Welcome to E-MARKETING 2009 Lecture 4: A WORLD OF E-MARKETING OPPORTUNITIES

E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Chapter 4

Bangor Business School/Wi2

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Dr. Marwan Khammash

Lecture 4 Objectives

  After lecture 4, you will be able to:  Discuss overall trends in Internet access, usage, and

purchasing around the world.  Define emerging economies and explain the vital role

of information technology in economic development.  Outline how e-marketers apply market similarity and

analyze online purchase and payment behaviors in planning market entry opportunities.

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Lecture 4 Objectives, cont.

  Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward internet use, slow connection speeds, Web site design, and electricity problems.

  Review the special challenges of e-marketing on the wireless internet in the context of emerging economies.

  Discuss the controversy related to the Digital Divide.   Explain why China is becoming a major market for e-

marketing innovation and competition.

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Idol Goes Global

  American Idol is broadcast in over 100 countries.

  Its popularity has spawned 39 national versions in countries such as Ethiopia, the Philippines, and Russia.

  The sharing of popular culture has been enhanced by the convergence of TV, internet, mobile phones, and messaging services.

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Idol Goes Global, cont. 4-5

  Check out international versions that are streamed over the internet:   Music Idol in Bulgaria: http://musicidol.btv.bg/news/6   Ethiopian Idol:

http://www2.jumptv.com/seo/Ethiopian_Idols/Ethiopian_Idols.htm

  Indian Idol: http://sify.com/indianidol/

Overview of Global E-Marketing Issues 4-6

  The globe is literally a world of opportunities.   Exhibit 4.1 shows that worldwide internet usage

increased more than 58% from 2004 to 2007.   Asia has the most internet users.   Africa saw the greatest growth in internet use.   North America has the highest penetration as a

percent of the population.

Worldwide Internet Usage Ex 4.1

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Internet Use Varies by Country

  The world’s largest online markets are the U.S. (215 million users) and China (162 million users).

  The top 10 countries account for 70% of all global users.

  Some smaller countries, such as Norway, Netherlands and Iceland, have the highest penetration, over 85% of their populations.

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Top Ten Internet Usage Countries Ex.4.2 4-9

Developed Economies

  Developed countries are highly industrialized, use technology to increase efficiency, and have a high GDP per capita.  Western Europe  North America  Japan  Australia & New Zealand

  Developed countries are ideal for the e-marketing activities discussed in the text.

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Emerging Economies

  Have low levels of GDP per capita and are experiencing rapid economic growth.

  Emerging economies can be found on every continent.  Mexico, Central & South America  Baltic States & Eastern Europe  Russia, Belarus & Ukraine  Africa  Central & Southeast Asia  China

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Importance of Information Technology

  The internet accelerates the process of economic growth through diffusion of new technologies.  Bangalore, India is the center of India’s explosive

growth in software and IT.   Internet marketing differences in emerging

economies include:  Fewer computer users  Limited credit card use  Lack of secure online payment methods  Unexpected power failures

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Market Approaches Ex 4.4 4-13

E-Commerce Payment and Trust Issues

  E-commerce in emerging markets is often hampered by limited use of credit cards and lack of trust in safely conducting online transactions.  Nepal, for example, is a cash-based economy and credit cards

are scarce.  For local Nepalis, only Visa, MasterCard, and Himalayan Bank cards

are accepted.

  In Bolivia, only 2.3 percent of the population has a credit card.  Credit card use is virtually non-existent in Ethiopia.

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E-Commerce Payment and Trust Issues, cont. 4-15

  In addition to credit card usage, e-marketers working in emerging economies should understand attitudes toward online purchasing.  A 2007 study in Lithuania found that 51% of internet

users had not made an online purchase because they thought it was too risky.

 To overcome trust issues, eBanka, an internet bank, was established in the Czech Republic in 1998 to handle secure online purchases.

