E-MARKETINGE-MARKETING

Sell Any Thing, Any Where, Any Way, Any Time, at Any Price

E - Business

e – Business is not just a dot-com.

The dot-com magic has evaporated.

Investors abandoned dot-coms in droves?

StrategyWeek (www.strategyweek.com):

80% of e-commerce sites will fail by 2005.

Gartner Group (www.gartner.com)

95% to 98% of all dot-coms will fail over the next 24 months.

E - Business

Bad thinking of using Internet : Brochure ware.

Creating a web site that is a mere reproduction of existing print materials –or brochures.

Brochure ware = shovel – ware

Putting existing marketing materials onto web pages with no regard to how it’s presented by online consumer

The Internet is its own medium. E-business has to learn how to use it.

Who’s got the power

The power has gone to the buyer

Net gives buyers more choices or e-tailers to choose from.

E-Tailer:

A company that has opened a storefront on the Net.

What is critical: Access to the customer

How, where, when and what he/she buys

Internet Marketing Strategies must give tools to reach the consumers whenever and wherever they buy.

New EthicsDisintermediation or Cutting out the Middleman

Disintermediation is used to describe the “disintegration” or extinction of the middlemen in the trading chain as we know it today, that is distributors, wholesalers, and retailers.

Disintermediation puts the producer of goods or services directly in touch with the customer.

The challenge to e-businesses today is to add value to the consumer’s shopping experience by building better and stronger customer relationships in order to win the disintermediation game.

The Attention EconomyWhat is valued in the New Economy is the consumer’s attention.

Consumer attention is scarce because there is only so much of it to give.

Challenge to e-businesses is how to capture and keep consumer’s attention, a consumer who at the same defines freedom as having not to pay attention when they don’t want to.

Yahoo! Is a good example of keeping consumer’s attention.

Internet Beyond PCsAccess to Internet is not available only from a PC

We can use cell-phones, Palmtops, Interactive TV and in the near future many other devices to access the Internet.

Net Appliance is a wired or wireless device that is specifically designed to connect to the Internet. They could be used to retrieve email, surf the web or shop for products and services.

There are > 200 million computers in the world today.

By 2002 this number will grow to 500 million.

Internet Beyond PCs

Multiple Net Access Devices will grow Dramatically by 2003

1999 2001 2003

Net Appliances

14 Million 237 Million 755 Million

Net Population

14 Million 240 Million 602 Million

Devices Per Surfer

1.02 0.98 1.25

Source International Data Corporation

Internet Beyond PCs

Results

Many distribution channels

Need for different web site – approach for each channel.

In the coming months and over the next few years, more and more e-commerce will be conducted offsite – that is off Web sites.

Marketing strategy must change, if it is focused on only one channel of distribution.

Principles of New Economy

Principle 1:

Matter Doesn’t Matter

It’s not the size that plays the important role.

Per pound, automobiles have less value than computers and computers less value than software.

Value is in the information, services, knowledge and entertainment it provides. In people, ideas, and strategic relationships.

Principles of New Economy

Value Per Pound

Product Dollar Value Per Pound

Taurus $5.22

Jeep $6.59

iMac $31.47

PC $76.41

Laptop $396.23

Source: Ernst & Young Center for Business Innovation

Principles of New Economy

Principle 2:

The Shrinkage of Space

The Good News:

Where your business is physically located is no longer important.

The entire world is the market.

The Bad News:

Companies have to compete with others around the world. Globalization is here.

Principles of New EconomyPrinciple 3:

The Collapsing of Time

Customers expect

• Instant response,

• Instant service, and

• Instant satisfaction.

If they don’t get it, the ease of finding your competitor is just a mouse click away.

Time is money, and if a company can save a consumer time, that will quickly equate to money in their cash registers.

Principles of New EconomyPrinciple 4:

It’s People That Matter

•Intellectual capital is more valuable than cash.

•At Net time, learning faster than your competitor is the only thing that will keep you ahead of the pack.

•People are employees and customers.

•“Knowledge worker” is a key component to the success of New Economy companies.

•Customer is important part of the marketing equation.

•Not just as consumer of a product but also as an evangelist of your business.

