Chapter 8 Internet market promotion 8.1 Introduction, category and function of Internet Marketing 8.1.1 Internet marketing conception and characteristic 1. Internet marketing What is Internet marketing? Internet marketing or Internet-based marketing can be defined as the use of the Internet and related digital technologies to achieve marketing objectives and support the modern marketing concept. These technologies include the Internet media and other digital media such as wireless mobile media, cable and satellite In practice, Internet marketing will include the use of a company web site in conjunction with online promotional techniques such as search engines, banner advertising direct e-mail and links or services from other web sites to acquire new customers and provide services to existing customers that help develop the customer relationship. However, for Internet marketing to be successful there is a necessity of integration with traditional media such as Print and TV 2. What benefits does the Internet provide for the marketer? The marketing opportunities of using the Internet can be appreciated by applying the strategic marketing grid for exploring opportunities for new markets and products. The Internet can potentially be used to achieve each of the four strategic directions as follows 1)Market penetration. The Internet can be used to sell more existing products into existing markets. This can be achieved by using the power of the Internet for advertising products to increase awareness of products and the profile of a company amongst potential customers in an existing market. This is a relatively conservative use of the Internet. (2) Market development. Here the Internet is used to sell into new markets, taking advantage of the low cost of advertising internationally without the necessity for a supporting sales infrastructure in the customers'country. This is a relatively conservative use of the Internet but it does require the overcoming of the barriers to becoming an exporter or operating in a greater number of countries the(3)Product development. New products or services are developed which can be delivered by Internet These are typically information products such as market reports which can b purchased using electronic commerce. This is innovative use of the Internet 8.1.2 Internet marketing classify New products are developed which are sold into new markets. Companies can use the Internet to adopt new approaches to selling products which involve positioning in one part of the grid presented. The Internet provides Guinness with the opportunity to provide non-core merchandising activity at a relatively low cost The lure of new sales and the threat of market share erosion has driven many companies on to the Internet, but there are many other benefits of establishing an Internet presence. Consider the example of the parcel courier companies. These companies now provide a range of customer services over the Internet which were traditionally delivered by telephone operators, thus reducing operating costs. In such situations, the online services may give better 24 hour, 7days a week, 365 days of the year customer service if measured by convenience, but some customers will want the option of the personal touch, and phone services must be provided for this type of customer. Many companies will also reduce the costs of the printing and distribution of promotional material, price lists and other marketing communications. In addition to increased sales and reduced costs, the Internet can be used to advantage in all of the marketing functions, for example (1)Sales: Achieved through increasing awareness of brands and products, supporting buying
Chapter 8 Internet Market Promotion 8.1 Introduction, category and function of Internet Marketing 8.1.1 Internet marketing conception and characteristic 1. Internet marketing What is Internet marketing? Internet marketing or Internet-based marketing can be defined as the use of the Internet and related digital technologies to achieve marketing objectives and support the modern marketing concept. These technologies include the Internet media and other digital media such as wireless mobile media, cable and satellite. In practice, Internet marketing will include the use of a company web site in conjunction with online promotional techniques such as search engines, banner advertising, direct e-mail and links or services from other web sites to acquire new customers and provide services to existing customers that help develop the customer relationship. However, for Internet marketing to be successful there is a necessity of integration with traditional media such as Print and TV. 2. What benefits does the Internet provide for the marketer? The marketing opportunities of using the Internet can be appreciated by applying the strategic marketing grid for exploring opportunities for new markets and products. The Internet can potentially be used to achieve each of the four strategic directions as follows: (1) Market penetration.The Internet can be used to sell more existing products into existing markets. This can be achieved by using the power of the Internet for advertising products to increase awareness of products and the profile of a company amongst potential customers in an existing market. This is a relatively conservative use of the Internet. (2) Market development.Here the Internet is used to sell into new markets, taking advantage of the low cost of advertising internationally without the necessity for a supporting sales infrastructure in the customers’ country. This is a relatively conservative use of the Internet, but it does require the overcoming of the barriers to becoming an exporter or operating in a greater number of countries. (3) Product development. New products or services are developed which can be delivered by the Internet. These are typically information products such as market reports which can be purchased using electronic commerce. This is innovative use of the Internet. 