Technological Readiness Influences Marketing

  E-marketers must deal with daunting issues of basic technology:

  Limited access to and use of computers and telephones   High internet connection costs   Slow internet connections speeds   Unpredictable power supplies

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Computers & Telephones

  Computer access is unevenly distributed throughout the world.

  Exhibit 4.6 shows computer ownership data for selected countries.  Ownership ranges from 84% in Kuwait to 2% in Bangladesh

and Uganda.

  Telephones (and connectivity) can be scarce and expensive.  Many consumers in countries with emerging economies access

the internet from free-standing shops rather than homes.

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Internet Connection Costs

  Countries with emerging economies often have higher internet-related business costs.

  Dial-up connection costs can vary considerably.   Broadband connections are developing quickly.

  In 2002, 88 countries had broadband vs. 166 countries in 2006.

 Broadband connections are still expensive in most countries.

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Wireless Internet Access 4-19

  At the end of 2007, there were 3.25 billion mobile phone subscriptions worldwide.

  Countries with emerging economies have leapfrogged industrial countries in terms of usage.

  Challenges of wireless e-marketing:  Modification of Web site content for small screens  Text entry using tiny keypads  Content development  Pricing and secure payments

The Digital Divide

  E-marketers must consider the social environment in which e-business operates.

  Disparities with regard to technology access can create a digital divide between countries or populations.

  The digital divide raises challenging questions for global policy, international business, and entrepreneurship.

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China: A View of the Future 4-21

  China is expected to be the largest economy in the world by 2015.

  China represents both the promise and challenge of e-marketing in emerging market economies.  70% of all Chinese internet users are under the age of

30.  China’s vibrant, growing online market requires

adaption to success.

Popular Web Sites in China Ex.4.16 4-22

Welcome to E-MARKETING 2009 CHAPTER 6: E-MARKETING RESEARCH

E-MARKETING 5/E (JUDY STRAUSS AND RAYMOND FROST) Chapter 6

Bangor Business School/Wi2

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Dr. Marwan Khammash

Lecture 5 Objectives

  After attending lecture 5, you will be able to:  Identify the three main sources of data that e-

marketers use to address research problems.  Discuss how and why e-marketers need to check the

quality of research data gathered online.  Explain why the internet is used as a contact

method for primary research and describe the main internet-based approaches to primary research.

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Lecture 5 Objectives, cont. 5-25

 Describe several ways to monitor the Web for gathering desired information.

 Contrast client-side, server-side, and real-space approaches to data collection.

 Highlight four important methods of analysis that e-marketers can apply to data warehouse information.

  Nestle Purina PetCare wanted to know whether their Web sites and online advertising increased off-line behavior.

  Nestle Purina developed 3 research questions:  Are our buyers using our branded Web sites?  Should we invest in other Web sites?   If so, where should we place the advertising?

The Purina Story 5-26

The Purina Story, cont.

  They combined online and off-line shopping panel data and found that:   Banner click-through rate was low (0.06%).   31% of subjects who were exposed to both online and off-

line advertising mentioned Purina.   The high exposure group mentioned Purina more than the

low exposure group.  Home/health and living sites received the most visits from

their customers.   Can you think of other Web sites besides petsmart.com

and about.com that would be appropriate for Purina PetCare ads?

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Data Drive Strategy

  Organizations are drowning in data.   E-marketers must determine how to glean insights

from billions of bytes of data.   Marketing insight occurs somewhere between

information and knowledge.   Purina, for example, sorts through hundreds of

millions of pieces of data about 21.5 million consumers to make decisions.

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From Data to Decision: Purina 5-29

  Knowledge management is the process of managing the creation, use, and dissemination of knowledge.

  Data, information, and knowledge are shared with internal decision makers, partners, channel members, and sometimes customers.

  Examples of the uses of knowledge management can be found in Exhibit 6.3.

