Unit 1 Introduction to E Marketing Internet marketing, also known as digital marketing, web marketing, online marketing, or e-marketing, is the

marketing of products or services over the Internet. Internet marketing is considered to be broad in scope because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media Digital customer data and electronic customer relationship management (EC !" systems are also often grouped together under internet marketing. Internet marketing ties together the creative and technical aspects of the Internet, including design, development, advertising, and sales. Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (#E!", search engine optimi$ation (#E%", banner ads on specific websites, email marketing, and &eb '.( strategies. In '((), The New York Times, working with com#core, published an initial estimate to *uantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found that the potential for collecting data was up to ',+(( times per user per month. E-marketing means using digital technologies to help sell your goods or services. ,hese technologies are a valuable complement to traditional marketing methods whatever the si$e of your company or your business model. ,he basics of marketing remain the same - creating a strategy to deliver the right messages to the right people. &hat has changed is the number of options you have. ,hough businesses will continue to make use of traditional marketing methods, such as advertising, direct mail and - , e-marketing adds a whole new element to the marketing mi.. !any businesses are producing great results with e-marketing and its fle.ible and cost-effective nature makes it particularly suitable for small businesses. ,his guide describes how to develop an e-marketing plan and provides guidance on implementing that plan and monitoring its effectiveness. The benefits of e-marketing E-marketing gives businesses of any si$e access to the mass market at an affordable price and, unlike ,/ or print advertising, it allows truly personalised marketing. #pecific benefits of emarketing include0

Global reach - a website can reach anyone in the world who has internet access. ,his allows you to find new markets and compete globally for only a small investment. Lower cost - a properly planned and effectively targeted e-marketing campaign can reach the right customers at a much lower cost than traditional marketing methods. Trackable, measurable results - e-marketing methods make it easier to establish how effective your campaign has been. 1ou can obtain detailed information about customers2 responses to your advertising.

2 -hour marketing - with a website your customers can find out about your products even if your office is closed. !ersonali"ation - if your customer database is linked to your website, then whenever someone visits the site, you can greet them with targeted offers. ,he more they buy from you, the more you can refine your customer profile and market effectively to them. #ne-to-one marketing - e-marketing lets you reach people who want to know about your products and services instantly. 3or e.ample, many people take mobile phones and -D4s wherever they go. Combine this with the personali$ed aspect of e-marketing, and you can create very powerful, targeted campaigns. More interesting cam$aigns - e-marketing lets you create interactive campaigns using music, graphics and videos. 1ou could send your customers a game or a *ui$ whatever you think will interest them. %etter con&ersion rate - if you have a website, then your customers are only ever a few clicks away from completing a purchase. 5nlike other media which re*uire people to get up and make a phone call, post a letter or go to a shop, e-marketing is seamless.

,ogether, all of these aspects of e-marketing have the potential to add up to more sales. 'tages in de&elo$ing (our e-marketing $lan It is important to recognise that planning for e-marketing does not mean starting from scratch. 4ny online e-communication must be consistent and work with the overall marketing goals and current marketing efforts of your business. ,he main components of an e-marketing plan will typically include the following stages0

Identif( (our target audience - if you identify multiple targets, rank them in order of importance so that you can allocate resources accordingly. -rofile each target group and understand their re*uirements, e.pectations and online behaviour so that you can pitch your costs and benefits at the correct level. -rofiling your target audience will also help you design an e-marketing campaign that will persuade the target to engage with your business. 'et (our ob)ecti&es - possible ob6ectives could include awareness raising (of your business, products or services", entering new markets, launching a new product, focusing on sales (building internet sales or increasing the fre*uency of sales", or internal efficiency (decreasing marketing costs, reducing order-taking and fulfilment costs, or improving customer retention rates". *ecide u$on the marketing mi+ - you should choose a mi. of e-marketing activities that will help you achieve your ob6ectives and fit with any e.isting traditional marketing activities you already have planned. 3or an outline of the range of emarketing options, see our guide on how to generate business from your e-marketing plan. ,gree a budget - careful budgeting allows you to prevent costs spiralling out of control. Identify the returns you e.pect to make from your investment in e-marketing activities and compare these with the costs in order to develop a cost7benefit analysis. ,ction $lanning - identify the tactics for implementing the selected e-marketing activities. ,he plan should include other non-internet marketing activities that are being undertaken.

