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Date Created: 12/21/15
Study on the Conceptual Model of Precision Internet Marketing In theAge of Web2.0 Lanying Du, Qing Han School of Management, Huazhong University of Science & Technology, Wuhan 430074, China firstname.lastname@example.org Abstract: Web 2.0 is a new model of network development. It is more personalized in content, more convenient in contact and stronger in application. This paper presents a precision internet marketing Conceptual Model in the model of Web2.0 based on the theory of 4C, the theory of customer perceived value, one to one direct communication and the principle of customer chain reaction. It is consist of the market segment and customer personalized information collection and handling, Precision internet marketing mix, customer relationship management. The enterprise can make reference to this conceptual model to carry out precision network marketing in the model of Web2.0. Keywords: Precision Internet Marketing, customer personalized information, customer interaction 1. INTRODUCTION Precision Marketing is one of the hottest topics in marketing research. There are many scholars who have researched the Precision Marketing on both theory and method in China. But because of the Web2.0 Internet model is a new generation of Internet model that puts forward recently, few scholars in China have studied the application of Precision Marketing on Internet Marketing in the age of Web2.0.With the internet Web1.0 model which only browsed the HTML website by browser developing to the internet Web2.0 model which is more personalized in content, more convenient in contact and stronger in application, the way and method of the internet marketing also change correspondingly (Table 1). The Precision Internet Marketing based on the network and the information technique will partly replace the traditional internet marketing method in the age of Web 2.0 （ Philip Kotler 2005） . This paper which presents a Precision Internet Marketing conceptual Model in the model of Web2.0 consists of the market segment and customer personalized information collection and handling, Precision internet marketing mix, customer relationship management. The enterprise can make reference to this conceptual model to carry out Precision Internet Marketing in the model of Web2.0. Table 1. The main differences between traditional internet marketing and Precision Internet Marketing traditional internet marketing Precision Internet Marketing Market position All visitors of the website, haven’t segmentedAims the gainful customer, have segmented market Mode of transmission Large-scale advertise intensively Personalized communication Mass communications, one-way disseminatioOne to one communication, Understand the personalized Communication system information demand of the customer Product Realization Standard Products custom-built Product Pay attention to the customer lifetime value and keep Customer Service System Emphasize market share and attract customers customers 2260………………The Sixth Wuhan International Conference on E-Business － Innovation Management Track 2. BACKGROUND KNOWLEDGE 2.1 The principle of Precision Internet Marketing The basic of Precision Internet Marketing is Precision position which relying on information technology to segment the market and establish personalized customer service system. The basic of theory in Precision Internet Marketing consists of the theory of 4C, customer perceived value (CPV), one to one direct communication and the principle of customer chain reaction .  2.1.1 The theory of 4C The theory of 4C contrast the theory of 4P had co nsidered the customer’s benefit (Robert Lauterborn, 1990). It asked to attach importance to the initiative and activity of customer in Marketing. Enterprise should  pay attention to the convenience and the cost of customers in their consuming process . Precision Internet Marketing created an environment of instant Message between seller and buyer. It can maintain effective communication and meet customer’s need expediently an d economically. Precision Internet Marketing is the practical application of the theory of 4C. 2.1.2 Customer perceived value (CPV) Customer perceived value (CPV) is the difference betw een the prospective customer's evaluation of all the benefits and all the costs of an offering the perceived alternatives (Philip Kotler). Because of Precision Internet Marketing emphasizes on understanding the personalized demand of the customer and Precision Internet Marketing use the method of One to One marketing, it can increase total customer value and decrease total customer cost. 2.1.3 One to one direct communication Precision Internet Marketing requires enterprise to adopt one to one direct communication in contacting customer. One to one direct communication emphasized direct communicat ion between enterprise and customer. It is a two-way interactive communication; enterprise and customer both play the disseminator and receiver of information two roles in the communication (. Figure1). The one to one direct communication in Precision Internet Marketing made distance of communication shorter and enhance the effectiveness of communication. E-mail Auto Reply; Online chat services; Customer Voice transmission; Enterprise Web Collaboration; Automated customer service; d i P l i Figure 1. Web2.0-based customer interaction 2.1.4 The principle of customer chain reaction Precision Internet Marketing quoted the principle of chain reaction in physics. Customer retention in Precision Internet Marketing is the customer prolif eration. The condition of a chain reaction occurred by Precision Internet Marketing is that sustains customer relationship when reaching the critical point of reaction. This kind of unceasing fission reaction made low-cost expansion possible. The system and method of Precision Internet Marketing make the chain reaction of customer proliferation occurring ceaselessly, the scale more and more larger, and the