Categories of levers

Product

•          Can be defined as both tangible goods and intangible services generally created for the purpose of transaction.

•          Two general types of products for which the levers of product development differ – physical and services.

•          The Internet is changing some accepted limitations of service-based offerings such as intangibility, simultaneity, heterogeneity, and perishability.

•          Three components to overall value proposition: core benefit, basic product and augmented product.

•          The 2Is allow a company to learn more about its customer, personalize a product to meet customer preferences, and offer CRM tools to provide more value for customers and cut costs for product sellers.

•          Websites which require customers to register to use the site have access to numerous tools to interact with the user as an individual.

How?Two primary techniques:

•          Deploying the product development levers that are appropriate for the existing relationship and

•          Emphasizing the elements of the value proposition that are most relevant at a given stage of the relationship.

Brand

•          According to the American Marketing Association, a brand is a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competition”.

How have the 2Is Affected Branding?

The 2Is of Internet-based communication help to establish and maintain brand meaning in several essential ways:

•          Message timing

•          Message frequency

•          Message content

Price

Key variables of basic demand-curve pricing:

•          Price

•          Substitute Offerings/ Prices

•          Complementary Offerings/ Prices

•          Income

•          Market Size

•          Taste

•          Marginal Revenue

•          Marginal Cost

strategies

•          Cost Plus

•          Target Profit Growth

•          Target-Return Pricing

•          Prestige Pricing

•          Price as a Sign of Quality

•          Cyclical Promotional Pricing (Hi-Lo)

•          Everyday Low Pricing

•          Fairness in Pricing

•          Promotional Low-Cost Pricing

•          Dynamic Pricing is one of the most significant contributions the Internet and the 2Is have made to pricing strategy.

•          The Internet has enhanced dynamic pricing in two ways:

–         Decreased Menu Costs

–         Interactivity

Advanced strategies

•          Price Discrimination

–         first-degree, second-degree and third-degree

•          Volume Discount Pricing

•          Two-Part Pricing

•          Bundling

•          Price Discrimination Over Time

•          Frenzy Pricing

Community

There are three broad types of Communities, differing by their foundation of shared interests.

1. Information-driven communities
2. Activity-driven communities
3. Commonality-driven communities

•          Cost Benefits

–         Reduced Customer Service Costs

–         Reduced Customer Acquisition Costs

–         Reduced Costs from Decreased Product Flaws and Marketing Mistakes

–         Reduced Marketing Costs

•          Revenue Benefits

–         Increased Customer Segmentation and Customization

–         Increased Branding

–         Deepened Customer Relationships

Communication

®      Goal of marketing and communication is to convey relevant messages to the right consumers at the right time.

®      Synergy between messages is integrated communications.

®      Traditional and interactive marketing methods are converging.

®      Marketing communications, which includes all the points of contact that a firm has with its customers, can be grouped into four categories:

1. Mass offline
2. Personal offline
3. Mass online
4. Personal online

Distribution

•          A distribution channel is the system of organizations involved in the process of making a product or service available for consumption or use.

•          Marketing channels therefore facilitate the exchange of goods and services between buyers and sellers.

The Internet:

•          Is a substitute for other forms of communication.

•          Has radically changed buyer-seller relationships.

•          Has changed the customer shopping experience.

•          Has increased the power of consumers.

•          Disintermediation

•          A strategy that involves the elimination of a channel intermediary.

•          Internet has become a driving force for disintermediation

•          Overall result is positive because channel works more closely to create value for customers

•          Awareness

•          Number of Intermediaries

•          Number of Channels/ Intermediary Type

•          Exploration/ Expansion

•          Degree of Channel Integration

•          Number of Channels/ Intermediary Type

•          Commitment

•          Degree of Channel Integration

•          Intermediary Type

•          Number of Channels

•          Intermediary Functions and Responsibilities

•          Dissolution

•          Elimination of Channel Types

•          Reduction in the Number of Intermediaries

•          Reduction in Channel Integration

Data( raw, unprocessed, qualitative, quantitative) à Analyze

àinfo ( in use for decision making) à combined with expertise

àKnowledge ( to make worker more productive and automated system)

