Internet Marketing
Internet Marketing
Internet Marketing
10
14
E-Business
22
Conclusion
25
27
Price - What pricing and payment policies will customers accept that yield sufficient revenues?
Advances in Internet technology can help a company reduce its costs, which in turn allows it to lower its
prices.
While the number of suppliers to a firm has generally been declining in recent years (as firms
engage more and more in relationship marketing which often entails long-term contracts with a smaller
number of suppliers), there is a trend among companies that use the Web to actually increase their
number of suppliers in particular the outsourcing of a wide
Percentage of People with Internet
variety of non-core services
Access at Home or Work
Age 16+
Access Access
at
at
Home Work
Australia
50%
30%
Austria
42%
27%
Belgium/Luxembourg
39%
23%
Denmark
58%
Finland
49%
38%
37%
22%
23%
25%
14%
28%
38%
21%
11%
17%
41%
31%
19%
26%
France
22%
Germany
35%
Hong Kong
58%
Ireland
46%
Italy
34%
Netherlands
56%
New Zealand
51%
Norway
53%
Singapore
56%
Spain
20%
South Korea
57%
Sweden
61%
Switzerland
43%
Taiwan
50%
UK
46%
Source: Nielsen//NetRatings
Marketing is typically an innovative operation that blends into the marketing mix both established
and state-of-the-art communication technologies. The Internet is one intriguing component that many
businesses are adding to their marketing mix. It presents a viable means to extend the marketing plans
traditional tactics and capitalize on the strengths of the underlying technologies.
Marketing on the Internet requires a marketing analysis to be broken into two areas.
Usage: What are the motivations of the target customer for using
the Internet? Is it to gather information, purchase, or interact?
What are their patterns of usage? Are they frequent users,
occasional users, or infrequent users?
Media and recreation: What media do the target group use? This
may be used to support Internet presence and direct publicity
campaigns.
2. Where is our "Best" Market Niche? Questions to review: What are our competitor's strengths?
What are our competitor's weaknesses? Are there niche opportunities for us to do business? Do we
have advantages over our competitors? How can we differentiate our pricing from the competition?
What are the strengths and weaknesses of our products? What areas of the industry do we want to
deliver our products and services to? How do we want to position ourselves in the marketplace? What
market goals and objectives do we have? What are our competitors doing on the Internet?
3. Lead Generation and Attracting Prospects: Identify lead generation and marketing activities,
Assign marketing responsibilities to those that have the interest and the skills, Set up administration
systems to carryout marketing activities, Develop a marketing campaign schedule, Develop a Sales
Cycle Process.
4. Relationship Building By Converting Prospects Into long-term Customers. Questions to
review: What activities or steps can we incorporate into our Marketing Plan that will help us transition a
"prospect" to a "customer"? What materials are necessary to support the relationship building process?
5. Image. What Image do our Customers have of Us? Questions to review: What Image do we
want customers to have about; Our Company, Our Product or Service, Our Customer Service,
Reliability, Cost of Service and Added Value. This is also part of the on-line branding process.
6. Selling Process. What types of buyers will be attracted to our products and services?
Questions to review: What needs are satisfied with our products and services? How will we present our
solutions to our customers and clients? How do we format and make a proposal that reflects our
company's image and products? What ways can we improve our "negotiating" and "closing" skills?
7. The Customers Perspective. What information are customers looking for? Questions to
review: Are customers looking for information about Products, Services, Support Services, Other ways
to Use the Product, Technical Details. How do our customers use the Internet?
The Internet provides a unique medium for marketing, combining the most desirable traits of
conventional media with the capability for an instantaneous call to action on the part of the prospect.
Since Internet users must find you on the Net, you can attract and identify prospective customers in a
more narrow target market than traditional media. Considering its potential, the Internet is an irresistible
medium.
Conduct a Marketing Audit
The Internet component should integrate with your overall business-marketing plan to align with
existing capabilities and practices. Before developing an Internet strategy a marketing audit may be
required to determine the strengths and weaknesses of your existing businesss marketing functions.
This review process may be done internally or by external consultants.
After conducting an audit of marketing practices, it should be evident where improvements are
required and what strengths exist to exploit. The next step is to consider how the Internet may be used
to build upon past strengths and overcome identified weaknesses. Once completed, it is possible to
formulate marketing tactics that leverage the technologies to achieve the marketing plans defined
goals.
YOUR MARKETING PLAN
Expectations for marketing via the Internet can range from modest goals of increasing sales leads
to those of revolutionizing your business-customer interactions.
