Learning Outcomes. U55080: Marketing Issues Week 3 New Developments in Internet Marketing. Direct Marketing. Direct Marketing.

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1 Learning Outcomes U55080: Marketing Issues Week 3 New Developments in Internet Marketing Dr. Bang Nguyen Oxford Brookes University Identify and discuss the major forms of direct marketing and define online marketing Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies Discuss how companies go about conducting online marketing to profitably deliver more value to customers Overview the public policy and ethical issues presented by direct marketing Oxford Brookes Business School 2011 Oxford Brookes University 2 Direct Marketing Direct Marketing Direct marketing consists of direct connection with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. No intermediaries An element of the promotion mix Fastest-growing form of marketing Benefits to Buyers Convenience Ready access to many products Access to comparative information about companies, products, and competitors Interactive and immediate Oxford Brookes Business School 2011 Oxford Brookes University 3 Oxford Brookes Business School 2011 Oxford Brookes University 4 Direct Marketing Customer Databases Benefits to Sellers Tool to build customer relationships Low-cost, efficient, fast alternative to reach markets Flexible Access to buyers not reachable through other channels Customer Database A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographical, demographic, psychographic, and behavioral data. Used to: Locate good and potential customers Generate sales leads Learn about customers Develop strong long-term relationships Oxford Brookes Business School 2011 Oxford Brookes University 5 Oxford Brookes Business School 2011 Oxford Brookes University 6 1

2 Personal selling Direct-mail marketing Catalog marketing Telephone marketing Direct-response television marketing Kiosk marketing Digital direct marketing Online marketing Direct-(E)Mail Marketing Direct-(E)mail marketing involves an offer, announcement, reminder, or other item to a person at a particular address. Personalized Easy-to measure results Costs more than mass media Provides better results than mass media Oxford Brookes Business School 2011 Oxford Brookes University 7 Oxford Brookes Business School 2011 Oxford Brookes University 8 Catalog Direct Marketing Catalog direct marketing involves printed and Web-based catalogs. Benefits of Web-based catalogs Lower cost than printed catalogs Unlimited amount of merchandise Real-time merchandising Interactive content Promotional features Challenges of Web-based catalogs Require marketing Difficulties in attracting new customers Oxford Brookes Business School 2011 Oxford Brookes University 9 Oxford Brookes Business School 2011 Oxford Brookes University 10 Digital Direct Marketing Technologies Mobile phone marketing Podcasts Vodcasts Interactive TV Digital Direct Marketing Technologies Mobile phone marketing includes: Ring-tone giveaways Mobile games Ad-supported content Contests and sweepstakes Apps Oxford Brookes Business School 2011 Oxford Brookes University 11 Oxford Brookes Business School 2011 Oxford Brookes University 12 2

3 Digital Direct Marketing Technologies Podcasts and vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or portable media player and listening to them at the consumer s convenience. Digital Direct Marketing Technologies Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences. Oxford Brookes Business School 2011 Oxford Brookes University 13 Oxford Brookes Business School 2011 Oxford Brookes University 14 Marketing and the Internet Internet marketing, also known as digital marketing, web marketing, online marketing, or e-marketing, is the marketing of products or services over the Internet. Domains Business to consumer (B2C) Business to business (B2B) Consumer to consumer (C2C) Consumer to business (C2B) Oxford Brookes Business School 2011 Oxford Brookes University 15 Oxford Brookes Business School 2011 Oxford Brookes University 16 Domains Domains Business to consumer (B2C) involves selling goods and services online to final consumers. Business to business (B2B) involves selling goods and services, providing information online to businesses and building customer relationships. Oxford Brookes Business School 2011 Oxford Brookes University 17 Oxford Brookes Business School 2011 Oxford Brookes University 18 3

4 Domains Consumer to consumer (C2C) occurs on the Web between interested parties over a wide range of products and subjects. Blogs Offer a fresh, original, and inexpensive way to reach fragmented audiences Difficult to control Eg. Ebay, Gumtree, private blogs, etc. Domains Consumer to business (C2B) involves consumers communicating with companies to send suggestions and questions via company Web sites. C2B is a business model in which consumers (individuals) offer products and services to companies, and the companies pay them. Eg. Google Adsense, Survey Monkey, etc. Oxford Brookes Business School 2011 Oxford Brookes University 19 Oxford Brookes Business School 2011 Oxford Brookes University 20 Types of Online Marketers Click-only marketers Click-and-mortar marketers Click-Only Marketers Click-only marketers operate only online without any brick and mortar presence. E-tailers Search engines and portals Shopping or price comparison sites Internet service providers Transaction sites Content sites Oxford Brookes Business School 2011 Oxford Brookes University 21 Oxford Brookes Business School 2011 Oxford Brookes University 22 Click-Only Marketers E-tailers are dot coms that sell products and services directly to final buyers via the Internet. Amazon Expedia Search engines and portals are ports of entry to the Internet. Yahoo! Google Click-Only Marketers Internet service providers (ISP) provide Internet connections for a fee. BT SKY Shopping or price comparison sites provide product and price comparison information Yahoo! Shopping comparethemarket.com Oxford Brookes Business School 2011 Oxford Brookes University 23 Oxford Brookes Business School 2011 Oxford Brookes University 24 4