•          Explicit Knowledge

§         Formally Stated

§         Potentially Available In Published Form

•          Tacit Knowledge

§         Subconscious/Difficult To Articulate

§         Shared Through Personal Communication

•          To Enable Human Agents to Work

§         Better

§         Faster

§         With More Customer-Satisfying Results

•          To Create Automated Systems

§         As Good as the Best Human Agent

•          A Knowledge Base

§         Is a Database of Information about a Specific Subject

§         Can be in the Form of Questions and Answers to Them

• . Information is the key that equips workers with knowledge to perform their tasks and on automated marketing programs of many kinds.
• information is obtained, are followed in steps, after the first steps are taken then the following information can be revealed in the next process. 
• .  integrated system in an attempt to make the process as quick and efficient
• Customer profile and database
• One time response- live chat if needed. 
• done automatically, using many applications, all relying on event-driven software.
• following up with emails and questions. 
•   You need detailed set of guidelines for using knowledge from several sources to provide the products, services, and support customers need
• Processes have become the key unit of analysis for improving quality and for implementing automated systems.  It is not the individual step in the process that is most important; it is the smooth functioning of the entire process that is critical for success. 
• Problems with missing data:  be patient, data can be obtained over time in the normal course of business.  Infer if needed.  The alternative is to exclude a consumer from any age-related promotion, if you’re not certain with age. 
• TACIT KNOWLEDGE: knowledge that has not been articulated; often subconscious and relatively difficult to communicate to other people.  Askjeeves.com allows user to makes their queries in natural language.
• EMAIL systems require both sophisticated technology and a great deal of customer-relevant knowledge to perform well. 

•          It may be strong, weak or nonexistent.

•          It can be intellectual, emotional or both.

Two categories of relationships:

1.        Type

2.        Involvement

•          Continuum ranging from communal to exchange based.

•          Can online firms build emotional, social or psychological benefits into the exchange process?

•          Lack of personal interaction makes it difficult, but not impossible.

     Relationship Involvement

•          Defined as the degree to which a relationship is relevant to the consumer – the extent to which it relates to consumers’ values, interests, or needs.

•          Involvement is a function not only of product characteristics, but also of the purchase situation and the consumer’s personal needs.

Why do firms want relationships with customers?

The long-standing buyer-seller relationship might lead the customer to:

•          Anticipate the positive feelings from remaining loyal to the seller.

•          Trust that the seller will provide good value.

•          Feel that the brand represents who they are.

•          Promote the seller to friends, family and acquaintances.

•          Seek out and actively read the seller’s promotional material.

Two basic reasons why customer relationships increase profitability:

1. Costs of serving existing customers are lower.
2. Existing customers are willing to pay  higher prices.
3. Awareness
4. Exploration and Expansion
   1. Attraction
   2. Relationship Norms
   3. Trust
   4. Power Relations
   5. Satisfaction
5. Commitment
6. Dissolution

Why The Web is Unique at Creating Customer Relationships

1. Interactivity

–         Defined as the extent to which a two-way flow if communication occurs between the firm and the customer.

1. Individualization

–         Reflects the degree to which firm-customer interactions are tailored or customized to the individual user.

ENTERPRISE METRICS

•          Site Administered

§         Hit Counters

•          Purchased Services

§         Server Request Log Data

§         Coded Web Pages

§         Customer Panel Data

l           Clickstream- 

the complete data record, made up of mouse-clicks, of consumer activity on the Internet during a specified period, usually the dureation of a visit to a single Website.

l           Server Log- record kept at the server level that records each file requested from a Website. 

 Created by the server that houses the Web site. 

Each time a browser requests a file in order to build a Web Page, it generates an entry in the server request log.(marketing task is to determine how these data can be sued to fin-tune existing marketing strategies, from the example of sally looking for fishing rod for father, they collected information regarding how she was unsuccessful on the listings for one and two, but she found for 3). 

·         Coded web page- a technique in which a small image, usually a 1-pixel transparent image ( called a pixel tag or transparent GIF), is placed on a Web Page.  Used in conjunction with a cookie on the user’s computer, the image returns data about user activity on the Web page. 

The use of coded pages is a new method of collecting data, on the “browser (user’s ) side” of the information transaction instead of on the server side.  (detailed info about the visitors’ activity on the page.  Data is more accurate. Data collected by web bugs has smaller storage requirements because it stores only relevant data. Data are collected in this manner, it permits real-time processing and viewing of site metrics.

To collect detailed information about visitor activity, tags must be sued in conjunction with cookies.   Cookies themselves have become controversial, although the general Internet public seems less aware of coded pages in general.

·         Panel data- the process for using panel data to generate site effectiveness data is the same as using panels in the general marketing research process. The first step is to recruit a statistically representative panel of internet users who agree to participate in the data collection. Specialized software is downloaded onto the participant’s computer to record the click stream data. The software is polled at regular intervals to upload the data. First, the source of the data is unambiguous, which it often it not with server logs. Second, a person who uses the internet from both home and work is two separate people according to server logs, but carefully planned and maintained panel data can overcome this issue. Third, the measurement firm can collect demographic and behavioral data from panel households that can be useful in reporting and analytics.

·         -record activity on internet one way or another. 

