Web E-Commerce
Ch. 4 Lecture Notes

You should read all of Chapter 4 except "Life-Cycle Segmentation" on pp. 179-184 and 195-198

Objective #1: Explain the difference between product-based & customer-based marketing strategies.

  • A marketing strategy is using a set of means to achieve a company's goals for selling and promoting their products and services.
  • The "Four P's" of marketing are
    • product - the customers' perception of a product is the product's brand.
    • price - recently experts have begun including a customer's transaction costs into the price of a product
    • promotion - how a product is communicated to existing and potential customers (e.g. email)
    • place (i.e. distribution) - the need to get products to various customers in various locations, the Internet allows efficient distribution of digital products
  • A product based marketing strategy is one which organizes promotional materials, etc. on the categories of the company's products. Staples is an example. See the tabbed headings at the top of staples.com. Sears is another example. This strategy works well for customers who are looking for a specific type of product and can narrow down their search by category and subcategory. But, the strategy does not work for customers who are shopping based on a need for a relatively unknown product. Therefore, it may be wise for companies to develop websites while thinking of these customers' perspectives.
  • A customer-based marketing strategy is one that meets the needs of various types of customers. First, a company must identify the different groups of customers and even subgroups. Colleges have done this well in the last few years by making navigation means for groups of people rather than divisions and academic departments of the college.

Objective #2: Communicating with different marketing segments.

  • Companies must develop trust using its website and the way it uses the Internet to communicate with its customers.
  • The levels on which a company can communicate with its customers with increasing levels of trust are:
    • mass media (e.g. t.v.) - not alot of trust but inexpensive, t.v. viewers are passive and not critical evaluators
    • the Web - more trust but more expensive, web surfers are active, critical evaluators
    • personal contact
  • Blogs have recently been used more to give more trust to the websites. Happy customers and even employees can make blog entries.
  • Market segmentation can be used to differentiate messages to different customer subgroups. Micromarketing can even be used for very small customer groups. Segmentation can be done geographically, demographically (e.g. age, gender, etc.) , & psychographically (e.g. social class, personality).
  • With the use of CSS, URL forwarding, and other techniques, a company can present the same products for the same store with two different website look-and-feels. This is not possible in brick-and-mortar stores. Dell even provides customers the ability to create their own personalized pages. This is one-to-one marketing.
  • Usage-based market segmentation is used to give the same customer different online experiences based on his behavior. For example, an online computer store could act differently if the customer needs technical support from when the customer is shopping for a new computer. At various times, the same customer could be acting as a web surfer, a buyer, or a shopper. Here are items to include in a website to help the experiences of these 3 categories of customers:
    • browsers - trigger words can be used to help customer remember he's looking for something, extra content on how products can be used, an entertainment section to keep the browser in the website longer, rich media, sales ads
    • buyer - direct link to purchase a specific item number, easy-to-use shopping cart, 1-Click purchase for return customers like Amazon
    • shoppers - product reviews, lists of features, comparison tools. Examples are Best Buy and Crutchfield.
  • Recent research identifies these 6 behavior-based categories
    • simplifiers - like convenience
    • surfers - find information
    • bargainers - in search of a good deal
    • connectors - communicate with others (chat, IM, etc.)
    • routiners - same sites over and over for news, stock quotes, etc.
    • sportsters - same as routiners but in search of sports and entertainment

Objective #3: Explain how companies advertise on the Web

  • Online advertising must complement a company's traditional advertising program.
  • Banner ads are the most widely used means of advertising. They often involve animated gifs and Flash. The standard sizes for banner ads are found at www.iab.net/standards/adunits.asp.
  • Sometimes groups of companies (especially not-for-profits) form banner exchange neworks to use each others banner ads. A company can also use a banner advertising network like DoubleClick or LinkExhange.
  • The success of banner ads is often measured by CPM (cost per thousand), impressions (# of views) and click-throughs (# of clicks on the ad). Average click-through rates have dropped to about 0.4 percent. Other terms for measuring website traffic are a visit which occurs when a unique visitor requests a page from the website and a page view which is any page being loaded by the visitor. It is still very difficult to truly measure the costs vs benefits of advertising on the Web.
  • More and more ads are created with Flash and Java these days. These technologies can incorporate interaction by tracking the user's mouse. Some banner ads even simulate an error message on the user's computer.
  • Pop-up ads are also used. But many browsers suppress pop-up windows. A pop-up ad is contained in another, smaller browser window that forces the user to click a close button. A pop-behind ad is a pop-up ad that is followed by a command that puts the focus back on the active window. When the user evenutally closes his main browser window, the pop-behind ad will be visible.
  • An interstitial ad is an full-page ad that opens in its own browser window when a user clicks a link that was supposed to link directly to something else. The interstitial ad usually automatically closes leaving the original intended page as the active window.
  • A rich media ad (aka active ad) is one that floats over a web page. This kind of ad sometimes has no close button but disappears after 10 seconds or so. Because it is contained in the main browser window and covers the main content of the page, there is no way to avoid it.

