Four Key Factors to Internet Marketing Success:

1
Four Key Factors to Internet Marketing Success

• Product
• Price
• Place (Distribution)
• Promotion
• The Four Ps of Marketing remain the central
  elements to a successful on-line marketing plan.

2
On-Line Product Strategy
Camera A at Retailer A

• On-line shoppers view products as branded
  commodities
• The brand is distinctive anddesirable
• The retailer is homogeneous andinterchangeable
• There is more loyalty to product manufacturers
  than to websites

Camera A at Retailer B
3
With Branded Commodities

• It matters little from which retailer the shopper
  ultimately gets the product
• Internet users are busy peoplethey dont want to
  build a relationship even when the marketers
  behind a site do!
• Price, free shipping, and fast checkout matter
  more than the retailers name

4
On-Line Distribution Strategy

• Manufacturers prefer consumers deal with the
  retailers that carry their products
• Visitors to a mfgs site must be redirected to a
  local supplier
• Bricks-and-clicks retailers have better on-line
  survival rate than Internet-only retailers

5
Affiliate programs expand the place of on-line
purchases

• Affiliatea virtual vendor that refers customers
  via links on their (the vendors) web site to an
  on-line retailer where the product may be
  purchased
• Affiliate receives a percentage of the resulting
  salei.e. a commission

6
On-Line Promotion Strategy

• FACT any financial benefit virtual sellers
  enjoy due to the absence of costly overheads
  (e.g. building maintenance, utilities, etc.) is
  frequently offset by the increased advertising
  costs required to gain a buyers business

7
On-Line Promotion Strategy

• FACT One of the biggest hurdles an on-line
  business has to overcome is the consumers lack
  of awareness that its website and company even
  exist!

8
On-Line Promotion Methods

• 1 E-mail
• FACTE-mail is the most widely and frequently
  used of all Internet services
• E-mail often produces a relatively profitable
  conversion rate
• Conversion ratethe percentage of all e-mail
  recipients who take a desired action (e.g. buying
  a product or requesting additional information)

9
On-Line Promotion Methods

• 2 Viral Marketingword-of-mouth on the
  Internet

10
Seth Godins Internet Marketing Rules (BTWhes
the author of Ideavirusthe most downloaded
e-book in history)

• Marketing by interrupting people is NOT effective
• Once you get the attention of your target market,
  youd better have something WORTHWHILE to say
• Ignite consumer networks, then GET OUT OF THE WAY
  and let them talk

11
On-Line Promotion Methods

• 3 Paid Search Engine Listings

No or low fee gets you at the bottom of the list
Gets you to the top of the list
12
On-Line Pricing Methods

• Auction pricinginterested buyers bid on products
• Demand pricingprices automatically rise and fall
  with demand (to maximize revenue)
• Posted (fixed) pricingprice at which product
  will be sold is revealed and non-negotiable

13
Internet Demographics
Online By Gender in the U.S.
60 of Men
14
Internet Demographics
15
Internet Demographics
16
The Internet Around the World
17
Basic Forms of Virtual Business
18
Search Engine Optimization
19
On-Line Privacy Issues
20
Cookies
Can trace where youve been on the Internet
Are the subject of a controversial debate
21
Identity Theft
Stealing personal information to commit fraud or
other crimes
Sharply increasing
In 2003, 27 million complaints filed with the FTC
22
Conflicting LegislationNot all countries have
the same laws regulating interstate commerce!
Marketers (M) responsible for every law in every
country
M
23
On-Line Predators

• Cyberstalking is on the rise
• Caution is declining (e.g., online dating is
  increasing, myspace.com is growing)
• Affects trust people have for legitimate
  marketing efforts

24
Creating Trust Online
3rd-party seals for creating trust
25
Internet Performance Metrics

• The server can
• tell
• Who visited
• How many times (hits)
• And where (page views)

• The server cant tell
• Recency of purchase
• Frequency of purchase
• Monetary value of purchase

26
Stickiness as the New Metric
Duration
Stickiness
Frequency
Site Reach
27
Debunking Myths of Internet Success
MYTHS 1st movers have the advantage
TRUTHS 1st movers pay the costs of development
2nd movers have the advantage
28
Every businesson or off linemust cover the
basics!
Distinctive competence
Sustainable competitive advantage
Attract loyal customers