Online Marketing & E-Commerce session two MOGHIMI

E-MARKETING COURSE
SESSION Two

Lecturer: Bahman Moghimi
Doctor of Business Administration
M.Sc. Of “Industrial Marketing & e-Commerce”

University of Georgia

What is Paradigm Shift?

 Information Age

 Buy-Side Market Place

 Competitors
B.Moghimi@yahoo.co.uk

 High Expectations

 High Rate of Change in
Cultures & Behaviors

 E-Life !!!!

Old Economy V.S. New Economy

Old Economy New Economy
Organize by product units Organize by customer segments
Focus on profitable transactions Focus on customer lifetime value
Look primarily at financial scorecard Look also at marketing scorecard

Focus on shareholders Focus on stakeholders
Marketing does the marketing Everyone does the marketing
Build brands through advertising Build brands through behavior
Focus on customer acquisition Focus on customer retention and growth

No customer satisfaction measurement Measure customer satisfaction & retention

Over-promise, under-deliver Under-promise, over-deliver

5

Meeting Increasing Customer Needs

6

What is Marketing? …

... a process by which companies create value
for customers and build strong customer
relationships in order to capture value
from customers in return.

It involves building profitable, value
exchange relationship with customers…….

7

Simple Model of Marketing Process

B.Moghimi@yahoo.co.uk 8

Customer-Driven Marketing Strategy

 What’s the target Market?
– Market Segmentation…
– Target Marketing…

 What’s the value proposition?
– Set of benefits & values to satisfy needs…
– Differentiation & Positioning…

9

Integrated Marketing Plan
The company’s
marketing
strategy should
develop an
integrated
marketing
program that
actually deliver
the intended-
value to target
customers

B.Moghimi@yahoo.co.uk 10

Building Customer Relationships

?
CRM is the overall process of building and
maintaining profitable customers relationships by

delivering superior customer value and satisfaction

 Customer (Perceived) VLUE (customers evaluation of differentiation)
 Customer SATISFACTION (Product Perceived Performance)

11

The Changing Nature of Customer Relationships

 More Carefully selected Customers
 Long-Term Relationships
 Connecting Directly

12

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
14 efficient functioning of the market

Definition of e-Commerce

15

THE GROWTH OF E-COMMERCE

Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed
measurably. In 2010, e-commerce revenues are growing again at an estimated 12 percent annually.

17

Why e-commerce is different – 8 unique features

1. Ubiquity
Internet/Web technology available everywhere: work,
home, etc., anytime.

 Effect:

– Marketplace removed from temporal, geographic locations
to become “marketspace”
– Enhanced customer convenience and reduced shopping
costs

18


2. Global reach
The technology reaches across national boundaries,
around Earth

 Effect:

– Commerce enabled across cultural and national
boundaries seamlessly and without modification
– Marketspace includes, potentially, billions of
consumers and millions of businesses worldwide

19


3. Universal standards
One set of technology standards: Internet standards

 Effect:
– Disparate computer systems easily communicate with each

other
– Lower market entry costs—costs merchants must pay to
bring goods to market
– Lower consumers’ search costs—effort required to find
suitable products

20


4.Richness
Supports video, audio, and text messages

 Effect:

– Possible to deliver rich messages with text, audio,
and video simultaneously to large numbers of people
– Video, audio, and text marketing messages can be
integrated into single marketing message and
consumer experience
21


5. Interactivity
The technology works through interaction with
the user
Effect:


– Consumers engaged in dialog that dynamically adjusts
experience to the individual
– Consumer becomes co-participant in process of
delivering goods to market

22


6. Information density
Large increases in information density—the total
amount and quality of information available to
all market participants

 Effect:
– Greater price transparency
– Greater cost transparency
– Enables merchants to engage in price discrimination

23


7. Personalization/Customization
Technology permits modification of messages,
goods
Effect


– Personalized messages can be sent to individuals
as well as groups
– Products and services can be customized to
individual preferences

24


8. Social technology
The technology promotes user content generation
and social networking

 Effect
– New Internet social and business models enable user
content creation and distribution, and support social
networks

25

Types of e-commerce

• Business-to-consumer (B2C)

• Business-to-business (B2B)

• Consumer-to-consumer (C2C)

• Mobile commerce (m-commerce)

26

E-commerce business models

 Portal

 E-tailer

 Content Provider

 Transaction Broker

 Market Creator

 Service Provider

27  Community Provider

E-Market-space

 A marketplace in which sellers and buyers
exchange goods and services for money (or
for other goods and services), but do so

electronically.

28

E-Commerce

 Website selling products/info is a useful service
to customers Serves 2 purposes:
 Marketing
 Allowing consumers to shop when on their own time

– If you don’t sell online, you might be missing an
opportunity to serve your customers

 Some E-Commerce sites are replacing high-street shops

29

What is E-Marketing & E-Business? 1

 EB=EC+BI+CRM+SCM+ERP
– EB = E-Business
– EC = E-Commerce
– BI = Business Intelligence

– CRM = Customer Relationship Mgmt
– SCM = Supply Chain Management
– ERP = Enterprise Resource Planning (SAP)


 E-Marketing
– Increases efficiency in
traditional marketing Pure Pure dot-com
(E*Trade)

Level of business impact
Business transformation
(competitive advantage, Play
industry redefinition)

functions. Enterprise Click and Mortar
(eSchwab)

– Technology of e- Effectiveness Customer
(Incremental sales, Business Process relationship

marketing transforms
customer retention) management

Efficiency Brochureware,
Activity
marketing strategies. (Cost
reduction)
Order processing

This results in new
business models that add
value and profits.


