Chapter 4

Marketing on the Web

Web Marketing Strategies

Companies use the term “marketing mix” to describe the combination of elements that they use to achieve their goals for selling and promoting their products or services.

A company calls its particular “marketing mix” its marketing strategy.

Companies use the Web in their marketing strategies : To advertise their products and services, and To promote their reputations.

Basic principles of marketing can be applied to Web marketing : 4 Ps

Product - physical item or service that a company is selling.

Price - the amount the customer pays for the product.

Promotion - spreading the word about the product.

Place - need to have the product in different locations.

To create a market strategy – companies need to consider

nature of their product nature of their customers

Many business think in terms of the products or services they sell = product-based marketing strategyExamples : Staples' , Service Merchandise Organized their Web sites from an internal

viewpoint – according to their product design and manufacturing process.

Companies can also organize their sites to meet the needs of various types of customers = customer-based marketing strategy = build their Web sites to meet the specific needs of various types of customers.

Communicating with Different Market Segments First step in selling to customers

identify groups of potential customers Identify communications media to carry the marketing

message - media selection - critical for online firm since it does not have a physical presence.

Challenge for online businesses - to convince customers to trust them even though they do not have a physical presence.

Image projected through media and Web site (intermediate step between mass media and personal contact)

Companies use the Web to capture some of the benefits of personal contact and avoid some of the cost.

Shows how these three information dissemination models compare on another important dimension,

trust.

Market segmentation = identification of specific portions of a market and targeting them with specific advertising messages

Divides the pool of potential customers into segments.

Three variables to identify market segments Geographic segmentation - specific groups

based on their locationDemographic segmentation - uses information

about age, gender, family size, income, education, religion or ethnicity to group customers.

Psychographic segmentation - group customers by variables, such as social class, personality, or their approach to life.

Companies that advertise on television often create messages designed to reach the likely audiences of various types of programs.

Customer Behavior and Relationship Intensity In the physical world, businesses can sometimes

create different experiences for customers in response to their needs.

The creation of a separate experience for customers based on their behavior is called behavioral segmentation.

Customizing visitor experiences to match the site usage behavior patterns of each visitor or type of visitor is called usage-based segmentation.

Categories that marketers use BrowsersBuyersShoppers.

A person might visit a Web site one day as a browser, and then return later as a shopper or buyer.

One goal of marketing is to create strong relationships between a company and its customers.

One-to-one marketing and usage-based segmentation are valuable because they help strengthen relationships with customers.

Customer relationships also have a life cycle whose stages are :

awareness, exploration, familiarity, commitment, and separation.

Customer Relationship Intensity and Life-cycle Segmentation

Advertising on the Web

Advertising is all about communication - between a company and its current customers, potential customers, or former customers.

Most companies that launch an electronic commerce site - have an existing advertising program – should coordinate with online advertising - example, print ads should include the company’s URL.

Most advertising on the Web uses banner ads.

A banner ad is a small rectangular object on a Web page that displays a stationary or moving graphic and includes a hyperlink to the advertisers Web site.

The most common sizes of banner ads are: Full banner Half banner Square button

3 ways to place them A banner exchange network coordinates ad-sharing

so that other sites run your ad while your site runs other exchange members’ ads.

Find Web sites that appeal to one of the company’s market segments and then pay them to carry the ads.

Use a banner advertising network. Decline in effectiveness of banner ads has prompted

advertisers to explore other formats for Web ads. pop-up ad - ad that appears in its own window when

the user opens or closes a Web page. pop-behind ad - popular ad that is followed very

quickly by a command that returns focus to the original window - The window is parked behind the user browser waiting to appear when the browser is closed.

E-mail Marketing E-mail marketing - Web advertising.

Businesses - send e-mail messages to their customers and potential customers to announce new products, new product features, or sales on existing products.

E-mail advertising has its own special concerns unsolicited e-mails are viewed as spam.

Therefore, in any e-mail marketing strategy - get customer’s approval

Send email to customer’s who request them = permission marketing

QUESTIONS

Q. What is a company's marketing mix?

Q. What are the four Ps of marketing?

Q. What is market segmentation?

Creating and Maintaining Brands on the Web Branding - identity or reputation of a product - makes it

easier to advertise and sell.

Used to make a statement about a product - quality status of the user, application of the product, or other desirable messages.

Critical elements of branding strategy are product differentiation, relevance to the user and perceived value.

Differentiation - creating an image of your brand in the mind of the consumer as somehow different in nature from all the others in the industry.

Relevance - the utility a consumer expects from your brand, such as features, attributes, and benefits.

Perceived value - give the consumer a notion that they are getting real value for their money, such as quality, longevity, or convenience.

Emotional branding - difficult to convey on the Web because it is an interactive medium controlled to a great extent by the customer.

Rational branding - offers to help Web users in some way in exchange for viewing their ad - popular strategy for Web marketers to create and maintain brands online.

Affiliate Marketing Strategies

Affiliate marketing = affiliate marketer provides information and promotional services about another firm’s product in exchange for a commission if the product is sold through an affiliate link to the selling firm.

Amazon.com created one of the first and most successful affiliate programs on the Web with over 400,000 affiliate sites.

Affiliate commissions - based on several variables.pay-per-click model - affiliate earns payment

each time a site visitor clicks the link and loads the seller's page.

pay-per-conversion model - affiliate earns payment each time a site visitor is converted to a qualified prospect or a customer.

Viral marketing strategies

Viral marketing relies on existing customers to tell other persons about the products or services that they have enjoyed using.

Viral marketing approaches use individual customers to spread the words.

Search Engine Positioning and Domain Names Visitors arrive at a site through many different means – most are

directed by a search engine. Search engine - helps people find things on the Web. A search engine has three major parts

The first part = spider, a crawler or a robot - searches the Web for pages that might interest the visitor and collects the URL and other information contained in the page.

The second part = index or database - the spider returns this information to be stored in an index.

The third part of the search engine is the search utility - a visitor enters search terms and the utility takes those terms and searches its index for pages that match the terms - the search utility returns the results = a Web page of links to URLs that match the search terms.

Web Site Naming Issues

Companies with well-established brand name or reputation - URL for their Web site that reflects that name or reputation.

Obtaining identifiable names to use on the Web is an important part of establishing a Web presence that is consistent with a company's image in the physical world.

URL brokers sell or auction domain names.

The Internet Corporation for Assigned Names and Numbers (ICANN) maintains a list of accredited domain name registrars.

Buying and Selling of Domain Names : example Poster art and framing co

www.artuframe.com. www.art.com - co in the

aerospace industry - drawing approximately 150,000 visitors per month who were looking for something art related.

Artuframe purchased the domain name from the company Advanced Rotocraft Technology (ART) and experienced a 30% increase in site traffic the day after implementing the name change.

QUESTIONS

Q. What is behavioral segmentation?

Q. What is usage-based segmentation?

Q. How many stages are there in the customer life cycle?

EXERCISE

Go to the Web and : Locate a local website that uses product-based

marketing strategy Locate a local website that uses product-based

marketing strategy Visit the RedEnvelope Web site to examine how

that company implements occasion segmentation. Describe two clear examples of occasion segmentation on the site.