1. e-Marketing (eBiz/MKTG 543)
Introduction and Course Overview
Arvind Rangaswamy
Web address:
October 17, 2016

2. My Background in Digital Marketing (e-Marketing)

5. Established in 1998.

6. My Research Publications in This Area
Rangaswamy, Arvind and G. Richard Shell (1997) “Using Computers to Realize Joint Gains in Negotiations: Toward An ‘Electronic Bargaining Table,’” Management Science, Vol. 43, No. 8 (August), p
Winer, Russell S., John Deighton, Sunil Gupta, Eric J. Johnson, Barbara Mellers, Vicki G. Morwitz, Thomas O’Guinn, Arvind Rangaswamy, and Alan G. Sawyer (1997), “Choice in New Media Environments,” Marketing Letters, Vol. 8., No.3, (July), p
Degeratu, Alexandru, Arvind Rangaswamy, and Jianan Wu (2000), “Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and Other Search Attributes,” International Journal of Research in Marketing, Vol. 17, No. 1, p Finalist for the best-paper award competition of IJRM for 2001 (with honorable mention). Winner of Jan-Benedict E.M. Steenkamp Award for Long-Term Impact (2011).
Wind, Jerry and Arvind Rangaswamy (2001), “Customerization: The Next Revolution in Mass Customization,” Journal of Interactive Marketing, Vol. 15,. No. 1, p

7. Research Publications in This Area
Srinivasan, Raji, Gary L. Lilien, and Arvind Rangaswamy (2002), “The Role of Technological Opportunism in Radical Technology Adoption: An Application to e-Business,” Journal of Marketing, Vol. 66, No. 3 (July), p
Shankar, Venkatesh, Amy Smith, and Arvind Rangaswamy (2003), “The Relationship Between Customer Satisfaction and Loyalty in Online and Offline Environments,” International Journal of Research in Marketing, Vol. 20, No. 2 (June), p Finalist for best-paper award of IJRM for 2003 (with honorable mention). Winner of Jan-Benedict E.M. Steenkamp Award for Long-Term Impact (2014).
Jianan Wu and Arvind Rangaswamy (2003), “A Fuzzy Set Model of Consideration Set Formation Calibrated on Data from an Online Supermarket,” Marketing Science, Vol. 22, No. 3, p
Rangaswamy, Arvind and Gerrit Van Bruggen (2005), “Special Issue: Multichannel Marketing,” (Editors), Journal of Interactive Marketing, Vol. 19, No. 2 (Spring).

8. Research Publications in This Area
Steckel, Joel, Russ Winer, Randolph E. Bucklin, Benedict Dellaert, Xavier Drèze, Gerald Häubl, Sandy Jap, John D.C. Little, Tom Meyvis, Alan Montogmery, and Arvind Rangaswamy (2005), “Choice in Interactive Environments,” Marketing Letters, Vol.16, No. 3-4 (December), p
Rangaswamy, Arvind, C. Lee Giles and Silvija Seres (2009), “A Strategic Perspective on Search Engines: Thought Candies for Practitioners and Researchers.” Journal of Interactive Marketing, Vol. 23, No. 1 (February), p (10th Anniversary Special Issue).
Hennig-Thurau, Thorsten, Edward C. Malthouse, Christian Friege, Sonja Gensler, Lara Lobschat, Arvind Rangaswamy, and Bernd Skiera (2010), “The Impact of New Media on Customer Relationships,” Journal of Service Research, Vol. 13, No. 3 (August), p Finalist for the “Best Article” in Journal of Service Research in 2010.

9. Research Publications in This Area
Sorescu, Alina, Ruud T. Frambach, Jagdip Singh, Arvind Rangaswamy, and Cheryl Bridges (2011), “Innovations in Retail Business Models,” Journal of Retailing, Vol. 87S, No. 1, p. S3-S16.
Clement, Michel, Arvind Rangaswamy, and Srikant Vadali (2012), “Consumer Responses to Legal Music Download Services that Compete with Illegal Alternatives,” Service Science, Vol. 4, No. 1, p (Lead article).
Ebbes, Peter, Zan Huang, and Arvind Rangaswamy (2016), “Sampling Designs for Recovering Local and Global Characteristics of Social Networks,” International Journal of Research in Marketing, Vol. 33, No. 3 (September), p. 578–599.
Kalyanam, Kirthi, Peter Lenk, and Arvind Rangaswamy (2016), “Understanding the Structure and Evolution of Perceived Service Quality from Online User Ratings and Sentiments” (Working paper).

