Final Exam Review- E-Marketing

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Chapter 2: Strategic E-Marketing and Performance Metrics
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The main goal of this chapter is to help you understand strategic planning and the way companies seek to achieve their objectives through strategies and tactics involving e-business and e-marketing. You will become familiar with common e-business models implemented at different organizational levels and with the application of performance metrics to monitor progress toward objective accomplishment.
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E-Business Models: Value and Revenue (p36-38)
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An e-business model is a method by which the organization sustains itself in the long term using information technology, which includes its value proposition for partners and customers as well as its r_____________ s____________.
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revenue streams
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E-business models d_____ h_____ to use the internet; when retailers scan products and customer data or reward cards at the checkout, these data can become a rich source of knowledge for inventory management and promotional offers- e-marketing without the internet.
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don’t have
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As part of its e-business model, an organization describes the ways in which it creates v_______ for customers and partners.
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value
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Value encompasses the customer’s p___________ of the product’s benefits, specifically its attributes, brand name, and support services.
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perceptions
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Subtracted from benefits are the c_____ i__________ in acquiring the product, such as money, time, energy, and psychic costs.
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costs involved
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Information technology usually, but not always, i_______ b___________ and lowers costs to stakeholders.
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increases benefits
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Balanced Scorecard (p46-47)
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The Balanced Scorecard is a good framework for understanding e-marketing metrics; thus, we present it as an organizational scheme for many important performance metrics.
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The scorecard approach links strategy to measurement by asking companies to consider their vision, critical success factors for accomplishing it, and subsequent performance metrics in four areas.
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These performance metrics are: 1. customer 2. internal 3. learning and growth 4. financial
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The customer perspective uses measures of the value delivered to customers.
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The internal perspective evaluates a company’s success at meeting customer expectations through its internal processes.
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The learning and growth perspective is when companies place value on continuous improvement to existing products and services as well as on innovation in new products.
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Financial measures include income and expense metrics as well as ROJ, sales, and market share growth.
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Chapter 6: E-Marketing Research
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The main objective of this chapter is to help you develop an understanding of why and how-marketers conduct online marketing research and how they turn data into marketing knowledge that provides insight into marketing activities. You will learn about the three categories of internet data sources, consider the ethics of online research, look at key database analysis techniques, and explore the use of knowledge management metrics.
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Marketing Knowledge Management (p139-141)
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Knowledge management is the process of managing the creation, use, and dissemination of knowledge and shared with: 1. internal marketing decision makers, 2. partners 3. distribution channel members 4. customers (sometime).
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A complete marketing knowledge database includes all the data about customers, prospects, and competitors, the analyses and outputs based on the data, and access to marketing experts.
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For example, Web advertisers need audience statistics prior to deciding where to purchase online display ad space. One way to get this information is through secondary sources such as Nielsen Net Ratings.
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Such companies rate Web sites and monitor traffic statistics by researching the internet usage habits of large panels of consumers. Web advertisers use the data to make effective and efficient Web media buys.
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Business customers, channel members, and partners often have access to customer sales data to facilitate product planning. Customer inquiries are usually automated, with personalized Web pages created instantaneously from customer databases.
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Web surveys (p159-162)
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Web Surveys are when companies post questionnaires on their Web pages. Respondents type answers into automated response mechanisms in the form of radio buttons (users click to indicate the response), drop-down menus, or blank areas for open-ended questions.
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Sometimes the purpose of these questionnaires is to gather opinions from a site’ s visitors (e.g., Web site registration); sometimes it is a more formal survey research.
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The best response rates come from members of e-mail lists, such as customers and prospects, because they usually have a special interest in the topic.
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Online survey research is fast and inexpensive, especially when compared with traditional survey methodologies.
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Some researchers believe that Web surveys reduce errors.
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In addition, some research have discovered that respondents will answer questions more honestly and openly on a computer than when an interviewer is present.
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Sample representativeness and measurement validity are the biggest disadvantages of online surveys over their offline counterparts; however, some researchers think the idea of sample representativeness is no longer possible for any type of market research.
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Marketing Databases and Data Warehouses (p166-167)
Marketing Databases and Data Warehouses (p166-167)
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Product databases hold information about product features, prices, and inventory levels;
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customer databases hold information about customer characteristics and behavior.
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Transaction processing databases are periodically copied into a data warehouse (Exhibit 6.20).
Transaction processing databases are periodically copied into a data warehouse (Exhibit 6.20).
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Data warehouses are repositories (storage spaces) for the entire organization’s historical data (not just marketing data). They are designed specifically to support analyses necessary for decision making and marketing planning.
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The current trend in data storage is toward cloud computing: a network of online Web servers in remote locations from the company, used to store and manage data (Exhibit 6.21).
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The advantages to of cloud computing for companies include: 1. no investment cost for server space 2. no software investment to manage the data 3. access to free applications such as those offered by the U.S. Post Office or Google Earth.