reaction more and more stronger. Precision Internet Marketing in the age of Web2.0 focuses on the customer lifetime value (CLV), and emphasizes customer proliferation and fission. The Sixth Wuhan International Conference on E-Business － InnovationManagementTrack ………………2261 2.2 The new application in the model of Web2.0 Web2.0 represents a new class of Internet applications contrasting to Web1.0 (model of internet before 2003). Web2.0 is a new generation of the internet model which based on the six degrees of separation theory,  xml, ajax and other new theories or technique . Its core is the application of social software such as Blog, Tag, Sns, Rss, Wiki and etc (Table 2). The representative websites are Flickr, Craigslist, Linkedin, Tribes, Ryze, Friendster, Del.icio.us, 43Things.com (Blogger Don). Web2.0 2004 Conference (held in San Francisco, USA) put forward the Web as a platform. Wiki said that Web2.0 is a transformation on World Wide Web. From the gather of website to the platform, WWW provide Web applications for the end-user. From these, we can see that web2.0 is not specific things, but a stage.  Table 2. Introduction of some social software related Web2.0 Blog Users can communicate with others and engage in other activities. Ideas can be quickly released. RSS Website can use it to share the contents with other Website WIKI WIKI site can be maintenance by any visitor; everyone can express their views in there or to explore a common theme TAG Users carry out the activity for cooperative classification by self-defined key words. SNS Social Network Software. Based on understand the friends of friends, expand their social network P2P Peer-to-peer; strengthen the communication of users, the exchange of files, distributed computing etc; IM Instant message. Users could have on-line communication by this software 3. CONCEPTUAL MODEL OF PRECISION INTERNET MARKETING IN THE AGE OF WEB2.0 Precision Internet Marketing conceptual Model consists of the market segment and customer personalized information collection and handling, Precision internet marketing mix, customer relationship management (Figure 2). Customer E-mail Auto IM (Instant SNS (Social WIKI Market segment and Blog touch-points Reply message) Network Software) (Encyclopedia) information collection Electronic Electronic Data Ordering system One to one personalized Interchange (EDI) (EOS) communication Front office Product Price Promotion Place People Process Physical evidence Precision internet marketing mix Date Mining OLAP Closed-loop Executive Information System (EIS) structure Strategic Information System (SIS) Decision Support System (DSS) Analysis of customer Reporting and Ad Hoc Query relationship management Date Warehouse or Data Mart Information Background Enterprise Resource Planning (ERP) Figure 2. Precision Internet Marketing conceptual model in the age of Web2.0 2262………………The Sixth Wuhan International Conference on E-Business － Innovation Management Track 3.1 Market segment and customer personalized information collection and handling The market segment variables of Precision Inte rnet Marketing commonly include geographical, demographic, psychological and behavioral factors. En terprises can select the appropriate variables according with their products to segment and choose their target market. For example: the enterprise which products mobile telephone can choose the Virtual Community or Blog Marketing their products. The form of segment market in Web2.0 model contains: Blog, virtual community, Wiki (encyclopedia) and the B2B, B2C, BBS etc Website which adopted the Web2.0 idea. Enterprise should assess the segment market after ch oosing appropriate target market. The efficiency of segment market can be evaluated by five indexes: Measurable, Profitable, enterable, identifiable and operable. We should notice that the indexes of the segment market are constantly changing. The methods of enterprise collect customer personalized information from target market by internet contain: ① Enterprise can visit the website of targe t segments market and know the customer personalized demand. ② Using the interactive characteristic of website in web2.0 model, to investigate the customer personalized demand directly by online questionnaire, Email investigation or other methods. En terpri se can visit the special website to gain market and environmental information of industry. ④Enterprise can obtain information of competitors by TAG, Blog, RSS, Wiki and other Application of Web2.0. After obtaining mass information of customer personalized demand, market and competitors, enterprise can select the target market and position its product. Enterprise builds the date warehouse or data mart base on these customer personalized information. Through data mining, enterprises can understand the information of customer personalized demand, market trend, market segment and other useful information. Data mining includes five models: Classification, Predictive Modeling, Clustering/Segmentation, Association Analysis and Sequential Modeling. Finally, according to the similari ty of customer information, enterprise classes the customer and determines its target markets. When selecting target markets, enterprise should consider three factors: the size and prospect of segment market, the attraction of segment market structure, the target and the resources of enterprise. 