2. © 2001 South-Western College Publishing 1 CHAPTER FOURTEEN INTERNET MARKETING

3. © 2001 South-Western College Publishing 2 A NEW BUSINESS FRANCHISE X The Internet is more than just an advertising tool - it is a new business franchise. X Customers can do many of the same things at a virtual store as at a brick-and-mortar store: 1. Find out about products and services you sell 2. Get answers to questions 3. Leave messages for people in the firm 4. Solve problems 5. Learn more about your company 6. Make purchases

4. © 2001 South-Western College Publishing 3 PLAYING IN THE BIG LEAGUE X Internet marketing available to all sizes and types of firms X Elements essential for survival: \Offer products customers want, need, or desire \Use promotion to create awareness \Ensure products available when customer wants \Sell products at fare exchange

5. © 2001 South-Western College Publishing 4 THE CUSTOMER IS KING X Direct selling over the Internet has changed the traditional business model by: \Eliminating intermediaries \Enhancing the two-way communication between company and customer

6. © 2001 South-Western College Publishing 5 THE WORLD IS YOUR MARKET X Only 2.5% of world population is online X Enormous potential in Europe \Must pay attention to cultural differences X Even greater potential in Asia and South America \Will take longer to realize gains here because nations are less developed in general

7. © 2001 South-Western College Publishing 6 FORMS OF INTERNET MARKETING X EMAIL X NEWSLETTER AND DISCUSSION LISTS X ADVERTISING X RETAILING

8. © 2001 South-Western College Publishing 7 FORMS OF INTERNET MARKETING - EMAIL X UNTARGETED EMAIL MARKETING \Send email to long lists of addresses regardless of whether recipients are interested in message X TARGETED EMAIL MARKETING \Recipients are qualified - they express interest in receiving messages on your topic before you send the email

9. © 2001 South-Western College Publishing 8 FORMS OF INTERNET MARKETING - NEWSLETTERS X NEWSLETTERS (ezines) \focused on a topic \generate ad revenue \free to recipient X DISCUSSION LISTS \allow dialogue between all recipients of list \exchange of ideas \ability to soft-sell products

10. © 2001 South-Western College Publishing 9 FORMS OF INTERNET MARKETING - ADVERTISING X Growing faster than any other media X Expected to reach $7.4 billion in 2000 X Three main types: \Banner Ads c56% of Web Ad dollars \Sponsored Web sites c30% of Web Ad dollars \Interstitial Ads c5% of Web Ad dollars c(balance of dollars on miscellaneous advertising)

11. © 2001 South-Western College Publishing 10 FORMS OF INTERNET MARKETING - RETAILING X 1999 revenues of $10 to $15 billion X High-growth sector (112% estimated for year 2000) X Advantages: \convenience of24 / 7 shopping year round \home delivery \mass customization means more personalized sites X Disadvantages: \cannot evaluate physical products before purchase \no human contact

12. © 2001 South-Western College Publishing 11 INTERNET DEMOGRAPHICS AND TRENDS X THREE FACTORS INFLUENCE ONLINE BUYING BEHAVIOR 1. Attitude toward technology 2. Income 3. Motivation to use the technology X ACCORDINGLY, CONSUMERS CLASSIFIED THREE WAYS 1. Early adopters 2. Mainstream 3. Laggards

13. © 2001 South-Western College Publishing 12 INTERNET MARKETING DEMOGRAPHICS X CONSUMERS CLASSIFIED THREE WAYS: 1. Early adopters 2. Mainstream 3.Laggards \embrace technology \income to purchase when introduced \waits to acquire technology because ctoo expensive creticent to use \pessimistic about technology \low income

14. © 2001 South-Western College Publishing 13 MARKETING RESEARCH ON THE WEB X SECONDARY DATA \Electronic versions of popular business publications \Suppliers of MR data at no cost \Suppliers of MR data for a fee X PRIMARY DATA \Email surveys \Web surveys \Cyber focus groups creal-time data collection cgraphical, interactive meeting cgreater geographic distribution of participants

