1. Copyright © 2002 Pearson Education, Inc.

2. E-commerce Marketing Concepts
CHAPTER 7
E-commerce Marketing Concepts
Created by, David Zolzer, Northwestern State University—Louisiana
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3. Internet Marketing Technologies
Web transactions logs
Cookies
Web bugs
Databases, data warehouses, data mining, and profiling
Advertising networks
Internet Marketing Technologies
Customer Relationship Management (CRM) systems
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4. Impact of Unique Features of E-commerce Technology on Marketing
Page 361, Table 7.6
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5. Web Transaction Logs Records user activity at a Web site
Registration forms gather personal data on name, address, phone, zip code, address, and other optional self-confessed information on interests and tastes
Shopping cart database captures all the item selection, purchase, and payment data
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6. A Web Transaction Log From Azimuth-Interactive.com
Page 362,
Figure 7.12
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7. Marketing Uses of Data From Web Transaction Logs
Page 363, Table 7.7
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8. Questions That Can Be Answered by Web Transactions Logs
What are the major patterns of interest and purchase for groups and individuals?
After the home page, where do most users go first, and then second and third?
What are the interests of specific individuals (those we can identify)?
How can we make it easier for people to use our site so the can find what they want?
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9. Questions That Can Be Answered by Web Transactions Logs
How can we change the design of the site to encourage visitors to purchase our high margin products?
Where are visitors coming from (and how can we optimize our presence on these referral sites)?
How can we personalize our messages, offerings, and products to individual users?
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10. Cookies
Cookie is a small text file that Web sites place on visitor’s client computers every time they visit, and during the visit, as specific pages are visited.
Cookies provide Web marketers with a very quick means of identifying the customer and understanding his or her prior behavior
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11. Cookies Placed by Amazon.com
Page 365,
Figure 7.13
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12. Web Bugs
Web bugs are tiny (1 pixel) graphic files hidden in messages and on Web sites
Web bugs are used to automatically transmit information about the user and the page being viewed to a monitoring server
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13. Databases, Data Warehouses, and Data Mining
Database is a software application that store records and attributes
Database management system (DBMS) is a software application used by organizations to create, maintain, and access databases
SQL is an industry standard database query and manipulation language used in relational databases
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14. Databases, Data Warehouses, and Data Mining
Relational databases represent data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be flexibly related so long as the tables share a common data element
Data warehouse is a database that collects a firm’s transactional and customer data in a single location for offline analysis
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15. A Relational Database View of E-commerce Customers
Page 369, Figure 7.14
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16. Databases, Data Warehouses, and Data Mining
Data mining is a ser of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers
Customer profile is simply a description of the typical behavior of a customer or a group of customers at a Web site
Query-driven data mining is data mining based on specific queries
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17. Databases, Data Warehouses, and Data Mining
Model-drive data mining involves the use of a model that analyzes the key variables of interest to decision makers
Role-based data mining examines demographic and transactional data of groups and individuals at a Web site and attempts to derive general rules of behavior for visitors
Collaborative filtering is where site visitors classify themselves into affinity groups characterized by common interests; products are then recommended based on what other people in the group have recently purchased
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18. Advertising Networks
Present users with banner advertisements based on a database of user behavioral data
Ad server selects an appropriate banner ad based on the user’s previous purchases, interests, demographics, or other data in the profile
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19. How an Advertising Network such as DoubleClick Works
Page 374, Figure 7.15
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20. Customer Relationship Management Systems
A repository of customer information that records all of the contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to “know the customer”
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21. Customer Relationship Management Systems
Customer profiles can contain
map of customer’s relationship with the institution
Product and usage summary data
Demographic and psychographic data
Profitability measures
Contact history summarizing the customers contacts with the institution across most delivery channels
Marketing and sales information containing programs received by the customer and the customer’s responses
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22. A Customer Relationship Management System
Page 376, Figure 7.16
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23. E-commerce Marketing & Branding Strategies
Internet marketing strategies for market entry
for new firms include:
pure clicks/first mover
mixed “clicks and bricks”/alliances
for existing firms
pure clicks/fast follower
mixed “clicks and bricks”/brand extender
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24. Generic Market Entry Strategies
Page 378, Figure 7.17
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25. Establishing the Customer Relationship
Permission marketing is a marketing strategy in which companies obtain permission from consumers before sending them information or promotional messages
Affiliate marketing is where one Web site agrees to pay another Web site a commission for new business opportunities it refers to the site
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26. Establishing the Customer Relationship
Viral marketing is the process of getting customers to pass along a company’s marketing message to friends, family, and colleagues
Leveraging brands refers to the process of using the power of an existing brand to acquire new customers for a new product or service
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27. Customer Retention
One-to-one marketing means segmenting the market based on a precise and timely understanding of an individual’s needs, targeting specific marketing messages to these individuals, and then positioning the product vis-à-vis competitors to be truly unique
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28. The Mass Market Personalization Continuum
Page 384, Figure 7.18
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29. Customer Retention
Customization means changing the product, not just the marketing message, according to user preferences
Customer co-production in the Web environment, takes customization one step further by allowing the customer interactively create the product
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30. Customer Retention
Transactive content results from the combination of traditional content, such as articles and product descriptions, with dynamic information culled from product databases, tailored to each user’s profile
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31. Customer Service tools:
Frequently asked questions (FAQ) is a text-based listing of common questions and answers, provide an inexpensive way to anticipate and address customer concerns
Real-time customer service chat systems, in which a company’s customer service representatives interactively exchange text-based messages with one or more customers on a real-time basis
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32. Customer Service Tools
Automated response systems send order confirmations and acknowledgements of inquiries
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33. Net Pricing Strategies
Pricing, putting a value on goods and services, is an integral part of marketing strategy
Demand curve is the quantity of goods that can be sold at various prices
Fixed costs are the costs of building the production facility
Variable costs are the costs involved in running the production facility
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34. Net Pricing Strategies
Price discrimination is selling products to different people and groups based on their willingness to pay
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35. A Demand Curve Page 390, Figure 7.19
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36. Net Pricing Strategies
It’s Free! -- can be used to build market awareness
Versioning is creating multiple versions of the good and selling essentially the same product to different market segments at different prices
Bundling offers consumers two or more goods for one price
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37. The Demand for Bundles of 1 - 20 Goods
Page 392, Figure 7.20
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38. Net Pricing Strategies
Dynamic pricing
Auctions establish the instant market price for goods
Yield management -- managers set prices in different markets, appealing to different segments, in order to sell excess capacity
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39. Channel Strategies
Channel refers to different method by which goods can be distributed and sold
Channel conflict occurs when a new venue for selling products or services threatens to destroy existing venues for selling goods
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40. Online Market Research
Market research involves gathering information that will help a firm identify potential products and customers
Primary research involves gathering first-hand information using techniques such as surveys, personal interviews, and focus groups
Secondary research relies on existing, published information as the basis for analyzing the market
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41. Types of Survey Questions
Page 396, Table 7.8
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42. Some Popular Secondary Research Tools
Page 399, Table 7.9
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