8.1.2 Internet marketing classify New products are developed which are sold into new markets. Companies can use the Internet to adopt new approaches to selling products which involve positioning in one part of the grid presented .The Internet provides Guinness with the opportunity to provide non-core merchandising activity at a relatively low cost. The lure of new sales and the threat of market share erosion has driven many companies on to the Internet, but there are many other benefits of establishing an Internet presence. Consider the example of the parcel courier companies. These companies now provide a range of customer services over the Internet which were traditionally delivered by telephone operators, thus reducing operating costs. In such situations, the online services may give better 24 hour, 7days a week, 365 days of the year customer service if measured by convenience, but some customers will want the option of the personal touch, and phone services must be provided for this type of customer. Many companies will also reduce the costs of the printing and distribution of promotional material, price lists and other marketing communications. In addition to increased sales and reduced costs, the Internet can be used to advantage in all of the marketing functions, for example: (1) Sales: Achieved through increasing awareness of brands and products, supporting buying
decisions and enabling online purchase Co(2)Marketing communications: The use of the web site for the range of marketing mmunication is described Customer service: Supplementing phone operators with information available online and other techniques described (4)Public relations: The Internet can be used as a new channel for public relations(PR)and provides the opportunity to publish the latest news on products, markets and people (5)Marketing research: Through search engines and e-mail alert services, the Internet enables more efficient techniques for finding a range of market information It also enables new method for collecting primary research online through focus groups and online questionnaires 8.1.3 How do Internet marketing communications differ from traditional marketing communication 1. Traditional marketing communications Internet marketing differs from conventional marketing communications because of the digital medium used for communications. The Internet and other digital media such as digital television, satellite and mobile phones create new forms and models for information exchange. A useful summary of the differences between these new media and traditional media has been developed by McDonald and Wilson(1999)which they describe as the 6ls of the e-marketing mix. Note that these can be used as a strategic analysis tool, but they are not used in this context ere. The 6ls are useful since they highlight factors that apply to practical aspects of Internet marketing such as personalization, direct response and marketing research, but also strategic issues of industry restructuring and integrated channel communications. By considering each of these facets of the new media, marketing managers can develop marketing plans that accommodate the characteristics of the new media. This presentation of the 6ls, is an interpretation of these factors using new examples and diagrams to illustrate these concepts 2. Interactivity Deighton was one of the first authors to summarize the key characteristics of the Internet. He identifies the following characteristics inherent in a digital medium the customer initiates contact the customer is seeking information(pull) keter will have 100 attention when he or she is viewing a web site a company can gather and store the response of the individual individual needs of the customer can be addressed and taken into account in future dialogues Traditional media are predominantly push media where the marketing message is broadcast from company to customer and other stakeholders. During this process, there is limited interaction with the customer, although interaction is encouraged in some cases such as the direct response advert or mail-order campaign. On the Internet, it is usually a customer who initiates contact and is seeking information on a web site. In other words it is a pull mechanism unless e-mail is used ( this can be considered as a push technique). The Internet should be used to encourage two-way communication. These may be extensions of the direct-response approach. For example, FMCG supplierssuchasNestle(www.nescafe.co.uk)usetheirwebsiteasamethodofgenerating interaction by providing incentives such as competitions and sales promotions to encourage the customer to respond with their names, addresses and profile information such as age and sex. 8.1.4 Function of Internet marketing Intelligence The Internet can be used as a relatively low cost method of collecting marketing research particularly about customer perceptions of products and services. In the competitions referred to above Nescafe are able to profile their customers on the basis of the infomation received in
