GTU MBA Last 10 Years 2010-2020 Question Papers || Gujarat Technological University
Module 5
E-marketing Manage
Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
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- A Taxonomy for Internet Products
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Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Creating Customer Value Online
- Never has competition for online customer been more fierce.
To succeed, firms must employ that result in
Customer value = Benefits - Costs.
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Creating Customer Value Online
- But what exactly is value?
- The entire product experience:
- Customer's first awareness of a product,
- All customer touch points (including the Web site from a firm),
- The actual product usage and postpurchase customer service,
- The compliments a consumer gets from friends who value the product.
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- Value is defined wholly by the customer.
- Value involves customer expectations; if the actual product or service falls short of their expectations, customers will be disappointed.
- Value is applied at all price levels.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Online Benefits
- The Internet technology brings a new set of desired benefits:
- Effective Web navigation,
- Quick download speed,
- Clear site organization,
- Attractive and useful site design,
- Secure transactions & privacy,
- Free information or services,
- User-friendly Web browsing and e-mail reading.
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- BUT as Internet technology evolves, user needs change and expand.
- Marketers must make five general product decisions about the bundle of benefits to meet customer needs: attributes, branding, support services, labeling, and packaging.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Attributes
- Product attributes include:
- Overall quality: "you get what you pay for" = higher quality generally means higher prices,
- Specific features: Include such elements as convenience and speed of service.
- Benefits are the same features from a user perspective: what does the attribute do to solve problems or meet needs?
- For example, Yahoo! provides a list of Web sites, which helps users find things quickly online (benefit). Product benefits are key components in the value equation.
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Attributes
- The Internet increases customer benefits in ways that have revolutionized marketing practice:
- The move from atoms to bits: media, music, software, and other information products are presented on the Web.
- Product customization:
- Tangible products such as laptop computers can be configured with various hardware and software items or services to provide a customized price.
- Intangible products, online research firms can offer a variety of combinations.
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- Information products can be reconfigured and delivered quickly, and cheaply, as compared to manufacturing.
Attributes
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- The Internet offers users the unique opportunity to customize products automatically without leaving their homes.
- User personalization is another form of customization. Through Web site registration and other techniques, firms can:
- Greet users by name,
- Suggest product offerings of interest based on past purchases,
- Amazonfirstranker.com
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Branding
- A brand includes a name (McDonald's), a symbol, or other identifying information.
- When a firm registers that information with the government, it becomes a trademark and is legally protected.
- According to the U.S. government, "a trademark includes any word, name, symbol or design, or combination of words, names, symbols or designs, that identifies and distinguishes the goods or services of one party from those of others."
Branding
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- A brand is:
- A promise to customers,
- A brand name + its image = the benefits customers seek,
- A way to establish trust for the customer.
- Important online, because of concern over security and privacy issues,
- Trustworthy brand names add to customer-perceived value and higher prices,
- The value proposition.
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Branding
- Customers and prospects develop brand images based on:
- One-way media such as advertising and packaging,
- Two-way communication such as conversations with customer service or sales people on the phone, at trade shows, on Web sites, and in e-mail.
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- When using the Internet, a firm must be sure that its online communications and e-mails convey a positive brand image that is consistent with all other contact points.
Branding
- Companies creating new products for online distribution face branding decisions:
- Whether to apply existing brand names to their new products,
- Whether to lend their brand name as a cobranding strategy with other firms,
- What domain name to use for the Web site.
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Branding
- 7 components for building a great global brand:
- Research your corporate constituencies. Understanding them is critical for global brand building.
- Understand your business. Set guidelines and measurable objectives.
- Advance the vision. Decide on the desired brand image, create a strategy to support it, and develop a positioning document.
- Release the power of communications. All communication should work together to build the brand.
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Branding
- 7 components for building a great global brand:
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- Set up your communications infrastructure. Establish a communication council with the firm's advertising, public relations, investor relations, and human resources specialists, both inside and outside the firm.
- Include your employees in the message. This is especially important in a time of PR crisis.
- Measure performance. Track progress and determine communication effectiveness.
Using Existing Brand Names On the Web
- An existing brand name can be used for any new product:
- Makes sense when the brand is well-known + has strong brand equity,
- For example, Amazon added music CDs, videos, software, and other products to its product mix. When products with offline sales increase, firms are choosing to use the same brand name (e.g., The New York Times).
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- Some firms may not want to use the same brand name for several reasons:
- If the new product or channel is risky, the firm does not want to risk the brand's good name by associating with a product failure,
- A powerful Internet success might inadvertently reposition the brand,
- Sometimes the firm wants to change the name slightly for the online channel, as a way of differentiating the online brand from the offline brand.
