Chapter 10 MKTG

Major Ethical/Legal Issues

- Privacy - Online Fraud - Intellectual Property Protection

Privacy

Companies cannot control the internet environment where cybercrime exists. In the US, the FTC tries to prevent identity theft, online fraud, and data breaches. A significant privacy issue is the personal information companies collect from website visitors - Concerns that this violates privacy rights - Fear that hackers can gain information stored by companies Web advertisers use the information and see more regulation as a threat.

Trends in digital marketing

Consumers increasingly tend to publish their thoughts, opinions, reviews and product discussions on blogs or digital media

Control

Consumers' ability to regulate the information they receive via the Internet

Product Considerations

Creates opportunities to add services to enhance products (games, instructional video, tips on how to use) Some products are only available digitally Some companies use online contests to develop better products Pay attention to consumer-generated "brand stories" that address quality and performance. Learning about consumer needs

Online Fraud

Cybercriminals increasingly use popular social networking sites to commit fraud. Hacking attacks have almost become the norm. Stealing personal information and committing identity theft. This may be a major threat to the continued growth of internet marketing. Consumers must always be careful what information they disclose online

Intellectual Property

Intellectual property can be anything from ideas and creative materials to songs, movies, books, or other products IP is generally protected by copyrights and patents - Not enforced uniformly in different countries IP protection is a growing problem in a digital age - Software industry is especially vulnerable

Price Considerations

Price relates to the concept of value, and it is the most flexible element of the marketing mix. Digital marketing facilitates both price and nonprice competition. Deal websites allow consumers to compare prices of products and find the best deals Forces the seller to be competitive and improve products so that customers focus on benefits other than price. Dynamic pricing

spectator

Read online information but do not produce any themselves.

connectivity

Social networking can connect customers with companies and with other customers

E-Marketing

Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools

Promotion Considerations

The most important impact is on promotion. Social networks give you a way to approach promotion in entirely new ways. A major advantage of internet advertising is being able to track advertising statistics. B2B promotion uses personal selling, and internet communication reduces travel needs. B2B YouTube lets businesses explain to customers and prospects how to use complex products.

Distribution Considerations

The role of distribution is to make products available at the right time, at the right place, and in the right quantities. The Internet is a new distribution channel. -Reduces inefficiencies, costs and redundancies and increases speed Shipping times and costs are an important element in attracting customers. Bricks and clicks, "webroom," omni-channel retailing.

______ usually constitute a smaller part of the online population than the other groups. a) Collectors b) Spectators c) Joiners d) Creators e) Critics

a) Collectors

The ability to obtain digital information is referred to as a) accessibility. b) addressability. c) interactivity. d) connectivity. e) control.

a) accessibility.

Sears sells online through its website, while also selling through physical store locations. This type of retailing is referred to as a) bricks-and-clicks. b) side-by-side. c) bricks-and-mortar. d) online-specialty. e) web-only.

a) bricks-and-clicks.

Consumers who act as ______ are becoming increasingly important to online marketers as a conduit for addressing consumers directly. a) creators b) critics c) collectors d) joiners e) spectators

a) creators

Interactivity

allows customers to express their needs and wants directly to a company in response to its marketing communications.

Critics

are people who comment on blogs or post ratings and reviews

collectors

are people who gather information and organize content generated by critics and creators

Creators

are those consumers who construct their own media outlets, such as blogs, podcasts, consumer-generated videos, and wikis

_______ facilitates _______, as it enables customer engagement to facilitate product innovation. a) Accessibility / customization b) Addressability / relationship marketing c) Accessibility / relationship marketing d) Control / relationship marketing e) Control / customization

b) Addressability / relationship marketing

_______ uses the Internet and mobile and interactive channels to develop communication and exchanges with customers. a) Digital marketing b) Digital media c) Electronic marketing d) Digital electronics e) E-marketing

b) Digital media

______ are computer-based online simulated environments that involve participants. a) Wikis b) Virtual realities c) Podcasts d) Blogs e) Photo-sharing

b) Virtual realities

A new trend in video marketing is the use of a) Blogs b) amateur filmmakers c) Twitter announcements d) advertising firms to develop videos e) Virtual realities

b) amateur filmmakers

Redbox has established outlets in the simulated environment of Second Life. Your _____ is able to rent a movie from a Redbox. a) clone b) avatar c) pet d) Q e) dynasty

b) avatar

One trend that has caused consumer-generated information to gain importance is a) an increase in mobile digital technology. b) consumers' tendencies to trust other consumers over corporations. c) the cultural trend of consumers being influenced by the "village." d) the increase in adults other than parents influencing children. e) a reduction in advertising expenditures.

b) consumers' tendencies to trust other consumers over corporations.

Coca-Cola entices consumers to their website through contests and games, but they cannot force people to visit their website due to the ______ characteristic of online media. a) accessibility b) control c) interactivity d) addressability e) connectivity

b) control

Electronic media that function using digital codes are called a) digital marketing. b) digital media. c) electronic marketing. d) digital electronics. e) e-marketing

b) digital media.

Consumers can order a computer through Best Buy's website and pick up the computer at the store. This type of delivery is called a) click and brick. b) site to store. c) bricks and mortar. d) digital to domestic. e) nontraditional.

b) site to store.

