part three using technology and information to build customer relationships 6 e-marketing and...

Part ThreePart ThreeUsing Technology and

Information to BuildCustomer Relationships

66E-Marketing and Customer Relationship Management

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Objectives

1. To define electronic marketing and electronic commerce and recognize their increasing importance in strategic planning

2. To understand the characteristics of electronic marketing—addressability, interactivity, memory, control, accessibility, and digitalization—and how they differentiate electronic marketing from traditional marketing activities


Objectives (cont’d)

3. To examine how the characteristics of electronic marketing affect marketing strategy

4. To understand how electronic marketing and information technology can facilitate customer relationship management

5. To identify the legal and ethical considerations in electronic marketing


Chapter Outline

• Marketing on the Internet

• Customer Relationship Management

• Legal and Ethical Issues in E-Marketing


Marketing on the Internet

• Electronic Commerce (E-Commerce)– Sharing business information, maintaining

business relationships, and conducting business transactions by means of telecommunications networks

• Electronic Marketing (E-Marketing)– The strategic process of creating,

distributing, promoting, and pricing products for targeted customers in the virtual environment of the Internet


Benefits of E-Marketing

• Open and instantaneous flows of information

• Enhanced customer service efficiencies

• Worldwide scope of the electronic market


Basic Characteristics of Electronic Marketing: Addressability

• Addressability is a marketer’s ability to identify customers before they make a purchase

• How e-merchants attain addressability– Limit access to areas of their website to

encourage customer registration– Offer contests and prizes in exchange for

consumer information– Place “cookies” on visitor’s computer to

track visitor usage and preferences


Basic Characteristics of Electronic Marketing: Interactivity

• Interactivity is the ability to allow customers express their needs and wants directly to the firm in response to the firm’s marketing communications– Real-time interaction with customers– Broader market coverage at a lower cost

• Community refers to a sense of group membership or feeling of belonging– Virtual communities on the Web


Basic Characteristics of Electronic Marketing: Memory

• Memory is the ability to access databases or data warehouses containing individual customer profiles and past purchase histories and to use these data in real-time to customize a marketing offer.

• A database is a collection of information arranged for easy access and retrieval.


Basic Characteristics of Electronic Marketing: Control

• Control refers to customers’ ability to regulate the information they view and the rate and sequence of their exposure to that information.

• A portal is a multiservice website that serves as a gateway to other websites.


Basic Characteristics of Electronic Marketing: Accessibility

• Accessibility is the ability to obtain information available on the Internet.– Informs and educates the inquiring

consumer about competing products and prices

– Creates competition for the consumer’s attention

– Helps make information available to employees to service customers


Basic Characteristics of Electronic Marketing: Digitalization

• Digitalization is the ability to represent a product, or at least some of its benefits, as digital bits of information.


E-Marketing Strategies

DistributionDistributionSystemsSystems

DistributionDistributionSystemsSystems

TargetTargetMarketsMarkets

TargetTargetMarketsMarkets

ProductProductMarketingMarketing

ProductProductMarketingMarketing

PromotionPromotionMediumsMediums

PromotionPromotionMediumsMediums PricingPricingPricingPricing

E-MarketingE-MarketingStrategy ConsiderationsStrategy Considerations

E-MarketingE-MarketingStrategy ConsiderationsStrategy Considerations


Customer Relationship Management

• Focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships– A focus on CRM is possible in e-marketing

because of marketers’ ability to target individual customers.

– The ability to identify individual customers allows marketers to shift their focus from increasing share of market to increasing share of customer.

– CRM is often based on the use of information technology.


The 80/20 Rule

• 80 percent of business profits come from 20 percent of customers.– Technology allows marketers to profile

customers in real-time and assess their lifetime value (LTV) to the firm.

– Some customers may be too expensive to retain given the low level of profits they generate.

– Firms should focus on developing and managing long-term relationships with more profitable customers.


Technology Drives CRM

• Customer support and call center software– Provides customer interaction and improved

service– Captures information about all interactions

• Sales automation– Links sales force to applications that facilitate

selling and providing service– Provides information to determine the best

solution for customers– Determines order status, tracks deliveries, and

identifies service problems


Technology Drives CRM (cont’d)

• Technology– Should not be used just as a cost-

reduction tactic– Should not be overwhelmed by gathering

unnecessary data– Should be used as a tool to sustain long-

term relationships


Legal and Ethical Issues in E-Marketing

• Personal privacy issues– Unauthorized placement of cookies on personal

computers– Website information requirements for registration– Collection of information from children– Use of spyware in software

• Spam– Unsolicited commercial e-mail (UCE)

• Misappropriation of intellectual property– Illegal copying of copyrighted software, movies,

CDs, and other creative materials


The BBBOnLine Privacy Seal and Program Explanation

FIGURE 4.1Reprinted by permission of the Council of Better Business, Inc.


After reviewing this chapter you should:

• Be able to define electronic marketing and electronic commerce and recognize their increasing importance in strategic planning.

• Understand the characteristics of electronic marketing—addressability, interactivity, memory, control, accessibility, and digitalization—and how they differentiate electronic marketing from the traditional marketing environment.


After reviewing this chapter you should:

• Have examined how the characteristics of electronic marketing affect marketing strategy.

• Understand how electronic marketing and information technology can facilitate customer relationship management.

• Be aware of legal and ethical considerations associated with electronic marketing.

part three using technology and information to build customer relationships 6 e-marketing and...

Documents

electronic marketing

emarketing slide

marketing offer

marketing open

marketing strategy

electronic market slide

internet slide

web slide