decisions and enabling online purchase. (2) Marketing communications: The use of the web site for the range of marketing communication is described. (3) Customer service: Supplementing phone operators with information available online and other techniques described. (4) Public relations: The Internet can be used as a new channel for public relations (PR) and provides the opportunity to publish the latest news on products, markets and people. (5) Marketing research: Through search engines and e-mail alert services, the Internet enables more efficient techniques for finding a range of market information. It also enables new methods for collecting primary research online through focus groups and online questionnaires. 8.1.3 How do Internet marketing communications differ from traditional marketing communications? 1. Traditional marketing communications Internet marketing differs from conventional marketing communications because of the digital medium used for communications. The Internet and other digital media such as digital television, satellite and mobile phones create new forms and models for information exchange. A useful summary of the differences between these new media and traditional media has been developed by McDonald and Wilson (1999) which they describe as the ’6Is of the e-marketing mix’. Note that these can be used as a strategic analysis tool, but they are not used in this context here. The 6Is are useful since they highlight factors that apply to practical aspects of Internet marketing such as personalization, direct response and marketing research, but also strategic issues of industry restructuring and integrated channel communications. By considering each of these facets of the new media, marketing managers can develop marketing plans that accommodate the characteristics of the new media. This presentation of the ‘6Is’, is an interpretation of these factors using new examples and diagrams to illustrate these concepts. 2. Interactivity Deighton was one of the first authors to summarize the key characteristics of the Internet. He identifies the following characteristics inherent in a digital medium: ▪ the customer initiates contact; ▪ the customer is seeking information (pull); ▪ it is a high intensity medium – the marketer will have 100 per cent of the individual’ attention when he or she is viewing a web site; ▪ a company can gather and store the response of the individual; ▪ individual needs of the customer can be addressed and taken into account in future dialogues. Traditional media are predominantly push media where the marketing message is broadcast from company to customer and other stakeholders. During this process, there is limited interaction with the customer, although interaction is encouraged in some cases such as the direct response advert or mail-order campaign. On the Internet, it is usually a customer who initiates contact and is seeking information on a web site. In other words it is a ‘pull’ mechanism unless e-mail is used (this can be considered as a push technique). The Internet should be used to encourage two-way communication. These may be extensions of the direct-response approach. For example, FMCG suppliers such as Nestle (www.nescafe.co.uk) use their web site as a method of generating interaction by providing incentives such as competitions and sales promotions to encourage the customer to respond with their names, addresses and profile information such as age and sex. 8.1.4 Function of Internet marketing 1. Intelligence The Internet can be used as a relatively low cost method of collecting marketing research, particularly about customer perceptions of products and services. In the competitions referred to above Nescafe are able to profile their customers on the basis of the information received in
questionnaires. The Internet can be used to create two-way feedback which does not usually occur inothermediaFinancialservicesproviderEgg(www.egg.com)collectsinformationabouttheir online service levels through a questionnaire that is continuously available in the customer service part of their site. What is significant is that the company responds via the website to the main concerns from customer; if the length of time it takes to reply to customer service e-mails is seen as a problem it will explain what the organization is trying to do to resolve this problem 2. Individualization thar x another important feature of the interactive marketing communications referred to above is they can be tailored to the individual unlike traditional media where the same message tends to be broadcast to everyone. The process of tailoring is also referred to as personalization and is an important aspect of achieving customer relationship management online. Personalization is often achieved through extranets which are set up with key accounts to manage the buying and after-salesprocessesDell(www.dell.com/premierpages)hassetuppreMierPages'forkey accounts such as the Abbey National where special offers and bespoke customer support are delivered. Another example of personalization is that achieved by business-to-business e-tailor RS Components(www.rswww.com).Everycustomerwhoaccessestheirsystemisprofiledaccording to their area of product interest and information describing their role in the buying unit When they next visit the site information will be displayed relevant to their product interest, for example office products and promotions if this is what was selected. This is an example of what is known as mass customization where generic customer information is supplied for particular segments i.e the information is not unique to individuals, but to those with a common interest. The online booksellerssuchasAmazon(www.amazon.co.uk)usethisapproachtocommunicatenewbooks to groups of customers. Gardeners for instance, who have previously purchased a gardening book, will receive a standard e-mail advertising the latest gardening tome. This is again mass 3. Integratio The Internet provides further scope for integrated marketing communications. When assessing the success of a web site, the role of the Internet in communicating with customers and other partners can best be considered from two perspectives. First organization to customer direction, how does the Internet complement other channels in communication of proposition for the company's products and services to new and existing customers with a view to generating new leads and retaining existing customers? Second customer to organization, how can the Internet complement other channels to deliver customer service to these customers? Many companies are now considering how they integrate e-mail response and web-Site call-back into their existing call-centre or customer service operation. This may require a substantial investment in training and new software 4. Industry restructuring Disintermediation and reintermediation are key concepts of industry restructuring that should be considered by any company developing an e-marketing strategy. For the marketer defining their companies communications strategy it becomes very important to consider a companies representation on these intermediary sites by answering questions such as which intermediaries should we be represented on? 