Objective #4: Explain how to use email marketing.

  • Getting customers to request email messages is a good idea. This is called opt-in email and is part of a marketing strategy called permission marketing. It is more likely that someone who chose to receive email will by products.
  • Email can be sent using automated scripts making it an inexpensive way to communicate with customers. A crontab can be used in a Linux hosted account to run a PHP script that automatically sends email to specified addresses on a daily or regular basis.
  • It can be effective to mix a little content in with your email advertisements.
  • It is probably better to include a link in the body of a message rather than lots of graphics. However, some web surfers are wary of clicking links in email messages for security reasons.

Objective #5: Explain how to use technology-enabled customer relationship management.

  • Customer relationship management (CRM) has long been an important tool for companies. New technologies especially on the Internet now make it even easier to track customers. A company can easily use the detailed info about a customer's behavior, preferences, needs, and purchase history to customize promotions and set prices.
  • Things like an online order history that a customer can retrieve or recommendations based on previous purchases help faciliate a customer's online experience and increases the likelihood that the customer will purchase more products.

Objective #6: Explain affiliate marketing strategies and viral marketing strategies.

  • Affiliate marketing occurs when a company with a decent brand allows others (perhaps individuals) to link to products on their site giving customers the chance to directly access certain products. Usually an affiliate is focused on a particular kind of product and gathers up links the products in that category. When another person clicks through the link from the affiliate to the main website, a commission is paid to the affiliate.
  • A viral marketing strategy is one that relys on one set of customers to communicate via email to another set of customers. Blue Mountain Arts and electronic greeting cards sites have perfected this strategy.

Objective #7: Explain how search engines can be used for effectively to meet a marketing strategy.

  • There are two main kinds of search engines, spiders and indexes, though some search engines act in both ways.
  • Spider search engine examples include Google and WebCrawler.
  • Index search engines (aka directories) include Yahoo and Lycos but Google has an index as well.
  • Search Engine Optimization (SEO) is the process of making sure a company's website is listed.
  • Some search engines allow you to submit a website to the search engine.
  • Some sites allow paid placement (i.e. search inclusion). Google's campaign is called AdWords. Sometimes the ad is placed in proximity of related content (called "contextual advertising").
  • The website Search Engine Watch is a good one to read about the current status and algorithms of various search engines and learning tips for SEO.
  • You can also pay Google to be listed as a business within the Google Local service.
  • Services such as submit-express.com will help you submit a site to various search engines for a fee or for free.
  • You can add posts to message boards and blogs that refer to and even link to your site.
  • A number of search engines are dedicated to offer price comparisons of prodcuts including pricewatch.com, calibex.com, bizrate.com, and products.google.com (formerly known as froogle.com).

Objective #8: Explain how to build a home page and web site for search engine optimization.

  • Use good, relevant keywords that fit the purpose and nature of your website. Some tools such as keyworddiscovery.com and wordtracker.com can be helpful.
  • Meta tags should be placed in the source of an HTML page so the search engines include the site. Supposedly very few search engines bother using a web page's meta tags anymore.
  • Use lowercase keywords in your <meta> tags.
  • Use different and appropriate keywords on each page of the site.
  • The <meta> title, description, and keyword tags should be consistent.
  • Include page <title> tags for each page of a site and make sure the titles contain important keywords.
  • When creating hypertext links, make sure that keywords are hyperlinked and not words like "click here".
  • Use regular <a href=...> links rather than links within Flash or complicated JavaScript links.
  • Include common mispellings of keywords as keywords.
  • Add a sitemap with plain HTML text links to the various pages of the site.
  • Include <alt> tags for important images.

Objective #9: Explain how to purchase an appropriate domain name.

  • Choosing a domain name is important. It should be easy for customers to remember. It should be easy to spell. It should not be easy to confuse the domain name with other domains.
  • You can either purchase a domain name as part of a hosting contract or directly from a domain registrar such as Network Solutions. Some hosting providers such as lunarpages.com even offer free domain registration for life.
  • You can purchase several domain names and have the extra ones "pointed" to the main one. This is sometimes called URL forwarding.
  • You can also "park" a domain name by purchasing the website domain name but not having it be accessible.
  • Subdomains as in widgets.acme.com can be used to increase a site's visibility and memorability.