Title: 4.2: One-to-One Marketing and Personalisation in EC
14.2 One-to-One Marketing and Personalisation in
EC
- One-to-one marketing
- Marketing that treats each customer in an unique
way, facilitated by the use of Internet
technologies. - Personalisation
- The matching of services, products, and
advertising content to individual consumers. - Several different ways to obtain information from
consumers - Soliciting the information from the individual
directly, using cookies or other methods to
observe online behavior - Performing market research
- Extrapolating from previous purchasing patterns
- Matching an individuals preferences (via a
software system) to available products and
services.
24.2 One-to-One Marketing and Personalisation in
EC
- User profile
- The requirements, preferences, behaviors, and
demographic traits of a particular customer - Cookie
- A data file that is placed on a users hard drive
by a Web server, frequently without disclosure or
the users consent, that collects information
about the users activities at a site
34.2 The New Marketing Model
44.2 One-to-One Marketing and Personalisation in
EC
- Collaborative filtering
- A personalisation method that uses customer data
to predict, based on formulas derived from
behavioral sciences, what other products or
services a customer may enjoy predictions can be
extended to other customers with similar profiles - Variations of collaborative filtering
- Rule-based filtering (prediction based on
behavioral patterns) - Content-based filtering (recommendation based on
user preferences) - Activity-based filtering (by watching users
activities on the Web) - Legal and ethical issues in collaborative
filtering - Invasion-of-privacy issues
- Permission-based personalisation tools to request
customer permission.
54.2 Loyalty and Trust in E-Commerce
- Customer Loyalty
- Customer loyalty is the degree to which a
customer will stay with a specific vendor or
brand for repeat purchase - Customer loyalty is expected to produce more
sales and increased profits over time - E-Loyalty
- Customer loyalty or commitment to an online
retailer
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74.2 Loyalty and Trust in E-Commerce
- Satisfaction in EC
- Customer satisfaction (including customer
service) is one of the most important consumer
reactions in the B2C online environment - Recent statistics show
- 80 of highly satisfied online consumers would
shop again within 2 months - 90 would recommend the Internet retailers to
others - However, 87 of dissatisfied consumers would
permanently leave their Internet retailers
without any complaints, thereby leading to
decreased sales.
84.2 Loyalty and Trust in E-Commerce
- Trust
- The psychological status of involved parties who
are willing to pursue further interaction to
achieve a planned goal. - Trust is very important in EC because of lack of
direct interaction between buyer and seller. - How to Increase Trust in EC
- Brand recognition
- EC security mechanisms can help solidify trust
- Disclose and update latest business status and
practices to potential customers and to build
transaction integrity into the system - Guarantee information and protection privacy
through various communication channels
94.3 Market Research for EC
- The Goal of Market Research
- To find information and knowledge that describes
the relationships among consumers, products,
marketing methods, and marketers. - To assist a firm in both marketing and product
mix decision. - The Aim of Market Research
- To discover marketing opportunities and issues,
- To establish marketing plans,
- To better understand the purchasing process,
- To evaluate marketing performance
104.3 Market Research for EC
- Market segmentation
- The process of dividing a consumer market into
logical groups for conducting marketing research,
advertising, and sales. - Makes markets more easier to managed and so
marketing strategies can be applied to specific
subsets of the population. - Segmentation is done with the aid of tools
- Data modeling
- Data warehousing
114.3 Market Research for EC
- Online market research methods
- Implementing Web-based surveys
- Online focus groups
- Hearing directly from customers
- Customer scenarios
- Tracking customer movements
- Analysis of clickstream data
12Example Internet Market Research Expedites
Time-to-Market for
Procter Gamble
- In the past, developing a major new product, from
concept to market launch, took PG over 5 years - In September 2000, PG introduced Whitestrips on
the Internet, offering the product for sale on
its Web site. - Online research was facilitated by data mining
conducted on PGs huge historical data and the
new Internet data - Internet created a product awareness of 35
percent before shipments were made to stores - Revolutionised process of studying the product
concept, segmenting the market, and expediting
product development
134.3 Market Research for EC
- Tracking Customer Movements
- Web Transaction log A record of user activities
at a companys Web site - Clickstream behavior Customer movements on the
Internet and, what the customer is doing there - Web Bugs Tiny graphics files embedded on e-mail
messages and in Web sites that transmit
information about the user and their movements to
a Web server - Cookie Frequently used with Web bugs.
