1. E-Marketing and Customer Relationship Management6
E-Marketing and Customer Relationship Management

2. Objectives
To define electronic marketing and electronic commerce and recognize their increasing importance in strategic planning
To understand the characteristics of electronic marketing—addressability, interactivity, memory, control, accessibility, and digitalization—and how they differentiate electronic marketing from traditional marketing activities
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3. Objectives (cont’d)
To examine how the characteristics of electronic marketing affect marketing strategy
To understand how electronic marketing and information technology can facilitate customer relationship management
To identify the legal and ethical considerations in electronic marketing
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4. Marketing on the Internet Customer Relationship Management
Chapter Outline
Marketing on the Internet
Customer Relationship Management
Legal and Ethical Issues in E-Marketing
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5. Marketing on the Internet
Electronic Commerce (E-Commerce)
Sharing business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks
Electronic Marketing (E-Marketing)
The strategic process of creating, distributing, promoting, and pricing products for targeted customers in the virtual environment of the Internet
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6. Benefits of E-Marketing
Open and instantaneous flows of information
Enhanced customer service efficiencies
Worldwide scope of the electronic market
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7. Basic Characteristics of Electronic Marketing: Addressability
Addressability is a marketer’s ability to identify customers before they make a purchase
How e-merchants attain addressability
Limit access to areas of their website to encourage customer registration
Offer contests and prizes in exchange for consumer information
Place “cookies” on visitor’s computer to track visitor usage and preferences
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8. Basic Characteristics of Electronic Marketing: Interactivity
Interactivity is the ability to allow customers express their needs and wants directly to the firm in response to the firm’s marketing communications
Real-time interaction with customers
Broader market coverage at a lower cost
Community refers to a sense of group membership or feeling of belonging
Virtual communities on the Web
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9. Basic Characteristics of Electronic Marketing: Memory
Memory is the ability to access databases or data warehouses containing individual customer profiles and past purchase histories and to use these data in real-time to customize a marketing offer.
A database is a collection of information arranged for easy access and retrieval.
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10. Basic Characteristics of Electronic Marketing: Control
Control refers to customers’ ability to regulate the information they view and the rate and sequence of their exposure to that information.
A portal is a multiservice website that serves as a gateway to other websites.
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11. Basic Characteristics of Electronic Marketing: Accessibility
Accessibility is the ability to obtain information available on the Internet.
Informs and educates the inquiring consumer about competing products and prices
Creates competition for the consumer’s attention
Helps make information available to employees to service customers
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12. Basic Characteristics of Electronic Marketing: Digitalization
Digitalization is the ability to represent a product, or at least some of its benefits, as digital bits of information.
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13. E-Marketing Strategies
E-Marketing Strategy Considerations
Distribution Systems
Target Markets
Product Marketing
Promotion Mediums
Pricing
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15. Customer Relationship Management
Focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships
A focus on CRM is possible in e-marketing because of marketers’ ability to target individual customers.
The ability to identify individual customers allows marketers to shift their focus from increasing share of market to increasing share of customer.
CRM is often based on the use of information technology.
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16. 80 percent of business profits come from 20 percent of customers.
The 80/20 Rule
80 percent of business profits come from 20 percent of customers.
Technology allows marketers to profile customers in real-time and assess their lifetime value (LTV) to the firm.
Some customers may be too expensive to retain given the low level of profits they generate.
Firms should focus on developing and managing long-term relationships with more profitable customers.
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17. Technology Drives CRM Customer support and call center software
Provides customer interaction and improved service
Captures information about all interactions
Sales automation
Links sales force to applications that facilitate selling and providing service
Provides information to determine the best solution for customers
Determines order status, tracks deliveries, and identifies service problems
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18. Technology Drives CRM (cont’d)
Should not be used just as a cost-reduction tactic
Should not be overwhelmed by gathering unnecessary data
Should be used as a tool to sustain long-term relationships
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19. Legal and Ethical Issues in E-Marketing
Personal privacy issues
Unauthorized placement of cookies on personal computers
Website information requirements for registration
Collection of information from children
Use of spyware in software
Spam
Unsolicited commercial (UCE)
Misappropriation of intellectual property
Illegal copying of copyrighted software, movies, CDs, and other creative materials
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20. The BBBOnLine Privacy Seal and Program Explanation
Reprinted by permission of the Council of Better Business, Inc.
FIGURE 4.1
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23. After reviewing this chapter you should:
Be able to define electronic marketing and electronic commerce and recognize their increasing importance in strategic planning.
Understand the characteristics of electronic marketing—addressability, interactivity, memory, control, accessibility, and digitalization—and how they differentiate electronic marketing from the traditional marketing environment.
Copyright © Houghton Mifflin Company. All rights reserved.

24. After reviewing this chapter you should:
Have examined how the characteristics of electronic marketing affect marketing strategy.
Understand how electronic marketing and information technology can facilitate customer relationship management.
Be aware of legal and ethical considerations associated with electronic marketing.
Copyright © Houghton Mifflin Company. All rights reserved.