'and how do our offerings e to those of competitors in terms of features, benefits and price? Independence of location Electronic media also introduce the possibility to increase the reach of company communications to the global market. This gives opportunities to sell into international markets thatmaynothavebeenpreviouslypossibleScottBader(www.scottbader.com business-to-business supplier of polymers and chemicals for the paints and coatings industry, can now target countries beyond the 40 or so it has traditionally sold to via a network of local agents and franchises. The Internet makes it possible to sell to a country without a local sales or customer service force(although this may still be necessary for some products). In such situations and with the restructuring in conjunction with disintermediation and reintermediation, strategists also need
questionnaires. The Internet can be used to create two-way feedback which does not usually occur in other media. Financial services provider Egg (www.egg.com) collects information about their online service levels through a questionnaire that is continuously available in the customer service part of their site. What is significant is that the company responds via the website to the main concerns from customer; if the length of time it takes to reply to customer service e-mails is seen as a problem it will explain what the organization is trying to do to resolve this problem. 2. Individualization Another important feature of the interactive marketing communications referred to above is that they can be tailored to the individual unlike traditional media where the same message tends to be broadcast to everyone. The process of tailoring is also referred to as personalization and is an important aspect of achieving customer relationship management online. Personalization is often achieved through extranets which are set up with key accounts to manage the buying and after-sales processes. Dell (www.dell.com/premierpages) has set up ‘Premier Pages’ for key accounts such as the Abbey National where special offers and bespoke customer support are delivered. Another example of personalization is that achieved by business-to-business e-tailor RS Components (www.rswww.com). Every customer who accesses their system is profiled according to their area of product interest and information describing their role in the buying unit. When they next visit the site information will be displayed relevant to their product interest, for example office products and promotions if this is what was selected. This is an example of what is known as mass customization where generic customer information is supplied for particular segments i.e. the information is not unique to individuals, but to those with a common interest. The online booksellers such as Amazon (www.amazon.co.uk) use this approach to communicate new books to groups of customers. Gardeners for instance, who have previously purchased a gardening book, will receive a standard e-mail advertising the latest gardening tome. This is again mass customization. 3. Integration The Internet provides further scope for integrated marketing communications. When assessing the success of a web site, the role of the Internet in communicating with customers and other partners can best be considered from two perspectives. First organization to customer direction, how does the Internet complement other channels in communication of proposition for the company’ s products and services to new and existing customers with a view to generating new leads and retaining existing customers? Second customer to organization, how can the Internet complement other channels to deliver customer service to these customers? Many companies are now considering how they integrate e-mail response and web-site call-back into their existing call-centre or customer service operation. This may require a substantial investment in training and new software. 4. Industry restructuring Disintermediation and reintermediation are key concepts of industry restructuring that should be considered by any company developing an e-marketing strategy. For the marketer defining their companies communications strategy it becomes very important to consider a companies representation on these intermediary sites by answering questions such as ‘which intermediaries should we be represented on?’ and ‘how do our offerings compare to those of competitors in terms of features, benefits and price?’ 5. Independence of location Electronic media also introduce the possibility to increase the reach of company communications to the global market. This gives opportunities to sell into international markets that may not have been previously possible. Scott Bader (www.scottbader.com), a business-to-business supplier of polymers and chemicals for the paints and coatings industry, can now target countries beyond the 40 or so it has traditionally sold to via a network of local agents and franchises. The Internet makes it possible to sell to a country without a local sales or customer service force (although this may still be necessary for some products). In such situations and with the restructuring in conjunction with disintermediation and reintermediation, strategists also need