- Spyware Software that gathers user information,
through an Internet connection, without the
users knowledge
144.3 Market Research for EC
- Web Analytics
- Enable retailers to make site adjustments on the
fly, manage online marketing campaigns and EC
initiatives, and track customer satisfaction - If a company redesigns its Web site, it can gain
almost-instant feedback on how the new site is
performing - Web analytics help marketers decide which
products to promote and merchandisers achieve a
better understanding of the nature of demand
154.3 Market Research for EC
- Limitations of Online Market Research
- Too much data may be available
- To use data properly, it should be organised,
edited, condensed, and summarised - Solution Automate the process by data
warehousing and data mining (use of a variety of
data sources to better understand customer
behavior and preferences) - Some of the limitations of online research
methods are - Lack of representativeness in samples of online
users. May not typify the population at large or
the demographics. - Accuracy of responses
- Loss of respondents because of equipment problems
- The ethics and legality of Web tracking
164.4 Internet Marketing in B2B
- Organisational Buyer Behavior
- Number of organisational buyers (purchasing for
their organisations) is much smaller than the
number of individual buyers - Transaction volumes are far larger
- Terms of negotiations and purchasing are more
complex - Marketing and Advertising Processes in B2B
- Uses a variety of marketing methods online and
off-line. - Online they may use directory services or try to
target specific customers. - Off-line they may make sales calls or attend
events.
174.4 Internet Marketing in B2B
- Methods for B2B Online Marketing
- Targeting customers
- Electronic wholesalers
- Other B2B marketing services. Examples
- Digital Cement
- Provides corporate marketing portals that help
companies market their products to business
customers - National Systems
- Tracks what is going on in an industry
- Affiliate programs
- Placing banners on another vendors Web site, for
a commission - Content alliance program in which content is
exchanged so that all can obtain some free
content - Infomediaries and online data mining services
184.5 Web Advertising
- Overview of Web Advertising
- Interactive marketing
- Web advertising, enabled by the Internet, allows
advertising to groups - Advertisers can interact directly with customers
and consumers can interact with
advertisers/vendors - More complex and personalised than off-line
advertising - Two major business models for advertising online
- Using the Web as a channel to advertise a firms
own products and services - Making a firms site a public portal site and
using captive audiences to advertise products
offered by other firms
194.5 Some Web Advertising Terminology
- Ad views The number of times users call up a
page that has a banner on it during a specific
time period known as page views - Button A small banner links to a Web site
- Page An HTML document
- Click (click-through or ad click) A count made
each time a visitor clicks on an advertising
banner to access the advertiser s Web site - CPM (cost per thousand impressions) The fee an
advertiser pays for each 1,000 times a page with
a banner ad is shown - Conversion rate The percentage of visitors who
actually make a purchase
204.5 Some Web Advertising Terminology
- Click-through rate (or ratio) The percentage of
visitors that are exposed to a banner ad and
click on it - Click-through ratio The ratio between the number
of clicks on a banner ad and the number of times
it is seen by viewers measures the success of a
banner in attracting visitors to click on the ad. - Hit A request for data from a Web page or file
- Visit A series of requests during one navigation
of a Web site a pause of a certain length of
time ends a visit. - Stickiness Characteristic that influences the
average length of time a visitor stays in a site
214.5 Web Advertising
- Why Internet Advertising?
- Television viewers are migrating to the Internet
as a viable media - Advertisers are limited in the amount of
information they can gather about the television
and print ads - Other reasons why Web advertising is growing
rapidly - Lower cost
- Increased Richness of format
- Ability to personalise
- Timeliness (fresh and up-to-the-minute)
- Location-basis (by the use of wireless tech and
GPS) - Digital branding (e.g., Amazon, British Airways)
224.5 Advertising Networks
- Role of Ad Networks in Web Advertising
- Advertising networks are specialised firms that
offer customised Web advertising. - Examples
- Brokering ads
- Targeting ads to select groups of consumers.
234.6 Web Methods
- Banners
- Banner
- On a Web page, a graphic advertising display
linked to the advertisers Web page - Keyword banners
- Banner ads that appear when a predetermined word
is queried from a search engine - Random banners
- Banner ads that appear at random, not as the
result of the users action
244.6 Web Methods
- Benefits of Banner Ads
- By clicking on them, users are transferred to an
advertisers site, and frequently directly to the
shopping page of that site - The ability to customise them for individual
surfers or a market segment of surfers - Viewing of banners is fairly high because forced
advertising is used - Banners may include attention-grabbing multimedia
254.6 Web Methods
- Limitations of Banner Ads
- Cost
- A limited amount of information can be placed on
the banner - Viewers have become somewhat immune to banners
and simply do not notice them as they once did
264.6 Web Methods
- Banner swapping
- An agreement between two companies to each
display the others banner ad on its Web site - Banner exchanges
- Markets in which companies can trade or exchange
placement of banner ads on each others Web sites - Pop-up ad
- An ad that appears in a separate window before,
during, or after Internet surfing or when reading
e-mail - Pop-under ad
- An ad that appears underneath the current browser
window, so when the user closes the active
window, he or she sees the ad - Interstitial
- An initial Web page or a portion of it that is
used to capture the users attention for a short
time while other content is loading
274.6 Web Methods
- E-Mail Advertising
- Possible for advertisers to send out large
volumes of advertisement contained inside e-mail
messages. - Effective method of advertising to large groups
- E-Mail Advertising ManagementFour guidelines
that marketers should consider to leverage
customer insights - Thinking about customer experience
- Making privacy protection a part of their brand
promise - Ensuring their recipients know about their
privacy protection and - Measuring impact.
