Part IV: emarketing
Learning Targets What are the key concepts of online marketing? How can we compare advertising media? How does the utilization of Internet and websites look like? What are the four levels of the maturity model for e-business? Why is a customer development model needed? What are the key indicators for web mining? 2
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Definition of Online Marketing The online marketing has the same rules as the classic marketing. Online marketing is also about developing a market and expanding existing business connections. The known AIDA formula (Attention, Interest, Desire, Action) or variations of it are still valid. A website has to attract attention, quicken interests, create a demand and it should animate the customer to buy. These marketing goals are not new, but the way to achieve them is. Online marketing is an interactive marketing by - multimedia, - non-linearity and - many-to-many communication. 4
Main Characteristics of Online Marketing Integration of text, pictures, and sound (multimedia) Non-linearity provided by hyperlinks (associative information acquisition) Many-to-many communication (customer platform) Market pull and customized push (dialog without obligation, specification of interests) Equal opportunities for all market participants (ubiquity) Structure of distribution 5
Push Strategy Push and Pull Strategies Push Push Manufacturer Intermediary Customer Sales Promotion Pull Strategy Manufacturer Pull Intermediary Pull Customer Sales Promotion 6
From General to Individual Marketing Generalization undifferentiated mass marketing differentiated mass marketing segmentation oriented marketing online marketing niche marketing customization marketing mass customization marketing Individualization 1940 1950 1960 1970 1980 1990 2000 7
Comparing Advertising Media Print Media Advertising e.g. prospectus Audio Media Advertising e.g. broadcast Video Media Advertising e.g. television Multimedia Advertising e.g. Internet Interactivity none profound profound distinctive Quantitative Range local - regional regional regional - global global Qualitative Range households & companies households households households & companies Up-to-dateness restricted medium medium high Utilization independent from time and place independent from time and place independent from time and place independent from time and place Promotional- Contact per chance per chance per chance active 8
Utilization of the Internet by Class of Business Example Switzerland, after [Meier et al. 2001] Industry Retailer others Public Service current use projected for 2000 unused Bank Insurance Wholesale Informatics 0 10 20 30 40 50 60 70 80 90 100 Percentage of companies with N=279'732 9
Companies with a Website grouped by Class of Business Example Switzerland, after [Meier et al. 2001] Retailer Industry Public Service others Wholesale Website projected for 2000 No Website / n.a. Insurance Bank Informatics 0 10 20 30 40 50 60 70 80 90 100 Percentage of companies with N=279'732 10
Companies with a Website grouped by Number of Employees Example Switzerland, after [Meier et al. 2001] 1-5 Website projectet for 2000 no Website / n.a. 6-19 20-99 100-499 500++ 0 25 50 75 100 Percentage 11
Services provided on the Website Example Switzerland, after [Meier et al. 2001] Online order tracking One-to-one marketing Digital agents Online payment other services Online creation of offers FAQ Online Procurement Newsletter / Newsgroups Job service Search engines Product catalogue and product information E-mail Information about the company 0 150 300 450 600 Entries 12
I. Information: Maturity Model for Electronic Business [Meier et al 2001] such as product catalogues and job offers II. Communication: such as e-mail, search engines, discussion forums III. Order Processing: with online offers, ordering services, electronic payments IV. Integration: such as one-to-one marketing, digital agents for consulting and sales 13
Electronic Business in Switzerland 2002 [http://diuf.unifr.ch/is/research/itee] 14
Electronic Business in Switzerland 2002 [http://diuf.unifr.ch/is/research/itee] Value for Company Level 3: Order Processing 27% Level 4: Integration 13% Level 2: Communication 52% of Companies Level 1: Information 7% n = 590 Complexity/ Interactivity 14
Customer Development Model: Online Surfer Behavior: - Just stops by - Searching for information about a brand, a service or a company - Surfing aimless through the web, is guided by emotional input Goals for this first level: - Attract as many visitors as possible, generating high attendance - High rate of recognition (the name recognition rating must be controlled often) Measures: - Hyperlinks and advertising banners on other websites - Registration in search engines and online portals - Unique and explicit domain name (company name, brand name, ) - Classic advertising (print, broadcast, tv, ) 15
Customer Development Model: Online Customer Behavior: - Bookmarks the website - Opens the website for specific information and services - Collects information, prints it or saves it for further processing Goals for this second level: - Keeping the customer on the website, animating him to come back again - Rising the retention period for specific services Measures: - Giving the possibility for a dialog - Simple feedbacks like brochures, online product information (pictures, sound, text), E-mail - Interactive applications integrate the customer 16
Behavior: Customer Development Model: Online Prosumer - Acts in an active way - Gives feedback and helps to (re)design the offers on the website - Interacts with other customers Goals for this third level: - Integrating the Prosumer into the value chain - Both company and customer should benefit Measures: - Giving the possibility to specify a special customer profile - Customizing the offers (based on the customer profile) - Creation of newsgroups and special customer platforms 17
Customer Development Model: Online Buyer Behavior: - Wants more detailed information about the scope of supply and services as well as about price conditions - Purchases a product if the offer is acceptable Goals for this fourth level: - Rising the confidence level of the online services Measures: - Providing an easy but secure offer system and purchasing system - Providing pleasant payment arrangements 18
Customer Development Model: Online Key Consumer Behavior: - Repeats the purchases - Purchases more often and at more regular intervals than the Online Buyer Goals for this fifth level: - A satisfied and loyal customer - Special customer loyalty programs and individual auxiliary services 19
Customer Development Model: Online Key Consumer Measures: - The experience of the customer is high, therefore he needs less time for his decisions the level of interactivity decreases. So the attractiveness of the website must be kept - Marketing research about customer satisfaction - Exclusive services just for key customers - Customer Relationship Management (CRM) 20
Recognition X 1 Customer Development Model after [Gräf 1999] Interactivity as a personal contribution Repurchases X 5 Technical Interactivity X 2 X 3 Initial Purchase X 4 Customer Group T Online Surfer Online Consumer Online Prosumer Online Buyer Target Group: Online Key Customer Effectiveness of Recognition X 1 T Effectiveness of Interactivity X 2 X 1 Effectiveness of Dialog X 3 X 1 Rate of Purchase X 4 X 1 Customer retention / loyalty X 5 X 1 or X 5 X 4 21
Customer Development Model: Example Recognition 300 Interactivity as a Personal Contribution 80 Technical Interactivity 100 Initial Purchase 30 Repurchases 5 Customer Group 10000 Online Surfer 300 Online Consumer 100 Online Prosumer 80 Online Buyer 30 Target Group: Online Key Customer Effectiveness of Recognition 300 10000 =3% Effectiveness of Interactivity 100 300 =33% Effectiveness of Dialog 80 300 =26% Rate of Purchase 30 300 =10% Customer retention / loyalty 5 5 300 =1,6% or 30 =16% 22