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Examples of cloud computing are: 1. Google docs 2. iCloud 3. Dropbox
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Chapter 7: Connected Consumers Online
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The primary objective of this chapter is to help you develop a general understanding of the online consumer population. You will explore the context in which online consumer behavior occurs, the characteristics and resources of online consumers, and the outcomes of the online exchange process.
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Individual Characteristics and Resources (p186-189)
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Beyond general social and cultural environmental trends, obviously, individuals vary in their online behavior. Some of this variance is based on differences in characteristics, such as demographics and attitudes, and some is based on the resources consumers bring to the exchange process.
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Individuals vary in their online behavior. Some of this variance is based on: 1, differences in characteristics, such as demographics and attitudes 2. resources consumers bring to the exchange process.
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Age, income, education, ethnicity, and gender all affect internet use. (demographics)
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A positive attitude toward technology can vary. Internet users who purchase products online tend to hold the attitude that technology helps make their lives richer and easier.
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Online skill and experience play an important role in the exchange process.
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Online shoppers tend to be more goal oriented than experience oriented Goal -oriented behavior often includes going to a specific Web site with a purpose in mind, or searching for the lowest price for a particular product.
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Experience orientation relates to having fun, bargain hunting, or just surfing to find something new and Pinterest, a social shopping site, may increase the experience orientation for many online shoppers.
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CONSUMER RESOURCES Chapter 2 introduced the value equation showing that consumers perceive value as benefits minus costs. These costs constitute a consumer’s resources for exchange: money, time, energy, and psychic costs.
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Monetary Cost: Clearly, consumers need enough discretionary income to exchange for the goods and services they want- and to afford a computer, smartphone, tablet, and ISP connection for internet access.
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Time Cost: Time poverty is a problem for today’s consumers, so they want to receive appropriate benefits for the time they spend online.
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Some believe that consumers pay more focused attention to Web sites than to the content in any other medium, except perhaps e-mail and text messages. When in front of a television, consumers are easily distracted by other people or activities in the environment.
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However, consumers are 100 percent involved and are not easily distracted when they are online. Whether they are in a goal-oriented or experiential shopping trip online, they are focused and in the “flow”.
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Energy and Psychic Costs: Closely related to time are energy and psychic resources. Sometimes it is just too much trouble to turn on the computer, log on to the internet, and check e-mail , especially for dial-up users.
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Consumers apply psychic resources when Web pages are hard to figure out or when facing technological glitches. Up to 75 percent of all online shoppers abandon online shopping carts.
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Exchange Outcomes (p189-194)
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People do only six basic things online: 1. connect 2. create 3. enjoy 4. learn 5. trade 6. give
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Consumers connect by communicating online with e-mail, tweeting, texting.
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Content creation occurs when these users upload pictures and other content on these sites. It is the highest form of user engagement because users are participating by adding to the Web’s offerings.
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ENJOY Many consumers use the internet to enjoy entertainment – 74% browse for fun – 75% watch online video – 37% download music.
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LEARN Consumers access information to learn things online such as news, driving directions, travel information, jobs, weather, sports scores, and radio broadcasts over the internet.
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TRADE Most consumers shop, buy, or conduct other transaction -oriented activities online.
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GIVE As previously mentioned, many people create art, text, and other things purely for the benefit of others.
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Chapter 8 (Strauss): Segmentation, Targeting, Differentiation, and Positioning Strategies
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The main goal of this chapter is to help you examine the various bases for market segmentation and the classifications and characteristics of several important e-marketing segments. It also provides examples of product differentiation and positioning strategies for e-marketing.
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Languages on Web Pages (p204)
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English has not been the language of most Web pages and online bulletin boards for many years, yet it has seen a slight increase in the past two years.
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In 20 I I, the top internet languages included: 1. English-(33 percent) 2. Chinese (29 percent) 3. Spanish (9 percent) 4. Japanese (6 percent) 5. Portuguese (5 percent) (Exhibit 8.5).
In 20 I I, the top internet languages included: 1. English-(33 percent) 2. Chinese (29 percent) 3. Spanish (9 percent) 4. Japanese (6 percent) 5. Portuguese (5 percent) (Exhibit 8.5).
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Until more online text appears in local languages, users in those countries will not be able to participate in e-commerce or other online activities.
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Unfortunately, Web developers in many Asian and Middle Eastern countries face technical challenges because local languages require double-byte character sets (versus single byte for Romance languages) and, therefore, need more database and transaction customization and complicated search algorithms.
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Another factor is that many countries recognize more than one national language, such as Canada, which has both English- and French speaking citizens.
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Influencials (p213-214)
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Many online marketers target influential people who are opinion leaders online; company stakeholders who are passionate about the brands and have big social network followings or others who hold some type of status that is instrumental in influencing purchase behavior.
