CHAPTER 9

PROMOTIONAL MIX ON THE INTERNET

Chapter Objectives

To introduce the elements of promotional mix as it is applied to online marketing.

To understand advantages Vs disadvantages of promotional mix.

To develop on line promotional strategy.

Online Awareness WWW is well suited to marketing mix strategies

including advertising, marketing research, product introduction, pricing and distribution(shipping).

Web is matured a great deal within last few years as such that: Abilities to personalize user’s site. Improving site navigation. Partnering with complementary products and services to save

viewer time and effort.

Online Awareness (cont.) Value of online promotion:

Web is a support media for most consumer goods and services accept computer hardware and software.

Since it is in a print format, it helps awareness and viewer’s interaction.

Because of interaction capability of online, marketers focus on external dialog rather than internal monologue since Web provides two way communication with audience.

Online Awareness (cont.) Value of online promotion (Cont.):

Web pages must sent information rather than exaggeration.

Two-way dialog sets by Web apart from traditional media which direct their messages through one-way dialog.

Web is ideal marketing medium because of its global reach and its accessibility to both consumer and business markets.

Online Awareness Stages in online awareness:

The site should establish visibility:Discussion groups, usernets.

The site should develop believability:It help to turn prospects into customersIt should be separate from real merchants from scam artists.

It should establish longevity:Mutual understanding and long term relationships between

buyers and sellers.

Commerce and Communications Web marketers should try to balance commerce with

electronic communications. Superior service at every point of contact with the

customers. Relationship marketing can encompass of influence four

opportunities (www.occ.com): Customer acquisition-new customers Customer retention-satisfied customers Customer extension-new product for existing customers Customer selection-frequent purchase programs/or 80/20 rule

Pull Strategy of the Web It is effective when unidentified prospect open the page

worldwide. There is a need for a directory that can guide customers to

targeted site. Yahoo has directory. http://advertising.utexas.edu/world

Site may be pure advertisement and it does not have order entry form.

It can be the first steps in sales activity on the internet.

Push Strategies of the Web The Web first use ‘pull’ technology where clients browser

must request a Web page before it is sent. Web will evolve into ‘push’ strategy as it delivers

customized news and advertising. Web marketers can combine the push interactively and the

promotional program into a push and pull strategy at the same time. www.pointcast.com

Send e-mail to relevant customers: www.doubleclick.com

Formulating the Promotional Strategy

Promotional Mix:AdvertisingSales promotionPublic relationsDirect marketingPersonal selling

Advertising Paid for of non-personal message about products/services:

Advantages: Effective way of communicating with large audience. It creates image and appeal for products/services. Well suited for brand awareness.

Disadvantages: The cost of national advertising coverage. It may not be selective for target market. Must be produced in advance, and allows a little flexibility. There s much clutter among advertising messages.

Direct Marketing A promotional media directly communicates with the target

customers to generate response or transaction: Advantages:

The ability to target customers via data base. It contains large amount of product/service information. It allows to personalize direct mail and web messages by adding recipient’s name

to envelope and e-mail It has ability to send samples to prospects or target users. There is opportunity to repeat exposure according to marketing plan.

Disadvantages: Cost is high if it uses traditional media It may be considered junk mail As advertising, it may fight with clutter problem.

Sales Promotion Marketing activities that provides extra value or incentives to

ultimate customers: Advantages:

Rapid increase in sales activity. Attract new buyers for trial purposes. Defend an established brand against competition Reward loyal customers as they continue product users. Provides additional marketing support.

Disadvantages: Trains customers to buy only if there is sales promotion. Extensive use of it can erode brand perception. It may encourage fraudulent coupon redemption.

Personal Selling Person-to-person communication in which a seller tries to

persuade the buyer: Advantages:

Its effects may last many years. Interactive face-to-face communication between buyers and sellers. Yields more immediate and precise marketing results.

Disadvantages: High cost. Reaching to prospective customers is limited. Salesmen may not act as same as home office intended. Many times purchase and repurchase cycle may be very long.

Developing Unique Advertising Strategy on the Web

Advertisement should be visually appealing: It should be effective to grab visitor’s attention and draw repeated

visits. Advertisement must be targeted to specific groups or

individual consumers. The contents should be valuable to consumers:

Web pages should provide valuable information and avoid slow downloading time.

Advertisement must emphasize brand and firm’s image: Ads should emphasize how your firm and its products differ from

other competition.

