MKTG 3810 Quiz #3

Chapter 10 Video - 2

"Efficient Markets--Great for Customers, Tough on Business" Efficient market is when the customer wins...Inefficient market is what the hotel market used to be (had to call different hotels to get the best sales) After 911, people went to Expedia and Travelocity to get the best deals. Expedia charges 25% commission. ($160 payment they would only get $120)

Chapter 10 Video - 4

"The Future of Money: Todd Hirsch at TEDxEdmonton" 1) Physicality of Money: fiat currency, bitcoin--no central authority behind it no bank... 2) 3) power/influence=money

Chapter 10 Video - 3

"The Future of Payments" We always had currency--cattle, brain, milk, cheese...simple system with everyone getting what they wanted. PayPal is simple and secure.

brokers vs agents

(278) How do brokers and agents differ? Brokers facilitate transactions between buyers and sellers without representing either party. They are market makers and typically do not take title to the goods. Agents usually represent either the buyer or the seller, depending on who hires and pays them. hey facilitate transactions between buyers and sellers but do not take title to the goods. Manufacturer's agents represent the seller, whereas purchasing agents represent the buyer.

Infomediary (2)

(280) What is an infomediary? Give an example. An online organization that aggregates and distributes information, acting as a personal agent for web users. One form of infomediary is a market research firm.

IMC

(311) IMC is a cross-functional process for planning, executing, and monitoring brand communications. The goal is to profitably acquire, retain, and grow customers. IMC strategy requires a thorough understanding of target markets, the brand, its competition, and other internal and external factors.

Integrated Marketing Communication

(311) What is integrated marketing communication (IMC), and why is it important? IMC is a cross functional process for planning, executing, and monitoring brand communications designed to profitably acquire, retain and grow customers. IMC is cross functional because every touch point that a customer has with a firm or its agents helps to form brand images...social media helps the customer to form an image of the brand...Profitable customers relationships are key to a firm's existence.

AIDA model

(312-313) The AIDA and "think, feel, do" (hierarchy of effects) models help guide selection of online and offline MarCom tools to meet their goals. The models suggest that consumers first become aware of a product before they develop feelings and purchase it. The models can help marketers select appropriate communication objectives and strategies, such as: Build brand equity. Elicit a sales response.

AIDA model/hierarchy

(312-313) Why do marketers keep the AIDA or hierarchy of effects model in mind when planning social media strategy?

page 314

(314) The five key marketing communication tools are also called the promotion mix: Advertising Public relations Sales promotion Direct marketing Personal selling Marketers often discuss IMC in terms of senders and recipients, media type, and owned, paid and earned media.

Five Traditional Marketing Communication Tools

(314-315) What are the five traditional marketing communication tools, and what are some social media platform examples of each? Advertising-Facaebook or LinkedIn ad Public relations-online videos, blogs, wikis, photos, reviews on books/products Sales promotion-Groupon shared discounts Direct marketing-displaying ads based on user behavior online; location based systems (Foursquare); and RSS feeds Personal selling-Chat bots that allow for convo on a website, virtual agents/assistants; also sales lead generation tools.

Owned, paid and earned media

(315) Owned media carry communication messages from the organization to internet users on owned channels. Paid media are properties owned by others who are paid to carry promotional messages. Earned media are when individual conversations become the channel.

Owned media, paid media, earned media

(316) How do reach and control of marketing communications in owned, paid and earned media differ? Owned-owned channels (branded pens) Paid media- properties owned by others who pare paid by the organization (advertising) Earned media-user generated media (bloggers, journalists) they cannot control the image in light of social media

Owned media's primary goals

(318) Owned media's Primary goals are to Engage consumers with positive brand content. Entice them to pass along content to others. Exercise CRM (customer relationship management). All owned media can be considered content marketing.

marketing public relations

(319) Marketing Public Relations (MPR) includes brand-related activities and non paid, third party media coverage to positively influence target markets. There were an estimated 555 million Web sites at the end of 2011. The Web site is a door into a company and must provide inviting, organized, and relevant content. Microsites are Web sites designed for a narrow purpose.

Marketing public relations (MPR)

(319) What is marketing public relations (MPR), and how can an organization use its Website as owned media for this purpose? directed to the firm's customers (PR) and prospects in order to build awareness and positive attitudes about its brands.

landing page

(320) A landing page is a unique page that appears after a user clicks on a link associated with a Web site. Companies create many different landing pages that match key words, current offers, ads, and more. A/B testing is when there are two versions of a Web page and the company conducts A/B tests to optimize clickthrough rates and conversion to purchase.

Blogs

(323) There were more than 181M blogs at the end of 2011. CEOs, consultants and thought leaders create blogs to disseminate views, promote books, etc. Marketers use blogs to draw users to their Web sites and need to decide: Which platform to use? Who will do the writing? How often will they post? What is the purpose of the blog?

E-Mail (direct marketing)

(327) E-mail remains the most important communication technique for building customer relationships. 75.4% of marketers invest in e-mail campaigns. E-mail has advantages over postal direct mail. No postage or printing charges. Immediate and convenient avenue for direct response using hyperlinks. Can be automatically individualized. (330) E-mail difficulties include spam filters and finding and maintaining appropriate e-mail lists.

email or texting over postal mail

(327-328) Why would a company use email or text messaging instead of postal direct mail for marketing? No postage or print charges Immediate and convenient avenue for direct response to web and social media sites using hyperlinks email can be automatically individualized to meet the needs of specific users--beyond just using a name in the email. Email offers the chance of real dialogue with individual customers, as well as a way to develop broad and deep customer relationships instead of merely using it to acquire customers.

Text Messaging (SMS)

(332) Short Message Services (SMS), commonly known as text messaging, are up to 160 characters of text sent over the internet with a cell phone or smartphone. Marketers can build relationships by sending permission-based information when and where consumers want to receive it. Should be short, personalized, interactive, and relevant.

Sales Promotion Offers

(333) Online sales promotions can build brands, databases, and support sales. Most do not build long term customer relationships. Offers are short-term incentives that facilitate the movement of products to the end user. They include: Coupons Sampling Contests, sweepstakes Virtual worlds Online games & gifting

Branded Mobile Apps

(335) Many companies create branded mobile applications and widgets that support social interactions. 45% of companies had branded apps and another 31% planned them in 2012. Marketers are placing QR codes on physical objects, such as ads, but the outlook is not positive. Use of two-dimensional mobile tags in retail stores is growing.

Social Networks

(337) 90% of companies with over 100 employees participate in social media. Marketers must realize that social networks are not purely for selling. Communicating with and learning from users are important goals. Social network share of visits (FB and YouTube had 58.8% and 24.6% respectively).

social networks

(337) What are the marketing benefits of initiating, participating in and influencing conversations on social networks? build friendships

Search engine optimization

(339) Search marketing is marketing via search engines. Complex art and science to drive qualified visitors to a Web site and convert them to customers. Search engine market shares in Oct. 2012.

Natural search

(340) Natural search (organic search) involves optimizing a Web site so it will appear near the top of search engine results. When Web sites are optimized for content and meta tags that hold keywords, search engines know how to categorize the site. Principles of SEO (search engine optimization) include: Spread fresh content all over the Web. Design for relevance and popularity. Optimize content. Adjust site to changing search algorithms.

natural search vertical search paid search

(340-343) How does natural search differ from paid search and vertical search? Natural - appears as close to the first search engine result as possible (optimizing the website) Paid - advertisers buy keywords that appear as sponsored links on mobile search engine results pages. Small screen sizes -- ads must be short and relevant Vertical - site specific search based on very specialized topics such as travel online retailers or books. Vertical sites are for viewers seeking specific content for fewer users

Vertical search

(343) Vertical search is site-specific search on specialized topics, such as travel or books that helps users find what they are looking for quickly. Hotels, for example, would want to be listed on a vertical search site such as TripAdvisor. Vertical search site examples include: ZoomInfo LinkedIn CareerBuilder

Owned Media Performance metrics (1)

(344) Marketers use Web analytics for company-owned Web sites and blogs, such as number of unique visitors, time on each page, conversion to sales, etc. For owned media, sales promotions, and direct marketing, there are also appropriate metrics. Podcasts: number of downloads and length of time listening. Branded mobile apps: number of downloads, updates and actions. Visits to sales promotion game sites. Communication opt-in from content participants Number of email messages read or forwarded to a friend.

