Principles of Marketing

Principles of Marketing 10e
Kotler, Armstrong

CHAPTER 3

MARKETING IN THE DIGITAL AGE:
MAKING NEW CUSTOMER CONNECTIONS

1. LOOKING AHEAD: PREVIEWING THE CONCEPTS
   A look at Charles Schwab and it choices in going on line or not.


2. MAJOR FORCES SHAPING THE INTERNET AGE
   1. Digitalization and Connectivity
      Intranets - Network that connects people within a company to each network and to the company network
      extranet - A network that connects a company with its suppliers and distributors
      internet- A vast public of computer networks connecting users of all types around the world.
   2. The Internet Explosion
      Growth of the internet has been from a techy few in the early 90's to 400 Million by the end of the 90's. It has helped to create a new economy.
   3. New Types of Intermediaries
      Because of the rise of the internet, companies had to decide how to modify their business to keep their channels happy on one side and not loose business to the internet upstarts on the other side. The had to decide to stay as brick and mortar or add to the click only companies and become click and mortar.
   4. Customization and Customerization
      The old economy focused on the standardization of products. The new economy focuses on customization, customizing a product for a customer, and customerization, letting a customer customize their purchase.
3. MARKETING STRATEGY IN THE NEW DIGITAL AGE
   In reality it will take a mixture of the old and new economies to survive in today's economy
   1. E-Business, E-Commerce, and E-Marketing in the New Digital Age
      1. E-Business
         The use of electronic platforms to conduct a company's business.
      2. E-Commerce
         Buying and selling process supported by electronic means, primarily by the Internet.
      3. E-Marketing
         The marketing side of e-commerce -- companies efforts to communicate about, promote, and sell products and services over the Internet.
   2. Benefits to Buyers
      There are many ways that benefit the buyer. They include: convenience, easy, private, product access and selection. It is also possible to gather information about products you are looking at as well as be interactive and immediate. Not all these are available in the non-internet world.
   3. Benefits to Sellers
      It is a powerful customer relationship building tool. While reducing cost it also increases speed and efficiency. flexibility is increased as well as it being global in nature.
4. E-COMMERCE DOMAINS
   1. B2C (Business to Consumer)
      The online selling of goods and services to final consumers.
      1. Online consumers
         Though people think of the on line user as the geek, in reality it is more a wide variety of people that transverses most socioeconomic categories. There is also a wide range in the age groups as well. Major difference is that the internet consumer is more the one to initialize the interaction and the one who tends to control it.
      2. B2C Web Sites
         Web sites are available for almost everything that you need. Still some people have trouble with this cause they cannot touch or feel anything.
   2. B2B (Business to Business)
      Though most emphasis is on the B2C more takes place Business to Business.
      1. Open trading networks
         Most of this takes place in open trading networks where businesses put up their needs and what they have available.
      2. Private trading networks
         Also available are Private trading networks, trading networks that link a particular seller with its own trading partners.
   3. C2C (Consumer to Consumer)
      The online exchange of goods and information between final consumers.
   4. C2B (Consumer to Business)
      Online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving the transactions.
5. CONDUCTING E-COMMERCE
   1. Click-only versus Click-and-Mortar E-Marketers
      1. Click-only companies
         The so called dot-com companies that exist only online without any brick and mortar market presence. They range from Internet Service Providers (ISP) to e-tailers, companies that do all business on line. Many of the dot com companies burst because of a bad business model, spending more money to advertise themselves then they were bringing in.
      2. Click-and-Mortar Companies
         Traditional brick and mortar companies that have added e-marketing to their operations. Many traditional companies had problems in joining the market as they were afraid to alienate their current partners or to cannibalize their sales in their own stores. But many of them have come through stronger. This was because many of them were established names that people went with versus the unknown.
   2. Setting Up an E-Marketing Presence
      1. Creating a Web Site
         1. corporate web site
            A web site designed to build customer goodwill and to supplement other sales channels, rather than to sell the company's products directly.
         2. Marketing web site
            A web site that engages consumers in interactions that will move them closer to a direct purchase or other marketing outcome.
         
         The seven C's of effective web design should be focused on when designing a site
         • context
         • content
         • community
         • customization
         • communications
         • connection
         • commerce
      2. Placing ads and promotions online
         Online advertising appears while consumers are surfing the web and include banner, ticker ads, intersitials and skyscrapers. Another form is viral marketing, using word of mouth (or word of email, chatroom, etc) to get people to come to visit your site.
      3. Creating or participating in web communities
         Web Sites which members can congregate and exchange views on issues of common interest. Because people are drawn their for the content, it is safe to assume that you could use that to specialize the ads to the site.
      4. Using E-mail and webcasting
         Emailing involves collecting names of people interested in your product and sending them regular advertising that interest them. Webcasting is the automatic downloading of customized information of interest to the owner of the PC. Also known as Push.
6. THE PROMISE AND CHALLENGES OF E-COMMERCE
   1. The Continuing Promise of E-Commerce
      The promise that the Internet would replace all ways of doing things has always been over rated. For the most part, it will remain part of the mix of things done by marketers.
   2. The Web's Darker Side
      1. Internet profitability
         because of the volume of information, customer's attention can easily be diverted. Also, marketing is hard to do in an area where things can be so tightly narrowed down. Many sites will go unnoticed because of this.
      2. Legal and ethical issues
         1. online privacy and security
            Like other companies, web sites can collect information. There are the facts that this information could fall into wrong hands, especially with the companies failing and their assets being sold. Customers also are concerned with people hacking into the information that is kept as well. It is up to the company to protect the customer
         2. other legal and ethical issues
            Because of lack of personal contact, internet fraud is a high concern. Also the fact that this market tends to divide or segment the population, only the more affluent having access to it. Lastly their is the problem of unauthorized access to information.
7. LOOKING BACK: REVIEWING THE CONCEPTS