 Level of commitment to E-Biz can vary
– Individual Business Activity - aim for efficiency
(cost reduction) Ex. Website for brochure-ware
– Business process - aim for effectiveness

(incremental sales, retention) (ex. CRM)
– Enterprise - the firm automates many business
processes in a unified system(ex. Click+Mortar)
– Pure Play-business transformation (dot.com)
 (competitive advantage, industry redefinition)

32

The challenges/ opportunities with E-Marketing

 Consumers Empowered
– Consumers now have more control. They want:
 Speed (ex. answer emails quick)
 Privacy, safeguards, permission to contact and use
information

 Low prices, convenience, self-service
 Service, personal attention/personalization (treat
customers important)
 Value (exceed expectations)
 Mass customization (adds value and can be

33 automated).


 Consumers want in a website:
– 1 stop shopping with integrated solutions.
– Effective web navigation
– Quick downloads

– Clear site organization
– Attractive/useful site design
– Secure and private transactions
– Free information/services - consumers used to
online culture of getting something for free.
34


 Businesses must address:
– Competition, changing value chain structures, conflict,
and coordinating the front/back end.
 Technology
– Costly and changing, but may offer LR savings

 But can offer value to both firms and consumers if done
right:
– Benefits of customization, personalization
– Decrease Costs - 24/7 convenience, self-service
ordering and tracking, one stop shopping.
35

E-Bay an example of E-Marketing success

 Still successful despite slowing  E-Bay on track for $8 billion in
economy as both consumers revenues in 2008 and 70%
and firm searching for stuff to earnings growth in next 2-3
sell. years.
 E-Bay takes a cut of every  Has 85% of online consumer
transaction - low risk as they auction market. Firms also set

don’t have to address up shops to sell at fixed prices.
inventory, warehousing, or
fulfillment issues.
 37.6 million users in 200
countries. 1/2 of users
referred to by other users.
36

Size of the Internet?

 The Internet is a big place. How big? Try gigantic. The attempts
to visually representing some of the mind-boggling numbers
that defined the Internet circa 2010 , still not very easy to wrap
your head around.
 How, for example, does one simply imagine the 2 billion videos
being watched on YouTube each and every day? How is it

possible that 35 hours of video can be uploaded to the site
every minute? What do 36 billion photos look like? Ask
Facebook; that's how many photos are uploaded to the site
each year. 107 trillion e-mails (!) are sent on year 2010!

39

E-Marketing Primary 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
40

E-Marketing Primary Strategies (Cont)

There are extra 3Ps as the extended marketing mix:

 People: Right person, trained well, motivated

 Process: Providing services to customers

 Physical evidence: Case studies, testimonials

41

Revision – Rules for Success

Rule #1 – Selling Anywhere
#1

Anywhere Means technologically (on wired and portable
wireless devices) and geographically (selling anywhere in

the world).
With Internet this is a reality.
Your local market is the global market.
If you are not selling everywhere, you are selling nowhere.


Rule #1 – Selling Anywhere
#1
Selling globally means that you have understand the culture
of the customer you are selling to.

You have to face the challenges of language, regulatory
challenges of import and export rules, taxation, social and
political issues, fulfillment and customer services problems.

Any of these items, If mishandled, can quickly torpedo your
global marketing efforts and furthermore your investment.


Rule #2 – Selling Anything
#2
The message is
“Find a need and fill it”

Once a need is found, the Internet makes it easy to serve it.
What is offered to consumers on the net is limited only by
the company’s imagination and the Internet technology that
you can create to deliver it.


Rule #2 – Selling Anything
#2

Trying to have the next big thing for the net, keep three
major human motivations in mind:

• Information
• Economic
• Entertainment

If your idea can satisfy these motivation then Internet can
translate the idea to money.


Rule #3 – Selling Anytime
#3
One of the unique advantage of Internet:
It allows companies to conduct business 24/7
But don’t forget:

Anytime, means that the user can use many different devices to
access the Internet with different capabilities each one
And secondly, your visibility on the Net is limited by having a
single Web site, thus the marketing costs of driving qualified
buyers to a Web site are a huge cash drain on dot-coms,
leading to bankruptcy.


Rule #3 – Selling Anytime
#3
One way to become known in the Internet and minimizing
the marketing costs is through affiliate marketing
This type of marketing rely on affiliate programs. These are

programs that a web site joins in which a merchant pays a
commission to an affiliate for generating clicks, leads, or
sales from a graphic or text link located on the affiliate’s site.
Strongly introduced by Amazon.


Rule #4 – Selling Anyway
#4

The new technological capabilities of the Internet are changing the face of EC.
Customers will use personal shopping services
These services will send their requests out for bid

Return with merchants offers in the form of multimedia “advertorials” on a
product or service.
www.geek.com
www.respond.com
www.radicalmail.com
www.entrypoint.com


Rule #4 – Selling Anyway
#4
Digital cash – or e-cash – will eventually become the dominant
way of paying for products and services on the Internet.
Although payment will come from consumer’s credit card or

bank account, how payment is made on the Net can take a
variety of forms as:
A prepaid payment option
A person-to-person (P2P) service, or
In the form of an Internet escrow service.


Rule #5 – Selling at Any Price
#5

In e-commerce, The customer is in control.

The “One price fits all” model is obsolete.
Pricing will get personal.
Not just preferred pricing for repeat customers, but the
delivery of customized price offers to each and every buyer.
Schemes of dynamic pricing will be dominant.


Rule #5 – Selling at Any Price
#5

Dynamic pricing is difficult in real world
However on the Net prices can be changed in a second.

Dynamic pricing schemes contain factors as
•Product selection
•Convenience factors
•Customer service and purchase guarantee information
•Rebates
•Personalized services

Online Marketing & E-Commerce session two MOGHIMI

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