Measure (our success - build in feedback mechanisms and regular reviews to assess the success of your e-marketing activities, particularly as e-commerce is such a dynamic and fast-changing area.

Building relationships with your customers 4 website provides an ongoing point of contact with customers and can be a useful way of collecting information for e-marketing purposes and for building successful relationships with them. !ro&ide engaging content !ake the information you provide about your business as engaging as possible. ,hink about what you can add to your website that will benefit your customers, eg online discounts or a blog about your business or a downloadable application. Increasing the interest and value of your website will improve your brand and encourage visitors to come back. #ee our guide &eb '.(0 a guide for business. ,nswering fre-uentl( asked -uestions 4nswering the fre*uently asked *uestions customers ask on your website demonstrates you2re ready to help. It may also save you time and money by reducing the number of basic phone *ueries. -rovide an email facility for *ueries and customer feedback - but ensure someone checks them regularly. espond to *ueries promptly and let people know their comments are appreciated. ,his process can be automated. -rovide full contact details, particularly phone numbers, for people in need of an immediate answer or they may look elsewhere. ,sking &isitors to register !any businesses ask first-time visitors to their site to register. ,his can be useful for gathering statistics and email addresses for direct mailings. 8ut asking people to register straight away may put them off. !ost people will not sign up unless there is an incentive for doing so, such as an e-newsletter, special offer or access to further information that is not available to non-subscribers. &ait until they are far enough into your site to want to find out more and tell them how they can benefit by registering. 4sk for the minimum details possible. If you intend to collect personal data, there are a number of legal re*uirements. #ee the page in this guide on the legal considerations in e-marketing. .ustomer relationshi$ management !any businesses invest in a customer relationship management (C !" system to improve their customer services. ,he C ! system brings information like customer data, sales patterns, marketing data and future trends together with the aim of identifying new sales opportunities, delivering improved customer service, or offering personalised services and deals.

4 C ! system is also a very effective way of handling customer complaints and can have a tremendous effect on your reputation. 3or more information on C ! solutions and implementation issues, see our guide on how to manage your customer database. Getting the technolog( right ,here are several elements that you could include in your e-marketing mi. including email, online advertising (such as display adverts and sponsored links", #!# messaging, setting up a website or web applications. ,he technology you will re*uire to deliver your e-marketing messages depends on which elements you decide to employ. If you are planning to use email as part of your e-marketing plan, make sure the technology you choose is right not only for the message but for your customers. &hen deciding what technology to use you should consider0

Computer set-up and performance - this can vary widely. 3or e.ample, some computers don2t have soundcards, making music or video files pointless. 3irewalls - these often limit the si$e of file that can be received. Compatibility - different programs will display emails differently. 8e careful in your use of images since these will increase download times and may be blocked by email filters. Create plain te.t versions as well as 9,!: versions to ensure cross-platform compatibility.

,he solution is to profile your customers and understand the best format for them. #ome may like emails with visual features, others might 6ust like a plain te.t email. #ee our guide on email marketing. If you decide to establish a web presence there are several options you can consider0

e-commerce website online advertising - including pay per click, sponsored links and display adverts brochureware website

,o establish a website you will need fast internet access, a server to host your website or an internet service provider to host the site for you. 1ou will also need an e-commerce software package if you want e-commerce capabilities. 1ou are also likely to re*uire a website designer if you don2t have the e.pertise in-house. #ee our guide on how to create an online shop. ,here are a number of techni*ues you can use to help potential customers find your site, eg search engine optimisation (#E%". !ost people using search engines will not go beyond the first page of results. If you are e.pecting your website to generate significant commercial returns, it is important to ensure that your website performs well with search engines. 3or more information, see our guides on how to generate business from your e-marketing plan and search engine optimisation. *ata $ri&ac( ,echnology gives you the opportunity to collect lots of information on your customers. 1ou must ensure that any data you collect about your customers is handled carefully, and in line with the principles of the Data -rotection 4ct. 1ou must also keep it up to date and not needlessly reveal information about customers. #ee our guide on privacy and data protection in direct marketing.

