13-1 © 2006 by nelson, a division of thomson canada limited 10/6/2015 slides developed by: peter...

© 2006 by Nelson, a division of Thomson Canada Limited13-104/19/23

Slides developed by:Slides developed by:

Peter YannopoulosPeter Yannopoulos

Chapter 13 Chapter 13

Internet Marketing

© 2006 by Nelson, a division of Thomson Canada Limited13-2

The Internet is a worldwide network of computers that allow users access to information and documents made available by commercial and non-commercial organizations

What is the Internet?


The Strategic Advantages of the Internet

Centralizationof inventory

More efficient distribution

Low costcommunication

Evening the playing

field

StrategicStrategicAdvantages Advantages

of theof theInternetInternet


In 2001, 60% of Canadian households were connected to the Internet, up from 51% in 2000

Canadians Connected to the Internet

77% of Canadians will have access to the Internet in 2006

Canada has the highest number of users in time spent online per capita


76% of Canadian businesses used the Internet in 2002, up from 63% in 2000

Percentage of Canadian Businesses Connected to the Internet


Canadian consumers shop less online than their American counterparts - 21% of Canadians shop online versus 29% in the United States

Canadian Internet Users Shop Less Online


Online Consumer Segments(McKinsey Study)

Connectors(36%)

Routiners(15%)

Sportsters(4%)

Bargainers(8%)

Simplifiers(29%)

Surfers(8%)

OnlineOnlineConsumerConsumerSegmentsSegments


The Impact of the Internet on Marketing Strategy Formulation

It changes consumerbehaviour

It shifts poweraway from sellers

to buyers

It revolutionizes marketing functions

Impact onImpact onMarketingMarketingStrategyStrategy


Ways of Creating Online Customer Relationships

Offer apositive

experience Make

contactpersonal

Create anonline

community

Offer exceptional

value

Keepcustomersinformed

Establishinteractivity

CreatingCreatingOnlineOnline

Customer Customer RelationshipsRelationships


Internet Product Strategy

Helps enhance the value of productsAllows customers to get involved in

buying processEconomies of aggregationCookiesDigital goodsRecommendation systems


Internet Brand Strategy

Branding is important in e-commerceOnline customers prefer trusted e-

companiesOnline image impacts offline businessTraditional businesses have an

advantage over “pure-play” companies


Factors Affecting Internet Pricing Strategy

Growth ofonline

suppliers

Interactiveshopping

agents

Increasedinformation

Auctionhouses

Factors Factors Affecting Affecting

Internet PricingInternet PricingStrategyStrategyPricing

research


Are Internet Prices Lower?

Prices are not lower across the boardSearch costs increaseOnline companies spend large amounts

promoting their websitesMany online shoppers are not price-

sensitive


Characteristics of Online Distribution

Electronicdata

interchange Death ofdistance

Timecompression

Differentcost

structure

Greaterconvenience

More time

consuming

OnlineOnlineDistributionDistribution


Best Distribution Strategy?

The best distribution strategy is

often combining both offline and

online approaches because it

provides customers with the option

of buying either offline, online, or

both.


Potential for conflict

There is potential for conflict when a manufacturing firm sells the same product through both traditional stores and the Internet


Internet Promotion StrategyInternet Promotion Strategy

Marketing communications tool Source of information To create a favourable image for companyComplementary to other forms of

communicationProvides a new way to reach people and

deliver the company’s message


Internet Promotion StrategyInternet Promotion Strategy

Online messages must be consistent with all other communication efforts

Must advertise websiteMust establish a two-way

communication with online customersMake it easy for customers to

communicate with the company


Integrating Offline and Online StrategiesIntegrating Offline and Online Strategies

Develop the right brand or set of brandsDevelop the right brand or set of brands

Leverage the assets of the existing businessLeverage the assets of the existing business

Manage offline/online channel conflictManage offline/online channel conflict

Use partnerships and alliancesUse partnerships and alliances

Create the right degree of separationCreate the right degree of separation

Create integrated information systemsCreate integrated information systems

Create integrated supply chains and logisticsCreate integrated supply chains and logistics

Manage the path to evolutionManage the path to evolution

13-1 © 2006 by nelson, a division of thomson canada limited 10/6/2015 slides developed by: peter...

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