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BM/OCT 2008/MKT544

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: : : :

INTERNET MARKETING MKT544 OCTOBER 2008 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. This question paper consists of two (2) parts : PART A (2 Questions) PART B (5 Questions)

2.

Answer ALL questions from PART A and any three (3) questions from PART B in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) the Question Paper ii) an Answer Booklet - provided by the Faculty

3.

4.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages
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BM/OCT 2008/MKT544

PART A Case Study 1 -800-Flowers.Com 1-800-Flowers.com (1-800-flowers.com) is a true Internet pioneer. It had an Internet presence in 1992 and full-fledged e-store capabilities in 1995. Online sales are a major marketing channel (in addition to telephone and fax orders). Competition is very strong in this industry. The company's success was based on operational efficiency, convenience (24/7 accessibility), and reliability. However, all major competitors provide the same features today. To maintain its competitive advantage, the company transformed itself into a customer-intimate organization, caring for more than 15 million customers. The challenge was to make 1-800-Flowers.Com the only retailer that customers really trust when shopping for gifts online or by phone. The company decided to cultivate brand loyalty through customer relationships, which is based on intimate knowledge of customers. How is this accomplished? SAS software spans the entire decision-support process for managing customer relationships. Collecting data at all customer contact points, the company turns that data into knowledge for understanding and anticipating customer behaviour, meeting customer needs, building more profitable customer relationships, and gaining a holistic view of a customer's lifetime value. Using SAS Enterprise Miner, 1-800-Flowers.com sifts through data to discover trends, explain outcomes, and predict results to that company can increase response rates and identify profitable customers. The rationale for the customer intimate effort is to build loyalty. In addition to selling and campaign management, the ultimate goal is to make sure that when a customer wants to buy, he or she continues to buy from 1-800-Flowers.Com and cannot be captured by a competitor's marketing. To build that kind of loyalty, it is necessary to know your customers and build a solid relationship with each one of them. At 1-800-Flowers.comm, the objective is not just about getting customers to buy more. It is about making sure that when they decide to purchase a gift online or by phone they do not think of going to the competition. Loyalty is earned through the quality of the relationship offered. The difficulty is that not every customer wants the same relationship. Some one wants you to be more involved with them than others; some will give you different levels of permission on how to contact them. At the end of the day, the data mining software helps the company identify the many different types of customers and how each would like to be treated. The company plans its ad campaigns based on the results of the data mining done on a oneto-one basis sales, others do not. So prefer notification via e-mail. The data for the analysis is derived from the data center, which is backed-up by AT&T technology. Many factors have contributed to the company's recent revenue growth- customer relationship management among them. The data mining analysis provides rapid access to better customer information and reduces the amount of time the company needs to spend on the phone with customers, which makes better use of every body's time. The net result is that customer retention has increased 15 percent over 2 years. Source: Turban et al. (2008).
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BM/OCT 2008/MKT544

QUESTION 1 How was the transformation to a customer-intimate business accomplished? (20 marks)

QUESTION 2 Explain the role of data mining. (20 marks)

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BM/OCT 2008/MKT544

PARTB QUESTION 1 Internet Marketing definition are divided into five components in the text. Identify and explain those five (5) components. (20 marks) QUESTION 2 Illustrating with a diagram, explain the four (4) organizational alignment dimensions. (20 marks)

QUESTION 3 Only One Sdn. Bhd. wants to develop customized interface (similar to Web site). As an Internet marketing consultant explain the dimensions of customization. (20 marks)

QUESTION 4 a) b) What is augmented product?

(8 marks)

There are two (2) general classification of products: physical goods and services. Distinguish between the two. (12 marks)

QUESTION 5 a) There are three (3) key brand positioning strategies with respect to price that retailers can adopt: cyclical promotional pricing (Hi-Lo), everyday low pricing (EDLP), and retail/outlet pricing. Briefly explain everyday low pricing (EDLP). (8 marks) Will the Internet commoditize prices? Discuss point and counterpoint. (12 marks)

b)

END OF QUESTION PAPER

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