·         because server logs record information/ the server side while Coded Data collects information from the browser side. 

·         Coded Pages are more useful than server logs

·         IP address may change during the session, instead of server log recording the same visitor, it gets confused by recording different visitors. 

·         With Coded pages, when data are collected in this manner, it permits real-time processing and viewing of site metrics.

·         Server log data, must be transferred to a separate analytics system for batch processing.

·         It can be made available quickly, but not in real time.  

·         ·         hits: the number of files requested

·         ·         impressions: the number of times and ad banner is requested by a browser

·         ·         page views or deliveries: the number of times a web page is requested

·         ·         sessions: the amount of activity on a site during a specified period

·         ·         click-through: the number of times visitors come to the site by clicking on an ad

Measuring the Audience

Visitors:  the number of people who visit the site

• Total
• Unidentified (anonymous)

Behavior on the site

• number of page views
• session time
• path through the site
• shopping cart abandonment
• entry page (many visitors do not enter through the home page)

BASIC METRICS

•          Site Traffic

•          Hits

•          Impressions

•          Page Views

•          Campaign Measures

•          Email Programs

•          Products/Offers

•          Search Effectiveness

•          Site Audience

•          Visitors

•          Unique Visitors

•          Identified Visitors

•          Unduplicated Audience

EXPOSURE versus ACTION

•          CPM – Cost Per Thousand Impressions

•          CPA – Cost Per Action

§         Cost Per Order

§         Cost Per (Sales) Lead

 less complain , less repurchase

Complaint—-> problem get solved–> repurchase

Channels

Telephone

Web-Based

Live Person

Email, Instant Messaging, Live Chat

Automated

FAQs, Knowledge Bases, Video

Stratgic customer care

Profile customer àSegmentation customer àUnderstanding their needsàInvesting technology and seeks solutionàManaging in consistent manner

Customer service scheme

• Customer Service Orientation Must Pervade All Departments Of An Enterprise
• Superior Customer Service Requires Long-Term Commitment (Management, Resources)
• Build Culture of Customer Service Using Quality Management Principles
• “What Gets Measured Gets Managed”
• Technology Can Help Improve Customer Service
• Customers Want Multiple Service Channels
• Customers Want The Option Of Human Contact
• Improve The Overall Customer Experience

 Anticipatory Customer Service

l           anticipate potential problem areas before they become troublesome, develop solutions

l           provide service that exceeds customer expectations.

l           even before the customer asks, perhaps even before the customer is aware of needing it, service will be provided.

l           The aim is to prevent problems, not just resolve them once they occur, but onto a different level of service.

l           the rules-based personalization–the actual business to notify the customer to see if they are aware of and allows them to agree to the modification of software.

l           Like suppose if the customer bought “this” then you need send them “that” update, it’s almost like automatic email systems. The information comes on a schedule-basis, not on demand, automate the process to immediately send a thank you email.

l           Another method of anticipatory customer service is to PUSH content to the user. The role this can play in successful customer service delivery is for example the Wall Street Journal Online offers desktop alerts on subjects selected by subscriber, based on their registration form. They took the initiative of providing information on them, without even them asking for it, this leads to successful customer satisfaction.

l           Successful Customer Service Delivery

l           Anticipatory customer service builds customer scenarios by using data including call center reports, e-mai logs, chat transcripts, and Website software. 

l           It also makes customer service pervasive by fulfilling common requests before the customer even asks and ensuring that service is readily available throughout the value chain.

l           live person, includes email, instant messaging, and chat.

l           price discount or free merchandise

l           Customer contact points include the Web, a telephone service center, field sales offices, and a telesales center

 http://www.lexisnexis.com.remote.baruch.cuny.edu/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T5360669917&format=GNBFI&sort=BOOLEAN&startDocNo=1&resultsUrlKey=29_T5360669921&cisb=22_T5360669920&treeMax=true&treeWidth=0&csi=6742&docNo=1

http://www.nytimes.com

Outsourcing?

quality vs cost   

“What get neasured gets managed

customers went multiple channels

human contact

Technology – Long term commitment, increase quality, royalty, satisfaction

The future belongs to marketers who best capture , analyze and use information and knowledge

Objective , positioning, current relationship, segment and targeting

Principles for marketspace matrix design

• -Effect to change
• Most leverage
• Barriers to advancement
• medium’s effect on desire behavior
• Level of involvement
• Learning Trend
• Credibility of channel Matter
• Consistent with positioning
• Medium can be the message or product
• Must be adaptive

http://www.nytimes.com/2008/11/15/business/15auto.html?_r=1&sq=automobile%20price&st=nyt&adxnnl=1&scp=9&adxnnlx=1227070371-WBYvS41aF+4CmIoHT5hl6w