Document

Report
6
E-Marketing and Customer
Relationship Management
Agenda
• Marketing on the Internet
• Customer Relationship Management
• Legal and Ethical Issues in E-Marketing
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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
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Benefits of E-Marketing
• Open and instantaneous flows of
information
• Enhanced customer service efficiencies
• Worldwide scope of the electronic
market
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Uses for Digital Marketing
Purpose of digital marketing
New customer lead generation
Brand awareness and recognition
Improved customer relationships
Cross-sell and up-sell to existing customers
Website traffic generation
Customer education
Customer support
Event promotion
Product sales
Percent of
companies
85%
71%
68%
61%
60%
54%
47%
45%
42%
Source: Robyn Greenspan, “E-Marketing Efforts Leave Room for Improvement,” ClickZ, February 6, 2004,
www.clickz.com/stats/markets/advertising/print.php/5941_3309721.
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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
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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
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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.
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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.
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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
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Kelley Blue Book provides accessibility to up-to-date
information about buying and selling automobiles.
© Copyright 2004 Kelley Blue Book. All rights reserved.
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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.
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Exercise
Identify the e-marketing characteristics
(addressability, interactivity, memory,
control, accessibility, digitalization) that
relate to the following examples.
1.Bluefly.com asks visitors to provide their email address, clothing preferences, brand
preferences, and sizes so it can create a
customized online catalog matching the
customer’s specified preferences.
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Exercise (cont’d)
2.FedEx’s web-based software allows
customers to track their own packages
from starting point to destination.
3.CDNow asks music lovers to supply
information about their listening tastes so
that the company can recommend new
releases.
4.Visitors to Yahoo! can search the site for
topics of interest and click to those sites
the search service finds.
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Exercise (cont’d)
5.Amazon.com recognizes visitors by name
if they have purchased from the site before
and then offers suggestions about
products they might be interested in based
on their previous purchases.
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E-Marketing Strategies
E-Marketing
Strategy Considerations
Target
Markets
Product
Marketing
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Distribution
Systems
Promotion
Mediums
Pricing
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Reasons Shoppers Cite for Online Buying
Top Seven Reasons for Buying Online
Save time by not going to store
Can shop when stores are closed
Avoid crowds
Might be able to find better prices
Can find products online more easily
Find products not available in stores
Easier to compare prices
Source: Robyn Greenspan, “E-tailers Will See Green,” ClickZ, November 6, 2003,
www.clickz.com/stats/markets/retailing/article.php/6061_3105491.
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The Relationship Between Websites and Retail
Stores
Source: American Demographics, December 2000, p. 42. Adapted with permission.
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Customer Relationship Management (CRM)
• 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.
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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.
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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
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Technology Drives CRM (cont’d)
• Technology
– Should not be used just as a costreduction tactic
– Should not be overwhelmed by gathering
unnecessary data
– Should be used as a tool to sustain longterm relationships
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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
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The BBBOnLine Privacy Seal and Program Explanation
Reprinted by permission of the Council of Better Business, Inc.
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FIGURE 4.1
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Financial Costs of Cyber Attacks
Companies were asked how much money they had lost from
computer security breaches or espionage over the past year.
35%
32%
30%
25%
17%
20%
15%
10%
5%
5%
5%
0%
Up to
$10,000
$10,001 to $100,001 More than
$100,000
to
$500,000
$500,000
Source: Original data from InformationWeek 2003 Global Information Security Survey of 421 business-technology and security
professionals, in “Snapshots,” USA Today, November 5, 2003.
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eTrust software
safeguards data from
internal and external
threats to facilitate
customer
relationship
management.
Reprinted with permission of Computer Associates, International
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