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The field of influencers: 1. Online journalists 2. Industry opinion leaders 3.Influential social network authors 4. Consumer journalists
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It is important for marketers to determine who the influentials are in their industry. They must also decide how to entice them to write about the company/products and to monitor for product and company mentions online.
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Behaviour Segments: Benefit, Usage (p214-217)
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Two commonly used behavioral segmentation variables are benefits sought and product usage.
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Marketers using benefit segmentation often form groups of consumers based on the benefits they desire from the product. For example, what benefits do you seek when searching travel sites online? content should appeal to these benefit segments.
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Product usage is applied to segmentation in many ways. Marketers often segment by light , medium, and heavy product usage.
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Heavy internet users- go online constantly Medium users- go online using a PC only while at work Light users- connect only once every day or two.
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Companies must research to determine actual usage and decide how to split their target into appropriate user categories.
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Another approach is to categorize consumers as brand loyal: 1. loyal to the competitive product 2. switchers (who don’t care which site they use) 3. nonusers of the product.
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Next, we discuss some of these variables as they apply to the internet.
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BENEFIT SEGMENTS Clearly, the internet offers something for everyone. If marketers can form segments based on the benefits sought by users, they can design products and services to meet those needs.
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Marketers can evaluate online activities: 6 basic online activities are: 1. connect 2. create 3. learn 4. enjoy 5. trade 6. give
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Marketers also check which Web sites are the most popular. Several sites report each month on the top online properties.
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Mobile Access Clearly, the type of internet connection and the information-receiving appliance affect usage behavior. Fifty-five percent of cell phone owners connect to the internet using smartphones,
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Mobile internet use is paralleling the early days of internet adoption, with the younger, better-educated, and higher-income consumers using their smartphones online more than the reverse demographics.
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Caucasians (Whitey) remain the lowest users of all ethnic groups. The main two reasons cell owners use the internet are because it is convenient and the cell is always with them
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Targeting Online Customers (p218-220)
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After reviewing man( potential segments, marketers must select the best for targeting. For this se lection , they: 1. review the market opportunity analysis (ch3) 2. consider findings from the SWOT analysis 3. look for the best fit between the market environment and the firm’s expertise and resources.
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The internet is especially well suited for two targeting strategies: 1. Niche marketing 2. Micromarketing, also known as individualized targeting.
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Niche marketing occurs when a company selects one segment and develops one or more marketing mixes to meet the needs of that segment.
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Micromarketing is when a company tailors all or part of its marketing mix to a small number of people, even down to 1 internet user!
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It can do this by using cookies.
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Chapter 9 (Strauss) : The Online Offer
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The primary goal of this chapter is to help you analyze the development of consumer and business products that capitalize on the internet’s properties and technology by delivering online benefits through product attributes, branding, support services, and labeling. You will become familiar with the challenges and opportunities of e-marketing-enhanced product development.
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Attributes (p231)
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Product attributes include overall quality and specific features. With quality, most customers know ‘you get what you pay for.” That is, higher and consistent quality generally means higher prices, thus maintaining the value proposition.
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Product features include such elements as color, taste, style, size, and online speed of service, or the ability to connect and personalize.
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Brand Equity (p235-236)
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Brand equity is the intangible value of a brand, measured in dollars.
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Exhibit 9.3 displays rankings for some of the top 100 U.S. brands in 20 11 . Google took the fastest-growing Global Brand of the Year award with a huge increase in brand value from 2008, putting it in the top of all brands-and it continued to grow substantially in 20II.
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Branding Decisions for Web Products (p237-239)
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Companies with products for online sale face several branding decisions: whether to apply existing brand names or to create new brand names for new products; whether to lend their brand name as a co-brand with other firms; and what domain name to use for the Web site.
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An existing brand name can be used for any product extensions, and it makes sense when the brand is well known and has strong brand.
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When products with offline sales introduce online extensions, many choose-to use the same brand name.
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Some companies may not want to use the same brand name online and offline, for several reasons. First, if the new product or channel is risky, the firm would run the risk of jeopardizing the brand’s good name by having it associated with a possible product failure.
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Also, a powerful internet success might inadvertently reposition the offline brand.
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Most internet products carry a high-tech, cool, and young image, which will carryover to offline branded products.
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If an organization wants to create a new internet brand, it is critical to select a good name. Good brand names should suggest something about the product (e.g., WebPromote.com and MySpace.com), should differentiate the product from competitors (e.g., gURL.com), and should be suitable for legal protection.
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On the internet, a brand name should be short, memorable, easy to spell, and translate well into other languages.
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Co-branding occurs when two different companies form an alliance to work together and put their brand names on the same product or service.
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Co-branding is quite common on the internet and is a good way for firms to build synergy through expertise and brand recognition, as long as their target markets are similar.
