Internet Marketing and Online Business Models

Internet Marketing and Online Business Models

Internet Marketing: An Overview & Framework Angela DAuria Stanton, Ph.D Central Task of Marketing Augmented Product Actual Product as Purchased Warranty Installation Brand Name Delivery Terms Quality Credit Core Product core benefit customer receives from product Packaging

Features Design Set of characteristics designed to deliver products core benefits Additional benefits of the product After Sale Support Define Your Unique Selling Proposition The USP The USP should: be unique and clearly set you apart from your competition, positioning you the more logical choice persuade someone to want your product make a proposal or offer suggested for acceptance (buy this product and you will get this specific benefit)

Some examples of clear USPs Head & Shoulders: "You get rid of dandruff" Olay: "You get younger-looking skin" Loreal: "Because you are worth it" Red Bull: "You get stimulation of body and mind" Domino's Pizza: "You get fresh, hot pizza delivered to your door in 30 minutes or less -- or it's free." FedEx: When it absolutely, positively has to be there overnight"

M&M's: "The milk chocolate melts in your mouth, not in your hand" Wonder Bread: "It helps build strong bones 12 ways Nyquil: The nighttime, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine How to Develop Your USP Identify your biggest benefits Be unique Solve a performance gap Be specific an offer proof Condense into one clear and concise sentence Integrate your USP into ALL marketing materials Deliver on your USPs promise The Internet Marketing Cycle

Step 2 Analyze the Market Opportunity Step 3 Marketing Strategy Step 1 Corporate and BusinessUnit Strategy Step 4 Design the Customer Experience Step 7 Evaluate the Marketing Program Step 6 Step 5 Design the

Customer Interface Design the Marketing Program Analyze the Market Opportunity 1. What value does the opportunity provide? Trapped Value Create more efficient markets Create more efficient value systems New-to-the World Value Disrupt current

pricing Enable ease of access Radically extend reach Hybrid Value Customize offerings Build community Introduce new to the world functionality or customer experience Analyze the Market Opportunity 2. Identifying Unmet and/or Underserved Needs

What are the series of activities/steps of the customer decision process in which a customer participates to receive an experience? What is the nature of the ideal experience the customer wishes to receive, both functionally and emotionally? How closely does the actual experience compare to the customers view of the ideal? What are the key frustration points? What behaviors does the customer engage in to overcome these frustrations? What underserved needs do you observe, regardless of whether the customer is conscious of them? Does the experience the customer seek vary according to the environment? How positively/negatively does a customer view the current set of company offerings? What are the online opportunities to enhance or transform the customers experience? Analyze the Market Opportunity 3. Identify who provides the resources to deliver the benefits of the offering

4. Assess the Attractiveness of the Opportunity Competitive Intensity Customer Dynamics The level of unmet need/magnitude of unconstrained opportunity Level of interaction between major customer segments Likely rate of growth Technology Vulnerability

Number and identity of competitors Strengths and weaknesses at delivering benefits Impact of penetration of new technologies Impact of new technologies on value proposition Microeconomics The size/volume of the market The level of profitability Evaluate the Competition Use many different search engines to find your competition. Evaluate competitors using variables such as the following: domain name and complete URL how you found them strengths, weaknesses

gaps in product offering strategies for attracting people to their page strategies for keeping visitors at their site (e.g., stickiness) customer retention strategies attractiveness of site customer service A Method for Organizing Competitive Intelligence Competitor Competitor Competitor A B C Site Name Strengths Weaknesses Promotions Site Design Etc

Look at the Competitors Source Code (title, description META tag and keyword tag) Go to: http://www.cigaraficionado.com Cigar Aficionado - Your Home for Cigars On the Web Marketing Strategy 1.

Segmenting the Market (major types of online market segmentation) Behavioral Demographic Psychographic (common interests, values and opinions along with personality, attitude and lifestyle preferences e.g. VALS) Technical (based on data collected about your visit IP address, browser, how did you get to the page, type of connection, etc.) Contextual (using the context or content of an event e.g. people who read WSJ online are good targets for financial service advertising) Search (using what theyre looking for at that moment sell them what they want) 2. Targeting - determine the attractiveness of the segments and choosing the segment(s) to market 3.

Positioning creating perception of product relative to competition Design the Customer Experience The customer experience equals: The objective experience + The perceived experience + The encounter experience + The reactions to stimuli experience + The sensory experience + The cognitive and emotional experience + The relative experience Design the Customer Stages of Customer Experience

Experience What Firm Does What Customer Experiences Stage One: Functionality (works well) Great design & information architecture Understanding of consumer behavior Platform independence Server transactions Usable Stage Two: Intimacy (they understand me)

Data warehousing and mining Tailoring of pages and offerings Overlay human interaction Integrated data Personalized Stage Three: Internalizatio n (its part of me) Consistent A Stage Four: Evangelism Support performance over time Constant innovation and upgrading (incremental or significant)

site Quick, speedy downloads Easy navigation Reliable information Increasing trust Consistent experiences sense of being in the know Exceptional value Repeated experiences of value Significant gap relative to other offerings Wants to take message to market evangelists Acknowledge evangelists Enjoys benefits of community Source: Internet Marketing: Building Advantage in a Networked Economy, p. 210 Design the Marketing Program The Internet Marketing Mix interactivity

product pricing promotion\/ communication individual place community Design the Marketing Program Building and Nurturing Customer Relationships Relationship Stages Awareness Exploration / Expansion Commitme nt

Dissolution Design the Customer Interface The 7 Cs of the Customer Interface Context Content The sites layout & design Text, pictures, sound and video that site contains Commerce Community Sites capabilities to enable commercial transactions How the site enables user-to-user

communication Connection Customization Degree to which site is linked to other sites Sites ability to self tailor to different users or allow a personalized experience Communication How site enables siteto-user communication or two-way communication Evaluate the Marketing Program Online Model of Purchasing and Associated Customer Metrics Online Buying Process Stage Metrics Commonly Used at this Stage

Visits stage Measuring Shopping behavior stage Number Purchase stage Number Post-purchase stage Return Loyalty stage Frequency unique and repeat visitors of page views Pattern of sites visited Length of stay on site Number of registrations completed per 100 visitors Number of customers with shopping carts / shopping cart

abandoned of purchases Dollar amount of purchases Conversion rate of customers Customer acquisition cost Customer profitability rates Referrals of purchase Percentage of purchases in category Percentage of true loyalists It's not the strongest or most intelligent that survive, but the ones most responsive to change. ---Charles Darwin

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