Seventh Edition

E-MARKETING

Judy Strauss
Associate Professor of Marketing,
University of Nevada, Reno

Raymond Frost
Professor of Management Information Systems,
Ohio University

International Edition contributions by

Nilanjana Sinha
NSHM Business School,
Kolkata

PEARSON

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CONTENTS

Preface 14

Part 1 E-Marketing in Context 17

Chapter 1 PAST, PRESENT, AND FUTURE 19

E-Marketing Landscape 21
What Works? 21
Internet 101 23
E-Marketing Is Biggerthan the Web 24
E-Marketing Is Biggerthan Technology 24
E-Marketing's Past: Web 1.0 26
The E Drops from E-Marketing 28
Marketing Implications of Internet Technologies
E-Marketing Today: Web 2.0 30
Power Shift from Seilers to Buyers 30
Customer Engagement 34
Content Marketing 35
Inbound Marketing 35
New Technologies 36
Exciting NewTechnology-Based Strategies 38
Other Opportunities and Challenges in Web 2.0
The Future: Web 3.0 40
Semantic Web 40
Stepping Stones to Web 3.0 42
Read on 44

Chapter 2 STRATEGIC E-MARKETING AND

PERFORMANCE METRICS 47
Strategie Planning 49
Environment, Strategy, and Performance 50
Strategy 50
From Strategy to Electronic Strategy 51
From Business Models to E-Business Models 52
6 Contents

E-Business Models 52
Value and Revenue 53
Menu of Strategie E-Business Models 54
Performance Metrics Inform Strategy 60
The Balanced Scorecard 62
Four Perspectives 63
Applying the Balanced Scorecard to E-Business
and E-Marketing 63
Social Media Performance Metrics 67
Awareness/Exposure Metrics 68
Brand Health Metrics 69
Engagement Metrics 69
Action Metrics 69
Innovation Metrics 70
Measurement Tools 70

Chapter 3 THE E-MARKETING PLAN 73

Overview of The E-Marketing Planning
Process 75
Creating an E-Marketing Plan 75
The Napkin Plan 76
The Venture Capital E-Marketing Plan 76
A Seven-Step E-Marketing Plan 77
Step 1—Situation Analysis 78
Step 2—E-Marketing Strategie Planning 79
Step 3—Objectives 81
Step 4—E-Marketing Strategies 81
The Offer: Product Strategies 81
The Value: Pricing Strategies 82
Distribution Strategies 82
Marketing Communication Strategies 83
Relationship Management Strategies 83
Step 5—Implementation Plan 83
Step 6—Budget 84
Revenue Forecast 84
E-Marketing Costs 85
Step 7—Evaluation Plan 85
Contents 7

Part 2 E-Marketing Environment 89

Chapter 4 GLOBAL E-MARKETS 3.0 91

Overview of Global E-Marketing Issues 93
Global Markets 94
Emerging Economies 96
Importance of Information Technology 97
Country and Market Opportunity Analysis 98
Diaspora Communities 98
E-Commerce Payment and Trust Issues 99
Infrastructure Considerations 101
Technological Tipping Points 103
Legacy Technologies: Computers and Telephones 103
Wireless Internet Access: Mobile Phones 104
Smartphones 106
Broadband 107
The Digital Divide 108
Building Inclusive E-Markets 110
Social Networking 113

Chapter 5 ETHICAL AND LEGAL ISSUES 117

Overview of Ethics and Legal Issues 119
Ethics and Ethical Codes 120
The Problem of Self-Regulation 121
Privacy 123
Privacy Within Digital Contexts 124
International Privacy Issues 129
Digital Property 132
Patents 132
Copyright 133
Trademarks 135
Licenses 137
Trade Secrets 139
Data Ownership 140
Online Expression 141
Emerging Issues 143
Online Governance and ICANN 143
Jurisdiction 143
Fraud 144
8 Contents

PART 3 E-Marketing Strategy 149

Chapter 6 E-MARKETING RESEARCH 151

Data Drive Strategy 153
Big Data 154
Marketing Knowledge Management 155
The Electronic Marketing Information System 157
Source 1: Internal Records 158
Source 2: Secondary Data 160
Source 3: Primary Data 166
Other Technology-Enabled Approaches 179
Client-Side Data Collection 179
Server-Side Data Collection 180
Real-Space Approaches 181
Marketing Databases and Data Warehouses 182
Data Analysis and Distribution 183
Knowledge Management Metrics 185

Chapter 7 CONNECTED CONSUMERS ONLINE 188

Consumers in the Twenty-First Century 190
Consumer Behavior Online 191
Inside the Internet Exchange Process 193
Technological Context 193
Social and Cultural Contexts 199
Legal Context 202
Individual Characteristics and Resources 202
Internet Exchange 205
Exchange Outcomes 205

Chapter 8 SEGMENTATION, TARGETING, DIFFERENTIATION, AND

POSITIONING STRATEGIES 213
Segmentation and Targeting Overview 215
Three Markets 215
Business Market 216
Government Market 217
Consumer Market 217
Market Segmentation Bases and Variables 217
Geographie Segments 219
Important Geographie Segments for E-Marketing 219
Demographic Segments 221
Psychographic Segments 224
Behavior Segments 230
Targeting Online Customers 234
Differentiation Online 236
Online Positioning Bases 238

