E marketing[1]

1. Agenda : E - Marketing
• Markets and e-marketspace
• E-marketing strategies
– Product development strategy
– Pricing on the Internet
– Branding and traffic building
– Web site promotion and advertising
• Types of e-Markets (product, pricing)
• Advertising (placement, promotion)
• Search engine positioning (example)
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2. Consumer Behavior
• The process and activities people engage in
when searching for, selecting, purchasing, using,
evaluating, and disposing of products and
services so as to satisfy their needs and wants
• The study of when, why, how, and where
people do or do not buy a product. It blends
elements from psychology, sociology, social
anthropology and economics

3. Economics
• Consumer Choice and Budget Constraint
• Utility Maximizing Rule
• “The consumer is a rational person, who tries to use his or
her money income to derive the greatest amount of
satisfaction, or utility, from it “
• Preferences: Each consumer has preferences for certain of
the goods and services that are available in the market.
Utility will be different for every individuals because all
individuals have different taste and preferences

4. Consumer Decision Making
Decision-Making Psychological Process
Problem recognition Motivation
Information search Perception
Alternative evaluation Attitude formation
Purchase decision Integration
Postpurchase evaluation Learning

5. Sources of Problem Recognition
New Needs
New Needs
Out of Stock
Out of Stock Dissatisfaction
Dissatisfaction or Wants
or Wants
Related Products,
Related Products, Market-Induced
Market-Induced New
New
Purchases
Purchases Recognition
Recognition Products
Products

6. Maslow’s Hierarchy of Needs
Self-actualization needs (self-development,
Self-actualization needs (self-development,
realization)
realization)
Esteem
Esteem
(self-esteem, recognition, status)
(self-esteem, recognition, status)
Social
Social
(sense of belonging, love)
(sense of belonging, love)
Safety
Safety
(security, protection)
(security, protection)
Physiological
Physiological
(hunger, thirst)
(hunger, thirst)

7. Information Search
es
a l sourc
Person
Market sou
rces
Pub
lic s
our
ces
Pe
rso
nal
exp
erie
nce

8. Perception
• Marketers want to know
– How consumers sense external information
– How they select and use sources of information
– How information is interpreted and
given meaning

9. Evaluation of Alternatives
All Available Brands
Brand A Brand B Brand C Brand D Brand E
Brand F Brand G Brand H Brand I Brand J
Brand K Brand L Brand M Brand N Brand O
Evoked Set of Brands
Brand B Brand E
Brand F Brand I
Brand M

10. Evaluative Criteria
Brand Evaluation
Brand Evaluation
Subjective
Subjective
Objective Attributes
Objective Attributes Attributes
Attributes
Price
Price Image
Image
Features
Features Style
Style
Warranty
Warranty Performance
Performance
Service
Service

11. Purchase Decision and Evaluation
Pre-evaluation
Pre-evaluation Decision
Decision Post evaluation
Post evaluation
Purchase intention
Purchase intention Satisfaction
Satisfaction
Dis-satisfaction
Dis-satisfaction
Integration Brand loyalty
Brand loyalty
Integration
processes
processes
Cognitive
Cognitive
dissonance
dissonance

