Electronic Commerce

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Electronic Commerce COMP3210

• Dr. Paul Walcott
• 15/10/04

The Department of Computer Science Mathematics
and Physics University of the West Indies, Cave
Hill Campus, Barbados
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Contents

• Web Marketing
• Product and customer-based strategies
• Communicating with different marketing segments

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What is Marketing?

• This is the process of planning and executing the
  conception, pricing, promotion and distribution
  of ideas, goods and services to satisfy
  customers.
• Source cfdccariboo.com/glossary.htm

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Marketing 101

• Marketing is more than sales it is those set of
  activities that
• Grabs a potential customer
• Encourages them to buy your product
• Actually gets them to purchase your product
• Makes them a repeat customer

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Marketing 101 (I)

• Marketing theory describes the 4 Ps
• Product a company sells a physical product or
  offers a service
• Price the amount paid for the product or service
• Promotion the communication of the existence of
  the product to the market
• Place (or distribution) ensuring that the right
  product or service is offered at the right place
  at the best time
• Each of these Ps contribute to your marketing
  mix

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Marketing Strategies

• The first stage (of a marketing strategy) is
  setting marketing objectives (where the
  organisation wants to be at the end of the
  strategic planning period) and goals (the
  objectives with specific numerical benchmarks and
  deadlines attached to allow management to measure
  achievement). www.fuel4arts.com/sauce/10_glossar
  y/glossary.htm

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Marketing Strategies (II)

• The second stage (of a marketing strategy) is
  specifying the core marketing strategy, i.e.
  specific target markets, competitive positioning
  and key elements of the marketing mix.
  www.fuel4arts.com/sauce/10_glossary/glossary.htm

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Marketing Strategies (III)

• The third (stage of a marketing strategy) is the
  implementation of tactics to achieve the core
  strategy. www.fuel4arts.com/sauce/10_glossary/gl
  ossary.htm

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Marketing Strategies (IV)

• Marketing strategies may come in two forms
• Product-based marketing strategy
• Customer-based marketing strategy

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Product-based Marketing Strategy

• When a customer is likely to buy or think about
  products in categories, a product-based marketing
  strategy is appropriate
• An example is an office supplier store were a
  customer may be looking for an office desk the
  customer immediately thinks about the product
  category office furniture
• See http//www.officedepot.com/

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Customer-based Marketing Strategies

• Due to the great flexibility of Web sites (as
  opposed to traditional mass media) they can offer
  products and services that are targeted towards
  specific type of customers
• First the customer types must be identified
• A Web site on its home page might allow the user
  to select the required customer type
• These approach is more common on B2B sites than
  B2C sites

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Communicating With Different Marketing Segments

• Trust and Media Choice
• The Web is an intermediate step between Mass
  media and personal contact
• Mass media (e.g. TV) offers the lowest level of
  trust yet is still widely used today
• The cost of mass media can be spread over a large
  number of people
• Person contact offers the highest level of trust
  it is also the most expensive

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Communicating With Different Marketing Segments
(I)

• In 1996 as companies began doing business online
  a splintering of the mass market occurred due to
  rising consumer expectations and reduced product
  differentiation
• This led to a reduction of the usefulness of mass
  marketing
• Advertisers subsequently began to identify market
  segment and sell to them

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Market Segmentation

• Market segmentation is the identification and
  targeting of specific portions of a market
• Demographic characteristics are usually used to
  create market segments
• E.g. age, gender, martial status, income level
  and geographic location
• Ring tones on Cell phones target market might be
  younger people between the ages of 10-20

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Market Segmentation (I)

• Market segments have traditionally been
  identified through the following categories
• Geographic segmentation
• Demographic segmentation
• Psychographic segmentation

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Geographic Segmentation

• When a company divides its customers into groups
  based on where they live or work this is referred
  to as geographic segmentation

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Demographic segmentation

• Demographic segmentation uses characteristics of
  people, for example age, gender, family size,
  income education, religion or ethnicity to group
  customers

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Psychographic segmentation

• Psychographic segmentation groups customers based
  on social class, personalities or approach to
  life
• For example auto car companies may focus sports
  car advertising to people who have a high need of
  achievement

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Web Market Segmentation

• The design of the site can immediate appeal to
  different market segments, for example
• For the young fashion-conscious buyer you may
  have a site with a wide variety of typefaces,
  bold graphics and bright colour product photos
• For the older more established buyer you may have
  a more muted conservative style