1 e-marketing basics web retailing 1-1 marketing web customer satisfaction
TRANSCRIPT
1
E-Marketing
• Basics
• Web Retailing
• 1-1 Marketing
• Web Customer Satisfaction
2
On-line Retailing Issues
• Product – what products are suitable?
• Software interface – ease of use, search time, help
• Process – how can the process be re-engineered?
• Pricing – willingness-to-pay
• Payment – which methods?
• Market penetration – build a loyal customer base
3
Product value
Services value
Personnel value
Image value
Total customer value
Monetary cost
Time cost
Effort cost
Psychic cost
Total customer cost
Customer delivered value
Determinants of Customer Delivered Value
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Individual Characteristics
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Environmental Characteristics
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Stimuli
Marketing Others
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Buyer’s Decision
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Vendor’s System
Logistics Technical Customer Service
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Consumer’s Decision Making Process
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Clo
thin
g
Jew
elry
Fu
rnit
ure
Ho
use
s
Au
tom
ob
iles
Res
tau
ran
ts
Vac
atio
n
Hai
rcu
t
Ch
ild c
are
TV
Rep
air
Leg
al s
ervi
ces
Ro
ot
can
al
Au
to r
epai
r
Med
ical
Dia
gn
ost
ics
Most goods
Most services
Easy to evaluate
Hard to evaluate
High in search quality High in experience High in credence
Product Type Product Evaluation Time
High in search qualities Before purchase
High in experience qualities After purchase
High in credence qualities Not even after purchase
Consumer Evaluation of Products
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What sells on the Internet?
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Consumer Adoption Process
Time of adoption
Ado
ptio
n pr
obab
i lity
Consumer type Key characteristicInnovators Risk takers
Early adopters Opinion leaders
Early majority Deliberate adopters
Late majority Skeptical
Laggards Tradition bound
Innovators 2.5%
Early adopters 13.5%
Early majority
34%
Late majority
34%Laggards
16%
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Deterrents to B2C
• Cost of delivery, receipt, return
• Start-up and site maintenance costs
• Differentiation and profitability achievement
• Security / privacy / reliability / ease of use
• Lack of hands-on experience / human contact
• Shopping no longer a social experience
• Consumer expectations / Speed / Bandwidth
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Improvement Based Marketing Models
Goal Examples
Enhancement• Brand building• Category building • Quality
• Disney (games, prizes)• Intel (games, tours, videos)• NPR (Images from Jazz shows)
Efficiency• Cost reduction• Free trial
• Cisco operating/staff/software distribution• Encyclopedia Britanica trial
Effectiveness• Dealer support• Supplier support• Information collection
• GM Buyer Power• GE TPN• DoubleClick custom ad
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Revenue Based Marketing Models
Method Examples
Provider Pays• Sponsorship • Alliances• Spot advertising• Prospect fees• Sales commissions
• ACO sponsors Dilbert on newspaper site• Excite linking to Amazon• TechWeb• Edmunds to Auto-by-tell• Amazon Associates
User Pays• Product sales• Pay per use• Subscriptions• Bundle sales
• Grainger• Wet Foot Press• Wall Street Journal• Science Magazine
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E-Marketing
• Basics
• Web Retailing
• 1-1 Marketing
• Web Customer Satisfaction
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Product/service search and discovery in the information space
Comparison shopping and product selection based on various attributes
Customer service and support (if not satisfied in X days, return product)
Negotiation of terms, e.g., price, delivery times
Authorization of payment
Placement of order
Receipt of product
Pre-purchase interaction
Purchase consummation
Post-purchase interaction
Consumer Mercantile Model
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Marketing Communication ObjectivesObjectives Tasks
1. Generateawareness
Prospecting
2. Featurecomprehension
Open relationship
3. Lead generation Qualify prospect
4. Performancecomprehension
Present salesmessage
5. Negotiation,customization
Close sales
6. Reassurance Account service
Effectiveness
Low High
Personal selling
Mass ads
Web?
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Surfers
Aware Surfers
Active Info Seekers Passive Info Seekers
Web Site Hits
Active Investigators
More Dialogue
Purchase
Re-purchase
Conversion Process on the WebInclude web address in broadcast ads; on product packaging, etc.
Passives: Hot links, sponsored sites Actives: Multiple sites, speed, bandwidth
Make it an interesting visit; visual appeal - graphics, sound, video, ease of use
Simplicity of establishing a dialogue, quality and speed of response
Respond to dialogue; simplicity and security of ordering; order status.
Exploit transaction database; purchase satisfaction and feedback.
