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Week 3: E-Marketing
Value creation
Value created is the difference between the consumers perceived benefit from a given product and the firms cost of providing that product. (J. and E. pg 96) Perceived Benefit What the customer values in a product or service Cost All cost incurred in the provison of the product or service Value
Difference between benefit and costs
The 5 Ps of Marketing
Product Price Place Promotion & People Packaging
Product
Has it?
Sold well in the past via catalogues
Is it?
A service (finance, travel etc) In demand
Does it?
Lend itself to new marketing strategies
Price
Is it? Affordable Cheaper than physical shopfront equivalent Can we? Have special offers, incentives Reduce advertising costs Get the customer to do most of the work
Place
Physical location of site not important Market is much larger global Global -> more competition Consider geographic, legal and cultural boundaries Consider marketplace (Are we easy to find?)
Packaging
Cyber product must appeal to customer Should look professional Offer incentives Discounts Club memberships
Market Segmentation
Market segmentation
identify specific customers within specific markets - segments target segments with advertising messages
Segments
Usually defined in terms of demographic characteristics, age, gender, income etc
Micromarketing
Targeting very small market segments
Market Segmentation
Geographic segmentation (location)
Creating different combinations of marketing efforts for each geographical group of customers, country, city, neighbourhood, etc
Demographic segmentation
Uses age, gender, family size, income, education, religion, or ethnicity to group customers needs and preferences
Behavioural segmentation
Based on usage rates of products and services
http://www.anz.com/default.asp
Internet Retail:
http://www.internetretailer.com/er http://www.internetretailer.com/2010/09/08/mobilecommerce-comes-together
Acts as a broker between advertisers and Web sites that carry ads
Ad-blocking software
Prevents banner ads and pop-up ads from loading
AdBlock
Adblock - removes ads
(https://addons.mozilla.org/en-US/firefox/addon/1865/)
Software to turn off banner ads on WWW sites Disables push technology, blocks cookies, blocks pop-ups and popunders Turns off sounds and freezes multimedia, etc
Shopping Agents
Return detailed description of item, price, direct link to virtual store BestBookBuys: http://www.bestwebbuys.com/books/ cnet.com.au Problems
Blocking access Rebundling: (Product bundling is a marketing strategy
that involves offering several products for sale as one combined produc ing of goods)
Site Sponsorships
Web sites offer advertisers an opportunity to sponsor all or part of a web site Give advertisers a chance to promote products, services, or brands in a more subtle way - associates the sponsor with a product, event or set of information Helps build brand images and develop reputation rather than generate immediate sales
European mGov conference:
http://www.mgovernment.org/events/mgov2008/home.html
E-Mail Marketing
Sending one e-mail message to a customer can cost less than one cent if the company already has the customers e-mail address Conversion rate
percentage of recipients who respond to an ad or promotion
Opt-in e-mail
sending e-mail messages to people who request information on a particular topic
Affiliate site
Obtains the benefit of the selling sites brand in exchange for the referral
Cause marketing
Affiliate marketing program that benefits a charitable organization
Brand Image
Key asset for building customer loyalty Organisations can use the web to affirm or build corporate identity or brand image E.g: Nokia Coca cola Ferrari
Branding
Elements of branding include: Differentiation
Company must clearly distinguish its product from all others
Relevance
Degree to which a product is useful to a potential customer
Perceived value
Key element in creating a brand that has value
Customer Relations
Commonly little consultation with customers regarding web site design Can be richer than buyer-seller Provide related information Attract other interested parties Encourage participation in surveys
E.g.Qantas: http://www.qantas.com.au/travel/airlines/hom e/au/en
Why CRM?
Customers drive e-business Customers want
Prompt excellent service
Organisations need to understand their customers/clients from a multi-faceted point of view Improving customer satisfaction & increasing revenue from existing customers is seen as critical for survival
Customer retention: turn existing customers into repeat customers and keep them for as long as possible. Customer extension: involves cross selling to existing customers
Cargo agent, money orders, retail travel, credit cards & travellers cheques, financial services
May involve
Personalised web pages Proactive notification of upgrades, promotions etc
References
Jelassi and Albrecht (2005) Strategies for E. Business Creating Value through Electronic and Mobile Commerce Concepts and Cases, Prentice-Hall Chap 4, 5 Turban, E., Lee, J.K., King, D., McKay, J. and Marshall, P. (2008). Electronic Commerce: A Managerial Perspective (5th ed.). Prentice Hall, New Jersey, Chap 2. Schneider, G (2007). Electronic Commerce. Thomson Learning. Chapter 3 Lawrence, E., Newton, S., Corbitt, B., Lawrence, J., Dann, S. And Thanasankit, T. (2003) lnternet Commerce: Digital Models for Business 3rd edition, John Wiley & Sons, Brisbane, Chapter 7 Kalakota, R. and Robinson, M. (1999) e-Business: Roadmap for Success Addison-Wesley Longman, Reading, MA. Chapter 5