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1. CHAPTER 14 WITH DUANE WEAVER
Internet Marketing

2. Internet Uses
Most common products researched online and
bought offline:
 Cars, computers, travel, electronics, books appliances,
music, sporting goods and clothing.
25% of all business-business purchases are done
online
54% of email users have responded to e-mail
advertisements (2004)
Internet retail is 2.5% of all retail sales

3. Impact of Internet on Marketing
 The following 3 functions can cost up to 30% of COGS, expectations are
that these costs can be reduced to 10-20% via e-commerce.
 Sales
 Marketing
 Distribution Systems
 Albeit, operating costs can be substantially lowered, the business must
have:
 Infrastructure (perhaps vested technology as a fixed cost or leased as an added
operating expense (can void net gain))
 Focus and design of company (bricks and mortar vs. virtual?)
 Design of Website must be conducive to the IMC plan and established to
the benefits of the target audience:
 Excellent for psychographic segmentation
 Multiple portals tailored to each segment (vs. one face for all)
 Use flashy where needed (affective buyers) and avoid it where frivolous
(cognitive buyers)
 Integrate cookies and path traveled information with purchase habits
 Requires constant modification to be on top of consumer needs
 Must have multiple Trust Cues

4. Success with E-Commerce
E-Commerce: selling of goods or services
online.
Three Incentives must exist for customers to
buy online:
 Financial: currently first time consumers require
financial incentive (price reduction) in addition to
trust cues.
 Convenience: ability to order anytime from anywhere
without having to visit a store. Delivered to your door.
 Value Added: needed to induce long term repeat
business such as:
 Personalization (Lands End, Amazon.com)
 Permission based marketing based on profiles
 Reduced information search (find it all in once place –
Insurance companies, E-bay)

5. Business-Business E-Commerce
Works well for repeat purchasing of low cost items with
strong brand recognition.
Can help to speed time to market, as well as reduce
inventory and transaction costs.
Increase in online brokerage services for business to
business…facilitating exchange of goods. (e.g.:
PaperExchange.com)
Websites can serve as alternate media to drive visits to
bricks and mortar
Nature of goods needs to be conducive to world-wide
shipping when considering world wide web store front for
international business
Must be designed to handle such an enterprise (structure
and function, marketing, aligned to meet expectations)

6. IMC and the Internet
 In addition to using the Internet as part of the IMC plan for
communications and marketing…
 Fundamental to integrated the entire company from IT through to human
resources, production and shipping.
 The ability to meet the demands of online marketing is as important to
survivability as having web presence.
 Technology does not solve business problems…it expedites those that
already exist! What once was broke and took attention once a week…will still be broken,
however, it may take attention once an hour. Fix the business processes, align the
companies resources, plan, build and then engage with a vengeance!
 Brand Spiraling: using traditional media to drive customers to the
online website to enhance brand recognition.
 Halo Effect: offline brand recognition induces online willingness to try
new products and services from the same brand on the net.

7. Discussion Questions
Please get into groups of 3-5 and discuss the
following three questions, be prepared to share
some of your answers with the class:
 P. 459-460 (blue book) and P. 431 (white book)
Questions:
 1. (Only in blue book):
What age group is most likely to use the Internet? Which is the
least? Does this have implications for IMC programs (explain)?
 5. (Both books):
Name and describe the three main incentives used to attract
shoppers to e-commerce Web sites.
 6.(Both books):
What is cyberbait? How must it be used over time to maintain it
as an effective marketing tactic?

8. Thank You
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