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Creating New Brand Names for Internet Marketing
- If an organization wants to create a new Internet brand, the name is very important.
- Good brand names should:
- Suggest something about the product (e.g., www.Petsfirstranker.com),
- Differentiate the product from competitors (e.g., Yahoo!),
- Be capable of legal protection.
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- On the Internet, a brand name should be:
- Short,
- Memorable,
- Easy to spell,
- Capable of translating well into other languages.
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Co-branding
- Co-branding:
- When two different companies put their brand names on the same product.
- Common on the Internet and is a good way to create synergy through expertise and brand recognition.
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- For example:
- Sports Illustrated now co-brands with CNN,
- Even the Web site address displays the cobranding: sportsillustrated.cnnfirstranker.com.
Internet Domain Names
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- Organizations spend a lot of time and money developing domain names for strong brand equity.
- Using the company trademark or brand name in the Web address helps consumers quickly find the site.
- For example, www.coca-colafirstranker.com.
- Anatomy of a URL:
- A URL (Uniform Resource Locator) = Web site address. (Internet Protocol) = domain name.
- Categorization scheme, similar to telephone area codes, helps computer users find other computers on the Internet.
- Are numbers, but because users can more easily remember words, a domain name server translates back and forth.
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Internet Domain Names
- A domain name contains several levels:
- http:// = hypertext protocol = The browser should expect hypertext protocol-meaning documents that are linked together,
- www = world wide web = Not necessary and most computers can find the name both with and without it.
- dell = second level domain = The name of the company,
- com = top level domain = Firms must first decide in which domain to register. Most businesses in the U.S. want firstranker.com,
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- The Internet Corporation for Assigned Names and Numbers (ICANN):
- A non-profit corporation,
- A committee of experts to make decisions about protocol, technical assignment, registration,
- Approves all new top level names such as the latest: biz, .info, .name, .pro, .aero, and .museum.
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| Domain Designation | Top Level Domain Name |
|---|---|
| net | Networks |
| com | Commercial |
| edu | Educational |
| jp | Japan |
| ca | Canada |
| de | Germany |
| uk | United Kingdom |
| au | Australia |
| it | Italy |
| us | United States |
Largest Top Level Domain Names in January 2002 and Number of Hosts Source: Data from FirstRankerfirstranker.com (www.isc.org)
Registering a New Domain Name
- VeriSign provides domain registering services for about $35 for two years/name.
- Problems:
- More than 97% of words in the dictionary are already taken as domain names,
- The online name a firm desires may not be available.
- A dictionary name is not necessarily the best choice because it already has a meaning attached to it = difficult to create a competitive advantage.
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Registering a New Domain Name
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- What happens if the firm name has been registered?
- Come up with alternative names: DeltaComm, a company, was not the first to register www.deltafirstranker.com before Delta Airlines (www.delta-airfirstranker.com),
- Buy the name from the currently registered holder,
- Many creative Netizens register lots of popular names and put them up for sale at prices of up to millions of dollars:
- GreatDomainsfirstranker.com allows users to buy and sell domain names.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Support Services
- Customer support (during and after purchase):
- Is a critical component in the value proposition,
- Need knowledgeable customer service representatives,
- Is critical for some technical products for handling maintenance problems, product guarantees, and warranties.
- Customer service:
- Works to increase customer satisfaction with products,
- Is a product benefit = an important part of customer relationship management.
--- Content provided by FirstRanker.com ---
Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Labeling
- Product labels:
- Identify brand names, sponsoring firms, and product contents,
- Provide often instructions for use and product recommendations,
- On tangible products = create product recognition and influence decision behavior at the point of purchase,
- For online services = provides terms of product use, lists of features, and other information comprising the service.
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Labeling
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- Labeling at Web sites, customers can read:
- How to install and use a software downloaded from the Web,
- Extensive legal information about copyright use,
- Online labeling can serve many of the same purposes.
- Many brick-and-mortar businesses display the Better Business Bureau logo on their doors to give the customer a sense of comfort.
- The TRUSTe privacy shield: If firms agree to certain standards for privacy of customer information collected at their Web sites, they can display the TRUSTe seal to their Web sites as part of a labeling effort.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Co-design
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
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E-Marketing Enhanced Product
- The move from atoms to bits adds complexity to online product development.
- Developers must:
- Combine digital text, graphics, video, and audio, with delivery systems.
- Must integrate front-end customer service operations with back-end collection + fulfillment methods to deliver product value.
- This creates steep learning curves for traditional product developers.
