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MMK737 Online Marketing

Seminar 1Introduction to Online Marketing

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Stewart Adam, PhD.Associate Professor in Electronic Marketing

Stewart Adam, Unit ChairKaren Lurati, Lecturer

• Well HELLO and Welcome to Online Marketing!

• What knowledge do I have to teach you?

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Expectations

• What do you want to learn about?

• What do you think this unit is about?

My expectations

• That you will keep up with the content and ask questions when you don’t understand

• Participate online and/or in class discussions

• Have fun too!3

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What is Online Marketing about?

• It is not about the IT (software, technical etc) aspects of the Internet and related technology

• It is a MARKETING unit and is about how to use the Internet (and related applications i.e., mobile) to be part of the overall IMC and improve your business from a  customer and profit perspective

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Demonstration of D2L (so you know where everything is!)

https://d2l.deakin.edu.au/d2l/lms/content/preview.d2l?tId=1407443&ou=25144

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Assessment

Assignment 1: Proposal (1000 words) 10%See Navigator. No longer groups. Each person is to develop a research proposal concerning use of Social Media in Marketing (see DSO for fuller details) See Navigator for due date: 2 April

Assignment 2: Research paper (3000 words) 40%See Navigator on DSO for submission dates. Each person is to complete a paper. See Navigator for due date: 14 May.

Examination 50% - Two hour. - Three questions of equal value.

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Need to do now for your Assignments!

• Form study groups

• Exchange contact details

• By all means study together if needs be, but do not copy from each other.

• Your assignments are automatically scanned by Turnitin …. But you may check your own work prior to submission.

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Let’s look at D2L and consider the marking template and rubric via a Vodcast

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Any ASSESSMENT questions?

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Week 1 – (chapter 1) Introduction to Online Marketing

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Learning objectives

• Evaluate the relevance of the Internet to the customer-centric, multi-channel marketing concept

• Distinguish between Internet marketing, e-marketing, digital marketing, e-commerce and e-business

• Evaluate the advantages and challenges of digital media

• Identify the key differences between Internet marketing and traditional marketing

• Assess how the Internet can be used in different marketing functions

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Internet and Marketing

• Since 1991 (now 20 years ago or 140 in Net/Web time!) the internet has changed everything about the way we find information, consumer behaviour, and the way businesses communicate

• Constant change in this space has rewritten all the traditional rules (or has it????)

• Consumers still want to engage/participate…. And businesses still need to make money whichever way they find a way to do this

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Introducing the scope of Internet Marketing

• “Achieving marketing objectives through applying digital technologies”– How?

• Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. Chartered Institute of Marketing– How?

• Marketing is an activity, a set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.AMA, AMI from 2012, Principles of Marketing, 5th edn, Pearson Australia. 15

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Internet and Marketing

• Innovation

• Survival

• Competition

• Identify and meet customer needs

• Sound business model

• What things will work for my organisation and customers?

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Quotes to consider?!?!?

• “Marketing is everything” (Regis McKenna)

• “eBusiness should be judged as any business” (Jeffrey Rayport)

• If it can’t be measured it isn’t marketing (Stewart Adam)

• Most of what is spoken about as eBusiness is marketing science … the stolen discipline but ... e-commerce as described by the media is solely transaction based …there is more to business and marketing …(Stewart Adam)

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PRODUCT, SERVICES &EXPERIENCESVarietyQualityDesignFeaturesBrand namePackagingSizesAdd-onsWarrantiesReturns

PRODUCT, SERVICES &EXPERIENCESVarietyQualityDesignFeaturesBrand namePackagingSizesAdd-onsWarrantiesReturns

PROMOTIONAdvertisingPersonal selling

PROMOTIONAdvertisingPersonal selling

PLACEMENT LOGISTICS

Demand chain managementLogistics managementChannel management

PLACEMENT LOGISTICS

Demand chain managementLogistics managementChannel management

PRICEList priceDiscountsAllowancesSettlement and credit terms

PRICEList priceDiscountsAllowancesSettlement and credit terms

PEOPLEPeople interacting with people is how many service experiences might be described. Relationships are important in marketing

PEOPLEPeople interacting with people is how many service experiences might be described. Relationships are important in marketing

PROCESSIn the case of ‘high-contact’ services, customers are often involved in the process of creating and enjoying experiences. Increasingly, so too is technology

PROCESSIn the case of ‘high-contact’ services, customers are often involved in the process of creating and enjoying experiences. Increasingly, so too is technology

PHYSICAL EVIDENCEServices are mostly intangible. The meaning of other tools and techniques used in measures of satisfaction are important

PHYSICAL EVIDENCEServices are mostly intangible. The meaning of other tools and techniques used in measures of satisfaction are important

TARGET CUSTOMERS

INTENDED POSITIONING

Armstong, Adam, Denize and Kotler, 2012, Principles of Marketing, p.18.Direct and online marketing

Extended marketing mix

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Questions for marketers• How significant is the Internet as a marketing tool?