PARI 4 E-Marketing Management 241

Chapter 9 PRODUCT: THE ONLINE OFFER 243

Many Products Capitalize on Internet Properties 246
Creating Customer Value Online 246
Product Benefits 247
Attributes 247
Branding 248
Support Services 258
Labeling 258
E-Marketing Enhanced Product Development 259
Customer Codesign via Crowdsourcing 259
Internet Properties Spawn Other Opportunities 261
New-Product Strategies for E-Marketing 261

Chapter 10 PRICE: THE ONLINE VALUE 265

The Internet Changes Pricing Strategies 267
Buyer and Seiler Perspectives 268
Buyer View 268
Seiler View 271
Payment Options 279
Pricing Strategies 282
Fixed Pricing 283
Dynamic Pricing 284
Renting Software 288
Price Placement on Web Pages 288
10 Contents

Chapter 11 THE INTERNET FOR DISTRIBUTION 291

Distribution Channel Overview 293
Online Channel Intermediaries 293
Content Sponsorship 294
Infomediary 296
Intermediary Models 296
Distribution Channel Length and Functions 308
Functions of a Distribution Channel 309
Distribution System 314
Channel Management and Power 316
Distribution Channel Metrics 317
B2C Market 317
B2B Market 322

Chapter 12 E-MARKETING COMMUNICATION: OWNED MEDIA 325

E-Marketing Communication 327
Integrated Marketing Communication (IMC) 327
IMC Goals and Strategies 328
Traditional Marketing Communication Tools 330
Owned, Paid, and Earned Media 331
Owned Media 333
Content Marketing 334
Web Site 335
Web Site Landing Pages 336
Mobile sites 338
Web Site Chat 338
Blogs 339
Support Forums/Communities 341
Podcasts 342
E-Mail 342
Permission Marketing: Opt-In, Opt-Out 344
Rules for Successful E-Mail Marketing 345
Spam 346
Privacy 346
Text Messaging 348
Online Events 349
Sa/es Promotion Offers 349
Coupons 349
Contents 11

Sampling 350
Contests, Sweepstakes 350
Virtual Worlds 350
Online Games 351
Online Gifting 351
Branded Mobile Apps 351
QR Codes and Mobile Tags 351
Location-Based Marketing 352
Social Networks 352
Coordinating Internet and Traditional Media IMC Plans 355
Search Engine Optimization 355
Owned Media Performance Metrics 360
Sales Promotion Metrics 360
Direct Marketing Metrics 361

Chapter 13 E-MARKETING COMMUNICATION: PAID MEDIA 364

Paid Media 366
Trust in Paid Media 366
Internet Advertising Trends 367
Paid Media Formats 368
Display Ads 370
Rieh Media Ads 371
Contextual Advertising 371
E-Mail Advertising 372
Text Link Ads 372
Sponsored Content 372
Classified Ads 373
Product Placement 373
Emerging Formats 374
Social Media Advertising 374
Paid Media on Facebook 375
Facebook Sponsored Stories 376
Social Ads 376
Twitter's "Promoted Tweets," "Trends," and "Accounts" 376
Linkedln Advertising 377
Advertising in Second Life 377
Paid Media in Online Videos 377
Mobile Advertising 378
12 Contents

Paid Search 380

Which Media to Buy? 383
Effective Internet Buys 383
Efficient Internet Buys 384
Paid Media Performance Metrics 385
Effectiveness Evidence 387
Metrics Example 387

Chapter 14 E-MARKETING COMMUNICATION: EARNED MEDIA 392

Earned Media 394
User Engagement Levels 394
Engaging Individuais to Produce Earned Media 396
Who Should a Company Engage? 396
Social Media Influencers 397
Traditional Journalists 397
Techniques for Engaging Users 398
Viral Marketing 399
Viral Blogging 402
Multimedia Sharing 402
Wikis 403
Ratings and Reviews 403
Social Recommendations and Referrals 404
E-Mail 405
Social Media Site Discussions 406
Community Discussion/Forums 408
Widgets and Social Apps 408
Location-Based Services (LBS) 409
Collaborative Content Creation by Consumers 410
How Do Companies Entice Engagement? 411
Provide High-Quality, Timely, Unique, and Relevant Information 412
Create Entertaining Content 412
Offer Competitions 412
Appeal to Altruism 412
Make an Exclusive Offer 413
Reward Influentials and Fans 413
Incentivize Group Behavior 413
Reputation Management Online 414
Which Reputations Matter? 416
Contents 13

Build, Maintain, Monitor, Repair, Learn 416

Reputation Management Systems 418
Earned Media Performance Metrics 418
Social Media Dashboard 419

Chapter 15 CUSTOMER RELATIONSHIP MANAGEMENT 423

Building Customer Relationships, 1:1 425
Relationship Marketing Defined 425
Stakeholders 426
Three Pillars Of Relationship Marketing 427
Customer Relationship Management (CRM 1.0) 428
Social Customer Relationship Management (CRM 2.0) 428
CRM Benefits 429
Crm Building Blocks 431
1. CRM Vision 432
2. CRM Strategy 434
3. Customer Experience Management 435
4. Customer Collaboration Management 437
5. Organizational Collaboration 438
6. CRM Processes 440
7. CRM Information 443
8. CRM Technology 444
9. CRM Metrics 452
Ten Rules For CRM Success 454

Appendix A Internet Penetration Worldwide as of December 31, 2011 459

Appendix B Glossary 465
Appendix C References 478
Index 486