Chapter 1 Introduction to Internet Marketing

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Chapter 1Introduction to Internet Marketing
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Learning objectives

• Evaluate the relevance of the Internet to the
  modern marketing concept
• distinguish between Internet marketing,
  e-marketing, e-commerce and e-business
• identify the key differences between Internet
  marketing and traditional marketing
• assess how the Internet can be used in different
  marketing functions

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Questions for marketers

• How significant is the Internet as a marketing
  tool?
• How does Internet marketing relate to
  e-marketing, e-commerce and e-business?
• What are the key benefits of Internet marketing?
• What differences does the Internet introduce in
  relation to existing marketing communications
  models?

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The impact of the Internet

• Andy Grove, Chairman of Intel, one of the early
  adopters of e-commerce, has made a meteorological
  analogy with the Internet. He says
• Is the Internet a typhoon force, a ten times
  force, or is it a bit of wind? Or is it a force
  that fundamentally alters our business? (Grove,
  1996)

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The impact of the Internet
Organisation Sector Online contribution Overall turnover
Cisco B2B Networking hardware 90 19bn
Easyjet B2C Air travel 85 264m
Dell B2B, B2C Computers 48 25bn
Lands End Clothing B2C Clothing 11 1.3bn
Book Club Associates B2C Books 10 100m
Electrocomponents B2B Electronics 7 761m Group
Dominos Pizza B2C Food 3.4 76m
Tesco B2C Grocery 1.4 18.4bn
Thomas Cook B2C Travel lt1 1.8bn
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The Internets impact on you?

• How many of you have purchased something on the
  Internet in the last 6 months?
• How many times have you used the Internet as an
  information source, before buying offline?

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Demand Internet access
Figure 2.13 Global variation in number of PCs per
hundred population and percent Internet access in
2000 Source ITU (www.itu.int)
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How does the Internet contribute to marketing?

• The definition of marketing by the Chartered
  Institute of Marketing (http//www.cim.co.uk/)
  is
• Marketing is the management process responsible
  for identifying, anticipating and satisfying
  customer requirements profitability
• Give examples of how the Internet (web and
  e-mail) contributes to marketing

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What is e-marketing?

• E-marketing is
• Applying
• Internet and other digital technology
• (web, e-mail, wireless, iTV, databases)
• to
• acquire and retain customers
• (through a multi-channel buying process
• and customer lifecycle)
• by
• Improving customer knowledge, targeting,
• service delivery and satisfaction

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Example youve been tangoed
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E-business and e-commerce

• Define e-commerce
• What is the relationship between e-commerce and
  e-business?

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E-business and e-commerce
Figure 1.2 The distinction between buy-side and
sell-side e-commerce
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Relationship between e-commerce and e-business
Figure 1.3 Three alternative de?nitions of the
relationship between e-commerce and e-business
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Internet marketing contexts
Figure 1.4 Summary of transaction alternatives
between businesses and consumers
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Internet applications
Figure 1.5 Market and product strategic grid
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Example - Guinness
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Drivers

• Cost/efficiency drivers
• Increase speed of dispatch
• Reduce sales cost
• Reduce operating costs
• Competitiveness drivers
• Customer demand
• Range and quality of services offered
• Avoid losing market share
• Exploit new markets

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Example rswww.com
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Technology - addressing

• Common gTLDs are
• .com represents an international or American
  company such as http//www.travelagency.com
• .co.uk represents a company based in the UK such
  as http//www.thomascook.co.uk/.
• .ac.uk a UK based University (e.g.
  http//www.derby.ac.uk)
• .org.uk or .org are not for profit organisations
  (e.g. www.greenpeace.org)
• .net a network provider such as
  www.freeserve.net.

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How it works - components
Figure 1.9 Infrastructure components of the
Internet
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How it works client/server
Figure 1.10 Information exchange between a web
browser and a web server
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How it works - HTML
Figure 1.11 Home page index.html for The B2B
Company in a web browser showing HTML source in
text editor
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Internet, intranet and extranet
Figure 1.12 The relationship between access to
intranets, extranets and the Internet
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Interactivity and intelligence
Figure 1.13 Summary of communication models for
(a) traditional media, (b) new media
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Individualisation
Figure 1.14 Summary of degree of
individualisation for (a) traditional media
(same message), (b) new media (unique messages
and more information exchange between customers)
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Integration
Figure 1.15 Channel requiring integration as part
of integrated e-marketing strategy
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Mixed-mode buying

• Figure 1.16 The role of mixed-mode buying in
  Internet marketing

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Conversion marketing
Figure 1.17 A model of the Internet marketing
conversion process
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Conversion marketing - example
Figure 1.18 An example of the conversion process