• How does Internet marketing relate to e-marketing, e-commerce and e-business?

• What are the key benefits of Internet marketing?

• What differences does the Internet introduce in relation to existing marketing communications models?

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Online Opportunities

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More recent opportunities

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A more in-depth definitionCustomer‐centric digital marketing involves:

Applying…

Digital technologies which form online channels… (Web, e‐mail, databases, mobile, iDTV)

to… 

Contribute to marketing activities aimed at achievingprofitable acquisition and retention of customers (within a multi‐channel buying processand customer lifecycle)

through…

Improving customer knowledge (of their profiles,  behaviour, value and loyalty drivers), then delivering integrated targeted communications and online  services that match their individual needs

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How the Internet supports marketing• Identifying – the Internet can be used for marketing research to find out

customers’ needs and wants (Chapters 7 and 10).

• Anticipating – the Internet provides an additional channel by which customers can access information and make purchases – evaluating this demand is key to governing resource allocation to e-marketing as explained in Chapters 2, 3 and 4.

• Satisfying – a key success factor in e-marketing is achieving customer satisfaction through the electronic channel, which raises issues such as: is the site easy to use, does it perform adequately, what is the standard of associatedcustomer service and how are physical products dispatched? These issues of customer relationship management are discussed further in Chapters 6 and 7.

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1.4

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1.5

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Why is a digital strategy needed?

• To set clear goals for digital channels

• To align with business strategy (avoid ad-hoc approaches)

• Create a specific online value proposition (OVP)

• Specify communications tools to drive visitors

• Integrate digital and traditional channels

• Manage customer lifecycle (e.g. through DOL marketing)

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Applications of digital marketing• An advertising medium

• A direct-response medium

• A platform for sales transactions

• A lead-generation method

• A distribution channel

• A customer service mechanism• A relationship-building medium

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Figure 1.7 Summary and examples of transaction alternatives between businesses,consumers and governmental organisations 31

Different forms of web presence

• 1. Transactional e-commerce site:– Examples – Amazon, Dell, Skorptec.com.au

• 2. Services-oriented/relationship building– Accenture; realestate.com.au; privacy.gov.au

• 3. Brand Building site– Qantas, Virgin, Coles, etc

• 4. Portal or media site– Yahoo!, Ninemsn,

• 5. Social network or media site – many, many

• Note that these types overlap 32

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Figure 1.9 Six categories of e-communications tools or media channels (Chaffey and Smith, 2008)36

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Explanation of tools

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Figure 1.11 Summary of communication models for (a) traditional media, (b) new media 38

Figure 1.12 Summary of degree of individualisation for: (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers

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Figure 1.13 Channels requiring integration as part of integrated e-marketing strategy40

Figure 1.14 The role of mixed-mode buying in Internet marketing41

Figure 1.15 Travel Republic (www.travelrepublic.co.uk)

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Can e-commerce provide a sustainable competitive advantage?

Issues:* Security; * Lack of value; * Lack of ROI;* Perceived hype ahead of reality.* Difficult to implement logistically

Source: AIDC & KPMG study

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Top Benefits of e-Business1. eBusinesses are gaining a competitive advantage.

2. eBusiness in Australia is widespread and delivering benefits to the economy.

3. Emerging Applications are Boosting eBusiness Gains.

4. eBusiness facilitates cost reductions.

5. eBusiness provides new ways to generate revenue.

6. Additional benefits for eBusinesses are improved relationships with suppliers and improved service to clients.

7. Collaborative online exchanges can generate eBusiness benefits for buyers and sellers.

8. eMarketplaces have the capacity to deliver the benefits of better business practices to participants.

9. eBusiness is facilitating major transformations in industry structures and business processes.

10. eProcurement by Government is acting as a driver to get businesses online.

11. Top benefits of e-BusinessSource: NOIE, ‘The Benefits of Doing Business Electronically – eBusiness’,

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eBusiness defined

e‐commerce

crm

supply chain management

business intelligence

knowledge management

collaboration technologiesGartner Group (1999), Enterprise Management Alert: Five e-Business Myths that can destroy a Business

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new business models

internet issue

not all are ‘pure dot.coms’.... many are SMEs ... Someare ‘hybrids’.

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PUREDOTCOM

ALMOSTPUREDOTCOM

CLICKS‘N

BRICKS

ALMOSTPURE

BRICKSAND

MORTAR

PUREBRICKS

ANDMORTAR

eBay.com.au MOST

Amazon.com

NSWTAB.com.au

COLESONLINE

eMarketing website spectrum

Stewart Adam & Kenneth R Deans (2000), “Online Business in Australia and New Zealand: Crossing a Chasm”, AUSWEB2K,SCU, 12-17 June, Cairns, Queensland.