- E-marketers need to consider several factors that influence product development and product mix strategies with new technologies.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Customer Codesign
- The power shift to buyers allows for many unusual new product development and for both business and consumer collaboration.
- Partners are forming synergistic clusters to help design and deliver value.
- Internet technology allows this type of codesign to occur electronically across international borders as well.
- Customer interaction in the early and late stages of product development can actually increase product success.
- This is especially true when product codesign occurs with the "lead user" of a product.
- This is a key person who uses the product and often has ideas about product use problems as they occur.
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Overview
--- Content provided by FirstRanker.com ---
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
Electronic Input
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- Good marketers look everywhere for customer feedback.
- With the increase of Web sites inviting customer feedback, the proliferation of e-mail "word of mouse," and the speed of the Internet, customers are quick to spread the word about product strengths and weaknesses.
- Savvy firms monitor customer input electronically to determine customers' needs.
- Companies hire electronic clipping services-firms that search the Web for company and product discussion = the electronic equivalent of clipping services that read print media and clip out articles about the firm and its brands.
- The electronic input process:
- Is similar to the use of marketing research to support product development,
- The scale is much larger because many customers worldwide offer quick feedback.
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Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
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- A Taxonomy for Internet Products
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Web Content Development
- On the Web, "content is king."
- Customers visit Web sites for information, entertainment, and social interaction.
- Content attracts users and keeps them returning.
- 5 tips for "screaming content:"
- Stay fresh. Update the site every day and at least once a week to show commitment!
- Be relevant and unique. Deliver highly focused content to build a competitive site content.
- Make it easy to find. Users want to find information quickly and include hyperlinks to other sites for content because users are busy,
- Serve a smorgasbord of content. Integrate current news, features, and commentary. Include interactive material relevant to the site, search engines, and so forth. Vary the format to include multimedia,
- Deliver content everywhere. This includes Web sites, e-mail, and special networks.
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Web Content Development
- A new breed of syndicated content providers has emerged to help developers:
- Is parallel to the Associated Press that feeds news to local newspapers and magazines.
- Includes stock quotes, breaking news, sports updates, weather, and converts formats from text to video.
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- An interesting trend involves users who want text-based content:
- A small but growing group of Web users does not want graphics, animation, and other non-text items,
- They favor simple text information,
- They block advertising content with special software and knowledge,
- They do not like HTML e-mail.
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- Important because mobile handheld devices use mostly text.
- Web content providers might consider how to pare down content for these users + charge a subscription fee for the content.
Overview
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
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Internet Properties Spur Other
- Market deconstruction created a disaggregation and recombination of product and service components to form unusual new products:
- These firms provide bundles of benefits difficult to achieve offline,
- The AutoMall Online.
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- The Internet is a great information equalizer:
- Fierce competition + lots of product imitation + short product life cycles,
- In this environment, product differentiation is the key to success in a commodity-driven commodity industry.
- Online auctions: Not long after eBay came online, Amazon started its own auctions.
- Short product life cycle: when Frank Sinatra died, BMG's online development team created a lifetime tribute and a series of CDs for its Web site in six short hours.
- Firms must respond quickly to new technology or lose out.
- Innovation online is richly rewarded.
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Overview
--- Content provided by FirstRanker.com ---
- Many Products Capitalize on Internet Properties
- Creating Customer Value Online
- Online Benefits
- Attributes
- Branding
- Support Services
- Labeling
--- Content provided by FirstRanker.com ---
- E-Marketing Enhanced Product Development
- Customer Codesign
- Electronic Input
- Web Content Development
- Internet Properties Spur Other Opportunities
- New-Product Strategies for E-Marketing
--- Content provided by FirstRanker.com ---
- A Taxonomy for Internet Products
New-Product Strategies for E-Marketing
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- Many new products were introduced by "online only" firms:
- = The firm was built around the first successful online product,
- Netscape, Yahoo!, and Classmates.
- Other firms added Internet products to an existing product mix:
- Microsoft.
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Product Mix Strategies
- How can marketers integrate hot product ideas into their product mix? There are 6 categories of new-product strategies, depending on firm objectives and other factors such as risk appetite, brand equity, resource availability, and competitive entry:
- Discontinuous innovations are new-to-the-world products that have not been available before.
- On the Internet = the first Web authoring tool, the first search engine, the first combination, shopping agent, and search engine,
- This strategy is quite risky, the potential rewards are high,
- E-marketers planning discontinuous innovations must remember that their customers will have to learn and adopt new behaviors that they have not done before,
- The new behavior must be easy and the perceived benefits must be high.
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Product Mix Strategies
- New product lines are introduced when a firm uses an existing brand name and create new products in a product category.