Owned Media Performance metrics

(344) Podcasts, Online events, virtual world, online games, branded mobile apps, QR codes, Web landing pages -Sales Promotion Metrics: Markters want to know how their sale promotions contribute to the overall communication goals. As with all metrics, the selected metrics depend on campaign goals. -Direct Marketing Metrics: Response rate and ROI are the most appropriate metrics for any direct marketing campaign.

Three pillars of relationship marketing

(PAGE 411-412) CRM, CEM, CCM

M-Commerce

(p287) Mobile commerce occurs when consumers make a transaction with a smartphone or other mobile device. M-commerce is a subset of e-commerce. 77% of U.S. population has a mobile phone; half are smartphones that enable m-commerce. M-commerce was projected to reach $11.6 billion in 2012, 5.9% of all e-commerce sales.

CRM VISION

1. CRM VISION To be successful, the CRM vision must start at the top and filter throughout the company to keep the firm customer focused. One key aspect of CRM vision is how to guard customer privacy. The benefits of using customer data must be balanced by the need to satisfy customers and not anger them. TRUSTe provides its seal and logo to any Web site meeting its privacy philosophies. PAGE 416

10 Rules for CRM Success

10 RULES FOR CRM SUCCESS Recognize the customer's role. Build a business case. Gain buy-in from end users to executives. Make every contact count. Drive sales effectiveness. Measure and manage the marketing return. Leverage the loyalty effect. Choose the right tools and approach. Build the team. Seek outside help. PAGE 438-440

CRM STRATEGY

2. CRM STRATEGY E-marketers must determine their objectives and strategies for initiating CRM programs and buying technology or setting up social media. Many CRM goals refer to customer loyalty. An important CRM strategy is to move customers up the relationship intensity pyramid to advocacy. Another CRM goal involves building bonds with customers on 3 levels: financial, social and structural. PAGE 418

Display Ads

22% of all online ad revenue is for display ads, which can contain text, graphics, and animation and allow users to click through. The Interactive Advertising Bureau (IAB) claims that 80% of online marketers follow their standard dimensions for display ads, which can include: Billboards Filmstrips Portraits Sidekicks Sliders PAGE 354

CUSTOMER EXPERIENCE MANAGEMENT

3. Customer Experience Management Consumers are constantly bombarded by marketing communications and unlimited product choices. According to Sheth (1995), the basic tenet of CRM is choice reduction. Many consumers are "loyalty prone," and will stick with the right product as long as its promises are fulfilled. Synchronous and asynchronous technologies can provide automated and human communications that solve customer problems. PAGE 419 & 420

CUSTOMER COLLABORATION MANAGEMENT

4. Customer Collaboration Management/Marketing (CCM) CCM is content, people, and interaction driven, while traditional CRM is data-driven. CCM is about managing customer relationships and experiences by creating and monitoring online content. Listening the online chatter using technology such as Google Alerts and social media dashboards is more important than talking when a company is selling. PAGE 421

ORGANIZATIONAL COLLABORATION

5. Organizational Collaboration Marketers collaborate within and outside the organization to focus on customer satisfaction to create a CRM culture. Online retailers can seamlessly link the "back-end" (e.g., inventory and payment) with the "front-end" CRM system and the entire supply chain management system (SCM). Extranets, two or more intranet networks that share information, allow CRM-SCM integration. PAGE 422

CRM Processes

6. CRM Processes Firms use specific processes to move customers through the customer care life cycle. PAGE 424

CRM Information

7. CRM Information The more information a firm has, the better value it can provide to each current or prospective customer. Firms gain much information by tracking behavior electronically. Bar code scanner data. Software that tracks online movement, time spent per page, and purchase behavior. Databases can provide a 360° customer view across various channels. PAGE 427

CRM Technology

8. CRM Technology The internet forms the centerpiece of a firm's CRM abilities. Cookies, Web logs, bar code scanners, social media, and other tools help to collect information about consumers and their behaviors. Firms use company-side tools to push customized information to users. Client-side tools allow the customer to pull information that initiates the customized response from the firm. PAGE 428

CRM Metrics

9. CRM Metrics E-marketers use numerous metrics to assess the internet's value in delivering CRM performance. ROI Cost savings Revenues Customer satisfaction Customer Lifetime Value (LTV) Contribution of each CRM tactic to these measures PAGE 436

Paid Media on Facebook

Advertisers on Facebook can potentially reach over 1 billion members. Facebook ads offer narrow targeting, 70 different languages, interactive features, ease of creation, and excellent metrics. In 2011 Facebook introduced sponsored stories that integrate social endorsement into ads. PAGE 359

Chapter 13 Video - 6

Advertisers, You Need Youtube! Youtube can show Advertisers how to gain more views and followers.

Chapter 11 Video - 2

Affiliate Marketing -- SOPS (Selling Other People's Stuff) GAP will get you a commission for helping to sell their stuff from friends and so on..digital goods (click bank) like software you can get a commission on every sale.

Build Maintain Monitor and Repair

As part of the decision about responding to a comment or complaint in online or offline media, what three question should a company ask?Build Maintain, Monitor and Repair (page 400-401 right under Maintaining in italics)

Chapter 12 Video - 2

Beiersdorf Manufacturing Hamburg - Producing Skin Care products for the world/NIVEA

Chapter 12 Video - 1

Beiersdorf Trainee Program Supply Chain Management -- Seminars and workshops help the trainees.

Three Pillars of Relationship Marketing/Customer Relationship Management (CRM 1.0)

CRM is a philosophy, strategy, and process that includes all 3 pillars. The benefits of CRM 1.0 include: Increased revenue from better targeting. Increased wallet share with current customers. Longer retention of customers. The cost of acquiring a new customer is typically 5 to 7 times higher than the cost of retaining a current customer. Satisfied customers recommend Web sites, stores, and products to their friends in social media. PAGE 411 & 412

Blendtec Story -- Will it blend?

Chapter 12 (310-311) Blendtec , a supplier of commercial blenders to Starbucks and others, produced a video in which the CEO blended unusual products such as a garden rake and a golf club. The video, uploaded to YouTube, received 3.9M views in an 8-month period and 8.2M views since 2010. The Will It Blend? Campaign clearly shows the product benefits in a humorous and engaging way and the value of connecting with consumers online. Will It Blend? is a favorite of nearly 10,000 registered YouTube visitors. Is it also one of yours?

Lenovo Wins Big with Paid Media

Chapter 13 Lenovo is a Chinese company that sells computers to both business and individual consumers. In 2008 Lenovo began a successful remarketing campaign using specifically tailored Google ads for 3 different shopping behaviors: General visitors. Those who abandoned shopping carts. Purchasers. They continue to use this strategy for maximum effectiveness and efficiency. Lenovo's tagged site visitors helped them reach 20% in total site sales. PAGE 349

Dell Starts Listening

Chapter 14 A blog post about Dell Computer brought a hailstorm of customer service complaints that lasted for nearly 2 years. The blogger complained that a laptop and its in-home service he purchased from Dell were inadequate. The complaint followed Dell's decision to outsource technical customer service to India, a move which also generated many negative comments. When the complaints didn't stop, Dell appointed a media manager to deal with internet chatter who initiated blogs in multiple languages to handle complaints and ideas. The blog IdeaStorm gathered ideas and endorsements that resulted in numerous changes in the company. PAGE 377

The Best Buy Story

Chapter 15 Best Buy is the 11th largest U.S. e-commerce retailer with 1B online visitors and a multichannel strategy. In 2008 Best Buy initiated the Best Buy Community online. 600,000 customers a quarter post 20,000 messages and view over 22 million pages of content. The community has yielded $5M in benefits to Best Buy. Best Buy also uses Twitter to engage customers (@twelpforce). PAGE 408

Social Media Influencers

Companies identify social media influencers by observing and participating in social media discussions. They can also find influentials by using a service such as Klout.com. Companies often include press releases about their brands on their Web sites and send them to media firms for publishing. PAGE 381

company side tools and client side tools

Company side tools is on page 428 and client side tools are on page 432

Contextual Advertising/Behavioral Advertising

Contextual advertising occurs when an ad system scans a Web page for content and serves an appropriate ad. Google's AdSense and Microsoft's adCenter offer this service. Behavioral advertising is a form of contextual advertising, but follows user behavior instead of page content. Remarketing is a tactic for communicating with users who previously visited a Web site. PAGE 355-356

Contextual Advertising

Contextual advertising tends to yield higher click-through rates because the ads are relevant to the user's needs. (page 356)

Chapter 13 Video - 7

Digital Marketing Trends of 2015-2016 -- Smartphones are great! They are always connected to the world and to us. Using smartphones EVERYWHERE! They are very important to our lives. Important to our shopping habits! 79% use to find savvy deals; 70% use while in the store; we do most of our shopping on our phones -- finding locations or local stores to find closest places we need. 71% of us search bc we saw an ad and we act on it 9/10 mobile users take action bc of what we see.

