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
Characteristics That The Eight Categories Share
- Consists of items for which product information is an important part of the purchase decision but prepurchase trial is not necessarily critical
Ex: Items such as Computers/Computer Accessories and Furniture & Home Furnishings - Items that can be delivered digitally
Ex: Computer software, books, music, video - Items that are regularly purchased & where convenience is very important
Ex: Health Care, Personal care, Beauty items and Food & Beverage products - Standardized products for which information about price is important
Ex: Automotive Products, Toys and Hobby items, & Casual apparel/accessories
Six Reasons Why Consumers Shop & Buy Online
- Convenience
- Choice
- Customization
- Communication
- Cost
- Control
Convenience
online shopping & buying is convenient
Ex: Consumers can visit Walmart’s website 24hrs a day without act going to the store
Bots
electronic shopping agents/robots that search websites to compare prices & product/serv features
Eight-Second Rule
customers will abandon their efforts to enter & navigate a website if download time exceeds eight seconds
› Websites must be easy to locate/navigate & image downloads must be fast
Choice
has two dimensions
› 1st Dimension: Product/serv selection offered to consumers
› 2nd Dimension: Choice assistance
1st Dimension: Product/serv selection offered to consumers
Ex: There’s more than 1 billion websites worldwide for almost anything they want
2nd Dimension: Choice assistance
-Choiceboard & personalization technologies invite customers to engage in an electronic dialogue w/ marketers for the purpose of making informed choices
Ex: Zappos offers an online chat room that enables prospective buyers to ask questions/receive answers in real time
Customization
some customers prefer one-of-a-kind items that fit their specific needs
Customization arises from digital capabilities that make possible a highly interactive & individualized information & exchange environment for shoppers & buyers
-Uses customerization
Customerization
the practice of not only customizing a product/serv but also personalizing the marketing & overall shopping and buying interaction for each customer
-It combines choiceboard & personalization systems to expand the exchange environment beyond a transaction & makes shopping/buying an enjoyable, personal experience
Communication
takes three forms
Three Forms of Communication
- Marketer-to-Consumer E-mail Notifications
- Consumer-to-Marketer Buying & Service Requests
- Consumer-to-Consumer Chat Rooms & Instant Messaging
Blog
a web page that serves as a publicly accessible personal journal for an individual/organization
-Popular because they provide online forums on a wide variety of subjects ranging from politics to car repair
Spam
electronic junk mail or unsolicited e-mail
Buzz
marketplace word-of-mouth behavior
Viral Marketing
digitally enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail, social networking websites, & blogs
Three Approaches to Viral Marketing:
- Marketers can embed a message in the product/serv so that customers hardly realize they are passing it along
Ex: Hotmail, each outgoing email message had the tagline “Get Your Private, Free Email from MSN Hotmail” - Marketers can make the website content so compelling that viewers want to share it with others
Ex: CareerBuilder did this with its Monk-email site, which allowed users to send personalized, private-themed e-cards for all occasions - Marketers can offer incentives (discounts, sweepstakes, free merch)
Ex: Burger King gave out free burgers if you unfriended 10 ppl on Facebook
Cost
many popular items bought online can be purchased at the same price or cheaper than in retail stores.
Dynamic Pricing
the practice of changing prices for products/servs in real time in response to supply & demand conditions
-Flexible pricing & can result in lower prices
Ex: Used for pricing time-sensitive items such as airline seats, scarce items found at art/collectible auctions, out-of-date computer equipment/accessories
Two Major Reasons for the Popularity of Online Shopping & Buying
- Greater Shopping Convenience
- Lower External Search Costs
Control
control it gives them over their shopping & purchase decision process
› Consumers seek info, evaluate alternatives, & make purchase decisions on their own time, terms, and conditions
Consumers refrain from making purchases online bc of
privacy & security reasons
Cookies
computer files that a marketer can download onto the computer & mobile phone of an online shopper who visits their marketer’s websites. Allows a marketer’s website to record a user’s visits & store and retrieve this information in the future.
First-Party Cookies
contain visitor info such as expressed product preferences, personal data, password, and credit card numbers. Can contribute to a satisfying user experience by making customized & personalized content for online shoppers
Third-Party Cookies
created by websites other than the one a user was visiting at the time. Track a user’s search patterns.