Planning an Internet strategy is vital to using the medium successfully. It includes not only a well
directed review of available technologies and tactics specific to the medium, but a calculated blending of
Internet marketing with traditional marketing strategies. Without integrating Internet marketing to your
traditional marketing strategies, you can lose focus of your primary goals, become disorganized, and fail
to capitalize on time-sensitive opportunities as well as mismanage resources.
In contrast, a well-planned marketing strategy is built on the premise that all aspects of your
operations are open for review against the needs of your customers. If you are focused in this way both
identify your value to your customers and strive to assess regularly your customers changing needs. As
the technology matures, new opportunities will
emerge and the marketing plan should adjust to
streamline operations and determine how
consumer needs are served most efficiently.
According to Forrester Research, only 23
percent of companies currently improve their online
operations by making use of the data associated
with how customers use their Web sites. However,
as the brick-and-mortar world has demonstrated,
understanding and reacting to customer behaviour
is the number one resource for acquiring and keeping your customers.
E-METRICS
As an online marketer you should do more than simply measure "click-through" rates and loosely
defined "hits." The key is to gain a fundamental understanding of your customer preferences and
purchasing lifecycles. You need information to help understand what is really taking place with your ebusiness, you should be asking:
Investigate your customer interests and segments to track individual behaviours and click-stream
patterns for more effective targeted marketing campaigns and communication. With this increased
customer knowledge, you will be able to improve customer retention, build a more loyal customer base,
and increase ROI.
Loyalty Marketing
By bringing together marketing, sales, service, and other divisions with state-of-the-art electronic
customer relationship management tools companies are able to interact with consumers, identify
customers, learn about customer behaviours, and customize some part of their products (or services) to
meet each and every customers unique requirements.
By implementing web-based customer communications strategies, developing business processes
devoted to customer loyalty and putting the necessary infrastructure in place, your company will be able
to:
Attract the most loyal prospects and customers for higher customer returns
and new customer referrals.
A more expansive
companion report
we have produced
titled 'Why the
Internet" is also
available for
download and
expands on this
section.
RELATIONSHIP MARKETING
Successful businesses recognize the value of relationship marketing. The Internet lends itself to this
beautifully with email and Web-based forms. Customers can register with the firm, thereby allowing it to
build a back-end database, which it can then use to collect and qualify leads and strengthen customer
relations. Using the Internet for customer communication costs less than using the phone for similar
purposes.
Customer service. The Internet allows companies to
conduct customer service directly at much lower costs and with
far greater convenience than over the telephone. FedEx claims
it saves over $1 million each month because customers can
check the status of their packages on FedExs Web site,
bypassing the need to speak to a customer service
representative.
Building trust. Trust is a significant factor in business
marketing. Companies can use the Internet to encourage
customers to chat or post messages discussing a firms
products, which speaks to open communication and trust
building.
Canadian online use of the Internet
10
Branding is something that happens over time as the result of a consistent effort to communicate a
clear message. It begins with a marketable concept as the foundation of a business. This requires that
the business founders have given great thought to how they will distinguish their business from the other
businesses selling essentially the same products and services.
Online, a better concept, even by a tiny company has the
opportunity to become the biggest and the best. In that respect
there is no doubt that the Internet is unique.
DIGITAL BRANDING
One focuses on the business process, that is, how a company finds, serves, and
satisfies its customers.
The other targets the branding process, in terms of how a company manages media
and positions messages in competitive and confusing markets.
Your Web site is the number one brand builder in cyberspace; its
development and operation should not be relegated to technical staff
that might have little regard for brand equity.
A point to remember is that a $500 web site looks like a $500 web
site.
11
Set up your site so it's easy to find what you're selling. Some sites
are arranged so poorly that you must wade through too many
pages to find the product or service sold there.
thorough message
expressed over time
Content and positioning
determined by considerable
thought and planning
Helps distinguish an
individual business from
the rest of the crowd
12
Protect your brand. On the Web, your brand and your domain
name are inextricably linked. If someone else has registered your
company name as a domain name, consider bartering for it, buying
it, legal action or waiting until the registration expires to obtain it.
On the Internet brand building is no longer a one-way street. Interaction with clients is a two way
process. Your customers tell you what they want your brand to be, and you listen and react. After all, the
customer is king?
Design everything around maximizing the customer experience. Anticipate their concerns. Serve
them. Surprise and delight them. Even tease them a bit. But make sure they get the whole brand
experience. Make sure they get the full impact of a good idea, delivered with excellence.
