There is no table of contents.·There is no model or theory discussed in the assessment.·There should have been some pictorial graphics and models assessed/discussed in the assessment and linked with the written textreference at least 15
cw1a_e_retailing_question_discussion_and_guidance.pdf
e_marketing_notes.pdf
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Please review the following videos on Online Shopping
Bricks and Clicks retailing
Is it the end for Brick and Mortar stores..??
Amazon opens its first brick-and-mortar
store in New York City
Now for your first assignment you will need to answer five questions.
Lets take a look at them……
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Q1. Does the growth in online shopping mean the
extinction of the typical ‘high street’ store?
What shifts have we seen in the composition of the high street?
What products and services can be offered online?
Products and services can be mapped across a continuum
Tangible Dominant
Intangible Dominant
Involvement of the customer in co-creation of the product/service
Shift in the buying behaviours of consumers?
Research in-store, buy online?
Relevance of catchment area
Knowledge of the customer base
Which elements cannot be easily replicated online
After sales service
Returns
Q2. Examine various business models, clicks, bricks,
bricks & clicks and finally clicks and bricks?
What is build-to-order?
Car manufacturers
Works well with products which are easily categorised?
Centred on the idea of modularisation
Mass customisation
Better meet customer demands
Disadvantages?
Level of stock – inventory costs
Delay between purchase and delivery
Difficulty in visualising the final product
Q3. We are increasingly hearing the term Omni-Channel
retailing what does this mean and how can businesses
exploit this new phenomenon?
Omni-Channel – multiple channels operating simultaneously
How can it be exploited?
Multiple opportunities to get marketing messages to customers
Can deliver the ‘best’ of each channel to enhance experience
Can acquire user data in many ways
Delivers a more ‘comprehensive’ shopping experience
The physical stores remain in business and can offer new services
Q4. Why are online travel services such a popular Internet
application? Why do so many Web sites provide free
travel information?
Mainly information process at the travel agent stage
Information has a practically negligible cost of transfer
Comparison possibilities
Disintermediation and reintermediation
Customisation
Incentivises interaction
Q5. Compare the advantages and disadvantages of
distributing digitisable products electronically versus
physically
What is a digitisable product?
Prime example is media
Intangible dominant with minimal co-creation
Benefits of increased catchment, reduced costs (e.g. inventory), unlimited
scalability, long tail model
Additional benefits e.g. cultural testing as a precursor to internationalisation
Ethical and legal issues
Is the product devalued?
Logistics of having a digital supply chain
BMG814 The Digital Landscape
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Table of Contents
1. Internet Marketing ………………………………………………………………………………………………… 2
1.1 Overview ………………………………………………………………………………………………………… 3
1.2 Learning Outcomes ………………………………………………………………………………………… 3
1.3 Definitions ………………………………………………………………………………………………………. 3
2. Learning about Consumer Behaviour Online ……………………………………………………….. 4
2.1 A Model of Consumer Behaviour Online ………………………………………………………… 4
2.1.1 The Major Influential Factors ……………………………………………………………………. 6
2.2 The Consumer Purchasing Decision-Making Model……………………………………….. 7
3. Mass Marking, Market Segmentation, and Relationship Marketing ……………………… 8
3.1 From Mass Marketing to One-to-One Marketing …………………………………………….. 9
3.1.1 Mass Marketing ……………………………………………………………………………………….. 9
3.1.2 Market Segmentation ………………………………………………………………………………. 9
3.1.3 Relationship Marketing …………………………………………………………………………….. 9
3.2 Personalisation and Behavioural Marketing ………………………………………………….. 11
3.2.1 Personalisation ………………………………………………………………………………………. 11
3.2.2 Behavioural Targeting ……………………………………………………………………………. 12
3.2.3 Collaborative Filtering …………………………………………………………………………….. 12
4. Web Advertising …………………………………………………………………………………………………. 13
4.1 Benefits of Web Advertising ………………………………………………………………………….. 14
4.2 Display Advertising ……………………………………………………………………………………….. 14
4.2.1 Benefits and Limitations of Banner Ads ………………………………………………….. 16
4.2.2 Ad Terminology ……………………………………………………………………………………… 16
4.3 Affiliate Marketing …………………………………………………………………………………………. 19
4.4 E-Mail Marketing …………………………………………………………………………………………… 19
4.4.1 Measuring and Tracking E-mail Marketing Activities………………………………. 20
4.5 Search Marketing …………………………………………………………………………………………. 21
4.5.1 Search Engine Advertising (Paid Search) ………………………………………………. 21
4.5.2 Search Engine Optimization (SEO) ………………………………………………………… 22
4.6 Social Media Marketing ………………………………………………………………………………… 23
4.6.1 Paid Advertising in Social Media ……………………………………………………………. 25
4.6.2 Social Media Marketing ………………………………………………………………………….. 26
4.6.3 The Social Media Landscape …………………………………………………………………. 26
5. Owned, Paid and Earned media ………………………………………………………………………… 27
6. Internet Marketing: Legal and Privacy Issues …………………………………………………….. 29
6.1 Cookies ………………………………………………………………………………………………………… 29
6.2 Behavioural Targeting …………………………………………………………………………………… 29
6.3 Social Media …………………………………………………………………………………………………. 30
7. References:………………………………………………………………………………………………………… 31
8. Additional Information Sources…………………………………………………………………………… 34
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1. Internet Marketing
1.1 Overview
The Internet is a major communications channel that provides consumers with a
means to search for and buy products, as well as a means to socialise and be
entertained (Jobber, 2010). It is important to understand how consumers use the
Internet when searching for and purchasing products, and to be aware of the
techniques and opportunities that Internet-based media offer to businesses throughout
the consumer’s purchase cycle (Chaffey et al., 2009).
