UNIT 3

E-MARKETING MANAGEMENT

 PRODUCT- ON INTERNET

A product is a 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. The term
product includes items such as tangible goods, services, ideas, people, and places.
Some new products such as search engines, smartphone apps, and social networks are unique
to the internet, others such as music simply use the internet as a distribution channel, and
some use the internet as an electronic storefront.

Products to sell online change everyday because there is massive competition. Major
companies and very intelligent individuals are constantly monitoring the market waiting to
capitalize on that next niche product that is in high demand and low supply.

Amazon is an empire. They serve some key information right up to anybody who would like
to utilize it. Figure out the niche market you are attempting to penetrate and then sort the
items by best sellers.

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  Creating Customer Value Online

Customer value = benefits – costs

PRODUCT
PRICE
DISTRIBUTION

Value is the entire product experience

Value is defined wholly by the mental beliefs and attitudes held by customers
Value involves customer expectations
Value is applied at all price levels

PRODUCT BENEFITS

The Internet created a new set of consumer desired benefits. Which Users(customer)expects
are as follows:

 Effective web navigation,

 Quick download speeds,
 Clear site organization,
 Attractive and useful site design,
 Secure transactions,
 Privacy

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  Free information or services, and
 User-friendly Web browsing and e-mail reading

Product decisions must be made that deliver these benefits to customers:

Support
Attributes Branding
Services

Labeling Packaging

Attributes include overall quality and specific features.

Product features can include color, taste, style, size, and speed of service.
Benefits also are the same features from a user perspective
The Internet increases customer benefits in ways that have revolutionized marketing.
Media, music, software, and other digital products can be presented on the Web.
Mass customization is possible for tangible & intangible products
User personalization of the shopping experience can be achieved.

Branding includes a name, symbol, or other identifying information.

 When a firm registers the information with the Patent Office, it becomes a trademark.

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 A trademark is a word, phrase, symbol or design, or combination of words, phrases,
symbols or designs, that identifies and distinguishes the source of the goods or
services of one party from those of others.
A brand is a way for companies to differentiate themselves from competitors. A brand is an
individual’s perception of an integrated bundle of information and experiences that
distinguishes a company and / or its product offerings from the competition”
A brand represents a promise or value proposition to its customers.

Support Services: Customer support is a critical component in the value

proposition.
Click-and-brick organization’s combine online and offline service to maximize the customer
experience and minimize downtime and frustrations.
Customer service reps help customers with installation, maintenance, product guarantees,
service warranties, etc. to increase customer satisfaction.
Customer service is an important part of customer relationship management (CRM)
Which combines online and offline channels to increase customer support.

Labelling for ecommerce businesses

 For ecommerce businesses, the correct labelling of products is even more important. In
online shopping, the customer’s buying decision depends solely on his/her experience while
looking at the product’s picture, its label in the picture, and the information given on the
label.

Packaging

Packaging is the protector of the product within. It protects the product from physical impacts
such as hitting, wetting, and bruising. Packaging allows for the product to reach the consumer
in the most economical way possible and creates ease of storage. Another important role is to
provide the consumer with ease of choice and usage with the information it holds. The
weight, price, production date, use by date, ingredients, name of producer company, usage
details written on the packaging provides major convenience to the seller and the consumer.

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 E-Marketing Enhanced Product Development

New-Product Strategies for E-Marketing Many new products, such as YouTube, Yahoo!, and
Twitter.com, were introduced by “one-pony” firms, built around the company’s first
successful product. Other organizations, such as Microsoft, added internet products to an
already successful product mix (e.g., the Internet Explorer Web browser). This section
explores product mix strategies to aid marketers in integrating offline and online offerings.

Product Mix Strategies

1) Discontinuous Innovations: These are new-to-the-world products never seen before.

2) New-Product Lines: These are introduced when companies take an existing brand
name and create new products in a completely different category.
3) Additions to Existing Product Lines: This occurs when organizations add a new
flavour, size, or other variation to a current product line.
4) Improvements or Revisions of Existing Products: These products are introduced as
“new and improved” and, thus, replace the old product.
5) Repositioned Products: These are current products that are either targeted to different
markets or promoted for new uses.

Price

Price is the amount of money charged for a product or service. More broadly, price is the
sum of all the values (such as money, time, energy, and psychic cost) that buyers exchange
for the benefits of having o r using a good or service.

Pricing Strategies:

1) Fixed pricing (also called menu pricing): Sellers set the price and buyers take it or leave
it. It shows same price for everyone.
2) Dynamic Pricing: The strategy of offering different prices to different customers

Various types of dynamic price are:

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  Peak User Pricing: ecommerce stores that have limited inventory can benefit from
peak user pricing by taking advantage of the inelasticity of demand. In other words,
you can charge more on every sale simply because the customer is willing to pay
more for the service or product.

