Master of Business Administration - MBA Semester 4

MK 0017 E-MARKETING
(4 credits)
(Book ID: B1810), WINTER 2016

Q 1 Define E-Customers with some examples. Also explain the Online buying
process.

Ans. The e-customer is a person with whom a business transaction occurs

electronically. E-customers receive or consume products that are sold online with the
help of the Internet. Given that this is a relatively new channel of business, the
companies that operate online business need to learn how to build and retain the e-
customer base and also attract new ones. The main difference with a traditional
customer is that the latter goes to a bricks-and mortar store, where he interacts with
the sales staff personally. On the other hand, information regarding the e-customer is
gathered in an indirect manner. The Web server maintains a log file in which
information about the customers interaction with the Website is recorded. This
includes the browser details, the device and the operating system, the pages the
customer visited, how long he spent on the pages, and so on. This is put though
specialized software which analyses the trail of mouse left by the customer, very much
like the footprints left by a person who walks on soft earth.

ONLINE BUYING PROCESS

Placement of order by e-customer: The customer browses the Website, selects the
products and places them in the cart and then orders. At this stage, the customer will
be required to submit his address and contact details. He will select the mode of
payment. The customer needs to have a credit or debit card. These days, there are
popular payment gateways such as Google Checkout, which are recommended by
experts

A payment gateway is an e-commerce application service provider service that

authorizes payments for e-businesses and online retailers. It is similar to a physical
point of sale terminal found in retail outlets. This application protects details of credit
card by encrypting sensitive information, such as credit card numbers, to ensure that
information is passed in a secured manner between the merchant and the customer and
also between merchant and the payment processor.

Processing of Request: The customers order is processed by the site. This involves
sending the request to the payment gateway, which in turn sends a confirmation
request to the concerned bank. The bank transfers the amount to the sellers account
and confirms the status to the payment gateway. This is intimated to the online seller,
who then ships the products to the buyer.
Receipt of purchased goods: The products are sent to the customer, who receives it
and this is confirmed to the seller. In some cases, payment is done through cash on
delivery mode. Cash on delivery (COD) is a transaction process where the payment is
made after delivery of a product and in some cases services. The product is purchased
from a third party and a collect call charge is levied on the recipient.

Q 2 An electronic marketplace (e-marketplace) refers to a website created for

common interest. It integrates the online and physical component of a company.
Discuss the five kinds of partners in an e-marketplace.

Ans. An electronic marketplace, or e-marketplace, refers to a Web site and portals or a

set of linked sites that are common interest to particular types of customers. The e-
marketplace model has come to be a very effective one, which integrates the online
and physical component of a company. It has in many ways helped business partners
to establish a dot.com strategy in their company. e-marketing, which was expected to
overtake physical stores, has not been able to bring in mass success as compared to the
traditional way of marketing. The e-marketplace marketplace and online technology
have not outdated the traditional selling. A problem of this mix that the retailers often
face is show rooming. Best Buy suffers the most among US retailers from show
rooming. E-marketing has in fact become a support system to the traditional business
arena. Thus, most of the e-business companies today are trying a mix of these two
concepts.

There are five kinds of partners in an e-marketplace:

o Private
o Sell-side
o Buy-side
o Public & Consortia
Private: Private e-marketplaces, which are owned and set up by individual
companies to deal with their own suppliers and buyers. They could be sell-side
and/or buy-side e-marketplaces. Private e-marketplaces are similar to public e-
marketplaces in terms of function and infrastructure, but their use is restricted
to the company and its employees.

Sell-side: The sell-side e-marketplace would be the operations of the e-market,

wherein the products are actually being sold to the customers. Here, the
operations of logistics and delivery are supreme.
 Buy-side: The buy-side e-marketplace would be the interface of the e-
marketplace where the consumers will buy the product. Thus, the payment,
interaction, pricing would come under the buy side of the e-marketplace.

Public: Public marketplaces are independent Internet-based trading platforms,

usually owned and/or managed by an independent third party. Such an e-
marketplace represents a community of many buyers and sellers, and where
every seller is given equal weight. These are also known as exchanges or third
party marketplace.

