e commerce chapter 4 marketing on web

COMMUNICATING WITH DIFFERENT MARKET SEGMENTS how to

Identifying groups of potential customers is just the first step in selling to those customers. An equally important component of any marketing strategy is the selection of communication media to carry the marketing message.

what manager response when they asked about business

If you ask managers to describe what their companies are selling, they usually provide you with a detailed list of the physical objects they sell or use to create a service

what should we consider when make marketing strategy

When creating a marketing strategy, managers must consider both the nature of their products and the nature of their potential customers

what we nee to known from marketing on web

• When to use product-based and customer-based marketing strategies • Communicating with different market segments • Customer relationship intensity and the customer relationship life cycle • Using advertising on the Web • E-mail marketing • Technology-enabled customer relationship management • Creating and maintaining brands on the Web • Search engine positioning and domain name selection

what are sequence to make customer based marketing strategy?

A good first step in building a customer-based marketing strategy is to identify groups of customers who share common characteristics. Sabre Holdings is a company that sells marketing services and technology to support those services to the travel industry. Its customers can be categorized into three groups: airlines, travel agencies and large companies' in-house travel departments, and consumers who would be interested in the Travelocity Web site. The Sabre Holdings home page, which appears in Figure 4-1, includes links to separate sections of its site that are designed to meet the needs of each of these customer groups, airlines, consumers, and travel agencies (including corporate travel departments). By following these links, Sabre's different categories of customers can find specific products and services targeted to each of their needs.

ADVERTISING ON THE WEB

Advertising is all about communication. The communication might be between a company and its current customers, potential customers, or even former customers that the company would like to regain. To be effective, firms should send different messages to each of these audiences.

sub groups in marketing strategy

Although Sabre's approach of breaking customers into three main groups is a good first step, subgroups probably exist within each of those groups. Marketers can use their experience with selling in their industries to identify those subgroups and then develop marketing strategies and tactics that will effectively reach customers in each subgroup.

Trust in three information dissemination models

Although mass media offers the lowest level of trust, many companies continue to use it successfully. The cost of mass media advertising can be spread over the many people in its large audiences. For example, the cost of creating and running a television ad can be millions of dollars, but that ad will be viewed by millions of people. Thus, the cost of advertising per viewer is very low. Its low cost per viewer makes mass media advertising attractive to many companies. In 2009, Ford Motor Company shifted a significant portion of its advertising budget from traditional car ads that focused on new vehicle features to ads that told stories about how Ford managers are running the company more intelligently than its competitors. Ford's two major U.S.-based competitors, Chrysler and General Motors, both needed taxpayer bailout money to survive the global economic recession. Ford was able to use mass media advertising to draw a sharp contrast between it and its competitors in the minds of millions of potential customers. The message was straightforward and could be delivered to all of Ford's customers (and potential customers) using the same language and images. Thus, mass media advertising was an ideal choice for delivering this messag

Market Segmentation

Companies' response to the decrease in advertising effectiveness was to identify specific portions of their markets and target them with specific advertising messages. This practice, called market segmentation, divides the pool of potential customers into groups, or segments. Segments are usually defined in terms of customer characteristics such as age, gender, marital status, income level, and geographic location. Thus, for example, unmarried men between the ages of 19 and 25 might be one market segment.

one-to-one marketing

Dell Premier accounts give users a high level of customer-based market segmentation. In these accounts, Dell offers each customer its own Dell Web site. Dell can customize a company's Premier account pages to show product selections for which price and terms have already been negotiated. Dell even allows individual employees of its customers to create their own personalized pages within their companies' Premier pages. This highly customized approach to offering products and services that match the needs of a particular customer is called one-to-one marketing

Offering Customers a Choice on the Web

Dell has done many things well in its online business. Its Web site offers customers a number of different ways to do business with the company. Its U.S. home page includes links for each major group of customers it has identified, including home, small business, medium and large business, government, education, and health care. Once the site visitor has selected a customer category, specific products and product categories are available as links.

psychographic segmentation

In psychographic segmentation, marketers try to group customers by variables such as social class, personality, or their approach to life. For example, an auto company might direct advertising for a sports car to customers who are gregarious and have a high need for achievement. The use of psychographic segmentation has increased dramatically in recent years as marketers attempt to identify characteristic lifestyles and then design advertising to reach people who see themselves as having a particular lifestyle.

how physical world are

In the physical world, companies can convey large parts of their messages by the way they construct buildings and design their floor spaces. For example, banks have traditionally been housed in large, solid-looking buildings that provide passersby an ample view of the main safe and its thick, sturdy door. Banks use these physical manifestations of reliability and strength to communicate an important part of their service offerings—that a customer's money is safe and secure with the bank.