Principles of New EconomyPrinciple 5:

Turning Customers into Salespeople

Internet connect everybody to everything,

So,

Every customer can be turned into a sales person and all customers into a sales force

One way to do this is Viral Marketing

Any advertising that propagates itself the way viruses do.

An example is Hotmail.

Principles of New EconomyPrinciple 6:

Value Rises with Market Share

The greater the network of people who use a product, the more valuable it is to the network and the more likely it will become the standard in a particular market space.

After a product becomes a standard, its value grows exponentially.

Use the rule “GIVE THEN TAKE”, in order to become a dominant player

Examples: Netscape, ICQ

Principles of New EconomyPrinciple 7:

Value Rises with Information

Internet creates a new type of middleman

The Infomediary

Infomediaries create digital value out of the bits and bytes of information on the Net.

Their job is to take information on buyers, their needs, preferences, criteria, and profiles, as well as information about sellers such as inventories, products, services.

Principles of New Economy

Principle 8:

Every Product Is Available Everywhere, All the Time

The impulse to buy and the purchase itself used to be separated by place and time.

The Net changes that

Consumers will be given

An infinite number of purchasing choice,

Customized to their needs, and

With the ability to buy what they want the moment they hear about it.

Information in New EconomyInformation is the engine that generates wealth in the New Economy.

E-Commerce means selling products, services, and information over the Net.

Every e-business not only can capture information at each point of customer contact, but also provide it.

Information is important because having it you own the customer.

Owning the customer means that a business has developed a strong relationship with a customer.

Information in New EconomyThe needed Information is called “The Customer Buying Cycle”

Consists of five elements:

Need Identification – The buyer has to realize a need

Product Brokering – Retrieving information to help determine what to buy

Merchant Brokering – Finding the merchant

Negotiation and Purchase – Finalizing the transaction

Product Service and Evaluation

Information in New EconomyWays to find Information or e-Scouting

• Through Industry Analysts that have moved to the Net as

www.thestandard.com

www.jup.com

www.forrester.com

Information in New EconomyWays to find Information or e-Scouting

• Through Web sites that provides reports and results of researches as

www.easidemographics.com

www.e-land.com

www.webcmo.com

www.cyberatlas.Internet.com

www.nua.ie

www.deepcanyon.com

www.hoovers.com

Information in New EconomyWays to find Information or e-Scouting

• Through Online Focus Groups, as

www.surveysite.com

www.sfionline.com

Information in New EconomyWays to find Information or e-Scouting

• Through Online Market Surveys organized by sites, as

www.vividence.com

www.activeresearch.com

www.opinionlab.com

www.insightexpress.com

New Economy – New DangersDoing business on the Internet is like opening your kimono.

Just about everything an e-business does on the Net is visible to one and all.

Parts that are not directly visible are vulnerable to security breaches both from outside and inside the company

Threats and dangers are come in many forms:

credit card fraud

theft of intellectual property

irate consumers

deliberate attacks

New Economy – New DangersCredit Card Fraud

Every credit card holder has up to 120 days to dispute a charge on his or her credit card statement.

If a cardholder sees a charge on his statement that he doesn’t recognize or that he wants to refute, he just contacts his credit card company and the charge is reversed. The process is called chargeback.

If a chargeback will happen a hefty $25 will put on merchant’s account plus the reversed charge.

New Economy – New DangersCredit Card Fraud

For merchant’s protection:

www.cybersource.com

www.nochargebacks.com

These are web sites that provide merchants access to a database of credit card numbers that have charged back transactions to mail order or Internet businesses.

New Economy – New DangersIntellectual Property

The most obvious:

Hackers breaking into computers systems to steal credit card numbers and company secrets

The hidden danger

From the employees and the contracted workers

“Most losses come from disgruntled or dishonest insiders using authorized access to do unauthorized things”.

Robert Steele, former CIA officer and CEO of Open Resource Solutions

New Economy – New DangersConsumer Comments

Prior to the Internet, consumers had a hard time finding others who purchased products that they were considering.

Now, with the Internet, for good or bad,

Newsgroups, discussion lists, newsletters, chat rooms, web sites have given consumers and

competitors the chance to talk about your company and the goods and services your company offer.

Solution: Monitoring customer comments with a variety of services such as eWatch (www.ewatch.com), MarkWatch (www.markwatch.com), and WebClipping (www.webclipping.com).

