Chapter 16 Electronic Marketing Internet Marketing Database Marketing

Chapter 16 Electronic Marketing: Internet Marketing, Database Marketing, and Direct Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 1

Electronic Marketing • Electronic marketing is normally associated with Internet marketing. • In practice, Internet marketing is integrated with database marketing and direct marketing. • Internet marketing captures data which feeds into the firm’s database, the database is used to generate profiles and lists which enable the firm to have effective direct marketing campaigns. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 2

Benefits of Internet Marketing Co nv eni en Inf ce or ma tio n Pri ce Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 3

Activities of the uses of a web-site • Selling: hotel, cruise, and airline companies are using the Internet to distribute their products directly to the customer. • Communication: the Internet is an excellent medium to communicate what products are offered and the benefits of those products. • Providing Content: the companies should design the content which will drive customers back to the web site. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 4

Web Site Development • Build brand image, convey whom the company is and what the company has to offer • Easy to navigate • Provide “contact us” access and respond quickly • Provide online purchase availability • Keep on the top of the search engines • Communicate with other devices. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 5

Business-to-Business E-commerce • • Business to business commerce accounts for the majority of Internet commerce. This is in part due to the size of businessto-business transactions and the efficiencies the Internet offers businesses. These Internet marketplaces match multiple purchasers with multiple sellers. The buyer receives the benefit of receiving offers from multiple companies and the seller has the advantage of being linked with multiple buyers. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 6

Database Marketing is the Process of Building, Maintaining, and Using Customer Databases and Other Databases for the Purposes of Contacting and Transacting With Customers. How Companies Use Their Databases: Identifying Prospects Deciding Which Customers Should Receive a Particular Offer Deepening Customer Loyalty Reactivating Customer Purchases Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 7

Uses for Databases 1. Identify Prospects 2. Match Customers & Offers 3. Deepen Customer Loyalty 4. Reactivate Customers Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 8

Developing a Marketing Database System • Databases should be relational, talk to each other, and integrate with each other. The system should be user friendly and available to various departments. • The data warehouse stores the information the company receives in a central repository of customer data. • Data mining is the exploration and analysis of a database by automatic or semiautomatic means to discover patterns or rules. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 9

Developing a Marketing Database System (cont. ) • Managers need to make sure the data in the databases is clean and accurate which has no entry errors or duplication. • The information in the database should be more than names or addresses. Companies should inquire some information on person’s lifestyle or purchase information. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 10

Customer Databases • Customer Databases are an Organized Collection of Comprehensive Data About Individual Customers or Prospects Including: – Geographic, – Demographic, – Psychographic, and – Behavioral Data. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 11

Using a database to create a competitive advantage Companies can utilize the database to create a competitive advantage based on the knowledge of their customers. • The database will provide information regarding customers’ likes and dislikes and which messages will be relevant to the customers. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 12

Using a database to create a competitive advantage (cont. ) • The customer list generated from the database is critical component of a success. • Companies can utilize the database to provide better service to customers • Companies can utilize the database for service recovery Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 13

Direct Marketing Direct marketing is an interactive system of marketing which uses one or more advertising I media to effect a measurable response and/or n transaction at any location. t Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens e R r M e ae s ca p tis o vu n er d a b l e © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 14

Mass Marketing and Direct Marketing Most Mass Marketing Involves One-Way Communications Aimed At Consumers. Direct Marketing Involves Two-Way Interactions With Customers. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 15

The New Direct Marketing Model • Some firms use direct marketing as a supplemental medium. • For many companies, direct marketing - especially Internet and e-commerce companies - constitutes a new and complete model for doing business. • Some firms use the new direct model as their only approach. • Experts envision a day when all buying and selling will involve direct connections between companies and their customers. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 16

Reasons for Growth of Direct Marketing Pre cisi on tar geti ng Per son aliz atio n Pri vac y Me asu rab ility Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 17

Forms of Direct Marketing Face-to-Face Selling Online Marketing Telemarketing Kiosk Marketing Direct-Response TV Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens Direct Mail Catalog © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 18

E-Mail • One of the problems with e-mail is the low cost of sending e-mails, which results in e-mail users receiving a lot of unwanted e-mails. The result is that more and more e-mail goes unopened and gaining permission to send someone an e-mail is becoming more important. • E-mail needs to provide detailed, useful, even driven information, and interaction with customers. • E-mail needs to integrate with web marketing. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 19

Integrated Direct Marketing • Direct marketing campaigns that use multiple vehicles and multiple stages to improve response rates and profits. • Marketers seek to improve response rates and profits by adding media and stages that contribute more to additional sales than to additional costs. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 20

An Integrated Direct-Marketing Campaign Paid ad with a response channel Direct Mail Outbound Telemarketing Face-to-face sales call Continuing Communication Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 21

Objectives of Direct Marketing • • Sale of a product Lead generation Lead qualification Maintenance of customer relationships Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 22

Through cluster analysis, multiple regression analysis and other techniques one can develop helpful models to form a list and purge lists. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 23

Relationship Between Direct Marketing and Database Marketing Direct marketing can be more effective when you have your own database. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens Importance of an Integrated Database © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 24

Database and Relationship Marketing • Customers like to deal with someone they know and trust • Customers like to be recognized and appreciated • It takes 4 -7 times as much effort to create a customer as it does maintain a customer • Research has shown a positive correlation between repeat business and profitability. • Most businesses are in the mature stage of the product lifestyle. Marketing for Hospitality and Tourism, 3 e Philip Kotler, John Bowen, James Makens © 2003 Pearson Education, Inc. Upper Saddle River, NJ 07458 25