15. © 2001 South-Western College Publishing 14 TARGETED INTERNET MARKETING X Conventional media PUSH marketing messages at consumer X Consumers PULL Internet marketing messages to themselves

16. © 2001 South-Western College Publishing 15 BRANDING ON THE WEB X For an established brand, need to present unified message with Internet marketing X Internet marketing can strengthen product branding X A company’s site can be its brand

17. © 2001 South-Western College Publishing 16 FORMS OF VIRTUAL BUSINESS X CONSUMER- ORIENTED X COMPANY- ORIENTED Increased product information 24/7 site accessibility at home delivery Develops tighter relatioships with suppliers and clients Increases sharing of business information

18. © 2001 South-Western College Publishing 17 CREATING AN INTERNET MARKETING PLAN 1. Purpose / goal 2. Target audience 3. Marketing mix 4. Integrated marketing strategy 5. Resources 6. Evaluation

19. © 2001 South-Western College Publishing 18 CREATING AN INTERNET MARKETING PLAN - THE GOAL Before setting the goal, decided how the Internet can be used by your organization 1. Increase/enhance company exposure 2. Improve customer service 3. Provide new products / services 4. Add value to existing products / services 5. Lower overall costs for the company 6. Create one-to-one relationships with customers 7. Others

20. © 2001 South-Western College Publishing 19 CREATING AN INTERNET MARKETING PLAN - DEFINING THE TARGET IMPLICATIONS OF PULL STRATEGY - Companies must identify the interests of their audience which will compel people to seek out the organization’s Web site

21. © 2001 South-Western College Publishing 20 CREATING AN INTERNET MARKETING PLAN - THE MARKETING MIX ProductPromotion Determine Consider suitability push vs. pull of item for strategies Internet sale PlacePrice No fixedGreater price locationpressure but no direct contact with customer

22. © 2001 South-Western College Publishing 21 CREATING AN INTERNET MARKETING PLAN - INTEGRATING CONVENTIONAL AND INTERNET 1. Use Internet to AUGMENT current strategies, not to REPLACE them X evaluate the role of the Internet in the marketing strategy X combine Internet with other media and channels to give greater coverage 2. Use IMC - message should be clear and consistent across all venues

23. © 2001 South-Western College Publishing 22 CREATING AN INTERNET MARKETING PLAN - ESTABLISHING THE BUDGET FACTORS AFFECTING THE BUDGET 4 Prior experience in developing & running Internet marketing program 4 Degree of program sophistication 4 Availability of internal resources (money & personnel for development and maintenance) 4 Magnitude of the program 4 Dynamics of the program

24. © 2001 South-Western College Publishing 23 EVALUATING THE OUTCOMES QUANTITATIVELY \Number of hits QUALITATIVELY \Registry of visitors \Clickstream Apply knowledge to less successful pages of site

25. © 2001 South-Western College Publishing 24 TRENDS THAT WILL IMPACT INTERNET MARKETING X VIRTUAL PRODUCTS X ORGANIZATIONAL STRUCTURE X VIRTUAL COMMUNITIES X GLOBALISM The Internet will continue to affect the conventional ways business is conducted

26. © 2001 South-Western College Publishing 25 TRENDS - ATOMS VERSUS BITS X Redistribution of revenue X Silent winners -UPS, FedEX, USPS X Increasing development of non-physical products From brick-and- mortar operations Online operations

27. © 2001 South-Western College Publishing 26 TRENDS - AGILE ORGANIZATION TECHNIQUES FOR SUCCESS Cultivate acute paranoia Foster creative and strategic thought Create an agile organization Create team- based organizations

28. © 2001 South-Western College Publishing 27 TRENDS - VIRTUAL COMMUNITY X More people participating in virtual communities \people feel more comfortable making purchases and conducting business in the security of the community X Business-oriented Internet communities are increasing in number \information seekers \bring together prospects, buyers, and sellers \target specific business interests

29. © 2001 South-Western College Publishing 28 TRENDS - GLOBAL VILLAGE ISSUES AFFECTING GLOBAL INTERNET MARKETING technology number of language culture users barriers For Internet marketing programs to be successful in the future, firms must carefully consider these issues