5 Click-Only Marketers Transaction sites take commissions for transactions on their sites. ebay Content sites provide financial, news, research, and other information Cna.com (Channel NewsAsia) ESPN.com Click-and-Mortar Marketers Click-and-mortar companies are brick-and-mortar companies with an online presence. Advantages of click-and-mortar companies include Known and trusted brand names Strong financial resources Large customer bases Industry knowledge Reputation Strong supplier relationships More options for customers Oxford Brookes Business School 2011 Oxford Brookes University 25 Oxford Brookes Business School 2011 Oxford Brookes University 26 Setting Up an Online Presence Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site. Types of Web sites Corporate Web site Marketing Web site Setting Up an Online Presence A corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the company s products directly to Provide information Create excitement Build relationships A marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome. Oxford Brookes Business School 2011 Oxford Brookes University 27 Oxford Brookes Business School 2011 Oxford Brookes University 28 Designing Effective Web Sites To attract visitors, companies must Promote in offline promotion and online links Create value and excitement Constantly update the site Make the site useful Designing Effective Web Sites The seven Cs of effective Web site design Context Content Community Customization Communication Connection Commerce Oxford Brookes Business School 2011 Oxford Brookes University 29 Oxford Brookes Business School 2011 Oxford Brookes University 30 5

6 Designing Effective Web Sites Context is the site s layout. Content is the site s pictures, sound, and video. Community is the site s means to enable user-to-user communication. Customization is the site s ability to tailor itself to different users or to allow users to personalize the site. Designing Effective Web Sites Communication is the way the site enables user-to-user, user-to-site, or two-way communication. Connection is the degree that the site is linked to other sites. Commerce is the site s capabilities to enable commercial transactions. The eighth C To keep customers coming back, the site needs to constantly change. Oxford Brookes Business School 2011 Oxford Brookes University 31 Oxford Brookes Business School 2011 Oxford Brookes University 32 Forms of online advertising Display ads Search-related ads Online classifieds Display ads Banners are banner-shaped ads found on a Web site. Interstitials are ads that appear between screen changes. Pop-ups are ads that suddenly appear in a new window in front of the window being viewed. Rich media ads incorporate animation, video, sound, and interactivity. Oxford Brookes Business School 2011 Oxford Brookes University 33 Oxford Brookes Business School 2011 Oxford Brookes University 34 Facebook Walls Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! are effective in linking consumers to other forms of online promotion. Oxford Brookes Business School 2011 Oxford Brookes University 35 Oxford Brookes Business School 2011 Oxford Brookes University 36 6

7 Other forms of online promotion include Content sponsorships Alliances Affiliate programs Viral advertising Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information. Alliances and affiliate programs are relationships where online companies promote each other. Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e- mail message, or another marketing event that customers pass along to friends. Oxford Brookes Business School 2011 Oxford Brookes University 37 Oxford Brookes Business School 2011 Oxford Brookes University 38 Creating or Participating in Web Communities Web communities allow members to congregate online and exchange views on issues of common interest. Using Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered environment. The Future of Online Advertising Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix. Oxford Brookes Business School 2011 Oxford Brookes University 39 Oxford Brookes Business School 2011 Oxford Brookes University 40 Facebook Pages Facebook Places Oxford Brookes Business School 2011 Oxford Brookes University 41 Oxford Brookes Business School 2011 Oxford Brookes University 42 7

8 Groupon Integrated Direct Marketing Integrated direct marketing involves the user of carefully coordinated multiple-media, multiple-stage campaigns. Oxford Brookes Business School 2011 Oxford Brookes University 43 Oxford Brookes Business School 2011 Oxford Brookes University 44 Public Policy Issues in Direct Marketing Public Policy Issues in Direct Marketing Customer irritation, unfairness, deception and fraud Privacy Security Irritation, Unfairness, Deception, and Fraud Irritation includes annoying and offending customers. Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers. Deception includes heat merchants who design mailers and write copy designed to mislead consumers. Internet fraud includes identity theft and financial scams. Oxford Brookes Business School 2011 Oxford Brookes University 45 Oxford Brookes Business School 2011 Oxford Brookes University 46 Public Policy Issues in Direct Marketing Invasion of Privacy The concern is that marketers may know too much about the consumers and use this information to take unfair advantage. Sale of databases Microsoft Oxford Brookes Business School 2011 Oxford Brookes University 47 8

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