Electronic Marketing & Internet Marketing

Key Terms E-commerce: B2B (business to business) B2C (business to consumer) C2B (consumer to business) C2C (consumer to consumer) Intranet Marketing Web site

Key Terms Corporate Web site Customer database Data warehouse Direct-mail marketing Direct marketing Disintermediation E-business E-commerce E-marketing Extranet Integrated direct marketing Internet

Marketing Communications and the Internet

“Computers in the future may weigh no more than 1. 5 tons “Computers in the future may weigh no more than 1.5 tons.” - Popular Mechanics, 1949

Marketing Communications and the Internet It can be accessed from almost anywhere in the world It is the simplest form of international market entry available “The firm cannot avoid creating interest in its offerings outside its local or national market” Christian Grönroos

Chapter Objectives Describe the relationship between Internet marketing, database marketing, and direct marketing Evaluate a company’s or destination Web site and comment on its marketing potential

Chapter Objectives Describe how to set up an effective database Discuss the growth of e-mail marketing Understand how databases can be used to develop direct marketing campaigns

Major Forces Shaping the Internet Age Digitalization and Connectivity The Internet Explosion New Types of Intermediaries Customization

Digitalization and Connectivity Digitalization consists of converting text, data, sound, and image into a stream of bits that can be dispatched at incredible speeds from one location to another Connectivity involves building networks and expresses the fact that much of the world’s business is carried over networks connecting people and companies

Types of Networks Intranets connect people within a company Extranets connect a company with its suppliers and customers The Internet connect users to an amazingly large “information superhighway”

The Internet Explosion Useful as a sales outlet and it provides a medium for communication between a company and its customers The number of Web surfers worldwide has reached 2,7 billion (2013) and is expected to approach 3.5 billion by 2015. It was only 1.04 billion in 2005.

New Types of Intermediaries With the birth of dot-com sites such as Booking.com, tripsta.com, tripadviser.com, Expedia.com, Priceline.com, and Travelocity.com, the hospitality % tourism industry has had to change how they do business

Customization Technology has been useful in assisting companies in understanding their customers and potential customers on an individual level and developing marketing to their specific needs & wants.

E-Business, E-Commerce & E-Marketing E-business involves the use of electronic platforms to conduct a company‘s or organisations’ business E-commerce involves buying and selling processes supported by electronic means, primarily the Internet E-marketing is company efforts to communicate about, promote, and sell products and other services over the Intranet

E-Commerce E-commerce can be divided into: E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall" Buying or Selling on various websites The gathering and use of demographic data through Web contacts and social media Electronic Data Interchange (EDI), the business-to-business exchange of data E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters) Business-to-business buying and selling The security of business transactions

Benefits to Buyers Convenient Easy and private Greater product access and selection Offers comparative information Immediate and interactive

Benefits to Sellers Builds customer relationships Reduces costs Quick and efficient Reduces communication costs

E-Commerce Domains B2C (business to consumer) B2B (business to business) C2B (consumer to business) C2C (consumer to consumer)

Types of Web Sites Corporate Web Sites are designed to build customer goodwill and to supplement other sales channels Marketing Web Sites engage consumers in an interaction that will move them closer to a direct purchase or other marketing outcome

Designing Attractive Web Sites The key is to create enough value and excitement to get consumers to come to the site, stick around, and come back again

Content Convey what the company is and what the company has to offer Project brand image Easy to navigate Attractive Have a “contact us” page Ask permission to send information on specials Able to purchase products online

Website Design Considerations (1) Contain useful, interesting information for target customers Facilitate self-service in information gathering Users friendly Firms must set explicit communication goals for websites

Website Design Considerations (2) Design should address attributes that affect website “stickiness” Content quality Speed of download Frequency of update Memorable web address helps attract visitors to a site Ensure that people are aware of/can guess firm’s web address

EasyJet Paints Its Website Address on Each of Its More than 200 Aircraft

Effective Advertising on Internet: Banner Advertising (1) Placing advertising banners and buttons on portals such as Yahoo!, Netscape and other firms’ websites Draw online traffic to the advertiser’s own site Websites often include advertisements of other related, but non-competing services Advertisements for financial service providers on Yahoo!’s stock quotes page Small messages from Amazon.com on web pages devoted to a specific topic Links relevant to e-mail content on GMail

Effective Advertising on Internet: Banner Advertising (2) Easy for advertisers to measure how many visits to its own website are generated by click-throughs Limitations Obtaining many exposures “eyeballs” to a banner does not necessarily lead to increase in awareness, preference, or sales Problem of fraudulent click-throughs designed to boost apparent effectiveness

Effective Advertising on Internet: Search Engine Advertising (1) Reverse broadcast network—search engines let advertisers know exactly what consumer wants through their keyword search Can target relevant messages directly to desired consumers Several advertising options Pay for targeted placement of ads to relevant keyword searches Sponsor a short text message with a click-through link Buy top rankings in the display of search results

Effective Advertising on Internet: Search Engine Advertising (2) Google – The New Online Marketing Powerhouse Google AdWords - allows businesses to connect with potential customers at the precise moment when they are looking at related topics; advertisers can display their ads at websites that are part of the Google content network Google AdSense - In return for displaying relevant Google ads on their websites, publishers receive a share of advertising revenue generated

Internet Marketing Offers Powerful Opportunities for Interactivity (1) Internet used for a variety of communications tasks Promoting consumer awareness Providing information and consultation Facilitating two-way communications Enabling customers to place orders Can market through firm’s own websites or advertise on other sites Supplement conventional communications channels at reasonable cost

Internet Marketing Offers Powerful Opportunities for Interactivity (2) Must be part of integrated, well-designed communications strategy Able to establish harmony with individual customers Interactive nature of the Internet can increase customer involvement Facilitates permission marketing and “self-service” marketing Banks allow customers to pay bills electronically, apply for loans over the Internet, and check account balances online

Legal and Ethical Issues Online Privacy and Security Online privacy is perhaps the number-one e-commerce concern Identification theft and commercial espionage are security fears of consumers and companies alike

Marketing Database System A marketing database is an organized collection of data about individual customers, prospects, or suspects that is accessible and actionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships

Using a Database to Create a Competitive Advantage Provide the guest with a better experience If on a prior visit a guest requests a certain type of mineral water, the mineral water is placed in the guest’s refrigerator on returning visits If a guest had a problem, all departments in the hotel are notified, and everyone works to regain the guest’s confidence and loyalty

Direct Marketing Direct marketing is an interactive system of marketing that uses one or more advertising media to affect a measurable response and/or transaction at any location

Reasons for Growth of Direct Marketing Precision targeting Personalization Privacy Immediate results Measurability

E-mail The greeting should be personalized and other persons being sent the same message should not be listed The name of the company should be identified The subject needs to be relevant to the reader E-mails need to be short Text message is the preferred format

Direct Marketing Builds Relationships Direct marketing allows companies to develop a strong relationship with their customers, which helps prevent them from switching to competitors It costs four to seven times as much to bring in a new customer as it does to maintain an existing one

Integrated Direct Marketing A more powerful approach: execute a multiple-vehicle, multiple-stage campaign Direct Mail Mechanism Outbound Tele- marketing Paid Ad with a Response Channel Face-to-Face Sales Call

Discussion Questions Go to two internet sites for the same type of tourism organisation (Hotel, Airline, Destination marketing organisation, Restaurant, Travel Agency, Tour Operator or Theme park like Disneyland). Based on the information provided so far in this lecture, critique the web sites.

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