0. Marketing in the Digital Age
Chapter 3

1. Objectives
Be able to identify the major forces shaping the digital age.
Understand how companies have responded to the Internet with e-business strategies.
Be able to describe the four major e-commerce domains.

2. Objectives
Understand how companies use e-commerce to profitably deliver greater value to customers.
Realize the promise and challenges that e-commerce presents for the future.

3. Charles Schwab c Invented discount brokerage category
First U.S. major player to go online
Initially offered two-tiered trading system to protect profits / stop cannibalization
Later became first true click-and-mortar full-service brokerage
Now world’s largest e-commerce site
85% online trades; 21% of trade volume; Strong stock return

4. Forces Shaping the Internet Age
Figure 3-1:
Forces Shaping the Internet Age

5. Major Forces Shaping the Digital Age
Digitalization & Connectivity
The flow of digital information requires connectivity
Intranets, Extranets and the Internet

6. Major Forces Shaping the Digital Age
The Internet Explosion
Key driver of the New Economy

7. Major Forces Shaping the Digital Age
New Types of Intermediaries
Brick-and-mortar firms often face disintermediation from click-only competitors
The click-and-mortar business model has been highly successful

8. Major Forces Shaping the Digital Age
Customization and Customerization
Information businesses are at the heart of the New Economy
Has enhanced marketer’s ability to customize and “customerize” product offerings

9. Major Forces Shaping the Digital Age
Customerization: Reflect.com allows clients to create their own beauty products.
What other businesses could implement customization to better serve their customers?

10. Marketing Strategy in the Digital Age
E-business:
uses electronic means and platforms to conduct business.

11. Marketing Strategy in the Digital Age
E-commerce:
facilitates the sale of products and services by electronic means.

12. Marketing Strategy in the Digital Age
E-marketing:
Includes efforts that inform, communicate, promote, and sell products and services over the Internet.

13. Marketing Strategy in the Digital Age
Buyer Benefits of E-Commerce:
Convenience
Easy and private
Greater product access/selection
Access to comparative information
Interactive and immediate

14. Marketing Strategy in the Digital Age
Seller Benefits of E-Commerce:
Relationship building
Reduced costs
Increased speed and efficiency
Flexibility
Global access

15. Figure 3-2
E-Marketing Domains

16. E-Commerce Domains Major Domains B2C B2B C2C C2B Online consumers
Now more mainstream and diverse
Offers new 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
Major Domains
B2C
B2B
C2C
C2B

17. E-Commerce Domains Major Domains B2C B2B C2C C2B
B2B sales far exceed B2C sales
B2B sales are estimated to reach $4.3 trillion in 2005
Open trading networks
E-marketspace bringing sellers and buyers together
Private trading networks
Links sellers with their own trading partners
B2C
B2B
C2C
C2B

18. E-Commerce Domains Major Domains B2C B2B C2C C2B
C2C web sites help consumers exchange goods or information
eBay is one example
Auction sites facilitate the exchange process
Allow access to a much larger audience
Newsgroups / forums
Help consumers to find and share information
Major Domains
B2C
B2B
C2C
C2B

19. E-Commerce Domains Major Domains B2C B2B C2C C2B
Allow consumers to search out sellers, learn about offers, initiate purchase, or dictate purchase terms
Ex: Priceline.com
Some sites facilitate the feedback process between customers and companies
Ex: Planetfeed.com
Major Domains
B2C
B2B
C2C
C2B

20. Figure 3-3:
Types of E-Marketers

21. Conducting E-Commerce
Click-Only Competitors
E-tailers
Search engines and portals
ISPs
Transaction sites
Enabler sites

22. Conducting E-Commerce
Dot.coms failed for many reasons
Lack of planning and research
Overemphasis on acquisition
Poor web site design and distribution problems
Low margins

23. Conducting E-Commerce
Click-and-Mortar Companies
Channel conflict was initially a concern
E-commerce often created new buyers, rather than cannibalizing existing ones

24. Conducting E-Commerce
Click-and-Mortar Companies
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

25. Setting Up For E-Marketing
Figure 3-4:
Setting Up For E-Marketing

26. Conducting E-Commerce
E-Marketing
Corporate web sites
Build goodwill and relationships; generate excitement
Marketing web sites
Engage consumers and attempt to influence purchase
Web site design
7 Cs of effective web site design
Creating web sites
Placing online ads and promotions
Creating or using web communities
Using and webcasting

27. Conducting E-Commerce
Evaluate the iVillage website with respect to the 7 C’s:
Context
Content
Community
Communication
Connection
Commerce
Customization
Clicking the WWW icon will open your web browser and link to the web site pictured in the screen shot.

