MGMT 120 - Principles of Marketing Summer 2005

1

The Internet as a Marketing Tool

Advantages Serves as an information conduit Direct sales channel Tracks customers and mines data Interactive medium that can build

marketing relationships

MGMT 120 - Principles of Marketing Summer 2005

2

The Internet as a Marketing Tool

Disadvantages Privacy Limited to customers and businesses

connected to the web Search and navigation is sometimes

difficult Speed

Slow connection time Web sites with large number of graphics

MGMT 120 - Principles of Marketing Summer 2005

3

Stages of E-marketing Up and going All that hype Shaken, rattled and rolled over Survival of the fittest Getting down to business

MGMT 120 - Principles of Marketing Summer 2005

4

Up and Going 1995 began the commercial use of

the internet 1996 – 500,000 web sites worldwide 2001 - 500 million internet users “If you build it, they will come” Fueling web site growth - banner

advertising Fueling access - free ISP

MGMT 120 - Principles of Marketing Summer 2005

5

All That Hype B-to-b sales were predicted to increase

from $420 billion in 2000 to $7.2 trillion by 2004

W-marketing P-marketing T-marketing E-marketing All “new paradigms” get absorbed into

the marketing tool chest

MGMT 120 - Principles of Marketing Summer 2005

6

Shaken, Rattled and Rolled Over

Infrastructure and purchasing habits take years to change regardless of the technology Must adapt technology to people

rather than forcing people to adapt to technology

Making money = business success Market value of stocks drop 80-90%

MGMT 120 - Principles of Marketing Summer 2005

7

Survival of the Fittest Gone

Webvan eToys Garden.com Furniture.com Napster

Still Around Travelocity Online stock

brokers Ebay Amazon.com AOL Time Warner

MGMT 120 - Principles of Marketing Summer 2005

8

Getting Down to Business The number of internet users

worldwide is still increasing e-commerce accounts for only 2% of all trade

Visits measured in cookies and registrations, not hits

Customer-driven not technology-driven

MGMT 120 - Principles of Marketing Summer 2005

9

Getting Down to Business Consumer and business cost efficiencies

are critical About $160 billion in mortgages were

processed online in 2001 15 million people paid bills online in 2001 16 million people accessed their checking or

savings accounts online in 2001 The internet is not a good place to get

new customers but a great place to keep them

MGMT 120 - Principles of Marketing Summer 2005

10

Getting Down to Business Internet shoppers are sophisticated

Complex questions require real time answers

Cost efficiencies of call center response, e-mail response, web site FAQ section or search option

Nordstrom.Com Text-based chat and swatching