Page 200 - Electronic Commerce

Marketing on the Web

In this chapter, you will learn how companies use advertising and marketing to develop long-term

relationships with customers that their employees might never meet in person. The importance of tell-

ing an authentic, accurate, meaningful, and consistent story through online and physical channels
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underlies the principles of branding, marketing, relationship management, and communication that

you will learn about in this chapter.

WEB M ARKETI NG STRATEGIES

In this chapter, you will learn how companies are using the Web in their marketing
strategies to advertise their products and services and promote their reputations.
Increasingly, companies are classifying customers into groups and creating targeted
messages for each group. The sizes of these targeted groups can be smaller when
companies are using the Web—in some cases, just one customer at a time can be
targeted. New research into the behavior of Web site visitors has even suggested ways in
which Web sites can respond to visitors who arrive at a site with different needs at
different times. This chapter will also introduce you to some of the ways companies are
making money by selling advertising on their Web sites.
Most companies use the term marketing mix to describe the combination of elements that
they use to achieve their goals for selling and promoting their products and services. When a
company decides which elements it will use, it calls that particular marketing mix its marketing
strategy. As you learned in Chapter 3, companies—even those in the same industry—try to
create unique brand presences in their markets. A company’s marketing strategy is an important
tool for conveying its branding and advertising messages to current and prospective customers.
Acompany’s Web presence is an element of that marketing strategy.

The Four Ps of Marketing
Most marketing classes organize the essential issues of marketing into the four Ps of
marketing: product, price, promotion, and place. Product is the physical item or service
that a company is selling. Elements such as quality, design, features, characteristics, and
even the packaging make up the product. These intrinsic characteristics of the product
are important, but customers’ perceptions of the product, called the product’s brand, can
be as important as the actual characteristics of the product.
The price element of the marketing mix is the amount the customer pays for the
product. In recent years, marketing experts have argued that companies should think of
price in a broader sense—that is, the total of all financial costs that the customer pays
(including transaction costs) to obtain the product. This total cost is subtracted from the
benefits that a customer derives from the product to yield an estimate of the customer
value obtained in the transaction. Later in this book, you will learn how the Web can
create new opportunities for creative pricing and price negotiations through online
auctions, reverse auctions, and group buying strategies. These Web-based opportunities
are helping companies find new ways to create increased customer value.

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