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Introducing Internet Marketing



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Objectives



<i><b>• Subject Overview</b></i>



<i><b>• The Internet and the marketing concept</b></i>


<i><b>• Benefits of the Internet for businesses</b></i>


• The new marketing medium



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Subject Overview



• General Aim and Rationale – the utility of


the Internet as a tool for business to increase


efficiency, competitiveness, and



effectiveness.


• Objectives



• Content



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The Internet and the Marketing


Concept



<sub>Two distinct meaning for marketing</sub>



1. The range of specialist marketing functions


carried out by the firm (marketing research,


public relations..)



2. An approach or concept that can be used as



the guiding philosophy for all functions and


activities



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The Internet and the Marketing


Concept



• The Internet can be applied by companies as an


integral part of the modern marketing concept


since:



– It can be used to support the full range of
organizational functions


– It is a powerful communication medium that integrates
the different parts of the organization


– It facilitates information management


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Internet Marketing Defined



The use of the Internet and related digital


technologies to achieve marketing


objectives and support the modern



marketing concept.



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Business Benefits of the Internet



<i>• Market penetration – sell more existing products </i>


into existing markets




<i>• Market development – Internet is used to sell into </i>


new markets



<i>• Product development – New products or services </i>


developed which can be delivered over the



Internet



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Market and Product Strategic Grid



Market



Development

Diversification



Market



penetration

development

Product



<i>Existing</i> <i>New</i>
<b>Product</b>
<i>N</i>
<i>ew</i>
<i>E</i>
<i>xi</i>
<i>st</i>
<i>in</i>
<i>g</i>
<b>M</b>
<b>ar</b>


<b>k</b>
<b>et</b>
<i>Conservative </i>


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Marketing Functions & The Internet



• Sales – achieve through increasing awareness of brands
and products, supporting buying decisions and enabling
online purchase


• Marketing communication – use of the web site for a range
of marketing communication


• Customer service – supplementing phone operators with
information available online


• Public relations – the Internet can be used as a new channel
for public relations (publish latest news on products)


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The 6 Cs’ of the Internet



• Cost reduction – reducing the need for sales and marketing
enquiries to be handled by telephone and producing printed
marketing communication material


• Capability – The internet provides new opportunities for new
products and services and for exploiting new markets


• Competitive advantage – First mover advantage



• Communications improvement – improved communications with
customers, staff, suppliers


• Control – Better marketing research through tracking customer
behavior


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The Internet – A New Marketing


Medium



• The Internet refers to the physical network that links


computers across the globe. It consists network servers and
wide-area communication links that are used to hold and
transport information.


• World Wide Web is a medium for publishing information on
the Internet.


• Intranet is a password protected network within a single


company which enables access to company information using
the familiar tools of the Internet such as web browsers.


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<i>Level of management</i> <i>Internet</i> <i>Intranet and extranet</i>


Strategic Environmental scanning
Competitor analysis
Market analysis


Strategic decision making


Supply chain mgt


Internet data analysis
Management information
Marketing information
Database


Operations efficiency
Business planning
Monitoring and control
Simulation


Business intelligence (data
warehouses)


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Internet Marketing Communications



• Characteristics inherent in digital medium:



– The customer initiates contact


– The customer is seeking information (pull)


– It is a high intensity medium – the marketer will have
100 per cent of the individual’s attention when he or
she is viewing a web site


– A company can gather and store the response of the
individual



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Old and New Media



<i>Old media</i> <i>New media</i> <i>Comment</i>


One-to many
communication
model


One-to-one or
many-to-many communication
model


Hoffmann & Novak (1996)states that Internet is a
many-to-many medium, but for company to customer
one-to-one


Mass marketing Individualized
marketing or mass
customization


Personalization possible because of technology to
monitor preferences and tailor content (Deighton,
1996)


Monologue Dialogue Indicates the interactive nature of the WWW, with the
facility for feedback


Branding Communication Increased involvement of customer in defining brand
characteristics. Opportunities for adding value to
brand



Supply-side thinking Demand-side thinking Customer pull becomes more important


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Internet marketing application in UK



<i>Use</i> <i>Percent</i>


PR/marketing information 70


Product contacts 40


Customer contacts 27


Facilitating customer feedback 20
Detailed product information 18
Distribution of paid-for reports 10


Online orders 8


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Avoiding Marketing Myopia



• Traps that should be avoided when embarking on Internet
marketing:


– Wrongly defining which business they are in
– Focusing on:


• Products rather than customer
• Production



• Technology (only an enabler, not an aim)


• Selling (the culture of the Internet is based on customer seeking
information to make informed buying decisions)


• Customer needs (the need for market orientation is a critical aspect of
web site design and Internet marketing strategy)


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Avoiding Marketing Myopia



– Unwillingness to innovate and ‘creatively destruct’
existing product/service lines


– Shortsightedness in terms of strategic thinking


– The lack of a strong and visionary CEO (Baker (1998)
found that this was important to companies’ using the
Internet effectively)


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