Introduction to eMarketing

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Introduction to e-Marketing

• Gary Akehurst

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e-Marketing

• Definition
• E-marketing is the use of information technology
  in the processes of creating, communicating, and
  delivering value to customers, and for managing
  customer relationships in ways that benefit the
  organization and its stakeholders
• Strauss, El-Ansary and Frost (2006 3)

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e-Marketing

• e-marketing is used as well as traditional
  channels to develop positive, long-term customer
  relationships (whether online or offline)
• and create a competitive advantage for the firm
  by allowing it to charge a higher price for
  products or services than its competitors can
  charge

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e-Marketing

• E-marketing
• increases the effectiveness and efficiency of
  traditional marketing functions
• the technology transforms marketing strategies
• opens new global markets and international
  partnerships
• it results in new business models that add
  customer value and increases profitability

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e-Marketing

• But e-marketing is more than just using the
  internet
• converging technologies enhance customer
  relationship management, database management and
  supply chain management
• but in time the e of e-marketing will be
  dropped electronic business will be all
  pervasive

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e-Marketing

• The Internet
• provides content
• communicates
• sells
• offers a network function

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e-Marketing

• marketers use websites to communicate with
  customers
• the goal is to create a strong relationship with
  the customer
• the Internet is used as a direct channel to sell
  services and products
• some websites provide purely digital information
• led to new electronic services facilitated by
  networked computers and mobile devices

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e-Marketing

• the transition to the information and knowledge
  age is profound (still in its early stages)
• rapid advances in technology with convergence on
  digital electronic technology
• escalating global competition
• rising consumer expectations for quality, speed
  of response and customisation (individualism)

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e-Marketing

• the current web is crude in capabilities and
  functionality
• it is a rather chaotic test bed for companies
• consumers are learning new modes of interaction
  and consumption
• eases time and place constraints on consumers
• no longer will goods and services be offered
  primarily at the sellers convenience (power
  shifts from sellers to buyers)
• anytime and anywhere purchasing and consumption
  will be common
• talk of a web 2.0 (private subscriber networks
  with downloads of software, music and other
  content)

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e-Marketing

• communication bandwidths will rapidly rise
• terminal equipment will be more powerful,
  smarter, easier to use, affordable, portable,
  cheaper, smaller
• the cost of digital storage is falling rapidly

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e-Marketing

• once hardware and an telecommunications
  infrastructure is in place, an enormous range of
  services can be exchanged at nominal incremental
  cost
• location-independent shopping and banking
• computer-mediated education and training
• on-line professional consultations
• informational, entertainment and leisure services

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e-Marketing

• as consumer behaviour changes, the marketing
  function needs to change dramatically
• argued that marketing will be at the centre of
  change
• marketing will become increasingly decentralised
  and fully integrated into business operations
• opportunities to lose as well as gain

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e-Marketing

• successful marketing in this new environment
  involves
• monocasting, pointcasting and podcasting of
  communications
• mass customisation of all marketing mix elements
• high degree of customer involvement and control
• a more efficient utilisation of marketing
  resources
• attempts to reduce customer alienation from
  mis-directed marketing stimuli
• increased pressure to deliver greater value
• intense jostling for loyalties of desirable
  customers

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e-Marketing

• Evolving technology and consumer behaviour
• production technology (CAD-CAM, just-in-time
  production, flexible manufacturing systems)
• distribution technology (computer-assisted
  logistics, scanner, product identification and
  tracking technologies, electronic data
  interchange, point of sale terminals linked to
  vendors, satellite-based locational systems,
  automated retail and warehouse ordering)
• personal use technologies (huge gains in
  price-performance) with the mobile phone at the
  centre of rapid changes

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e-Marketing

• As the power and pervasiveness of technologies
  grow
• consumers are in a unique, unaccustomed position,
  i.e. not passive
• they have greater control of information flows
  between buyers and sellers

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e-Marketing

• future consumers will be dramatically different
  from past and even present consumers
• they will be more demanding, more time-driven,
  more information intensive, highly
  individualistic
• targeted interactive digital media allowing
  advertisers to mass customise messages allowing
  user interaction and input

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e-Marketing

• consumers will in most cases have more
  information about product providers than
  providers will have about consumers
• consumers will dictate the timing and mode of
  communications
• they will determine the time and place of
  resulting transactions

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e-Marketing

• Lifestyle and Demographic Changes
• rising median age in developed countries
• households progressively more time poor but money
  rich (consumers are redesigning time-consuming
  tasks, and embracing time-saving and
  time-shifting technologies)
• consumers are demanding hassle-free, get it
  right first time service on demand
• increased stress (blurring of traditional family
  roles, increase in autonomy)

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e-Marketing

• Lifestyle and Demographic Changes
• greater concern for privacy (previous social
  norms of a homogeneous society giving way to
  pluralistic and diverse values)
• legal rights of individuals will be emphasised
• emphasis on safety and security (ageing
  population, greater numbers living alone,
  feelings of vulnerability)
• personal entrepreneurship (opportunities provided
  by new technologies and rise of niche markets)

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e-Marketing
Location-free
Digital commerce
Time-free
Time-bound
Gravitational commerce
Location-bound
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e-Marketing

