Table Of Content

0273694057_COVER 11/5/06 13:48 Page 1 SSII ttnn rr ‘The authors have been highly successful in showing that they not only understand the relevant academic aa literaturebut are also familiar with the complexities of real life experienced by many practitioners.’ tetett Dr Ahmad Jamal, Cardiff Business School ggee yy ,, ‘Comprehensive, up-to-date and practical in focus.’ Im Imrr Dr Lisa Harris, Brunel University ppnn ll ee mmee ee Internet Marketing: Strategy, Implementation and Practice, Third Editionprovides a comprehensive guide to how organisations nntt can use the Internet to support their marketing activities, and covers all aspects of Internet marketing — environment, tt aa analysis, strategy development, and digital marketing campaign-planning and execution. tt ioioMM The book is based on emerging academic models and examples of best practice from leading experts in digital media. nn The practical knowledge developed through reviewing these concepts and practices will enable the reader to exploit the aa opportunities of marketing using the Internet while minimising risks. nnaa dd PPrr rr aakk cc New features in this edition include: tt icicee (cid:2) In-depth global cases illustrating best practice and the challenges of online marketing from well-known global ee e-businesses, including Amazon and eBay tt (cid:2) Updated references to the full range of digital media, including blogging, RSS, instant messaging, podcasting, ii nn digital TV and mobile marketing (cid:2) Improved four-colour design to increase clarity and ease readability gg (cid:2) Greater focus on strategy and development, with a revised chapter on Improving E-Marketing Performance A Companion Website at www.pearsoned.co.uk/chaffey contains additional study materials for students, as well as TTHHIIRRDD extensive links to relevant websites and extra pedagogical resources designed for lecturers. EEDDIITTIIOONN Dave Chaffey(www.davechaffey.com) is an Internet Marketing trainer and consultant for Marketing Insights Limited. He is a lecturer on e-marketing courses at Cranfield and Warwick Universities and the Institute of Direct Marketing. Dave has been recognised by the CIM as one of the 50 marketing 'gurus' worldwide who have shaped the future of marketing. EECC llhh ll Fiona Ellis-Chadwickis a lecturer in Marketing at the Business School at Loughborough University and is a member of the isisaa Marketing and Retailing Research Group. Her work has been published in Journal of Business Research, International --ffff CCee Journal of Retail Distribution and Management, European Journal of Marketing, Internet Research, and Journal of Retailing and hhyy Consumer Services. aa Richard Mayeris a Senior Lecturer in Marketing at the University of Derby, where he is the programme manager for CIM dd J J wwoo qualifications. He is also the Director of his own Marketing Training Company, specialising in Strategic Marketing, Business iihh to Business Marketing and Marketing Communications. ccnn kk ss Kevin Johnstonis a Senior Lecturer at Liverpool John Moores University, specialising in marketing, strategy and e-commerce. tt oo He previously lectured at the University of Derby, where he created one of the UK’s first e-commerce degree programmes. MM nn aa yy ee rr ISBN 0-273-69405-7 Additional student supportat www.pearsoned.co.uk/chaffey 9 780273 694052 Cover image: www.pearson-books.com Additional student supportat An imprint of © Eureka/Alamy www.pearsoned.co.uk/chaffey INMA_A01.QXD 17/5/06 12:00 Page i Internet Marketing Strategy, Implementation and Practice Visit the Internet Marketing, third editionCompanion Website at www.pearsoned.co.uk/chaffeyto find valuable studentlearning material including: (cid:1) Web links to case study materials, academic articles and examples of best practice (cid:1) Guidance on tools and techniques for effective web sites (cid:1) A comprehensive online glossary INMA_A01.QXD 17/5/06 12:00 Page ii We work with leading authors to develop the strongest educational materials in business and management, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Financial Times Prentice Hall, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk INMA_A01.QXD 17/5/06 12:00 Page iii Third Edition Internet Marketing Strategy, Implementation and Practice Dave Chaffey Fiona Ellis-Chadwick Richard Mayer Kevin Johnston INMA_A01.QXD 17/5/06 12:00 Page iv Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published 2000 Second edition published 2003 Third edition published 2006 © Pearson Education Limited 2000, 2003, 2006 The right of Fiona Ellis-Chadwick to be identified as author of this