CHAPTER 4

INTERNET MARKETING STRATEGIES

4.1 An overview of marketing strategies
No matter how tremendous a firm’s qualities are high, its marketing strategy and execution are often
just as important. The best business concept, or idea, will fail if it is not properly marketed to potential
customers. Market strategy is the plan you put together that details exactly how you intend to enter a
new market and attract new customers or Market strategy is How the firm plan to promote about firms
products or services to attract its target audience. For instance, Twitter, YouTube, and Pinterest have a
social network marketing strategy that encourages users to post their content on the sites for free, build
personal profile pages, contact their friends, and build a community. In these cases, the customer
becomes part of the marketing staff.
4.2. Product strategies over the internet
A product is a bundle of benefit that satisfies the needs of organizations or consumers and for which
they are willing to exchange money or other items of values. The term product includes; tangible
goods, services, ideas, people and places. The success of Google demonstrates how a new and purely
online product can use the internet’s properties to build a successful brand. All these can be marketed
on the internet, as the Google.com example shows. Products may also be classified by the purpose for
which they are purchased. Consumer products are those purchased by an individual for personal
consumption. Businesses sell products to consumers in the business-to-consumer (B2C) market, and
Consumers sell products to another consumer in the consumer-to-consumer (C2C) market. Industrial
products are used in the operation of an organization, as components for manufacture into final product,
or for sale (B2B market), that is businesses sell products to businesses.
Some new products such as search engines are unique to the internet while other products such as
books simply use the internet as a new distribution channel, often adding unique technology –enabled
services. With the internet’s unique properties, customer control, and other e-marketing trends, product
developers face many challenges and enjoy a plethora of new opportunities while trying to create
customers value using electronic marketing tools.
3.2.1. Creating customer value online
To succeed, firms must employ strategies that result in customer value.
Value = Benefit - costs. But what is exactly is value?
First, it is the entire product experience. It starts with a customer’s awareness of a product, continues at
all customer touch point (including the web site experience and e-mail from a firm) and ends with
actual product usage and post purchase customer service.
Second, value is defined by the customer (by the mental beliefs and attitude held by customers).
Regardless of how favorably the firm views its own products, it is the customers’ perceptions that
count.
Third, value involves customer expectation; if the actual product experience falls short of their
expectation, customers will be disappointed.
Fourth, value is applied at all price levels. The internet can increase benefits and lowers costs, but it
can also work in reverse.

Product Benefits
The benefits customers seek online are:
• Effective online navigation • Quick download speed
• Clear site organization • Attractive and useful site design
• Secure transaction • Privacy
• Free information or service & • User-friendly web browsing and e-
mail reading
To capitalize on these opportunities, marketers must make five general product decisions that comprise
its bundle of benefits to meet customer needs: These are
1. Attributes
Product attributes include overall quality and specific features. With quality, most customers know
“you get what you pay for”. Higher and consistent quality means higher prices, thus, maintaining the
value proposition. Product features include; color, taste, style, size and speed of service. For example,
Yahoo! provides list of website categories (attribute), which helps users to find things quickly online
(benefit). Product benefits are key components in the value proposition.
The internet increases customer benefits in many remarkable ways that have revolutionized marketing
practice. The most basic is the move from atoms to bits, one of the internet’s key properties. This
capability opened the door for media, music, software, and other digital products to be presented on the
web. Perhaps the most important benefit is mass customization. Tangible products such as laptop
computers can be sold alone at rock-bottom price online or bundled with many additional hardware,
software items or services to provide additional benefits at a higher price.
The internet offers users the unique opportunity to customize products automatically without leaving
their keyboards. User personalization is another form of customization. Through website registration
and other techniques, websites can greet users by name and suggest product offerings of interest based
on previous purchases. For instance, a returning customer to Amazon.com gets a tabbed menu item
with his name on it: “Sam’s store.” Clicking on the tab reveals a list of items that might be interested in
examining, based on his previous purchases from Amazon.
2. Branding
A brand includes a name, a symbol, or other identifying information. When a firm registers that
information it becomes a trademark. A trade mark is a word, phrase, symbol or design, or combination
of these, that identifies and distinguishes the source of the goods or services of one party from those of
others. A brand is much more than its graphic and verbal representation in marketing materials,
however. It is an individual’s perception of an integrated bundle of information and experiences that
distinguishes a company and/or its product offerings from the competition.