Chapter 14 Video - 8

Domino's President responds to Prank video -- Patrick Doyle -- he apologized and thanked members of the online community who showed them what happen in NC. The two team members have been dismissed and wanted for arrest...they want customer's trust! They will update how they hire. Want cleaner stores.

Chapter 14 Video - 7

Domino's prank video (workers fired) -- NASTY!

Chapter 10 Video - 5

Dynamic Pricing--pricing things differently to different people for the same product (unfair to shoppers--discriminatory) cookies show where you have shopped and how much money you have based on previous behavior...use different browsers...multiple accounts/computers to be anonymous

Mobile Advertising

E-marketer predicted that mobile ads would reach $2.61 billion in 2012. Mobile advertising formats available to marketers include: Paid search Display ads Full screen takeovers Messaging Location-based ads Video Voice Apps PAGE 362

Earned Media

Earned media are like physical word-of-mouth on steroids: a social megaphone. Can be initiated by the company through branded content, news sites, and press releases. Companies have little to no control over user-generated content (UGC). PAGE 378

User Engagement Levels

Engagement occurs among and between the company and internet users, who are actively discussing the brand. There are many levels of user engagement online. PAGE 378

Social Recommendations and Referrals

Explain how shoppers use or contribute content to the seven forms of online reviews and ratings. (page 388-389)

Widgets and Social Apps

Facebook features thousands of software apps on its site that engage users. Facebook messenger allows users to send messages to mobile phones. Instagram allows users to take photos and share them on Facebook, Twitter, and Tumblr. PAGE 393

User Engagement Levels

Five Levels: CONSUME, CONNECT, COLLECT, CREATE, COLLABORATE (page 379-380)

Chapter 10 Video - 1

Freemium: The First Business Model of the 21st Century -- what is the premium to your free? -- Freemium is the 21st century business model giving away 90% of your goods for free to get money for 10% -- you reach the largest possible audience and use your product -- they have figured out the value & are happy to pay after a while -- people converted with more sense and knowledge of what they are purchasing -- exclusives free !! -- other people will report on your exclusives and you will get no traffic -- head of the curve: most popular (best to monetize) tail of the curve: niche stuff (narrower interests--what they are charging for--less competition--clear value to the customer) give away the head sell the tail -- Free to play: at some point you want them to pay, but more so "ooh, Shiny!" make them like it/want it -- people will pay to save time

Chapter 13 Video - 8

How Search Ads Work -- Google Ads -- People do web searches for their own pleasure and to aid them somehow Entertainment , Enlightenment , Information ( MOST FREQUENTLY ) Ads offer meaningful information. Moment of Relevance is the moment that a customer does their search. You can pay to have our ads put in a certain place on the screen

efficient internet buys

How and why would an advertiser measure efficiency according to CPM, CPA, and CPC? (page 368-369)

advergames

How are advergames used in marketing? (335)

Viral Marketing

How are viral marketing and viral blogging used to generate word of mouse? when individuals forward email to friends or share Facebook news feeds posts or Youtube videos ... (page383)

Social Recommendations

How do social recommendations and referrals differ from ratings and reviews? (page 388)

Paid Search

How does keyword advertising differ from paid inclusion and directory submission? (page 364)

labeling on the internet

How does labeling work on the internet? Labeling has digital equivalents in the online world. For online services, terms of product usage, product features, and other information comprise online labeling at Web sites. For example, when users download iTunes software for organizing their iPod music, they can first read the label to discover how to install and use the software.

Sponsored Content

How does sponsored content help advertisers reach their audiences? (page 356-357)

Chapter 13 Video - 5

How social media advertising works -- 7 most important reasons to use it: 1) showcase your brand 2) develop a loyal community 3) improve customer service 4) increase digital exposure 5) boost traffic in search engine rating 6) expand sales to reach a new audience 7) cut marketing costs (social media marketing is affordable for any business and the channel itself is free)

Chapter 14 Video - 2

How to make a splash in social media -- make and create content that users attract to and discover new things that pop up on the web...lots of trends come up online

Chapter 14 Video - 3

How to turn Facebook fans into paying customers--only customers can choose to buy something for your business...on Facebook you want to engage with people and products and services that you offer but also mix it up. You want the editorial that you are selling to have a bigger picture and actually sell to the customer. Share their experiences, etc.

Social Media Advertising

In 2011, two-thirds of marketers conducted social media advertising and 18% said they intended to do so in 2012. Four main objectives for paid branded content on social media sites: Build brand awareness. Engage existing customers. Increase size of community. Drive traffic to an online destination. Advertising on social media is predicted to grow 15-34% faster than search ads over the next 5 years. PAGE 358

2011

In _____, 96 percent of Google's revenues came from advertising. It generates revenues from several B2B markets.

Who should a company engage?

In addition to consumers and prospects, which two groups should companies seek to engage for earned media? influential bloggers and social network members (page 380-381)

Earned Media Performance Metrics

In addition to metrics such as number of likes and shares on company-owned channels, there are a number of metrics that can be applied to earned media. General earned media metrics: number of users who interact with an application, time spent viewing a video, social media fan growth, etc. Actions taken by users: Number of downloads of a white paper, ring tones, number of games played, polls voted, etc. Conversations on blogs and elsewhere: Tweets/retweets, positive/negative comments, etc. PAGE 402 & 403

Collaborative Content Creation by Consumers

In what ways does collaborative content creation help companies? (page 394)

Internet Advertising

Internet advertising in the US was 1 billion in 1998 and 31 billion in 2011 with a small drop off due to recession of 2009. (page 351-352)

Chapter 13 Video - 4

Introduction to Contextual Advertising -- (Google Content Network) it is essentially those eyes that you see in other peoples sites...when Google is trying to match the context of what a website is to what the campaign of what something was trying to construct...Photo Umbrella

Efficient Internet Buys

It is difficult to generalize about the most effective media because it varies widely based on many factors. Efficiency is easier to determine by using 3 important metrics: CPM (cost per thousand impressions) CPA (cost per action) CPC (cost per click) Exhibit 13.13 displays many popular paid media metrics and the percentage of advertisers using them. (PAGE 370) PAGE 368-369

Chapter 14 Video - 1

Klout Score -- basically the attractiveness on social media ... content you create vs the actions that you create ... your popularity online!

Location-Based Services (LBS)

LBS is a business model for m-commerce. There are several major players. Foursquare works via a smartphone app on its mobile Web site. Yelp published 33 million reviews of local businesses in 2012. Facebook places can add a location to Facebook text-based or photo posts. page 393 & 394

Labeling

Labeling has digital equivalents in the online world. Online labels provide information about product usage and features. Online labels also provide extensive legal information about the software product. Online firms may add the Better Business Bureau logo or TRUSTe privacy shield. (242)

User Engagement Levels (2)

Least engaged internet users consume only online content. At the next level, users connect with others by creating a profile on a social network, such as by "friending" on Facebook. Consumers who collect information filter content and tag what they find valuable in social media sites. Creators write or upload original content. The most engaged customers collaborate with the company when they engage in discussions to improve products.

