1. Marketing in the New Internet Economy
Chapter 3
Marketing in the New Internet Economy

2. Road Map: Previewing the Concepts
Identify the major forces shaping the new Internet Age.
Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers.
Describe the four major e-commerce domains.
Discuss how companies go about conducting e-commerce to profitably deliver more value to customers.
Overview the promise and challenges that e-commerce presents for the future.

3. Major Forces Shaping the Internet Age (Fig. 3-1)

4. Major Forces Shaping the Internet Age
Digitalization & Connectivity
Intranets – connect people within a company.
Extranets – connect a company with its suppliers.
Internet – connects users all around the world.
Internet Explosion
Explosive growth forms the heart of the New Economy.
Companies must adopt Internet technology or risk being left behind.

5. Customization and Customerization
Old Economy Revolved Around Manufacturing Companies. New Economy Revolves Around Information Businesses.
Company Customizes
the Market Offering
Customers Design the Market Offering

6. Marketing Strategy in the New Internet Age
Conducting business in the new Internet Age will call for a new model for marketing strategy and practice.
All buying and selling may involve direct electronic connections between companies and customers.
Marketing should play the lead role in shaping new company strategy.

7. e-Business, e-Commerce, and e-Marketing in the Internet Age
e-Business Involves the Use of Intranets, Extranets & the Internet to Conduct a Company’s Business
e-Commerce Involves Buying & Selling Processes Supported by Electronic Means
E-Marketing “e-selling” side of e-commerce

8. e-commerce Yields the Following Benefits
Benefits to Buyers
e-commerce Yields the Following Benefits
to Buyers
Convenient
Buying is Easy and Private
Greater Product Access and Selection
Access to Comparative Information
Buying is Interactive and Immediate

9. e-commerce Yields the Following Benefits
Benefits to Sellers
e-commerce Yields the Following Benefits
to Sellers
Customer Relationship Building
Reducing Costs & Increasing Speed and
Efficiency
Offers Greater Flexibility
Truly Global Medium

10. Interactive Student Assignments
Consider the following thought questions, formulate an answer, pair with the student on your right, share your thoughts with one another, and respond to questions from your instructor.
What is the new Internet Age?
What are the major forces shaping this new Internet Age?
What is the difference between an intranet, extranet, and Internet?
Recent technological advances have created a New Economy.
Digitalization and connectivity, explosion of the Internet, new types of intermediaries, and customization and customerization.
Intranet connects people within a company to each other and to the company network.
Extranets connect a company with its suppliers and distributors.
Internet is a vast public web of computer networks that connect users of all types all around the world to each other and to an amazingly large “information repository”.

11. E-Commerce Domains (Fig. 3-2)

12. B2C (Business to Consumer)
Sales expected to increase from $34 billion in 2001 to $130 billion by 2006.
Provides e-marketers with access to consumers in all age groups.
More customer-initiated and customer-controlled.

13. B2B (Business to Business)
Estimates are that B2B e-commerce will reach $3.6 trillion in 2003.
By 2005, more than 500,000 enterprises will participate as buyers, sellers, or both.
Much e-commerce takes place in open trading networks:
Some companies are also setting up private trading networks (PTNs)

14. C2C (Consumer to Consumer)
Occurs between people over a wide range of products and services.
EBay’s C2C transacted more than $5 billion in trades last year.
Involves interchanges of information through:
Forums
Newsgroups

15. C2B (Consumer to Business)
Today’s consumers can contact and communicate with companies.
Consumers can search out sellers on the Web, learn about their offers, and initiate purchases.
Example: Using consumers can bid for airline tickets, hotel rooms, etc.
Then, sellers decide whether to accept their offers.

16. Discussion Questions
What are your biggest fears about doing business online?
How could a marketer deal with these fears and reduce them?

17. Types of e-Marketers (Fig. 3-3)

18. Types of Click-Only Companies
E-tailers
Search Engines & Portals
Internet Service Providers
Enabler Sites
Content Sites
Transaction Sites
Click-Only
Companies

19. Reasons for Dot.com Failures
Failure to research or plan
Spin & hype instead of marketing strategies
Spending offline to establish brand identities
Attention on gathering new customers instead of building brand loyalty
Poorly designed Web sites
Lack of good distribution delivery processes
Prices and margins were often very low

20. Click-and-Mortar Companies
Many resisted adding e-commerce because of potential for channel conflict and cannibalization.
Many are doing better than brick or click-only operations i.e. Why?
Trusted brand names & financial resources,
Large customer bases,
Knowledge & experience,
Good relationships with key suppliers,
Ability to offer customers more options,
Buy online & return unwanted merchandise to store.

21. Setting Up for e-Marketing (Fig. 3-4)

22. Creating a Web Site
Types of Web Sites Corporate – builds customer goodwill Marketing – moves customers closer to a direct purchase

23. SonyStyle.com Marketing Web Site
This marketing web site offers engages consumers in an interaction that will bring them closer to a direct purchase, all with a few clicks of the mouse button.

24. Designing Attractive Web Sites
Create value & excitement to get people:
to the site,
look around (hopefully to buy)
and come back again.
Value of the site’s content that will do all of the above.
7 C’s of effective Web Site Design
Context
Content
Community
Customization
Communication
Connection
Commerce

25. Placing Ads and Promotions Online
Online advertising - used to build Internet brands or attract visitors.
Forms of online advertising & promotion:
Banner ads & tickers (move across the screen)
Skyscrapers (tall, skinny ads at the side of a page)
Rectangles (boxes larger than banner)
Interstitials (online ads that pop up between changes)
Browser ads (sponsors pay viewers to watch)
Content sponsorships (sponsoring content on sites)
Microsites (limited areas managed by an external co.)
Viral marketing (Internet word-of-mouth)

26. Other e-Marketing Methods
Creating or Participating in Web Communities
Allow members to exchange views on issues of common interest.
Share common interests & well-defined demographics.
or Webcasting
mainstay for B2C & B2B
Webcasting automatically downloads customized information to recipients’ PCs.

27. Promise and Challenge of e-Commerce
Limited exposure and buying
Skewed demographics and psychographics
Chaos and clutter
Security
Ethical concerns

28. Road Map: Reviewing the Concepts
Identify the major forces shaping the new Internet Age.
Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers.
Describe the four major e-commerce domains.
Discuss how companies go about conducting e-commerce to profitably deliver more value to customers.
Overview the promise and challenges that e-commerce presents for the future.