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Internet Domain Names- Organizations spend a lot of time and money developing powerful , unique brand names for strong brand equity.
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E-Marketing-Enhanced Product Development (p243-244)
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E-marketers need to consider several factors that affect product development and product mix strategies with new technologies that the Internet causes to occur.
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Customer Codesign exist because internet technology allows this type of collaboration to occur electronically among consumers across international borders as well.
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Customer Codesign is when the product is in a development stage and users will try it and give feedback to the company about possible changes to improve usability.
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Many organizations engage customers by inviting them to create advertisements and Website content on their sites or social media pages.
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Crowdsourcing is the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.
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Chapter 10: Price: The Online Value
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The primary goal of this chapter is to help you examine how internet technology influences pricing strategies. You will gain an understanding of both the buyer’s and the seller’s perspectives of pricing online and consider whether the internet is an efficient market. You will also read about fixed pricing as well as the return to dynamic pricing, such as online auctions, and many other strategies and tactics.
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The Internet Changes Pricing Strategies (p251-252)
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Price is the sum of all the values (such as money, time, energy, and psychic cost) that buyers exchange for the benefits of having or using a good or service.
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The internet is taking us back to an era of dynamic pricing- varying prices for individuals.
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The internet’s properties, especially in the role of information equalizer, allow for price transparency- the idea that both buyers and sellers can view competitive prices for items sold online.
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Internal Factors: Information Technology Affects Costs (p256-258)
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Information technology can be expensive, but once it is running smoothly it can create tremendous cost efficiencies- putting both upward and downward pressure on prices.
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Some of the factors that put upward pressure on internet pricing: 1. Customer Service: Online customer service is no longer a competitive edge, but an expensive competitive necessity.
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2. Distribution: Online retailers face hefty distribution costs for their products: Each product must be shipped separately to its destination rather than by the case to brick and-mortar retailers or centrally located warehouses.
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3. Affiliate programs. Many Web sites pay a commission on referrals through affiliate programs. Affiliate sponsors reward the referring Web sites by paying a 7 percent to 15 percent commission on each reference that leads to a sale.
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4. Customer acquisition costs (CAC). The cost of acquiring new customers online is quite high;
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5. Maintenance: Site development, social media,
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The Internet Puts Downward Pressure on Prices: 1. Order processing-self-service. Because customers fill out their own order forms, firms save the expense of order entry.
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2. Just-in-time inventory. Some manufacturers use electronic data interchange (EDI) to drive down costs in the digital channel by coordinating value-chain activities and allowing for just-in-time (JNT) delivery of parts and reduced inventories.
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3. Overhead. Online storefronts can lower their overhead costs because companies do not have to rent and staff expensive retail space.
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4. Customer service. Although customer service can initially add to an organization’s costs, companies save by automating some customer service function that were formerly performed by employees.
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5. Printing and mailing. Online sellers do not incur mail distribution and printing costs for their product catalogs.
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6. Digital product distribution costs. Distribution costs for digital products are extremely low in the internet channel, such as when a customer downloads a purchased music file from iTunes or reads articles with Instapaper.
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Segmented Pricing (p268-271)
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Dynamic pricing is the strategy of offering different prices to different customers.
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Dynamic pricing can be initiated by the seller or the buyer (as compared with fixed pricing, which is always initiated by sellers).
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Two types of dynamic pricing are segmented pricing, where the company sells a good or service at two or more prices, based on segment differentiation rather than cost alone and the second is price negotiation.
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Segmented pricing uses the internet properties for mass customization, automatically devising pricing based on order size and timing, demand and supply levels.
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For example, any person who books a flight within 7 days of departure is quoted the full price (no discount) , whereas advance purchasers may receive a discounted price.
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Segmented pricing at the individual level is easier online because sophisticated software and large databases permit firms to set rules and make price changes in a nanosecond—even as a buyer is clicking on a Web page.
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Using cookie files, online sellers recognize individuals and experiment with offers and prices to motivate transactions.
Using cookie files, online sellers recognize individuals and experiment with offers and prices to motivate transactions.
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Also, online firms can build loyalty programs, like frequent flyer programs, to offer special prices to individuals who return a purchase often.
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Segmented pricing can be effective when the market is segmentable and the costs of segmentation do not exceed the extra revenue obtained from the price difference.
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Finally, the firm must take care not to upset customers who learn they are getting prices different from their neighbors. OK with airline tickets but not with books from Amazon.
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Geographic Segment Pricing: With geographic segment pricing , a company sets different prices when selling a product in different geographic areas by looking at IP addresses.
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Geographic pricing can help a company better relate its pricing to country-by-country or regional factors such as competitive pressure, local costs, economic conditions, legal or regulatory guidelines, and distribution opportunities.
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Value Segment Pricing With value segment pricing, the seller recognizes that not all customers provide equal value to the firm , segmenting by high, medium, and low value and pricing accordingly.