12. Categories of consumers
• Impulsive buyers: purchase quickly
• Patient buyers: make some
comparisons first
• Analytical buyers: do substantial
research before buying
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13. Functions of markets
Three main functions of markets
– Matching buyers and sellers
– Facilitating the exchange of information,
goods, services, and payments associated with
market transactions
– Providing an institutional infrastructure, such
as a legal and regulatory framework, that
enables the efficient functioning of the market
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14. E-Marketplaces
• Electronic marketplaces (e-marketplaces or
marketspaces), changed several of the processes used in
trading and supply chains
– Greater information richness
– Lower information search costs for buyers
– Diminished information asymmetry between sellers and buyers
– Ability of buyers and sellers to be in different locations
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15. E-Marketplaces
e-marketspace
A marketplace in which sellers and buyers exchange
goods and services for money (or for other goods and
services), but do so electronically
infomediaries
Electronic intermediaries that control information flow in
cyberspace, often aggregating information and selling it
to others
E.g., http://www.abebooks.com
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16. E-Marketplaces
• Marketspace components
front end
The portion of an e-seller’s business processes through
which customers interact, including the seller’s portal,
electronic catalogs, a shopping cart, a search engine, and
a payment gateway
back end
The activities that support online order-taking. It includes
fulfillment, inventory management, purchasing from
suppliers, payment processing, packaging, and delivery
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17. Market Mechanisms
• Electronic catalogs
• Search engines
• Electronic shopping cart
• Auctions
– Forward
– Backward
• Dynamic pricing
• E-Bartering
• Mobile computing/commerce
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18. Electronic Catalogs and
Other Market Mechanisms
electronic catalogs
The presentation of product information in an electronic
form; the backbone of most e-selling sites
• Issues to consider:
1. Interactivity
2. The degree of customization
3. Integration with business processes
4. Search capabilities
5. Ease of updating
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19. Electronic Catalogs and
Other Market Mechanisms
• Two approaches to creating customized
catalogs
– Let the customers identify the parts of interest
to them from the total catalog
– Let the system automatically identify customer
characteristics based on the customer’s
transaction records
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20. Electronic Catalogs and
Auctions as EC Market Mechanisms
electronic shopping cart
An order-processing technology that allows customers to
accumulate items they wish to buy while they continue
to shop
auction
A competitive process in which a seller solicits
consecutive bids from buyers (forward auctions) or a
buyer solicits bids from sellers (backward auctions).
Prices are determined dynamically by the bids
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21. Auctions As EC
Market Mechanisms
• Limitations of Traditional Off-line Auctions
– The rapid process may give potential buyers little
time to make a decision
– Bidders must usually be physically present at
auctions
– Difficult for sellers to move goods to an auction
site
– Commissions are fairly high
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22. Auctions As EC
Market Mechanisms
forward auction
An auction in which a seller entertains bids from
buyers
reverse auction (bidding or tendering system)
Auction in which the buyer places an item for bid
(tender) on a request for quote (RFQ) system,
potential suppliers bid on the job, with the price
reducing sequentially, and the lowest bid wins;
primarily a B2B mechanism
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23. Auctions As EC
Market Mechanisms
“name-your-own-price” model
Auction model in which a would-be buyer
specifies the price (and other terms) he or she is
willing to pay to any willing and able seller. It is a
C2B model that was pioneered by Priceline.com
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24. Auctions As EC
Market Mechanisms
• Limitations of E-Auctions
– Minimal security
– Possibility of fraud
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25. Bartering and Negotiating Online
bartering
The exchange of goods or services
e-bartering (electronic bartering)
Bartering conducted online, usually by a bartering
exchange
bartering exchange
A marketplace in which an intermediary arranges barter
transactions
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26. EC in the Wireless Environment:
M-Commerce
mobile commerce (m-commerce)
E-commerce conducted via wireless devices
m-business
The broadest definition of m-commerce, in which
e-business is conducted in a wireless environment
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27. E-Marketing Strategies
The essential issues of marketing are also
referred to as the four Ps of marketing
mix:
• Product: Physical item or service that a company is selling
• Pricing: Amount the customer pays for the product
• Placement: How the product/service gets to the customer,
sometimes called “place” referring to “where” a product/service is
sold
• Promotion: Any means of spreading the word about the product
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28. E-Marketing Strategies (cont.)
There are extra three Ps as the extended marketing
mix:
• People: Right person, trained well,
motivated
• Process: Providing services to customers
• Physical evidence: Case studies,
testimonials
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29. Market segmentation
• The identification of specific portions of
a market and targeting them with
specific advertising messages
• Divides the pool of potential customers
into segments
• The practice of targeting very small
market segments - micromarketing
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30. Market Segmentation
Key Topics • Geographical segmentation
– Marketing mixes are
customized geographically
• Segmenting Consumer
Markets • Demographic segmentation
– Most popular type
• Segmenting Business
– Demographics are closely
Markets related to needs, wants and
• Segmenting usage rates
International Markets • Psychographic segmentation
- Lifestyle, social class, and
personality-based
segmentation
• Behavioral segmentation
• Using multiple segmentation

31. Market Segmentation
Geographic
Segmentation Variables
World Region City or
or Country Metro Size
Country Neighborhood
Region Density
City Climate

32. Market Segmentation
Demographic
Segmentation Variables
• Age Occupation
• Gender Education
• Family size Religion
• Family life cycle Generation
• Income Nationality
• Ethnicity

33. Market Segmentation
Behavioral
Segmentation Variables
• Occasions Loyalty Status
• Benefits Readiness Stage
• User Status Attitude Toward
• User Rates the Product

34. Market Segmentation
Key Topics • Demographic segmentation
– Industry, company size, location
• Segmenting Consumer • Operating variables
– Technology, usage status,
Markets customer capabilities
• Segmenting Business • Purchasing approaches
Markets • Situational factors
• Segmenting – Urgency, specific application, size
International Markets of order
• Personal characteristics
– Buyer-seller similarity, attitudes
toward risk, loyalty
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35. Market Segmentation
Key Topics • Geographic segmentation
– Location or region
• Segmenting Consumer • Economic factors
– Population income or level of
Markets economic development
• Segmenting Business • Political and legal factors
Markets – Type / stability of government,
• Segmenting monetary regulations, amount of
bureaucracy, etc.
International Markets • Cultural factors
– Language, religion, values,
attitudes, customs, behavioral
patterns
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36. Acquisition, conversion, retention
• The first step in doing business on the web is to
acquire or draw visitors to the site itself
• The second step is converting those first time
visitors into customers by persuading them to
make a purchase or register with the site, etc.
• Customers who return to the site one or more
times after making their first purchases are
retained customers
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37. Advertising
• Advertising is all about communication
between:
– a company/organization and its current
customers
– a company/organization and potential
customers
– a company/organization and its former
customers
• To be effective, firms should send different
messages to each of these audiences
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38. Types of Internet advertising/marketing
• Banner ads: most popular, different sizes and
styles
• Pop-up ads: popular, another type is pop-behind
• E-mail marketing: powerful, economical, legal
implications, spam
• Affiliate marketing: commission-based, benefit of
the selling site’s brand in exchange for the
referral
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39. E-mail Marketing
• Fast, cheap, far-reaching
• Define the reach
– The span of people you would like to target, including
geographic locations and demographic profiles
• Determine the level of personalization
– Personalized direct e-mail targets consumers with specific
information and offers by using customer names, offering
the right products at the right time and sending
promotions
• Response rate
– Shows campaign success or failure by measuring the
percentage of responses generated from the
target market