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Measuring Effectiveness
Awareness efficiency = People aware of site / People with Web access
Attractability efficiency = Hits on site / People with Web access
Contact efficiency = Active visitors / Hits on site
Conversion efficiency = Purchases / Active visitors
Retention efficiency = Repurchases / Purchases
Web site efficiency
Caching and undercounting
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Some E-Tailing Fallacies
• Focus of competition away from quality, features and service to price
• Dubious measures of sales (lower price inflates sales volume, some revenue in form of stocks of partner dot-coms)
• Wrong metrics (number of customers or site visitors)
• Lower estimation of costs (infrastructure needs, customer acquisition, employee compensation schemes)
• Business model not sustainable
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E-Marketing
• Basics
• Web Retailing
• 1-1 Marketing
• Web Customer Satisfaction
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Evolution of 1-1 Marketing
• Mass Marketing: One price for all
• Direct Marketing: Target market segments
• Micro Marketing: Variable pricing for micro-segments
• One-to-one Marketing: Unique pricing for individuals
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MASS MARKETING
Average customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
Mass promotion
One-way message
Economies of scale
Share of market
All Customer
Customer attraction
ONE-TO-ONE MARKETING
Individual customer
Customer profile
Customized market offering
Customized production
Individualized distribution
Individualized message
Individualized incentives
Two-way messages
Economies of scope
Share of customer
Profitable customers
Customer retention
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Customer Relationship ManagementIntegrated sales, service and marketing intelligence
Benefits Challenges
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One-to-one Marketing: Steps
• Identify customers– Collect more customer names– Collect more customer information– Verify and update customer data
• Differentiate customers – Who are the top customers? Who’s unhappy?
Who’s buying less? Who’s missing in the list?– Which customers drain your resources?
– Rank customers into A, B and C categories
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One-to-one Marketing: Steps (continued)
• Interact meaningfully– Just call top 2-3 people at 5% customers
– Call your company / competitor posing as a customer– Evaluate paper / voice / email communication
• Customize your behavior– Customize / personalize communication– Find what / how often customers want to hear from you– Ask top ten customers what they want
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Using Web Data
• Registration Forms
• Shopping Cart Data
• Transaction logs
• Cookies
• Web Bugs
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Establishing Customer Relationship
• Permission Marketing – Obtain customer’s permission to send messages
• Affiliate Marketing – Paying another Web site for customer referral
• Viral Marketing – Customers transmit message to friends and families
• Brand Leveraging – Using an existing brand to promote another
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E-Marketing
• Basics
• Web Retailing
• 1-1 Marketing
• Web Customer Satisfaction
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Model of Internet Consumer Satisfaction
Customer Satisfaction
After-Sales
Sales Activity
Product
Web-site Store Front
3rd PartySeal of Approval
Trust inWeb-shopping
VendorReputation
Repeat Web Purchase (Brand Loyalty)
Security
Authentication
Privacy Transaction Safety
Non-repudiationIntegrity
SystemReliability
Speed of Operation
Ease of Use
Content,Quality
Format
Reliability
Completeness
Timeliness
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Customer Satisfaction
Sources
Product
Sales Activity
Vendor Reputation
After Sales
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Customer Satisfaction from Product
Satisfaction Components Online Methods
Design• Messages & quality signals• Sales & support effectiveness
• Product information• Additional, related products• FAQs
Feedback and Incentives • Early users• E-mail from users• Usenet groups
Sourcing & Manufacturing• Customer contact• Quality • Cost
• Collaborative design with suppliers• Intranets & Extranets
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Customer Satisfaction from Sales Activity
Satisfaction Components
Online Methods
Messages• Overt• Covert
• Web site positioning• Information / editorial content• Personalization
Attitudes• Sales force training• Sales force rewards
• Brand reinforcement by site• Ease of use• Responsiveness
Intermediaries• Incentives• Selection • Training• Monitoring
• Dealer support information
• Advance support to dealers using extranets• On-line product / service information
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Customer Satisfaction from After-Sales
Satisfaction Components Online Methods
Support Services• Coverage• Quality & performance
• Self-help problem solving• On-line tech support• User groups
Feedback & Restitution• Coverage• Responsiveness
• Customer service e-mail• Repair tracking• Warranty explanations
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Customer Satisfaction from Vendor Reputation
Satisfaction Components Online Methods
Formal Symbols • Mission statement• Performance standards• Compensation
• On-line image and branding• Performance measures on-line
Informal Symbols • Beliefs• Values
• Public work involvement• Social activities
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Online Market Research for EC
Advantages Problems
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Key Points
• Internet only approach may be limited
• Web can cut costs, enhance customer satisfaction, may produce new revenue
• On-line market research is one alternative