Chapter 4: Marketing on the Web

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marketing mix
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Combination of elements used to achieve company goals for selling and promoting products and services
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marketing strategy
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When a company decides which elements it will use and implement
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Four Ps of Marketing
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Product, price, promotion, place
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Product
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They physical item or service that a company is selling. Elements such as quality, design, features, characteristics and even packaging make this up.
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Price
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Element of the marketing mix that is the amount the customer pays for the product
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Customer value
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The cost that a customer pays for a product, minus the benefits the customer gains from the product.
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Place (Distribution)
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The availability of products and services in many different locations. The problem of getting the right products to the right places at the best time to sell them has plagued companies since commerce began.
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Promotion
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Any means of spreading the word about a product
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product-based marketing strategy
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When managers of companies think of their businesses in terms of the products and services that they sell. It is a logical way to think of a business because companies spend a great deal of effort, time and money to design and create those products and services.
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customer-based marketing strategies
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A business strategy which places the customers and their differing needs at the center of their marketing mix.
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Weblog or Blog
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An outlet for expressing political, religious, and other strongly felt beliefs on a personal Web site and invite others to add commentary.
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market segmentation
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Dividing the pool of potential customers into smaller segments
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Segments
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Way of dividing potential customers, usually defined in terms of characteristics such as age, gender, marital status, income level and geographic location.
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micromarketing
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Practice of targeting very small market segments using approaches similar to mass media
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geographic segmentation
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dividing customers into groups based on where they live or work.
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demographic segmentation
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dividing customers based on information about age, gender, family size, income, education, religion or ethnicity.
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psychographic segmentation
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division of customers based on variable such as social class, personality, approach to life.
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behavioral segmentation
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creation of separate experiences for customers based on their behavior
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occasion segmentation
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dividing customers based on things that happen at a specfic time or occasion.
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usage-based market segmentation
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Customizing visitor experiences to match the site usage behavior patterns of each visit or type of visitor.
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trigger words
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Prompt a visitor to stay and investigate the products and services offered on a site.
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shopping cart
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Part of a website that keeps track of selected items for purchases and automates the purchasing process.
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simplifiers
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Online objective: convenience Attractive Website Characteristics: tools or facilities that make doing business easier, faster or more efficient
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surfers
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Online objective: Find new information, new ideas Attractive Website Characteristics: Content that is entertaining, attractive, well-displayed and constantly updated
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Bargainers
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Online objective: Find a good deal Attractive Website Characteristics: Auctions, discounts, coupons and sales
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Connectors
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Online objective: Stay in touch with others Attractive Website Characteristics: chat rooms, discussion boards, social networking features, online greeting cards, email services
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Routiners
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Online objective: Information in one place Attractive Website Characteristics: News, financial information, a familiar and stable user interface
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Sportsters
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Online objective: Information in one place Attractive Website Characteristics: Sports, entertainment, a familiar and stable user interface
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touchpoints
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online and offline customer contact points
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What do we mean when we say that companies should strive for a consistent customer experience at a particular life-cycle stage?
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Customers should experience the same level and quality of service whether they encounter the company online or offline.
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touchpoint consistency
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The goal of providing similar levels and quality of service at all touchpoints.
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Five Stages of Customer Loyalty
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awareness, exploration, familiarity, commitment, separation
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Awareness
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A customer who recognizes the name of the company, know that the company or product exists, but have not had any interaction with the company.
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Exploration
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Potential customers learn more about the company or its products. The potential customer might visit the company’s Website to learn more and the two parties will often communicate by telephone or email.
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Familiarity
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The stage when a customer has completed several transactions and are aware of the company’s policies regarding returns, credits and price flexibility. Customers are as lucky to shop and buy from the company as they are competitors.
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Commitment
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After experiencing a considerable number of highly satisfactory encounters, a customer in this stage of customer loyalty may develop a fierce loyalty or strong preference for the products or brands of that company.
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Separation
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conditions that made the relationship valuable might change, the customer might be disappointed by changes in the level of service (either provided or perceived) or product quality
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customer life cycle
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Another phrase for the stages of customer loyalty
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life-style segmentation
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creating groups of customers separated by what stage they are in the customer life cycle
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funnel model of customer acquisition
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used as a conceptual tool to underestand the overall nature of a marketing strategy, but also provides a clear structure for evaluation a specific strategy elements.
