Part Two Using Technology for Customer Relationships in a Global Environment E-Marketing and...

Part TwoUsing Technology

for Customer Relationships in a

Global Environment

E-Marketing and Customer Relationship Management

44

Vis

Copyright © Houghton Mifflin Company. All rights reserved. 4–4

Marketing on the Internet

• Electronic Commerce (E-Commerce)

–Sharing business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks

• Electronic Marketing (E-Marketing)

–The strategic process of creating, distributing, promoting, and pricing products for targeted customers in the virtual environment of the Internet


Benefits of E-Marketing

• Open and Instantaneous Flows of Information

– Marketers and customers share information in real-time on prices, specifications, and product availability.

• Enhanced Customer Service Efficiencies

– Rapid response and always-on availability

• Worldwide Scope

– Opens markets to firms of all sizes


Basic Characteristics of E-Marketing

• Addressability

• Interactivity

• Memory

• Control

• Accessibility

• Digitalization


Basic Characteristics of Electronic Marketing: Addressability

• Addressability is a marketer’s ability to identify customers before they make a purchase

• How E-Merchants Attain Addressability

–Limit access to areas of their web site to encourage customer registration

–Offer contests and prizes in exchange for consumer information

–Place “cookies” on visitor’s computer to track visitor usage and preferences


Basic Characteristics of Electronic Marketing: Interactivity

• Interactivity is the ability to allow customers express their needs and wants directly to the firm in response to the firm’s marketing communications

–Real-time interaction with customers

–Broader market coverage at a lower cost

• Community refers to a sense of group membership or feeling of belonging

• Blogs are web-based journals where writers can editorialize and interact with others


Basic Characteristics of Electronic Marketing: Memory

• Memory is the ability to access databases or data warehouses containing individual customer profiles and past purchase histories and to use these data in real-time to customize a marketing offer.

• A database is a collection of information arrangedfor easy access and retrieval.


Basic Characteristics of Electronic Marketing: Control

• Control refers to customers’ ability to regulate the information they view and the rate and sequence of their exposure to that information.

–The Web is a pull medium because users control the information they view

–Marketers have to work harder and more creatively to retain customers at their web sites

• A portal is a multiservice web site that serves as a gateway to other web sites.


Basic Characteristics of Electronic Marketing: Accessibility

• Accessibility is the ability to obtain information available on the Internet.

–Informs and educates the inquiring consumer about competing products and prices

–Creates competition for the consumer’s attention


Basic Characteristics of Electronic Marketing: Digitalization

• Digitalization is the ability to represent a product, or at least some of its benefits, as digital bits of information.


E-Marketing Strategies

DistributionDistributionSystemsSystems

DistributionDistributionSystemsSystems

TargetTargetMarketsMarkets

TargetTargetMarketsMarkets

ProductProductMarketingMarketing

ProductProductMarketingMarketing

PromotionPromotionMediumsMediums

PromotionPromotionMediumsMediums PricingPricingPricingPricing

E-MarketingE-MarketingStrategy ConsiderationsStrategy Considerations

E-MarketingE-MarketingStrategy ConsiderationsStrategy Considerations


Types of Advertising on Web Sites


Most Popular Daily Internet Activities

Daily Online Activity % Internet Users Engaging

Send e-mail 49

Get news 31

Use a search engine to find information

30

Check the weather 22

Do an internet search to answer a specific question

21

Surf the Web for fun 21

Research a hobby or interest 20

Source: “Daily Internet Activities,” Pew Internet & American Life Project, March 2, 2005, www.pewinternet.org/trends/Daily_Activities_3.02.05.htm.


E-Commerce by Ethnicity

Source: Robyn Greenspan, “Online Asians Lead in Income, E-Commerce,” ClickZ, March 15, 2004, www.clickz.com/stats/big_picture/demographics/print.php/3326041.

Group % making 1+ online purchase/ year

% making 5+ online purchases/ year

Asian 56 31

White 45 26

Hispanic 28 14

Black 27 12

TOTAL 41 23


The Relationship Between Web Sites and Retail Stores

Source: USA Today, September 28, 2001, p. A1.


Customer Relationship Management

• Customer relationship management (CRM) focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships.

– A focus on CRM is possible in e-marketing because of marketers’ ability to target individual customers.

– The ability to identify individual customers allows marketers to shift their focus from increase share of market to increasing share of customer.

– CRM is often based on the use of information technology.


The 80/20 Rule

• 80 percent of business profits come from 20 percent of customers.

–Advances in technology allow marketers to profile customers in real-time and thereby assess their lifetime value (LTV) to the firm.

–Some customers may be too expensive to retain given the low level of profits they generate.

–Firms should focus instead on developing and managing long-term relationships with more profitable customers.


Technology Drives CRM

• Customer Support and Call Center Software

– Provides customer interaction and improved service

– Captures information about all interactions

• Sales Automation

– Links sales force to applications that facilitate selling and providing service

– Provides information to determine the best solution for customers

– Determines order status, tracks deliveries, and identifies service problems


Technology Drives CRM (cont’d)

• Technology

–Should not be used just as a cost-reduction tactic

–Should not be overwhelmed by gathering unnecessary data

–Should be used as a tool to sustain long-term relationships


Legal and Ethical Issues in E-Marketing

• Personal Privacy Issues

– Unauthorized placement of “cookies” on personal computers

– Web site information requirements for registration

– Collection of information from children

– Use of “spyware” in software

• Spam

– Unsolicited commercial e-mail (UCE)

• Misappropriation of Intellectual Property

– Illegal copying of copyrighted software, movies, CDs, and other creative materials


The BBBOnLine Privacy Seal and Program Explanation

FIGURE 4.1

Source: Reprinted with permission from BBBOnLine, Council of Better Business Bureaus, Arlington, VA.


Code of Ethics

Source: Reprinted by permission of the American Marketing Association.


Code of Ethics (cont’d)


Part Two Using Technology for Customer Relationships in a Global Environment E-Marketing and...

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