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4-star customers- Brand loyal and may not be price sensitive because they perceive that the brand or firm offers greater benefits (e.g., free upgrades and special treatment) and has earned their loyalty.
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3-star customers may be price shoppers or infrequent users of the product category, not accounting for much of the seller’s revenue.
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2-star customers are also price sensitive and probably use the product category more than do one-star customers.
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The seller’s goal is to keep five-star customers brand loyal and to move all groups up to a higher level of value.
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Conversely, one- and two-star customers most often seek the lowest price, so discounts are not likely to create brand loyalty- they will continue being price-shopping brand switchers.
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These customers might enjoy e-mail blasts with fixed prices so they can be informed of the firm ‘s prices and competitive benefits of the brand. The seller can use this technique to build a database for moving customers up in value.
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Chapter 11-The Internet for Distribution
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The key objective of this chapter is to help you develop an understanding of the internet as a distribution channel, identify online channel members, and analyze the functions they perform in the channel. You will learn how the internet presents opportunities to alter channel length, restructure channel intermediaries, improve the performance of channel functions, streamline channel management, and measure channel performance. Special emphasis is on e-commerce, m-commerce, and social commerce.
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M-Commerce (p.287-289)
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Mobile commerce (m-commerce) occurs when consumers make a transaction with a smartphone or other mobile device (e.g., iPhone, iPad, Android).
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M-commerce is a rapidly growing area of e-commerce, which involves not only the ultimate act of online purchasing but also all the related e-marketing activities: • Mobile search • Location-based services (such as Foursquare), • QR code scanning (for more product information or promotions) • Two-dimensional bar code scanning (for building a shopping list or comparing products), • Image recognition (for linking to online content) • Voice and text message offers from businesses (e.g., airline flight delays and breaking news alerts), • Social networking (e.g., answering product questions via Twitter) • Marketing-related apps (Clorox has three apps, including “MyStain”).
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Marketing Communications (p293-294)
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Marketing communication encompasses advertising and other types of product promotion. This function is often shared among channel players.
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For example, a manufacturer may launch an ad campaign while its retailers offer coupons.
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Cooperative advertising is another example, with manufacturers sharing advertising costs with retailers. These communications are most effective when they represent a coordinated effort among channel players.
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The internet adds value to the marketing communications function in several ways. Manual labor can be automated. When American Airlines sends out a promotional message to millions of its registered users, it requires no papers to fold, no envelopes to stuff, no postage to imprint- its marketers simply click “Send” to distribute the message.
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Communications can be closely monitored and altered minute by minute.
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Google’s AdWords program, for instance, allows its clients to monitor the click-through rates of their online ads in real time and quickly make substitutions for poorly performing ads.
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Web analytics software for tracking a user’s behavior can be used to direct highly targeted communications to individuals.
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Internet enhances promotional coordination among intermediaries. Companies e-mail ads and other material to each other, and all firms may view current promotions on a Web site at any time.
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It is still all too common for brick-and-mortar headquarter firms to run promotions that retailers don’t know about until consumers begin asking for the special deals internet communication helps prevent this kind of surprise from occurring.
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The Last Mile Problem (p297)
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One big problem facing online retailers and logistics managers is the added expense of delivering small quantities to individual homes and businesses. It is much less expensive to send cases of products to wholesalers and retailers and let them break the quantities into smaller units for sale.
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Two other problems arise: 25 percent of deliveries require multiple delivery attempts, thus increasing costs, and 30 percent of packages are left on doorsteps when no one is home, opening the way for possible theft.
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With billions of packages delivered in the United States, e-marketers are looking for ways to save costs and solve this last mile problem.
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Innovative firms have tried four solutions; 1. smart box. The consumer buys a small steel box that comes with a numeric keypad connected to the internet via a two-way modem. Delivery people, such as FedEx or the USPS, receive a special code for each deli very and use it to open the box and leave th e shipme nt. This activity is sent via the internet and recorded in a database. The consumer uses his or her own code to open the box and receives the delivery- also recorded in the database. This solution is efficient and secure for consumers who are willing to pay the hefty box fee.
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2. retail aggregator model. Consumers can have packages shipped to participating retailers.
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3. special e-stops, storefronts that exist solely for customer drive through and package pickup.
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4. many multichannel retailers allow customers to order online for offline retail delivery. Recreational Equipment, Inc. (REI), the outdoor apparel and gear retailer and Walmart for example.
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Chapter 12-E-Marketing Communication: Owned Media
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This chapter discusses how marketers use communication media and social media to connect with customers and prospects. After reading an overview of integrated marketing communication (IMG), you will learn about selecting, applying, and evaluating tools for messages in owned media, one of the three main elements of content strategy. You will also gain an understanding of the complex art and science of search engine optimization.