Developing Unique Advertising Strategy on the Web (cont.)

Advertisement must be part of an overall marketing strategy:Firms should participate other internet activities such as

newsgroups, mailing lists and bulletin boards. Advertisement should be seamlessly linked with

the ordering process:When the internet customer sees the advertisement and

wants to buy it, he/she should be able to order and pay conveniently.

Designing Internet Advertisements Web site design is an art as well as science. Click-through is higher if the ad is placed one third of way

down than the top: www.webreference.com/dev/banners

Research results: Page loading speed:

Graphic and tables should be simple and meaningful. Business Contents:

Clear and concise. Requested information for registration should be minimal.

Designing Internet Advertisements Navigation Efficiency:

Well-labeled, accurate, meaningful links are a must. Sites must be compatible with browser, software, etc.

Security and privacy: It must be assured.

Marketing Customer focus: Terms and conditions of purchases including delivery

information, return policy, etc. must be provided. Confirmation page after the purchase is needed.

Creativity on the Internet The Web should be able to tell the story about

product, and give answer to the questions of Web visitors.

Unique selling proposition:Generate fresh and appropriate ideas.Convenience, quality, efficiency, delivery, availability

and performance.E-mail addresses in all advertising and activity

materials.

The Services of an Interactive Agency

State-of-the-Art technology to communicate, inform and sell.

Dynamic page creation capability of the Web site. Enable to perform secure electronic commerce and

personalized technology for user customization. Using media expertise to allow Webcasting and high

performance Web serving. www.cks.com

International expertise reaching global audience.

Attracting Visitors to the Site Making the top List of a search engine:

URL and search engine spider for establishing links. Improving company’s ranking on the search

engine list:By adding, removing, or changing a few sentences, the

Web designer may alter he way a search engine’s spider ranks its findings.

When the Web designer redesign a page, use search queries to be responsive.

Economics and Effectiveness of Advertisement

Exposure models that are based on Cost Per Thousand Impression(CPMs): The price charged is different for different search engines and

other popular sites: Excite charged $68 per CPM and Lycos charged $50-$60 per CPM

Click-Through: More accountable way of charging for Web advertising

The payment for a banner ad is based on the number of times a visitor actually clicks on it:

www.pawluk.com/pages.htm

Economics and Effectiveness of Advertisement

Interactivity: Instead of click-through, the pricing is based upon the amount the

visitors interacts with the target ad: Number of repeat visits and duration

Actual Purchase: Instead of number of visits, the ultimate outcome of the visit is

used as an effect an ad. Exp. Amazon.com pays 8% of the purchase price as a referral fee to AOL.

Other methods: Fixed monthly fee Market prices-auctions

Components of the Promotional Plan It should meet corporate objectives. Consideration should be given to promotion mix,, the

message and the media. Promotional objectives should be extended to online

media. Sales promotion should be used for introduction of a new

product. If sampling will be used, it should match the right product

with the right prospects in the right place.

The Major Web Ad Players Advertising agencies and Web site developers:

Market segmentation and targeting.

Market research providers. These are companies that are tracking the evolution of internet

technology with a focus on its impact on business and certain industries, including the Web advertising area.

Traffic Measurement and Analysis companies: Offer software and services to aid publishers in tracking and

executing advertising delivery on their Web sites.

The Major Web Ad Players (cont.)

Networks/rep firms:They provide value-added services for Web advertisers

and publishers alike by brokering the distribution of advertisement and overseeing their delivery.

Order processing and support:They are the companies that provide outsourcing

services to Internet publishers and services providers.

Managerial Issues Make Vs. buy:

Web advertisement is a complex undertaking; therefore, outsourcing may be considered.

Finding the most visited sites:Check the traffic of most popular Web sites such as

Yahoo or Nestcape.www.web21.com www.pcmag.com/special/Web100/top100fwww.arbitron.com

Managerial Issues (cont) Company research:

Companies should research the Web thoroughly before meeting with an internet marketing/advertising service.

An Ad network should provide a convenient way for web publishers to manage a portfolio of Web pages or sites.

Commitment to Web advertising and coordination with traditional advertisement: A successful Web program requires top management support. Coordination with the traditional media is a must:

Wed address on TV advertisement.

Managerial Issues (cont.) Ethical Issues:

Selling of mailing list and customer information. Integrating advertisement with ordering and other

business process:Shopping cart.Catalog.Ordering.Paying