chapter

1 TANZEEL A.RAUF
PATKER
PHD (Under progress – Uni Mas, Saba
Sarawak, M.Phil. & MBA ( Marketing)
Certified Trainer – Google AI Toolkit & Skill
Host
Certified Trainer – Soft Management Skills
from Toast Master International
Marketing Consultant
Elected Chairman Advertising Committee
District EAST
0345-2123922 :
tanzeelpatker@gmail.com
Introduction to Internet Marketing TBAROfficial

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Introduction to Internet Marketing —
Today’s Objectives
 Objectives will be to:

 Define the scope of Internet marketing

 Explore the stages of Internet marketing

 Discuss the relationship stages and the Marketspace Matrix

 Examine guidelines for success

 Outline the progression of the book

Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Definition and Scope of Internet
Marketing
Exhibit 1.1: Assessing the Impact of
Internet Marketing
Marketing Resource Allocation
Offline Online
Location of Revenue Stream

Bricks-and- Mortar

Cell
Cell 44 Cell
Cell 22

ct
pa
Im
g
ti n
ke
ar
M
Online

et
Cell
Cell 33 Cell
Cell 11
rn
te
In
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Exhibit 1.2: The Seven-Stage Cycle of
Internet Marketing

Step 2
Step 3
Formulating the
Marketing Strategy Designing the
Customer
Experience

Step 1
Framing the
Market
Opportunity

Step 4
Crafting the
Customer
Step 7 Interface
Evaluating
the
Marketing
Program

Step 5
Step 6
Designing the
Leveraging Customer
Marketing Program
Information Through
Technology
Exhibit 1.3: Framework for Market
Opportunity
Seed
SeedOpportunity
Opportunity in
inExisting
Existing New
New Value
Value System
System

Identify
Identify Unmet
Unmetand
andUnderserved
UnderservedNeed(s)
Need(s)

Identify
Identify Target
TargetSegment(s)
Segment(s)

Declare
Declare Company’s
Company’sResource-Based
Resource-Based
Opportunity
Opportunity forAdvantage
for Advantage

Assess
Assess Competitive,
Competitive, Technological,
Technological, and
and Financial
Financial
Opportunity Attractiveness
Opportunity Attractiveness

Make
Make“Go
“Go//No-Go”
No-Go”Assessment
Assessment
Framework for Market Opportunity
Microsoft CarPoint Example
Leverage
• MSN CarPoint identified an opportunity to leverage
Leverage the
the Internet
Internet to
to Improve
Improve the
the
the Internet to deliver customer value in the car
Consumer Car-Buying Process
Consumer Car-Buying Process industry

• The retail car-buying process was frustrating and

Car inefficient:
Car Buyers
Buyers Are
Are Dissatisfied
Dissatisfied With
With Current
Current • Little information available to the consumer
Retail Car-Buying Process
Retail Car-Buying Process • Bargaining with salesperson viewed as an hassle
• Long process overall

Shoppers
Shoppers Who
Who Feel
Feel Intimidated
Intimidated by
by Sales
Sales • MSN CarPoint selected two primary target
People
People and Look for More Efficient Way
and Look for More Efficient Way segments for its service:
• “The intimidated by the process”
• “The information seekers”

Microsoft’s
Microsoft’s Software
Software and
and Free
Free Placement
Placement on
on • MSN CarPoint could leverage Microsoft’s
All
All Its
Its Websites
Websites expertise in software development, its brand
name and its multitude of online properties

• Competition was getting fierce with more and

How
How Big
Big Is
Is the
the Online
Online Car-Buying
Car-Buying Market?
Market? more online car services entering the market…
Who
Who Are
Are CarPoint’s
CarPoint’s Main
Main Competitors?
Competitors? • But the financial opportunity was large: 66% of
new car buyers were estimated to use online
services in 2000

• In 1996, the first version of CarPoint was

Make
Make “Go
“Go // No-Go”
No-Go” Assessment
Assessment shipped
• By 1998, CarPoint was driving $5 million in car
sales a day
Exhibit 1.4: Corporate, Business-Unit
and Marketing Strategy
Linkages Example

Corporate
Corporate Strategy
Strategy Amazon
Amazon

Business
Business Unit
Unit Strategy
Strategy Tools
Tools and
and Hardware
Hardware

Integrated
Integrated Marketing
Marketing
Integrated
Integrated Marketing
Marketing Strategy
Strategy for
for Tools
Tools and
and
Strategy
Strategy for
for Unit
Unit Hardware
Hardware Unit
Unit

Internet
Internet Traditional
Traditional Online
Online Offline
Offline
Marketing
Marketing Marketing
Marketing Marketing
Marketing Mix
Mix Marketing
Marketing Mix
Mix
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Exhibit 1.5: The Four Key Stages of
Customer Relationship

Four Key Stages of Customer Relationship

Exploration
Exploration //
Awareness
Awareness Commitment
Commitment Dissolution
Dissolution
Expansion
Expansion
Exhibit 1.6: Four Key Stages of Customer
Relationship by Level of Intensity