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E-Marketing Communication/IMC (p311-312)
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Online marketers must be increasingly clever to design and deliver brand messages that capture and hold audience attention- because on the internet, users are in control.
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They can delete unwanted incoming e-mail and impatiently click away when Web sites don’ t quickly deliver desired information.
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Also, the internet allows consumers to widely disseminate their own views and brand experiences via e-mail and social media , shifting the balance of control over brand images from companies to consumers.
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The keys to success include: 1. providing relevant,interesting messages when and where target customers want them 2. engaging internet users by enticing them to upload content, make comments, share content, or simply play with a game or other fun content.
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Integrated marketing communication (IMC) is a cross-functional process for planning, executing, and monitoring brand communications designed to profitably acquire, retain, and grow customers.
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For example, a Home Depot retail customer might buy and use a product from the Web site, then e-mail or call 1-800 to complain about a problem, write about the problem on a product review site or on her Facebook wall, and finally return the product to the brick-and-mortar retail store.
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Every contact with an employee, a Website, a blog comment about the product, a YouTube video, a magazine ad, a mobile app, a catalog, the physical store facilities, and so forth helps the customer form an image of the company.
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In addition, the product experience, its pricing level, and its distribution channels enhance the firm’s marketing communication in a variety of online and offline media to present a strong brand image.
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The best marketing communication can be undermined if these online and offline contact experiences do not communicate in a unified way to create and support positive brand relationships with customers.
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Using technology, firms can monitor profits customer by customer and, based on this analysis, pay more attention to high-value customers both online and offline.
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IMC strategy begins with a thorough understanding of target markets, the brand, its competition, and many other internal and external factors.
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A four-step process, good for any marketing communication campaign: 1. Set clear and measurable objectives and strategies. 2. Understand your audience motivations and behavior, especially in social media. 3. Develop a creative approach appropriate for the brand in one or more platforms (earned, paid, or owned media). 4. Define success metrics.
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Many IMC experts agree that it should: 1. be more strategic than executional (i. e ., more than just about ‘one voice, one look ‘ ) 2. be about more than just advertising and sales promotion messages 3. include two-way as well as one-way communication, 4. be results driven
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Traditional Marketing Communication Tools (p314-315)
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Consumers tend to think that everything with a company name on it, from a Facebook contest, Web Website or YouTube video to an iPhone application, is “advertising.”
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In contrast, marketers have specific definitions of the five key marketing communication tools they use (often called the “promotion mix”).
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These definitions help when selecting the appropriate tool(s) to create the desired effect in the target market.
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Marketing tool definitions: Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
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Public relations: Public relations involves “Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events”
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Sales promotion: Sales promotion consists of “Short -term incentives to encourage the purchase or sale of a product or service”
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Direct marketing: “Direct marketing is an interactive process of addressable communication that uses one or more … media to effect, at any location, a measurable sale, lead, retail purchase, or charitable donation, with this activity analyzed on a database for the development of ongoing mutually beneficial relationships between marketers and customers, prospects, or donors”
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Personal selling: Personal selling is defined as personal interactions between a customer’s and the firm’s sales force for the purpose of making sales and building customer relationships”
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Owned, Paid, Earned Media (p315-317)
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Owned media carry communication messages from the organization to internet users on channels that are owned and, thus, at least partially controlled by, the company.
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Owned media offline include company brochures, catalogs, signs, promotional items (e.g., branded pens), and more.
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Paid media are properties owned by others who are paid by the organization to carry its promotional messages (e.g., advertising).
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The company controls the content; however, the media have content and technical requirements to which the advertisers must adhere (thus, less control than owned media). Paid media online include traditional advertising in magazines, newspapers, television, radio, outdoor, cinema, in stores, and more.
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Earned media are when individual conversations become the channel: messages about a company that are generated by social media authors (such as bloggers), traditional journalists on media Web sites and by internet users who share opinions, experiences, insights, and perceptions on Web sites and mobile applications.
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This is sometimes also called user-generated media or user-generated content.
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Offline, earned media includes word-of-mouth and stories about the company or brands in traditional media. Companies have the least amount of control over this media channel; however, they respond to customer conversation and try to guide it toward their positive brand messages.
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Content Marketing (p318 – plus most used owned media)
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Content marketing is a strategy involving creating and publishing content on Web sites and in social media.
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Content marketing is an interesting trend, in which companies are organizing themselves as media publishers online. Marketers have long created content offline when they create paper flyers, newsletters, brochures, catalogs, infomercials, and DVDs.
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What is new is that marketers now use digital content as inbound marketing that attracts customers and prospects. It is about having content available to inform, entertain, and engage users when they seek the company- and most internet users in both business-to-business (B2B) and business-to-consumer (B2C) markets do searches and come across this material when shopping.
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For example, a company can create video content that entertains, engages, and entices users to visit the company Website to learn more.