work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. ISBN-13: 978-0-273-69405-2 ISBN-10: 0-273-69405-7 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalogue record for this book is available from the Library of Congress 10 9 8 7 6 5 4 3 2 1 10 09 08 07 06 Typeset in 9/12.5pt Stone Serif by 30 Printed and bound by Mateu Cromo Artes Graficas, Spain The publisher’s policy is to use paper manufactured from sustainable forests. iv INMA_A01.QXD 17/5/06 12:00 Page v Brief contents Preface xiii Guided tour xxii About the authors xxv Acknowledgements xxvi Part 1 Internet marketing fundamentals 1 An introduction to Internet marketing 3 2 The Internet micro-environment 41 3 The Internet macro-environment 97 Part 2 Internet strategy development 4 Internet marketing strategy 151 5 The Internet and the marketing mix 214 6 Relationship marketing using the Internet 256 Part 3 Internet marketing: implementation and practice 7 Delivering the online customer experience 301 8 Interactive marketing communications 348 9 Maintaining and monitoring the online presence 415 10 Business-to-consumer Internet marketing 451 11 Business-to-business Internet marketing 484 Glossary 514 Index 534 v INMA_A01.QXD 17/5/06 12:00 Page vi 1 INMA_A01.QXD 17/5/06 12:00 Page vii Contents Preface xiii Introduction 42 Guided tour xxii Different environment components 43 About the authors xxv Marketplace 45 Acknowledgements xxvi Competitive forces 46 Value creation and value chain analysis 49 New channel structures 53 Part 1 Location of trading in marketplace 57 INTERNET MARKETING FUNDAMENTALS Commercial arrangement for transactions 58 Business models in e-commerce 59 1 An introduction to Internet marketing 3 Revenue models 61 Learning objectives / Questions for marketers / Customers 61 Links to other chapters 3 Assessing demand for e-commerce services 62 Introduction – how significant is the Internet for Online demand for business services 72 marketing? 4 Online buyer behaviour 74 Marketing applications of Internet marketing 5 Customer persona and scenario analysis 75 Our changing media consumption 6 Multi-channel customer experiences 77 Our changing buyer behaviour 7 Models of online buyer behaviour 78 What is Internet marketing? 8 Competitors 85 E-marketing defined 9 Digital marketing defined 10 Suppliers 86 E-commerce and e-business defined 11 Intermediaries 86 E-business defined 11 Case Study 2 Zopa launches a new lending model 90 Business or consumer model? 12 Summary 92 What benefits does the Internet provide for the marketer? 14 Exercises 93 Self-assessment exercises 93 A strategic approach to Internet marketing 18 Essay and discussion questions 93 How do Internet marketing communications differ Examination questions 94 from traditional marketing communications? 20 References 94 A short introduction to Internet technology 26 Further reading 96 How does the Internet work? 27 Web links 96 From the Internet to intranets and extranets 32 Case Study 1 eBay thrives in the global 3 The Internet macro-environment 97 marketplace 33 Learning objectives / Questions for marketers / Summary 37 Links to other chapters 97 Exercises 38 Introduction 98 Self-assessment exercises 38 Social factors 99 Essay and discussion questions 38 Social exclusion 100 Examination questions 38 Legal and ethical issues of Internet usage 101 References 39 Further reading 39 Privacy legislation 101 Web links 40 Other e-commerce legislation 113 Technological factors 116 2 The Internet micro-environment 41 Alternative digital technologies 120 Learning objectives / Questions for marketers / Digital radio 129 Links to other chapters 41 Security 131 vii INMA_A01.QXD 17/5/06 12:00 Page viii CONTENTS Economic factors 136 Summary 209 Globalisation 137 Exercises 210 Political factors 138 Self-assessment exercises 210 Internet governance 139 Essay and discussion questions 210 Taxation 140 Examination questions 211 Tax jurisdiction 140 References 211 Case Study 3 Boo hoo – learning from the largest Further reading 213 European dot-com failure 141 Web links 213 Summary 144 Exercises 144 5 The Internet and the marketing mix 214 Self-assessment exercises 144 Learning objectives / Questions for marketers / Essay and discussion questions 144 Links to other chapters 214 Examination questions 145 Introduction 215 References 145 Product 217 Further reading 146 The long tail concept 223 Web links 147 The Internet and branding 224 The importance of brand online 229 Part 2 Price 231 INTERNET STRATEGY DEVELOPMENT 1 Increased price transparency 231 2 Downward pressure on price 233 3 New pricing approaches (including auctions) 235 4 Internet marketing strategy 151 4 Alternative pricing structure or policies 237 Learning objectives / Questions for marketers / Links to other chapters 151 Place 237 1 Place of purchase 238 Introduction 152 2 New channel structures 240 Internet strategy is a channel marketing strategy 152 3 Channel conflicts 240 The scope of Internet marketing strategy 153 4 Virtual organisations 242 An integrated Internet marketing strategy 154 Promotion 243 Is a separate Internet marketing plan needed? 