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Chapter 2 adapting marketing in the new economy
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Transcript of Chapter 2 adapting marketing in the new economy
CHAPTER 2
ADAPTING
TO THE NEW ECONOMY
REPORTED BY:
GRACE R. ASI
© 2003 Prentice Hall, Inc.
OBJECTIVES:
• IDENTIFY THE MAJOR FORCES DRIVING THE NEW ECONOMY.
•UNDERSTAND HOW BUSINESS AND MARKETING PRACTICES ARE CHANGING AS A RESULT OF THE NEW ECONOMY.
• EXPLORE HOW MARKETERS USE THE INTERNET, CUSTOMER DATABASES, AND CUSTOMER RELATIONSHIP MANAGEMENT IN THE NEW ECONOMY
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DRIVERS OF THE NEW ECONOMY
•DIGITALIZATION AND CONNECTIVITY
•DISINTERMEDIATION AND REINTERMEDIATION
•CUSTOMIZATION AND CUSTOMERIZATION
•INDUSTRY CONVERGENCEADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DIGITALIZATION AND CONNECTIVITY
•INTRANETS-CONNECT PEOPLE WITHIN A COMPANY TO ONE ANOTHER AND TO THE COMPANY MAINFRAME
•EXTRANETS-CONNECT A COMPANY WITH ITS SUPPLIERS AND DISTRIBUTORS
•INTERNET-CONNECT USERS TO A LARGE WORLD WIDE “INFORMATION REPOSITORY”
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DIGITALIZATION AND CONNECTIVITY
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DIGITALIZATION AND CONNECTIVITY
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DISINTERMEDIATION AND REINTERMEDIATION
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
DISINTERMEDIATION AND REINTERMEDIATION
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
CUSTOMIZATION AND CUSTOMERIZATION
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
INDUSTRY CONVERGENCE
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
CHANGES IN BUSINESS PRACTICES
OLD ECONOMY
• Organize by product units• Focus on profitable transactions• Look primarily at financial
scorecard• Focus on shareholders• Marketing does the marketing• Build brands through advertising• Focus on customer acquisition• No customer satisfaction
measurement• Overpromise, under deliver
NEW ECONOMY
• Organize by customer segments• Focus on customer lifetime value• Look also at marketing scorecard• Focus on stakeholders• Everyone does the marketing• Build brands through behavior• Focus on customer retention and
growth• Measure customer satisfaction
and retention rate• Under promise, over deliver
ADAPTING MARKETING TO THE NEW ECONOMY
VS.
© 2003 Prentice Hall, Inc.
HOW MARKETING PRACTICES ARE CHANGING:
•E-BUSINESS
•CUSTOMER RELATIONSHIP MARKETING
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
HOW MARKETING PRACTICES ARE CHANGING:
•E-BUSINESS - USES ELECTRONIC MEANS AND PLATFORMS TO CONDUCT BUSINESS.
•E-COMMERCE - WEB SITES FACILITATE THE ONLINE SALE OF PRODUCTS AND SERVICES.
•E-PURCHASING – PURCHASING FROM ONLINE SUPPLIERS.
•E-MARKETING – COMPANY’S EFFORTS TO INFORM, COMMUNICATE, PROMOTE, AND SELL PRODUCTS AND SERVICES OVER THE INTERNET.
E-BUSINESS
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
INTERNET DOMAINS
•B2C•B2B•C2C•C2B
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: E-BUSINESS
© 2003 Prentice Hall, Inc.
INTERNET DOMAINS
•B2C•B2B•C2C•C2B
• BUSINESS-TO-CONSUMER
• ACTIVITIES OF BUSINESSES SERVING END CONSUMERS WITH PRODUCTS AND/OR SERVICES
• BENEFITS INCLUDE: GREATER ORDERING CONVENIENCE, LOWER COST, EASIER INFORMATION AND PRICE GATHERING
• LESS USEFUL FOR PRODUCTS THAT MUST BE TOUCH AND EXAMINE
HOW MARKETING PRACTICES ARE CHANGING: E-BUSINESS
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
B2C: Customers can shop online at Calyx and Corolla or ask for a catalog
and shop by phone
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
POPULAR B2C SITE IN THE PHILIPPINES
© 2003 Prentice Hall, Inc.
INTERNET DOMAINS
•B2C•B2B•C2C•C2B
• BUSINESS-TO-BUSINESS
• COMPANIES DOING BUSINESS WITH EACH OTHER
• VOLUME IS 10-15% HIGHER THAN B2C.
• BENEFITS INCLUDE: LOWER OR BETTER PRICES VIA B2B AUCTION SITES, BUYING ALLIANCES, GREATER ACCESS TO INFORMATION, PRICE TRANSPARENCY
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: E-BUSINESS
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
POPULAR B2B WEBSITES
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
B2B WEBSITE IN THE PHILIPPINES
© 2003 Prentice Hall, Inc.