Brand Decision for web products
A) Using existing brand name on the web
Firms can use exiting brand names for their new products. An existing brand name can be used for any
new product and it makes sense when the brand is well known and has strong brand equity. For
example, Amazon added music CDs, videos, software, electronics, and more to its product mix. It is
beneficial for Amazon to use its well established web brand name for these additional offerings rather
than launch a new electronic storefront with another name.
B) Creating new brand names for the internet marketing
If an organization wants to create a new internet brand, a good name is important. Good brand names
should suggest something about the product (e.g. webpromote.com and Google.com), should
differentiate the product from the competitors (e.g. gurl.com), and should be capable of legal
protection. On the internet, a brand name should be short, memorable, easy to spell, and capable of
translating well into other language. For example, Dell computer at www.dell.com is much easier than
Hammacher Schlemmer (www.hammacher.com), the gift retailer. As another example, consider the
appropriateness of these search tool names: Yahoo!, Excite, Lycos, Alta Vista, InfoSeek, HotBot,
WebCrawler, GoTo, Google, and LookSmart. Which ones fit the preceding criteria?
 C) Co-Branding
It occurs when two different companies put their brand names on the same product. This practice is
quite common on the internet and is a good way for firms to build synergy through expertise and brand
recognition, as long as their target markets are similar. For example, sports illustrated now co-brands
with CNN as CNNSI. Even the website address displays the co-brand: sportsillustrated.ccn.com.
Yahoo! is a good place to look for co-branded services.
D) Internet Domain Names
Organizations spend a lot of time and money developing powerful, unique brand names for strong
brand equity. Using the company trademark or one of its brand names in the web address helps
consumers quickly find the site. For example, coca-cola.com adds power to Coca-cola brands. This
parallel usage is not always possible, however. Many factors must be considered when it comes to
domain names.
3. Support Service
Customer support during and after purchase-is a critical component in the value proposition. Customer
service representatives should be knowledgeable and concerned about customer experiences. Site
that care about developing relationships with their customers, such as Amazon.com; place some of their
best people in customer support. Some products need extra customer support, for example when user
purchases software such as Survey Solutions to design online questionnaires, technical support
becomes important.
Customer service representatives help customers with installation, maintenance problems, product
guarantees, and service warranties, and in general work to increase customer satisfaction with the
firm’s product. Customer service as a product benefit is an important part of customer relationship
management; however, it has now become more of a necessity than competitive edge.
4. Packaging
Packaging decisions are the fourth set of decisions that must be made about individual products.
Packaging is the activity of designing and producing the container or wrapper for a product. Protection
of the product and promotion are the two major purposes of packaging. The package may include:
 The primary package (what the product is in it – a tube full of toothpaste);
 The secondary package (the box the tube came in);
 the shipping package (a card box case)
5. Labeling
Product labels identify brand name, sponsoring firms, product ingredients, and often provides
instructions for use and promotional materials. Labels on tangible products create product recognition
and influence decision behavior at the point to purchase. Labeling has digital equivalents in the online
world. For online services, terms of product usage, product features, and other information comprise
online labeling at web sites. For example, when user downloads RealAudio software for listening to
online broadcasts, they can first read the ‘label’ to discover how to install and use the software.
4.3. Pricing Strategy as Part of Internet Marketing Plan
In the narrowest sense, price is the amount of money charged for a product or service. More broadly,
price is the sum of all the values (such as money, time, energy and psychic cost) that buyers exchange
for the benefits of having or using a good or service. Throughout most of history, prices were set by
negotiation between buyers and sellers, and that remains the dominant model in many emerging
economies.
One of the first questions you need to answer is what your site visitors like? Are they bargain hunters?
Or do they look for excellence in customer service? Or shop for products based on their prestige value?
Another important question is what does it cost you to purchase (or produce) and market this product or
service? Your price will have to be above your costs-most of the time.
Fixed price policies Refers to setting one price for all buyers- is a relatively modern idea that arose with
the development of large-scale retailing and mass production at the end of the 19th century. Now, one
hundred years later, the internet is taking us back to an era of dynamic pricing-varying prices for
individual customer or different price for different customers.
Buyer and seller perspectives of price
The meaning of price depends on the viewpoint of the buyer and the seller. Each party brings different
needs and objectives that help to describe a fair price.
