chapter
11
Introduction to Internet MarketingIntroduction to Internet Marketing
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
Introduction to Internet Marketing — Today’s Objectives
Objectives will be to:
Define the scope of Internet marketing
Explore the stages of Internet marketing
Discuss the relationship stages and the Marketspace Matrix
Examine guidelines for success
Outline the progression of the book
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Definition and Scope of Internet Marketing
Cell 4 Cell 2
Cell 3 Cell 1
Loca
tion
of R
even
ue S
trea
m
Bric
ks-a
nd- M
orta
rO
nlin
e
Marketing Resource Allocation
Offline Online
Internet
Marketi
ng Impac
t
Exhibit 1.1: Assessing the Impact of Internet Marketing
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Exhibit 1.2: The Seven-Stage Cycle of Internet Marketing
Step 2
Formulating the Marketing Strategy
Step 3
Designing the Customer
Experience
Step 4
Crafting the Customer Interface
Step 5
Designing the Marketing Program
Step 6
Leveraging Customer Information Through
Technology
Step 7
Evaluating the
Marketing Program
Step 1
Framing the Market
Opportunity
Exhibit 1.3: Framework for Market Opportunity
Seed Opportunity in Existing New Value System
Identify Unmet and Underserved Need(s)
Identify Target Segment(s)
Declare Company’s Resource-Based Opportunity for Advantage
Assess Competitive, Technological, and Financial Opportunity Attractiveness
Make “Go / No-Go” Assessment
Framework for Market OpportunityMicrosoft CarPoint Example
Leverage the Internet to Improve the Consumer Car-Buying Process
Car Buyers Are Dissatisfied With Current Retail Car-Buying Process
Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way
Microsoft’s Software and Free Placement on All Its Websites
How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors?
Make “Go / No-Go” Assessment
• MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry
• The retail car-buying process was frustrating and inefficient:
• Little information available to the consumer• Bargaining with salesperson viewed as an hassle• Long process overall
• MSN CarPoint selected two primary target segments for its service:
• “The intimidated by the process”• “The information seekers”
• MSN CarPoint could leverage Microsoft’s expertise in software development, its brand name and its multitude of online properties
• Competition was getting fierce with more and more online car services entering the market…• But the financial opportunity was large: 66% of new car buyers were estimated to use online services in 2000
• In 1996, the first version of CarPoint was shipped• By 1998, CarPoint was driving $5 million in car sales a day
Exhibit 1.4: Corporate, Business-Unit and Marketing Strategy
Corporate Strategy
Business Unit Strategy
Amazon
Tools and Hardware
Integrated Marketing Strategy for Tools and
Hardware Unit
Linkages Example
Integrated Marketing Strategy for Unit
Internet Marketing
Traditional Marketing
Online Marketing Mix
Offline Marketing Mix
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Awareness Exploration /Expansion Commitment Dissolution
Four Key Stages of Customer Relationship
Exhibit 1.5: The Four Key Stages of Customer Relationship
Exhibit 1.6: Four Key Stages of Customer Relationship by Level of Intensity
Leve
l of
Inte
nsity
Stages of Customer Relationships
Awareness Exploration Commitment Dissolution
IntensityIntensity
Exhibit 1.7: Internet Marketing Mix
Branding
Product Pricing Communication Community Distribution
Exhibit 1.8: Impact of the 2Is on the Internet Marketing Mix
Branding
Product Pricing
Individual
Communication DistributionCommunity
Interactivity
Exhibit 1.9: The Marketspace Matrix Relationship Stages
Awareness Exploration Commitment Dissolution
Product
Price
Communication
Community
Distribution
Cat
egor
ies
of L
ever
s
BrandingBranding can also
accentuate (or lessen) the impact of the levers
in each cell
The 2Is should influence the design of each cell
in the matrix
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Critical Success Factors for Internet Marketing ExecutivesCustomer Advocacy and Insight
Integration
Balanced Thinking
Passion and Entrepreneurial Spirit
Willingness to Accept Risk and Ambiguity
The willingness to understand customer needs and provide added value to each customer interaction
The ability to manage marketing campaigns in a more uncertain, dynamic environment, with a new set of tools that often have few records of successes, failures or best-practices
The ability to have a holistic view of the customer and the enterprise in order to create a uniquely advantaged strategic plan
Being able to understand the dynamic tension between one-to-one marketing and mass marketing and being able to strike a strategic balance between them
The willingness to change the status quo, take chances and use “bleeding edge” tools to lead teams to success
Exhibit 1.10: The New Rules of Marketing for the Global Digital World
The New Rules1. Target segments of one, and create virtual communities
2. Design for customer-led positioning
3. Expand the role of branding in the global portfolio
4. Leverage consumers as coproducers through customization
5. Use creative pricing in the Priceline.com world
6. Create anytime/anyplace distribution and integrated supply chains
7. Redesign advertising as interactive and integrated marketing, communication, education and entertainment
8. Reinvent marketing research and modeling as knowledge creation and dissemination
9. Use adaptive experimentation
10. Redesign the strategy process and supporting organizational architectureSource: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.
Point-Counterpoint: New Rules or Old Rules of Marketing
New Rules Old Rules
Several basic conceptual and process changes occur in online marketing
One such change is the increased ability to deliver on the promise of one-to-one marketing
There is also a fundamental shift to a more consumer-driven and controlled world — for example, a shift towards pull-marketing and the use of more “pull” levers, such as online community
Differences in the online marketing world are overstated
Segmentation is still at the core of marketing — “clusters” of consumers will emerge that share behavior
From the supply side, it is most efficient to aggregate these consumers to reduce costs
Successful marketing programs include mixing different marketing levers, both new and old: the “master-mixer” concept still remains
Point-Counterpoint
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
4. Crafting the Customer Interface
1. Framing the Market
Opportunity
2. Formulating the Market Strategy
3. Designing the Customer
Experience
Exhibit 1.11: Overview of the Chapters
5. Designing the Marketing Program
6. Leveraging Customer
Information through
Technology
7. Evaluating the Marketing
Program
Customer Relationships Product Pricing Communication Community Distribution Branding Designing the
Marketspace Matrix Illustration: Marketing
Campaign for The Lord of the Rings: The Fellowship of the Ring
Chapter 1: Introduction to Internet Marketing
Definition and Scope of Internet Marketing
Seven-Stage Cycle of Internet Marketing
Four Key Relationship Stages and the Marketspace Matrix
Guidelines for Internet Marketing Success
Overview of the Book
Conclusion
Traditional marketing methods are still highly relevant in the networked economy, though firms must now consider a host of new and innovative marketing methods available online (e.g., dynamic pricing, online community)
In contrast to the one-way mass promotion that characterizes modern marketing, Internet marketing enables firms to engage the individual in personalized dialogues
Individualization and Interactivity are two forces that make online marketing different
Marketing, and the relationships it creates, should be considered in the context of particular processes and stages
Introduction to Internet Marketing — Conclusion
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