Ch02 - Adapting Marketing to the New Eco
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Transcript of Ch02 - Adapting Marketing to the New Eco
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8/13/2019 Ch02 - Adapting Marketing to the New Eco
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Copyright 2003 Prentice-Hall, Inc.
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Chapter 2
Adapting Marketing To TheNew Economyby
PowerPoint by
Milton M. Pressley
University of New Orleans
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The I nternet wil l
create new winnersand bury the
laggards.
Kotler on
Marketing
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Chapter Objectives
In this chapter, we will address thefollowing questions:
What are the major forces driving the New
Economy? How are business and marketing practices
changing as a result of the New Economy?
How are marketers using the Internet,customer databases, and customerrelationship management in the NewEconomy?
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Adapting Marketing to the
New Economy Major Drivers of the New Economy
Digitization and Connectivity
Disintermediation and
Reintermediation
Customization and
Customerization
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Procter & Gambles Reflect.com site allows customers
to design their own beauty products
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Adapting Marketing to the
New Economy
Industry Convergence
How Business Practices are Changing
Organize by product units to organize bycustomer segments
Shift focus from profitable transactions to
customer lifetime value
Shift focus from financial scorecard to also
focusing on the marketing scorecard
Shift focus from shareholders to stakeholders
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Table 2-1: Old Economy vs. New Economy
Old Economy New Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial
scorecard
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction
measurement
Overpromise, underdeliver
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
Focus on stakeholders
Everyone does the marketing
Build brands through behavior
Focus on customer retention and
growth
Measure customer satisfaction and
retention rate
Underpromise, overdeliver
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Adapting Marketing to the
New Economy Everyone does the marketing
Build brands through performance,not just advertising
Customer retention ratherthan customer acquisition
From none to in-depth customer
satisfaction measurement From over-promise, under-deliver to
under-promise, over-deliver
The New Hybrid
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How Marketing Practicesare Changing: E-Business
E-business E-commerce
E-purchasing
E-marketing Internet Domains: B2C
(Business to Customer)
Adapting Marketing to the
New Economy
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Customers can shop online at Calyx and Corolla or
ask for a catalog and shop by phone
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Adapting Marketing to the
New Economy
Internet Domains: B2B
(Business to Business)
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Figure 2-1:The Supplier-
Customer
Relationship:
Traditional and
New Economy
Structures
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www.transora.com: global online marketplace for
the consumer packaged goods industry
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Adapting Marketing to the
New Economy Internet Domains: C2C
(Consumer to Consumer)
Internet Domains: C2B(Customer to Business)
Pure Click vs. Brick andClick Companies
Pure-click companies
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CarPoint, leading metamediary for car buying, is a pure
click company: It exists only on the Web.
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Adapting Marketing to the
New Economy
Brick and Click companies
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Which is more important for
developing an e-presence: the agility
of a pure click company, or the well
defined and readily identifiable
resources of a traditional
brick and mortarcompany?
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Adapting Marketing to the
New Economy How Marketing Practices are Changing:Setting Up Web Sites
Designing an Attractive Website
Seven elements of effective sites
Context
Content
Community
Customization
Communication
Connection
Commerce
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Would you be willing to give up one or
more of the seven elements of an effective
web site in order to speed the deploymentof a new company e-commerce site?
What would the expected trade-offs be
between an effective siteand an early web
presence?
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Attracting and Keeping Visitors
How can we get more prospects to know and visit our site?
How can we use marketing to spread word-of-mouth?How can we convert visitors into repeaters?
How do we make our site more experiential and real?
How can we build a strong relationship with our customers?
How can we build a customer community?
How can we capture and exploit customer data for up-sellingand cross-selling?
How much should we spend on building and marketing our
site?
Advertising on the Internet
What are the various ways that we can advertise on theInternet?
How do we choose the right sites for placing our ads or
sponsorship?
Table 2-2:
Setting
Up aDot-com
Presence
See text for complete table
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Adapting Marketing to the
New Economy
Context factors
Content factors
Getting feedback
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Adapting Marketing to the
New Economy Placing Ads and Promotions Online
Banner ads
Sponsorships
Microsite
Interstitials
Browser ads
Alliances and affiliateprograms
Push
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Infogate.com pushes targeted content and ads to those
who are interested in a product or product category
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Adapting Marketing to the
New Economy Building a Revenue and Profit Model
Advertising income
Sponsorship income
Membership andsubscriptions
Profile income
Product and servicesales
Transaction commissionand fees
Market research/information
Referral income
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Adapting Marketing to the
New Economy How Marketing Practices are Changing:
Customer Relationship Marketing
Reduce rate of customer defection Increase longevity of
customer relationship
Enhance growth potential
through cross-selling and up-selling
Make low profit customers more profitable
or terminate them
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Adapting Marketing to the
New Economy
Focus disproportionate efforton high value customers
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Table 2-3: Mass Marketing vs.
One-to-One Marketing
Mass Marketing One-to-One MarketingAverage customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
Mass promotion
One-way message
Economies of scale
Share of market
All customers
Customer attraction
Individual customer
Customer profile
Customized market
offering
Customized productionIndividualized distribution
Individualized message
Individualized incentives
Two-way messages
Economies of scope
Share of customer
Profitable customers
Customer retention
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Adapting Marketing to the
New Economy Four steps for One-to-One Marketing
Dont go after everyone,
identify prospects. Define customers by their needs
and their value to the company.
Individual interaction with customersbuilds stronger relationships.
Customize messages, services, andproducts for each customer.
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Adapting Marketing to the
New Economy
Customer Databases and
Database Marketing
Customer mailing list
Business database
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Data Warehouses and Data Mining Using the database
To identify prospects
To determine target market
To deepen customer loyalty
To reactivate customerpurchases
To avoid serious customer
mistakes
The Downside of DatabaseMarketing
Adapting Marketing to the
New Economy