Internet Marketing 15.823

1
INTRODUCTION

• Internet Marketing 15.823
• Professor Glen L. Urban
• Spring 2001

2
WELCOME

• EXCITING TIME -- New Technology
• LIFE CYCLE -- State of the Art
• WHATS NOT WORKING -- WHAT IS
• LESSONS OF BIRTH PHASE
• EXPECTATIONS
• OUTLINE OF COURSE

3
Life Cycle of Technology
Birth
Growth
Maturity
4
BIRTH PHASE

• High Expectations
• Gold Rush
• Claim the High Ground -- Grow Big Fast
• Get Sales then Worry About Profit
• Ready Venture Capital
• Natural Experimentation

5
BIRTH PHASE (continued)

• Substitution with Technology
• Information (search engines)
• Catalogues
• Self service
• Early Innovation
• Shopping malls
• Supply chain
• Aggregation
• Price

6
WHATS NOT WORKING

• Pure Play B2C
• High acquisition cost
• Low Conversion, Repeat, Repurchase, Margins
• Advertising Model
• Small Audience
• Click Through and cost/000 down
• Exchanges
• Not Include channel Players
• Little Solution/Decision Content
• Technology Play Only
• Buzz

7
WHATS WORKING

• Large Volume Branded Sites
• Portals
• 2nd generation eTailers
• Reverse and Commodity Auctions
• Transaction Fee Models
• Clicks and Mortar
• Infrastructure -- software, computers, networks

8
INDUSTRIES REVOLUTIONIZED

• Stock Trading
• Autos
• Travel
• Telecom/Computers
• Games

9
LESSONS

• Fundamentals
• Value to customer
• Technology Link to Customer Need
• Business Model - ROI
• Operations
• Reliability/Scalability
• fulfillment/service
• Finance
• Do not Be Over Influenced by
• Realism -- Contingency Plan

10
MORE LESSONS

• Marketing
• Core Benefit Proposition
• Selling is Tough Job
• Allocate Resources Here
• Innovation
• Internet Speed is High Risk
• Adoption May be Slow
• Need Structured Process

11
EXPECTATIONS
Growth
Birth
Mature
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EXPECTATIONSGROWTH PER YEAR B2B B2C

• 0-10
• 10-25
• 25-50
• 50-75
• 75-100
• Over 100

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VIEWS OF THE INTERNET

• Direct Mail / Catalog Substitute
• Advertising Enhancement
• Magazine/Newspaper Substitute
• New Information Source
• An Additional Store
• New Channel / Relationship
• New World

14
GROWTH DRIVERS

• Customer Experience -- Recommendations and
  Personalization
• Profit -- ROI
• Community
• Established Firms
• eMarketing -- Sales Productivity and CRM
• Technology -- wireless/broadband
• Trust

15
SUMMARY

• Bright Future for Growth
• Profit Opportunities
• Good Fundamental Management Required

16
COURSE REVIEW

• Outline
• Cases
• Projects

17
Understanding Customers Consumer Behavior B2C vs
B2B
Strategy Formulation Trust vs. Push Product
Design Segmentation Positioning
Customer Acquisition Advertising /
PR/Selling Pricing Promotion
Distribution Channel Logistics
Relationship Building Fulfillment Service
18
STRATEGIC QUESTIONS

• Why are people buying on the Internet/why is
  conversion rate so low?
• Trust Based Marketing-- When to use it?
• Are there any opportunities left? How do you
  find them?
• Is personalization and one to one marketing the
  ultimate segmentation?
• How do we compete if we are not the first entrant?

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STRATEGIC QUESTIONS (CONT.)

• What are the roles of Advertising and Selling in
  eMarketing success?
• Is Internet Marketing going to be a price game
  only?
• Is a separate company the only way to solve the
  Internet channel conflict?
• Will single sources (portals/mega retailers) own
  the customer relationship?
• What is the next wave in Internet Marketing and
  how do you ride it?

20
ADMINISTRATION

• TAs
• Ben Gibbon
• Sebastian Periera
• Shyan Wen
• Srinath Narayanan
• URL

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FEEDBACK

• Evaluation
• project (group) -- 40
• class participation -- 20
• case discussion -- 40
• Student Feedback
• To TAs
• Mid Course Input
• Final Course Evaluation