10. Outline for Today’s Session
Course overview
The emerging space of real-time, global, digital, networked organizations
Role of e-Marketing in a connected world

11. Course Overview Course web site at Canvas (Look under Syllabus tab)

12. Course Objectives
Provide an understanding of the business rationale for e-Marketing, and the potential value of e-Marketing to consumers, to companies, to the marketing function, and to society at large.
Expose students to the essential vocabulary they need to meaningfully discuss current developments in e-Marketing.
Offer useful frameworks for dissecting and understanding the elements of value creation, value delivery, and value appropriation via e-Marketing. And, to use these frameworks to leverage the online medium to strengthen customer relationships and exploit market opportunities.
Help students to critically evaluate an e-Marketing problem and develop strategic and operational plans appropriate for that problem.
Identify and articulate the key management issues that arise in implementing e-Marketing strategies.

13. Course Materials Required Materials Canvas Course Web site
Case packet with cases (available at bookstore).
Any other materials will be handed in class, or posted as a link at Canvas course site.
Canvas Course Web site
All other materials required for the course are available under the Calendar tab at Canvas – keyed to each session.

14. Cases in the Course Wed, Oct 19
Amazon, Apple, Facebook, and Google (in class discussion)
Mon, Oct 24
Dove: Evolution of a Brand (in-class discussion)
Wed, Oct 26
Denver Museum of Nature and Science
Mon, Oct 31
Demand Media
Wed, Nov 2
Major League Baseball
Mon, Nov 7
Sephora Direct
Mon, Nov 14
Improving Repurchase Rates at Zulily
Wed, Nov 16
New York Times Paywall
Mon, Nov 28
Bank of America: Mobile Banking
Wed Nov 30
Social Strategy at Nike
Mon Dec 5
Airbnb (A) (in-class discussion)

15. Grading Class participation (30%)
Group case presentations and write-ups (35%)
e-Marketing audit/new initiative (35%)

16. Class Preparation/Participation
Meet with group to prepare for class.
Quality of participation is far more important than quantity of participation.
Everyone is here to learn from each other.

17. 3-Stage Learning Process

18. Grading Criteria Illustrative criteria for evaluating content
Actionable and specific recommendations (versus general recommendations)
Conceptual framework guiding recommendations (i.e., rationale for recommendations)
Overall strategy
Basic financials
Operational/implementation considerations
Use of course concepts
Coverage of discussion questions
Internal consistency
Insightful -- brought out key lessons learned

19. Grading Criteria (Contd)
Illustrative criteria for evaluating presentations
Focused?
Captured audience attention?
Quality of report/charts/presentation materials

20. Grading  -- -  + ++  Meets my expectations for the course
-- -  + ++
++ Outstanding – the work speaks for itself and reflects non-obvious and generalizable insights
+ Clearly beats my expectations/norms for the course
 Meets my expectations for the course
 - Below my expectations, but can improve
 -- Should be taking another course

21. Introduction to Course Topics

22. Growth of the Internet Communications (~1980) Commerce (~1991)
Community (~2003)
Contraptions (~2009)
Internet of
everything (now)

23. The Evolution of Online Functionality at Leading Companies
Real time business
Web-centric
enterprise
Process
management
Transactions
Dynamic content
Static
content
1992
1997
2000
2003
2007
2011

24. Emerging Global Real-Time Enterprises Focused on Customers
e-Operations
e-Marketing
Supplier
network
Company’s
digital
infrastructure
Customer/Market
network
Extranet
Intranet
Internet
Customer-driven
Activities and flows
Emerging real-time organizations, powered by customer-centered information and process management architectures, for anticipating and responding to changing customer and market needs as fast, or faster than, those changes.
9/19/2018 24

25. Digital-Networked-Mobile Convergence
Analog
Standalone
Fixed location
Digital
Networked
Mobile
Digital and
Digital, Mobile
Museum
Businesses becoming more real-time, global, social, and mobile

26. .

