Chapter 3: Marketing in the Digital Age: Making New Customer Connections

 

Objectives
  • •Be able to identify the major forces shaping the new digital age.
  • •Understand how companies have responded to the Internet with
    e-business strategies.
  • •Be able to describe the four major e-commerce domains.
  • •Understand how companies use e-commerce to profitably deliver greater value to customers.
  • •Realize the promise and challenges that e-commerce presents for the future.
 

 

 

Please Open The Following Figures In Different Windows and Leave Them Open:

Animated Figure 3-1  , Animated Figure 3-2 , Animated Figure 3-3 , Animated Figure 3-4

 

Case Study
Charles Schwab

Charles Schwab 

  • •Invented discount brokerage category
  • •First U.S. major player to go online
  • •Initially offered two-tiered trading system
    to protect profits / stop cannibalization
 

 
  • •Later became first true click-and-mortar full-service brokerage
  • •Now world’s largest
    e-commerce site
  • •85% online trades;  21% of trade volume; Strong stock return
 

 

 

 

Major Forces Shaping the Digital Age
  • •Digitalization and Connectivity
  • §The flow of digital information requires connectivity
  •  Intranets, Extranets, and the Internet
  • •The Internet Explosion
  • §Key driver of the “new economy”
  • •New Types of Intermediaries
  • §Brick-and-mortar firms often face disintermediation from click-only competitors
  • §The click-and-mortar business model has been highly successful
  • •Customization and Customerization

 

 

Marketing Strategy in the Digital Age
  • •E-business:
  • §uses electronic means and platforms to conduct business.
  • •E-commerce:
  • §facilitates the sale of products and services by electronic means.
  • •E-marketing:
  • §Includes efforts that inform, communicate, promote, and sell products and services over the Internet.
  • •E-commerce benefits both buyers and sellers
  • •Buyer Benefits of E-Commerce:
  • §Convenience
  • §Easy and private
  • §Greater product access/selection
  • §Access to comparative information 
  • §Interactive and immediate
  • •Seller Benefits of E-Commerce:
  • §Relationship building
  • §Reduced costs
  • §Increased speed and efficiency
  • §Flexibility
  • §Global access, global reach
 

 

 

 

E-Commerce Domains
 

Major Domains

  • •B2C

     

  • • B2B

     

  • • C2C

     

  • • C2B
 
  • •Online consumers
  • §Now more mainstream and diverse
  • Has created new targeting opportunities
  • Online behavior differs by age
  • §Online consumers differ from traditional off-line consumers
  • They initiate and control the exchange process
  • Value information highly

 

E-Commerce Domains
 

Major Domains

  • •B2C

     

  • • B2B

     

  • • C2C

     

  • • C2B

 
  • •B2B sales far exceed B2C sales
  • §B2B sales are estimated to reach $4.3 trillion in 2005
  • •Open trading networks
  • §E-marketspace bringing sellers and buyers together
  • •Private trading networks
  • §Links sellers with their own trading partners

 

 

 

E-Commerce Domains
 

Major Domains

  • •B2C

     

  • • B2B

     

  • • C2C

     

  • • C2B
 

 
  • •C2C web sites help consumers exchange goods or information
  • §eBay is one example
  • •Auction sites facilitate the exchange process
  • §Allow access to a much larger audience
  • •Newsgroups / forums
  • §Help consumers to find and share information

 

 

 

E-Commerce Domains
 

Major Domains

  • •B2C

     

  • • B2B

     

  • • C2C

     

  • • C2B
 

 
  • •Allow consumers to search out sellers, learn about offers, initiate purchase, or dictate purchase terms
  • §Ex: Priceline.com
  • •Some sites facilitate the feedback process between customers and companies
  • §Ex: Planetfeed.com

 

 

Conducting E-Commerce
  • •Click-Only-Competitors
  • §E-tailers, search engines and portals, ISPs, transaction sites, enabler sites
  • •Dot.coms failed for many reasons
  • §Lack of planning and research
  • §Over emphasis on acquisition vs. retention
  • §Poor web site design / distribution systems
  • §Low margins
  • •Click-and-Mortar Companies
  • §Channel conflict was initially a concern
  • §E-commerce often created new customers, rather than cannibalizing existing ones
  • §Many firms now enjoy greater success than their click-only competition
  • Trusted brand names, greater financial resources, larger customer base, industry knowledge, and strong supplier relationships were key advantages
 

 

 

 

Conducting E-Commerce
E-Marketing
  • •Creating web sites

     

  • •Placing online ads and promotions

     

  • •Creating or using web communities

     

  • •Using E-mail and webcasting
 
  • •Corporate web sites
  • §Build goodwill and relationships; generate excitement
  • •Marketing web sites
  • §Engage consumers
    and attempt to influence     purchase
  • •Web site design
  • §7 Cs of effective web site design

 

 

Conducting E-Commerce

Seven C’s of Web Site Design
  • •Context
  • •Content
  • •Community

 
  • •Communication
  • •Connection
  • •Commerce
 

  • Customization

 

 

Conducting E-Commerce
E-Marketing
  • •Creating web sites

     

  • •Placing online ads and promotions

     

  • •Creating or using web communities

     

  • •Using E-mail and webcasting
  • •Online forms of ads and promotions
  • §Banner ads/tickers
  • §Skyscrapers
  • §Interstitials
  • §Browser ads
  • §Content sponsorships
  • §Microsites
  • §Viral marketing
  • •Future of online ads

 

Conducting E-Commerce
E-Marketing
  • •Creating web sites

     

  • •Placing on-line ads and promotions

     

  • •Creating or using web communities

     

  • •Using E-mail and webcasting
 
  • •Web communities allow members with special interests to exchange views
  • §Social communities
  • §Work-related communities
  • •Marketers find well-defined demographics and shared interests useful when marketing

 

 

Conducting E-Commerce
E-Marketing
  • •Creating web sites

     

  • •Placing on-line ads and promotions

     

  • •Creating or using web communities

     

  • •Using E-mail and webcasting
  • •E-mail marketing
  • §Key tool for B2B and B2C marketing
  • §Clutter is a problem
  • §Enriched forms of
    e-mail attempt to break through clutter
  • •Webcasting
  • §Auto downloading of  customized content to recipients’ PCs
 

 

 

Promise and Challenges of E-Commerce
  • •The Promise of E-Commerce
  • §The future of B2B E-commerce is bright
  • §A few click-only companies may succeed
  • §Most companies will integrate online marketing into the marketing mix
  • •Challenges: The Web’s Darker Side
  • §Few B2C companies are profitable
  •  Limited exposure, skewed demographics
  • v Navigating the web is often problematic
  • •Challenge: Legal and Ethical Issues
  • §Online privacy and security concerns
  • §Internet fraud, the digital divide, access by vulnerable or unauthorized groups
 
 

 

Chapter 3: Marketing in the Digital Age: Making New Customer Connections

Study Guide
  • Concepts Check

 

Study Guide
  • Concepts Challenge

 

 
  • Chapter Outline

 

 
  • Video Case

 

 
  • PowerPoint Express - kotler03_exs.PPT               
  • Chapter 3 Power point

 

 

BACK

Chapter 3: Marketing in the Digital Age: Making New Customer Connections

Animated Figure 3-1  , Animated Figure 3-2 , Animated Figure 3-3 , Animated Figure 3-4

PowerPoint Express - kotler03_exs.PPT               

Chapter 3 Power point