Chapter 14 Video - 4

Location Based Services -- present offers, reward clients, gather data, find family and friends share tips, but how?Add value to your customers with LBS increase your value added services

Chapter 14 Video - 9

Managing Bad News in Social Media -- the prank news was more popular than the apology or the commentary news :/ People relay JUICY gossip or bad news quicker than good news...the connection of the commentary and apology views were much more denser than the prank news unfortunately.

Paid Media in Online Videos

Marketers can place ads before, during or after videos on sites such as YouTube and Vimeo. In-stream videos are 15-30 seconds and can be pre-roll, mid-roll and video takeovers. Interactive banners and buttons. Branded player skins. In-text video ads. In October 2012 there were nearly 11 billion streaming video ads. PAGE 361

Widgets and Social Media apps

Marketers use widgets and social apps to engage social media buyers.

Marketing Automation

Marketing Automation Marketing automation activities help provide: Effective targeting. Efficient marketing communication. Real-time monitoring of customer and market trends. SAS, a business intelligence and predictive analytics software provider, offers automation software to aid CRM. PAGE 427

Chapter 9 Video - 2

Mass Customization (individual design for the masses) -- 80 choices of toppings to put on 4 different chocolates -- necessity and choice -- Foods you can put together yourself -- mass products you can put together for yourself creatively at good prices -- individual projects are booming! individual lifestyles and individual ways of working -- can create your own perfume online

Multimedia Sharing/Wikis

Multimedia sharing of photos, art, video, and music can generate online discussion. Wikis, Web sites that allow users to post, edit, and organize content, as well as online ratings and reviews can also be effective tools for engaging online users. page 386 & 387

BUILDING BLOCKS OF CRM

NINE BUILDING BLOCKS OF CRM ARE ON PAGE 415 AT THE BOTTOM

Chapter 13 Video - 1

Online Ads 101: Display Ads -- Web servers, Ad servers, Ad servers track clicks and impressions

Internet Advertising Trends

Only 16% of internet users click on ads today (down from 32% in 2007) and 8% of users account for 85% of all clicks. U.S. online advertising grew to $31 billion in 2011, approximately 23% of all advertising dollars spent and more than the amount spent on traditional print advertising. PAGE 351-352

research

Organizations use ________ to determine what is important to customers when creating new products.

CRM BENEFITS

PAGE 413 -- INCREASED REVENUE, INCREASED WALLET SHARE WITH CURRENT CUSTOMERS, RETAINING CUSTOMERS FOR LONGER PERIODS OF TIME

Paid Search

Paid search occurs when an advertiser pays a search engine a fee: to display its ad when users type in related keywords. for directory submission. for inclusion in a search engine index. Paid search captured nearly half of all online advertising dollars in 2011. PAGE 364

Chapter 12 Video - 4

Paid, owned and earned media Paid-traditional ads Earned-organic Earned-corporate content

Chapter 12 Video - 5

Performing A/B Tests -- comparison on your site to figure out which is better either A or B...Green background better than a white one? Use an experiment and TEST! Select the original and changes...

Pricing Strategies

Price setting is full of contradictions and has become an art as much as a science. (pg 266) How marketers apply pricing strategy is as important as how much they charge. Marketers can employ all traditional pricing strategies to the online environment.

Segmented Pricing

Pricing levels are set based on order size and timing, demand and supply levels, or other factors. Becoming more common as firms collect more behavioral information. Segmented pricing can be effective when: The market is segmentable. Pricing reflects value perceptions of the segment. Segments exhibit different demand behavior. The costs of segmentation do not exceed revenue. The firm must be careful not to upset customers. (pg269)

Chapter 9 Video - 3

Professer Kevin Lane Keller on Brand Value and Marketing -- Value is what you have to give (time, energy) for what you have to get (piece of mind) -- more broader than what the customer spends (money) -- COMMUNICATE WITH CUSTOMERS -- people have to see the broader concept of things that they are spending their money on -- maximizing value on the broadest sense

Provide High quality, timely, unique and relevant information

Provide high-quality, timely, unique, and relevant information. Create entertaining content. Offer competitions. Appeal to altruism. Make an exclusive offer. Reward influentials and fans. Incentivize group behavior. PAGE 396-397

Building customer relationships, 1:1

Relationship capital is the foundation of future business...why? (page 409)

Relationship Marketing Defined

Relationship marketing is about establishing, maintaining, enhancing, and commercializing customer relationships through promise fulfillment. A firm using relationship marketing focuses more on wallet share, the amount of sales one customer can generate over time, than on market share. PAGE 409

Relationship Marketing

Relationship marketing is about establishing, maintaining, enhancing, and commercializing, customer relationships through promise fulfillment (page 409) contrast the term with mass marketing PAGE 409

Rich Media Ads

Rich Media Ad types--in-banner, expandable, popup, popunder, floating ad, interstital, wallpaper, map and trick (page 355)

Chapter 13 Video - 3

Rich Media Ads -- Hoover Ads, Hover Ad with Video, Sidedoor Ad with Video, Peeldown Ad, Pushdown Ad

Sales Force Automation (SFA)

Sales Force Automation Sales force automation allows salespeople to build, maintain, and access customer records, manage leads, and manage their schedules. Up-to-date customer and prospect records help build customer relationships. Salesforce.com also has tools to monitor brand conversations in the social media. PAGE 426 & 427

Chapter 12 Video - 6

Search Engine Optimization (SEO) -- Google and Bing are the librarians of the internet...algorithms turn the information into useful results.Search engines account for every word on the web. Each page on the web has an official title. Titles matter! Links between websites matter (recommendation)! REPUTATION...

The Internet Corporation for Assigned Names and Numbers

Seven generic top level domain names that must be used by the type of organization indicated in the name (.com, .edu, .gov, .int, .mil, .net, and .org) 250 two-letter country top-level domain names (ex. .de, .mx. and pn, for the Pitcairn Islands with a population of 50 residents). Many other general names, such as .biz, .info, .pro, .name, .coop, .aero, .museum, .asia, .cat, .jobs, .mobi, .tel, and .travel

Mobile Advertising (2)

Several issues affect the future of mobile ads. Wireless bandwidth is currently small which affects downloads. Limited ad-size due to small screens. Advertising tracking requires different techniques. Many mobile users are opposed to paying for ad time. Despite the issues, content-sponsored ads on mobile device are likely to increase in the future. PAGE 364

Social Customer Relationship Management (CRM 2.0)

Social CRM (CRM 2.) adds social media technology and customer collaborative conversations to the process. Adds benefits such as: Monitoring and improving reputations. Learning more about customer needs, wants, and problems. Improving target market selection and revenue potential. Gathering data for market research on products and customer service. Decreasing customer service costs. Identifying new revenue opportunities. PAGE 412 & 413

Social Bookmarking

Social bookmarking sites allow users to share their favorite Web sites and comments. StumbleUpon.com Delicious.com Referral programs involve rewards for customers who refer new customers. Groupon Gilt Marketers can integrate email with social media. Yahoo!, Gmail and Outlook allow integration with Facebook contacts. PAGE 388

Social commerce

Social commerce M-commerce F-commerce

Viral Marketing

Successful viral marketing programs involve appealing content that has a high chance of spreading. Few companies can create content that goes viral, although Old Spice is credited with the fastest-growing online viral video campaign. PAGE 383 & 385 Viral blogging via Twitter can also be effective. PAGE 386

Ten rules for CRM

Ten Rules for CRM success is on page 438-439

Chapter 9 Video - 1

The History of Google -- Jan 1996 -- BackRub -- Google News -- started as a research project -- Google Plus -- Marketing Mobility -- Google Earth/Google Voice -- AdWords and video sharing website Youtube is most popular -- 20% personal usage

Chapter 13 Video - 2

The Startup Making Money on 30B Online Ads Each Day -- online ads are expected to reach 50 billion (2014) more than 2013...Programtic Advertising...makes a connection between the advertisers and sellers.

