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MGT 3225: E-Business

Lecture 6:

E-commerce Marketing and E-commerce Marketing and

Advertising Concepts Advertising Concepts

Md. Mahbubul Alam, PhD

Intended Learning Outcomes

 Identify the key features of the Internet audience.

 Discuss the basic concepts of consumer behavior &

purchasing decisions.

 Understand how consumers behave online.

 Identify and describe the basic digital commerce marketing

and advertising strategies and tools.

 Identify & describe the main technologies that support

online marketing.

Consumer Behavior

 Study of consumer behavior

 Attempts to explain what consumers purchase and where,

when, how much, and why they buy

 Consumer behavior models

 Attempt to predict or explain wide range of consumer

decisions

 Based on background demographic factors and other

intervening, more immediate variables

 Profiles of Online Consumers

 Consumers shop online primarily for convenience

A General Model of Consumer Behavior Figure 6.1, Page 333 (^) SOURCE: Adapted from Kotler and Armstrong, 2009.

The Consumer Decision Process and Supporting Communications Figure 6.2, Page 334

A Model of Online Consumer Behavior Figure 6.3, Page 335

How Consumers Shop

 How shoppers find online vendors

 Search engines

 Marketplaces (Amazon, eBay)

 Specific retail site

 27% of Internet users don’t shop online

 Trust factor

 Hassle factors (shipping costs, returns, etc.)

Trust, Utility & Opportunism in Online Markets

 Two most important factors shaping decision to purchase

online:

 Utility :

 Better prices, convenience, speed

 Trust :

 Most important factors: Perception of credibility, ease of

use, perceived risk

 Sellers can develop trust by building strong reputations for

honesty, fairness, delivery

Digital Commerce Marketing and Advertising:

Strategies and Tools

 Internet marketing (vs. traditional)

 More personalized

 More participatory

 More peer-to-peer

 More communal

 The most effective Internet marketing has all four features

Multi-Channel Marketing Plan

1. Web site

2. Traditional online marketing

 Search engine, display, e-mail, affiliate

3. Social marketing

 Social networks, blogs, video, game

4. Mobile marketing

 Mobile/tablet sites, apps

5. Offline marketing

 Television, radio, newspapers

Establishing the Customer ^ Relationship

Web site functions to:

 Establish brand identity and customer expectations

 (^) Differentiating product

 Inform and educate customer

 Shape customer experience

 (^) The totality of experiences that a customer has with a firm , including the search, informing, purchase, consumption, and after- sales support for its products, services, & various retail channels.

 Anchor the brand online

 (^) Central point for all marketing messages

Online Advertising

 Online advertising

 A paid message on a Web site, online service, or other

interactive medium.

 Display (banners, video, rich media), search, mobile

messaging, sponsorships, classifieds, lead generation, e-mail

 Fastest growing form of advertising

 Advantages:

 (^) 18–34 audience is online  (^) Ad targeting  sending of market messages to specific subgroups in the population.  (^) Price discrimination  ability to charge different type of consumers different prices for the same product or service.  (^) Personalization

Spam

 Unsolicited commercial e-mail

 65–70% of all e-mail

 Most originates from bot networks

 Efforts to control spam have largely failed:

 Government regulation (CAN-SPAM)

 State laws

 Voluntary self-regulation by industries (DMA )

Social Marketing and Advertising

 Fastest growing type of online marketing

 Targets the enormous audiences of social networks

 Four features driving growth

 Social sign-on signing to various Web sites through a SNS.

 Collaborative shopping sharing shopping experiences.

 Network notification sharing consumers’ approval (or

disapproval).

 Social search (recommendation) Asking friends for purchase

decisions.

 Blog marketing

 Educated, higher-income audience

 Ideal platform to start viral campaign

 Game marketing

 Large audiences for social games (FarmVille, Words with Friends)

 Used for branding and driving customers to purchase moments at

restaurants and retail stores

Local Marketing

 Geared to user’s geographic location

 Local search and purchasing

 Local searches:

 25% of all searches

 50% of mobile searches

 Most common local marketing tools

 Geotargeting with Google Maps

 Display ads in hyperlocal publications

Multi-Channel Marketing

 Integrating online and offline marketing.

 Average American spends more than 40% of media time on

digital media channels

 Consumers also multitask, using several media

 Internet campaigns strengthened by using other channels

 Most effective are campaigns using consistent imagery

throughout channels