,d&antages Internet marketing is ine.pensive when e.amining the ratio of cost to the reach of the target audience. Companies can reach a wide audience for a small fraction of traditional advertising budgets. ,he nature of the medium allows consumers to research and to purchase products and services conveniently. ,herefore, businesses have the advantage of appealing to consumers in a medium that can bring results *uickly. ,he strategy and overall effectiveness of marketing campaigns depend on business goals and cost-volume-profit (C/-" analysis. Internet marketers also have the advantage of measuring statistics easily and ine.pensively; almost all aspects of an Internet marketing campaign can be traced, measured, and tested. ,he advertisers can use a variety of methods, such as pay per impression, pay per click, pay per play, and pay per action. ,herefore, marketers can determine which messages or offerings are more appealing to the audience. ,he results of campaigns can be measured and tracked immediately because online marketing initiatives usually re*uire users to click on an advertisement, to visit a website, and to perform a targeted action. Limitations 9owever, from the buyer2s perspective, the inability of shoppers to touch, to smell, to taste, and <to try on< tangible goods before making an online purchase can be limiting. 9owever, there is an industry standard for e-commerce vendors to reassure customers by having liberal return policies as well as providing in-store pick-up services.

Marketing '(nergies Integration of E-Marketing and traditional Marketing /esources0

4lthough e-marketing e.uberance e.poses plenty of opportunities however, the foundations of marketing don2t show any signs of becoming obsolete. !arketing still involves products, services and ideas which have to be sold at some price. E-marketing is often misconceived as the use of technology (online" to conduct specific marketing activities. #avvy industry professionals recogni$e this to be a relatively limiting definition of what truly constitutes e-marketing. !ore than a series of isolated tactics e-marketing actually refers to a philosophical way of considering strategic ob6ectives and understanding how technology can be more efficiently and cost-effectively leveraged to support brand strategies, differentiate them from competitive entries, and e.tend or e.pand their value. &hen considered as an ad6unct to conventional marketing initiatives, e-marketing - and the Internet in particular can provide significant scalability and optimi$ation to marketers. 4ccordingly, e-marketing allows brands to build on the success of their conventional programs and e.pand their reach to a wider and more diverse audience of healthcare professionals and7or consumers. E*ually important is the ability of e-marketing to achieve this goal with better scalability and lower e.pense to a company. /arious companies currently spend millions of dollars each year to develop and deliver its messages to their prospects through conventional tactics. 3ortunately, some organi$ations7companies already possess sufficient conventional e.perience and the technological wherewithal to e.pand and measure this landscape. 9owever, a good synergy between conventional and e-marketing is re*uired for a laying down successful marketing strategies. =o company purely on the basis of e-marketing can milk the benefit to its fuller potential without conventional marketing strategies and vice versa. >oogle is a perfect e.ample of integrating online marketing with traditional media as it offers conventional print, radio and ,/ advertisements via 4d &ords. It is unfortunately true that the traditional marketing alone is no longer ade*uate to meet the increased demands of customers, especially catering to niche market. ,oday, all mortar and brick businesses have online presence. &hether they are into 8'8, 8'C and C'C, all are endeavoring to make use of e-marketing with