- Microsoft created a new line when it introduced its Internet Explorer. Because the Netscape browser was already available, this was not a discontinuous innovation.
- Additions to existing product lines occur when a firm adds a new flavor, size, or other variation to a current product.
- The New York Times Direct is a slightly different version of the newspaper adapted for online delivery. It is yet another product in the New York Times line that includes the daily paper, weekly book review, and others.
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Product Mix Strategies
- Improvements or revisions of existing products are labeled "new and improved" and, thus, replace the old product.
- Web-based e-mail systems improved on client-based e-mail systems such as Eudora or Outlook because users could check their e-mail from any Web connected computer.
- Repositioned products are current products that are targeted to different markets or promoted for new uses.
- Yahoo! began as a search directory on the Web and was later repositioned as a portal (an Internet entry point with many services).
- Me-too lower-cost products are introduced to compete with existing brands by offering a price advantage.
- When America Online and other ISPs were charging $20 per month for Internet access, several other providers introduced a lower flat rate pricing for $19.95 per month.
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A Word About ROI
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- Need for performance metrics:
- As feedback so firms can assess the success of their strategies and tactics.
- When introducing new products, online or offline,
- (The expected product revenue over time is forecast and compared to other expenses) = an estimated ROI for new product development.
- Payout = the R & D and other initial costs will be recouped based on projected sales.
- Break-even date = when the product is projected to break even.
- How long is acceptable? Internet projects had to break even in 18 months or they would not get funded. Of course this varies by industry.
- ROI and break-even are important metrics for managing internally and for measuring their success in the marketplace.
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Price-Overview
The Internet Changes Pricing Strategies
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- Buyer and Seller Perspectives
- Buyer View
- Seller View
- Pricing Strategies
- Fixed Pricing
- Dynamic Pricing
- Bartering
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The Internet Changes Pricing Strategies
- Price is:
- The amount of money charged for a product or service,
- The sum of all the values (such as money, time, energy) that consumers exchange for the benefits of having or using a good or service,
- Set by negotiation between buyers and sellers.
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- Fixed price policies:
- One price for all buyers,
- A relatively modern idea = end of the nineteenth century,
- Arose with the development of large-scale retailing and mass production.
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- Now, one hundred years later: Dynamic pricing
- The Internet is taking us back to an era of dynamic pricing = Varying prices for individual customers
The Internet Changes Pricing Strategies
- In the past, the Internet was used for:
- Marketing communication benefits,
- Distribution channel benefits.
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- BUT it has a huge potential to change pricing.
- The Internet properties allow for price transparency = the idea that both buyers and sellers can view all competitive prices for items sold online.
- This feature would tend to commoditize products sold online, making the Internet an efficient marketplace.
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Overview
The Internet Changes Pricing Strategies
Buyer and Seller Perspectives
- Buyer View
- Seller View
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Pricing Strategies
- Fixed Pricing
- Dynamic Pricing
- Bartering
Buyer and Seller Perspectives
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- The meaning of price depends on the perspective of the buyer and the seller.
- Each party to the exchange brings different objectives that help describe a fair price.
- In the end, both parties must agree on the price.
Overview
The Internet Changes Pricing Strategies
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Buyer and Seller Perspectives
- Buyer View
- Seller View
Pricing Strategies
- Fixed Pricing
- Dynamic Pricing
- Bartering
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Buyer View
- For the buyers: values = benefits - costs
The Real Costs
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- Today's buyer must be quite sophisticated to uncover the true dollar cost of a product.
- The seller's price may or may not include shipping and other hidden elements (costs revealed online at the last minute of the experience).
- Promotion of a new pricing scheme for a long distance carrier:
- Complex deals,
- Some carriers advertise "$0.07 a minute, period."
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The Real Costs
- How about the time, energy, and psychic costs in addition to a buyer's monetary costs?
- Sometimes:
- The Net is slow,
- Information is hard to find,
- Other technological problems,
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- Users can spend more time and energy and become frustrated (psychic cost).
The Real Costs
- Shopping agents will find the lowest prices, but the time to search adds to the time cost.
- A search for the lowest airfare at Orbitzfirstranker.com or Travelocityfirstranker.com may be minimal compared to the dollar savings,
- BUT the same may not be true for a book price.
- It depends on:
- The time it takes to search & the savings as a percentage,
- How much familiarity and experience the buyer has with the Web.
- As bandwidth increases, technology evolves, and firms develop better online strategies, some of these psychic costs will decline.
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Buyer Control
- The change in power from seller to buyer affects pricing.
- Reverse auction:
- Buyers set prices for new products and sellers decide whether to accept the prices.
- Example = Pricelinefirstranker.com (n
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