Intensity
Level of

Intensity

Awareness Exploration Commitment Dissolution

Stages of Customer Relationships

Exhibit 1.7: Internet Marketing Mix

Branding

Product Pricing Communication Community Distribution

Exhibit 1.8: Impact of the 2Is on the
Internet Marketing Mix

Interactivity

Branding

Product Pricing Communication Community Distribution

Individual
Exhibit 1.9: The Marketspace Matrix
Relationship Stages
Awareness Exploration Commitment Dissolution
Product
Categories of Levers

Price
The
The2Is2Is should
should influence
influence
the
the design of eachcell
design of each cell
in the matrix
in the matrix
Communication

Community

Distribution

Branding
Brandingcan can also
also
accentuate (or lessen)
accentuate (or lessen)
Branding the
the impact
impact of
ofthe
thelevers
levers
in each cell
in each cell
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Critical Success Factors for Internet
Marketing Executives
 The willingness to understand customer needs
Customer and provide added value to each customer
Customer Advocacy
Advocacy and
and Insight
Insight interaction

 The ability to have a holistic view of the

Integration customer and the enterprise in order to create
Integration a uniquely advantaged strategic plan

 Being able to understand the dynamic tension

Balanced between one-to-one marketing and mass
Balanced Thinking
Thinking marketing and being able to strike a strategic
balance between them

 The willingness to change the status quo, take

Passion
Passion and
and chances and use “bleeding edge” tools to lead
Entrepreneurial
Entrepreneurial Spirit
Spirit teams to success

 The ability to manage marketing campaigns in

Willingness
Willingness to
to Accept
Accept a more uncertain, dynamic environment, with a
Risk new set of tools that often have few records of
Risk and
and Ambiguity
Ambiguity
successes, failures or best-practices
 Exhibit 1.10: The New Rules of
Marketing for the Global Digital World
 The New Rules
1. Target segments of one, and create virtual communities
2. Design for customer-led positioning
3. Expand the role of branding in the global portfolio
4. Leverage consumers as coproducers through customization
5. Use creative pricing in the Priceline.com world
6. Create anytime/anyplace distribution and integrated supply chains
7. Redesign advertising as interactive and integrated marketing,
communication, education and entertainment
8. Reinvent marketing research and modeling as knowledge creation and
dissemination
9. Use adaptive experimentation
10. Redesign the strategy process and supporting organizational architecture

Source: Wind, Jerry and Vijay Mahajan. Digital Marketing. New York: John Wiley and Sons, p.8.
Point-Counterpoint: New Rules or Old
Rules of Marketing
Point-Counterpoint
New Rules
Several
basic conceptual and process
changes occur in online marketing
One such change is the increased ability
to deliver on the promise of one-to-one
marketing
There is also a fundamental shift to a
more consumer-driven and controlled
world — for example, a shift towards
pull-marketing and the use of more
“pull” levers, such as online community
Old Rules
Differencesin the online marketing world
are overstated
Segmentation is still at the core of
marketing — “clusters” of consumers will
emerge that share behavior
From the supply side, it is most efficient
to aggregate these consumers to reduce
costs
Successful marketing programs include
mixing different marketing levers, both
new and old: the “master-mixer” concept
still remains
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Exhibit 1.11: Overview of the Chapters

1.
1. Framing
Framing the
the 2.
2. Formulating
Formulating 3.
3. Designing
Designing the
the
Market
Market the
the Market
Market Customer
Customer
Opportunity
Opportunity Strategy
Strategy Experience
Experience

6.
6. Leveraging
Leveraging
4.
4. Crafting
Crafting the
the 5.
5. Designing
Designing the
the Customer
Customer 7.
7. Evaluating
Evaluating
Customer
Customer Marketing
Marketing Information
Information the
the Marketing
Marketing
Interface Program through
through Program
Interface Program Program
Technology
Technology
 Customer Relationships
 Product
 Pricing
 Communication
 Community
 Distribution
 Branding
 Designing the
Marketspace Matrix
 Illustration: Marketing
Campaign for The Lord of
the Rings: The Fellowship
of the Ring
Chapter 1: Introduction to Internet
Marketing
 Definition and Scope of Internet Marketing

 Seven-Stage Cycle of Internet Marketing

 Four Key Relationship Stages and the Marketspace Matrix

 Guidelines for Internet Marketing Success

 Overview of the Book

 Conclusion
Introduction to Internet Marketing —
Conclusion
 Traditional marketing methods are still highly relevant in the
networked economy, though firms must now consider a host of
new and innovative marketing methods available online (e.g.,
dynamic pricing, online community)

 In contrast to the one-way mass promotion that characterizes

modern marketing, Internet marketing enables firms to engage
the individual in personalized dialogues

 Individualization and Interactivity are two forces that make

online marketing different

 Marketing, and the relationships it creates, should be

considered in the context of particular processes and stages