ELC 310 E-Marketing

Day 5

Agenda

Exam # 4 next week 10 Short essays Entire class period Albert Chapters 1-14

Case study Analysis 5 A’s Not much difference in scores Student scoring much higher than mine

Student prepared Case Studies Written due December 14 Presentation due December 17 Student work to be shared and discussed with others

Peer Grading Lecture/Discuss Evaluation Methodology and Research in

E-Commerce

Case Study RecapCase Industry Marketing Challenge

1 Insulation Manufacturer

Integrated marketing Communications

2 Steel Mill Pricing Decision Process

3 Hardware Distributor Business Strength matrix

4 Utility Company Branded Customer experience

5 Not for Profit Branding Strategies

6 Consumer packaged goods

Service Marketing Model

7 Insurance Company Disintermediation Reintermediation

8 Financial Service New Product Development

Chapter 13

Customerization--a future online opportunity

What is “Customer”ization?

Customerization defines the exchange process of marketing in the context of complete customer-control.

Natural fit with the electronic environment

Entices customers to remain loyal

Overview of the Model

Customerization is a buyer or customer- centric marketing model.

Develops a relationship between: One-to-one marketing Mass customization

Internal operations must have the capability to customize “Build to order process”

Characteristics

Flexible Requires database

integration, operations, and production for success

Relies on a number marketing approaches: traditional mass marketing targeted direct marketing

8 Enhanced Marketing Outcomes

Develop/Deepen Customer Relationship

Transitioning Experienced-Based Decision

Customizing the Interaction

Co-develop Products and Services

Premium Pricing Acceptance

Interactive Information Exchange

Distribution Channel Choice

Personal Brands

I. Developing/Deepening Customer Relationship

Capitalizes on relationship building

E-business component demonstrated : CRM

Value Bubble Steps involved: Attract, Engage, Retain, Learn, Relate

II. Transitioning Experienced-Based Decisions

“Design and Discover Process” allows user to see the outcome provides the experience that is

necessary E-business component

demonstrated : CRM and SCM

Value Bubble Steps involved: Engage, Retain

III. Customizing the Interaction

Relies on accurate databases that integrate all customer information a firm possesses. Segmentation and Microsegmentation

E-business component demonstrated : CRM and BI

Value Bubble Steps involved: Learn and Relate

IV. Co-Develop Products and Services

Collaborate with customers to develop a new product or service part of market research

E-business component demonstrated : BI, CRM

Value Bubble Steps involved: Engage

V. Premium Pricing Acceptance

Increases value beyond competition creates customer satisfaction and

loyalty E-business component

demonstrated : E-Commerce or the transaction

Value Bubble Steps involved: Learn and Relate

VI. Interactive Information Exchange

Leverages information about the products and services it provides

E-business component demonstrated : CRM

Value Bubble Steps involved: Engage and Retain

VIII. Personal Brands

Transfers the brand from the company to the customer allows for total customer

empowerment E-business component

demonstrated : CRM

Value Bubble Steps involved: Engage and Retain

Original Article

Evolution mass customization personalization 1:1 marketing

Customerization buyer-centric mass customization with customized

marketing

1:1 and Personalized

“Know thy customer” Controlled by the firm Customerization

more than customized products/services

internal processes supply chain partnerships what if significant costs are involved?

Customerization

Why? Changing customer ability/competency to co-produce technological and operational

capabilities Customer-centric

active participant drive process building/solidifying relationships

Potential Benefits

Customer better meet needs worth premium

price higher satisfaction

Firm reductions in

inventory enhance loyalty avoid

commoditization better channel mgmt.

Online environment: reconfigurable, and easier identification of preferences

Company Examples

Dell (build to order) inventory = $273 million/sales of $18.2

billion (1.5%)

Compaq (build to stock) inventory = $2 billion/ sales of $38.5

billion (5.2%)

1999 figures

Marketing Implications

Relationship Marketing passive to active participants “What can you do with us?” adoption of MP3 by music industry

Focusing on Unarticulated Needs guides customer through design & discovery product use experiences (search vs. experience) Andersen Windows

Tailoring the offer only relevant options (db, software, ask)

New Products interactive process (no longer laboratory only) Acumin

company no longer manufacturer but service provider TI specs for new calculator

high school teachers’ web reviews pre-sold copycat product from competitor reaction

Marketing Implications

Price is Negotiable: Global Bazaar more fluid tailored to specific users based on elasticity customer acceptance issues dynamic pricing evolves

prices don’t go down value-added services

price becomes less important Interactive Edu-tainment

mix what you know with what you offer DuPont customer selects information

Marketing Implications

Distribution off-the-shelf direct channel channel conflict customer has choice reverse portals

aggregate and coordinate final distribution garden.com e-milkman

Marketing Implications

Competitive Advantage: Power of Finesse instead of brute strength high customer value wins levels playing field

street likes finesse and flexibility “big will not eat the small…the fast will eat

the slow” E-volve-or-Die.Com

Marketing Implications

Customerization--additional strategy determine optimal portfolio

mass marketing direct marketing to target segments interactive customized marketing

E-businesses have advantage Amazon vs. General Motors

Technology is easy strategic and organizational decisions more complex and

expensive.

Marketing Strategies/Implications

Researching E-Business

Chapter 14

E-business Market Research

Business Intelligence Web Site Focus Results impact

E-Commerce Customer relationship management Supply chain management Enterprise resource planning

Traditional Marketing Research Process

5 steps Define the issue or challenge Develop the research plan Collect information Analyze the information Actions

Defining the issue or challenge

Indicators Declining market share Sales reduction Profits Order reduction Increased complaints Competitive actions

Develop research objectives

Developing the Research Plan

5 Steps (for step two) Deciding on the research design Determining the types of information

needed and sources Evaluating different data Collections

options Developing the data collection device Deciding who and how many will

participate

Research Design

Exploratory research Devine patterns

Look for connections Independent variables (cause) Dependant variables (effect) Multivariate analysis

Experimental research Experimental group Control group

Data sources Primary Secondary

Skewed Populations

Collecting the Information

Face-to-Face Telephone On-line Representative samples?

Analyzing the Data

Begin with research objectives Address the issue, opportunity or

challenge Analysis leads to

Recommendations Actions

Must be supported by quantifiable evidence

3 Strategies for an Initial Web Launch

Setup Strategies Maintenance strategies Evaluation Strategies

Setup Strategies

Attract customers applicable to offerings

3 components Web Site Quality Frequency of updates Speed

56K—10 secs Value bubble

Attract, Engage & Retain

Maintenance Strategies

Create Site Loyalty and Facilitate Sales

GIST Gather Infer Segment Track

Measure Sales

Evaluation Strategies

Site-Centric (automated) Daily, weekly and monthly reports (hits) Length of time spent (stickiness) Frequency of visits for each page and/or

sections Customer-Centric (still new)

Clickstream Core Services aspects Recovery aspects