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-5 Major Forces Shaping the Digital Age Digitalization and Connectivity –Text, data, sound, and images can be converted into bitstreams –Today’s computers, appliances, automobiles, and communication devices all operate using bits of digital information –Connecting these devices creates huge potential for convenience and new services –Intranet, Extranet, Internet

6. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-6 The Internet Explosion –World wide web and browsers created in early 1990’s –Dot.com crash of 2000 did not slowed down usage growth –End of 20th century: 400 million web surfers –Estimated 2007: 1.5 billion web surfers world wide –Internet penetration in Canada has reached 78% –The Internet has become the primary source of information –Empowers customers when making decisions Major Forces Shaping the Digital Age

7. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-7 Major Forces Shaping the Digital Age New Types of Intermediaries –Internet-only companies such as AOL, Amazon.com, Dell, eBay –Traditional companies feared disintermediation by new e-tailers –New channel relationships developing –Many click-only companies failed to develop a profitable business –Late entry click-and-mortar companies emerge as stronger competitors than click-only –Not all goods and services suitable for virtual purchasing

8. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-8 Major Forces Shaping the Digital Age Customization: –Old economy was built on standardization of goods and services –New economy runs on information; easier to differentiate, customize, personalize, and communicate –Today’s customer wants the product “their way” –Firms let the customers design the product offering –Companies become facilitators –Consumers become pro(active)sumers

9. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-9 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

10. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-10 Ebusiness: –Uses electronic means and platforms to conduct business Ecommerce: –Buying and selling processes supported by electronic means Marketing Strategy in the Digital Age

11. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-11 Emarketing: –Includes efforts that inform, communicate, promote, and sell products and services over the Internet Ecommerce and the Internet benefit both buyers and sellers Marketing Strategy in the Digital Age

12. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-12 Benefits to Buyers –Convenience –Buying is easy and private –Greater product access/selection –Access to comparative information –Online buying is interactive and immediate Marketing Strategy in the Digital Age

13. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-13 Benefits to Sellers –Powerful tool for customer relationship building –Reduce costs –Increase speed and efficiency –Offers great flexibility –Global access, global reach Marketing Strategy in the Digital Age

14. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-14 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

15. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-15 E-Commerce Domains B2C B2B C2C C2B Online selling of goods and services to consumers Travel services, clothing, computer hardware/software, electronics, books, music, and video Online consumers Online consumers –Now more mainstream and diverse Has created new e-commerce targeting opportunities Online behavior differs by age –Online consumers differ from traditional off- line consumers They initiate and control the exchange process Value information highly

16. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-16 E-Commerce Domains B2C B2B C2C C2B Using trading networks, auction sites, spot exchanges, online catalogues, and barter sites to reach organizational customers B2B volume is much larger than B2C; $28.3 billion Used to provide better service, increased efficiencies, and more competitive pricing Open trading exchanges –E-marketspace bringing sellers and buyers together Private trading exchanges –Links sellers with their own trading partners

17. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-17 E-Commerce Domains B2C B2B C2C C2B Online exchanges of goods and information between consumers These exchanges are the electronic flea market eBay is the most popular auction site Other uses: –Forums –Newsgroups Blogs –Allows interchanges of information for special interest groups –Highly credible for advertisers

18. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-18 E-Commerce Domains B2C B2B C2C C2B Allow consumers to search out sellers, learn about offers, initiate purchase, or dictate purchase terms –Ex: Priceline.com Consumers become more active in the process; empowered Consumers have direct channel to companies for suggestions and complaints Some sites facilitate the feedback process between customers and companies –Ex: Planetfeed.com

19. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-19 Pure-Play/Click-Only Companies –E-tailers, search engines and portals, ISPs, transaction sites, some content sites, enabler sites –During the “dot.com gold rush” of the late 1990s stocks prices reached dizzying heights Dot.coms failed for many reasons –Lack of planning and research –Did not develop marketing strategies and spent lavishly off-line on mass marketing –Overemphasis on acquisition vs. retention –Low margins Conducting ECommerce

20. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-20 Click-and-Mortar Companies –Combine traditional and online operations –Channel conflict was initially a concern –E-commerce often created new customers, rather than cannibalizing existing ones –Many firms now enjoy greater success than their click-only competition Trusted brand names, greater financial resources, larger customer base, industry knowledge, and strong supplier relationships were key advantages Conducting ECommerce

21. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-21 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

22. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-22 Setting up an Emarketing Presence Creating web sites Placing online ads and promotions Creating or participating in Web communities Using E-mail Corporate websites –Build goodwill and relationships; generate excitement Marketing websites –Engage consumers and attempt to influence purchase Website design –7 C’s of effective website design

23. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-23 Setting up an Emarketing Presence Seven C’s of Website Design –Context –Content –Community –Customization –Communication –Connection –Commerce

24. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-24 Setting up an Emarketing Presence Creating web sites Placing online ads and promotions Creating or participating in Web communities Using E-mail Online forms of ads and promotions –Banner ads/tickers –Skyscrapers –Interstitials –Content sponsorships –Microsites –Viral marketing Future of online ads

25. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-25 Discussion Question ?? What is the consumer response to Internet advertising? When is it welcomed by the consumer? What else can advertisers do to reach their targets?

26. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-26 Setting up an Emarketing Presence Creating web sites Placing online ads and promotions Creating or participating in Web communities Using E-mail Sites for members to congregate online and exchange views on common interests Attraction is the strong sense of community generated Web communities allow members with special interests to exchange views –Social communities –Work-related communities

27. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-27 Setting up an Emarketing Presence Creating web sites Placing online ads and promotions Creating or participating in Web communities Using Email and Webcasting E-mail marketing –Key tool for B2B and B2C marketing –Clutter is a problem –Enriched forms of e-mail attempt to break through clutter –Spam is a problem –Permission-based marketing

28. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-28 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future

29. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-29 The Continuing Promise of E-Commerce –Online marketing will become a successful business model for some companies –For others the Internet should be used as one approach or tool in the fully integrated marketing mix –The question is “how,” not “whether,” to deploy Internet technology Promise and Challenges of E-Commerce

30. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-30 The Web’s Darker Side –Internet Profitability Few B2C companies are profitable Limited exposure, skewed demographics Navigating the Web is often problematic –Legal and Ethical Issues Online privacy and security concerns Internet fraud, the digital divide, access by vulnerable or unauthorized groups Promise and Challenges of E-Commerce

31. Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition 17-31 Learning Goals 1.Identify the major forces shaping the new digital age 2.Explain how companies have responded to the Internet and new technologies with e-business strategies, resulting in benefits for both buyers and sellers 3.Describe the four major e-commerce domains 4.Discuss how companies conduct e-commerce to profitably deliver more value to customers 5.Overview the promise and challenges that e-commerce presents for the future