to carefully consider channel conflicts that may arise. If a customer is buying direct from a company in another country rather than via the agent, this will marginalize the business of the local agent who may want some recompense for sales efforts or may look to partner with 8.2. Strategy of Internet marketing 8.2. 1 Define the objection Developing a successful Internet marketing strategy is an essential part of your online success. In order to succeed, you must develop and implement a strategic plan that includes all of the following A great product a website specifically designed to sell a killer marketing strategy Dor Each step plays an important role in your overall strategy and must be developed to its fullest ential. If even one step fails, your chances of success will be minimal 8. 2.2 Design content 1. Developing Your Product Your first step will be to develop a great product. You're probably thinking that's easier said than done, but it's really not The absolute best product is one that you can develop yourself and deliver over the Internet. With today's technology, there is absolutely no reason why you cant create your own product. The knowledge you have within your own mind is extremely valuable Everybody is good at something, has a special talent or some specialized knowledge. Use this nowledge to create a product The key to developing a great product is exclusiveness. Your product should be unique and not be in competition with hundreds of other similar products. You must give your potential customers exactly what they want Another consideration of great importance is your target market. Keep in mind, the Internet is marketplace. Develop a product with a large geographic target and a wide appeal. A great will fulfill a need or desire and provide instant gratification e a few of the top sellers a Software nformation de before you develop your product, do some research --find out exactly what people want and develop your product accordingly The most important consideration when developing your product is quality. Your product should not only deliver what you promise, but should go above and beyond the expected and over deliver. Your customers'satisfaction is of the utmost importance 2. Developing Your Website Once you've developed a great product, your next step will be to develop a great websi ur website must be specifically designed to sell your produc Everything within your website should have one purpose- getting your visitor to take action Words are the most powerful marketing tool you have. The right words will turn your visitors into customers. The wrong words will cause them to click away and never return Your words are the entire foundation of your business. Your product, your website and your marketing strategies all depend upon your words. Fancy graphics don't make sales-- words de Every word, sentence and headline should have one specific purpose -to lead your potential customer to your order page. Write your website copy as if you are talking to just one person Identify a problem and validate that one visitors need for a solution. Continue to write and explain why your product is the solution to their problem. Tell them exactly what your product will do for them -why it will solve their problems and how. Pack your copy with benefits and more benefits. Write to persuade -thats the bottom line
to carefully consider channel conflicts that may arise. If a customer is buying direct from a company in another country rather than via the agent, this will marginalize the business of the local agent who may want some recompense for sales efforts or may look to partner with competitors. 8.2. Strategy of Internet Marketing 8.2.1 Define the objection Developing a successful Internet marketing strategy is an essential part of your online success. In order to succeed, you must develop and implement a strategic plan that includes all of the following: ▪ A great product. ▪ A website specifically designed to sell. ▪ A killer marketing strategy. Each step plays an important role in your overall strategy and must be developed to its fullest potential. If even one step fails, your chances of success will be minimal. 8.2.2 Design content 1. Developing Your Product Your first step will be to develop a great product. You're probably thinking that's easier said than done, but it's really not. The absolute best product is one that you can develop yourself and deliver over the Internet. With today's technology, there is absolutely no reason why you can't create your own product. The knowledge you have within your own mind is extremely valuable. Everybody is good at something, has a special talent or some specialized knowledge. Use this knowledge to create a product. The key to developing a great product is exclusiveness. Your product should be unique and not be in competition with hundreds of other similar products. You must give your potential customers exactly what they want. Another consideration of great importance is your target market. Keep in mind, the Internet is a global marketplace. Develop a product with a large geographic target and a wide appeal. A great product will fulfill a need or desire and provide instant gratification. Here are a few of the top sellers: ▪ Software. ▪ Information. ▪ Private sites. ▪ Internet services. Before you develop your product, do some research -- find out exactly what people want and develop your product accordingly. The most important consideration when developing your product is quality. Your product should not only deliver what you promise, but should go above and beyond the expected and over deliver. Your customers’ satisfaction is of the utmost importance. 