Consortia: These are internet locations owned jointly by consortia of industry

leaders, which allow other companies or individuals to get new suppliers or
buyers for their products as well as develop trading networks which makes
negotiating, settlement and delivery easier and more efficient. Consortium
marketplace provides large networks of suppliers, including distributors and
sellers, to the founding companies. Suppliers and buyers also benefit by joining
such a network.

Q 3 Discuss about web analytics. List and explain the visitor statistics can be gained
by using metrics

ANS. Web analytics is referred to as the collection, measurement, analysis and

reporting of Internet data for the purposes of understanding and optimizing Web
usage. Web analytics not only serves as a tool for measuring Web traffic, but can also
be used as a tool for business and market research, and to assess and improve the
effectiveness of a Website.

There are two types of Web analytics; off-site and on-site Web analytics. Off-site Web
analytics refer to Web measurement and analysis of a Website taken at random,
independent of whether you own or maintain a Website. It gives an account of a
Websites potential audience (opportunity), share of voice (visibility), and buzz
(comments) that is happening on the Internet as a whole.
The visitor statistics could be gained by using metrics like:-

Hit: A request for a file from the Web server. The number of hits received by a
Website decides its popularity; at the same time, this could be extremely
misleading and could overestimate the popularity of the Website

Page view: A request for a file whose type is defined as a page in log analysis.
This would be a script being run in page tagging. In log analysis, a single page
view may generate multiple hits as all the resources required to view the page
(images, .js and .css files) are also requested from the Web server.

First visit/first session: This is the Absolute Unique Visitor who has not
made any previous visits to the Website.
Visit/session: A visit could be said to be a series of page requests from the
same uniquely identified client with a gap of less than 30 minutes between each
page request. A session ends when someone goes to another site or it takes
more than 30 minutes to review another, whichever comes first.
Unique visitor/unique user: This would be a uniquely identified client who
generates requests on the Web server (log analysis) or viewing pages (page
tagging) in a said time period (like Sundays). The same person visiting from
two different computers will be counted as two unique visitors.
Impression: An impression is each time an advertisement loads on a users
screen like a banner.
Repeat visitor: This would be a visitor who has made at least one previous
visit. The period between the last and current visit is called visitor recency and
could be judged in days.
Singletons: The number of visits where only a single page is viewed.
% exit: The percentage of users who exit from a page.
Visibility time: The time for which a single page is viewed.
 Bounce Rate: The percentage of visits where the visitor enters and exits at the
same page without visiting any other pages.
Session duration: Average amount of time that visitors spend on the site each
time they visit.
Click path: the sequence of hyperlinks one or more Website visitors follow on
a given site.
Page View Duration/Time on Page: Average amount of time that visitors
spend on each page of the site.
Page depth/page views per session: Page depth is the average number of page
views by a visitor before ending their session.
Q4 Write a short notes on :
A. Any five points on e-marketing as competitive advantage.
B. Virtuous cycle of e-marketing
ANS

A)

Convenience

Internet marketing enables you to be open for business around the clock without worrying
about store opening hours or overtime payments for staff. Offering your products on the
Internet is also convenient for customers. They can browse your online store at any time and
place orders when it is convenient for them.

Reach

By marketing on the Internet, you can overcome barriers of distance. You can sell goods in
any part of the country without setting up local outlets, widening your target market. You can
also build an export business without opening a network of distributors in different countries.

Cost

Marketing products on the Internet costs less than marketing them through a physical retail
outlet. You do not have the recurring costs of property rental and maintenance. You do not
have to purchase stock for display in a store. You can order stock in line with demand,
keeping your inventory costs low.

Personalization

Internet marketing enables you to personalize offers to customers by building a profile of

their purchasing history and preferences. By tracking the web pages and product information
that prospects visit, you can make targeted offers that reflect their interests. The information
available from tracking website visits also provides data for planning cross-selling campaigns
so that you can increase the value of sales by customer.

Relationships

The Internet provides an important platform for building relationships with customers and
increasing customer retention levels. When a customer has purchased a product from your
online store, you can begin the relationship by sending a follow-up email to confirm the
transaction and thank the customer. Emailing customers regularly with special, personalized
offers helps to maintain the relationship. You can also invite customers to submit product
reviews on your website, helping to build a sense of community.