I. Buyer view
Buyers define value as benefits minus costs. Internet creates many benefits important to consumers and
business buyers alike. Here we explore the cost side of the formula: money, time, energy, and psychic
costs.
II. Seller view
Sellers view price as the amount of money they receive from buyers. Both internal and external factors
affect pricing levels. Internal factors are the firm’s strength and weaknesses from its SWOT analysis,
its overall pricing objectives, its marketing mix strategy, and the cost involved in producing and
marketing the product. External factors that affect online pricing in a particular include the market
structure and the buyer’s perspective, as discussed earlier.
Here are the various pricing objectives you’ll want to consider.
• To maximize short-term profits
Here you try to squeeze as much money out of sales of the product as possible, even though fewer
customers may make a purchase. Your strategy may be to charge premium prices for website design
services. You end up with fewer customers, but then dealing with a lot of customers multiplies your
problems. And you can make more profit off each customer. Or you may need to maximize profits in
order to satisfy an impatient boss or investor.

• To gain market share

The other main strategy is to price your service lower to gain market share. You may want to maximize
the number of subscribers to your online Internet access business, even though you don’t make as much
on each customer. But you know that later you’ll be able to sell these subscribers other services such as
web hosting, e-commerce, website design, DSL, and a host of others once they get comfortable with
you. You don’t make as much early, but you plan to make money later with “back end” sales.
• To survive
Survival is a worthy goal. Sometimes companies lower prices so they can generate enough revenue to
survive short term. But this isn’t a very good long-term strategy. There’s an old joke about the
businessman who said he was losing money on every sale, but he expected to make it up in volume.
• To help society
You might keep the price lower than “what the market will bear” in order to make essential products
available to the consumers who would otherwise be priced out of the market. Altruism has its place.
You don’t have to make as much money as possible, unless making money is your only goal. For
example, I really want to keep my consulting services priced within reach of small businesses. I long to
see small businesses thrive; that’s part of what makes me tick. But I also want to charge better-funded
companies a more appropriate fee for the more extensive services I render them. The way I do this is to
offer a standard product or service, and an economy service at a lower price, but with clear limitations.
4.3.1. Pricing Approaches
Of course, pricing isn’t just scientific. It has a lot to do with your particular niche on the Internet, and
how you’ve determined you can best succeed. Here are some demand-oriented approaches to pricing:
• Skimming pricing: When you are offering a new or innovative product you can initially charge a
high price, since the “early adopters” aren’t very price sensitive. Then you lower prices to “skim” off
the next layer of buyers, etc. Eventually, the price will drop as the product matures and competitors
offer lower prices.
• Penetration pricing: You set a low initial price in order to penetrate quickly into the mass market. A
low initial price discourages competitors from entering the market, and is the best approach when many
segments of the market are price sensitive. Amazon.com, for example, offers a discount price and may
lose money on the first sale, but this way they gain more customers who will purchase products later at
a lower marketing cost (since it costs much less to attract them back for the second or third sale if they
are happy with their first purchase experience).
• Prestige pricing. Cheap products are not taken seriously by some buyers unless they are priced at a
particular level. For example, you can sometimes find clothing of the same quality brand at Nordstrom
as you do at the Men’s Warehouse. But because it is priced higher, Nordstrom’s clientele believes it to
be of higher quality.
• Odd-even pricing takes advantage of human psychology that feels like $499.95 is less than $500.
Studies of price points by direct marketers have found that products sell best at certain price points,
such as $197, $297, $397, compared to other prices slightly higher or lower. Strange, we humans!
• Demand-backward pricing is sometimes used by manufacturers. First, they determine the price
consumers are willing to pay for a product. Then they work backward through the standard markups
taken by retailers and wholesalers to come up with the price they can charge wholesalers for the
product.
• Bundle pricing is offering two or more products together in a single package price. This can offer
savings to both the buyer and to the seller, who saves the cost of marketing both products separately.
And the customer is willing to pay more because he perceives that he is getting a lot more, even though
the cost to the seller may not really be that much more.
Here are some cost-oriented approaches to pricing that I’m sure you are familiar with:
• Standard mark-up pricing: Typically a manufacturer marks his price up 15% over his costs, a
wholesaler 20% over his costs, and a retailer 40% over his costs. The retailer gets a larger markup
based on the idea that, since he is closest to the end user, he is required to spend more services and
individual attention meeting the buyer’s needs.