13
Search Engines and Directories: Search engines are one of the most popular means of
finding web sites, second only to following links
on web pages.
Search engines help people find relevant
information on the Internet. Major search
engines maintain huge databases of web sites
that users can search by typing in keywords or
phrases.
Advertise your message. Web
directories/search engines are information
gateways that have high traffic and are good for
displaying advertisement banners. They are
used to find Internet information and for this
reason, appeal to broad target groups.
For detailed information, download our companion report, 'Search Engines Explained'
E-zines: (Online magazines) These publications are focused on specific topics and may be a way
to reach a target audience interested in that subject. Some companies have gathered the e-mail
addresses of potential customers and used these lists to send out product inform ation specific to client
interests.
Seven good reasons to establish an E-Zine
1.
2.
3.
4.
5.
6.
7.
Establishes Trust
Brings Visitors Back
Establishes
as anFresh
Expert
Keeps Your You
Website
in Visitors' Minds
Keeps Current & Potential Customers Up to Date on New Products & Services
Builds Relationships
Allows You to Build an Opt-In Email Marketing List
14
E-mail: Ethical methods of gathering e-mail addresses are through on-line registration built into
your corporate Web sites, or requests for information forms that request submission to your opt-in lists.
An alternative is to purchase lists of customer e-mail addresses indexed by special interests from a
private company such as 'Postmaster Direct'.
Online customers are becoming increasingly selective about their relationships, the brands they
trust, and what they consider relevant. While most marketers are aware of privacy issues and the risks
of Spam, there is still need for improvement. Email marketing campaign management is still fairly
unsophisticated even at the largest of organizations.
Considering the retail sales growth (see below) what will be important to understand about your
online customers? A survey of 400 online customers conducted by IMT Strategies in 2000 and again a
year later highlights several aspects of customer behaviour that translate directly into marketing results.
15
Marketers have to think about the drivers of customer response and purchase. Over time, as more
is learned about your customer buying behaviour, you can will isolate campaign and program
characteristics that drive your customer or visitor response and action. Isolating the behaviour of highvalue customers, business customers, or the minority of customers who prefer to buy online will be
critical. For example, we have found that new online buyers get referrals when shopping online, while
experienced frequent buyers prefer search engines.
Affiliate Marketing: Affiliate Marketing enables you to increase online sales by promoting your
products and services through a network of Affiliate sites on a
payment-by-results basis.
It also provides the opportunity to generate additional
revenue by exploiting your site's own content to promote the
products and services of other online Merchants.
A Merchant recruits content sites to partner with them as
Affiliates in exchange for commissions. A common third party
provider such as Commission Junction can be used.
The Merchant provides their advertising banners and links to their Affiliates and assigns a
commission for each click-through to their site, subscription to their service, or purchase of their
products that is generated from those links.
Affiliates place the tracking code for these ads and links on their Web sites. This allows clickthrough's to be tracked online and commissions to be calculated.
If a product or service is purchased, the customer pays the Merchant directly and the Affiliate is paid
a commission for that transaction.
Banner Advertising: Banner advertising can play an extremely important role within your
website strategy. You can use banner advertising as a means of promoting your own products and
services, raising awareness, or as a way of generating revenue by selling advertising space on your
own website.
16
Branding. While CTR and cost per sale relate to direct marketing objectives, another
way of looking at banner ads is as "branding" tools. They create brand awareness, and
a brand image in the viewer's mind, whether or not the viewer clicks on the ad.
Branding is very difficult to measure, but can be very powerful.
The average click through ratio on banners is just under 1%, although with a well planned and
executed advertising campaign using effective banners you can increase this to as much as 15%, but
be prepared to work at it.
It is a good idea to have a number of different banner ideas so that you can carry out small test
marketing campaigns with each one until you find those that work best.
There are a number of key issues that must be considered when designing a successful banner:
n
Any campaign is limited by the amount of advertising you can do depending on the size of your
budget. Therefore it is important that you target your market carefully so as to maximize advertising
spend on effective banner campaigns.
17
Rich Media Advertising: Looking for ways to make online advertising more compelling, and
hopefully thereby more acceptable, marketers have increasingly been turning to streaming advertising.
In effect another kind of rich media advertising, streaming advertising comes in two basic forms.
First, it can either be part of a streaming audio or video program on the web. With many people now
listening to web radio or watching web broadcasts, this makes perfect sense. After all, everyone is
accustomed to getting commercials on their TV or car radio.