Social

Internet marketing enables you to take advantage of the growing importance of social media.
An article on the Harvard Business School Executive Education website highlighted the link
between social networking and online revenue growth. According to the article, a group of
consumers that responded most strongly to the influence of social networks generated
increased sales of around 5 percent. You can take advantage of this type of influence by
incorporating social networking tools in your Internet marketing campaigns.

B) The virtuous cycle of online marketing

1. Create awareness

Creating awareness about your product is usually associated with promoting your product.
The underlying dynamic however is building trust. If you can gain an individuals trust,
youre likely to convert him or her into a customer and make a sale.

At first creating awareness can be extremely costly and time consuming.

2. Increase business

Increasing business is usually directly related to creating awareness. However if you havent
been able to build trust, you wont gain repeat business and youll only be able to rely on
creating awareness which is costly.

The underlying dynamic of increasing business is creating loyalty. If you have loyal
customers, you have repeat business and a customer base.

3. Build a customer base

Your customer base is what is going to keep you in business and help you expand as the
base grows. It is also a formidable asset to create more awareness. You will of course
create more awareness only if you deliver on your promises and you are able to sustain the
trust youve built.
Your biggest (and mostly free) reward for having a satisfied customer base is word of mouth
promotion. There is nothing more effective to promote a product or service than to have
someone you trust telling you about it.

Q 5 Functions of E-marketing are represented by 2P+2C+3S formula

(Personalisation, privacy, customer service, community, site, security, and sales
promotion). These functions form the framework of an e-marketing strategy.
Discuss this formula with a diagrammatic representation.

Ans. The 2P+2C+3S Formula in E-Marketing

The 4Ps model (product, price,promotion and place), which is based and built upon
the principles that are the same as in traditional offline marketing. The extra 3Ps
(people, processes and physical evidence) provided the whole extended marketing mix
required to cover the transactional activities involved in the delivery of services, in
contrast to traditional marketing, e-marketing is unique as it has a series of specific,
relational functions that can be represented by the 2P+2C+3S formula
(personalization, privacy, customer service, community, site, security and sales
promotion). The above-mentioned functions of the e-marketing form the framework
of an e-marketing strategy. These factors revolve around the concept of relational
functions and they are necessary components of an e-marketing strategy in order for it
to be efficient and deliver results. All the elements of the 2P+2C+3S
model of e-marketing mix are moderating factors that apply to all the 4Ps separately.

1. 2Ps

a. Personalization: This is an extremely important component of e-marketing, as

it recognizes and establishes a direct, personal relationship with a customer.
This way, some vital information about the customer is gathered which helps
the company to customize its service to that particular customer. For example,
if a visitor to Flipkart.com has been searching biographies, information on this
genre will be displayed to the user the next time. The information on the users
visit to the site is obtained by the logfiles.
b. Privacy: This factor is closely related to personalization, that is, how the
information about the individual user is obtained and stored. Also, who will be
able to use it and for what purpose. Thus, before initiating an e-marketing
strategy, the company must put in place a policy for the collection, storage and
usage of the data. Moreover, there should be checks and controls on the access
to the information. There are also legal and ethical requirements.

2. 2Cs

a. Customer Service: This is a necessary feature in any transactional service, and

any e-marketing programme will be incomplete without it. As with other
elements of the 2P+2C+3S model of e-marketing, customer service is a
moderating factor that applies to all the 4Ps separately.

b. Community: The community refers to the groups of clients or customers who

interact with the company. The larger the network and its reach, the better it is
for the success of the e-marketing programme.

3. 3S

a. Site: Site refers to the location where the e-marketing activities take place.
Generally, the site is the Website.

b. Security: This is an essential element in the e-marketing mix, in order to

ensure the security of the transactions over the Internet, which should not be
accessible to any outsider. Also, the information collected from the customer
should also be kept private and confidential. This should be clearly
communicated to the customer and be strictly enforced.

c. Sales promotion: This is also commonly adopted in traditional marketing, and

involves offers and discounts, etc, to attract customers and boost sales. In
emarketing, too, sales promotion is a good way to achieve a boost in sales in a
 short period. One such example is the GOSF promotion On 12 December 2012,
Google brought the Great Online Shopping Festival in India.