28. Conducting E-Commerce
E-Marketing
Online forms of ads and promotions
Banner ads/tickers
Skyscrapers
Interstitials
Browser ads
Content sponsorships
Microsites
Viral marketing
Future of online ads
Creating web sites
Placing online ads and promotions
Creating or using web communities
Using and webcasting

29. Findwhat.com Video Clip
BusinessNow
Findwhat.com Video Clip
Findwhat.com is a search engine company. Paid search is a key revenue tool.
Click the picture above to play video

30. Viral Marketing . . . Creating a Marketing Event
BMWFilms.Com
Viral Marketing Creating a Marketing Event
The Problem:
BMW’s market research revealed that the brand was not appealing to younger luxury car buyers. Also, competition was increasing.
References:
Visit to download a currently playing mini-film. NOTE: Most films are approximately 100 megabytes in size.
The BMW mini-film campaign has been discussed in several trade articles:
BMW films put 'e' in entertainment; Peter Gwin; Europe, Washington; Jul/Aug 2001, Iss. 408; pg. 5, 1 pgs
BMWfilms.com; Jeff Howe; Brandweek, New York; Nov 12, 2001; Vol. 42, Iss. 42; pg. IQ5, 1 pgs
BMWfilms.com; Jeff Howe; Mediaweek, New York; Nov 12, 2001; Vol. 11, Iss. 42; pg. IQ5, 1 pgs
BMWfilms.com; Jeff Howe; Adweek, New York; Nov 12, 2001; Vol. 42, Iss. 46; Eastern edition; pg. IQ5, 1 pgs
Super Reggie Winner: Crouching brand, hidden bimmer; Karl Greenberg; Brandweek, New York; Mar 18, 2002; Vol. 43, Iss. 11; pg. R4, 4 pgs
Thrill ride; Barbara Lippert; Adweek, New York; Oct 28, 2002; Vol. 43, Iss. 43; Eastern edition; pg. 22, 1 pgs

31. BMWfilms.com The Solution
Objectives:
Make BMW cool and relevant to year-old buyers new to the luxury-car market without alienating existing customers
Capture qualified buyers and ultimately increase sales
Target Market:
Doesn’t watch a lot of TV; tends to resent marketing
Thinks of technology as their friend
85% of this group use the Web to research cars before visiting dealerships

32. BMWfilms.com The Solution
BMWfilms.com Instead of using traditional TV advertising, BMW launched five short Internet films in April 2001, featuring edgy stars, action-oriented plots, and famous directors.
Web Promotion: Three months prior to the premiere, Internet-movie rumor sites, chat rooms, and fan sites were seeded with information. These efforts formed the core of viral marketing campaign.

33. BMWfilms.com The Solution
Off-line PR Strategy:
PR firm pitched the films as reviewable movies to Time, Entertainment Weekly, NY Times, and generated reviews in the film section.
Off-line Ad Strategy:
BMW ran 15-second teasers resembling movie trailers on A&E, Bravo, & Independent Film Channel with tag, “Now playing at BMWfilms.com”

34. BMWfilms.com The Results
85% perception increase among film viewers vs. nonviewers
Planned dealer visits for target market film viewers rose 550%
12.5% sales increase in 2001 despite no major product launches; 3-series increase of 37% in 4 months that films ran.
As of March 2002, over 11 million people had logged onto the BMWfilms web site.
Traditional buyers (median age 32, HH income $88,000) were majority of those requesting more information.

35. Discussion Question Visit the Babycenter.com web site
What forms of online ads and promotion does this site feature?
Were you surprised by any of the ads featured on this site? Why?

36. Conducting E-Commerce
E-Marketing
Web communities allow members with special interests to exchange views
Social communities
Work-related communities
Marketers find well-defined demographics and shared interests useful when marketing
Creating web sites
Placing online ads and promotions
Creating or using web communities
Using and webcasting

37. Conducting E-Commerce
E-Marketing
marketing
Key tool for B2B and B2C marketing
Clutter is a problem
Enriched forms of attempt to break through clutter
Webcasting
Auto downloading of customized content to recipients’ PCs
Creating web sites
Placing online ads and promotions
Creating or using web communities
Using and webcasting

38. Is this the Future of E-mail?
is the golden child of web marketing due to its:
low cost per contact
quick response time
response tracking ability
response rates
Enriched executions (see ad at left) are on the rise.
What are the drawbacks of using the enriched format for your marketing messages?

39. Promise and Challenges of E-Commerce
The Promise
The future of B2B E-commerce is bright

40. Promise and Challenges of E-Commerce
The Promise
A few click-only companies may succeed
Most companies will integrate online marketing into the overall marketing mix, rather than treat it as a separate component.

41. Promise and Challenges of E-Commerce
Challenges: The Web’s Darker Side
Few B2C companies are profitable:
Limited exposure, and skewed demographics
Navigating the web is often problematic

42. Promise and Challenges of E-Commerce
Challenges: The Web’s Darker Side
Online privacy and security concerns
Internet fraud
The digital divide
Access by vulnerable or unauthorized groups