1.2 Learning Outcomes
1. Describe the factors that influence consumer behaviour online.
2. Understand the online consumers decision making process
3. Be able to describe segmentation and how companies can build one-to-one
relationships with consumers.
4. Understand how consumer behaviour can be analysed in order to create
personalised services
5. Understand and be able to describe web advertising and the major techniques
used
6. Understand and describe the role of social media in Internet marketing.
7. Be able to outline some of the legal and privacy issues impacting upon
Internet Marketing
8. Be able to differentiate between paid, owned and earned media online.
1.3 Definitions
Internet marketing can be defined as:
“The application of the Internet and related digital technologies in conjunction
with traditional communications to achieve marketing objectives.”
(Chaffey et al., 2009, p. 8).
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The objective of Internet marketing is to (re)position the organisation, its products or
services, in the mind of members of the target audience as a solution to their current
or future dilemmas. In order to do this, marketers first need to understand consumer
behaviour online.
2. Learning about Consumer Behaviour Online
2.1 A Model of Consumer Behaviour Online
The purpose of a consumer behaviour model is to help firms understand how a
consumer makes a purchasing decision. If a firm understands consumers decision
processes, it may be able to influence a buyer’s decision, through for example,
advertising or special promotions. (Turban et al. 2012, p. 429)
Figure 1 shows the basic elements of a consumer behaviour model. The model is
composed of two major parts: influential factors and the consumer decision process.
(Turban et al. 2012, p. 429)
Influential factors. Five dimensions are considered to affect consumer
behaviour. They are customer characteristics, environmental characteristics,
merchant and intermediary characteristics (which are at the top of the diagram
and are considered uncontrollable form the seller’s point of view),
product/service characteristics (which include market stimuli), and EC systems.
The last two are mostly controlled by the sellers. (Turban et al 2012, p. 429)
The attitude-behaviour decision process. The consumer decision process
usually starts with a positive attitude and ends with the buyer’s decision to
purchase and/or repurchase. A favourable attitude would lead to a stronger
buying intention which would result in the actual buying behaviour. (Turban et
al 2012, p. 430)
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Figure 1 EC Consumer Behaviour Model
(Source: Turban et al., 2012)
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2.1.1 The Major Influential Factors
Table 1 – Major Influential Factors of Consumer Behaviour Online
Influential Factor
Description
Consumer
Consist of demographic factors (e.g. age, gender,
Characteristics
education, income), individual preferences and
behavioural characteristics.
Product/Service
May include product/service price, quality, design, brand
Factors
or other product/service attributes.
Merchant and
Includes factors such as the reputation of the merchant
Intermediary Factors
and trust in the merchant which may impact online
transactions.
EC Systems
Refers to the EC platform for online transactions and can
be divided into motivational and hygiene factors.
Motivation factors include functions available on the
website that directly support transactions, for example,
onsite search engines, shopping carts and payment
methods.
Hygiene factors include functions whose main purpose is
to ensure a trouble-free transaction, for example,
usability, security, product tracking.
Environmental
Includes factors in the environment in which a transaction
Factors
occurs which my impact upon a consumer’s purchase
decision. Can be divided into social, cultural/community,
and other environmental variables.
Social variables include the influence of peers.
Cultural/Community variables include factors such as
where a consumer resides and what culture they may be
a part of which could influence their decision.
Other Environmental variables include situational factors,
available information, legal constraints and government
regulations.
(Source: Compiled from Turban et al., 2012)
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2.2 The Consumer Purchasing Decision-Making Model
Vendors need to ensure that they have a structured approach to moving the customer
through their decision process. If a company understands how the consumers use
online media in their decision-making then they can develop strategies that support
the customer at each stage.
From the consumer’s perspective, a generic purchasing decision model presented
consists of five stages:
1. Need Identification: A marketer’s goal is to get the consumer to recognise their
need for a product or service
2. Information Search: After identifying the need, the consumer will search for
information on the various alternatives available to satisfy the need. The consumer
will consider what product to buy (product brokering), and from what seller
(merchant brokering).
3. Evaluation of Alternatives: Based on the information search consumers will
develop a set of choice criteria to sue when evaluating and comparing the
alternatives
4. Purchase and Delivery: After evaluating the alternatives, the consumer will make
the purchasing decision.
5. Postpurchase Activities:
This stage consists of customer service, and the
consumer’s evaluation of the product and service.
(Turban et al. 2012, p. 432).
These stages can be grouped into three distinct phases: pre-purchase, purchase, and
post-purchase.
