1Introduction to Internet Marketing

Introduction to Internet Marketing Todays ObjectivesObjectives will be to: Define the scope of Internet marketingExplore the stages of Internet marketingDiscuss the relationship stages and the Marketspace MatrixExamine guidelines for successOutline the progression of the book

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Definition and Scope of Internet Marketing

Exhibit 1.1: Assessing the Impact of Internet MarketingCell 4Cell 2Cell 3Cell 1Location of Revenue StreamBricks-and- MortarOnlineMarketing Resource AllocationOfflineOnlineInternet Marketing Impact

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Exhibit 1.2: The Seven-Stage Cycle of Internet MarketingStep 2Formulating the Marketing StrategyStep 3Designing the Customer ExperienceStep 4Crafting the Customer InterfaceStep 5Designing the Marketing ProgramStep 6 Leveraging Customer Information Through TechnologyStep 7Evaluating the Marketing ProgramStep 1Framing the Market Opportunity

Exhibit 1.3: Framework for Market OpportunitySeed Opportunity in Existing New Value SystemIdentify Unmet and Underserved Need(s)Identify Target Segment(s)Declare Companys Resource-Based Opportunity for AdvantageAssess Competitive, Technological, and Financial Opportunity AttractivenessMake Go / No-Go Assessment

Framework for Market OpportunityMicrosoft CarPoint ExampleLeverage the Internet to Improve the Consumer Car-Buying Process

Car Buyers Are Dissatisfied With Current Retail Car-Buying Process

Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way Microsofts Software and Free Placement on All Its WebsitesHow Big Is the Online Car-Buying Market? Who Are CarPoints Main Competitors?Make Go / No-Go Assessment MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry The retail car-buying process was frustrating and inefficient: Little information available to the consumer Bargaining with salesperson viewed as an hassle Long process overall MSN CarPoint selected two primary target segments for its service: The intimidated by the process The information seekers MSN CarPoint could leverage Microsofts expertise in software development, its brand name and its multitude of online properties Competition was getting fierce with more and more online car services entering the market But the financial opportunity was large: 66% of new car buyers were estimated to use online services in 2000 In 1996, the first version of CarPoint was shipped By 1998, CarPoint was driving $5 million in car sales a day

Exhibit 1.4: Corporate, Business-Unit and Marketing StrategyCorporate StrategyBusiness Unit StrategyAmazonTools and HardwareIntegrated Marketing Strategy for Tools and Hardware UnitLinkagesExampleIntegrated Marketing Strategy for UnitInternet MarketingTraditional MarketingOnline Marketing MixOffline Marketing Mix

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Exhibit 1.5: The Four Key Stages of Customer RelationshipAwarenessExploration /ExpansionCommitmentDissolutionFour Key Stages of Customer Relationship

Exhibit 1.6: Four Key Stages of Customer Relationship by Level of IntensityLevel of IntensityStages of Customer RelationshipsAwarenessExplorationCommitmentDissolutionIntensity

Exhibit 1.7: Internet Marketing MixBranding

Exhibit 1.8: Impact of the 2Is on the Internet Marketing MixBrandingIndividual Interactivity

Exhibit 1.9: The Marketspace Matrix Relationship StagesCategories of LeversBrandingBranding can also accentuate (or lessen) the impact of the levers in each cellThe 2Is should influence the design of each cell in the matrix

Awareness

Exploration

Commitment

Dissolution

Product

Price

Communication

Community

Distribution

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Critical Success Factors for Internet Marketing ExecutivesCustomer Advocacy and InsightIntegrationBalanced ThinkingPassion and Entrepreneurial SpiritWillingness to Accept Risk and AmbiguityThe willingness to understand customer needs and provide added value to each customer interactionThe ability to manage marketing campaigns in a more uncertain, dynamic environment, with a new set of tools that often have few records of successes, failures or best-practicesThe ability to have a holistic view of the customer and the enterprise in order to create a uniquely advantaged strategic planBeing able to understand the dynamic tension between one-to-one marketing and mass marketing and being able to strike a strategic balance between themThe willingness to change the status quo, take chances and use bleeding edge tools to lead teams to success

Exhibit 1.10: The New Rules of Marketing for the Global Digital WorldThe New Rules1.Target segments of one, and create virtual communities2.Design for customer-led positioning3.Expand the role of branding in the global portfolio4.Leverage consumers as coproducers through customization5.Use creative pricing in the Priceline.com world6.Create anytime/anyplace distribution and integrated supply chains7.Redesign advertising as interactive and integrated marketing, communication, education and entertainment8.Reinvent marketing research and modeling as knowledge creation and dissemination9.Use adaptive experimentation10. Redesign the strategy process and supporting organizational architectureSource: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.

Point-Counterpoint: New Rules or Old Rules of MarketingPoint-Counterpoint

New Rules

Old Rules

Several basic conceptual and process changes occur in online marketing

One such change is the increased ability to deliver on the promise of one-to-one marketing

There is also a fundamental shift to a more consumer-driven and controlled world for example, a shift towards pull-marketing and the use of more pull levers, such as online community

Differences in the online marketing world are overstated

Segmentation is still at the core of marketing clusters of consumers will emerge that share behavior

From the supply side, it is most efficient to aggregate these consumers to reduce costs

Successful marketing programs include mixing different marketing levers, both new and old: the master-mixer concept still remains

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Exhibit 1.11: Overview of the Chapters4. Crafting the Customer Interface1. Framing the Market Opportunity2. Formulating the Market Strategy3. Designing the Customer Experience5. Designing the Marketing Program6. Leveraging Customer Information through Technology7. Evaluating the Marketing ProgramCustomer RelationshipsProductPricingCommunicationCommunityDistributionBrandingDesigning the Marketspace MatrixIllustration: Marketing Campaign for The Lord of the Rings: The Fellowship of the Ring

Chapter 1: Introduction to Internet MarketingDefinition and Scope of Internet MarketingSeven-Stage Cycle of Internet MarketingFour Key Relationship Stages and the Marketspace MatrixGuidelines for Internet Marketing SuccessOverview of the BookConclusion

Introduction to Internet Marketing ConclusionTraditional marketing methods are still highly relevant in the networked economy, though firms must now consider a host of new and innovative marketing methods available online (e.g., dynamic pricing, online community)In contrast to the one-way mass promotion that characterizes modern marketing, Internet marketing enables firms to engage the individual in personalized dialoguesIndividualization and Interactivity are two forces that make online marketing differentMarketing, and the relationships it creates, should be considered in the context of particular processes and stages