e.isting tools and technology to promote their products and services. &hile e-marketing ensures a fair return of %I, it however never means that a company should single-handedly focus on e-marketing. ather, a blend of both traditional and modern marketing methodology should be undertaken to promote business. ,here are pros and cons for each of the two marketing methodology. 5sing multiple media in a campaign has a far greater impact than an individual medium by itself. ,he more interactions you can engage a consumer in, the greater the likelihood of winning them over to your brand and7or making a purchase. #econd Discussion. 4s the world of marketing information becomes more and more comple., marketers should strive to simplify their decision making processes. %ver the last twenty?five years, marketing data have grown by volumes to the point of intimidation, and this overflow of data has been fanned by computer resources, either -C, mini, or mainframe machines. 3ortunately, these same computer tools are being harnessed by marketers to assist in the analysis, planning, and implementation of marketing programs, in both consumer and business-to-business situations. Improved communications and enhanced corporate memory are the results of the marketer@s electronic environment, whether the business comprises of two employees to two thousand employees. 4ny enterprise benefits from improvements in operational efficiency and effectiveness, and the marketing function is now embracing more electronic resources as computing costs go down and computing utility goes up. It has been said that a successful marketer@s career depends on two *ualities ? the ability to organi$e and the ability to persuade. ,he purpose of this te.tbook is to assist marketers and marketing students in recogni$ing the value of electronic marketing resources and to demonstrate how to integrate these electronic tools into each stage of the marketing process. 8etter organi$ation through improved segmentation strategy or better database management as well as enhanced e.ecution of online communications channels leads to better management of the marketing function that, of course, leads to better performance. ,he ability to organi$e, be it marketing research, prospect profiles, segmentation or media strategies, customer communications systems, or database arrangements, allows the marketer to stay on track with firm direction. :ikewise, knowing the shortest distance between two points, say from the marketing concept to market consumption, is worth its weight in gold to any company. &hile this te.tbook does not deal with the second marketing *uality of persuasion, well-designed and carefully considered marketing programs can be *uite persuasive to the marketer@s superiors and peers. Concise strategies do speak volumes. ,he content of this te.tbook and the e.periences and e.amples of marketing activities have been drawn from the collective business backgrounds and education of its three authors. ,heir e.perience spans three decades of marketing history. 4s they all have specialties within the applied marketing arenas, the authors stand united in their approach to harnessing electronic resources to improve the steps of the marketing process. ,he stages of a traditional marketing approach, specifically engaging in a situation analysis that leads to the marketing planning and then advances a pattern of marketing implementation, are carefully followed. ,he authors believe the methods by which marketing success is attained can be made more accurate and timely. ,he book proposes to introduce and integrate the best practices for the contemporary marketing process. ,he reader will note that the content of the te.t is ultimately directed toward enhancing decision making among promotional tools, primarily advertising and other forms of communications. In traditional marketing, the promotional element is a costly portion of the marketing budget. Can the promotional effort become more cost effective and efficientA ,his leads to the applications for the Internet, more specifically the &orld &ide &eb. ,he &eb is recogni$ed as a tremendously fle.ible medium that is well suited to the marketing function. ,he &eb will be used in several manners in this te.tbook0 as a research tool, as an e.posure tool for advertising and other promotional activities, as a customer contact vehicle, as well as a customer feedback vehicle. ,he B&eb performs admirably in all of these research and communications tasks, but it is wise to remember that currently the &orld &ide &eb can muster household penetration of less than '+ percent. %ther traditional media such as newspaper or television are still needed to reach the ma.imum of consumer groups. In other words, the net of the &eb is still not sufficiently big enough to use online communications e.clusively. &orld &ide &eb usage is growing, but it still needs more time to mature. !ost communicators compare the household penetration to that of cable television. Cable took more than twenty years to become a viable advertising vehicle, and marketers believe that &eb usage will outstrip the acceptance levels of cable television. ,he te.tbook@s writing style stresses a clear, concise, and interesting treatment of electronic marketing and electronic commerce sub6ects, and up-to-date e.amples and situation vignettes are employed abundantly in every chapter. ,he organi$ation of the material within each chapter follows a critical thinking path of who,

