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CHAPTER 6: MARKETING FOR E-BUSINESS - Coggle Diagram
CHAPTER 6: MARKETING FOR E-BUSINESS
introduction
Marketing
is defined as: The management process responsible for identifying, anticipating and satisfying customer requirements profitably.
It has become a data-driven, technology-enabled,
customer-centric
discipline that integrates psychology, analytics, AI, social platforms, and multi-channel strategies.
CUSTOMER SEGMENTATION & THE MARKETING MIX (4Ps)
SEGMENTATION
Segmentation means dividing the market into different groups or categories based on shared traits:
demographics (age, gender)
geography (location)
psychographics (values, lifestyle)
behavior (loyalty, purchase patterns)
Essential Insight:
Segmentation allows targeting customers more efficiently, reducing waste and increasing relevance.
Why segmentation is CRITICAL for e-business
Because digital environments generate data constantly (clicks, searches, purchases), making hyper-segmentation possible.
THE 4Ps (Marketing Mix)
Product
How the product is designed to meet customer needs.
Digital enhances product value: digital features, UX, online reviews.
price
Based on customer willingness to pay, competition, and margin.
Online pricing is transparent → customers compare instantly.
Place (Distribution)
Where and how customers access the product.
E-business introduces: websites, apps, third-party platforms, social commerce.
Promotion
How to encourage purchase: ads, influencers, email, SEO, PR, social media.
CUSTOMER LIFE CYCLE
The Customer Life Cycle describes the full relationship journey:
1. Selection
Which customer segments will you target?
Also includes discouraging unprofitable customers (e.g., high returns, high service cost).
middle aged, middle income woman
2. Acquisition
Creating relationships with NEW customers through:
online ads
influencer campaigns
content
Goal: low acquisition cost + high lifetime value.
3. Retention
Keeping customers by building trust and satisfaction.
Methods:
• loyalty programs
• reminders
• high service quality
• personalization
• consistent omnichannel experience
Retention is cheaper than acquisition.
4. Extension
Increasing the value of each existing customer.
Examples:
• Cross-selling
• Up-selling
• Bundles
• New complementary products: for example a company that makes hoodies they will extend their products and start making sweatpants too
Goal: increase customer lifetime value (CLV) and to increase the business relationship with additional offerings.
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
It is a strategy + process + technology system.
CRM integrates ALL customer-touching functions: marketing
sales
service
tech
support
into ONE unified system
so the company treats the customer as
one individual
, not disconnected interactions.
CRM Marketing Applications
Sales force automation
Customer service management
Sales process management
Marketing campaign management
Customer analytics
Common CRM Failures
Implementing CRM with no customer strategy.
Buying software without cultural change.
Over-investment in technology (thinking “more = better”).
“Stalking customers” with excessive communication.
Essential lesson:
CRM is NOT software — it's a philosophy of customer relationships.
ADVERTISING & BRANDING IN E-BUSINESS
What is a
brand
?
A sum of characteristics perceived by a user.
Brand = psychological relationship.
what is
branding
?
it is the process of creating or evolving successful brands
Brand experience
Created through:
product use
digital interaction
online reputation
social media presence
Customers form emotional reactions → trust, love, loyalty
7 directives for Customer-centric Brand Management
1) Customers come before the brand
2) Brands must match customer segments
3) Brand extensions must be based on customer needs
4) Allow switching within company brands (e.g., Toyota vs. Lexus)
5) If a brand collapses → rebrand immediately
6) Brand equity varies by customer; IT helps measure that
7) Make your brand as narrow as possible but still economically feasible
E-MARKETING & ONLINE REVENUE CONTRIBUTION
E-marketing aims
to increase
online revenue contribution
, meaning:
How much your digital presence directly contributes to total sales.
A physical product like ice cream cannot be delivered online → low online revenue, but high online promotion potential
A digital product like music can be fully delivered online → naturally high online revenue contribution
THE 6 I’s OF DIGITAL MARKETING
These explain HOW digital differs from traditional marketing( offline marketing) :
Interactivity
Interactivity refers to the two-way communication enabled by digital media.
In traditional media (TV, radio, print), communication is one-directional → brands speak, customers listen.
In digital media:
Customers can click, comment, ask, complain, compare, like, share, and question.
They actively participate in the communication process.
The journey is not linear — the user chooses WHAT to see and WHEN.
Example:
A customer reading reviews before buying →
customer-driven pull
,
not marketer push
.
