CH.6

Long-Tail Marketing

• The internet allows for the sale of obscure products with little demand, generating substantial revenue due to near-zero inventory costs and little marketing costs, with the help of search and recommendation engines.

Channel Management

• Channels refer to different methods of distributing and selling goods and services.
• Channel conflict occurs when a new sales venue threatens or destroys existing sales venues, e.g., online airline/travel services vs. offline travel agencies.
• Some manufacturers use a partnership model to avoid channel conflict.

The Revolution in Internet Marketing

• The internet has broadened the scope of marketing communications, increased their richness, and expanded the information intensity of the marketplace.
• The always-on mobile environment has expanded marketing opportunities.
• Internet marketing technologies include:
  • Web transaction logs
  • Tracking files
  • Databases and data warehouses
  • Data mining
  • Hadoop and Big Data
  • Customer relationship management systems

Web Transaction Logs

• Built into web server software, these logs record user activity at a website and provide valuable marketing data, especially when combined with:
  • Registration forms
  • Shopping cart databases
• Logs answer questions such as:
  • What are major patterns of interest and purchase?
  • Where do users go after the home page?

Tracking Files

• These files track users as they move from site to site.
• Four types of tracking files exist:
  • Cookies (small text files placed by a website)
  • Flash cookies
  • Beacons (“bugs”)
  • Apps

Databases

• A database stores records and attributes.
• A database management system (DBMS) is software used to create, maintain, and access databases.
• SQL (Structured Query Language) is an industry-standard database query and manipulation language used in relational databases.
• Relational databases represent data as two-dimensional tables with records organized in rows and attributes in columns.

Data Warehouses and Data Mining

• A data warehouse collects a firm's transactional and customer data in a single location for offline analysis.
• Data mining involves analytical techniques to find patterns in data, model customer behavior, and develop customer profiles.
• There are three types of data mining:
  • Query-driven data mining
  • Model-driven data mining
  • Rule-based data mining

Online Purchasing Decision

• Psychographic research combines demographic and psychological data to divide the market into groups based on social class, lifestyle, and/or personality characteristics.
• The consumer decision process involves:
  • Awareness of need
  • Search for more information
  • Evaluation of alternatives
  • Actual purchase decision
  • Post-purchase contact with the firm

Model of Online Consumer Behavior

• The decision process is similar for online and offline behavior.
• Factors influencing online consumer behavior include:
  • Consumer skills
  • Product characteristics
  • Attitudes toward online purchasing
  • Perceptions about control over the web environment
  • Website features (latency, usability, security)
  • Clickstream behavior

Clickstream Behavior

• Factors influencing clickstream behavior include:
  • Number of days since last visit
  • Speed of clickstream behavior
  • Number of products viewed during last visit
  • Number of pages viewed
  • Supplying personal information
  • Number of days since last purchase
  • Number of past purchases
• Clickstream marketing is developed dynamically as customers use the internet.

Online Shoppers

• 88% of internet users are shoppers, with 72% being buyers and 16% being browsers.
• One-third of offline retail purchases are influenced by online activities.
• Online traffic also influences offline brands and shopping.
• E-commerce and traditional commerce are coupled, being part of a continuum of consuming behavior.

Social Marketing

• Social marketing is the fastest-growing type of online marketing, with unknown long-term prospects.
• Four features drive growth:
  • Social sign-on
  • Collaborative shopping
  • Network notification
  • Social search (recommendation)

Twitter Marketing

• Twitter allows for real-time interaction with consumers.
• 50% of companies with 100+ employees use Twitter.
• Twitter marketing products include:
  • Promoted Tweets
  • Promoted Trends
  • Promoted Accounts

Blog Marketing

• 43% of all US companies use blogs for marketing.
• Blogs are ideal for starting viral campaigns and can be used for branding messages and advertisements.
• Blog advertising networks and brand advocacy blogs exist.

Viral Marketing

• Viral marketing is a form of social marketing where customers pass along marketing messages to friends, family, and coworkers.
• Referred customers cost less to acquire and keep.

Mobile Marketing

• Mobile marketing accounts for 7% of online marketing and is growing rapidly.
• Major formats include:
  • Messaging (SMS)
  • Display
  • Search
  • Video
• Other formats include:
  • QuickResponse (QR) codes
  • Couponing

App Marketing

• Revenue sources include:
  • Pay-per-app
  • In-app purchase
  • Subscriptions
  • Advertising
• Most popular types of apps include social networks, banking, search, and news.
• Retailer's apps allow for browsing and purchasing.