Then there are competition-oriented approaches to pricing that you’ll recognize:
Customary pricing is where the product “traditionally” sells for a certain price. Candy bars of a certain
weight all cost a predictable amount—unless you purchase them in an airport shop.
• Loss-leader pricing works on the basis of losing money on certain very low priced advertised
products to get customers in the door who will buy other products at the same time.
• Flexible-price policies offer the same product to customers at different negotiated prices. Cars, for
example, are typically sold at negotiated prices. Many B2B sales depend on negotiated contracts.
Once you have determined list or quoted price you can make some special adjustments still.
• Quantity discounts encourage customers to buy larger quantities, and thus cut marketing costs.
• Seasonal discounts encourage buyers to stock inventory earlier than their normal demand would
require. This enables the manufacturer to smooth out manufacturing peaks and troughs for more
efficient production.
• Rebates, such as $40 off Microsoft FrontPage 2000, are usually offered by the manufacturer, but
sometimes a retail store will offer its own rebate. Rebates make marketing sense, since they strongly
motivate sales, but often less than 50% of the buyers will remember to collect the receipt, proof-of-
purchase, and rebate form, fill it out, and mail it prior to the expiration date. And, of course, the rebate
is often subtracted from the list price of the item, which still has considerable profit built in. Rebate
marketing is less than half as expensive to the marketer as the price cut would seem to indicate.
• Trade discounts are offered by manufacturers to distributors or resellers in their distribution chain.
For example, a manufacturer may quote list price of $1000 less 30/10/5, meaning 30% off the list price
to the retailer, an additional 10% off the $1000 to the wholesaler, and an additional 5% off the $1000 to
the jobber. This pricing will be expected if you have an online B2B store.
• Cash discounts are sometimes offered for the costs saved from not having to extend credit and bill
the buyer on an open account. This mainly affects B2B sales rather than retail.
• Allowances may be permitted for trade-ins (not too many trade-in cars shipped by modem though) or
by a manufacturer for promotional advertising that a retailer undertakes.
4.4. Online Distribution Strategies
Marketing intermediaries are firms which help the company to promote, sell, and distribute its goods to
final buyers. They include: resellers, physical distribution firms, marketing service agencies, and
financial intermediaries. Resellers are distribution channel firms that help the company find customers
or make sales to them. These include wholesalers and retailers, who buy and resell merchandise.
Physical distribution firms help the company to stock and move goods from their points of origin to
their destinations. Marketing services agencies are the marketing research firms, advertising agencies,
media firms, and marketing consulting firms that help the company target and promote its products to
the right markets. Financial intermediaries include banks, credit companies, insurance companies, and
other businesses that help finance transactions or insure against the risks associated with the buying and
selling of goods. Most firms and customers depend on financial intermediaries to finance their
transactions.
4.4.1. New types of intermediaries
New technologies have led thousands of enterprises to launch internet companies. The amazing success
of early internet only companies such as amazon.com, Expedia, Priceline, eBay and dozens of others
struck terror in the hearts of many established manufacturers and retailers. Established store-based
retailers of all kinds- fear being cutout by these new types of intermediaries. The new intermediaries
and new forms of channel relationships caused existing firms to re-examine how they served their
markets.
4.4.2. Brick & mortar, click and mortar and click only marketers
a. Brick and mortar marketers
A “brick and mortar business” is a term used mainly on the Internet to differentiate between companies
that are based solely online, and those that have a real-world counterpart. Such a business has a
commercial address “made of brick and mortar” where customers can transact face-to-face. When e-
commerce was new, however, some consumers were wary of doing business with companies that did
not have a commercial address. This brings us to one of the main advantages of a brick and mortar
business: customer security.
b. Click only companies
The click-only dot.coms operate only online without any brick and mortar market presence. They
directly sell products and services to final consumers via the internet. Familiar e-tailers include
amazon.com, Expedia and wine.com. The click only group also includes search engines and portals
such as such as Google, Yahoo and Excite, which started as search engines and later added services
such as news, weather, stock reports, entertainment, etc.
Internet service providers such as AOL and Earth link are click only companies that provide internet
and email connections for a fee. Transaction sites such as auction site eBay, take commissions for
transactions conducted on their site.
