Interactive Marketing and Electronic Commerce

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Chapter 8

• Interactive Marketing and Electronic Commerce

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Electronic Commerce (e-commerce)

• Any activity that uses some form of electronic
  communication in the inventory, exchange,
  advertising, distribution, and payment of goods
  and services
• The technology infrastructure for targeting
  customers, conducting customer transactions, and
  maintaining online relationships with all members
  of the marketing channel

or
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Interactive Marketing

• Buyer-seller electronic communications in a
  computer-mediated environment in which the buyer
  controls the kind and amount of information
  received from the seller
• e-marketing the strategic process of creating,
  distributing, promoting, and pricing products for
  targeted customers in the virtual environment of
  the internet

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Marketspace

• An information- and communication-based
  electronic exchange environment
• Occupied by sophisticated computer and
  tele-communications technologies and digitized
  offerings
• Marketplace traditional material environment
  where buyers and sellers engage in exchange
  relationships
• Occupied by people, facilities, and physical
  objects

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Types of e-commerce

• Business-to-consumer (B2C)
• Use of Internet and WWW
• Over ½ of US households expected to buy online in
  2002
• Business-to-business (B2B)
• 90-95 of e-commerce
• Electronic data interchangeselectronic link from
  retailers to suppliers (e.g., Wal-Mart to PG)
• Extranetprivate web-based network for
  communication between a company and its
  suppliers, distributors, business customers, and
  others

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Whos on-line?
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What do they buy?
37
Travel reservations Computer/electronics
Groceries Music
books Specialty (flowers, wine) Ticket
event sales Clothing
Other
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30
23
8
15
7
12
7
5
4
5
3
6
11
7
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Why do they buy?

• Convenience
• Cost
• Choice
• Customization
• Communication
• Control

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Important Characteristics of e-commerce for
e-marketers

• Addressabilityidentifying customers
• Registration
• Cookies
• Interactivitydialogue with consumers
• Memoryability to access databases containing
  individual consumer profiles and purchase
  histories and use this data in real time to
  customize marketing offers to a specific customer

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Product Considerations

• Digitalization
• Brand recognition increasingly important
• Adds search properties to services
• New products and services possible
• Efficient target marketing opportunities

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Place Considerations

• Electronic order processing and communication
• reduces inefficiencies and costs in the channel
• speeds delivery time
• improves customer service
• Lower overhead costs (fewer buildings!)
• Global reach

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Promotion Considerations

• Increased customer involvement
• Increased availability and use of information
  about individual consumers (customizable
  promotions)
• Types of on-line advertisements
• Banner and button ads
• Key word ads
• Intermercials
• Sponsorships

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Price Considerations

• Consumers have access to more price information
  than ever before
• Marketers can facilitate price-comparisons or
  pass e-commerce savings on to consumers
• More flexibility (customizable pricing)

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Ethical and Legal Issues

• Consumer privacy
• Use of cookies
• E-marketing to children
• Spam
• Domain names and trademark infringement