Stakeholders

The four stakeholders most affected by internet technologies include: Employees who need training and access to data and systems used for relationship management. Business customers in the supply chain. Lateral partners, such as other businesses, not-for-profit organizations, or governments. Consumers who are end users of products and services. PAGE 410

CRM

The marketing mix 4 Ps and _____ work together to produce relational and transactional outcomes with consumers.

Paid Media, Trust in Paid Media

The terms "paid media" and "advertising" are often used interchangeably. Paid media can engage target markets and move them to owned media and social media conversation (earned media). The most trusted digital media include branded Web sites, opt-in emails, coupons (owned media) and recommendations from peers and contacts, like minded people and social network contacts (earned media). PAGE 350

Rich Media Ads

There are numerous formats for highly interactive rich media ads. Some can sense mouse movement, while others have built-in games or videos. In-banner video ad Expandable ad Pop-up and Pop-under Floating ad Interstitial ad Wallpaper ad Trick banner ad Map ad PAGE 355

Social Media Advertising

Three unique aspects of social network accounts account for the expected rise in spending in social media advertising? personal profile, social data graph, interpersonal interaction data (page 358)

Twitter's Promoted Tweets/LinkedIn Advertising

Twitter launched promoted tweets, ads that appear as content at the top of a page or timeline, in 2010. Advertisers can target Twitter users by 350 narrow interests. Advertisers can use LinkedIn Direct Ads to target by: Job title and function. Industry or company size. Seniority or age. LinkedIn Group membership. PAGE 360-361

Chapter 10 Video - 6

Websites Vary Prices, Based on Your Location Staples... 8% price difference Websites are adopting techniques to glean information about visitors to their sites, in real time, and then deliver different prices of the same products to different people. Safe: $1,100 in the pricier areas and $1,000 in lower areas. doesn't make customers happy when someone else is getting lower price than they are.

Location Based Services

What are location based services and how do marketers benefit from them? (page 393-394)

Social Media Dashboard

What is a social media dashboard and why would a company is it? (page 403)

Chapter 14 Video - 6

What is online reputation management? Monitoring your brand's reputation online while suppressing false advertisements and information. Insure positive feedback from customers. 89% of consumers go online to do traditional research about... Adults rather buy products that are recommended. 78% of employers search for candidates online.

Right above paid search

What issues are likely to affect the future of mobile advertising? (page 394)

Reputation Management Online

Which reputations should a company monitor and seek to manage? (page 398-400) build, maintain, monitor and repair

CRM Technology

Why CRM uses social media so much is on PAGE 428

Email

Why are many companies integrating e-mail and social media for marketing communication? (page 389-391)

SFA and MA

Why do companies use sale force automation and marketing automation? page 426 - 427

Idk

Why do consumers abandon online shopping carts? Because of shipping prices.

E-marketers estimating difficulty

Why do e-marketers often have difficulty estimating the revenues, costs, and payout or ROI of a new product under development? E-marketers need to consider several factors that affect product development and product mix strategies with new technologies...(p243)

search engine optimization

Why is search engine optimization an important consideration for the company's owned media strategy? (339) maximizing the number of visitors to a website or social media site.

Trust when planning for earned media

Why should marketers be aware of the role of trust when planning for earned media? (page 392-393)

Community Discussion/Forums

Widgets can include brand information in contests or games. Companies such as Friend2Friend and Product Pulse create widgets for advertisers that allow voting, gaming, and gifting. PAGE 392

Which Reputations Matter?

With earned media, there are many opportunities for other people to shape the reputations of a company, its brand, and employees. According to PR firm Weber Shandwick, 63% of a company's market value is attributable to reputation. The reputation management process includes 4 steps: Build Maintain Monitor Repair PAGE 400

Chapter 11 Video - 3

Working in Supply Chain Management at Beiersdorf -- Source, Make, Deliver...What products will you sell to the consumer? What products do you need? How to produce the products...to what markets? Transport and Distribution to all of our customers is the deliver.

Chapter 11 Video - 1

Zappos on CBS -- online shoe selling source Amazon paid 1.2 million to get a hold of Zappos

Google

______ had revenues of $37.9B and 25.7% in net income in 2011 and continues to grow in sales, new markets, and new products offered.

host

a computer connected to the internet and may contain multiple IP addresses.

data mining, real time profiling collaborative filtering and outgoing email

data mining, real time profiling collaborative filtering and outgoing email help companies customize offerings how? page 430

online display ad

online display ads are embedded in webpages, allowing users to click through to the advertiser's site and can include texts, graphics, and animation. (page 354)

Paid Media on Facebook

options advertisers have when they use Facebook, Twitter, LinkedIn, or Second Life as paid media? reach a larger audience (page 359)

F-commerce

page 290...(Facebook commerce) is a subset of social commerce, where companies use Facebook to facilitate e-commerce...

CRM-SCM integration

page 422 is CRM-SCM integration next generation of CRM-SCM integration would allow immediate inventory checking at the wholesaler or manufacturer to determine availability.

customer care life cycle

page 438 is customer care life cycle or customer life cycle stage map with CRM metrics

5 levels of relationship intensity?

relationship marketing is on page 418

paywall

some web content is hidden and only available to users who pay a fee for access

Price transparency

the idea that both buyers and sellers can view competitive prices for items sold online -- the feature makes the internet an efficient market, but is it? (251)

5Ms of CCM requirement

this is on page 421

effective internet buys/Purchase funnel

which types of paid media tend to be most effective at each stage of the B2B purchase funnel? (page 367)

Which Media to buy?

why must advertisers be concerned with both the effectiveness and efficiency of media buys? (page 367)

multichannel marketing

(286) What is multichannel marketing? The use of more than one sales channel, such as Web, mobile brick and mortar, and catalog. Omni-channel marketing? The shopper's perspective of multichannel marketing, describing the way consumers move seamlessly through many shopping channels

Disintermediation

(292) What is disintermediation? Give an example. Describes the process of eliminating traditional intermediaries. Disintermediation allows the supplier to transfer goods and services directly to the consumer in a direct channel.

The last mile problem

(297) Why are e-marketers concerned with the last mile problem? The Last Mile Problem is an added expense of delivering small quantities to individual home and businesses. E-marketers are looking for ways to save costs and solve this last mile problem.

SCM

(299) What is supply chain management (SCM) and why is it important? SCM refers to the coordination of flows in 3 categories: material (physical product); information (demand forecast); and financial (credit terms) The most important flow is the information because creation of the physical product and the financing depend on the information. (FLOW--continuous stream of products, info and finances flowing)

B2C Markets

(302) What types of distribution channel metrics are used in B2C market? Revenue, ROI, customer satisfaction levels, customer acquisition costs, conversion rates and average order values.

Zappos Story

(p276-277) Zappos is the world's largest online shoe store. Sales over $1 billion in 2009. Part of amazon.com since November 2009. Operates as a wholly owned subsidiary in Henderson, NV. Success factors include a culture of outstanding customer service. Other success factors: great search engine marketing, strong word of mouth, astute competitiveness, and repeat customers.

Distribution channel definition

(p277) A distribution channel is a group of interdependent firms that transfer product and information from the supplier to the consumer. Producers Intermediaries Buyers The structure of the channel can make or impede opportunities for marketing on the internet.

Wholesalers

(p278) Wholesalers buy products from the manufacturer and resell them to retailers. Retailers buy products from manufacturers or wholesalers and sell to consumers. Brokers facilitate transactions between buyers and sellers. Agents may represent either the buyer or seller. Manufacturer's agents represent the seller. Purchasing agents represent the buyer.

Content sponsorship

(p278-279) In this model firms create Web sites, attract traffic, and sell advertising. All the major portals, Google, Yahoo!, and MSN, utilize this model. Online magazines, newspapers, Pandora Radio, and Craigslist use the content sponsorship model. Content sponsorship is often used in combination with other models to generate multiple revenue streams.

Infomediary

(p280) An infomediary is an online organization that aggregates and distributes information. Market research firms and product review sites are examples of infomediaries. Some infomediaries compensate consumers for sharing demographic and psychographic information and receiving ads targeted to their interests.

Intermediary models

(p280) Three intermediary models are in common use on the internet. Brokerage models. Online exchange Online auction Agent models for sellers and buyers. Online retailing.

