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2. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 10: Product
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3. Chapter 10 Objectives After reading Chapter 10 you will be able to:
Define product and describe how it contributes to customer value.
Discuss how attributes, branding, support services, and labeling apply to online products.
Outline some of the key factors in e-marketing enhanced product development.
Identify the six categories of new-product strategies and the six classifications for a suggested Internet product taxonomy.
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4. The Google Story
In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords.
Generates revenue from two B2B markets:
Licensing of its search services.
Sales of keyword banners to advertisers.
Innovative products and strong customer focus are driving its success and profitability.
Go to Google.com and explore Products, GMail Google Apps and the Tool Bar. Do you agree that they are highly innovative products?
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5. Many Products Capitalize on Internet Properties
A product is a bundle of benefits that satisfies needs of organizations or consumers.
Includes tangible goods, services, ideas, people and places.
Products such as search engines are unique to the Internet while others simply use the Internet as a new distribution channel.
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6. Marketing Mix and CRM Strategies and Tactics for Relational and Transactional Outcomes
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7. Creating Customer Value Online
Customer value = benefits - costs
Product decisions must be made that deliver benefits to customers:
Attributes
Branding
Support Services
Labeling
Packaging
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8. 1. Attributes Attributes include quality and features.
The Internet increases customer benefits in many ways.
Media, music, software and other digital products can be presented on the Web.
Mass customization is possible.
User personalization of the shopping experience can be achieved.
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9. 2. Branding A brand includes a name, symbol or other information.
A brand represents a promise or value proposition to its customers.
Brand equity is the intangible value of a brand, measured in dollars.
eBay, Yahoo! and Amazon rank among the top 100 brands in the U.S.
A great brand taps into popular culture and touches consumers.
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10. Brand Relationships
Exhibit 10.4 displays 5 levels of brand relationship intensity.
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11. Branding Decisions for Web Products
Firms can use existing brand names or create new brands on the Internet.
Some firms may use different names offline and online to avoid risk if the new product or channel should fail.
Sports Illustrated created thriveonline.com.
Wired Magazine changed its online version name to Hotwired.
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12. Creating New Brands for Internet Marketing
Good brand names should:
Suggest something about the product.
Differentiate the product from competitors.
Be capable of legal protection.
Be short, memorable, easy to spell and translate well into other languages.
Cobranding occurs when two companies put their brand names on a product:
Yahoo! Visa shopping pages
EarthLink-Sprint
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13. Internet Domain Names
A URL (Uniform Resource Locator) is a Web site address.
Also called an address or domain name.
Domain names contain several levels.
The second-level is often the name of the company.
The top-level may be .com or a country name, such as .mx for Mexico.
ICANN is a nonprofit corporation that makes decisions about protocol and domain name assignment, registration, etc.
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14. Largest Top-Level Domain Names
Domain Designation
Top Level Domain Name
Number of Hosts
(millions)
net
Networks
103.0
com
Commercial
94.7 jp
Japan
13.1
edu
Educational
7.8 it
Italy
5.5 uk
United Kingdom
4.3 ca
Canada
3.6 de
Germany
3.5 nl
Netherlands
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15. Registering a New Domain Name
Sites such as VeriSign provide domain registration services.
More than 97% of words in the dictionary have already been registered as domain names.
Picking the right domain name can make a huge difference.
Directing people correctly to a site.
Building consistency in marketing communications.
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16. Registering a New Domain Name
What happens if the firm name has been registered by someone else?
Come up with alternative names: DeltaComm, a software developer was the first to register before Delta Airlines (originally
Buy the name from the currently registered holder.
Bob.com
Many creative Netizens register lots of popular names and offer them for sale at prices of up to millions of dollars:
GreatDomains.com allows users to buy and sell popular domain names.
Name squatters
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17. Have an Extra $1.5 Million to Spare? Buy www.ad.com.
Source: GreatDomains.com
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19. 3. Support Services
Customer support is a critical component in the value proposition.
Customer service reps help customers with installation, maintenance, product guarantees, etc. to increase customer satisfaction.
CompUSA combines online and offline channels to increase customer support.
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20. 4. Labeling Labeling has digital equivalents in the online world.
Online “labels” provide information about installing and using software.
Online “labels” also provide extensive legal information about the software product.
Online firms may add the Better Business logo or TRUSTe privacy shield to their sites.
SSL Certificates
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21. Microsoft’s Terms of Use Label
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22. Customer Codesign
Business and consumer collaborations are possible on the Internet.
Software developers often seek customer input about new products.
They often allow users to download new products, test them, and provide feedback.
Customer interaction has been found to increase product success.
Amazon seeks customers’ product reviews.
Latest Internet C0-design product
Skins
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23. Product Mix Strategies
Companies can choose among six categories of new-product strategies.
Firms will select one of the following strategies, based on marketing objectives, risk tolerance, resource availability, etc.
Discontinuous innovations: new-to-the-world products.
TV, CD’s
New-product lines: new products in a different category for an existing brand name.
Microsoft IE’s, Honda’s Ridgeline Truck
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24. Product Mix Strategies, cont.
3. New variation of a current product line.
On-line stock trading
4. Improvements or revisions that replace an old product.
“new and improved” Ford hybrid Escape
5. Current products targeted to different markets or promoted for new uses.
Yahoo! (search->Portal->Life Engine)
6. Me-too lower-cost products.
Apple iPod Clones
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25. Taxonomy of Internet Products
Content Provider
B2B Market
Internet
Infrastructure
End User
B2C and C2C Markets
Hardware
Server farm, high- speed switch
Router, satellite, fiber-optic backbone
Modem, PC, WebTV, PDA, assistive technologies convergence products
Software
Web authoring, encryption, audio/video digitizing
enabling software
Protocols, TCP/IP, DNS
Web browser, client, decryption, audio/video player software
Services
E-commerce consulting, Web development, Web design, application service providers
ISP, backbone service provider, Web hosting
Web-based virus scan, auto updates, calendaring,
Products can be classified according
to the customers to
whom they appeal.
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