E-MARKETING

Definition
E Marketing is the use of information
technology in the processes of
creating, communicating and
delivering value to customers and for
managing customer relations
Effects of E Marketing
Increases efficiency and effectiveness of
marketing
Transforms marketing strategies
Helps in identifying new business models
Adds to customer value and satisfaction
Increase company profits
Technology convergence

Benefit % Mentioning

Better quality customer relationships 61
More business development opportunities 50
Better brand visibility 50
Drive fat from supply chain 42
Reduce time-to-market 33
Increase customer quantity 25
E Marketing is bigger than the Web
E Marketing technology uses many other software
and hardware not related to the web
Non-web internet communication like emails, e -
fax, etc are effective marketing tools
Internet delivers text, audio, video, etc., to many
other devices not only to computers
Offline electronic data collection devices( bar
code readers, scanners)


E Marketing is bigger than technology
Individuals: Access to unlimited information;
Access to various forms of entertainment;
Connect with people; etc
Communities: Blogs; Social and Professional
networking
Business: Digitalized, cross functional
environment which drastically increased
efficiency and profitability
Societies: More efficient markets



Evolution of E-Marketing
Phase One:
Portals
Everywhere
Phase Two:
Simple
Transactions
Phase Three:
The
Digital Decade
1) Search engine marketing

2) Display Advertising

3) E-mail marketing

4) Interactive marketing

5) Blog marketing

6) Viral marketing

E-Marketing Methods
1) Search engine marketing

2) Display Advertising
3) E-mail marketing (ex. Health related emails)

4) Interactive Advertising 5) Blog Marketing

6) Viral Marketing (ex. Word of mouth)
Challenges
Low percentage of computer penetration
Internet connectivity
Low percentage of surfers entering into online
transactions
Credit cards
Cyber security
Cyber crime
Loss of personal touch in shopping
Legal issues (Trade mark, Domain name,
Copyright, Jurisdiction issues, etc.)
Mistaken purchases or auctions


Opportunities
E Marketing reduces prices
Huge potential for growth (70% rural population)
E Intermediaries
Affordable computers and internet connectivity
Desire of the customers


E Strategic Planning
Strategic planning is the managerial process of
developing and maintaining a viable fit between
the organizations objectives, skills and
resources and its changing market
opportunities Kotler

Incorporating digital technology into strategic
planning is e strategic


E - Business Models
Its a method by which the organization sustains
itself in the long term and includes its value
proposition for partners and customers as well
as its revenue systems
It describes a set of business entities and
interrelationships among them. The model
describes the sources of revenue and potential
benefits accruing to the involved business
participants




















Pure
Play

Enterprise


Business Process

Activity






Pure dot-com
(Amazon)


Click and Mortar
(eSchwab, most retailers)

Customer
Relationship
Management

Brochureware
E-mail
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f

b
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Business transformation
(competit ive advantage,
industry redefinition)


Effectiveness
(customer
retention)

Efficiency
(cost
reduction)

Exhibit 2 - 1 Level of Commitment to E-business
Source: Adapted from www.mohansawhney.com
Activity level E Business Models
increases efficiency, reduces costs & low risk
Online purchasing
Order processing
E mail
Content publisher
Business Intelligence
Online advertising
Online sales promotion
Pricing strategies

Business process level Model
Increases a firms effectiveness
Customer relationship management
Knowledge management
Supply chain management
Community building / Networking
Affiliate programs (link to anothers website)
Database marketing
Enterprise resource planning


Enterprise level E Business Models
Most business process are fully automated

E commerce (direct selling, content
sponsorship)
Portal- point of entry (yahoo)
Online brokers
Manufacturers agents
Purchasing agents (buyers cooperative)
Virtual mall


Pure Play
Pure plays = businesses that began on the Internet, even if
they subsequently added a brick-and-mortar presence.

E.g. E*Trade is a pure play, beginning with only online
trading

Pure plays face significant challenges: They must compete
as new brands and take customers away from established
brick-and-mortar businesses.

One way to change the rules is to invent a new e-business
model, as Yahoo! and eBay did.
Market Segmentation
Segmentation and Targeting
Companies must have in-depth:

Market knowledge,
A savvy segmentation,
Targeting strategy.