As shown in Figure 2, the consumers purchasing decision process can be supported
through the use of various Internet and web support facilities.
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Figure 2 Purchase Decision-Making Process and Support System
(Source: Turban et al., 2012)
Discussion topic 1: Use an example to explain the five stages in the purchasing
decision model, and the Internet support functions
3. Mass Marking, Market Segmentation, and Relationship
Marketing
The Internet provides a platform upon which marketers can cater to individual
customer needs, and tailor their communications to each customer. With online
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communications it can be easier to segment and target customers, and have one-toone interaction.
3.1 From Mass Marketing to One-to-One Marketing
Turban et al. (2012) identify three basic approaches used in marketing and advertising:
mass marketing, market segmentation, and one-to-one marketing.
3.1.1 Mass Marketing
Traditional marketing efforts through broadcast media such as television or newspaper
are targeted to everyone, and consist of an impersonal
one-way, one-to-many
communication. As the effort is not targeted, some of the effort is wasted on non-target
audience. However such an effort can be effective in increasing brand recognition or
for the introduction of new products or services. On the Internet it may consist of
placing banner advertisement on web pages in order that the message is conveyed to
everyone who views the web page.
3.1.2 Market Segmentation
Market segmentation is the process of dividing a consumer market into consumer
groups that have similar characteristics. A product or service can then be promoted to
a specific group. An advantage of market segmentation is that advertising and
marketing efforts can be targeted to match segments for effectively than mass
marketing efforts, providing a better response rate and at lower cost.
3.1.3 Relationship Marketing
Relationship marketing focuses on building long-term relationships with customers.
One approach to relationship marketing is one-to-one marketing, which treats each
individual customer uniquely. One-to-one marketing enables marketers to understand
each individual’s preferences, and then provide personalised advertisements and
marketing messages. In contrast to the mass marketing approach, one-to-one
marketing relies on a two-way dialogue between the customer and the company in
order to foster a relationship. Figure 3 provides an example of a one-to-one marketing
strategy.
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Figure 3 The One-to-One Marketing Cycle
(Source: Turban et al., 2012)
A comparison of mass marketing, market segmentation and relationship marketing is
presented in Figure 4.
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Figure 4 From Mass Marketing to Segmentation to One-to-One
(Source: Turban et al., 2012)
3.2 Personalisation and Behavioural Marketing
Three issues related to one-to-one marketing are personalisation, behavioural
targeting, and collaborative filtering.
3.2.1 Personalisation
Personalisation refers to the matching or tailoring of services, products and ads to
individuals based on their preferences. The process of tailoring or matching is based
on what a company knows about the user. This knowledge is referred to as a user
profile and consists of the requirements, preferences, demographics and behavioural
traits of the particular customer (Turban et al., 2012, p. 441). A user profile may be
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generated using a cookie, a data file that is placed on a user’s computer by a Web
server, and which collects information about the user’s activity at the site.
Cookies can be used by websites in a number of ways:
To identify customers visiting a site and enabling customers to be greeted by
their name
To target relevant ads to customers leading to higher click-through rates
To increase sales, make purchasing suggestions based on a customer’s
browsing or buying history, items viewed or purchased by other customers who
bought the product being viewed, or items that seem related to the product
being viewed. One example is Amazon’s ‘Inspired by Your Browsing History’,
or ‘You bought this, you might like this’
3.2.2 Behavioural Targeting
Behavioural targeting uses information collected about an individual’s web browsing
behaviour, for example pages visited or searches made, to match advertisements to
individuals and select and advertisement to display to that individual. Behavioural
targeting may be used in conjunction with location data to make advertisements more
relevant
3.2.3 Collaborative Filtering
Collaborative filtering is a personalisation method that is used to predict what products
or services are of interest to a customer. The technique uses preferences and activities
of customers with similar characteristics to build user profiles of new customers and
make product recommendations to them. A well-known example of collaborative filter
is the Netflix recommendation system.
It is important to note that a number of legal and privacy issues surround the use of
cookies, behavioural targeting and collaborative filtering. These issues are discussed
in Section 6 ‘Internet Marketing: Legal and Privacy Issues’.
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4. Web Advertising
Web advertising performs an important role in e-commerce. Advertising can be used
to drive site traffic or to increase brand awareness and build brands. Moreover the
Internet provides a platform for interactive marketing, allowing marketers and
advertisers to interact directly with customers, and customers to interact directly with
advertisers and businesses. For example a customer can click on an advertisement
to obtain further information, send an e-mail to ask a question, or conduct a live chat
with a merchant or peers.
Figure 5 The Advertising Cycle
Source: Turban et al., 2012)
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4.1 Benefits of Web Advertising
The Internet has a number of advantages over mass marketing.
Table 2 – Benefits of Web Advertising
Benefit
Description
Cost
Online ads may be less expensive than those in other
media and can be updated at any time with minimal cost.
Richness of format
Online ads can combine multiple forms of media such as
text, graphics, video and audio.
Personalisation
Online ads can be interactive and targeted to specific
groups or individuals
Timeliness
Online ads can be very up-to-date
Location-based
Online ad …
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