1 / 40

Internet Marketing

Internet Marketing. Personalization. Topics. Personalization and marketing Consumer benefits of personalization Implementing personalization. Personalization & Marketing. Marketing has the responsibility to reflect customers’ goals, needs and wants

jaquelyn-knowles
Download Presentation

Internet Marketing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Internet Marketing Personalization

  2. Topics • Personalization and marketing • Consumer benefits of personalization • Implementing personalization

  3. Personalization & Marketing • Marketing has the responsibility to reflect customers’ goals, needs and wants • The result is that companies create product lines with many product and service variations in order to meet the needs of various target markets • Personalization is a special form of product differentiation • A standard product is transformed into a specialized solution for an individual

  4. Personalization & Marketing Choice Assistance • An explosion in the number of choices leads to customer confusion • The Web is rapidly developing methods to help consumers choose wisely from the wide array of available products • Choice assistance can help the consumer to discover his or her own tastes

  5. Personalization & Marketing Customization • Mass customization has emerged by combining individual-level information and flexible manufacturing • By incorporating individual preferences, marketing more closely reflects the “voice of the customer” • Using specialized software, it is possible to deliver truly unique and dynamically personalized Web sites in real time • The Web is emerging as an essential piece of the customization puzzle

  6. Personalization & Marketing Relationship Marketing • Choice assistance and customization lead to more powerful personalization • Personalization becomes the basis for retaining loyal and committed customers • When successful, customers are satisfied and profits are high

  7. Choice Assistance Design Mass Market Differentiated Customized Relationship Personalization & Marketing Relationship Marketing • On the left of the continuum, there’s no personalization • Further to the right, products are customized for individual tastes • On the far right, consumers collaborate with companies to create customized products, which builds relationships Figure 7.4: The Personalization Continuum

  8. Personalization & Marketing Personalization and the DNI Framework • Digital technology makes it possible • Encyclopedic storage of information provides a rich base of material • The network makes it available • Internet connections can tap into databases and data archives, get news feeds, and provide time-sensitive information or accumulate information for later use • Individuals make it valuable • Personalization provides value by focusing on specific individual needs

  9. Personalization & Benefits The “Democracy of Goods” • Technology has the power to make available to the masses what was previously available only to the rich • “Democracy of goods” refers to open and low-cost access to products and services • Automation and leverage of existing digital assets makes personalized goods and services cheap to provide and widely available to consumers

  10. Personalization & Benefits The Internet Benefits Consumers By Turning Experience Goods into Search Goods • SEARCH GOODS are products and services that are easy for a consumer to evaluate • Example – well-known branded products such as gasoline from Texaco • EXPERIENCE GOODS tend to be difficult to understand and evaluate. They are too complex to judge easily. They may be highly subjective, with personal taste being the most important determinant of usefulness • - Example – health care services

  11. Personalization & Benefits The Internet Benefits Consumers By Turning Experience Goods into Search Goods • Consumers benefit from reduced uncertainty about experience goods • An accurate personalization system that can match products to taste can eliminate unpleasant consumption experiences

  12. Personalization & Benefits Personalization and the Total Product Levitt’s rules for success through differentiation • Any product can be customized • Consumers use products to solve problems • Do not ignore hard-to-measure features of the product such as fun or friendliness • Make the intangible tangible. Provide signals that demonstrate quality and reliability

  13. Figure 7.6: Increasing Amounts of Differentiation Personalization & Benefits Use the Wells Fargo example to illustrate Levitt’s framework Personalization is a rich area for augmenting the product and finding ways to achieve the potential product

  14. Personalization & Benefits The Personalization Balance • Providing Useful Information • A key challenge is to determine the type and scope of information consumers will value and use • Customers judge information programs by their efficiency and the ratio of usage costs with usage benefits • Information programs that are linked to customers’ personal targets and objectives are often successful

  15. Personalization & Benefits The Personalization Balance • Personalization Backlash • A natural result of personalization is treating customers differently • More valuable customers will receive special/preferential treatment • This can lead to a backlash among customers who don’t receive special treatment • Preventing resentment may be easier online where preferred programs are less visible

  16. Implementing Personalization • Personalization has powerful potential competitive advantages • The first company to create an effective personalization approach in an industry can capture many of the most profitable customers • Personalization creates the opportunity to learn more about • Customers’ current desires • Future trends • New opportunities for product features and extensions

  17. Direct interaction between the firm and individual customers / consumers • Software capable of delivering customization Customization / Personalization Two Necessary Ingredients