Ex: Popup ads
-Made possible behavioral targeting
Behavioral Targeting
uses information provided by third-party cookies to direct online advertising from marketers to those online shoppers whose behavioral profiles suggest they might be interested in such advertising
Social Commerce
the use of social networks for browsing & buying
Ex: Instagram/Tiktok feeds you videos where you can click on videos/links to purchase products
Subscription Commerce
the payment of a fee to have products/servs delivered on a recurring schedule
Ex: Amazon prime, Netflix, Dollar Shave Club
Cross-Channel Customers
online consumers who shop online but buy offline, or shop offline but buy online
Showrooming
examining products in a store & then buying them online for a cheaper price
› Cross-channel consumers who shop offline but buy online engage in this
› Showroomers gather additional product info, look for online promotions, & check product reviews/ratings on social media
Ex: Consumer electronics/home appliances are most popular showrooming product categories
Webrooming
examining products online & then buying them in a store
› Cross-channel consumers who shop online but buy offline engage in this
› Webroomers avoid shipping costs, gain immediate possession of product, & allow for easier returns
Ex: Automobiles/auto parts, apparel, home office equip are popular webrooming categories
Multichannel Marketing
the blending of different communication & delivery channels that are mutually reinforcing in attracting, retaining, & building relationships w/ consumers who shop/buy in the traditional marketplace and the digital marketspace
Three Steps to Implement Multichannel Marketing
- Document cross-channel consumer behavior
- Employ communication & delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with their current & potential consumers
- Monitor & measure multichannel marketing performance
1) Document the Cross-Channel Consumer Journey
Cross-Channel Consumer Journey Map
Cross-Channel Consumer Journey Map
three insights can be gained from it
› 1. Identifies the communication & delivery channels engaged by cross-channel consumers
› 2. Shows links b/w communication & delivery channels across the prepurchase, purchase, & postpurchase phases of the consumer purchase decision process
› 3. Highlights consumer touchpoints that are outside the control of the company, such as comparison websites/social media
2) Employ Channels That Are Mutually Reinforcing in Attracting, Retaining, & Building Relationships With Consumers
Done by conveying a consistent customer experience through consumer touchpoints & messages across channels
3) Monitor & Measure Multichannel Marketing Performance
Two Reasons This Step Is Difficult:
- The magnitude of data corresponding to which channel(s) each consumer accesses during each stage in the purchase decision process has made data difficult to assemble & integrate
- Task of assigning the proportional credit to each channel & consumer touchpoint across all online & offline channels for a desired consumer action is extremely complex
Marketing Attribution
the practice & techniques used to credit or value a particular channel & consumer touchpoint
Uses of the Internet
-Facilitating sales (information source)
-Virtual communities
-Brand building
-Selling merchandise
Facilitating Sales (information source)
Consumers gather information before they purchase
Ex: Google something, compare brands, look at reviews
Virtual Communities
Areas where ppl tend to share a common interest
Ex: Duolingo, LinkedIn, Twitter
Brand Building
Provides behind the scenes of what the brand stands for
-builds meaningful brand more than just the product
Ex: DWR provides ways to educate customers & chat with someone online
Selling Merchandise
Facilitates sales. Tries to ease customers in journey & so you don’t lose then
Customer Benefits by Electronic Retailing
-Vast number of alternatives
-Information tailored to individual consumers (improves decision making)
-Super Sales associate
-Side by side comparison
-Full motion video
Vast Number of alternatives
find anything you want/many options to choose from
Information tailored to individual consumers (improves decision making)
gives you your purchase history/recommendations.
Helps customers make easier/better purchase decisions
Super Sales Associate
Real & AI
Ex: Best Buy has associates on standby for 24 hrs
Side-by-Side Comparison
Ex: Best Buy provides pros/cons of products on one page
Full-Motion Video
Ex: Apple showcasing is something happens to your phone, AirPods, watch, it’s protected through AppleCare
Security of Transactions Issues
Phishing
Pharming
Evil Twin
Man in the Middle Attack
Pharming
misrepresenting a website , mocking up a version of a website
Ex: An email provides website address but it’s not the real one
Phishing
attacker trying to get private information from you
Evil twin
compromises the access point
Ex: When you’re using Wi-fi in an open area ppl can intersect what you’re doing & redirect you somewhere else while grabbing your info
Man in the Middle Attack
using open Wifi & attacker extracts data right from what you’re doing
Privacy Issues
3rd Party Cookies
Bandwidth
M-commerce
3rd Party Cookies
other companies extracting data that you didn’t agree to
Bandwidth
big data is taking up so much space & we need more bandwidth to feed us information
M-Commerce
when you’re using your phone & the attacker knows exactly where you are at all times
