The Internet and the marketing mix

The 4Ps and the 4Cs

Product Cost

Communications
Price with
company

Customer needs
Place and wants

Promotion Customer
convenience
 Mixing the mix online
• Which variables are important for the ideal
customer?
– Price and quality?
– Where they buy?
• So need to decide on target markets first and do
the research on the mix variables.
• Remember the mix is not generic for all
customers, but for segments.
The elements of the marketing mix
 Product
The element of the marketing mix that involves
researching customers’ needs and developing
appropriate products
• Core product
– The fundamental features of the product that meet the
user’s needs.

• Extended product
– Additional features and benefits beyond the core
product.
 Product
• Options for varying core product

• Options for changing the extended product

• Conducting research online

• Velocity of new product development

• Velocity of new product diffusion

Options for varying core product
Adding digital value to the customers
 Options for varying core product
By offering additional information or transaction services
to existing customer base
Options for varying core product
By addressing needs of new customer segments by
repacking current info or by creating new business
proposition using internet
Options for varying core product
By attracting customers to generate new sources of
revenue or sales of complementary products
Options for changing the extended product

Additional elements beyond the core

 Extended product options

– Add-on services – gift wrapping @ Amazon

– Endorsements
– Awards
– Testimonies
– Customer lists
– Customer comments
– Warranties
– Guarantees
– Money back offers
– Customer service (see people, process and physical evidence)
 Conducting research online

Customers perceptions of products/services

Online focus groups Online survey

Customer feedback Web logs
Velocity of new product development
Velocity of new product diffusion
Price
 Price

Increased price transparency &

differential pricing

Downward pressure on price

New pricing approaches

Alternative pricing structures

Increased price transparency & differential
pricing
Downward pressure on price
 New pricing approaches
Forward auction

are electronic auctions, which can be used by sellers to sell their

items to many potential buyers

Items are commonly placed at a special site for auction

(e.g. eBay.com).

Buyers can continuously bid for the items they are interested in.

Eventually the highest bidder wins the item.

 New pricing approaches
reverse auction

is a type of auction in which

the roles of buyers and
sellers are reversed

In a reverse auction, sellers

compete to obtain business,
and prices typically decrease
over time.
Alternative pricing
structures

Payment per use

Renal at a fixed cost/month

Bundling
 Place

Where from to be purchased online

Company site
Third party site
 Place

Place of purchase

New channel structures

Channel conflicts

Virtual organizations
 place of purchase
Seller-controlled sites

are those that are the main site of the supplier company which are
e-commerce enabled.
 place of purchase
Seller-oriented sites

are controlled by third parties, but are representing the seller rather
than providing a full range of options.
 place of purchase
Neutral sites

are independent evaluator intermediaries that enable price and

product comparison and will result in the purchase being fulfilled on
the target site.
 Evans and Wurster view of place
• Reach.
This is the potential audience of the e-commerce site. Reach can be
increased by moving from a single site to representation with a
large number of different intermediaries.

• Richness.
This is the depth or detail of information which is both collected about
the customer and provided to the customer. This is related to the
product element of the mix.

• Affiliation.
This refers to whose interest the selling organisation represents –
consumers or suppliers. This particularly applies to retailers. It
suggests that customers will favour retailers who provide them with
the richest information on comparing competitive products.
New channel structures
• Disintermediation

• Reintermediation

• Countermediation
Channel conflicts
Forms of channel

A communication channel
only.

A distribution channel to
intermediaries
.
A direct sales channel to
customers.

Any combination of the

above.
Strategic Options

No internet sales
Internet sales by reseller
Internet sales by
manufacturer
Internet sales by all
Virtual organizations
• Autoresponders. These automatically generate a response when a
company e-mails an organisation, or submits an online form.

• E-mail notification. Automatically generated by a company’s systems to

update customers on the status of their order, for example, order received,
item now in stock, order dispatched.

• Call-back facility. Customers fill in their phone number on a form and

specify a convenient time to be contacted. Dialling from a representative in
the call centre occurs automatically at the appointed time and the company
pays which is popular.

• Frequently Asked Questions (FAQ). For these, the art is in compiling and
categorising the questions so customers can easily find (a) the question
and (b) a helpful answer.

• On-site search engines. These help customers find what they’re looking for
quickly and are popular when available. Site maps are a related feature.

• .