Q&A: E-Business and Marketing

Transcription

1 Q&A: E-Business and Marketing Question 1: Why is the relationship between e-marketing, e-business, and e-commerce viewed as a hierarchy? Answer 1: The hierarchy depicts an e-commerce economic network infrastructure at the base that enables e-business digital business models and online value propositions, which then support specific e-marketing strategies for creating successful e-brands and online marketing mix elements. E-business and e-marketing rely on e-commerce network exchanges, so e-commerce is positioned at the base of the hierarchy. The e-business model is positioned at the middle level and ranks second in the digital hierarchy. E- marketing focuses on a specific online value proposition and is the most visible and immediate of the three levels. Its direct dependence on e-business and e-commerce places it at the next level of the hierarchy. For example, even though the online banking e-marketing Web site features, sponsored ads, and interactive features make the strongest impression on customers, those aspects must be supported by an e- business value proposition of low-cost services with rapid loan approval. This, in turn, requires the virtually free, anytime access to a computerized e-commerce transaction network. Question 2: Why does the new economy created by e-commerce differ from the services economy, industrial economy, or agricultural economy? Answer 2: E-commerce relies upon a connected real-time computer network to permit anytime, anywhere, anyone market interaction. These more fluid network exchanges allow for faster, inexpensive, and more customized market transactions compared to other traditional economies. For example, the traditional services economy completes customized transactions conducted interpersonally in the physical marketplace with telecommunication assistance. The traditional industrial economy relies upon interorganizational material exchanges and mass produced merchandise transactions. Most distinctly, the agricultural economy completes inter-regional natural resource exchanges of organically farmed products. As an example of e-commerce, an online flower delivery business first appears to be rooted in the agricultural economy. However, once the source of economic value is traced to the information network protocols that enable rapid order processing, global supply sourcing, real-time delivery logistics tracking, and autonomous Web site product customization without direct human contact, the e-commerce aspect is most predominant.

2 Question 3: Why are online value propositions important e-business elements for supporting e-marketing strategies? Answer 3: Value propositions transform both traditional and digital business models from product oriented to customer oriented. Business operations and profitability are designed based on a unique benefit sought by specific customers. Consequently, value-propositions may direct two manufacturers of similarly styled automobiles to focus on different vehicle benefits tailored to separate customer segments. For instance, one subcompact car may emphasize its fuel economy and target urban middle-aged commuters whereas the other identical subcompact may stress the car's small size as a modular design muse for young college students interested in detailing their vehicle for personal identity. In online e-business and e-marketing situations, the vital strategic role of value propositions increases significantly because of the greater potential for designing customized benefits as attributes of specific online offerings. Without value propositions as strategic anchors, the vast spectrum of digital design options related to media, messages, and marketing modes would lack a meaningful pattern for addressing customer needs and desires. To show another example, say that two online education providers possess the exact same technology and instructional and informational resources but pursue different online value propositions based on their contrasting strategies for combining those assets in a meaningful way for students. One online education provider could present a low-cost and time-flexible program, and the other online education provider could emphasize customizable course content and charge premium tuition for that tailored approach. In reality, either value proposition is attainable by both online education providers because of their adaptable digital resources. However, once a specific online value proposition is specified as the business model focus, e-marketing efforts cohere around that focus like a target's bull's-eye to distinguish the educational offering for prospective online students. In this way, e-business value propositions are vitally important for formulating specific e-marketing strategies. Question 4: Why are the primary economic and digital technology advantages supporting e-business models also relevant to e-marketing? Answer 4: E-business models are supported by the advantages of a relatively low operating cost electronic information transmission, customizable digital content, and computerized network connections that are not bound by time (anytime), location (anywhere), or status of person/unit (anyone). These primary cost, content, and connection advantages can be combined into an almost limitless set of e-marketing benefits for online

3 customers. For example, low-cost electronic transmission of information provides a competitive pricing advantage to online entertainment marketing above traditional music or film marketing because significant distribution costs and wholesale/retail margins are eliminated. Customizable digital content has propelled e-marketing ads because new media promotions allow a common message to be tailored to target narrow online demographic markets. Computerized network connections are the driving force behind the growth of online business-to-business (B2B) e-marketing because manufacturers can manage customer relationships around the clock (anytime), around the world (anywhere), and around the organization (anyone). Question 5: Which marketing strategies and types of focus do you generally observe from visiting online retailing Web sites? Answer 5: E-marketing strategies are generally aligned with the traditional marketing mix of product/brand, place/distribution, price, and promotion/advertising (i.e., the four Ps). In addition, e-marketing strategies continuously utilize marketing research methods like online surveys and opinion polls. A main focus of e-marketing is to build loyal customer relationships. A variety of strategies may be used to gain affinity from Web site visitors, including the use of sponsoring ads aimed at a common customer profile; soliciting reviews of merchandise; and enlisting participation in the use of links, , or other services originating at the site. Examples of e-marketing within the general categories of marketing mix, marketing research, and customer relationship loyalty might encompass the following: particular product designs, styles, or brand image symbolism that caters to online customers (e.g., "design your own" options, product search, etc.) pricing discounts, bargains, or credit services exclusive to online purchases expedited shipping and delivery availability exceeding in-store merchandise stock promotional sweepstakes or tailored pop-up ads online survey participation incentives or options for testimonials and reviews a variety of affinity building features intended to bond customers to the site/brand Question 6: Why is online customer relationship management (CRM) the strategic focus of the e-marketing process? Answer 6: Online customer relationship management (CRM) is the strategic focus of the e- marketing process because customer loyalty builds Web site traffic to support the e-