3.2 Precision Internet Marketing mix Precision Internet Marketing mix includes seven factors: product, price, promotion, place, people, process, physical evidence. Precision Internet Marketing emphasizes that enterprise which design marketing mix bases on the view of customer. So Precision Internet Market ing needs to consider 4C: cu stomer solution, customer cost, convenience and communication (Figure 3). Precision Internet Marketing mix Product： Promotion: Price： Place: People: Process: Physical Quality; Communication; Position Channel; Recruitment; Customer evidence: Figure; Salesmanship; Tariff; Sales Support; Performance attention; Customer Brand; Sales Promotion; Discount; Amount of assessment; Business brand Characteristic; Public relation; Credit; channel; Knowledge; guide; experience; Mix; Direct marketing Payment; Subdivisible Train; IT support; Product show; Support; Free；Increase Channel; Inspirit; Design; Online Service; in value Pay; Research & Experience; Use condition; Development; Practicabilit Figure 3. Precision Internet Marketing mix The Sixth Wuhan International Conference on E-Business － InnovationManagementTrack ………………2263 One of advantages of Precision Internet Marketing compared with internet mass marketing is that it can meet the personalized needs of the customers. The influe nces of Precision Internet Marketing upon product are: ① Cor② product d③ ④rsificatioExtending product diversificatiOnline market researchAccelerate  the speed of development of new prod⑤cAccelerate the speed of transmission of new pr.ducts The other advantage of in Precision Internet Marketing compared with internet mass marketing is that it establishes a one to one direct communication system with custo、TAG. 、lIM、 SNS 、 RSS 、Wiki etc applications of social software make enterprise communicate with customers more convenient than before. The ways of enterprise communicating with customers contai ns: E-mail Auto Reply, Online chat services, Voice transmission, Web Collaboration, Automated customer service, personalized service, Frequently Asked Questions (FAQ) and instant message (IM). In the model of Internet Marketing, Elizabeth Daniel put forward six ways to increase customer value by IT: ① Integration. Enterprise integrates and share customers’ data by various channels so that it can provide more effective product or serv②Interaction. Enterprise have interactive communicate with customers so that it can understand customers more comprehensi③Geographical independence. Suppliers can provide product or service to more custome④Individuation. Enterprise has personalized communication with customers and provides personalized product or serv⑤ntelligence. Enterprise obtain custr personalized demand information⑥ Remodeling Industry. Enterprise has direct sales or develops a new agent to-addedde value services . 3.3 Customer relationship management The core of Precision Internet Marketing is customer relation management (CRM). In Precision Internet Marketing, CRM is a circulatory process including Knowledge Discovery, Marketing Planning, Product Realization, Analysis and Refinement (Figure4). CRM in e-commerce environment has established a personalized communication system relying on Information Technology; it can maximize benefit of enterprises. Continuing to improve customer relations Product Customer Output Product Realization Analysis and Marketing Satisfaction Web-based Refinement Planning interaction Customer Knowledge Discovery Personalized Input demand Figure 4. process-based CRM system model Knowledge discovery requires enterprise to analyze the demand of customer. Enterprises base on knowledge discovery to identify market opportunities adecide investment strategy. The process of knowledge discovery includes customer recognitionstomer distinction and customer forecast. Market planning includes defining specific customer product, plan channel, cycle and affiliation. Product realization is providing products or services to meet the personali zed needs of customers according to marketing planning. 2264………………The Sixth Wuhan International Conference on E-Business － Innovation Management Track Analysis and refinement is utilize the information from enterprise and customer interaction to analyze demand of customer and improve product. The applications of information technology in CRM inc① ②oint of Sale, POS;Electronic Ordering System, EOS/ Electronic Data Interchange, EDEn③terpre Resource Planning, ERP; Call Center; ⑤ Business Intelligence (BI), Data Warehouse, Data Mart, On Line Analytical Processin⑥ Executive Information System (EIS), Strategic Information System(SIS), Decision Support System (DSS), Reporting, Ad Hoc Query;⑦ ⑦Data Mining; Web -based Customer Interaction. Precision Internet Marketing in the age of Web2.0 allo ws customers directly to integrate their information into applications of enterprise, Personal productivity software, communication and collaborative applications etc decision-making tools. Intel call this stage Customer Information Integration era. So the competition between enterprise and enterprise in Precision Internet Marketing has transformed to who can most effectively integrate into the information flow of customer or the cooperative enterprises (Chris Thomas & Andrea Williamson). 4. CONCLUSIONS Enterprise wanting to achieve Precision Internet Marketing in the age of Web2.0 should have three factors: Firstly, it must have measurable and precise market test technology. Secondly, enterprise should keep long-term and personalized communication with customers. Thirdly, enterprise need to base on customer’s personalized demand to continuing develop their marketing mix continuingly. The new applications in the age of Web2.0 make enterprise breakthrough the technological bottlenecks. Enterprise can really achieve the customer-centered Precision Internet Marketing. REFERENCES Hailiang Xu. (2006). The System and Theory of Precision Marketing. fromeam.org/static/95/95900.html. Philip Kotler. (2003). Marketing Management. Pearson Education, Limited. 306-334(in Chinese). TimO, Reilly. (2006). What is Web2.0. from http://www.oreillynet com/pub/a/oreilly/tim/news/2005/09/30/what2is2web2 20. html. http://it.sohu.com/s2005/web2info.shtml. (2006) Dave Chaffey, Richard Mayer. (2003).Internet marketing: Strategy, Implementation and Practice. Pearson Education, Limited. 47 Elizabeth Daniel, Hugh Wilson, Malcolm McDonald, John Ward. (2001).Marketing Strategy in the Digital Age. Pearson Education, Limited. 108 The Sixth Wuhan International Conference on E-Business － InnovationManagementTrack ………………2265
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