We continued into chapter 1 and discussed further into detail about the internet marketing paradigm.
The marketing inputs are environmental factors that affect how internet marketing is done. Business models, interactive channels, offline channels, and social and regulatory issues are all part of marketing inputs. Marketing actions are online advertising, e-commerce, and customer service and support.
Drivers of the internet economy are:
1. information which produces the greatest value. It can either be as an added value for existing products or services or information products.
2. Distance: in the internet world, distance does not matter in many types of communications and transactions.
3. Speed
4. People are the key assets in internet enterprises
5. Network: growth in network causes exponential increase in value.
- Moore’s Law describes the increase in productivity coupled with the decrease in costs that makes computing power widely available today.
- Metcalfe’s Law portrays the exponentially increasing power of the network.
6. One to one basis, where marketers are trying to cater more to your needs. An example would be Amazon, where they have a profile just for you.
7. Demand can be predicted with greater accuracy.
8. Cost patterns change as transaction and coordination costs shrink for businesses, and consumers recognize that switching costs are low.
9. Customer power: consumer have power in information-rich channels.
10. An information economy is characterized by choice and abundance.
The value chain: Porter; where the final good is made up of different component parts. The value chain concept incorporates two business processes: the supply chain and the channel of distribution
The supply chain maps the physical movement of goods from initial production through assembly through the distribution process and to the customer. Zara is a perfect example of combining customer information with supply chain integration. For Zara, customer information is key for their trendy fashions, they use real time customer feedback creating a relationship, where they are treated as the experts.
Dell is a good example of an integrated value chain and their build to order model. Dell customizes a computer for an individual customer; it ships it directly to them and uses information to create customer value.