Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Definition of Internet Marketing

Internet

Marketing is the process of building and maintaining customer relationships through online activities to facilitate the exchange of ideas, products, and services that satisfy goals of both parties.

Exhibit 1.1: Assessing the Impact of Internet Marketing

Marketing Resource Allocation
Offline Online

Location of Revenue Stream

Bricks-and- Mortar

Cell 4

Cell 2

Cell 3

Cell 1

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Exhibit 1.2: The Seven-Stage Cycle of Internet Marketing

Step 2 Formulating the Marketing Strategy
Step 3 Designing the Customer Experience

Step 1 Framing the Market Opportunity

Step 4 Crafting the Customer Interface

Step 7
Evaluating the Marketing Program Step 6 Step 5 Designing the Marketing Program

Leveraging Customer Information Through Technology

7 stage cycle of internet marketing

Stage 1: Opportunity assessment unmet customer needs, target market. Stage 2: Formulating the marketing strategy: Offline and online marketing activities Stage 3: Designing the customer experience: Functionality, Intimacy and Evangelism Stage 4: Crafting the customer interface: marketspace: (screen to face interaction) Internet enabled appliance. Stage 5: Designing the marketing program: Customer relationships: Awareness, Exploration, Commitment, Dissolution. Internet Marketing Mix.

Continued
Stage 6: Leveraging Customer Information Through Technology: Marketing Research, Database marketing, CRM Stage 7: Evaluating the marketing program: Evaluation of the overall internet marketing program.

Exhibit 1.3: Framework for Market Opportunity

Seed Opportunity in Existing New Value System

Identify Unmet and Underserved Need(s)

Identify Target Segment(s)

Declare Companys Resource-Based Opportunity for Advantage

Assess Competitive, Technological, and Financial Opportunity Attractiveness

Make Go / No-Go Assessment

Framework for Market Opportunity Microsoft CarPoint Example

Leverage the Internet to Improve the Consumer Car-Buying Process
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

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 Websites

How Big Is the Online Car-Buying Market? Who Are CarPoints Main Competitors?

Make Go / No-Go Assessment

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 Strategy

Linkages
Corporate Strategy

Example
Amazon

Business Unit Strategy

Tools and Hardware

Integrated Marketing Strategy for Unit

Integrated Marketing Strategy for Tools and Hardware Unit

Internet Marketing

Traditional Marketing

Online Marketing Mix

Offline Marketing Mix

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Exhibit 1.5: The Four Key Stages of Customer Relationship

Four Key Stages of Customer Relationship

Awareness

Exploration / Expansion

Commitment

Dissolution

Exhibit 1.6: Four Key Stages of Customer Relationship by Level of Intensity

Level of Intensity

Intensity

Awareness

Exploration

Commitment

Dissolution

Stages of Customer Relationships

Exhibit 1.7: Internet Marketing Mix

Branding

Product

Pricing

Communication

Community

Distribution

Exhibit 1.8: Impact of the 2Is on the Internet Marketing Mix

Interactivity

Branding

Product

Pricing

Communication

Community

Distribution

Individual

Exhibit 1.9: The Marketspace Matrix

Relationship Stages
Awareness Product Exploration Commitment Dissolution

Categories of Levers

Price

Communication

The 2Is should influence the design of each cell in the matrix

Community

Distribution

Branding

Branding can also accentuate (or lessen) the impact of the levers in each cell

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Critical Success Factors for Internet Marketing Executives

Customer Advocacy and Insight

The willingness to understand customer needs and provide added value to each customer interaction

Integration

The ability to have a holistic view of the customer and the enterprise in order to create a uniquely advantaged strategic plan

Balanced Thinking

Being able to understand the dynamic tension between one-to-one marketing and mass marketing and being able to strike a strategic balance between them The willingness to change the status quo, take chances and use bleeding edge tools to lead teams to success

Passion and Entrepreneurial Spirit

Willingness to Accept Risk and Ambiguity

The 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-practices

Exhibit 1.10: The New Rules of Marketing for the Global Digital World

The New Rules

1. Target segments of one, and create virtual communities

2. Design for customer-led positioning

3. Expand the role of branding in the global portfolio 4. Leverage consumers as coproducers through customization 5. Use creative pricing in the Priceline.com world 6. Create anytime/anyplace distribution and integrated supply chains 7. Redesign advertising as interactive and integrated marketing, communication, education and entertainment 8. Reinvent marketing research and modeling as knowledge creation and dissemination 9. Use adaptive experimentation 10. Redesign the strategy process and supporting organizational architecture
Source: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.

Point-Counterpoint: New Rules or Old Rules of Marketing

Point-Counterpoint
New Rules
Several

Old Rules
Differences

basic conceptual and process changes occur in online marketing such change is the increased ability to deliver on the promise of one-to-one marketing 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

in the online marketing world are overstated is still at the core of marketing clusters of consumers will emerge that share behavior the supply side, it is most efficient to aggregate these consumers to reduce costs marketing programs include mixing different marketing levers, both new and old: the master- mixer concept still remains

One

Segmentation

There

From

Successful

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Exhibit 1.11: Overview of the Chapters

1. Framing the Market Opportunity 2. Formulating the Market Strategy 3. Designing the Customer Experience

4. Crafting the Customer Interface

5. Designing the Marketing Program

6. Leveraging Customer Information through Technology

7. Evaluating the Marketing Program

Customer Relationships Product Pricing Communication Community Distribution Branding Designing the Marketspace Matrix Illustration: Marketing Campaign for The Lord of the Rings: The Fellowship of the Ring

Chapter 1: Introduction to Internet Marketing

Definition and Scope of Internet Marketing Seven-Stage Cycle of Internet Marketing Four Key Relationship Stages and the Marketspace Matrix

Guidelines for Internet Marketing Success

Overview of the Book Conclusion

Introduction to Internet Marketing Conclusion

Traditional 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 dialogues Individualization and Interactivity are two forces that make online marketing different

Marketing, and the relationships it creates, should be considered in the context of particular processes and stages