New Economy – New DangersThe Threat of Screen Scrapers

What is?

Screen scraper is a software application that lets users pull information from one Web site and deposit that information onto another web site or into a database, even if the two sites are not

connected, according to the wishes of the consumers.

Where is the problem?

When this data is scraped and reorganized your company and brand can be lost in the process.

Revision – Rules for SuccessRule #1 – Selling AnywhereRule #1 – Selling Anywhere

Anywhere Means technologically (on wired and portable wireless devices) and geographically (selling anywhere in the world).

With Internet this is a reality.

Your local market is the global market.

If you are not selling everywhere, you are selling nowhere.

Revision – Rules for SuccessRule #1 – Selling AnywhereRule #1 – Selling Anywhere

Selling globally means that you have understand the culture of the customer you are selling to.

You have to face the challenges of language, regulatory challenges of import and export rules, taxation, social and political issues, fulfillment and customer services problems.

Any of these items, If mishandled, can quickly torpedo your global marketing efforts and furthermore your investment.

Revision – Rules for SuccessRule #2 – Selling AnythingRule #2 – Selling Anything

The message is

“Find a need and fill it”

Once a need is found, the Internet makes it easy to serve it.

What is offered to consumers on the net is limited only by the company’s imagination and the Internet technology that you can create to deliver it.

Revision – Rules for SuccessRule #2 – Selling AnythingRule #2 – Selling Anything

Trying to have the next big thing for the net, keep three major human motivations in mind:

• Information• Economic• Entertainment

If your idea can satisfy these motivation then Internet can translate the idea to money.

Revision – Rules for SuccessRule #3 – Selling AnytimeRule #3 – Selling Anytime

One of the unique advantage of Internet:

It allows companies to conduct business 24 hours a day, 7 days a week, every day of the year.

But don’t forget:

Anytime, means that the user can use many different devices to access the Internet with different capabilities each one

And secondly, your visibility on the Net is limited by having a single Web site, thus the marketing costs of driving qualified buyers to a Web site are a huge cash drain on dot-coms, leading to bankruptcy.

Revision – Rules for SuccessRule #3 – Selling AnytimeRule #3 – Selling Anytime

One way to become known in the Internet and minimizing the marketing costs is through affiliate marketing

This type of marketing rely on affiliate programs. These are programs that a web site joins in which a merchant pays a commission to an affiliate for generating clicks, leads, or sales from a graphic or text link located on the affiliate’s site.

Strongly introduced by Amazon.

Revision – Rules for SuccessRule #4 – Selling AnywayRule #4 – Selling Anyway

The new technological capabilities of the Internet are changing the face of e-commerce.

Customers will use personal shopping services

These services will send their requests out for bid

Return with merchants offers in the form of multimedia “advertorials” on a product or service.

www.geek.com

www.respond.com

www.radicalmail.com

www.entrypoint.com

Revision – Rules for SuccessRule #4 – Selling AnywayRule #4 – Selling Anyway

Digital cash – or e-cash – will eventually become the dominant way of paying for products and services on the Internet.

Although payment will come from consumer’s credit card or bank account, how payment is made on the Net can take a variety of forms as:

A prepaid payment option

A person-to-person (P2P) service, or

In the form of an Internet escrow service.

Revision – Rules for SuccessRule #5 – Selling at Any PriceRule #5 – Selling at Any Price

In e-commerce,

The customer is in control.

The “One price fits all” model is obsolete.

Pricing will get personal.

Not just preferred pricing for repeat customers, but the delivery of customized price offers to each and every buyer.

Schemes of dynamic pricing will be dominant.

Revision – Rules for SuccessRule #5 – Selling at Any PriceRule #5 – Selling at Any Price

Dynamic pricing is difficult in real world

However on the Net prices can be changed in a second.

Dynamic pricing schemes contain factors as

•Product selection

•Convenience factors

•Customer service and purchase guarantee information

•Rebates

•Personalized services

Bibliography

Frank Fiore, “E-Marketing strategies”, Que editions, 2001

www.standard.com

www.emarketer.com

www.e-businessworld.com

www.internetnews.com

www.digitrends.net

www.office.com

www.coremetrics.com