Agent Models

(p281) Agent Models: May represent sellers or buyers, depending on who pays their fee. Agent models that represent sellers include: Selling agents, such as affiliate programs. Manufacturer's agents represent more than one seller. Metamediaries: Edmunds.com and TheKnot.com. Virtual malls: Yahoo! Shopping, Amazon.

Online exchange

(p281) The broker creates a market in which buyers and sellers negotiate and complete transactions. Online Exchanges, E*Trade, Schwab and Ameritrade, allow customers to place trades online without a broker. Autobytel.com is a vehicle exchange and alibaba.com is a global marketplace. The B2B market has also spawned brokerages. Converge is the leading anonymous exchange for global electronics. Guru.com is an exchange for professional talent. Online auctions are available in the B2B (uBid), B2C (priceline), and C2C (ebay) markets.

Agent Models Representing Buyers

(p283-284) Agent models that represent buyers include: Shopping agents BizRate, PriceScan, and CNET Shopper. Reverse auctions--occurs at a Web site serving as purchasing agent for individual buyers. Priceline was the first major player in reverse auctions. Buyer Cooperatives (buyer aggregators) pool many buyers together to drive down prices. Groupon and LivingSocial are two leading buyer cooperative sites in the United States (there are many in other countries as well).

Online Retailing: E-Commerce

(p284) E-commerce is one of the most visible e-business models. In this business model, merchants set up online storefronts and sell to businesses and consumers.. In the e-commerce model, merchants, such as Zappos, set up storefronts online and sell to businesses and consumers. Online companies can sell a wider and deeper assortment of products in smaller quantities than offline stores because they are not bound by space constraints. The "long tail" refers to the ability to increase revenue by selling small quantities of large numbers of products profitably online.

Intermediaries

(p288) What are the types of intermediaries in a distribution channel? Online channel intermediaries--Wholesalers, Brick-and-mortar and online retailers, Brokers, Agents Manufacturers' agents represent the seller, whereas purchasing agents represent the buyer.

Social Commerce

(p289) Social commerce uses social media and consumer interactions to facilitate online sales. Product rating, recommendation and review sites allow for the sharing aspect critical to social commerce. 18-23% of Pinterest users also visited online retailers. Social sign-in Over half of social media users prefer to use Facebook to sign into a Web site.

Distribution channel length and functions

(p292-293) Channel length refers to the number of intermediaries between the supplier and the consumer. Direct distribution channels have no intermediaries. Indirect distribution channels have one or more intermediaries. Eliminating intermediaries can potentially reduce costs. Disintermediation describes the process of eliminating traditional intermediaries.

Transactional Functions

(p293-294)Transactional Functions include: Making contact with buyers. Marketing communication strategies. Matching products to buyer's needs. Negotiating price. Processing transactions.

product

A ________ is a bundle of benefits that satisfies needs of organizations or consumers. Includes goods, services, ideas, people, and places. Products such as search engines are unique to the internet while others simply use the internet as a new distribution channel.

brand

A brand includes a name, symbol, or other identifying information. When a firm registers the information with the U.S. Patent Office, it becomes a trademark and is legally protected. A brand represents a promise or value proposition to its customers. Delivering on this promise builds trust, lowers risk, and helps customers by reducing stress of making product switching decisions. (pg. 232)

Internet as an efficient market

A market is efficient when customers have equal access to information about products, prices, and distribution. In an efficient market, one would expect to find: Lower prices. High price elasticity. Frequent price changes. Smaller price changes. Narrow price dispersion. (pg259-260)

Customer Codesign via Crowdsourcing

Internet technology allows collaboration to occur electronically among consumers and across international borders. Software developers often seek customer input about new products. They often allow users to download beta version products, test them, and provide feedback. Good marketers look for customer feedback to improve products. Some set up sites to gather customer ideas and input: mystarbucksidea.com. (244)

6 categories

List six new product strategy categories and provide internet examples of each. 1. Discontinuous Innovations-hula hopps and computers 2. New product lines- Microsoft 3. Additions to Existing Product Lines-USA Today 4. Improvements or revisions-Web2Mail; Gmail, Hotmail, Yahoo! Web mail 5. Reposition Products- Yahoo!, America Online, MSNBC repositioned its news organization for younger viewers.

The Price of an iPhone

Mobile apps have different pricing and revenue models. Freemium is when companies offer a basic product for free and an upgraded version for a fee. Lite versions are sold at low prices with fewer features. Full price versions include more features. In June 2011, 52% of top game app revenue came from freemium games. So how can companies monetize apps? --Some marketers expect users to upgrade to versions containing more advanced features after they've joined the free version. Others sell advertising in the freemium apps and get paid for each click-through and still others sell products within the apps themselves. Companies like Netflix use freemium apps to move users to their paid Web services. When the freemium version of the Instapaper app was removed, sales of the paid app increased and reduced costs--reviews were better for the paid app than the free app The company also noticed that few people upgraded from freemium to the paid version. (251)

Functions of a Distribution Channel

(p293-297) Channel functions can be characterized as follows: Transactional-making contact with buyers and using marketing communication strategies to make buyers aware of products. Logistical-include physical distribution activities such as transportation and inventory storage, as well as the function of aggregating product. Facilitating-include market research and financing

Logistical Functions

(p294-297) Logistical functions include physical distribution activities, such as: Transportation Inventory storage Aggregation of products Logistical functions are often outsourced to third-party specialists such as UPS or FedEx. Radio frequency identification (RFID) tags are used to transmit a signal to scanners. Third-party logistics providers such as UPS or FedEx can provide value-added services.

The Last Mile Problem

(p297) 25% of deliveries require multiple delivery attempts. 30% of packages are left on doorsteps, with possibilities for theft. Innovative firms are introducing solutions. Smart box. Retail aggregator model: delivery at convenience stores or service stations. E-stops, storefronts for customer package pickups. Order online for offline retail delivery.

Market Research

(p297) Market research is a major function of the distribution channel. There are costs and benefits of internet-based market research. Some information is free. Employees can conduct research from their desks. Internet-based information tends to be timelier. Web-based information is in digital form. E-marketers can receive detailed reports.

Financing

(p298) Intermediaries want to make it easy for customers to pay in order to close the sale. Credit card companies have formed Secure Electronic Transaction (SET). Legitimizes merchants and consumers. Protects consumers' credit card numbers. U.S. customers have a maximum $50 liability for purchases made with a stolen card.

Distribution System

(p298) There are 3 ways to define the scope of the channel as a system. Distribution functions that are downstream from the manufacturer to the consumer. The supply chain, upstream from the manufacturer, working backward to raw materials. Consider the supply chain, manufacturer, and distribution channel as an integrated system called the value chain or integrated logistics.

Exhibit 11.10

(p299) Supply chain management (SCM) refers to the coordination of the flow of material, information, and finance. Key functions of supply chain management are continuous replenishment and build to order to help eliminate inventory. Supply chain participants use enterprise resource planning (ERP) systems to manage inventory and processes.

Channel Management and Power

(p300) Channel management requires coordination, communication, and control to avoid conflict among channel members. Electronic data interchange (EDI) is effective for establishing structural relationships among businesses. The goal is to create an internet-based, open system so that suppliers and buyers can seamlessly integrate their systems.

B2C Market

(p301) U.S. consumers spent $194.3 billion online during 2011, only 4.6% of all retail sales. Besides revenue, B2C performance metrics may include: ROI. Customer satisfaction levels. Customer acquisition costs. Conversion rates. Average order values.

B2B Market

(p306) It is impossible to measure B2B revenue because it happens behind company walls. B2B metrics may include: Time from order to delivery. Order fill levels. Other activities that reflect functions performed by channel participants.

Attributes

Attributes include quality and specific features. Benefits are the same features from a user perspective. The internet increases customer benefits in ways that have revolutionized marketing. Media, music, software, and other digital products can be presented on the Web. Mass customization is possible. User personalization of the shopping experience can be achieved.

brand equity

Brand equity is the intangible value of a brand, measured in dollars. A great brand taps into popular culture and touches consumers. 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 10 of all brands. (pg. 235) Exhibit 9.3 displays rankings for some of the top brands.