27. Growing Interest in Digital Marketing
Each series is indexed to 100 for its maximum value during this period, and indicates the interest in the topic based`on Google searches conducted on those terms. The absolute number of searches for “Digital marketing” is much smaller than the absolute number of searches for “Marketing.”
From (accessed October 7, 2016)

28. Changing Conceptions of Marketing
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
-- American Marketing Association (July 2013)
want us to be.”
-- Senior executive of travel company

29. Changing Conceptions of Marketing
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
-- American Marketing Association (July 2013)
Marketing is an adaptive, technology-enabled process by which firms collaborate with customers and partners to jointly create, deliver, and sustain value for all stakeholders.
Emerging view
“Marketing is a way of thinking and doing that enables us to be whatever today’s customers want us to be.”
-- Senior executive of travel company

30. The Marketing Process in a Connected Digital World
Create offerings
Customize offerings
Simplify channels
Design customer experience
Build platforms
Generate externalities
Expand ecosystem
Enhance customer experience
Sustain
value
Augment
Realize
Communicate
Architect
Refine
Find
Customer
Relationship
Repository
Adapt
Sense market trends
Understand customers
Identify opportunities
Redefine markets
Segment customers
Choose desirable segments
Craft value propositions
Validate/adapt value propositions
Expand touchpoints
Price to maximize yield
Bundle/unbundle offerings
Adapt pricing/revenue strategy
Manage brand
Deliver consistent message
Optimize communications mix
Integrate communications
Monitor customer experience
Personalize relationships
Develop complete offerings
Institute loyalty programs
Source: Adapted from Mohan Sawhney

31. Some Opportunities and Challenges for Marketers Today
Real-time marketing
“Customerization” that increases value for all stake-holders
Market expansion (scaling) due to disappearing boundaries
Supply-demand integration (end-to-end visibility)
Loss of control (e.g., user-generated content)
Potential loss of brand power
Fragmentation of consumer decision processes (e.g., separation of choice from purchase)
“Tax” paid to Internet choke points (e.g., Google)

32. Real-Time Marketing

33. Real-Time Bidding for Ads (Realizing Value from Each Impression)
Ad Exchange
Real-time understanding of visitor/context
Show Ad of highest bidder for that visitor .
Ad inventory
Exchange selects appropriate ad to show each visitor to partner web sites – billions of ads per day with a response latency of less than 100 milliseconds.

34. What Wal-Mart did on 9/11/2001
Within a few hours of the 9/11 attacks, sales of flags and other patriotic items started skyrocketing.
On Sept 11, the 2,700 Wal-Mart stores sold over 100,000 flags (compared to 6,400 the previous year on that day), and over 200,000 on Sept 12th.
Detecting these increases, Wal-Mart locked up all the supplies it could find before its competitors (like Kmart) could react.
Real-time tracking and analysis helped “adapt” to a demand surge.

36. Real-Time Marketing is Really Tricky

37. Real Time Advertising that Worked

38. Why Did This Tweet Backfire?

39. Customerization

40. Leverage Interactivity to Drive Customerization
Personalization/
1-to-1 Marketing
Customerization
Marketing customization 
Lo Hi
Mass
Customization
Standardization
Lo Hi
Operational customization 

41. Market Expansion

42. This 405-foot in length, th Giga-yacht from the builder Frank Mulder was sold in 2005 at a staggering price of $140 million making it one of the most expensive item sold on Ebay. The yacht had 10 multi-level suites, large panoramic windows, eight guest cabins, a salon, a cinema room, a workout room, an office, and a helipad with a garage made it an amazing vessel to set sail in style. The helicopter added that extra cushion to reach even the remotest of the areas on the world map.
Surprisingly the man who bought this piece preferred to stay anonymous, but one can surely conclude that the person would be a sheikh or a super-rich villain who would buy such a piece, which has a built in helicopter garage to carry on with his devil plans.