INTERNET DOMAINS
•B2C•B2B•C2C•C2B
• CONSUMER-TO-CONSUMER
• ELECTRONIC COMMERCE WHICH INVOLVES ELECTRONICALLY FACILITATED TRANSACTIONS BETWEEN CONSUMERS
• TRANSACTIONS OCCUR VIA ONLINE TRADING SITES
• CONSUMERS ARE CREATING ONLINE PRODUCT INFORMATION VIA NEWSGROUP AND CHAT ROOM
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: E-BUSINESS
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
C2C WEBSITES
© 2003 Prentice Hall, Inc.
INTERNET DOMAINS
•B2C•B2B•C2C•C2B
•CONSUMER-TO-BUSINESS
•FACILITATE COMMUNICATION BETWEEN CUSTOMER AND BUSINESSES.
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: E-BUSINESS
© 2003 Prentice Hall, Inc.
PURE-CLICKBRICK-AND-
CLICK
ADAPTING MARKETING TO THE NEW ECONOMY
VS.
E-BUSINESS
HOW MARKETING PRACTICES ARE CHANGING:
© 2003 Prentice Hall, Inc.
•LAUNCHED A WEB SITE WITHOUT ANY PREVIOUS EXISTENCE AS A FIRM
•DOT-COMS FAILED FOR A VARIETY OF REASONSRUSHING INTO THE MARKET WITHOUT
PROPER RESEARCH OR PLANNINGSPENDING LARGE AMOUNTS ON MASS
MARKETING AND OFFLINE ADVERTISINGFAILURE TO BUILD A SOUND BUSINESS
MODEL THAT WOULD DELIVER EVENTUAL PROFITSADAPTING MARKETING TO THE NEW ECONOMY
PURE-CLICK COMPANY
© 2003 Prentice Hall, Inc.
•EXISTING COMPANIES THAT ADDED AN ONLINE SITE FOR INFORMATION AND/OR E-COMMERCE.
•MORE SUCCESSFUL THAN PURE CLICK COMPETITORSBETTER KNOWN BRAND NAMESGREATER FINANCIAL RESOURCES AND ACCESS
TO FUNDSDEEPER INDUSTRIAL KNOWLEDGE AND
EXPERIENCE, CUSTOMER BASE, AND RELATIONSHIPS WITH SUPPLIERSCAN BE EASILY REACHED ABILITY TO REACH AND SERVE CUSTOMERS ON
FAR AWAY LOCATION
ADAPTING MARKETING TO THE NEW ECONOMY
BRICK-AND-CLICK COMPANY
© 2003 Prentice Hall, Inc.
•CONTEXT
•CONTENT
•COMMUNITY
•CUSTOMIZATION
•COMMUNICATION
•CONNECTION
•COMMERCE
The Seven “C’s” of Web Site Design
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING:
SETTING UP WEB SITES
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
CONTEXT FACTORS
• WEB SITE DOWNLOADS QUICKLY
• FIRST PAGE IS EASY TO UNDERSTAND
• VISITORS FIND IT EASY TO NAVIGATE TO OTHER PAGES THAT OPEN QUICKLY
• INDIVIDUAL PAGES ARE CLEAN LOOKING AND NOT OVERLY CRAMMED WITH CONTENT
• TYPE FACES AND FONT SIZES ARE VERY READABLE
• SITE MAKES GOOD USE OD COLOR AND SOUND
EASE-OF-USE PHYSICAL ATTRACTIVENESS
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
CONTENT FACTORS
•DEEP INFORMATION WITH LINKS TO RELATED SITES
•CHANGING NEWS OF INTEREST
•CHANGING FREE OFFERS TO VISITORS
•CONTESTS AND SWEEPSTAKES
•HUMOR AND JOKES
•GAMES
© 2003 Prentice Hall, Inc.
•BANNER ADS
•SPONSORSHIPS
•MICROSITE
• INTERSTITIALS
•BROWSER ADS
•ALLIANCES AND AFFILIATE PROGRAMS
HOW MARKETING PRACTICES ARE CHANGING:
SETTING UP WEB SITE
ADAPTING MARKETING TO THE NEW ECONOMY
PLACING ADS AND PROMOTIONS
© 2003 Prentice Hall, Inc.
•ADVERTISING INCOME
•SPONSORSHIP INCOME
•ALLIANCE INCOME
•MEMBERSHIP AND SUBSCRIPTION INCOME
•PROFILE INCOME
•PRODUCT AND SERVICE SALES INCOME
•TRANSACTION COMMISSIONS AND FEES
•MARKET RESEARCH/ INFORMATION
•REFERRAL INCOME
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING:
SETTING UP WEB SITE
DOT.COMS REVENUE AND PROFIT MODEL
© 2003 Prentice Hall, Inc.