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acquisition costs
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The total amount of money a site spends, on average, to draw one visitor to the site
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conversion
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Convert a first-time visitor into a customer. On an advertising-supported site, this usually happens when a visitor registers at a site, or when a registered user returns
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conversion cost
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The total amount of money that a site spends, on average, to induce one visitor to make a purchase, sign up for a subscription or (on an advertising-supported site) register
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retained customer
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Customers who return to the site one more more times after making their first purchases. Some consider customers this when they return to the site and buy again (or renew the subscription, view more advertising). Others use a number of subsequent purchases or some number of subsequent purchases within a specific time frame.
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retention costs
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The costs of inducing customers to return to a Web site and buy again
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banner ad
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A small rectangular object on a Web page that displays a stationary or moving graphic and includes a link to the advertiser’s Website. They can be versatile advertising vehicles–their graphic images help increase awareness and users can click them to open the advertiser’s Web site and learn more about the product.
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Interactive Marketing Unit (IMU) ad formats
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the standard banner sizes that most Web sites have voluntarily agreed to use.
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Interactive Advertising Bureau
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A not-for-profit organization that promotes the use of Internet advertising and encourage effective Internet advertising. IAB has established voluntary standards for IMUs, by 2003 advertisers were using more than different IMU formats, now their are four standard formats.
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Four UAP formats (and IAB specfications)
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1. Medium rectangle ( 300 x 250 px) 2. Rectangle (180 x 150 px) 3. Leaderboard (728 x 90px) 4. Wide skyscraper (160 x 600 px)
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Universal ad package (UAP)
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Most common ad formats used on the Web today.
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leaderboard ad
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A banner ad that is designed to span the top or bottom of a web page
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skyscraper ad
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A banner ad that is designed to be placed on the side of a Web page and remain visible as the user scrolls down the page.
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banner exchange network
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coordinates ad sharing so that other sites run one company’s ad while the company’s site runs other exchange members’ ads. Usually the exchange requires each member sit to accept two ads on its site for every one of its ads that appears on another memeber’s site.
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banner advertising network
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asks as a broker between advertisers and Web sites that carry ads
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text ad
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A short promotional message that does not use any graphic elements and is usually placed on the top of right side of a Web page. Google was the first company to use this kind of add successfully on the Web.
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inline text ad
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A type of advertising done by sites when they provide information used in text ads in another way by turning some of the text in the stories they display into hyperlinks that lead to advertiser’s sites. Newspapers, magazines and other sites that users commonly visit to learn more about a topic often use this technique.
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pop-up ad
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an ad that appears in its own window when the user opens and closes a Web page
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pop-up behind ad
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Pop-up ad that is followed very quickly by a commond that returns the focus to the original browser window. The result is an ad that is parked behind the user’s browser
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ad-blocking software
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prevents banner ads and pop-up ads from loading
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interstitial ad
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An intrusive ad format, in which the ad opens in its own browser window instead of the page the user intended to load. Interstitial means something that comes between two other things.
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rich media ads/active ads
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Generate graphical activity that “floats” over the Web page itself instead of opening in a separate window. These ads always contain moving graphics and usually include audio and video elements
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mobile apps
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programs that run on smartphones and tablets
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mobile ads
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display messages from advertiser the same way banner advertising on websites is sold
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site sponsorships
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gives advertisers a change to promote their products, services or brands in a more subtle way than by placing banner or pop-up ads on the sites (although some sponsorship packages include a certain number of banner and pop-up ads)
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cost per thousand (CPM)
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When a company purchases mass media advertising it pays a dollar amount for every thousand people in the estimated audience
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cost per click (CPC)
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The site monitors the number of visitors who click an ad and charges for each click rather than for each time the ad is shown on a Web page.
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visit
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occurs when a visitor requests a page from the Website
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trail visit
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The first time a particular visitor loads a Web site page
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repeat visit
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Every subsequent page load after the trial visit
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page view
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Each time a visitor loads a page
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ad view
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If the visitor loads a page that contains an ad
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impression
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Each time the banner ad laods
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click-through
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If a visitor clicks the banner ad to open the advertiser’s page
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They measure the number of new visitors to their site who buy for the first time after arriving at the site by way of a click-through. They can then calculate the advertising cost of acquiring one customer on the Web and compare that to how much it costs them to acquire one customer through traditional channels.
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What new forms of metrics can companies use to evaluate desired outcomes of their advertising yields?