154 People, process and physical evidence 245 A generic strategic approach 157 People 245 Situation review 160 Process 248 Internal audit or analysis 160 Physical evidence 248 External audits or analysis 166 Case Study 5 The re-launched Napster changes Strategic goal setting 168 the music marketing mix 248 Frameworks for objective setting 172 Summary 251 Strategy formulation 174 Exercises 252 Decision 1: Market and product development Self-assessment exercises 252 strategies 176 Essay and discussion questions 252 Decision 2: Business and revenue models strategies 179 Examination questions 252 Decision 3: Target marketing strategy 180 Decision 4: Positioning and differentiation References 253 strategy (including the marketing mix) 185 Further reading 255 Decision 5: Multi-channel distribution strategy 191 Web links 255 Decision 6: Multi-channel communications 6 Relationship marketing using the strategy 194 Decision 7: Online communications mix and budget 196 Internet 256 Decision 8: Organisational capabilities (7S) 197 Learning objectives / Questions for marketers / Links to other chapters 256 Strategy implementation 204 Case Study 4 Tesco.com uses the Internet to Introduction 257 support its diversification strategy 207 Key concepts of relationship marketing 258 viii INMA_A01.QXD 17/5/06 12:00 Page ix CONTENTS Benefits of relationship marketing 258 Web site prototyping 308 Differentiating customers by value 260 Initiation of the web site project 309 Key concepts of electronic customer relationship Domain name registration 309 management (e-CRM) 262 Selecting an Internet service provider (ISP) 310 Benefits of e-CRM 263 Researching site users’ requirements 312 Marketing applications of CRM 264 Usability 312 CRM technologies and data 264 Web accessibility 314 Customer lifecycle management 267 Localisation 317 Permission marketing 268 Reviewing competitors’ web sites 317 Personalisation and mass customisation 270 Designing the information architecture 318 Online and multi-channel service quality 272 Designing the user experience 322 Approaches to implementing e-CRM 272 Developing customer-oriented content 323 Stage 1: Attract new and existing customers to site 273 Marketing-led site design 324 Stage 2a: Incentivise visitors to action 273 Elements of site design 324 Stage 2b: Capture customer information to Site design and structure 324 maintain relationship 273 Page design 332 Content design 332 Stage 3: Maintain dialogue using online communication 275 Development and testing of content 334 Stage 4: Maintain dialogue using offline Testing content 334 communication 276 Tools for web site development and testing 334 The IDIC approach to relationship building 277 Promote site 335 Techniques for managing customer activity and Service quality 335 value 278 Tangibles 336 Lifetime value modelling 278 Reliability 337 Loyalty schemes 286 Responsiveness 337 Virtual communities 288 Assurance 338 Customer experience – the missing element Empathy 338 required for customer loyalty 290 The relationship between service quality, customer Case Study 6 Boots mine diamonds in their satisfaction and loyalty 339 customer data 291 Case Study 7 Refining the online customer Summary 293 experience at dabs.com 341 Exercises 294 Summary 343 Self-assessment exercises 294 Exercises 344 Essay and discussion questions 294 Self-assessment exercises 344 Examination questions 294 Essay and discussion questions 345 References 295 Examination questions 345 Further reading 296 References 345 Web links 296 Further reading 347 Web links 347 Part 3 8 Interactive marketing communications 348 INTERNET MARKETING: IMPLEMENTATION AND PRACTICE Learning objectives / Questions for marketers / Links to other chapters 348 Introduction 349 7 Delivering the online customer The characteristics of interactive marketing experience 301 communications 350 Learning objectives / Questions for marketers / Differences in advertising between traditional and Links to other chapters 301 digital media 354 Introduction 302 Integrated Internet marketing communications 357 Planning web site design and build 304 Integration through time 360 Who is involved in a web site project? 306 Campaign response mechanics 362 ix