what, when, why, and how in developing the marketing processes. ,his direct and repetitive approach keeps the processes on target. In the narrative te.t, fre*uent references are made to the marketing or communications cycle for products and services. ,o avoid a horrendous repetition of these two elements, many times the te.t will read Cproducts,D with no restatement of the e*ual marketing position of services. ,herefore, when products are being discussed, the student should read the reference as Cproducts and servicesD unless otherwise disclaimed. Electronic !arketing is divided into four parts, organi$ed according to the planning and implementation from concept to special topics of the marketing process. ,he first part, C,he Concepts of Electronic !arketing,D e.plains the foundations of online research and marketing and draws parallels to the stages of the traditional marketing process (situation analysis, marketing planning, and marketing implementation". ,he second part, CIntegrating Electronic !arketing esources,D develops the substituting electronic tool for the traditional tool and provides e.amples of the online e.ecution. #ection three, CImplementing the Commerce Concept,D covers the actual activities of establishing and promoting a virtual storefront with attention given to ongoing responsibilities of the e-marketer and &eb master. ,he fourth part, C#pecial ,opics,D addresses the uni*ue opportunities that the &eb presents such as a direct business-to business channel, international e-commerce, the ethics of e-marketing, and the commercee.panding possibilities in the future of electronic marketing. ,he te.tbook includes appendices of an outline for creating an online marketing and promotional program, geo-demographic data analysis, a list of current electronic marketing resources and &eb addresses, and a survey format for interviewing businesses that are online. %ne last comment about &eb navigation0 5nderstand that &eb addresses continually change and sometimes are abandoned by their creators. &hile the authors have diligently tried to include current and active &eb site addresses by publication time, some addresses may have changed or have been deleted by the information source. #ometimes a posted notice on the &eb page you have been routed to may be included informing the viewer of changes; sometimes this new address is a hyperlink to an active location. In these cases, follow the hyperlink to see if your desired information resides on that site, or double-check the address that you originally typed.

!erce$tion to the $roducts and se &ice of E .ommerce0

,he term <e-commerce< was defined broadly for the purposes of this survey and includes the use of email between business partners, so that in ,able E.F the number responding positively to the *uestion <is your firm engaged in electronic commerce with other organisationsA< is similar to the numbers indicating they use email (GGH compared with G)H, e.g. ,able I.F". ,here is a very low level of integration between this aspect of ecommerce and firms2 internal business systems (overall, FFH". In this respect, larger firms are clearly much more advanced than their smaller counterparts (JH for firms with G or fewer 3,E# compared with ')H for firms of '( or more". 3irms in the <business services< and <IC,< sectors have a higher level of integration than the others ('KH and FKH respectively". /ery few firms claim not to be using ecommerce at all but, at the same time, very few claim to be making ma.imum possible use (IH in each case". %verall, these results signal that there is great potential for ecommerce use to e.pand0 overall awareness and use at a primary level (email" are high but there is little integration with core business systems. 4 high level of integration would be an indicator that electronic commerce is a ma6or consideration for businesses and this is clearly not yet the case.

Table 011 %usiness Use of E-.ommerce '(stems

Is engaged in e-commerce with other organisations 5 E-commerce linked to internal business s(stems 5 To what e+tent are (ou using e-commerce now3 Ma+imum e+tent $ossible 5

2as a domain name 5

'ometimes 5

#ften 5

4ot at all 5

Size (FTES) + or fewer G to FJ '( and over Location !ain Centres -rovincial and rural Business sector !anufacturing Construction -rimary sector &holesale7 etail ,ransport7 #torage 8usiness services -ersonal services IC, 4ll 'G '( F I' GG +K I( G( G K K F( EE EF 'K E( FJ F) I 'K G ( F F ( F( ( F E( 'E K' +K F' J EF IF 'J '' E F I I 'J EK G) GI )( JF J F+ ') IJ E) E) '+ 'K I) ' ) ) I E I

')

GI

EK

'(

E)

)G

'K

IE

EJ

I' G' II

GI )+ GG

( FK FF

II E( E(

'F I+ 'G

( ' I

J ) I

,he survey attempted to gauge business perceptions of how important e-commerce was considered to be, and for what reason. 3igure E.' and ,able E.' indicate that opinions on e-commerce are polarised, with very few people having a neutral perspective on e-commerce and the overwhelming ma6ority seeing it as being either critical or important on the one hand, or not important or irrelevant on the other.