Digital media have created opportunities for companies to a) gain more control over what the consumer sees. b) target specific markets. c) offer the exact experience as a brick and mortar store. d) manage information that is disseminated through the web. e) stimulate all five senses during the on-line shopping experience.

b) target specific markets.

Which of the following characteristics distinguish online media from traditional marketing? a) Experience, networking, and personal contact b) Social networking, personal contacts, control, and salesmanship c) Addressability, interactivity, accessibility, connectivity, and control d) Environment, responsiveness, customization, and affordability e) Dynamic responsiveness, control, friendliness, and attention-getting

c) Addressability, interactivity, accessibility, connectivity, and control

______ are online users who do not participate in any digital online media. a) Collectors b) Spectators c) Inactives d) Creators e) Critics

c) Inactives

Anyone who becomes a member of MySpace, Twitter, Facebook, or other social networking sites is a a) Collector. b) Spectator. c) Joiner. d) Creator. e) Critic.

c) Joiner.

Pizza hut has restaurants in India where Joiners make up the majority of the online population. To match their marketing efforts with the characteristics of the population, Pizza Hut should a) have a contest to gather consumer-generated content. b) ignore comments from Critics. c) create a Fan Page and invite consumers to post their thoughts. d) post its own promotional messages on blogs and websites. e) stick to traditional promotions rather than social networking.

c) create a Fan Page and invite consumers to post their thoughts.

Which of the following refers to the strategic process of distributing, promoting, pricing products, and discovering the desires of customers using digital marketing. a) digital orientation b) digital media c) electronic marketing d) digital electronics e) electronic processing

c) electronic marketing

______ are more consumer-driven than traditional media. a) Television commercials b) Radio spots c) Print ads d) Digital media e) Billboard advertisements

d) Digital media

_______ involves the use of digital networks to provide linkages between information providers and users. a) accessibility. b) addressability. c) interactivity. d) connectivity. e) control.

d) connectivity.

Red Bull has started introducing new products and information to bloggers in the hope that they will pass the information on to their online followers. In this case, the bloggers are a) collectors. b) spectators. c) joiners. d) creators. e) critics.

d) creators.

As a result of the increasing usage of digital media, some of the marketer's control over dispensing product information has been placed a) in limbo. b) under the authority of the government. c) in the hands of the company's competitors. d) in the hands of the consumer. e) in the hands of the stockholders.

d) in the hands of the consumer.

Walmart has stores in China where Spectators make up the majority of the online population. To match their marketing efforts with the characteristics of the population, Walmart should a) have a contest to gather consumer-generated content. b) ignore comments from Critics. c) create a Fan Page and invite consumers to post their thoughts. d) post its own promotional messages on blogs and websites. e) stick to traditional promotions rather than social networking.

d) post its own promotional messages on blogs and websites.

One trend that has caused consumer-generated information to gain importance is a) the recession. b) the globalization of companies. c) the increase in store brands. d) the increase of consumers using digital media to publicize their own product reviews. e) the increase in consumer buying power.

d) the increase of consumers using digital media to publicize their own product reviews.

______ refers to customers' ability to regulate the information they view and the rate and sequence of their exposure to that information. a) Accessibility b) Addressability c) Interactivity d) Connectivity e) Control

e) Control

Of the online user segments in The Social Technographics Profile, the largest group is most countries is a) Creators b) Critics c) Collectors d) Joiners e) Spectators

e) Spectators

A(n) ________ channel provides the opportunity for a marketer to customize promotions. a) accessible b) controlled c) marketing d) linked e) addressable

e) addressable

Smart phones and PDAs contain _______ that help consumers access more information about businesses. a) treatments b) digits c) modulars d) actions e) applications

e) applications

KFC has restaurants in Mexico where Inactives make up the majority of the online population. To match their marketing efforts with the characteristics of the population, KFC should a) have a contest to gather consumer-generated content. b) ignore comments from Critics. c) create a Fan Page and invite consumers to post their thoughts. d) post its own promotional messages on blogs and websites. e) focus more on traditional promotions rather than social networking.

e) focus more on traditional promotions rather than social networking.

Blockbuster has set up a website that enables customers to converse with the company. This is an example of a(n) ______ website. a) accessible b) controlled c) linked d) addressable e) interactive

e) interactive

Digital Media

electronic devices and media platforms such as computers, cell phones, digital video, social networking sites, the Internet, video games, and virtual worlds that allow users to create, communicate, and interact with one another or with the device or application itself

joiners

includes anyone who becomes a user of social networking sites or other online communities to connect and network

addressibility

the ability of the marketer to identify customers before they make a purchase

Accessibility

the ability to obtain digital information on competing products, prices, reviews and details on firms

social networking

the creation and maintenance of personal and business relationships especially online

Two trends that have caused consumer-generated information to gain importance is a) the recession and a reduction of advertising expenditures. b) globalization and the cultural trend of consumers being influenced by the "village." c) the increase of consumers sharing their opinions through digital media and the consumer's mistrust of information from corporations. d) an increase in mobile digital technology and store brands. e) an increase in children's influence over the purchasing decision and the fact that adults other than parents influence children.

c) the increase of consumers sharing their opinions through digital media and the consumer's mistrust of information from corporations.