 Penetration Pricing: when ecommerce introduce a new product to customers, but are
unsure how successful it may be, consider leveraging the power of penetration pricing
to draw them to their ecommerce store and away from your competitor’s. Under this
model, a new product is initially sold under market value in order to gauge its
popularity, and then the price is incrementally adjusted to match its true market value.

 Segmented Pricing: Not everyone is willing to pay the same amount for the same
product. For this reason, ecommerce stores can boost their sales by implementing a
segmented, or “tiered” pricing strategy to capture as much of the market as possible.
This pricing strategy sees multiple tiers from “Value” to “Premium Plus” so that
consumers with different budgets can access their product.

 Service Time: Many e-commerce businesses charge more for faster services. For
instance, same-day service or one-day delivery can and should result in a premium
service charge. This way, you can maximize profits by capitalizing on the increased
demand for a higher-quality product or service from a segment of your customer base.
 One-stop shopping: The internet opened the door for companies to increase customer
convenience through one-stop shopping. Auto Mall Online has partnered with a
number of firms to provide automobile price comparisons, research about various
models and manufacturers, financing and insurance information, and service options.

Internal Factors: Pricing Objectives

Marketers begin by setting overall pricing objectives from among those that are profit
oriented, market oriented, or competition oriented.
Payment options:
 Electronic money, also called e-money or digital cash, is a system that uses the
internet and computers to exchange payments electronically.

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  Payment by smart chip. MZOOP, created by Harex InfoTech in South Korea, is a
chip inserted in a cell phone that can be pointed at a vending machine or other point
of purchase reader for purchasing items. The transaction is charged to the owner’s
debit or credit bank card.
 Mobile wallets: Google recently introduced a mobile wallet application that stores all
credit cards in the mobile phone. Owners simply swipe the phone at participating
retailers and can remotely disable the function from the Web if the phone is lost.

Distribution channel
A distribution channel is a group of interdependent firms that work together to transfer
product and information from the supplier to the consumer. It is composed of the following
participants:

 Producers: Manufacturers and their suppliers, or originators of the product or

service.
 Intermediaries: Firms that match buyers and sellers and mediate the transactions
among them (e.g., wholesalers and retailers).
 Buyers: Consumers or users of the product or service.

Four major elements combine to form a company’s channel structure, and all affect
internet marketing strategy as shown in the sections that follow:

1. Types of online channel intermediaries.

2. Length of the online channel.
3. Functions performed by members of the channel.
4. Physical and informational systems that link the channel members and provide for
coordination and management of their collective effort to deliver the product or service.

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 Online Channel Intermediaries
 Wholesalers buy products from the manufacturer and resell them to retailers. • Both
brick-and-mortar and online retailers.
 Retailers buy products from manufacturers or wholesalers and sell them to
consumers.
 Brokers facilitate transactions between buyers and sellers without representing either
party. They are market makers and typically do not take title to the goods.

 Agents usually represent either the buyer or seller, depending upon who hires and
pays them. They facilitate transactions between buyers and sellers but do not take title
to the goods.

 Manufacturer’s agents represent the seller, whereas purchasing agents represent

the buyer.

 Content Sponsorship: Companies create Web sites, attract a lot of traffic, and sell
advertising.

 Infomediary: An infomediary is an online organization that aggregates and

distributes information, acting as a personal agent for Web users. One form of
infomediary is a market research firm.

The length of a distribution channel refers to the number of intermediaries between the
supplier and the consumer.

Disintermediation describes the process of eliminating traditional intermediaries.

Eliminating intermediaries

Functions of a Distribution Channel

1) Transactional functions refer to making contact with buyers and using

marketing communication strategies to make buyers aware of products. They also
include matching products to buyer needs, negotiating price, and processing
transactions.

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 Contact with Buyers
 Marketing Communications
 Matching Product to Buyer’s Needs
 Negotiating Price
 Process Transactions.

2) Logistical Functions:
Logistical functions include physical distribution activities such as transportation and
inventory storage, as well as the function of aggregating product.
 Transportation
 Inventory storage
 Aggregation of products

3) Third-party logistics provider such as UPS or FedEx. Taking logistics one step
further, third parties can also manage the company’s supply chain and provide value-
added services such as product configuration and subassembly. The logistics
providers will even handle the order processes, replenish stock when needed, and
assign tracking numbers so customers can find their orders.

 UPS
 FedEx

 United States Postal Service (USPS)

4) Facilitating Functions performed by channel members include market research

and financing.

5) Distribution System: The distribution channel is actually a system, when viewed

by the flow of products, information, and finances along the channel—a unified
system of interdependent organizations working together to build value as products
proceed through the channel to the consumer.

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