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Most used owned media are: Web Site- Marketing public relations (MPR) includes brand-related activities and nonpaid, third-party media coverage to positively influence target markets by building awareness and positive attitudes about its brands.
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Several advantages come with using the Web for publishing product information: 1. low-cost alternative to paper brochures or press releases sent in overnight mail. 2. product information is often updated in company databases, so Web page content can be updated more easily 3. reach new prospects who are searching for particular products (inbound marketing).
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The Web site is a door into a company, and must provide inviting, organized, and relevant content.
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Web Site Chat
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Blogs (from the term Web logs) are Web sites where entries are listed in reverse chronological order and readers can comment on any entry.
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Support Forums/Communities- Companies create spaces for consumers, prospects, and business customers to discuss topics of interest, provide new product ideas, or seek company support with technical or product issues.
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Podcasts: A podcast is a digital media file available for download online to computers, music players, tablets, or smartphones.
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E-Mail: Direct marketing includes such techniques as telemarketing, outgoing e-mail, and postal mail- of which catalog marketing is a big part.
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Location-based Marketing (p336)
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Location-Based Marketing, including promotional offers that are pushed to mobile devices and customized based on the user’s physical location.
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On the iPhone, users simply type a business type into the map function, such as “pizza restaurant,” and Google immediately returns a map with pizza restaurant locations near their current location.
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Imagine receiving a short text message on your cell phone offering a 20 percent off your favorite boutique while driving in the neighborhood!
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Chapter 13-E-Marketing Communication: Paid Media
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This chapter explores paid media, the second of the three elements of content marketing used to communicate with customers and prospects. In addition to learning about the latest trends and specific uses of paid media, you will examine some of the pricing models that apply when marketers select these tools. Finally, you will see how advertisers use metrics to evaluate the effectiveness and efficiency of paid media.
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Trust in Paid Media (p350-351)
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Do you trust ads? Globally, consumers trust earned media the most, followed by owned media, and then paid media. “Its alphabetically children, EOP”
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The most trusted digital media include branded Web sites, opt-in e-mails, coupons (owned media), and recommendations from like-minded people and social network contacts (earned media).
The most trusted digital media include branded Web sites, opt-in e-mails, coupons (owned media), and recommendations from like-minded people and social network contacts (earned media).
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Most paid media is at the bottom of the trust scale. Incidentally, Nielsen found that consumers don’t trust traditional paid media much either: TV ads (47 percent), magazine ads (47 percent), and newspaper ads (46 percent) (“Earned, Owned Media … ,” 2012). And it goes downhill from there for ads before movies and radio ads.
Most
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The least trusted ads are mobile ads (only 33 percent trust mobile display ads and 29 percent trust text ads).
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Conversely, several studies have noted that ad recall is greater in social media and the movement of consumers to social media means that ad dollars are flowing to social media properties.
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Thus, marketers want to create authentic ads that drive traffic to their great owned content.
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Even though a majority of consumers love to hate advertising, they usually recognize that someone has to pay for free content in the media.
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Nonetheless, in addition to the much disliked Web page pop-up ads, there are some online formats that frustrate users, according to usability testing. Here are the “dirty ten” that online marketers would be wi se to avoid: 1. Banner ads below headers 2. ads that look like content (e.g., some sponsorships), 3. dancing ads (across the Web page) 4. auto-expanding half-page ads 5. banners next to logos 6. billboards in the top right corner 7. Google text links interrupting content 8. Ads with hidden close buttons 9. Interstitials (taking over the entire screen) 10. Other page takeovers
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Nonetheless, paid media are still very effective for building awareness and moving users to owned media: Online advertising is growing!
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Product Placement (p357)
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Online gaming creates huge special-interest communities. Advertisers are keenly interested in online games because they reach a broad spectrum of demographics and the players actually like to see product placement in the games.
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This is because it makes the games seem more real. This is similar to movie product placement offline. For example, the online music video game Guitar Hero often has advertisements on the stage behind the musicians. Some games include billboards or signs on walls behind the players.
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LinkedIn Advertising (p361)
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The Linkedln social network is great for adverti advertising to narrowly targeted business professionals.
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Advertisers can use the LinkedIn DirectAds product to target by (I) job title and function, (2) industry or company size, (3) seniority or age, or (4) LinkedIn Group membership.
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Advertisers have the choice of paying for the number of impressions or clicks.
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Chapter 14-E-Marketing Communication: Earned Media
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This chapter examines why and how companies plan, implement, and evaluate e-marketing communication initiatives for earned media, the third element of the online content strategy. You will learn about the techniques that marketers use to engage users, encourage collaborative content creation, manage the firm ‘s reputation online, and monitor earned media activities.
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User Engagement Levels (p378-380)
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Engagement occurs among and between the company and internet users, who are actively discussing the brand. This is compared to traditional media, which allow only passive exposure, such as when a consumers watching television.