6igure 021 %usiness !erce$tion of the Im$ortance of E-.ommerce

=ot important L not important and irrelevant combined Important L critical and important combined In nearly all cases, e-commerce is seen to be important by many more respondents than see it as not important. <Developing the customer base<, <information gathering and research<, and <keeping ahead of competitors< are seen as the most important areas for e.ploiting e-commerce. <>rowing e.ports< stands out as the one area which respondents overall see as being relatively unimportant. >iven the increasingly global nature of commerce and the potential contribution of e-commerce to this, this result seems to indicate a gap in understanding of its potential on the part of many businesses. Interest in e-commerce is likely to increase with an overwhelming ma6ority of respondents seeing it as being critical or important for their business in F' months time, with only FKH seeing it as unimportant or irrelevant.

Table 021 %usiness !erce$tion of the Im$ortance of E-.ommerce

Im$ortant 5 II 4ot im$ortant 5 '( Irrele&ant 5 FF

Issue

.ritical 5

4eutral 5 +

*on7t know 5 J

Efficiency and cost reduction Customer relations #upplier relations Developing customer base Information and research >rowing e.ports

''

'E

II

''

FJ

IE

'E

F'

I(

IG

FE

I( F+

EE FJ

+ G

FF F)

G I'

E J

Competition Importance in F' months

I( IG

I) I+

G +

FI FF

K G

G K

=ote0 !ay total to more than F((H because of multiple selection 3rom ,able E.I it seems that there is little difference between smaller and larger firms in their perception of the importance of the contribution of e-commerce in different areas.

Table 081 Im$ortance of E-.ommerce b( 6irm 'i"e

9 : 6TE' 4ot Im$ortant 5 Efficiency and cost reduction Customer relations #upplier relations Developing customer base Information and research >rowing e.ports Competition Importance in F' months I' Im$ortant 5 +I : to 1; 6TE' 4ot Im$ortant 5 'J Im$ortant 5 G( 2< = 6TE' 4ot Im$ortant 5 FE Im$ortant 5 GG

Issue

IF

++

'G

GK

'F

KF

IG

+F

IF

+)

I+

+E

'F

GG

''

GK

'I

GJ

F) +F 'F FJ

K' II GK GJ

FE EG FJ G

)( E( KG ))

F+ E' F+ FF

)' IJ K+ )I

=ot important L not important and irrelevant combined Important L critical and important combined =ote0 !ay total to more than F((H because of multiple selection ,able 0 summarises factors seen by respondents as inhibiting the take up of e-commerce. %nly F(H indicate that there are no barriers to the adoption of e-commerce but no one area stands out as being of overwhelming significance. Cost is the single biggest issue with IJH seeing this as being a ma6or inhibitor. :ack of proven benefits, concerns over loss of contacts with customers, and lack of skilled staff are all seen as important by over one third of respondents. %verall, about half this number (F+H" register concern over the readiness of

business partners to enter into e-commerce relationships but this seems to be a matter of greater concern for larger firms ('GH" than for small ones (FIH". %ther differences on the basis of location or si$e are not statistically significance but could indicate some underlying issues. ,here may be a slightly higher level of scepticism about the benefits in provincial and rural areas but a lower level of concern about security issues for e.ample, but it runs counter to e.pectation that main centre firms should be finding greater difficulty in locating skilled staff than those in provincial and rural areas. %n the other hand, there is anecdotal evidence which is not reflected here that obtaining e.ternal assistance is a problem in some provincial centres. Table 0 1 6actors Inhibiting Take-U$ of E-.ommerce

Location !ro&incial and rural 5 F(

'i"e >6TE'?

Inhibiting factor

#&erall 5

Main centres 5 F)

9: 5 FI

: to 1; 5 'F

2< = 5 'G

8usiness partners not ready 8usiness partners not ready 8enefits not proven :oss of contact with customers :ack of skilled staff #ecurity issues Implementation costs :ack of e.ternal assistance %ther =o perceived barriers

F+

F+ IK IG IK IE IJ ') F) F(

F) IE IE EF I) IJ ') F) F(

F( EF IJ IF ') E( ') F) F'

FI IK IK IG IE IJ ') F) F(

'F II II IG IE EF 'G FG FG

'G EI 'J EI EI IJ 'J '' )

=ote0 !ay total to more than F((H because of multiple selection