potential market with funnel model for cutomer life cycle

In this funnel model of the steps that potential customers take as they become loyal, repeat customers are on the right side of the figure. The top of the figure explains the increasing level of commitment that occurs in each step. Using market research and past history as a guide, the marketing manager develops the numbers that show the effectiveness of the planned strategy. The wider the right end of the funnel, the better the strategy; that is, the more prospects are converted into loyal customers. The funnel model can be used in planning marketing strategies by comparing the projected results shown in the diagram with the results for alternative strategies shown in separate diagrams. The funnel model can also be used to show results that can then be compared with the costs of running the marketing campaign. Either way, the model gives marketing managers a tool for conceptualizing and evaluating alternative strategies

what customer need

Many of these former catalog retailers organize their Web sites from an internal viewpoint, that is, according to the way that they arranged their product design and manufacturing processes. If customers arrive at these Web sites looking for a specific type of product, this approach works well

geographic segmentation

Marketers have traditionally used three categories of variables to identify market segments. One variable is location. Firms divide their customers into groups by where they live or work. In this type of segmentation, called geographic segmentation, companies create different combinations of marketing efforts for each geographical group of customers. The grouping can be by nation, state (or province), city, or even by neighborhood. Alternatively, companies can develop one marketing strategy for urban customers, another for suburban customers, and yet a third for rural customers.

Customer Acquisition, Conversion, and Retention: The Funnel Model

Marketing managers need to have a good sense of how their companies acquire and retain customers. They often must evaluate competing marketing strategies to determine which are the most effective ways to attract and retain customers. The funnel model is used as a conceptual tool to understand the overall nature of a marketing strategy, but it also provides a clear structure for evaluating specific strategy elements

usage-based market segmentation

Marketing researchers study how and why people prefer different combinations of products, services, and Web site features and how these preferences are affected by their modes of interaction with the site. Market researchers know that people want Web sites that offer a range of interaction possibilities. Remember that a particular person might visit a particular Web site at different times with different needs and will want an interaction that meets those needs on each visit. Customizing visitor experiences to match the site usage behavior patterns of each visitor or type of visitor is called usage-based market segmentation. Researchers have identified common patterns of online behavior and grouped patterns into categories. One set of categories that marketers use today includes browsers, buyers, and shoppers.

banner ad

Most advertising on the Web uses banner ads. A banner ad is a small rectangular object on a Web page that displays a stationary or moving graphic and includes a hyperlink to the advertiser's Web site. Banner ads are versatile advertising vehicles—their graphic images can help increase awareness, and users can click them to open the advertiser's Web site and learn more about the product. Thus, banner ads can serve both informative and persuasive functions

what are marketing mix are?

Most companies use the term marketing mix to describe the combination of elements that they use to achieve their goals for selling and promoting their products and services. When a company decides which elements it will use, it calls that particular marketing mix its marketing strategy. As you learned in Chapter 3, companies—even those in the same industry—try to create unique presences in their markets. A company's marketing strategy is an important tool that works with its Web presence to get the company's message across to both its current and prospective customers.

what are 4 ps of marketing strategies

Most marketing classes organize the essential issues of marketing into the four Ps of marketing: product, price, promotion, and place. Product is the physical item or service that a company is selling. The intrinsic characteristics of the product are important but customers' perceptions of the product, called the product's brand, can be as important as the actual characteristics of the product. The price element of the marketing mix is the amount the customer pays for the product. In recent years, marketing experts have argued that companies should think of price in a broader sense, that is, the total of all financial costs that the customer pays (including transaction costs) to obtain the product. This total cost is subtracted from the benefits that a customer derives from the product to yield an estimate of the customer value obtained in the transaction. Later in this book, you will learn how the Web can create new opportunities for creative pricing and price negotiations through online auctions, reverse auctions, and group buying strategies. These Web-based opportunities are helping companies find new ways to create increased customer value. Promotion includes any means of spreading the word about the product. On the Internet, new possibilities abound for communicating with existing and potential customers. In Chapter 2, you learned how companies are using the Internet to engage in meaningful dialogues with their customers using e-mail and other means. In this chapter, you will learn even more communication techniques that companies are using to promote their products. For years, marketing managers dreamed of a world in which instant deliveries would give all customers exactly what they wanted when they wanted it. The issue of place (also called distribution) is the need to have products or services available in many different locations. The problem of getting the right products to the right places at the best time to sell them has plagued companies since commerce began. Although the Internet does not solve all of these logistics and distribution problems, it can certainly help. For example, digital products (such as information, news, software, music, video, and e-books) can be delivered almost instantly through the Internet. Companies that sell products that must be shipped have found that the Internet gives them much better shipment tracking and control than did previous information technologies.

