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Chapter 4
E-Commerce:
Marketing in the
Digital Age
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Chapter Objectives
1. Define e-commerce and give examples of each function of
the Internet.
2. Describe how marketers use the Internet to achieve their
firms’ objectives.
3. Explain how online marketing benefits organizations,
marketers, and consumers.
4. Identify the goods and services marketed most often on the
Internet and the demographic characteristics of the typical
online shopper.
5. Identify the primary online marketing channels.
6. Explain how marketers use interactive tools as part of their
online marketing strategies.
7. Discuss how an effective Web site can enhance customer
relationships.
8. Describe how to measure the effectiveness of online
marketing efforts.
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What is E-Commerce?
Electronic commerce (e-commerce): Targeting
customers by collecting and analyzing business
information, conducting customer transactions,
and maintaining online relationships with
customers by means of computer networks.
Electronic marketing (e-marketing): Strategic
process of creating, distributing, promoting, and
pricing goods and services to a target market
over the Internet or through digital tools.
Digital tools: Fax machines, PDAs, smart
phones, and DVDs.
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Capability Description Example
Global reach The ability to reach anyone eBay—the online auction site
connected to a PC —links buyers and sellers
anywhere in the world throughout the world
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Capability Description Example
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Interactivity and E-Commerce
Interactive Marketing
Buyer-seller communications in which the
customer controls the amount and type of
information received from a marketer
through such channels as the Internet, and
virtual reality kiosks.
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The Internet
Over 132 million active users in the USA
Intranets
Internal corporate network that allows
employees within an organization to
communicate with each other and gain
access to organizational information
Extranets
Secure network accessible through a
Website by external customers or
organization for electronic commerce. It
provides more customer-specific
information than a public site.
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Four Web Functions
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Four Web Functions
Communication
E-mail; Instant messaging; Chat rooms
and bulletin boards; Online communities
Information
Search engines; Online publications;
Newsgroups; Internet forums; Electronic
bulletin boards; Web communities
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Four Web Functions
Entertainment
Games; Radio and TV programming,
including music; Streaming video of live
news reports, sports, and musical
performances; Electronic books
E-Commerce
Online auctions
B2B: electronic exchanges; Extranets
and private exchanges
B2C: Electronic storefronts and
cybermalls; Web kiosks, Online
ticketing; Matchmaking
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Accessing the Internet
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E-Commerce and the Economy
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Benefits of Business-to-Business
Online Marketing
Finding new markets and customers
Cost savings in every area of the
marketing mix
Time reduced in reaching markets
Easy commerce
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Online Consumer Marketing
Lower Prices
Bots (short for robots): programs that
check hundreds of sites, gather and
assemble information, and bring it back
to the sender
Convenience
Worldwide access, Day or night,
Customized products and information
Personalization
Improves the quality of the shopping
experience
Improves customer satisfaction
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Benefits of Online Consumer Marketing
Relationship Building
Crucial to success
Online’s personalization helps
Easier for small businesses with small
budgets
Customer service is the key
Increased Efficiency
Greater profit margins
Educating customers online frees
salespeople from answering routine
questions
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Cost Reductions
Reduced start-up costs
Reduced operating costs
Frees funds for new marketing efforts
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Online Marketing is International Marketing
Examples of Global Web Sites
Netsprint.pl
Polish version of infoseek
Us.starmedia.com
Spanish- and Portuguese-language Star Media
Network
Homeuol.com.br
Universo Online, the largest Internet portal serving
Brazil
Sify.com
Offering users of Indian ancestry “all the India you
want to know.”
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Security and Privacy Issues
Critical factors in building a relationship online
Electronic signature
Credit card security
Authenticity of item offered
Payment guarantees
Fraud protection
Truste: Ensuring Internet Privacy
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Who Are the Online Buyer and Sellers?
Online buyers
Annual household income of $30K-$75K
Demographic continue to change
The next generation of online shoppers will be
more representative of offline consumers
Online sellers
At first, offered familiar products like books
and computer hardware
Now offering a wider variety of goods including
toys, groceries, consumer electronics and
prescription drugs
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Interactive Online Marketing
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Company Web Sites
Corporate Web sites and Marketing Web sites
Electronic Storefronts and Cybermalls
Advertising on Other Web sites
Banner ads; Pop-up ads; Search ads
Online Communities
Electronic bulletin boards
Other Interactive Marketing Links
Web kiosks
Smart cards
Virtual coupon and online sample
Blogs
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Creating an Effective Web Presence
Measuring
Effectiveness
Managing a
Web Site
Building an
Effective Web Site
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Building an Effective Web Site
Establish a Mission for the company’s site
Identify the purpose of the site
Satisfy customer needs and wants through a
clear site design
Managing a Web Site
Update the site frequently
Flag new merchandise and services
Ensure that site appears to be current
Update software as needed
Track costs and revenues
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Measuring Effectiveness of Online Marketing
An elusive task
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