Co-branding

Co-branding occurs when two companies form an alliance and put their brand names on a product: Sports Illustrated co-brands with CNN as CNNSI. Yahoo! Has joined with TV Guide and Gist to provide TV listings. EarthLink joined with Sprint in 1998 to provide ISP services. This practice 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.

customer value

Customer Value = Benefits - Costs Product decisions must be made that deliver benefits to customers. Attributes (include overall quality and specific features--the internet increases customer benefits--move from atoms to bits) Branding (brand includes a name, a symbol, or other identifying information--pg. 232-242) Support Services (Customer support is a critical component in the value proposition; customer experience and service is important--pg. 242) Labeling (product labels identify brands, sponsoring firms, and product ingredients, and often provide instructions for use and promotional materials--labels on tangible products create product recognition and influence decision behavior at the point of purchase pg. 242) Packaging

Support Services

Customer support is a critical component in the value proposition. Customer service reps help customers with installation, maintenance, product guarantees, service warranties, etc. to increase customer satisfaction. CompUSA combines online and offline channels to increase customer support. (242)

Geographic Segment Pricing

Geographic segment pricing can help a company relate its pricing to regional or country factors, including competitive pressures, local costs, etc. Pricing differs by geographic area. May vary by country. May reflect higher costs of transportation, tariffs, margins, etc. (pg270)

media e-business model

Google uses a _____ __-_________ ______ to generate revenue, 96% of its revenues from advertising. Google's product mix includes 24 search products, 3 advertising products, 20 applications, and many enterprise products. Pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers.

Google's strategy for creating value

Describe Google's strategy for creating value: attributes, branding, support services, and labeling...Google pays close attention to user value, keeps costs low, and delivers eyeballs to advertisers. 1) Google got the technology right at a low cost 2) Google invented an innovative new search strategy: ranking search query page results based on keywords and popularity 3) Google maintained a customer focus, used simple graphics, allowed no advertising on the homepage and

Dynamic pricing

Dynamic pricing is the strategy of offering different prices to different customers. Airlines have long used dynamic pricing to price air travel. Dynamic pricing can be initiated by the seller or buyer. There are 2 types: Segmented pricing Price negotiation (pg268)

Electronic money

Electronic money has distinct advantages for online retailers. It is more efficient, with lower transaction fees, and draws new customers without credit risk fears. Allow to sell to customers without credit cards or who don't want to put their credit cards in online. Multiple payment options can actually entice more people to buy online. (p266)

Payment Options

Electronic money uses the internet and computers to exchange payments electronically. Off-line e-money payment systems include: Smart chips in cell phones. Mobile wallets. For one-time payments, PayPal has become the industry standard with over 113 million accounts worldwide. Online, 61 percent os US consumers pay bills with a bank's online banking service, showing the huge adoption of e-money systems. (pg263)

Market Efficiency

External market factors place downward pressure on internet prices and contribute to efficiency. Shopping agents such as BizRate.--facilitate consumer searches for low prices Flash sales.--limited time offers for site members to purchase a product at a deep discount High price elasticity.--the variability of purchase behavior with changes in price (leisure travel is an elastic market) Reverse auctions.--allow buyers to name their price and have sellers match it Tax-free zones.--most online retailing takes place over state lines and many buyers do not pay tax on purchases Venture capital.--companies can price lower bc they do not have a profit-maximization pricing objective Competition.--competitors are willing to set prices that return little to no short-term profits to gain brand equity and market share Frequent price changes.--the online market experiences more frequent price changes than offline market bc 1)online competitors jockey with competitors, 2)shopping agents give consumers excellent comparative information about prices, 3) sellers can easily change prices using databases to drive web page content, 4) firms can offer volume discounts in smaller increments than in an offline environment Smaller price change increments.--smallest offline price change was .35 cents when online was .01 cent; price sensitive customers (pg260-261)

The internet puts downward pressure on prices

Firms can save money by using internet technology for internal processes. Self-service order processing. Just-in-time inventory. Overhead. Customer service. Printing and mailing. Digital product distribution. These efficiencies usually result in lower prices for customers online. (p257)

online extensions

Firms can use existing brand names or create new brands on the internet. Some firms may use different names offline and online to avoid risk if the new product or channel should fail. Sports Illustrated created thriveonline.com. Wired originally changed its online version name to Hotwired to convey a high-tech image and perhaps to position two publication differently--since reverted to Wired brand name. When product with offline sales introduce online extensions, many choose to use the same brand name (New York Times became nytimes) Creating a brand name--when selecting a brand name, it is critical to select a good name--good brand names should suggest something about the product, differentiate the product from competitors, and should be suitable for legal protection. On the internet, a good brand name should be short, memorable, easy to spell, and translate well into other languages. (pg. 238)

Product Mix Strategies

Firms will select one or more of the following strategies, based on marketing objectives, risk tolerance, resource availability, etc. Discontinuous innovations are new-to-the-world products. (hula hoops and computers when introduced) New-product lines are new products in a different category for an existing brand name. (these are introduced when companies take an existing brand name and create new products in a completely different category) Additions to existing product lines occurs when organizations add a new flavor, size, or other variation to a current product line (246) Improvements or Revisions of Existing Products are introduced as new and improved and replace the old product. Repositioned Products are current products that are either targeted to different markets or promoted for the new uses.

Fixed pricing

Fixed pricing (menu pricing) occurs when sellers set the price and buyers must take it or leave it. Everyone pays the same price. Most US brick and mortar retailers use this model. Three common fixed pricing strategies are: Price leadership--the lowest-priced product entry in a particular category (productive for the internet) Promotional pricing--to encourage a first purchase, encouraging repeat business, and close a sale Freemium pricing--most companies offer free versions of products. Free PROMOTIONAL pricing is where a free product is offered for a limited time. (30 day free trial) (pg268)

Sellers usually set pricing levels when using segmented pricing, and buyers usually initiate pricing when bidding for items online.

How do e-marketers use geographic, value segment, and negotiated pricing online? (p270-271)

Fixed vs dynamic pricing

How does fixed pricing differ from dynamic pricing? Fixed--setting one price for all buyers Dynamic--varying prices for individuals (251)

Me-too lower cost products

Improvements or revisions of existing products. Repositioned products can be targeted to different markets or promoted for new uses. Me-too lower-cost products are introduced to compete with existing brands by offering a a price advantage. This strategy can be considered promotional sampling. Although the B2C market gets most of the attention, many cutting-degree technology products and trends in the B2B markets...

billion

In 1998, co-founders Brin and Page delivered an innovative new search strategy that ranked results on popularity as well as keywords. Today, Google performs over a ______ searches a day in 181 countries, speaks 146 languages and is the most-visited U.S. Web site.

New Product Strategies

Many new products, such as YouTube, Yahoo!, and Twitter, were introduced by "one-pony" firms built around the company's first successful product. Other firms have added internet products to an already successful product mix. Product mix strategies can help marketers integrate offline and online strategies. (245)

External Factors Affecting Online Pricing

Market structure and market efficiency affect online pricing strategy. The seller's leeway to set prices varies by market type: Pure competition. (MP3 music downloads) Monopolistic competition. (Online University Courses) Oligopolistic competition. (expedia and travelocity) Pure monopoly. consists of one seller whose prices are usually regulated by the government If price transparency results in a completely efficient market, sellers will have no control over online prices. Page 258

The Internet Puts Upward Pressure on Prices

Online customer service-- is no longer a competitive edge, but it is an expensive competitive necessity. (p256) Distribution and shipping costs--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. Retailers past shipping costs to customers. Affiliate programs add commission costs--Many websites pay a commission on referrals through affiliate programs. The commission, like all channel intermediary costs, has the effect of inflating the price of the item or lowering company profits if referral fees are absorbed. Site development and maintenance--Website development and maintenance are not cheap. Social media maintenance--Companies spend a lot of staff time monitoring and responding to consumer posts on Facebook, Twitter and other social media. Customer acquisition costs (CAC)--The cost of acquiring new customers online is quite high; this factor caused the downfall of many dot-com firms in 2000. The average CAC for early online retailing was $82. **Many customers are not nearly as brand loyal online as they are offline.**

Internet Domain Names

Organizations should purchase alternative or related names and spellings. Coca-Cola owns cocacola.com, coca-cola.com and coke.com, among others. Picking the right domain name can make a huge difference in: Directing people correctly to a site. Building consistency in marketing communications.