Various content sites, such as New York Times on the web (www.nytimes.com), ESPN.com and
Encyclopedia Britannica Online, provide financial, research and other information. Finally enabler sites
provide the hardware and the software that enable internet communication and commerce.
C. click and mortar companies
Click and mortar companies are traditional brick and mortar companies that have added e-marketing to
their operations. However most resisted adding ecommerce to their sites they worried that this would
produce channel conflict- that selling their products or services online would be competing with their
offline retailers and agents. For example Hewlett-Packard feared that its retailers would drop HP’S
computers if the company sold its computers directly online. Merrill lynch hesitated to introduce online
stock trading fearing that its own brokers would rebel. Even store based bookseller Barnes & Noble
delayed opening its online site to challenge Amazon.com. These companies struggled with the question
of how to conduct online sales without cannibalizing the sales of their own stores, resellers or agents.
However, they soon realized that the risks of losing business to online competitors were even greater
than the risks of angering channel partners. If they don’t cannibalize these sales, online competitors
soon would.
4.5. Online Promotion strategies
Simply put, online promotion is promoting or communicating the product or service to customers
digitally. Online advertising encompasses adverts on search engine results pages, adverts placed in
emails and other ways in which advertisers use the Internet.
One of the greatest benefits of online display advertising is that the messages are not restricted by
geography or time and are more interactive than offline advertising.
Internet ads can be updated any time at minimal cost, and therefore can always be timely. They can
reach a very large number of potential buyers all over the world. Online ads are sometimes cheaper in
comparison to print (newspaper and magazine), radio, or television ads. Ads in these other media are
expensive because they are determined by space occupied by how many days (times) they are run, and
by the number of local and national stations and print media that run them. Internet ads can be
interactive and targeted to specific interest groups and/or to individuals. Finally, the use of the Internet
itself is growing very rapidly, and it makes sense to move advertising to the Internet, where the number
of viewers is growing. Nevertheless, the Internet as an advertising medium does have some
shortcomings, most of which relate to measurement of effectiveness.
4.5.1. Types of display advertising
There are different ways to display messages online, some of which are mentioned below.
1. Interstitial banners
These are banners that are shown between pages on a web site. As you click from one page to another,
you are shown this advert before the next page is shown. Sometimes, you are able to close the advert.
2. Pop-ups and pop-under
As the name suggests, these are adverts that pop up or under the web page being viewed. They open in
a new, smaller window.
3. Map advert
This is advertising placed within the online mapping solutions available, such as Google Maps. Pricing
is a function of coverage area, content and design requirements, final size.
4. Floating advert
This advert appears in a layer over the content, but is not in a separate window. Usually, the user can
close this advert. It looks very much similar to pop ups ads, but definitely more infuriating. It "fly"
anywhere around the page for 5-30 seconds, obscure view of the page you are trying to read, and often
block mouse input. Often, the animation ends by disappearing into a banner ad on the page.
5. Wallpaper advert
This advert changes the background of the web page being viewed. Usually, it is not possible to click
through this advert.

6. Banner advert
A graphic image or animation displayed on a web site for advertising purposes. They may be static
banners rich media such as Flash, video, JavaScript and other interactive technologies. Banners are not
limited to the space that they occupy; some banners expand on mouse over or when clicked on. There
are two types of banners:
Keyword banners appear when a predetermined word is queried from the search engine. It is effective
for companies who want to narrow their target to consumers interested in particular topics. Random
banners appear randomly and might be used to introduce new products to the widest possible audience,
or to keep a well-known brand, such as Amazon.com or IBM, in the public eye.
A major advantage of using banners is the ability to customize them to the target audience. Keyword
banners can be customized to a market segment or even to an individual. If the computer system knows
who you are, or what your profile is, you may be sent a banner that is supposed to match your interests.
However, one of the major drawbacks of using banners is that limited information is allowed. Hence
advertisers need to think of creative but short messages to attract viewers.
4.6. Web site development and design
A website is a connected group of pages on the World Wide Web regarded as a single entity, usually
maintained by one person or organization and devoted to a single topic or several closely related
topics/subjects.
Web development and design are at the heart of successful e-Marketing. Developing a web site
involves more than choosing colors and header images.
While it is tempting to focus on the design aesthetics of web sites, and eye-catching web sites can be
converting web sites, it is important to remember that a web site is a marketing tool which should be
increasing revenue for the company.