43. Augmenting the Offering (1-800-Flowers)
Gift reminder service
Holiday specials
Everyday celebrations suggestions
Special occasion suggestions
Gift guru
Favorite gifts
Gift frequency
Gift impossible
Gift baskets
Corporate gift services
Ideas and Information
Floral ideas
Garden ideas
Home ideas
Gift ideas
Gourmet ideas
Store locator
Recommendations by budget
Best sellers
Gift Recommendations
“Care and handling”
“Do it yourself”
Special events and educational workshops held at stores
Flower / Gift Decision Process
Need Recognition
Offering
Education on Flowers and Decoration
Search For Ideas and Offerings
Post-Sales Support
Order receipt
eQ&A online customer service
FAQ
Customer service inquiry form
Perks
Miles earned with flower purchases
Free gifts
Discounts at AOL & BN with flower purchases
Member specials
Post Sales Support and Perks
Evaluation of Alternatives
Product price
Product picture
Product description
Delivery information
Delivery availability
Message Selection
Purchase Decision
Shopping basket
e-commerce transaction
Special shopping features
Delivery outside U.S.
1-800-lasfloras.com
Gizmo fully-animated greeting cards
Physical cards in gifts
Source: Adapted from
Rayport and Jaworski

44. The Long Tail Phenomenon
Twitter data from 2013.
Source:
Hits: Few but very expensive
Predicting hits gets harder but more important
Danger zone?
Examples:
Fridgedoor.com
Featherplace.com
Tail: Many and (typically) cheap
Need multiple tools to manage

45. Another Example of the Long Tail
Source:

46. The Tail Wagging the Dog?
Free Marketing?
-- Need for real-time monitoring
-- Shifting money from media to content production/distribution
-- But, low control
Social Media
Blogs
YouTube
CNN iReport
…….

47. Declining Half-Life of Content

48. Challenges Associated with Social Media

49. Growing Roles of Search and Social Media in Marketing in the US
Top 10 Web Brands (Home & Work, USA)
(December 2007, Nielsen)
Brand
Unique Desktop
Audience
(‘000)
Hours:Min/
Person
1. Google
117,719
1:11
2. Yahoo!
113,203
3:06
3. Microsoft
98,338
0:49
4. MSN/WindowsLive/Bing
96,448
1:53
5. AOL Media Network
90,850
0:48
6. YouTube
68,582
2:09
7. Fox Interactive
57,591
0:34
8. Amazon
59,624
2:01
9. eBay
59,374
1:15
10. Apple
50,686
0:16
Top 10 Web Digital Media Properties (USA)*
(August 2016, comScore)
Brand (All sites)
Unique
Multiplatform Audience
(‘000)
1. Google sites
240,704
2. Yahoo! sites
213,333
3. Facebook
206,333
4. Microsoft sites
188,837
5. Amazon sites
186,256
6. Comcast/NBC
164,245
7. AOL
159,599
8. CBS Interactive
158,303
9. Apple
153,163
10. Linkedin
127,229
*: Includes both Desktop and Mobile
Aug 2016 data from

50. A Facebook Metric (October 6, 2016) University # of Likes
University # of Fans
U.Penn 8,655
Harvard 19,728
Penn State 92,171
U. of Michigan 95,630
(February 26, 2010)
University # of Likes
U.Penn 176,563
Harvard 4,765,042
Penn State 383,793
U. of Michigan 754,758
Michigan State 457,054
Ohio State 694,010
UT Austin 666,238
UCLA 424,230
Temple 76,742
(October 6, 2016)
In June 2010, Facebook replaced the “Become a Fan” with a “Like” button.

51. Early Demonstration of the Power of Social Media
June 13, 1994: Professor Nicely discovers flaw in Intel Pentium chip (called FDIV)
October 19, 1994: He confirms flaw after a series of tests
October 30, 1994: Sends asking people in various user groups to do tests of their own
November 21, 1994: Story picked up by CNN
Intel acknowledges flaw but does not offer to fix it
December 20, 1994: Intel backtracks after public outcry, and offers to fix all flawed processers
Another Example: United Breaks Guitars

57. Fragmentation

62. So, What Questions Should I be Asking?
How well is my business leveraging the digital, networked, mobile, social, and global convergence?
How real time is my business?
Am I doing enough experimenting and adapting in the digital space?
How well integrated is my business with the online and social ecosystems that influence my business?

63. Summary
e-Marketing is technology-mediated marketing. It is bringing about major changes in how an organization interfaces with its customers and its markets, and how it implements its marketing functions internally.
e-Marketing is here to stay and is growing in importance.
The growth of real-time/adaptive organizations is further increasing the role and impact of e-Marketing.