2. 2 Electronic Commerce COMP3210 Session 8: Marketing a Web Site and Promoting Products and Services Dr. Paul Walcott Dr. Paul Walcott - Department of Computer Science, Mathematics and Physics, University of the West Indies, Cave Hill Campus, Barbados, W.I.; email pwalcott@uwichill.edu.bb; © 2005pwalcott@uwichill.edu.bb

3. Session Objectives The objectives of this session are: To provide a general introduction to Web marketing To discuss product and customer-based marketing strategies To categorise individuals into various market segments To analyse Web customer behaviours through the use of customer relationship models To describe methods used to promote your Web site

4. What is Marketing? This is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to satisfy customers 2.

5. What is Marketing Cont’d? Marketing is more than sales; it is those set of activities that Grabs a potential customer Encourages them to buy your product Actually gets them to purchase your product Makes them a repeat customer

6. What is Marketing Cont’d? Marketing theory describes the 4 P’s Product: a company sells a physical product or offers a service Price: the amount paid for the product or service Promotion: the communication of the existence of the product to the market Place (or distribution): ensuring that the right product or service is offered at the right place at the best time Each of these “P”s contribute to your marketing mix

7. Marketing Strategies The first stage (of a marketing strategy) is setting marketing objectives (where the organisation wants to be at the end of the strategic planning period) and goals (the objectives with specific numerical benchmarks and deadlines attached to allow management to measure achievement) 3.

8. Marketing Strategies Cont’d The second stage (of a marketing strategy) is specifying the core marketing strategy, i.e. specific target markets, competitive positioning and key elements of the marketing mix 3.

9. Marketing Strategies Cont’d The third (stage of a marketing strategy) is the implementation of tactics to achieve the core strategy 3.

10. Marketing Strategies Cont’d Marketing strategies may come in two forms Product-based marketing strategy Customer-based marketing strategy

11. Marketing Strategies Cont’d Product-based Marketing Strategy When a customer is likely to buy or think about products in categories, a product- based marketing strategy is appropriate: An example is an office supplier store where a customer may be looking for an office desk; the customer immediately thinks about the product category “office furniture” See http://www.officedepot.com/

12. Marketing Strategies Cont’d Customer-based Marketing Strategies Due to the great flexibility of Web sites (as opposed to traditional mass media) they can offer products and services that are targeted towards specific type of customers First the customer types must be identified A Web site on its home page might allow the user to select the required customer type This approach is more common on B2B sites than on B2C sites

13. Communicating With Different Marketing Segments Trust and Media Choice The Web is an intermediate step between mass media and personal contact Mass media (e.g. TV) offers the lowest level of trust yet is still widely used today The cost of mass media can be spread over a large number of people Personal contact offers the highest level of trust; it is also the most expensive

14. Communicating With Different Marketing Segments Cont’d In 1996 as companies began doing business online a splintering of the mass market occurred due to rising consumer expectations and reduced product differentiation This led to a reduction of the usefulness of mass marketing Advertisers subsequently began to identify market segment and sell to them

15. Web Advertising Advertising is about communication Communication may be between a company and Its current customers Potential customers Or former customers that the company is trying to regain

16. Web Advertising Cont’d Banner Advertising Most Web advertising uses banner ads –A small rectangular object normally at the top of the Web page which displays stationary or moving graphics –These ads are created using animated GIFs, or objects created in Shockwave, Java or Flash) –These ads must be attention grabbing

17. Web Advertising Cont’d Banner Advertising Cont’d Web ads have been standardised by an organisation called the Interactive Advertising Bureau (IAB) which is responsible for –Creating banner size standards (e.g. 728x90, 160x600, 300x250, or 180x150) –Encourage effective Internet advertising

18. Web Advertising Cont’d Banner Ad Placement There are three ways that a company can have their banner ads displayed –(1) Use a banner exchange network A banner exchange network arranges for banner ads for one company to be displayed on another company’s Web site Each member site would accept two ads for each ad placed on someone’s site The banner exchange network earns money by selling ad space to other businesses