2. Developing Your Website Once you've developed a great product, your next step will be to develop a great website. Your website must be specifically designed to sell your product. Everything within your website should have one purpose -- getting your visitor to take action. Words are the most powerful marketing tool you have. The right words will turn your visitors into customers. The wrong words will cause them to click away and never return. Your words are the entire foundation of your business. Your product, your website and your marketing strategies all depend upon your words. Fancy graphics don't make sales -- words do. Every word, sentence and headline should have one specific purpose – to lead your potential customer to your order page. Write your website copy as if you are talking to just one person. Identify a problem and validate that one visitor’s need for a solution. Continue to write and explain why your product is the solution to their problem. Tell them exactly what your product will do for them – why it will solve their problems and how. Pack your copy with benefits and more benefits. Write to persuade – that’s the bottom line
8.2.3 Decide the marketing strategy 1. Developing Your Marketing strategie Your marketing strategy is the final process of your plan. Your plan must include both short-term and long-term strategies in order to succeed Short term marketing strategies are those that bring you a temporary boost in traffic Although these techniques are very important to your over-all plan, they are only a temporary traffic source and must not be solely relied upon Short term marketing strategies include Bulletin boards Long term marketing strategies are those that bring you a steady stream of targeted traffic over time. These strategies will continue to produce results even years down the road Long term marketing strate By creating and implementing a balanced marketing strategy, using both short-term and long-term strategies, you will drive a steady stream of targeted traffic to your website 8.3 Internet Advertisement Marketing 8.3. 1 Summary of Internet Ads Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction Interactive marketing-marketing that allows a consumer to interact with an online seller Two-way communication and e-mail capabilities; Vendors also can target specific groups and individuals 1. Internet Advertising Terminology Ad views number of times users call up a page that has a banner on it during a specific time period; known as impressions or page views Button: a small banner that is linked to a Web site Page: hTmL document Click: a count made each time a visitor clicks on an advertising banner to access the advertisers Web site(ad clicks and click through) CPM(cost per thousand impressions): fee an advertiser pays for each 1, 000 times a page with a banner ad is viewed Hit: request for data from a Web page or file 2. Why Internet advertisement? 3/4 of PC users gave up some television time Well educated, high-income Internet users are a desired target for advertisers Internet is by far the fastest growing communication medium Advertisers are interested in a medium with such potential reach, both locally and globally Cost: Online ads are cheaper than those in other media, Ads can be updated at any time with minimal cost Richness of format Use of text, audio, graphics, and animation, Games, entertainment, and promotions are easily combined in online ads Personalization see Figure 8.1
8.2.3 Decide the marketing strategy 1. Developing Your Marketing strategies Your marketing strategy is the final process of your plan. Your plan must include both short-term and long-term strategies in order to succeed. Short term marketing strategies are those that bring you a temporary boost in traffic. Although these techniques are very important to your over-all plan, they are only a temporary traffic source and must not be solely relied upon. Short term marketing strategies include: ▪ Purchasing advertising. ▪ Bulletin Boards. ▪ Search Engines. Long term marketing strategies are those that bring you a steady stream of targeted traffic over time. These strategies will continue to produce results even years down the road. Long term marketing strategies include: ▪ Opt-in Lists. ▪ Freebies. ▪ Content. By creating and implementing a balanced marketing strategy, using both short-term and long-term strategies, you will drive a steady stream of targeted traffic to your website. 8.3 Internet Advertisement Marketing 8.3.1 Summary of Internet Ads Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction. Interactive marketing—marketing that allows a consumer to interact with an online seller ▪ Two-way communication and e-mail capabilities; ▪ Vendors also can target specific groups and individuals; ▪ Enables truly one-to-one advertising. 1. Internet Advertising Terminology Ad views: number of times users call up a page that has a banner on it during a specific time period; known as impressions or page views; ▪ Button: a small banner that is linked to a Web site; ▪ Page: HTML document; ▪ Click: a count made each time a visitor clicks on an advertising banner to access the advertiser‘s Web site (ad clicks and click through); ▪ CPM (cost per thousand impressions) : fee an advertiser pays for each 1,000 times a page with a banner ad is viewed; ▪ Hit: request for data from a Web page or file. 2. Why Internet Advertisement? ▪ 3/4 of PC users gave up some television time ▪ Well educated, high-income Internet users are a desired target for advertisers ▪ Internet is by far the fastest growing communication medium ▪ Advertisers are interested in a medium with such potential reach, both locally and globally ▪ Cost: Online ads are cheaper than those in other media, Ads can be updated at any time with minimal cost. ▪ Richness of format: Use of text, audio, graphics, and animation, Games, entertainment, and promotions are easily combined in online ads. ▪ Personalization: see Figure 8.1