EMarketing Strategies:

1
CHAPTER 4

• E-Marketing Strategies
• Product Pricing

2
Learning Objectives

• Marketing review
• Define product and price
• Describe six new product strategies
• Understand the importance of branding and
  positioning on-line
• Explain how the Internet can increase customer
  value
• Give examples of product attributes, branding,
  labeling, and customer services online
• Explain important criteria for Internet domain
  naming
• Understand many new trends affecting development
  of behind-the-scenes products

3
Learning Objectives

• Discuss the hottest areas for new products behind
  the scenes in e-business
• Discuss nine cells of a suggested Internet
  product taxonomy
• Tell how the power shift to buyers affects
  product development
• Discuss whether or not the Net is an efficient
  market
• Understand the factors putting downward pressure
  on Internet pricing
• Explain several pricing strategies appropriate
  for products selling on the Net

4
INTRODUCTION

• Defining a Product
• bundle of benefits that satisfies the needs of
  organizations or consumers and for which they are
  willing to exchange money or other items of value
• includes items such as tangible goods, services,
  ideas, people, and places
• How Marketers create products providing benefits
  using new technologies
• Market efficiencies brought about by Internet
  technologies
• E-Marketing pricing strategies appropriate for
  e-commerce

5
Creating Customer Value Online

• What Is Value?
• The entire product experience
• Defined by the customer (Consumer Perception)
• Value is applied at all price levels

6
Online Benefits

• Companies must fill Web user needs
• Effective Web navigation, attractive and useful
  site design, quick download speed, user-friendly
  Web browsing etc..
• Marketers must make five general product
  decisions

7
ATTRIBUTES

• Attributes include overall
• specific features It includes color, taste,
  style, size, and speed of service.
• Marketing Mix Customization

8
BRANDING

• A Brand includes a name, a symbol, or other
  identifying information
• Do we use existing brand name or change it?

9
Using Existing Brand Names in Cyberspace

• Firms can use existing brand names or create new
  brands for their new products

10
Creating New Brands for Internet Marketing

• Criteria for a new Internet brand name

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Cobranding

• Cobranding occurs when two different companies
  put their brand name on the same product
• Advantages
• Good way for firms to build synergy through
  expertise and brand recognition
• Yahoo! and TV Guide initially combined to provide
  television listings on the Yahoo! Site. Since
  that time, TV Guide separately branded its own
  site

12
Internet Domain Names

• Organizations spend time and money to develop
  unique brand names and, thus, developing strong
  brand equity
• Using the company trademark helps consumers
  quickly find the site
• There is the possibility to buy the name from the
  currently registered holder, or to come up with a
  new or modified site name
• Can make a huge difference when trying to entice
  users to the site and to build consistency in the
  firms marketing communications.

13
Support Services

• Customer support is a critical component to the
  value proposition
• To develop customer relationships, customer
  service representatives should be knowledgeable
  and concerned about customer experiences

14
Labeling

• Product labels identify brand names, sponsoring
  firms, product ingredient, and often provide
  instructions for use and promotional materials
• Tangible products labels create product
  recognition and influence the purchase
• Labeling has a digital equivalent. For online
  services, terms of product usage, product
  features, and other information comprise online
  labeling at Web sites
• Online labeling can serve many of the same
  purposes on the Web as offline

15
Online Costs

• Internet technologies often save customers money,
  time, energy, and psychic costs thus increasing
  value
• Nonmonetary costs reductions based on Net
  technology

16
Additional Nuances of Product Development

• Several additional features affecting product
  development due to new technologies
• Product imitation, and short product life cycles
• The power shift to buyers, when combined with the
  Nets reach global reach and death of distance,
  allows for many unusual business partnerships and
  for both business and consumer collaboration

17
New-Product Strategies for E-Marketing

• Product Mix Strategies (How can marketers
  integrate hot product ideas into current product
  mixes?)
• Six categories of new-product strategies
• Discontinuous innovations
• New product lines
• Additions to existing product lines
• Improvements or revisions of existing products
• Repositioned products
• Me-too lower-cost products

18
Market

• B2B
• 4 trends value chain automation, outsourcing,
  information sharing centralizing information
  access
• Potential to increase both efficiency and
  effectiveness in performing important marketing
  functions sales, distribution

• B2C
• 3 trends multimedia, assistive technologies
  convergence of media
• Power to open up new markets

19
Value chain automation

• The value chain includes all businesses involved
  in moving product from supplier to consumer

20
Outsourcing ASPs

• ASPs application service providers
  (www.webharbor.com)
• Advantages
• Perform value chain functions off-site
• Different location of the software and support
• Lower startup costs
• No internet service staff costs
• Lower switching costs
• Disadvantages
• Lack of control over key customer data and
  business processes
• Risk by putting the business reputation in the
  ASPs hands
• VSPs vertical service providers

21
Information sharing and Centralizing info.

• EDI Electronic data interchange is a generic
  term that refers to the exchange of data between
  businesses in digital form
• Corporate portals reduce search times by using
  Web-based technology to create sites designed for
  a companys employees
• Linked to a wide variety of corporate information
  stores sales data, groupware documents

22
Multimedia

• Multimedia technologies available today
• Conferencing software
• Webcams
• Streaming audio and streaming video
• CD-quality audio

23
Assistive technologies

• Clever developments allow for computer access by
  persons with a wide range of disabilities
• Voice-activated computers
• Large-type screen displays
• Type-to-speech or braille
• Speech-to-text telephony
• Eye gaze-to-type

24
Pricing efficient market

• Efficient market means perfect price competition
• Equal access to information about products,
  prices and distribution
• Expectations lower prices, high price
  elasticity, frequent price changes, smaller price
  changes

25
Lower prices

• Mainly true thanks to
• Shopping agents
• Venture capital
• Competition
• Lower costs Order processing self service, JIT,
  Overhead, Customer service, Printing and mailing,
  Digital product distribution costs

26
Price changes

• Frequent price changes due to
• Competition
• Shopping agents
• Easiness
• Volume discount
• experimentation

• Smaller price change increments
• Price sensitive consumers
• Shopping agents

27
Pressure on internet pricing

• Distribution
• Affiliate programs
• Site development and maintenance
• Marketing and advertising

28
Pricing strategies

• Penetration pricing
• Market skimming pricing
• Price leadership
• Promotional pricing

• Segmented pricing
• Negotiation
• Dynamic pricing