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site objectives

budget allocation

site evaluation

measures of success

cultural differences

Metrics

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markcomms‐new media

transactions‐marketing channel

CRM‐knowledge media

internet roles in eMarketing

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IndustryCompetitors

Intensity ofrivalry

Substitutes

Suppliers Buyers

New entrants

Threat of new entrants

Threat of substitutes

Industry profitability is determined by these forces

porter’s five forces

After Porter, M.E., (1985) Competitive Advantage: Creating and Sustaining Superior Performance. The Free Press. 51

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IndustryCompetitors

Intensity ofrivalry

Substitutes

Suppliers Buyers

New entrants

Threat of new entrants

Threat of substitutes

Industry profitability is determined by these forces

five forces + Downes & Mui

After: After Porter, M.E., (1985) Competitive Advantage: Creating and Sustaining Superior Performance. The Free Press, and Downes, L. and Mui, C. (1998), Unleashing the Killer App. Digital Strategies for Market Dominance, Harvard Business School Press, Boston.

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Unbundling the value proposition

Traditional value proposition components are pooled …. but online, they can be disaggregated:– Content (company offering)

– Context (how the offer is made)

– Infrastructure (what enables transactions to occur)

Yakhlef, A. 1998, ‘The Internet as a new locus for value creation’, Management Decision, Vol. 36, No.9, pp. 610-14.

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Customer RelationshipManagement

identify, attract, and build

relationships with customers

ProductInnovation

conceive of attractive new products and services and

commercialise them

InfrastructureManagement

build and manage facilitiesfor high-volume, repetitive

operational tasks

Source: John Hagel III & Marc Singer (1999), “Unbundling thecorporation,” HBR, (March-April):133-141.

Unbundling the organisation and adding value

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internet roles

markcomms (new media)

marketing channel (transactions)

CRM (knowledge media)

business models (issues)

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• Two‐way comms.

• Brand personality devpm’t & attitude movement

• Product awareness  Amazon spent 68% of rev. about US$25 per product order to establish brand

• Experiential augmentation

• Creating a sense of community

• Context adaptive banner ads. push

• Digital display pages (pull)

• Digital classifieds (pull)

• Thematic change agents

• Third generation online marketing eg. P.A’s; M‐Commerce; Groove Networks P2P

new mediaOnline Marketing Focus Online Marketing Activities

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internet roles

markcomms (new media)

marketing channel (transactions)

CRM (knowledge media)

business models (issues)

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Rawmaterials

Assembly Finalpacking

DISTRIBUTOR

MANUFACTURER

RETAILER

EDILINK

JITSYSTEM

QRTEDI LINK

EFTPOS & POS SCAN DATA

AGENTS&

BROKERS

Batch, LineContinuous Process

Marketing logistics networks

FLOWS: Information ~ Materials ~ Title ~ Payment / Credit

But what gets cut away online?

Marketing 5/e . 58

internet roles

markcomms (new media)

marketing channel (transactions)

CRM (knowledge media)

business models (issues)

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Rawmaterials

Assembly Finalpacking

DISTRIBUTOR

MANUFACTURER

RETAILER

EDILINK

JITSYSTEM

QRTEDI LINK

EFTPOS & POS SCAN DATA

AGENTS&

BROKERS

Batch, LineContinuous Process

Marketing logistics networks

FLOWS: Information ~ Materials ~ Title ~ Payment / Credit

But what gets cut away online?

Marketing 5/e . 60

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e-marketing channel

electronic /networked

media: the internet

Shopping:•drudgery•complex•experiential

home / office:•telephony•gaming•shopping•pay-tv•video-on-demand“Once the consumer is loyal to

a certain context, the potentialfor related transactions is limitedonly by the imagination”.“...and relationships,” Adam

Source: Rayport & Svoilka, 1994 Harvard Business Review, December

...with online FMCG ... re-intermediation

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e-marketing channelelectronic /networked

media:

high street banks

ATMs home /office banking

super ATMsKiosksetc

... with online financial services

... costs change62

• Online sales

• Channel structure developments (e.g. associates, clickthrough commissions etc)

• Drudgery / Complex / Experiential product mix

• Commoditisation issues

• Context adaptive ads. push & pull with thematic change

• Transaction engines

• Strategic network alliances

• Margin improvement

• Third generation online marketing eg. Intelligent agents; P2P

e-marketing channel

Online Marketing Focus Online Marketing Activities

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TUTORIAL QUESTIONS

• Any content questions about week 1?

• ACTIVITIES advised based on time left!

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