CUSTOMER RELATIONSHIP MARKETING :
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
ADAPTING MARKETING TO THE NEW ECONOMY
• A BUSINESS PROCESS IN WHICH CLIENT RELATIONSHIPS, CUSTOMER LOYALTY AND BRAND VALUE ARE BUILT THROUGH MARKETING STRATEGIES AND ACTIVITIES.
© 2003 Prentice Hall, Inc.
EFFECTIVE CUSTOMER RELATIONSHIP MARKETING REQUIRES:
•REDUCING CUSTOMER DEFECTION RATES• INCREASING THE LONGEVITY OF THE
CUSTOMER RELATIONSHIP•ENHANCING THE GROWTH POTENTIAL OF
EACH CUSTOMER : SHARE-OF-WALLET, CROSS-SELLING AND UPSELLING
•MAKING LOW-PROFIT CUSTOMERS MORE PROFITABLE OR TERMINATING THEM
•FOCUSING DISPROPORTIONATE EFFORT ON HIGH VALUE CUSTOMERS
HOW MARKETING PRACTICES ARE CHANGING:
ADAPTING MARKETING TO THE NEW ECONOMY
CUSTOMER RELATIONSHIP MARKETING
© 2003 Prentice Hall, Inc.
• IDENTIFY YOUR PROSPECTS AND CUSTOMERS. DO NOT GO AFTER EVERY ONE.
•GROUP CUSTOMERS BY THEIR NEEDS AND THEIR VALUE TO THE COMPANY; AGGRESSIVELY PURSUE THE MOST VALUABLE CUSTOMERS.
• INDIVIDUALIZED INTERACTIONS WITH CUSTOMERS TO IMPROVE YOUR LEARNING
•CUSTOMIZE PRODUCTS, SERVICES AND MESSAGES TO EACH CUSTOMER
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
FOUR-STEP FRAMEWORK FOR ONE-TO-ONE MARKETING
ADAPTING MARKETING TO THE NEW ECONOMY
© 2003 Prentice Hall, Inc.
MASS MARKETING• Average customer• Customer anonymity• Standard product• Mass production• Mass distribution• Mass advertising• Mass promotion• One-way message• Economies of scale• Share of market• All customers• Customer attraction
ONE-TO-ONE MARKETING
ADAPTING MARKETING TO THE NEW ECONOMY
VS.
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
• Individual customer• Customer profile• Customized market offering• Customized production• Individualized distribution• Individualized message• Individualized incentives• Two-way messages• Economies of scope• Share of customer• Profitable customers• Customer retention
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
•CUSTOMER DATABASE-AN ORGANIZED COLLECTION OF COMPREHENSIVE INFORMATION ABOUT INDIVIDUAL CUSTOMERS OR PROSPECTS THAT IS CURRENT, ACCESSIBLE, AND ACTIONABLE FOR MARKETING PURPOSES.
•DATABASE MARKETING-THE PROCESS OF BUILDING, MAINTAINING, AND USING CUSTOMER DATABASE AND OTHER DATABASES TO MAKE CONTACT, FACILITATE TRANSACTIONS AND BUILD CUSTOMER RELATIONSHIPS.
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
•DATA WAREHOUSE-STORAGE FILES FOR DATA COLLECTED BY THE COMPANY’S CONTACT CENTER FROM CUSTOMER PURCHASES, CUSTOMER SERVICE CALLS, ONLINE INQUIRIES, MAIL-IN REBATE CARDS, ETC.
•DATA MINING-EXTRACTING USEFUL INFORMATION ABOUT INDIVIDUALS, TRENDS, AND SEGMENTS FROM THE DATA.
© 2003 Prentice Hall, Inc.
ADAPTING MARKETING TO THE NEW ECONOMY
DATA WAREHOUSE AND DATA MINING
© 2003 Prentice Hall, Inc.
USES OF DATABASE:
•BEST PROSPECT IDENTIFICATION•MATCHING OFFERS TO CUSTOMERS•DEEPENING CUSTOMER LOYALTY•REACTIVATING CUSTOMER PURCHASING•AVOIDING SERIOUS MISTAKES
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
© 2003 Prentice Hall, Inc.
DOWNSIDE OF DATABASE MARKETING:•REQUIRES LARGE INVESTMENT•DIFFICULTY IN GETTING EVERYONE TO BE CUSTOMER-ORIENTED
•NOT ALL CUSTOMERS WANT AN ONGOING RELATIONSHIP WITH THE COMPANY
ADAPTING MARKETING TO THE NEW ECONOMY
HOW MARKETING PRACTICES ARE CHANGING: CUSTOMER RELATIONSHIP MARKETING
© 2003 Prentice Hall, Inc.
THE END
THANK YOU!