E-Marketing 5/E
Judy Strauss and Raymond Frost
Part IV: E-Marketing Management
Chapter 7: E -Marketing Management
©2009 Pearson Education,
1-1 Inc. Publishing as Prentice
Hall
E –Product: Product capitalize on internet properties
• A product is a bundle of benefits that satisfies the
needs of organizations or consumers and for which
they are willing to exchange money or other items of
value.
• Items such as tangible goods, services, ideas, people,
and places..
• All of these can be marketed on the internet.
• Some new products i.e. search engines and social
networks are unique to the internet.
©2009 Pearson Education,
9-2 Inc. Publishing as Prentice
Hall
E –Product: Product capitalize on internet properties
A product may be classified by the purpose for which
they are purchased:
Consumer products = purchased by an individual for
personal consumption.
Businesses sell products to consumers in the business- to-
consumer (B2C) market.
Consumers sell products to one another in the consumer-
to-consumer (C2C) market.
Industrial products = used in the operation of an
organization, as components for manufacture into final
product, or for resale (B2B market).
©2009 Pearson Education,
9-3 Inc. Publishing as Prentice
Hall
E –Product: Product capitalize on internet properties
Some new products are unique to the Internet (search
engines). Other products use the Internet as a new
distribution channel +add unique technology-enabled
services (books). With the Internet’s properties of
market deconstruction, customer control, and other e-
marketing trends: Many challenges, A plethora of new
opportunities. The success of [Link]
demonstrates how a new and purely online product can
use the Internet’s properties to build a successful
brand.
©2009 Pearson Education,
9-4 Inc. Publishing as Prentice
Hall
E –Product: Product capitalize on internet properties
To create new products: Research to determine what is
important to customers, Design strategies to deliver more
value than do competitors. In line with the Sources,
Databases, and Strategy model, tier two strategies
involve the marketing mix 4Ps and customer relationship
management (CRM). The process of designing these
strategies is closely tied to the tactics used to implement
them. The marketing mix (product, price, distribution,
marketing communication) + customer relationship
management (CRM) work together to produce relational
and transactional outcomes with consumers.
©2009 Pearson Education,
9-5 Inc. Publishing as Prentice
Hall
©2009 Pearson Education,
6 Inc. Publishing as Prentice
Hall
E -Marketing enhanced product
development
The move from atoms to bits adds complexity to
online product offers. Developers must: Combine
digital text, graphics, video, and audio, and use new
Internet delivery systems. Must integrate front-end
customer service operations with back- end data
collection + fulfillment methods to deliver product.
This creates steep learning curves for traditional
firms. E-marketers need to consider several
factors that affect product development and product
mix strategies with new technologies.
©2009 Pearson Education,
9-7 Inc. Publishing as Prentice
Hall
New product strategies for E -marketing
Many new products were introduced by “one-pony”
firms: The firm was built around the first successful
product, Netscape, Yahoo!, and Classmates. Other
firms added Internet products to an already successful
product mix: Microsoft.
©2009 Pearson Education,
9-8 Inc. Publishing as Prentice
Hall
A taxonomy for internet products
Thousands of products based on Internet technologies
have been introduced. These can be classified
according to the customers to whom they appeal: Each
column represents a group of customers, Each row in
the exhibit represents a type of product. This matrix
is helpful because it displays areas of new-product
opportunity.
©2009 Pearson Education,
9-9 Inc. Publishing as Prentice
Hall
Product Mix Strategies
Product line differentiation is an important e-marketing strategy.
How can marketers integrate hot product ideas into current product mixes? There are 6
categories of new-product strategies based on marketing objectives and other factors such as
risk appetite, strength of current brand names, resource availability, and competitive entries:
[Link] innovations are new-to-the-world products never seen before. On the
Internet = the first Web authoring software, cell phone/PDA combination, shopping agent,
and search engine. There are many discontinuous innovations yet to come on the Internet.
This strategy is quite risky, the potential rewards for success are great. E-marketers planning
discontinuous innovations must remember that their customers will have to learn and adopt
new behaviors things they have not done before. The new behavior must be easy and the
perceived benefits worthwhile. Initiation may include customization, bundling, and
attractive pricing of products.
Internet sales may not rely as heavily on product packaging and displays as do traditional
retailers.
Packages shipped to households may require additional packing materials not required in
bulk case shipments to wholesalers and retailers.
©2009 Pearson Education,
9-10 Inc. Publishing as Prentice
Hall
Product Mix Strategies
[Link] product lines are introduced when firms take an existing
brand name and create new products in a completely different
category. Microsoft created a new line when it introduced its
Internet Explorer Web browser. Because the Netscape browser
was already available, Microsoft’s entry was not a
discontinuous innovation.
[Link] to existing product lines occur when organizations
add a new flavor, size, or other variation to a current product
line. The New York Times Direct is a slightly different version
of the hard- copy edition, adapted for online delivery. It is yet
another product in The New York Times line, which includes
the daily paper, weekly book review, and others.
©2009 Pearson Education,
9-11 Inc. Publishing as Prentice
Hall
Product Mix Strategies
• [Link] or revisions of existing products are
introduced as “new and improved” and, thus, replace the old
product. Web-based e-mail systems improved on client-based
e-mail systems such as Eudora or Outlook because users could
check and send e-mail from any Web connected computer.
• [Link] products are current products that are either
targeted to different markets or promoted for new uses.
Yahoo! began as a search directory on the Web and then
repositioned itself as a portal (an Internet entry point with
many services).
• [Link]-too lower-cost products are introduced to compete with
existing brands by offering a price advantage. When America
Online and other ISPs were charging per hour rates for Internet
access, several other providers introduced unlimited use at flat
rate pricing for $19.95 per month.
©2009 Pearson Education,
9-12 Inc. Publishing as Prentice
Hall