  18. 2 ingredients needed • Direct interaction between the firm and the individual (the individual’s information are collected, see figure 7.8) • Software abilities of data retrieval, dynamic web page generation, and capturing user choices)

  19. Types of Customization Change Transparent Collaborative Smart Ads Smart Offers Smart EPG’s Reflect.com Product Attributes: create unique functionality Product Attributes Adaptive Cosmetic Representation:how a product or service is portrayed to a customer Sybase.com NYTimes.com No Change Representation Change Dialogue with customers to help articulate needs, then create custom product Observe users’ behaviors (implicit model) Possible to create personalization online via use of frames & cookies Present a uniform representation & let users filter out most possibilities to create personalized service

  20. Types of Customization Adaptive Customization • Offer the same basic product and representation to everyone • Let users filter out most of the possibilities using pop-up menus, search functions and preference settings • Example: At Spinner.com, users can select the music they want to hear using a pop-up menu

  21. Types of Customization Cosmetic Customization • Present a standard product differently to each customer • Use of unique packaging, presentation, etc. • Example: New York Times uses cookies to store registration information and show the user’s name at the top of the page • Essential requirement is modularization – division of a product into components

  22. Types of Customization Transparent Customization • User needs and behaviors are observed • The product is automatically changed to reflect individual tastes • The user isn’t told or made aware of changes • Example: Smart ads – use observable behavior to show different ads

  23. Types of Customization Collaborative Customization • Conduct a dialogue with individual customers • Help them articulate their needs • Identify the precise offering that fulfills those needs • Make customized products • Example: Using a password protected extranet to communicate with customers via real-time sound and video sessions

  24. Customization / Personalization Q: When isone-to-one marketing worthwhile?

  25. Valuations:How different are your customers in terms of their value to your enterprise? Highly Differentiated Quadrant III Quadrant IV Customer Valuations Needs:How different are your customer needs? Quadrant I Quadrant II Uniform Customer Needs Highly Differentiated 1:1 Matrix

  26. Figure 7.11: The 1:1 Matrix III IV Wide Range Frequency Marketing Key Accounts 1:1 Marketing Customer Valuations I II Mass Marketing Niche Marketing Target Marketing Similar Customer Needs Highly Differentiated Uniform When Is Personalization Profitable?

  27. Brand Endorsement Collaborative Filtering Mass Marketing Price Rule Based CASE Determining the Correct Personalization System Qualitative Complex Key Product Attributes Quantitative Few Uniform Highly Differentiated Figure 7.12 Customer Needs, Product Space

  28. Personalization Systems Rule-Based System • Observe behavior  predict preferences • Unobtrusive: consumers don’t have to answer questions or fill in extensive questionnaires • Best when • Product space isn’t complicated • Product / service attributes can be quantified • Example: American Airlines • Require effective user models that are tied to observable online triggers • A trigger is a user action that a model can use to decide what personalized information to send

  29. Personalization Systems Case-Based System • CASE (computer-assisted self-explication) • The system queries users about preferences  matches user with the right product / service • Best when users only have to evaluate a small number of well-understood attributes and features • Example: Chipshot.com & Personalogic (Chapter 7 Online) • Require user cooperation to get relevant user data

  30. FIGURE 7.14 (4875 ->294)

  31. FIGURE 7.15 (294 ->285)

  32. FIGURE 7.16 (285)

  33. Personalization Systems Endorsement System • Connects users with local preferred providers • Best when • Users’ product needs don’t differ greatly • It’s a challenge for consumers to judge quality and for vendors to explain the value of available choices • Examples: Autobytel.com

  34. Personalization Systems Collaborative Filtering • Match users who share similar tastes • Users share recommendations and preferences • Best when • Product space is complicated • Preferences are subjective, qualitative and complex • Example: Amazon.com instant recommendations • Requires user cooperation to get relevant user data

  35. TABLE 7.1

  36. TABLE 7.2

  37. YES YES YES Collaborative Filtering NO NO NO Q1 Q2 Q3 CASE YES YES NO NO Endorsement Q2 Q3 Don’t Personalize Rules Based Personalization Flowchart (See Figures 7.11, 7.12, 7.17) Q1: Do customer lifetime values vary significantly? Q2: Do customer needs vary significantly? Q3: Are product attributes qualitative or complex?

  38. Personalization Challenges • Varying Benefits (Figure 7.18, Table7.2) • Data Needs (Figure 7.19)

  39. FIGURE 7.18

  40. FIGURE 7.19

More Related