E-marketing strategic planning occurs in two highly
interrelated tiers:

The first tier = segmentation, targeting, differentiation,
and positioning,
Second tier = the 4Ps and CRM.

Sources, Databases, and Strategy: Tier 1 Strategies


Bases Geographics Demographics Psychographics Behavior
Identifying /
Profiling
Variable
Examples
City
County
State
Region
Country
Age
Income
Gender
Education
Ethnicity
Activities
Interests
Opinions
Personality
Values
Benefits
sought
Usage level
Brand
loyalty
User status
Fiesta Americana Site in Spanish and English
Posadas:
The leading hotel chain in Mexico,
Targets tourists in Mexican and United States markets.
Focuses heavily on the U. S. market and built its first site for the United
States because it recognized that Internet penetration was much higher.
Importance of Geographic
Segmentation
English
42%
Japanese
9%
German
7%
Portuguese
3%
Other
9%
Italian
4% Korean
5%
Dutch
2%
Chinese
9%
French
3%
Spanish
7%
Less Than Half of Web Users Access in English
Targeting Online Customers
E-marketers select among 4 targeting strategy:

1. Mass marketing = undifferentiated targeting = when the firm offers
one marketing mix for the entire market.

2. Multi-segment marketing = when a firm selects two or more
segments and designs marketing mix strategies specifically for each.
Most firms use a multi-segment strategy.

3. Niche marketing = when a firm selects one segment and develops
one or more marketing mixes to meet the needs of that segment.

4. Micromarketing, = individualized targeting = when a firm tailors all
or part of the marketing mix to a very small number of people.

The Internets big promise is individualized targeting =giving
individual consumers exactly what they want at the right time and
place.
Targeting Communities on the Internet
The Internet is ideal for gathering people with similar interests and
tasks into communities.

People join communities to feel connected with others who have the
following common interests:
44.8% with folks who share their hobbies;
31.5% with other professionals;
27.2% with family members;
15.7% in support groups

Targeting can be achieved by building community through online
chat rooms, discussion groups, bulletin boards, and online events.
Motivation: value received in both information and social bonding.
A firm needs to build and maintain the watering hole to present
products and messages customized to the groups interests.

Targeting Communities on the Internet
Two of the most publicized consumer community sites
include:
Yahoo! GeoCities: Members build Web pages that Yahoo!
hosts for free and also join in chats and bulletin board
postings geocities.yahoo.com.
Google groups provides Web access to the Usenet with
over 35,000 special interest bulletin board discussion
groups and 700 million community messages.

Business communities also play a big role in B2B
commerce.
Most professionals subscribe to discussion groups
containing information in their field, and many Web sites
promote community.


Consumers in the 21st Century
Internet usage is still growing.


Understanding online consumer behavior helps
marketers design marketing mixes that provide value
and thus attract and retain customers.
U.S./Canada
182.8 (33%)
Europe/Middle
East
141.6 (27%)
Asia Pacific
110.0 (21%)
Latin America
13.4 (3%)
Rest of World
83.5 (16%)
Developed nations = 15% of the worlds population
= 88% of all Internet users
Social and Cultural Issues
Consumers are accustomed to touching merchandise before buying
(Egypt and Mexico).

The marketplace = a social meeting place (Arab countries).

Consumers often have security and privacy concerns.

Payment = a problem in countries where the credit-card processing
infrastructure is weak.
Most consumers in some countries have no credit cards or bank
accounts, and local retailers accept only cash.

Lack of Internet education.
Technological Issues
Biggest barriers to Internet adoption:

Low PC penetration.
Communications infrastructure problems.
Arab countries, have only 49 telephones per thousand people
versus 133 phones per thousand people worldwide.
Internet connections, where they exist, are often slow and
unreliable.
Phone companies charge:
A per minute charge for local calls.
ISP charges for Internet access.
Postal services are not reliable in many countries.
Legal and Political Issues
Government censorship and regulation = slow Internet
adoption.


BUT a global community connected by the Internet should
emerge over time, fueled by:
The benefits of connecting multinational businesses,
The lure of B2B e-business activity,
Increasing consumer demand led by the younger generation.
Inside the Internet Exchange Process
What explain consumer buying behavior?