4.6.1. Types of websites
Marketers beyond simply creating a website must design an attractive site and find ways to get
consumers to visit the site, stay around and come back often.
Websites vary greatly in purpose and content. The most basic type is
1. Corporate website: These sites are designed to build customer goodwill and to supplement other
sales channels, rather than to sell the company’s products directly. For example, you can’t buy ice
cream at benjerrys.com, but you can learn all about Ben & Jerry’s company philosophy, mission,
current events, financial performance, company personnel, employment opportunities, products and
locations.
Corporate websites typically offer a rich variety of information and other features in an effort to answer
customer questions, build closer customer relationships and generate excitement about the company.
Most corporate websites also provide entertainment features to attract and hold visitors. Finally, the site
might also provide opportunities for customers to ask questions or make comments through e-mail
before leaving the site.
2. Marketing website: A website that engages consumers in interactions that will move them closer to
a direct purchase or other marketing outcomes. Such sites might include catalog, shopping tips and
promotional features such as coupons, sales events or contests. For example, visitors to Sonystyle.com
can search through dozens of categories of Sony products, review detailed features and specifications
lists for specific items, read expert product reviews. They can place an order for the desired Sony
products online and pay by credit card, all with a few mouse clicks.
Companies aggressively promote their marketing websites in offline print and broadcast advertising
and through banner-to-site advertisements that pop up on others’ websites.
Toyota operates a marketing website at www.toyota.com. Once a potential customer clicks in, the
carmaker wastes no time trying to turn the inquiry into a sale. The site offers plenty of information and
a garage full of interactive selling features, such as detailed descriptions of current Toyota models
information on dealer locations and services, complete with maps and dealer web links.
4.6.2. How to create an effective website?
Creating a website is one thing; getting people to visit the site is another. The key is to create enough
value and excitement. Today’s website users are quick to abandon any website that doesn’t measure up.
“Whether people are online for work reasons or for personal reasons”, says a website design expert, “if
a website doesn’t meet their expectations, two/thirds say they don’t return-now or ever. We call it the
internet death penalty. This means that companies must constantly update their sites to keep them
current, fresh and useful. Doing so involves time and expense, but the expense is necessary if the e-
marketer wishes to cut through the increasing online clutter.
For some types of products, attracting visitors is easy. Consumers buying new cars, computers, or
financial services will be open to information and marketing initiatives from sellers. Marketers of low
involvement products, however, may face a difficult challenge in attracting website visitors. For low
interest products the company can create a corporate website to answer customer questions, build
goodwill and excitement, supplement selling efforts through other channels and collect customer
feedback.
The early text based websites have largely been replaced in recent years by graphically sophisticated
websites that provide text, sound, and animation to attract first view and to encourage repeat visits.
To attract new visitors and to encourage revisits, suggests one expert, e-marketers should pay close
attention to the seven Cs.
• Context: The site’s layout and design
• Content: The text, pictures, sound and video that the website contains.
• Community: The ways that the site enables user-to-user communication
• Customization: The site’s ability to tailor itself to different users or to allow users to personalize the
site.
• Communication: The ways the site enables site-to-user, user-to-site or two way communication.
• Connection: The degree that the site is linked to other sites.
• Commerce: The site’s capabilities to enable commercial transactions.
An important part of selling online can be the domain name for the site. Internet addresses are known
as domain names. Domain names are used in URLs to identify particular Web pages. For example, in
the URL http://www.pcwebopedia.com/index.html, the domain name is pcwebopedia.com.
Domain names include: Business.com, Microsoft.com, Altavista.com, Loans.com, wine.com,
autos.com, express.com, etc. Every domain name has a suffix that indicates which top level domain
(TLD) it belongs to. There are only a limited number of such domains.
For example:
Gov-----------------Government agencies
edu-----------------Educational institutions
org-----------------Organizations(not for profit)
mil-----------------Military
com----------------Commercial business
net - ---------------Network organizations
4.7. Consumers’ Behavior and e-market research
To successfully conduct B2C, it is important to find out who are the actual and potential customers.
Several research institutions collect Internet usage statistics, look at factors that inhibit shopping, then
enable to reshuffle marketing ad strategies.