Market Segmentation on the Web

The Web gives companies an opportunity to present different store environments online. For example, if you visit the home pages of Juicy Couture and Talbots, you will find that both pages are well designed and functional. However, they are each directed to different market segments. The Juicy Couture site is targeted at young, fashion-conscious buyers. The site uses a wide variety of typefaces, bold graphics, and photos of brightly colored products to convey its tone. The emphasis is to make a bold fashion statement and, presumably, become the envy of your friends. In contrast, the Talbots site is rendered in a more muted, conservative style. The site is designed for older, more established buyers. The messages emphasized are stability, home life, and the trademark Talbots red doors. These images appeal to a market segment of people looking for classics instead of the latest trends.

Trust, Complexity, and Media Choice in marketing stragetgy

The Web is an intermediate step between mass media and personal contact, but it is a very broad step. Using the Web to communicate with potential customers offers many of the advantages of personal contact selling and many of the cost savings of mass media. Figure 4-2 shows how these three information dissemination modes compare on the important dimensions of trust and product (or service) complexity

funnel model importance

The funnel model is very similar to the customer life-cycle model you learned about earlier in this chapter; however, the funnel model is less abstract and does a better job of showing the effectiveness of two or more specific strategies. The funnel is a good analogy for the operation of a marketing strategy because almost every marketing strategy starts with a large number of prospects and converts fewer and fewer of those prospects into serious prospects, customers, and finally, loyal customers.

Segmentation Using Customer Behavior

The point is that the same person requires different combinations of products and services depending on the occasion. In general, the creation of separate experiences for customers based on their behavior is called behavioral segmentation. When based on things that happen at a specific time or occasion, behavioral segmentation is sometimes called occasion segmentation

demographic segmentation

The second category uses information about age, gender, family size, income, education, religion, or ethnicity to group customers. This type of segmentation is called demographic segmentation. Demographic variables are frequently used by traditional marketers because research has shown that customers' need for and usage of products are strongly related to these types of variables. Demographic segmentation also exists on the Web. For example, a number of sites are devoted to women's issues or directed at specific age groups (such as teenagers) whose members tend to purchase music CDs and trendy clothing. Often, demographic and geographic segmenting strategies are combined. For example, an airline might target middle-income families living in Wisconsin and Michigan with midwinter advertising for vacation trips to Florida

when to use customer based marketing approach

The use of customer-based marketing approaches was pioneered on B2B sites. B2B sellers were more aware of the need to customize product and service offerings to match their customers' needs than were the operators of B2C Web sites. In recent years, B2C sites have increasingly added customer-based marketing elements to their Web sites. One of the most noticeable trends in this direction is in university Web sites

browsers and key words

These key words are often called trigger words because they prompt a visitor to stay and investigate the products or services offered on the site. Links to explanations about the site or instructions for using the site can be particularly helpful to this type of customer. A site should include extra content related to the product or service the site sells. For example, a Web site that sells camping gear might offer reviews of popular camping destinations with photos and online maps. Such content can keep a visitor who is in browser mode interested long enough to stay at the site and develop a favorable impression of the company. Once visitors have developed this favorable impression, they are more likely to buy on this visit or bookmark the site for a return visit.

business operate in physical world how do that

Usually, businesses that operate in the physical world can meet only one or a few of a customer's differing behavioral needs. For example, the Chinese restaurant mentioned earlier might offer dining room service and take-out service, but it probably would not offer a drive-through window or a morning coffee kiosk. Very few restaurants are able to offer everything from fast food through a five-course dinner. In the online world, it is much easier to design a single Web site that meets the needs of visitors who arrive in different behavioral modes. Thus, a Web site design can include elements that appeal to different behavioral segments.

main types of marketing strategies

customer based product based

usage-based market segmentation,

customizing visitor experiences to match the site usage behavior patterns of each visitor or type of visitor

identify market segments

s, firms began identifying smaller and smaller market segments for specific advertising and promotion efforts. This practice of targeting very small market segments is called micromarketing. However, the low cost per viewer of traditional mass media advertising campaigns becomes much higher when mass media methods are used to target very small market segments. This cost increase hampered the success of micromarketing strategies. Even though micromarketing was an improvement over mass media advertising, it still used the same basic approach and suffered from the weaknesses of that approach.

Customer-Based Marketing Strategies

used for flexibility in meeting the specific needs of various types of customers; used instead of an approach on websites as collections of products

Product-Based Marketing Strategies

used when customers are likely to buy items from particular product categories, or are likely to think of their needs in terms of product categories