Stimuli = marketing communication messages and
cultural, political, economic, and technological factors.

Individual buyer characteristics = income level,
personality, psychological, social, and personal
aspects.

Consumers move through a variety of decision
processes based on situational and product attributes.

Inside the Internet Exchange Process

The e-marketing: ...creating exchanges that satisfy
individual consumer and organizational customers
objectives.

Exchange = act of obtaining a desired object from
someone by offering something in return.

Individuals bring their own characteristics + personal
resources (within a social, cultural, and technological
context) to the process as they seek specific outcomes
from an exchange.
Individual
Characteristics
Resources
Outcomes
Relationships
Entertainment
Media Consumption
Information
Transactions
Internet
Exchange
Cultural, Social, and Technological Contexts
Technological Context
The Internet = a utility in most of the nations.

E-marketers need to consider home connection speeds +
the changing landscape of digital receiving devices:

Connection with broadband (fast)
Access from a narrow band mobile handheld device
(or 56k modem in a PC): access news, weather, stock
quotes, and other data services that are low in graphics.

Technological Context


PC is not anymore the only way to communicate with
customers:

Digital receiving devices = PC, electronic pager, FAX
machine, iTV (interactive TV), voice mail, handheld
PDA, cell phone, and a other devices.

Need to learn which devices a firms customers and
prospects own and prefer to use for various purposes,
from communication through purchase and post
purchase service.
Social and Cultural Context

trends are affecting online exchanges:
Information overload overwhelms consumers.
Bunkering means people are staying at home more.
Security and privacy are major concerns.
Home and work boundaries are dissolving.
Anywhere, anytime convenience
Time poverty
Demanding expectations.
Self-service is required.
Sophisticated consumers
Personalization is becoming expected.
Easy.
Multiple channel shopping has become the norm.
Individual Characteristics Affecting Internet
Exchanges

Characteristics specific to Internet users:

A positive attitude toward technology.
Online skill and experience play an important role in the
exchange process.
Gender affects attitudes toward use of technology: Men
are more positive about Internet shopping.
Language: the Internet would be more useful it had more
content in the local languages of various countries.

Consumer Resources

For consumers:

VALUE = BENEFITS - COSTS

Costs = a consumers resources for exchange:
Money,
Time,
Energy,
Psychic costs.
Internet Exchange
When exchange occurs:

Browser bookmarks = quick jump to favorite online
retailer.
E-mail messages contain hyperlinks to bring consumers
directly to specific information, news reports, or
advertised specials.
The Internet has the added feature of automation to
facilitate exchange.
CNN.com sends one sentence e-mails several times a
day or week with breaking news for those who sign up
for the service.

Exchange Outcomes
What benefits do consumers get by exchanging all that
money, time, and energy?

Relationships,
Entertainment,
Media consumption,
Information gathering,
Transactions.


Each is ripe with marketing opportunity.
Outcome % Outcome %
Send e-mail 95 Chat in online discussion 23
Send instant message 48 Make Internet phone call 12
Share files with others (music,
video, games)
37 check e-mail on cell phone or
PDA
10
Visit online support group 36 Visit dating Web site 9
Entertainment
Outcome % Outcome %
Surf for fun 64 Listen/download music 37
Watch video or audio clip 51 Play a game 37
Download games, videos,
pictures
41 Visit adult Web site 14
Media Consumption
Outcome % Outcome
%
Get news 70 Political news / information
40
Check the weather 64 Sports scores
38
Listen to music from radio
station, music store,
recording artist
37
Information
Outcome % Outcome %
Hobby information 80 Find phone number /address 53
Map or driving directions 79 Research for school/training 53
Travel information 66 Financial 44
Books, movies, leisure
activities
63 A job 37
Health/medical 61 A place to live 29
Government site 57 Religious/spiritual 28
Research for job 54 Family history/genealogy 20
Buy & Shop for Products
Outcome % Outcome %
Research product before buying 75 Groceries 8
Buy a product 56 Charity donation 7
Buy/make travel reservation 42 Gamble 5
Bank online 23 Take class for college credit 5
Participate in online auction 20 Take any online class 5
Buy/sell stocks, bonds, mutual
funds
12