Shopping habits keep changing as a result of innovative marketing strategies. Finding out what specific
groups of consumers (such as teenagers or residents of certain geographical zones) want is a major role
of market research. Some like classical music while others like jazz. Some like brand names, while
price is more important to many others.
2.4.1. Market Research
Market research has been conducted offline for years in order to find out how consumers behave in
their buying decision.
The Internet is a powerful and cost-effective tool to conduct market research about consumer behavior,
to identify new markets, to investigate competitors and their products, to test consumer interest of new
products and various motives. There are basically two ways to find out what customers want.
1. Asking customers what they want: The Internet provides easy, fast, and relatively inexpensive
ways for vendors to by interacting directly with them. The simplest way to find out what customers
want is to asking them to fill in electronic questionnaires.
To do so, vendors need to provide some inducements. For example, in order to play a free electronic
game or participate in a sweepstakes, you are asked to fill in an online form and answer some questions
about yourself. Marketers not only learn what you want from the direct answers, but also try to infer
from your preferences of music, for example, what type of books, clothes, or movies you may be likely
to prefer.
2. Tracking customer activities on the Web: Today it is possible to learn about customers by
observing their behavior on the Internet. Many companies offer site tracking services. For example, Net
tracker (from sane.com) collects data from client/server logs and provides periodic reports that include
demographic data such as where customers come from or how many customers have gone straight from
the home page to ordering. One of the most interesting tools for tracking customers on the Internet as
well as helping them to shop is intelligent agents.
Agents are computer programs that conduct routing tasks, search and retrieve information, support
decision making, and act as domain experts. These agents sense the environment and act autonomously
without human intervention. These agents use expert, or knowledge-based, capabilities to do more than
just “search and match.” For example, it can monitor movement on a Web site to check whether a
customer seems lost or ventures into areas that may not fit his profile, and the agent can notify the
customers and even provide assistance.
Search and filtering agents: Intelligent agents can help customers to determine what to buy to satisfy
a specific need. This is achieved by looking for specific product information and critically evaluating it.
An agent helps consumers decide what product best fits their profile and requirements.
Product- and vendor-finding agents: Once the consumer has decided what to buy, a comparison
agent will help in doing comparisons, usually of prices from different vendors.
A pioneering intelligent agent for online price comparison was Bargain finder from Andersen
Consulting. This agent was used only in online shopping for CDs. The agent queried the price of a
specific CD from a number of online vendors and returned the list of vendors and prices.
Profiling customers using intelligent agents: Some companies collect information about consumers
for the purpose of creating a customer’s profile. With this profile, the company can tailor ads to the
specific customers or offer them product information.
Use of this type of intelligent agent is called product brokering. To build a customer profile, an agent
uses a collaborative filtering process. The consumer is asked to rate a number of products; the system
then matches these ratings with the ratings of other consumers, and, relying on the ratings of other
consumers with similar tastes, recommends products that the consumer has not yet rated.
4.8. E-mail Marketing
At its core, email marketing is a tool for customer relationship management (CRM). Used effectively,
this extension of permission based marketing can deliver one of the highest returns on investment
(ROI) of any e-Marketing activity.
Simply put, email marketing is a form of direct marketing which utilizes electronic means to deliver
commercial messages to an audience. It is one of the oldest and yet still one of the most powerful of all
e-Marketing tactics. The power comes from the fact that it is:
• Extremely cost effective due to a low cost per contact
• Highly targeted
• Customizable on a mass scale
• Completely measurable
4.8.1. How e-mail works
If you consider marketing as communicating with current and potential customers, you will see that
every email that is sent from your organization should be considered as part of your email marketing
plan.
Transaction emails: when you place an order, there will be a number of emails that you receive, from
confirmation of your order, to notice of shipping. Should you need to return an item, you will no doubt
communicate with Zappos via email. These kinds of messages are transactional.
Newsletters: these are emails which are sent to provide information and keep customers informed.
They do not necessarily carry an overt promotion, but instead ensure that a customer is in regular
contact with the brand.
Promotion emails: should the firm has a summer sale, it will send an email relating directly to that
promotion. Every touch point will market an organization. However, here we will focus on commercial
emails. Email marketing may be highly cost effective, but the cost of getting it wrong can be very high
indeed.
