chapter 17 Flashcards
Two Market Environments
- Traditional Marketplace
2.Digital Marketspace
Traditional Marketplace
buyers & sellers engage in face-to-face exchange relationships in a material environment characterized by physical facilities (stores & offices) & mostly tangible objects
Digital Marketspace
a digitally enabled environment characterized by face-to-screen exchange relationships & electronic images/offerings
Traditional Marketplace
legacy companies like P&G/Walmart
› Challenge: defining the nature & scope of their digital presence
› Solution: comps are constantly refining the role of digital technology in attracting, retaining, & building consumer relationships to improve their competitive positions in the traditional marketplace while also bolstering their digital marketspace presence
Ex: Prada/luxury designers don’t sell their products online
Digital Marketspace
digital natives like Amazon, Google, eBay, E*TRADE
› Challenge: to continually refine, broaden, & deepen their marketspace presence. At the same time, comps must consider what role, if any, the traditional marketplace will play in the future
Ex: Amazon has opened physical showrooms that give shoppers an opportunity to experience products in person before buying online
The Comps Success in Achieving a Meaningful Marketspace Depends on Two Factors
its ability to design & execute a marketing program that capitalizes on (1) the unique value-creating & (2) the relationship building capabilities of digital technology in delivering a favorable customer experience
(1) Creating Customer Value in a Digital Environment
creates time, place, form, & possession utilities thereby creating value for consumers
-Possibilities for customer value creation are greater in the digital marketspace than in the physical marketplace
Creating Customer Value (4 Utilities)
- Place Utility: the provision of direct, on-demand information is possible from marketers anywhere to customers anywhere
-Why: Geographical constraints don’t exist in marketspace
-Ex: A U.S. consumer in Chicago can access a British store to shop for clothing as easily as a person living in London - Time Utility: the provision of direct, on-demand information is possible from marketers to consumers at anytime
-Why: Operating hours don’t exist in marketspace
-Ex: Recreational Equip Inc orders are placed b/w 10pm & 7am, long after/before retail stores are open for business
-Possession Utility: getting a product/serv to consumers so they can own or use it- is accelerated in marketspace
Ex: Airline, car rental, & lodging electronic reservation systems allow comparison shopping for the lowest rents/rates & almost immediate access to and confirmation of travel arrangements/accomodations
- Form Utility: communication capabilities in marketspace invite consumers to tell marketers specifically what their requirements are, making customization of a product/serv to fit their exact needs possible
-Form Utility is the greatest marketspace opportunity for marketers
Ex: Seven Cycles, customers can arrange for a custom-made bike to fit their specifications
(2) Interactivity & Individuality Create Customer Relationships
Two Capabilities of Digital Technology That Promote & Sustain Customer Relationships: interactivity & individuality
- Interactivity: comps interact w/ their customers by listening & responding to their needs
-Individuality: treat customers as individuals and empower them to (1) influence the timing & extent of the buyer-seller interaction and (2) have a say in the kind of product/servs they buy, the information they receive, & in some cases, the prices they pay
- These make interactive marketing possible
Interactive Marketing
two-way buyer-seller electronic communication in which the buyer controls the kind & amount of information received from the seller
-Characterized by choiceboard & personalization systems that transforms info
Choiceboard
an interactive, digitally enabled system that allows individual customers to design their own products/servs by answering a few questions & choosing from a menu of product/serv attributes (or components), prices, and delivery options
Ex: Decorating M&M’s w/ personal photos & messages
Collaborative Filtering
process that automatically groups people w/ similar buying intentions, preferences, & behaviors and predicts future purchases
Ex: Amazon, “customers who bought this item also bought…”
Choiceboards and Collaborative Filtering are marketer-initiated efforts to provide customized responses to the needs of _______ _______.
individual buyers
Personalization
the consumer-initiated practice of generating content on a marketer’s website that is custom tailored to an individual’s specific needs and preferences
Ex: Sunglass Hut has the “you might be interested in …”
Personalization Systems are ____________
buyer-initiated efforts
Permission Marketing
the solicitation of a consumer’s consent (called opt-in) to receive e-mail & advertising based on personal data supplied by the consumer
Three Rules To Successfully Employ Permission Marketing
- Make sure opt-in customers receive only info that’s relevant/meaningful to them
- Customers are given the option to opt-out, or change the kind, amount, or timing of info sent to them
- Customers are assured that their name or buyer profile data will not be sold/shared with others
Customer Experience
the sum total of the interactions that a customer has w/ a comps website, from the initial look at a home page through the entire purchase decision
-definition from an interactive marketing perspective
Seven Website Design Elements That Contribute to a Customer Experience
- Context
- Content
- Customization
- Connection
- Communication
- Community
- Commerce
Context
website’s aesthetic appeal & the functional look/feel of the site’s layout & visual design
-Conveys the core consumer benefit provided by the comp’s offerings
Functionally Oriented: website focuses largely on the company’s offering, be it products, servs, or information
Ex: Priceline emphasizes on destinations, scheduling, and prices
Aesthetically Oriented: beauty websites like Revlon
Content
all digital information on a website, including the presentation form-text, video, audio, and graphics
**Content is King
Customization
the ability of a site to modify itself to, or be modified by and for, each individual user
Ex: My Amazon moves items around to reflect a consumer’s priorities/selecting topics of interest to them
Connection
the network of linkages b/w a comp’s website & other sites
Ex: Companies routinely display links to their Facebook, Instagram, & Twitter accts
Communication
dialogue that unfolds b/w the website & its users
Ex: Chatbots
Community
ways the site enables user-to-user communication
Web Communities
websites that allow people to congregate online & exchange views on topics of common interest
Ex: Pampers Club hosted by P&G, Harley Owners Group(HOG) sponsored by Harley-Davidson
Commerce
the website’s ability to conduct sales transactions for products/servs
Online Consumers
the subsegment of all Internet users who employ this technology to research products/serv and make purchases
Eight Product Categories Account for 90% of U.S. Online Retail Sales:
- Computer & Accessories
- Apparel & Accessories
- Furniture & Home Furnishings
- Health, Personal Care, Beauty
- Toys & Hobby
- Auto & Parts
- Books, Music, Video
- Food & Beverage