DIAGRAM :- The e-marketing mix: 2P+2C+3S formula

Q 6 Discuss the selling methods and sales promotion of E-marketing.

Ans. Selling methods comprise a body of methods used in the profession of selling,
also known as personal selling.

The major techniques used for selling are as follows:

Virtual Sales Staff

The Virtual Sales and Marketing Team solution immediately provides a company with
a senior team of sales and marketing professionals. It avoids the lengthy hiring process
for sales and marketing staff. The following are different methods of carrying out
virtual sales and marketing:

1. Crowdsourcing: This is a process that involves outsourcing tasks to a

distributed group of people. This process can occur both online and offline.
Crowdsourcing is different from ordinary outsourcing because a task is
outsourced to an undefined public as compared with a specific body, like paid
employees.

2. Microwork: Microwork is a series of small tasks that have been broken out of
a larger project and can be completed via the Internet. Microwork is considered
the smallest unit of work in a virtual assembly line. This is a crowdsourcing
platform where users perform small tasks.
 3. Crowdpurchasing: This means to leverage the collective purchasing power to
win the best possible deals. Group purchasing Websites like
groupbuyingsite.com could be the best example here.

4. Crowdfunding: This is the process of funding your projects by a multitude of

people contributing a small amount each in order to attain a certain monetary
goal. One example of a crowdfunding tool is Kickstarter, which is funding
creative projects. Kickstarter is a funding platform for creative projects.
Everything from films, games, and music to art, design, and
5. technology. Kickstarter is full of ambitious, innovative, and imaginative
projects that are brought to life through the direct support of others

6. Crowdvoting: This is a process of collecting opinions and judgment on a

certain topic by a Website. For example Inkfruit in India allows crowdvoting
on t-shirt designs. It is also crowdsourcing, because designing is open to
everyone. Wisdom of the crowd: With this method one collects large amounts
of information and aggregates it to gain a complete and accurate picture of a
topic, as per the idea that a group of people are often more intelligent than an
individual

Affiliate Marketing

Affiliate marketing is a performance-based marketing in which the company rewards

one or more affiliates for the number of visitors or customers which have been
brought by the affiliates own marketing efforts. There are four key players involved
in affiliate marketing: the merchant (or the retailer or brand), the publisher (or the
affiliate), the network (affiliate
payments and offers), and the customer. Affiliate marketing overlaps with other
Internet marketing methods as they are nothing but regular advertising methods.

Explanation Of Sales Promotion In E Marketing :-

Sales promotion is one of the seven ways of enhancing sales. The other six parts are
advertising, personal selling, direct marketing, publicity/public relations, corporate
image and exhibitions. The most common devices used in sales promotion include
incentive programmes and loyalty programmes.

Incentive Programmes

Retention of existing customers is a very important aspect of any business. All that
needs to be done for the retention of the existing customers is to make them feel
honoured and valuable to the company. Companies may use online emarketing to
record online customer needs and send them an instant mailer of delivery of products
ordered by them so that these instant mailers serve more as information notification
and record-keeping. The store can take advantage of this by offering promotions of
various kinds to get consumers to engage in a behaviour and feel good about doing it.
It can also enhance the effectiveness of the last stage of the supply chain management.
This will help the company position their products
and thus make the customer happy. These promotions for retaining the customers
range from discounts and offers to loyalty programmes and feel-good approaches such
as thank-you notes and birthday cards

Loyalty Programmes
This could be one way in which online e-marketing can help the company position
their products and thus make the online customer happy. Another way is promotions
for retaining the online customer range from loyalty programmes and feel-good
approaches, such as thank-you notes and birthday cards. Delivering to online
customers means keeping them active with you. If this is not done, they will slip away
and eventually no longer be online customers. Loyalty programmes like membership
cards encourage this interaction of online
customers with your company, even if you are just sending out a product on time and
this is where online e-marketing can help you keep a track of the same