Internet Domain Names

Organizations spend a lot of time and money developing powerful, unique brand names for strong brand equity. March 2012--9.4 billion indexed Web pages and 644 million Websites.. Most of the top global brands use their brand names in the Web site name.. URLs are numbers, but users can remember names better. http--browser should expect data using the hypertext protocol-meaning documents that are linked together using hyperlinks..Disney's address is disney.go.com to let people know they should visit Disney, but typing disney.com in the browser immediately redirects to the same place. Sometimes URLs start with ftp (file transfer protocol) will send a data file to the user (most likely a document that is not an HTML page). The www is not necessary and register their name with/without it and use an automated re-firect command. A URL (Uniform Resource Locator) is a Web site address. Also called IP address (internet protocol) and domain name. http:// indicates that the browser should expect data using the hypertext protocol. The top-level may be .com or a country name, such as .mx for Mexico or .uk for the United Kingdom. "www" is no longer necessary and most sites register their name with and without it.

Price is...

Price is the sum of all values that buyers exchange for the benefits of a good or service. Price is the sum of all values (such as money, time, energy, and psychic cost) that buyers exchange for the benefits of having or using a good or service Throughout history, prices were negotiated between buyers and sellers,and that remains the dominant model in many emerging economies; fixed price policies are a modern idea. The internet is taking us back to an era of dynamic pricing--varying prices for individual customers. The internet also allows for price transparency--both buyers and sellers can view prices online. (p251-252)

Seller View

Sellers view price as the amount of money they receive from buyers, unless they are making a barter exchange. Seller costs for producing the good or service represent the pricing floor, under which no profit is made. The seller's perspective on pricing includes internal and external factors. Internal factors include the firm's strengths/weaknesses from its SWOT analysis, its overall pricing objectives, its marketing mix strategy, and the costs involved in producing and marketing the product. External factors include market structure, competition, the buyer's perspective and market efficiency. Internal factors include pricing objectives, marketing mix strategy, and information technology. External factors include market structure and market efficiency. Pricing objectives may be: Profit oriented (MOST COMMON) -- current profit maximization Market oriented--building a larger customer base may lead to lower costs and higher long-run profit. Low prices generally build market share. (p255) Competition oriented--to price according to what competitors charge for similar products, paying less attention to the company's own costs or to demand. The internet's pricing transparency gives firms quicker access to competitive price changes and increases the number and speed of online price changes.

Internal Factors: Marketing Mix Strategy

Successful companies use an integrated and consistent marketing mix strategy. The internet is only one sales channel and must be used in concert with other marketing mix elements. Marketing managers carefully consider how to price the same product for sale in both online and offline channels.

ICANN

The Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit corporation that makes decisions about protocol and names. .xxx and .post are two recently-approved extensions. GoDaddy and other sites provide domain registration services at low cost. More than 97% of words in the dictionary have already been registered as domain names.

Chapter 10 story

The Price of an App iPhone Story: The difference between Free, Light and Full: Freemium is a combination of free and premium where companies offer a basic product for free and then provide upgraded versions for a fee. Lite versions of apps are sold at low prices and do not include all features of the full app versions. Full price versions include many more features.

Brand relationship process

The explosion of social media sites escalates the brand relationship process with peer-to-peer communication about brands. Ernst & Young found that 63% of entertainment and media CEOs used social media to build brands. (p237) Forrester Research identified 3 roles for social media in branding: 1. Build trust through social media relationships with consumers. 2. Differentiate the brand in social media to enhance the emotional connections. 3. Nurture consumers in social media to build brand loyalty. (B2C market the Web and internet are first in importance for brand building, social media are second, search marketing third, followed by content development and e-mail marketing--and in B2B market, social media are fourth, after Web, content and e-mail) Websites are still important for brand building (p 237)

Is the Net an Inefficient Market?

The internet does not act like an efficient market with respect to narrow price dispersion for various reasons: Branding and brand strength. Differentiation. Online pricing. Delivery options. Time-sensitive shoppers. Switching costs. Second-generation shopping agents. (pg262)

Meaning of price...

The meaning of price depends on viewpoints of the buyer and the seller. Buyer's costs may include money, time, energy, and psychic costs. But they often enjoy many cost savings: The internet is convenient and fast. Self-service saves time. One-stop shopping & integration save time. Automation saves energy.

Value Segment Pricing

The seller recognizes that not all customers provide equal value to the firm. Pareto principle: 80% of a firm's business comes from the top 20% of customers. A firm's five-star customers contribute disproportionately to revenues and profits. (pg270)

Buyer control

The shift in power from seller to buyer affects (e-marketing) pricing strategies. (p254) Buyers set prices and sellers decide whether to accept the prices in a reverse auction. (Priceline--you name the price you want to pay for hotels, cars, etc.) In the B2B market, buyers bid for excess inventory at exchanges. In the B2G market, government buyers request proposals for materials and labor needed for a particular project, and businesses bid for the work. The government buyer selects the lowest price, in effect having control over the exchange. Online sellers are more willing to negotiate than their offline counterparts in most industrialized nations, this giving power to buyers in the exchange. Buyer power online is also based on the huge quantity of information and product availability on the Web. Online buyers are becoming more sophisticated. Also, the social media save time and money when consumers can look at online reviews written by people like them. With power comes risk. (p255)

Negotiated Pricing and Auctions

Through negotiation, the price is set more than once in a back-and-forth discussion. Online auctions such as eBay utilize negotiated pricing. In the C2C market, trust between buyers and sellers is an important issue. Ebay uses a feedback system to assist buyers. B2B auctions, such as uBid, are an effective way to unload surplus inventory. (pg271)

existing brand name online

Under what circumstances would it make sense to take an existing brand name online? When would it not make sense? To differentiate the online brand from the offline brand; the firm could jeopardize the good name of the brand

Criteria for naming internet domains

What are some important criteria for naming internet domains? Good brand names should suggest something about the product, should differentiate the product from competitors, and should be suitable for legal protection...one the internet, a brand name should be short, memorable, easy to spell and translate well into other languages.

brand names

What are the arguments for and against using existing brand names on the Web? It makes sense when the brand name is well known and has a strong brand equity... may not want to use the same brand name due to jeopardizing the brand's good name and also a powerful internet success might inadvertently reposition the offline brand. differentiating the online brand from the offline brand

Distribution channel

What are the three major functions of a distribution channel? Producers, Intermediaries and Buyers

distribution channel

What is a distribution channel? (p277-288) a group of interdependent firms that work together to transfer product and information from the supplier to the consumer...it is composed of the following participants: Producers--manufacturers and their suppliers, or originators of the product or service. Intermediaries--Firms that match buyers and sellers and mediate the transactions among them (ex. wholesalers and retailers) Buyers--Consumers or users of the product or service

e-marketers to enhance new product development

What techniques can e-marketers employ to enhance new product development? Developers must now combine digital text, graphics, video and audio and use new internet delivery system. They must integrate front-end customer service operations with back-end data collection and fulfillment methods to deliver product.

Google and advertising

Why do you think Google's primary revenue comes from advertising? What other products do you think Google could monetize? Google delivers narrowly targeted relevant ads based on keyword searches (pg 229)

PayPal a good idea for merchants

Why is PayPal a good idea for merchants? Electronic cash is an important pricing component. When merchants use PayPal or other systems, their costs increase and this is reflected in the product's price...Second, when online purchasing is easier for customers, this balances the higher price--recall that the costs for consumers include money, time, energy, and psychic costs. PayPal's merchant pricing system demonstrates the skill that goes into pricing strategy. (p266)

Customer value online

Why is value tied to the entire product experience? Customer's first awareness of a product, continues at all customer touch points, and ends with the actual product usage and post purchase customer service. It even includes the compliments a consumer gets from friends.