284.6 Web Methods
- Search Engine Advertisement
- (The major advantage of using URLs as an
advertising tool is that it is free and
remembered home. - Improving a companys search-engine ranking
(optimisation) - Paid search-engine inclusion
- Advertising in chat rooms
- Beneficial if merchant is sponsoring a room.
- Advertising in newsletters
294.6 Uunsolicited Commercial E-mail (UCE)
- Spamming
- Using e-mail to send unwanted ads (sometimes
floods of ads) - What drives UCE?
- 80 percent of spammers are just trying to get
peoples financial information - credit card or
bank account numbers - to defraud them
304.6 Uunsolicited Commercial E-mail (UCE)
- Why is it difficult to control Spamming?
- Spammers send millions of e-mails, shifting
internet accounts to avoid detection - Use cloaking, they strip away clues (name and
address) about where spam originates - Server substitutes fake addresses
- Many spam messages are sent undetected through
unregulated asian e-mail routes - Spamming is done from outside the U. S.
314.6 Uunsolicited Commercial E-mail (UCE)
- Solutions to Spamming
- Antispam legislation is underway in many
countries - ISPs and e-mail providers (yahoo, MSN, AOL)
- Junk-mail filters
- Automatic junk-mail deleters
- Blockers of certain URLs and e-mail addresses
- Spam-filtering site for a country
324.7 Advertising Strategies and Promotions Online
- Associated ad strategy
- An advertising strategy that displays a banner ad
related to a term entered into a search engine - Affiliate marketing
- Marketing arrangement by which an organisation
refers consumers to the selling companys Website
for a commission - Most effective in generating a user base for a
new site. - Viral marketing
- Word-of-mouth marketing by which customers
promote a product or service by telling others
about it - Ads-as-a-commodity trategy
- Customers are paid to read ads by advertisers
- Webcasting
- Free Internet news service that broadcasts
personalised news and information, in categories
selected by the user
334.7 Advertising Strategies and Promotions Online
- Customising Ads
- Advertisements are customised by comparing users
preferences to available products or services.
Products or services that fit a users preference
are then used as the ad is displayed/sent. - Online Events, Promotions, and Attractions
- Major consideration when implementing an online
ad campaign - Target audience of online surfers clearly
understood - A powerful enough server used to handle the
expected traffic volume - Assessment of results is needed to evaluate the
budget and promotion strategy (such give-aways
and discounts) - Consider co-branding
- Admediation
- Third-party vendors that conduct (usually
large-scale) promotion.
344.7 Framework for Admediation
354.8 Special Advertising Topics
- Permission Marketing
- Advertising (marketing) strategy in which
customers agree to accept advertising and
marketing materials - Ad Management
- Methodology and software that enable
organisations to perform a variety of activities
involved in Web advertising (e.g., tracking
viewers, rotating ads) - Localisation
- The process of converting media products
developed in one environment (e.g., country) to a
form culturally and linguistically acceptable in
countries outside the original target market. - The major issue with localisation is the ability
to perform it correctly.
364.8 Special Advertising Topics
- Internet radio
- A Web site that provides music, talk, and other
entertainment, both live and stored, from a
variety of radio stations. - Wireless advertising
- Wireless advertising uses m-commerce and
l-commerce technologies to advertise to people
using mobile devices. - Ad Content
- The content of ads is extremely important, and
companies use ad agencies to help in content
creation for the Web just as they do for other
advertising media - Content is especially important to increase
stickiness
374.9 S/W Agents in Marketing Advertising
Applications
- Major Issues of EC Agents Agents that Support
- Need identification (what to buy)
- Product brokering (from whom to buy)
- Merchant brokering and comparisons
- Buyer-seller negotiation
- Purchase and delivery
- After-sale service and evaluation
- Software agents can be used to help customers
recognise their need for a product by providing
product stimuli and information. For example,
agents can be used to identify different
merchants that can supply specific products.
384.9 S/W Agents in Marketing Advertising
Applications
- Character-Based Animated Interactive Agents
- Avatars
- Animated computer characters that exhibit
human-like movements and behaviors - Social Computing
- An approach aimed at making the human-computer
interface more natural. - Chatterbots
- Animation characters that can talk (chat).
- These agents are used to provide a friendly
interface and communication method with the
merchant.
39Managerial Issues
- 1. Do we understand our customers?
- 2. Should we use intelligent agents?
- 3. Who will conduct the market research?
- 4. Are customers satisfied with our Web site?
- 5. Can we use B2C marketing methods and
research in B2B? - 6. How do we decide where to advertise?
- 7. What is our commitment to Web advertising,
and how will we coordinate Web and traditional
advertising? - 8. Should we integrate our Internet and
non-Internet marketing campaigns? - 9. What ethical issues should we consider?
- 10. Are any metrics available to guide
advertisers?