40. E-mail Marketing
• Improve customer service
– Add an e-mail link to Web site
– E-mail systems set up so that incoming e-mails will be
sorted automatically and directed to the appropriate
people
– Track location of orders, inform customers of when to
expect delivery and possible delays and providing
information such as the carrier’s name
• Permission-based marketing
– A company can market its products and services to people
who have granted permission
– Internet mailing lists include contact information for
people who have expressed interest in receiving
information on certain topics

41. Search Engine Positioning
• Potential customers find web sites in many
different ways
• Some site visitors will be referred by a
friend, others by affiliates, some will see the
site’s URL in a print advertisement or on
television
• Many site visitors will be directed to the site
by a search engine
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42. Search Engines
• Search-engine ranking important to bring
consumers to a site
– Method used by search engines to rank your Web
site will determine how "high" your site appears in
search results
• Make sure all Web pages have been published
on the Web and linked correctly
• By registering with search engines a company
will increase traffic to its site

43. META Tags
• META tag
– An HTML tag that contains information about a Web page
– Does not change how Web page is displayed
– Can contain description of page, keywords and title of page
• Most search engines rank your site by sending out a
spider to inspect the site
– The spider reads the META tags, determines the relevance
of the Web page’s information and keywords and ranks
the site according to that visit’s findings
• Examine competitors’ sites to see what META tags
they are using
• Top ten results

44. Search-Engine Registration
• Submit keywords and a description of business
• Search engine will add information to its database
• Registering will increase the possibility that a site
will make an appearance in search-engine results
• Many search engines do not charge a fee for
registering
– AltaVista, Yahoo!, Lycos, Excite, Google and Ask Jeeves
• Ask Jeeves uses natural-language technology that allows people to
enter their search subjects in the form of questions

45. Banner Advertising
• Banner ads
– Located on Web pages, act like small billboards, usually
contain graphics and an advertising message
– Benefits include:
• Increased brand recognition, exposure and possible revenue
– Side panel ads or skyscraper banners
• Advertisements that lie vertically on Web sites
– Banner advertisements are losing their effectiveness
• Industry has calculated click-through rates at around .5 percent
– Place logo on banners, enhancing brand recognition

46. Buying and Selling Banner
Advertising
• Buy advertising space on sites that receive a
large number of hits and target a similar
market
• Selling ad space provides additional income
• Monthly charges for online advertising rarely
used
• CPM (cost per thousand)
– A designated fee for every one thousand people
who view the site on which your advertisement is
located

47. Buying and Selling Banner
Advertising
• Unique visitors versus total number of hits
– Visiting any site registers one unique visit
– Hits are recorded for each object that is downloaded
– To determine the value of a Web site for advertising
purposes, use the number of unique visitors, not total hits
• Advertising payment options
– Pay-per-click: you pay the host according to the number of
click-throughs to your site
– Pay-per-lead: you pay the host for every lead generated
from the advertisement
– Pay-per-sale: you pay the host for every sale resulting
from a click-through

48. Buying and Selling Banner
Advertising
• Selling advertising space
– Provide appropriate contact information on your
Web site
– Register with organizations that will sell your
space for you
• These companies typically charge a percentage of the
revenue you receive from the advertisements placed on
your site
• ValueClick, DoubleClick, AdSmart and LinkExchange

49. ValueClick Feature
• ValueClick acts as a broker for people who want to
buy and sell advertising space
• Gives you the option of targeting specific markets
• To buy advertising through ValueClick:
– Design a banner
– Contact a representative of ValueClick to determine what
program best fits your advertising needs
– Pre-pay for the service based on the number of visitors you
want to receive, a minimum fee is required

50. ValueClick Feature
• Offers many segmented markets for advertising
– Segmented markets are people or companies that are
grouped together based on similar characteristics
• Earnings depend on number of click-throughs
resulting from the advertisements
• Pays host monthly if revenues are greater than
certain amount
• Offers four options for publishing advertisements on
your site
– ValueClick Affiliate, Premium, AdVantage and AdVantage
Plus programs