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spam, unsolicited commercial email (UCE) or bulk mail
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electronic junk mail that includes solicitations, advertisements, email chain letters.
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conversion rate
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percentage of recipients who respond to an ad or promotion
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opt in email
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sending email messages to people who request information on a particular topic or about a specific product
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permission marketing
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When consumers can opt in to receiving marketing information
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clickstream
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the information that a Website can gather about its visitors (which pages were viewed, how long each page was viewed, the sequence and similar data)
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Technology-enabled relationship management
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Occurs when a firm obtains detailed information about a customer’s behavior, preferences, needs and buying patterns and uses that information to set prices, negotiatre terms, tailor promotions, add product features and otherwise customize its entire relationship with that customer
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customer relationship management (CRM), technology-enabled relationship management, electronic customer relationship managment (eCRM)
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All terms for technology-enabled relationship management
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marketspace
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Commerce in the information world in which digital products and services can be delivered through electronic communication channels, such as the internet
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data warehouse
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In a CRM system, the large database where multiple sources of information about customers, their preferences and their behavior is entered into
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data mining/analytical processing
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a technique that examines store information and looks for patterns in data that are not yet known or suspected. In CRM, analysts might apply these techniques to the data warehouse and find that customers often buy two specific products at the same time. By offering both products together at a reduced price whenever a customer views either product page, the company could increase sales in both products
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Statistical modeling
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A technique that test theories that CRM analysts have about relationships among elements of customer and sales data
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Key Elements of a Brand
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1. Differentiation 2. Relevance 3. Perceived Value
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rational branding
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Relies on the cognitive appeal of the specific help offered, not on a broad emotional appeal. The brand offers to help the consumer in some way with a valuable product or service experience.
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affiliate marketing
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one firm’s Website–the affiliate firm–includes descriptions, reviews, ratings or other information about a product that is linked to another firm’s site that offers the item for sale. For every visitor who follows link from the affiliate’s site to the seller’s site, the affiliate site receives a commission.
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pay-per-click model
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affiliate earns a commission each time a site visitor clicks the link and loads the seller’s page. Similar to the click-through model of banner advertising and the rates paid per thousand click-throughs are similar to those paid for banner ads
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pay-per-conversion model
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affiliate earns a commission each time a site visitors is converted from a visitor to either a qualified prospect or customer
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affiliate program broker
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company that serves as a clearinghouse or marketplace for sites that run affiliate programs and sites that want to become affiliates
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cause marketing
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An affiliate marketing program that benefits a charitable organization. In this form of marketing, the affiliate site is created to benefit the charitable organization. When visitors click a link on the affiliate’s web page, a donation is made by the sponsoring company.
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viral marketing
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This form of marketing relies on existing customers to tell other people–the company’s prospective customers–about the products or services they have enjoyed using
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fans
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followers of a particular company’s discussion activities
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fan base
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combined number of associated individuals over social media accounts for a given company or brand
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search engine
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a Web site that helps people find things on the Web
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spider/crawler/robot/bot
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A program that automatically searches the Web to find Web pages that might be inetresting to people
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index/database
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storage element of search engine
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search utility
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takes the search terms and finds entries for Web pages in its index that match those seatch terms. It is a program that creates a Web page that is a list of links to URLs that the search engine has found in its index that will match the site visitor’s terms.
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search engine ranking
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the weighting factors that search engines use to decide which URLs appear first on searches for a particular search term
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search engine positioning/search engine optimization/search engine placement
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the combined art and science of having a particular URL listed near the top of the search engine results
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paid placement
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option of purchasing a top listing on results pages for a particular set of search terms
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sponsorship or search term sponsorship
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another term for paid placements-the rates for paid placements vary tremendously depending on the desirability of the search terms to potential sponsors
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search engine placement brokers
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companies that aggregate inclusion and placement rights on multiple search engines and then sell those combination packages to advertisers
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contextual advertising
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technique in which ads are placed in proximity to related content
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localized advertising
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Uses search engine results pages that are generated in response to a search for products or services in a specific geographical area
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URL brokers
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Legitimate online companies that are in the business of selling, leasing or auctioning domain names that they believe others will find valuable.
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domain name parking/domain name hosting
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a service that permits the purchaser of a domain name to maintain a simple Web site (usually one page) so that the domain name remains in use.
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Promotion (Distribution)
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Promotion (Distribution)
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