The other channel for streaming advertising is essentially an infomercial. Consumers can download
a streaming clip for a product or service from a marketer's website.
Two new studies recently released suggest that the streaming advertising market is going to boom
now and in the years to come. According to DFC Intelligence, streaming advertising, as part of online
audio and video programming, is expected to generate $138 million in 2001. Similarly, researchers at
the Yankee Group said that spending on streaming media advertising would ramp up from $44 million in
2000 to a whopping $3.1 billion by the year 2005.
Sponsorship: Acting as a sponsor for a charity or other worthwhile cause and receiving
advertising on their literature and web site. Such as the 'Montreal Breast Cancer Foundation' or ''Miriam
Foundation'.
Conferences: By their nature conferences are organized for special interests. Advertising in
conference literature, print and electronic, is an excellent way to contact target markets.
18
Couponing - e-couponing that may be printed off from Web sites or email.
Games with prizes: Useful to keep people coming back to Web sites.
Some legal restrictions may apply, depending upon the jurisdiction.
Publicity: The goal of publicity is to have others talk about the small business or its products. It
can be inexpensive or even free and it may have the potential to generate far more in sales than even a
well executed advertising plan. Key publicity tactics include:
Entering awards contests. For instance, web site design contests hosted by a variety
of consultant agencies, professional associations, Internet magazines, suppliers, or
consumer groups may generate traffic to a winning site.
19
other useful devices that enable the users to develop or locate useful information.
Subscriptions: Business marketers may use their Web sites to encourage visitors to subscribe
to receive regular email messages from the company. These messages are called digests or
newsletters, and are a clever way for marketers to push
product news to willing customers.
Controlled-access Web pages: Clever business
marketers may use their Web site to attract new customers.
They might publish a Web page that allows customers to
download a free trial version of a software application that
expires after a time if not paid for. Or, customers might
receive an e-mail message inviting them to visit a private
Web page on the companys intranet, and giving them a password. The company, as a way of
encouraging a sale, offers customers who visit the page a prize or enticement of some sort.
Public Forums: These are often community-based or interest-based sites that allow visitors to
communicate with one another. An opportunity for small businesses to reach to their intended target
group via these forums is by posting messages or by sponsoring such a forum. E-mail based forums
appeal to a wider audience due to the greater use of this application over Web-based forums. Webbased forums are advantageous for their superior display of advertising images/messages
Resellers: Some sites will remarket other companies products as intermediaries. The companies
that host these sites may have invested significant resources in making them attractive to the target
audience a small business is interested in attracted. By piggybacking on another companys efforts,
cost-efficiencies may be realized by engaging in a reselling arrangement.
E-mail Links: Visitors to a site should have the opportunity to correspond with the host of that
site, especially if out of the telephone area or time zone. E-mail links may be strategically placed
throughout the site to elicit response from visitors for at various points. These are also useful for
feedback on site maintenance problems.
On-line Surveys: Information may be collected on the visitors to a Web site through registration
forms, on-line surveys, or through tracking of areas of site they visit.
20
Virtual Malls: Web based sites that allow companies to post their products or services for sale
along with other companies. These may be product specific, may be arranged by complementary
products, or may have products that are not
related except by their companies desire to
attract a similar target audience.
Measurement: The Internet has the
unique ability to provide marketers with
detailed information about the success of their
Web marketing programs. Companies can
track visitors to their site and collect
information about them from their cookies,
then process this information using Web site
analysis software.
Cookies are a type of digital identification, which is read every time the user connects to a public
Web site. The Web site can collect some very basic information about the user (e-mail address, time of
day the site was accessed, which pages were visited) and use it to create visitor profiles. Visitors can
then be identified as old or new when they visit the site.
Cookies are an essential part of many companies business strategies. The inform ation collected
from them is used to measure site visitors, develop user profiles, and target advertising in much the
same way that television allows advertisers to target their message to a certain demographic.
21
E-BUSINESS
Your approach to creating and marketing an E-business system on your web site will depend on the
business you are in and how much of your business you intend to place on the Web. E-business
becomes part of your sales, customer service, order taking and order fulfilment process online.
For an existing business, as opposed to one starting on the Web, one of the best ways to come up
with an online strategy is to let the customers do it for you. If some of your business is now conducted
over the phone and by mail, that is the most obvious candidate for translation to the Internet.
But moving to the Internet is not as simple as throwing your mail-order catalogue on the Web, even
though that is what most people do. It is a start, certainly, but when you do that you often lose crucial
steps in your interaction with the customer, steps that usually are not written down anywhere.