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Occasionally, however, traditional media will prompt engagement when the consumer writes an e-mail to the magazine editor or sends a text to a friend about a television program.
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Traditional media can also prompt communication to companies about their brands when designed for this purpose, such as awarding a prize to the first 100 people who comment on a company Facebook page or the American Idol voting by text message.
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However, it is not as easy for consumers to engage when they receive the information in traditional media and must move to the computer or smartphone to respond.
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There are many levels of user engagement online. It is important for a company to review its marketing communication objectives and understand what proportion of its customers and prospects operate at each hierarchy of effects level (from awareness through behavior), so that it can use social media for positive discussion online and collaboration with customers.
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Exhibit 14.1 displays the 5 levels of engagement from least to most engaged: consume, connect, collect, create, and collaborate.
Exhibit 14.1 displays the 5 levels of engagement from least to most engaged: consume, connect, collect, create, and collaborate.
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The least engaged internet users consume only online content.
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At the next level, users connect with others by creating a profile on a social network, such as by “friending” on Facebook, or joining Tripadvisor or other sites that require registration to read the social media content.
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Consumers who collect information go through a process of filtering content and tagging what they find valuable in social media sites. This could include Flickr or Facebook for photo tagging, or ” liking” someone else’ s content.
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Moving up the engagement ladder, creators actually write or upload original multimedia content to Web sites, such as videos to YouTube, photos to Facebook, or music and podcasts to iTunes.
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Finally, the most engaged customers collaborate with the company when they work with others in discussion to find ways to improve products. For example, CNN offers iReporter, where users send in videos of breaking news, which can result in CNN sending a company report to the event for a story.
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Ratings and Reviews (p387-388)
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Prior to a purchase, consumers like to collect information, such as what brand to buy, from which vendor, and at what price.
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Online customers do this via shopping aids (e.g., comparison shopping agents), looking at product review sites such as Epinions, and conducting research at company sites and other sources.
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Ratings and reviews in social networks facilitate commerce, both online and offline. The majority of online customers already rely on social networks to guide them in purchase decisions.
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Shoppers resort to friends, fans, followers, and other experienced customers.
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With peer-to-peer engagement through social media and high consumer trust in acquaintances, retailers recognize that their customers’ voices can be an extremely strong marketing tool for building sales and improving products. Therefore, retailers want to hear what the customers say.
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A variety of tools is available to engage shoppers online:
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1. Customer ratings and reviews. This is feedback from real customers, integrated into an ecommerce product page, a social network page, a customer’s review site, or in customer news feeds.
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2. Expert ratings and reviews. The view from the independent voice of authority, whether professional or prosumer, a professional consumer, can be integrated into an ecommerce product page, a social network page, a product review site, an online magazine, and/or in news feeds.
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3. Business reviews. These sites hold reviews for everything from local restaurants and retailers to national brands and professionals. Examples: Yelp, RateMDs, Rate My Professors, Rate My EP Group Member.
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4. Community questions and answers. These sites are especially valuable to professionals who want to build a thought leadership niche, demonstrating their knowledge when answering questions in their specialty area. Examples: Yahoo! Answers and WikiAnswers
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5. Sponsored reviews. These are paid-for reviews written by either customer bloggers or experts on social media platforms (e.g., SponsoredReviews and PayPerPost). Expert and sponsored reviews are often generated in video format.
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Consumer conversations. People communicate via e-mail, blog, live chat, discussion groups, and tweets, in original posts.
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Collaborative Content Creation by Consumers (p394-395)
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As previously mentioned, the most engaged customers help the company improve products and promotions because they either care deeply about the brand or are enticed by a successful engagement technique.
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In the process , the company gains market research about the behaviors and preferences of its markets. At the simplest level, when you visit an automobile company’s Web site and click around to change the color of the car and give it leather, seats and other options, you are helping the company learn about consumer preferences as it captures your online clickstream and this will guide its future product design.
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Collaborative content creation is crowdsourcing at its best.
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Another important crowdsourcing trend involves user-generated advertising. Frito Lay offers internet users $1 million, a free trip to the Super Bowl, and the chance to work with an ad agency to create winning 30-second television commercials about the Doritos brand chips. The winning spot each year is aired at the game.
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General Motors (GM) tried the same strategy, providing consumers’ video, audio, and images to use in constructing commercials. It worked well for GM, too; however, there was a negative backlash- approximately 20 percent of the entries had superimposed text mentioning the Chevy Tahoe’s part in using up the world’s oil and causing global warming. These videos were posted as ad parodies on YouTube and received lots of press. The moral: In an online environment where everyone is a journalist, expect your underbelly to be exposed. Regardless, GM felt the campaign was a huge success.
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Crowdfunding involves raising money online for new product ideas, or for political campaigns, and nonprofit causes.
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