4 business model while also affirming the unique appeal of specific e-marketing strategies. In the online market, customers cannot see a business or merchant in physical space. All Web sites are lodged within the cyberspace realm that lies behind the screen of a digital device. With literally billions of online Web sites, e-marketers cannot leave customers' shopping patterns to chance because the odds are that another similar Web site will be found. Due to those odds and the abstract nature of cyberspace, customer relationships are the best e-marketing approach for ensuring that customers seek out a specific Web site location and return often despite the numerous online competitors. Online customer relationships are managed by first gathering data on what prospective customers find appealing about Web sites and then the types of merchandise and services they desire to purchase. Beyond these initial steps toward bonding with online customers by building sticky Web sites (i.e., Web sites that attract repeat visits), e-marketers must continuously entice customers to interact because each Web site interaction provides another opportunity to improve the customer profile and convince customers that they benefit from being loyal. In addition, concern about customer integrity and ethics improve online customer relationships by raising the level of trust attributed to the e-marketing Web site. Question 7: How can the three dimensions of fundamental marketing concepts be combined to support traditional marketing success? Answer 7: The three dimensions of fundamental marketing concepts are external marketing environment factors (e.g., demographic, economic-competitive, political-legal, socialcultural, technological, and natural-ecological, etc.); customer behavior characteristics; and the marketing mix strategy elements (e.g., product/brand, place/distribution, price, promotion). The relative importance of these three primary dimensions for traditional marketers depends upon the particular marketing situation. For instance, tobacco, alcohol, and pharmaceutical marketers are heavily impacted by the political-legal outcomes from external government agency marketing environment factors. These political-legal factors outcomes can overshadow successful customer targeting and marketing mix strategies. On the other hand, entertainment marketers are challenged to continuously update their customer profiles because of the rapidly changing demographic tastes and lifestyle preferences for music, television, and film. In the case of automobile marketers, success relies heavily on the marketing mix that embodies a vehicle brand. High-priced sports utility vehicles found appeal because of their adaptable family transport and cargo space. Most recently, however, strategies have shifted toward the benefit of gas mileage, and hybrid models have gained appeal. Although traditional marketing success is integrally affected by all three fundamental marketing dimensions, a particular dimension may loom larger under certain market circumstances. Question 8: What are the applications of the three fundamental marketing concept dimensions to the online environment?

5 Answer 8: E-marketing adapts the marketing fundamentals to the online marketing context by addressing the unique ways in which digital conditions are altered in the marketing environment, the particular online dynamics influencing digital customer profiles, and the online resources available for composing digitally customized commodities. In particular, digital conditions may entail an e-marketing adaptation related to a technological marketing environment factor such as the move toward wireless Internet access (e.g., Wi-Fi) in large urban municipal areas and facilities. An effective online personal computer business whose operations have been traditionally linked to wired computer networks will have to prepare for a less structured platform of Internet connections, which will introduce increased competition and the need for incorporating new business processes. Digital customer profiles can be altered by the preference for online collaboration among younger shoppers. The ability for digital customers to seamlessly dialogue online may fuse the demographic and taste profiles of one customer with another or many others. E-marketers must address this digital customer profile nuance in far more novel ways than would traditional marketers who are more capable of distinguishing among the participants of a customer's reference group. E-marketing also enables the traditional marketing mix elements to more fluidly overlap into digitally customized commodities. The capability for customers to personalize brands becomes a form of promotion or advertising just as online price bargaining is as much of a product/brand design feature as a pricing strategy. Similarly, online service brands offering the benefit of music downloading blur the distinction between product/brand and place/distribution elements of the traditional marketing mix. Question 9: How do e-marketing and traditional marketing applications of fundamental marketing concepts contrast with one another? Answer 9: E-marketing and traditional marketing applications of marketing fundamentals employ contrasting methods for delivering customer value because of their reliance on different types of resources. Traditional marketing relies upon physical facilities, transport, and interpersonal contact to a far greater extent than does e-marketing. E- marketing uses digital content to construct electronic Web site facilities for conducting business, digital communication networks to transport informational products/services, and digital interaction to substitute (or support) human contact. These contrasts result in widely differing e-marketing processes for businesses like real estate, where traditional marketing consists of conveying the experience of human sales agents through interpersonal meetings with and expertly navigated visits to physical property locations. E-marketing for online real estate services, on the other hand, touts the

6 benefits of autonomous informal property searches from the convenience of the home or office. Intelligent software applications are promoted as a major feature for providing a virtual property viewing experience very similar to an in-person inspection. Question 10: How do e-marketing and traditional marketing applications of fundamental marketing concepts complement one another? Answer 10: E-marketing and traditional marketing applications of marketing fundamentals employ complementary approaches toward creating customer value. Customer value is an intangible benefit that is common to online and offline marketing situations. As a result, e-marketing customer value can be profiled with identical indicators as traditional marketing customers. The intangible nature of customer value enables it to be transferred in tact from physical marketplace outlets to electronic cyberspace Web sites. Customer value is the point of convergence between e-marketing and traditional marketing. E-marketers can look to traditional marketing methods for identifying and satisfying customers to provide complementary strategic direction. Although e- marketing may rely on online surveys to derive customer preferences, the value at the heart of those digital product preferences is compatible with the value at the heart of physical product preferences. Therefore, e-marketers are urged to seek complementary applications of customer value with traditional marketing approaches whenever possible. The convenience sought by in-store fashion apparel buyers may pertain to physical displays whereas for online apparel shopping sites convenience may pertain to style/size search features. However, the essence of a fashion apparel customers' convenience value is common to both the e-marketing and traditional marketing experience. These complementary approaches to creating intangible customer value benefits aid e-marketing by availing a host of situations for combining click-and-order with brick-and-mortar retailing often described as click-and-mortar retailing.