4.9. Search engine Marketing
Portals such as Yahoo, Google, MSN/Windows Live, and AOL offer users powerful Web search tools
as well as an integrated package of content and services, such as news, e-mail, instant messaging,
calendars, shopping, music downloads, video streaming and more, all in one place. They are marketed
as places where consumers will want to start their Web searching and hopefully stay a long time to read
news, find entertainment, and meet other people (think of destination resorts). Portals (search engines)
do not sell anything directly. Portals generate revenue primarily by charging advertisers for ad
placement, collecting referral fees for steering customers to other sites, and charging for premium
services.
Although there are numerous portal/search engine sites, some are ranked as follows based on number of
monthly visitors in 2014 (Google, Bing, Yahoo, Ask.com, AOL, WOW, WEBCRAWLER, etc). These
portals possess the highest traffic because of their superior brand recognition. Being first confers
advantage because customers come to trust a reliable provider and experience switching costs if they
change to late arrivals in the market. By garnering a large chunk of the marketplace, first-movers just
like a single telephone network can offer customers access to commonly shared ideas, standards, and
experiences.
Google, Yahoo, AOL, MSN/Windows Live, and others like them are considered to be horizontal
portals because they define their market space to include all users of the Internet. Vertical portals
(sometimes called vortals) attempt to provide similar services as horizontal portals, but are focused
around a particular subject matter or market segment. For instance, Sailnet specializes in the consumer
sailboat market that contains about 8 million Americans who own or rent sailboats. Although the total
number of vortal users may be much lower than the number of portal users, if the market segment is
attractive enough, advertisers are willing to pay a premium in order to reach a targeted audience. Also,
visitors to specialized niche vortals spend more money than the average Yahoo visitor.
Search marketing is often to refer to the industry that has built up around search engines.
Google is by far the leading player in the market over 45% of the global search engine market share. In
Europe, close to 80% of searches are on Google.
4.9.1. Types of search results
a. Organic search results
Organic search results are the primary product of a search engine. These results are the listings
generally found on the left hand side on the search engine results pages (SERPs). They are not
influenced by financial payment and are therefore also called natural search results.
b. Paid search results
Paid search, also known as Pay per Click (PPC) advertising, involves the displaying of sponsored
results alongside the organic results. Advertisers bid for placement, and pay the search engine when
their advert is clicked on. Paid search results must be distinguished from organic results since paid
placement introduces bias. PPC adverts are usually displayed at the top and on the right side of the
SERPs. Search engines attract and keep users through organic search, but they make most of their
money from paid search.
4.9.2. The importance of search to marketers
As search engines have become essential to a web user’s Internet experience so has search becomes
essential to a marketer. Search is important for a number of reasons:
Search is goal oriented: people use search to find the things they need and want.
The Internet is a highly competitive environment, with literally billions of pages in existence. Web
users find what they need primarily via search. Search drives targeted traffic (and therefore sales) to
web sites.
Search engines are the doorways to the Internet: search engines are the entrance to the internet or
websites
 The search industry is BIG: The daily search volume numbers are in the hundred millions.
According to ComScore figures, there were more than 10 billion searches in the US alone during
January 2008! That’s around 322 million per day.
To be found you must be visible: If you want your web site to generate a significant amount of
traffic, it needs to be listed on the major search engines and listed high up enough to be seen. Statistics
show that users are not likely to view listings beyond the first 30 results, with the top 6 (above the fold)
listings enjoy the lion’s share of clicks.
Top of search equates to top of mind awareness: Beyond traffic, a high ranking web site is valuable
for brand perception. Web users often perceive search engine results as an indication of authority.
Search visibility promotes brand recognition and research has shown that search engine listings can
stimulate brand recall by 220% (Enquiro, 2007).
People trust organic search results: Research has shown that people find organic search results more
relevant and more trusted than paid search results (Enquiro, 2004)
Catch potential customers at every phase of the buying cycle: Most purchases are subject to a
buying cycle. At different points in that cycle, prospects are searching with different key phrases. Give
them what they want at each phase, and they will keep coming back till they’re ready to buy. In
addition, they’ll be ready to buy more quickly because information is the best way to shorten the
buying cycle.
Search engine marketing (SEM) has two arms: search engine optimization (SEO) and pay per click
(PPC) advertising.
SEO + PPC = SEM
SEO aims at improving a web site’s ranking in the natural search results. PPC advertising involves
bidding for placement in the paid search results section of the SERP.