When taking an order over the phone,
what questions do you ask your customers?
What manual steps do you go through to
fulfill those orders? Do you have anyone on
your staff that understands direct marketing
and sales?
How do your representatives sell the
customer upgrades or additional product?
Much of your current sales procedures will
have to translate on the Web.
E-BUSINESS SYSTEM
22
E-BUSINESS
Canadian banks are only lately getting comfortable with Internet commerce, but a large number of
American based companies can provide this service with an Internet Merchant Account to US
companies and Canadian.
If you are embarking on an E-business implementation, as mentioned earlier you need to know
what your target market is, what budget constraints will be put on the system, whether it will be entirely
Web-based, the size and number of transactions it will need to support, how outside parties will connect
to the system, and what level of security is appropriate.
For many companies, the process of Webifying current business functions can be made part of
reengineering those functions to improve their
efficiency, customer responsiveness, and cost
structures.
WEB PROMOTION
Intranets and extranets are the latest additions to corporate Internet strategy. These private,
controlled networks allow companies to use the Internet as an effective business marketing and
communications tool.
An intranet is an internal corporate network, based on the same technology as the Internet, but to
which access is controlled. The information published on an intranet is not available to the general
population of Internet users. Using software such as e-mail, document management, scheduling,
collaboration, and workflow especially developed for intranets, employees in large, decentralized, and
geographically dispersed organizations can share information as easily as if they were in the same
office building.
23
E-BUSINESS
Marketing departments can publish product information on internal Web pages for the sales staff to
read. Limited access might also be granted to customers. Your corporate Intranet can be an extension
of your E-business in particular with existing suppliers or large corporate customers.
Allowing your intranet to be accessed by customers and other non-employees in this way has led to
the development of a new term, the extranet. In business-to-business communications, using the
Internet allows direct, platform -independent communications with your business partners. This is a huge
benefit to businesses and represents a major shift from the problems of even five years ago.
24
CO NCLUS IO N
Use of the Internet for business marketers is a reality. Television, print, newspaper, and other
traditional marketing avenues will continue to be used but those who ignore the Internet will lose the
race for competitive advantage. On the other hand, those who have embraced the Internet have
demonstrated its power and are innovators. Many believe that we have only seen the beginning of a
technological leap.
Marketing on the Internet is a new business channel, yet in many ways it remains the same as
traditional marketing, for example by focusing on the five constants of marketing. But companies
need to learn what works on Web sites, how to communicate their message and how to differentiate
their Web sites.
You should examine companies
who use their Web sites
as a
promotional tool, for brand image
building, as a distribution channel, for
customer service, and in building
supplier relationships.
The Internet and the Internet
gives business a better way to do the
things they do. The Internet has the
capability to cut costs for selling and
buying organizations. Automated
functions and instant data information
can cut purchasing cycle times,
reduce human resources costs, and
lower transaction costs for suppliers.
Further to cost reductions, there is increased efficiency. Online functions for customer service,
product information, product ordering and order-tracking functions are available to customers 24 hour a
day every day of the year. These are value-added services that serve to differentiate the products they
compliment.
Increasingly through innovative outside relationships, organizations are aggressively reshaping
themselves and fundamentally changing the way they do business. Unprecedented levels of
performance and profitability have resulted from these efforts. The bottom line is that the Internet and
outsourcing of 'skill specific' tasks has become one of today's most powerful, organization-shaping
management strategies.
25
CONCLUSION
Today's corporations better serve their customers and their bottom line by functioning more as a
focus of resources than as an owner of resources.
Outsourcing non-core functions like Web Site Maintenance and the use of Internet business
consultants provides many companies with enhanced levels of service at a lower cost and will help your
business compete in today's highly competitive marketplace.
Global competition has intensified with the introduction of new technologies. Those who can exploit
the opportunities of this new technology will win. Internet marketing enables a large company to be
responsive, innovative, and fast and a small company to compete internationally with the big boys.
Information technology changes on a month-to-month basis and sometimes week to week. The pace of
change is accelerating. To remain competitive, companies must position themselves and commence
marketing on the Internet.
26
Operations are
controlled from
Montreal, Canada.
He has a great deal of International
experience, having lived and worked
From here we are
within the United Kingdom, Germany,
able to provide
Switzerland and Canada.
service on a global
basis in English, French, Chinese and Arabic to a
diverse range of companies from start-up to
established corporations.
27