Marketing Knowledge Management 5-30

Uses of Knowledge Management

Use in the Telecom Industry Representative Firm

Scanner Check-Out Data Analysis Call Volume Analysis Equipment Sales Analysis Customer Profitability Analysis Cost and Inventory Analysis Purchasing Leverage with Suppliers Frequent-Buyer Program Management

AT&T Ameritech Belgacom British Telecom Telestra Australia Telecom Ireland Telecom Italia

Use in the Retail Industry Representative Firm

Scanner Check-Out Data Analysis Sales Promotion Tracking Inventory Analysis and Deployment Price Reduction Modeling Negotiating Leverage with Suppliers Frequent-Buyer Program Management Profitability Analysis Product Selection for Markets

Wal-Mart Kmart Sears Osco/Savon Drugs Casino Supermarkets W. H. Smith Books Otto Versand Mail Order Amazon.com

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The Electronic Marketing Information System

  Marketers manage knowledge through a marketing information system (MIS).  Many firms store data in databases and data warehouses.

  The internet and other technologies have facilitated data collection.   Secondary data provides information about competitors,

consumers, economic environment, etc.  Marketers use the Net and other technologies to collect

primary data about consumers.

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Source 1: Internal Records 5-33

  Accounting, finance, production, and marketing personnel collect and analyze data.  Sales data  Customer characteristics and behavior

  Universal product codes   Tracking of user movements through web pages

Source 2: Secondary Data

  Can be collected more quickly and less expensively than primary data.

  Secondary data may not meet e-marketer’s information needs.  Data was gathered for a different purpose.  Quality of secondary data may be unknown.  Data may be old.

  Marketers continually gather business intelligence by scanning the macroenvironment.

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Public and Private Data Sources

  Publicly generated data  U.S. Patent Office  CIA World Factbook  American Marketing Association  Wikipedia

  Privately generated data  comScore  Forrester Research  Nielsen/NetRatings

  Commercial online databases

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Source 3: Primary Data

  Primary data are information gathered for the first time to solve a particular problem.

  Primary data collection enhanced by the internet:  Experiments  Focus groups  Observation  Survey research

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Primary Research Steps 5-15

  Exhibit 6.10

  Exhibit 6.15

Advantages & Disadvantages of Online Research 5-38

Ethics of Online Research 5-39

  Companies conducting research on the Web often give respondents a gift or fee for participating.

  Other ethical concerns include:   Respondents are increasingly upset at getting unsolicited e-

mail requests for survey participation.   “Harvesting” of e-mail addresses from newsgroups without

permission.   “Surveys” for the sole purpose of building a database.   Privacy of user data.

Monitoring the Social Media 5-40

  Companies must now monitor numerous web pages, blogs, and photo sites in order to learn what is being said about their brands or executives.

  Companies can hire public relations firms or online reputation management firms to help.

  They can also set up automated monitoring systems using e-mail, RSS feeds, or special software.

Other Technology-Enabled Approaches

  Client-side Data Collection  Cookies  Use PC meter with panel of users to track the user

clickstream.

  Server-side Data Collection  Site log software  Real-time profiling tracks users’ movements through a

Web site.

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Real-Space Approaches

  Data collection occurs at off-line points of purchase.   Real-space techniques include bar code scanners and

credit card terminals.   Catalina Marketing uses the UPC for promotional

purposes at grocery stores.

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Marketing Databases & Data Warehouses 5-43

  Product databases hold information about product features, prices, and inventory levels; customer databases hold information about customer characteristics.

  Data warehouses are repositories for the entire organization’s historical data, not just for marketing data.

  Data are stored in the data warehouse system and used for analysis by marketing decision makers.

Data Analysis and Distribution 5-44

  Four important types of analysis for marketing decision making include:  Data mining  Customer profiling  RFM (recency, frequency, monetary value) analysis  Report generating

Knowledge Management Metrics 5-45

  Two metrics are currently in widespread use:  ROI: total cost savings divided by total cost of the

installation.  Total Cost of Ownership (TCO): includes cost of

hardware, software, labor, and cost savings.