Chapter 4: Marketing on the Web

Objectives
In this chapter, you will learn about: When to use product-based and customer-based marketing strategies Communicating with different market segments

Customer relationship intensity and the customer relationship life cycle

Using advertising on the Web E-mail marketing Technology-enabled customer relationship management Creating and maintaining brands on the Web Search engine positioning and domain name selection
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Web Marketing Strategies

Four Ps of marketing
Product
Physical item or service that the company is selling

Price
Amount a customer pays for the product

Promotion
Any means of spreading the word about the product

Place
Need to have products or services available in different locations
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How do you reach customers?

Identify groups of potential customers Select the appropriate media Build the right message (write to your reader)
Content (e.g., product presentation) Context (e.g., trust)
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Customer-Based Marketing Strategies

How do you build a customer-based marketing strategy?
Rudimentary approaches start by identifying groups of customers who share common characteristics

Market Segmentation
Market segmentation is dividing the pool of potential customers into segments and targeting specific portions of the market with advertising messages
Segments are usually defined in terms of demographic characteristics Micromarketing is a term suggesting that we can target very small market segments

Market Segmentation
Geographic segmentation: Where are they?
Demographic segmentation: Income, race, education, etc. Psychographic segmentation: variables such as social class, personality, or lifestyle

Geographic Segmentation

Trust and Media Choice

The Web is an intermediate step between mass media and personal, FTF, contact
Companies can use the Web to capture some of the benefits of personal contact, yet avoid some of the costs inherent in FTF customer management Trust is often related to proximity

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Product-Based Marketing Strategies

The product-based strategy views the world from the perspective of the firm and its products
For example, stores such as Staples and Sears believe customers organize their needs into product categories and they organize their sites accordingly

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Beyond Market Segmentation: Customer Behavior and Relationship Intensity

Behavioral segmentation: Creation of separate experiences for customers based on their behavior Occasion segmentation: Behavioral segmentation based on things that happen at a specific time Usage-based market segmentation: Customizing visitor experiences to match the site usage behavior patterns of each visitor

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Beyond Market Segmentation: Customer Behavior and Relationship Intensity

Behavior-based categories include:
Simplifiers like convenience Surfers use the Web to find information and explore new ideas Bargainers are in search of a good deal Connectors use the Web to stay in touch with other people Routiners return to the same sites over and over again
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Customer Relationship Intensity and Life-Cycle Segmentation

One goal of marketing is to create strong relationships between a company and its customers
Good customer experiences can help create an intense feeling of loyalty Touchpoints
Online and offline customer contact points

Touchpoint consistency: provide similar levels and quality of service at all touchpoints
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Acquisition, Conversion, and Retention of Customers

Acquisition cost
Money a site spends to draw one visitor to the site

Conversion
Converting a first-time visitor into a customer Conversion cost: the cost of inducing one visitor to make a purchase, sign up for a subscription, or register

Retained customers
Customers who return to the site one or more times after making their first purchases
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Customer Acquisition, Conversion, and Retention: The Funnel Model

Funnel model: Used as a conceptual tool to understand the overall nature of a marketing strategy that is similar to the customer life-cycle model

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Advertising on the Web Terms and Concepts

Banner ad
Small rectangular ad

Interactive marketing unit (IMU) ad formats

Standard banner sizes

Banner exchange network

Coordinates ad sharing

Banner advertising network

Acts as a broker between advertisers and Web sites that carry ads
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Advertising on the Web Terms and Concepts

Cost per thousand (CPM)
Pricing metric used when a company purchases mass media advertising

Trial visit
First time a visitor loads a Web site page

Page view
Each page loaded by a visitor

Impression
Each time the banner ad loads
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Advertising on the Web Terms and Concepts

Pop-up ad
Appears in its own window when the user opens or closes a Web page

Ad-blocking software
Prevents banner ads and pop-up ads from loading

Interstitial ad
When a user clicks a link to load a page, the interstitial ad opens in its own browser window

Clickstream
Information (e.g., page visits, duration, etc.) that a Web site can gather about its visitors
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Site Sponsorships
Advertisers are given an opportunity to sponsor all or part of a website.
Helpdesk.com

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E-Mail Marketing
Dangerous Territory or Priceless Opportunity?
Email is cheap! But, customers hate spam

How should a firm use email?

Opt-in e-mail is should be the rule.
Conversion rates are higher and complaints are fewer

Combine email content with appropriate, targeted ads

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Technology-Enabled Customer Relationship Management

Customer relationship management (CRM): processes and technologies used to manage relationships with clients
Relationship management: collecting, managing, and analyzing information about a customers behavior, buying patterns, etc., and using it to customize the interactions with the customers
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Creating and Maintaining Brands on the Web

Elements of branding include:
Differentiation: How is our product unique? Relevance: How does our product fit into our customers lives? Perceived value: What is value of our product to a potential customer?

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Emotional Branding vs. Rational Branding

Emotional branding is the norm; lets make customers feel good about our product, themselves as users of our product, or others affective paths to persuasion
Coca Cola video game ad (1st QTR)

Rational branding relies on the cognitive appeal of the specific service offered, not purely on a broad emotional appeal
Toyota Tundra truck ad (1st QTR)

Brand Leveraging is done to extend the image or value of a successful brand to other product offerings
Sprint Broadband ad (2nd QTR) Nationwide Insurance ad (3rd QTR)
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Affiliate Marketing Strategies

Affiliate marketing
One firms Web site includes descriptions, reviews, ratings, or other information about a product that is linked to another firms site Affiliates receive compensation from the selling sites brand in exchange for the referral
Cause marketing is a type of affiliate marketing program that benefits a charitable organization

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Viral Marketing Strategies

Relies on existing customers to tell other people about products or services they have enjoyed using Example:
Blue Mountain Arts Woot gmail
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Search Engine Positioning and Domain Names

Search engines have 3 major parts:
Spiders, crawlers, or robots
Programs that automatically searches the Web

Index or database
Storage element of a search engine

Search utility
Uses terms provided to find Web pages that match

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Search Engine Positioning and Domain Names

Search engine positioning or search engine optimization is the process of tuning a site so that it is listed in the top 10 of results

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Paid Search Engine Inclusion and Placement

Paid placements involve purchasing a top listing on the results pages for a particular set of search terms
e.g., Google Adwords

Search engine placement brokers are companies that aggregate inclusion and placement rights on multiple search engines
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Web Site Naming Issues

Domain names
An important part of selling online can be the domain name for the site.
If you want a car, might you give cars.com a try?

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URL Brokers and Registrars

URL brokers
Sell, lease, or auction domain names

ICANN
Maintains a list of accredited registrars

Domain name parking

Permits the purchaser of a domain name to maintain a simple Web site so that the domain name remains in use
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Summary
Four Ps of marketing
Product, price, promotion, and place

Market segmentation
Using geographic, demographic, and psychographic information can work well on the Web

Types of online ads

Pop-ups, pop-behinds, and interstitials
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Summary
Technology-enabled customer relationship management can provide better returns for Web businesses Firms on the Web can use rational branding instead of emotional branding techniques Critical for many businesses is successful search engine positioning and domain name selection
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