19. Web Advertising Cont’d Banner Ad Placement Cont’d –(2) Pay a site to display the banner ad Rates can be negotiated through an advertising agency –(3) Use a banner advertising network who acts as brokers between advertisers and Web sites that carry ads They often broker space on large Web site like Yahoo, which has high traffic volumes and are therefore expensive

20. Web Advertising Cont’d Measuring Cost for Ads Several measurements exist including: –Cost per thousand clicks (CPM) –The number of new visitors that arrive via a click- through that buy on the site To measure Web audiences is complicated, however the following definitions are instructive: –A visit occurs when a Web page is requested by a visitor; further page loads from the same site within a time period is considered part of the same visit

21. Web Advertising Cont’d Measuring Cost for Ads Cont’d –A trial visit, is the first time a visitor loads a Web site –When a visitor loads a page several time these are called repeat visits –If a visitor clicks on an ad that is displayed on a Web page this is called a click-through Rates vary depending on how much demographic information is captured, and the kind of visitors the site attracts The cost per one thousand clicks may range from $1 to $50.

22. Marketing Methods E-Mail Marketing E-mail may well be one of the greatest tools created for communication in the 20 th century Some of the ways that email has been used for marketing are: –Permission marketing is the sending of emails to people who request further information on a product or service (for example) –Combining content (e.g. articles or news stories that are of interest to the target market) with advertising messages

23. Marketing Methods Cont’d Affiliate Marketing In affiliate marketing a Company’s Web site includes products or services offered for sale by another company in exchange for a commission The affiliate’s site benefits from the selling site’s brand in exchange for the referral –Amazon.com has over 800,000 affiliate sites

24. Marketing Methods Cont’d Viral Marketing Viral Marketers rely on non-customers being told about products or services by existing customers The number of customers increase the way a virus increases An example of a viral marketing campaign is Blue Mountain Arts –When an electronic greeting card is sent to a person, a link to Blue Mountain is included which they click on to read the card; they are now more likely to send a card themselves

25. Web Site Naming People with established brands want to name their Web site after their brand Companies other buy more than one domain name, just in case the person misspells it (e.g. Yahoo.com owns Yahow.com) In some cases the Web site domain is owned by some one else (e.g. virginatlantic.com -> viginatlantic.com) Domain names can be expensive, e.g. Altavista.com cost $3.3 million

26. Promoting Your Web Site 4,5 Internet marketing is about capturing the attention of potential customers through promotion The guidelines used for direct mail marketing are also used for Internet marketing These guidelines are summarised by the acronym AIDA

27. Promoting Your Web Site Cont’d A – Attention –The goal is to get the attention of the visitor which may be achieved through: The quality of the Web site The ease of navigation Personalisation Good graphics Attractive Banners Colour

28. Promoting Your Web Site Cont’d I – Interest –Once the visitor’s attention has been captured, an interest in the product must be sparked. Quick response times and ease of navigation are vital at this point D – Desire –A desire must be created for action Interactivity through navigation provides this

29. Promoting Your Web Site Cont’d A - Action –The desired action is the customer placing an order, or the actual sale. At this point the information is sent off to the company to process and deliver (i.e. the fulfilment phase)

30. Promoting Your Web Site Cont’d Several methods of promotion are in use today: –The combination of online and off-line marketing (these must work together) –Banner ads (very popular, however only about 0.5% of visitors click through) –Email marketing (very cost effective and with good results, i.e. 5-15% response rate, however may clutter customer’s in boxes)

31. Promoting Your Web Site Cont’d –Traditional media: local newspapers, radio programmes and mass mailing campaigns –It is important to promote your Web site on your Web site. This can be achieved through: The domain name; use the company’s name Negotiate reciprocal links, i.e. other Web sites linking to your site –Search engines and directories Search engines locate sites based on keywords Directories are organised listing of Web sites

32. Promoting Your Web Site Cont’d –Newsgroups and mailing list –Promotion agreements 5 One company promotes another (e.g. 1-800- flowers.com customers can earn frequent-flyer miles with American Airlines