Explain the web marketing strategies. Briefly explain the marketing segmentation on web


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Most companies use the term marketing mix to describe the combination of elements that they use to achieve their goals for selling and promoting their products and services. When a company decides which elements it will use, it calls that particular marketing mix its marketing strategy. Companies – even those in the same industry – try to create unique presences in their markets. A company’s marketing strategy is an important tool that works with its Web presence to get the company’s message across to both its current and prospective customers.

 

Four Ps of Marketing:

  • Product: The physical item or service that a company is selling.
  • Price: The amount the customer pays for the product.
  • Promotion: Includes any means of spreading the word about the product. On the Internet, new possibilities abound for communicating with existing and potential customers.
  • Place: The need to have products or services available in many different locations.

 

Web Marketing:

Product-based marketing strategies:

When creating a marketing strategy, managers must consider both the nature of their products and the nature of their potential customers.

 

 Customer-based marketing strategies:

A good first step in building a customer-based marketing strategy is to identify groups of customers who share common characteristics.

 

Communicating with Different Marketing Strategies

Identifying groups of potential customers is just the first step in selling to those customers. An equally important component of any marketing strategy is the selection of communication media to carry the marketing message. Media selection can be critical for an online firm because it does not have a physical presence. The only contact a potential customer might have with an online firm could well be the image it projects through the media and through its Web site. The challenge for online businesses is to convince customers to trust them even though they do not have an immediate physical presence.

 

Market Segmentation

Advertisers’ response to the decrease in effectiveness was to identify specific portions of their markets and target them with specific advertising messages. This practice, called market segmentation, divides the pool of potential customers into segments. Segments are usually defined in terms of demographic characteristics such as age, gender, marital status, income level, and geographic location. Thus, for example, unmarried men between the ages of 19 and 25 might be one market segment.

 

  • Micromarketing: Practice of targeting very small market segments.
  • Geographic segmentation: Firms divide their customers into groups by where they live or work.
  • Demographic segmentation: Uses information about age, gender, family size, income, education, religion, or ethnicity to group customers.
  • Psychographic segmentation: Marketers try to group customers by variables such as social class, personality, or their approach to life.

 

Market Segmentation on the Web

The Web gives companies an opportunity to present different store environments online. For example, if you visit the home pages of Steve Madden and Talbots, you will find that both pages are well designed and functional. However, they are each directed to different market segments. The Steve Madden site is targeted at young, fashion-conscious buyers. The site uses a wide variety of typefaces, bold graphics, and photos of brightly colored products to convey its tone. The emphasis is to make a bold fashion statement and, presumably, become the envy of your friends. In contrast, the Talbots site is rendered in a more muted, conservative style. The site is designed for older, more established buyers. The messages emphasized are stability, home life, and the trademark Talbots red doors. These images appeal to a market segment of people looking for classics instead of the latest trends.

 

Offering Customers a Choice on the Web

Dell has done many things well in its online business. Its Web site offers customers a number of different ways to do business with the company. Its USA home page includes links for each major group of customers it has identified, including home, small business, medium and large business, government, education, and health care. Once the site visitor has selected a customer category, specific products and product categories are available as links.

 

Segmentation Using Customer Behavior

In general, the creation of separate experiences for customers based on their behavior is called behavioral segmentation. When the behavioral segmentation is based on things that happen at a specific time or occasion, behavioral segmentation is sometimes called occasion segmentation.

Marketing researchers are just beginning to study how and why people prefer different combinations of products, services, and Web site features and how these preferences are affected by their modes of interaction with the site. Market researchers are finding that people want Web sites that offer a range of interaction possibilities from which they can select to meet their needs.

 

Remember that a particular person might visit a particular Web site at different times and might search for different interactions each time. Customizing visitor experiences to match the site usage behavior patterns of each visitor or type of visitor is called usage-based market segmentation. Researchers have begun to identify common patterns of behavior and to categorize those behavior patterns. One set of categories that marketers use today includes browsers, buyers, and shoppers.

 

Customer Relationship Intensity and Life-Cycle Segmentation

One goal of marketing is to create strong relationships between a company and its customers. The reason that one-to-one marketing and usage-based segmentation are so valuable is that they help to strengthen companies’ relationships with their customers. Good customer experiences can help create an intense feeling of loyalty toward the company and its products or services. Researchers have identified several stages of loyalty as customer relationships develop over time.

 

Five-stage Model of Customer Loyalty:

  • Awareness: Customers who recognize the name of the company or one of its products are in the awareness stage of customer loyalty.
  • Exploration: In this stage potential customers learn more about the company or its products.
  • Familiarity: Customers who have completed several transactions and are aware of the company’s policies regarding returns, credits, and pricing flexibility are in this stage.
  • Commitment: After experiencing a considerable number of highly satisfactory encounters with a company, some customers develop a fierce loyalty or strong preference for the products or brands of that company.
  • Separation: Over time, the conditions that made the relationship valuable might change. The customer might be severely disappointed by changes in the level of service (either as provided by the company or as perceived by the customer) or product quality.

 

The second step that a Web business wants to take is to convert the first-time visitor into a customer. This is called a conversion. For advertising-supported sites, the conversion is usually considered to happen when the visitor registers at the site, or, in some cases, when a registered visitor returns to a site several times. For sites with other revenue models, the conversion occurs when the site visitor buys a good or service or subscribes to the site’s content. The total amount of money that a site spends, on average, to induce one visitor to make a purchase, sign up for a subscription, or (on an advertising-supported site) register, is called the conversion cost.

 

Customer Acquisition, Conversion, and Retention: The Funnel Model

The funnel model is very similar to the customer life-cycle model; however, the funnel model is less abstract and does a better job of showing the effectiveness of two or more specific strategies. The funnel is a good analogy for the operation of a marketing strategy because almost every marketing strategy starts with a large number of prospects and converts fewer and fewer of those prospects into serious prospects, customers, and finally, loyal customers.

 


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