• move from time-bound and location-bound marketing
• to time-free and location-free marketing
• if a consumer is unable to transact at times and
  locations convenient for them the transaction
  will either not occur or will occur with a
  different supplier (e.g. banking)
• advertising and other forms of information will
  be received on demand

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e-Marketing
consumer behaviour trends
Automation of consumption
Disintermediation and reintermediation
Personalisation and reaggregation
Power shift to consumers
Shopping on demand
Blurring of consumer and business markets
Greater value consciousness
Consumers as co-producers
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e-Marketing

• Intermediaries
• current marketing practice depends heavily on
  multiple intermediaries in the supply chain
• they add time and place utilities to the
  products functional quality
• they provide broader and more convenient access
  to products for a wide range of customers
• they serve as informational conduits
• building an adequate distribution channel is
  often a hurdle in entering a market

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e-Marketing

• Intermediaries
• electronics mean a high level of accessibility
  almost immediately
• establishes a two-way information flow
• numerous administration tasks can be automated
• huge numbers of customers can be served
  efficiently and effectively
• inventories can be reduced
• leads to growth in support services (e.g. small
  package shipping, orders consolidation)

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e-Marketing

• Personalisation
• the mass market is splintering into ever smaller
  segments (mass customisation)
• but customers are not always looking for
  customised products may be content with
  well-designed standardised products
• customers may pool purchases (buying consortia)
  to gain better terms and prices

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e-Marketing

• Consumers as co-producers
• consumers will take on increasingly active roles
  (e.g. designing and customising products
  purchased)
• while consumers take more control over some
  commercial relationships, they will relinquish
  control in other areas (insourcing to outsourcing)

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e-Marketing

• Greater value consciousness
• consumers will expect to pay less for most
  products (or pay more where perceived additional
  value)
• time is a more valuable currency than money for
  some consumers (trade-offs)
• convenience and simplicity
• ability to easily locate the best price (via
  price scraping websites)
• consumers will not keep large stocks but want the
  advantages of large-scale buying

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e-Marketing

• Blurring between consumer and business markets
• lines between home and workplace are rapidly
  blurring
• movement of home-based services to business and
  vice versa is observed with dual-purpose
  applications (e.g. DVD shopping, travel planning,
  legal advice, on-line databases)

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e-Marketing

• Power shift from marketers to consumers
• savvy consumers will make great use of
  information tools knowledgeable and demanding
  drivers of marketing activity
• marketers will have to show greater respect for
  consumers (who are increasingly immune to
  marketing hype)
• transactions will be in the context of a complex
  relationship revolving around lifestyle issues

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e-Marketing

• Power shift from marketers to consumers
• marketing management thus becomes demand
  management (and customer equity management)
• the task of influencing the timing, the level and
  composition of demand in a way that helps the
  organisation achieve its objectives
• customer knowledge becomes the capstone of
  effective marketing (a highly valued corporate
  resource)
• real time interactive relationship marketing
  becomes the norm

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e-Marketing

• The concept of the personal marketplace
• a repository where participating companies
  prepare and market customised offerings directly
  to a consumer
• these are categorised by product or service as
  specified by the consumer
• by selecting a particular category, the consumer
  alerts companies that they are a potential
  customer, and offers flow in
• the customer voluntarily provides as much
  customising information as needed
• participating companies agree not to sell the
  data they collect outside the personal
  marketplace, and not to use it to market in any
  other channel

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e-Marketing

• How marketing should respond to these changes
• must simultaneously get smaller and bigger (role
  will grow but numbers of marketers may decrease)
• need to be more technology savvy (including just
  in time capabilities, on-line transaction
  processing, voice recognition, efficient
  downloading services and logistics)
• learn how to retain customer loyalty (primary
  focus shifts from customer acquisition to
  relationship management)

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e-Marketing

• How marketing should respond to these changes
• develop cross-functional teams organised around
  customer needs
• practice interactive one-to-one marketing (far
  beyond current database marketing)
• interactions may take several forms
• person to person (marketer interacts with
  customer)
• person to system (marketer interacts with
  customers agent)
• system to person (marketers agent interacts
  with customer)
• system to system (marketers agent interacts with
  customers agent)

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e-Marketing

• Chaffey, D., Mayer, R., Johnston, K. and F.
  Ellis-Chadwick (2003) Internet marketing, (2nd
  edition) Harlow Pearson, Financial Times
  Prentice Hall, chapter 1 An introduction to
  internet marketing (2006 3rd edition)
• Strauss, J., El-Ansary, A. and R. Frost (2006)
  E-marketing, (4th edition), Upper Saddle River
  NJ Pearson Prentice Hall, chapter 1 E-marketing
  in context
• Laudon, K.C. and C.G. Traver (2003) E-commerce,
  Boston Pearson Addison Wesley, chapters 1 to 3,
  The revolution is just beginning E-commerce
  business models and concepts The internet and
  world wide web E-commerce infrastructure
• Smith, P.R. and D. Chaffey (2002) e-marketing
  e-xcellence, Oxford Butterworth Heinemann,
  chapter 1 Introduction to e-marketing