Intelligence
Digital channels generate high-quality, real-time data about customers.
This is one of the most powerful advantages of e-marketing.
Companies can track:
clicks
browsing history
search terms
time spent on pages
cart abandonment
purchase patterns
demographics
device types
referral sources
This “digital trace” provides superior market intelligence compared to traditional marketing.
Individualization
Also called personalisation, this is the ability to tailor:
content
…to individual customers, based on their behaviour and profile.
offers
recommendations
emails
product suggestions
landing pages
Example:
Amazon shows “Products recommended for you” → based on your unique profile.
Customers feel “understood”, which strengthens the brand relationship.
Integration
Integration means connecting all marketing and service channels together, ensuring a seamless experience across online and offline touchpoints.
Integration occurs between:
website + physical stores
mobile app + CRM
social media + customer service
email + loyalty programs
digital ads + offline purchases
The subject guide gives the example of retailers whose online and offline data combine to identify customers across all channels.
Example:
Searching online, buying in-store
Industry Restructuring
Digital technologies reshape traditional industry structures, especially in distribution.
This restructuring occurs through:
Disintermediation
Removal of intermediaries (middlemen).
Example: airlines selling tickets directly through their website.
Independence of Location
Digital channels eliminate geographical limitations. Customers and companies do NOT need to be in the same place.
Internet access is enough for:
information search
purchasing
customer service
content consumption
communication
Example:
A small seller in Egypt can sell to Europe, Asia, or the US via Etsy or Shopify.
Personalisation & Mass Customisation
Personalisation (one-to-one)
involves individualization of content
tailored pages
personalised emails
product suggestions
behavioural triggers
saved preferences
recommendations
Mass Customisation (one-to-many)
Large groups receive tailored experiences:
Nike custom shoes
Dell custom laptops
Spotify playlists
personalised skincare quiz products
amazon's recommendation systems
To marketing it refers as collective filtering and is also known as recommendation marketing
Challenges:
high data cost
algorithm risk
privacy regulation
user trust
login barriers
“creepy” over-tracking perception
SEO, Online Ads & Affiliate Marketing
Search Engine Optimisation
SEO is the process of achieving the highest possible ranking for selected keyphrases in the natural (organic) search listings. like Google.
Goal:
Increase visibility → attract more targeted visitors → increase conversions & revenue.
SEO improves visibility in organic search results. SEO targets high-intent, free traffic.
Activities include:
keyphrase optimisation
metadata
content quality
backlinks
page speed
technical structure
Affiliate Marketing
External partners promote products and earn commissions.
Benefits:
low risk
high reach
trustworthy recommendations
performance-based cost
Many businesses rely heavily on affiliates for online sales.
affiliate marketing
is a performance based online marketing strategy where a business ( the merchant) rewards an external partner ( the affiliate) for bringing customers or generating actions ( clicks, leads, puchases) through the affiliate's promotional efforts.
Online Advertising (Display, Video, Retargeting)
Role of Online Advertising
Major revenue source for websites
Early internet relied heavily on banner ads & pop-ups
Many dot-com businesses depended on ad income
Online + Offline Relationship
Online and offline worlds are not separate
Online ads can influence offline purchases
Consumers research online, buy offline
Internet used for comparison, reviews, information
Viral marketing
means:
Uses pre-existing social networks (e.g., Instagram, TikTok, WhatsApp)
Goal: increase brand awareness or sales
Works through self-replicating / user-to-user sharing
Modern version of word-of-mouth, boosted by the internet
Benefits
Low cost once it takes off
Extremely fast reach
Can create massive brand awareness
High credibility because it comes from peers
Challenges
Very hard to design viral content intentionally
No guaranteed formula → unpredictable
Many campaigns fail despite planning
multi channel integration
means:
Combining multiple marketing channels to create a seamless customer experience
Channels include: online (website, social media, email, apps) and offline (stores, call centers, print media)
Goal: ensure the brand message and service are consistent across all channels
Example
A customer sees a social media ad, clicks through to the website, then picks up the product in-store
All channels recognize the customer and maintain consistent pricing, promotions, and messaging
DYNAMIC PRICING
Definition
Pricing strategy where prices change in real-time based on market conditions, demand, or customer behavior
Also called flexible pricing or demand-based pricing
Common in e-commerce, airlines, ride-sharing, hotels, and event tickets
Purpose
Maximize revenue and profit by adjusting prices to match demand fluctuations
Encourage sales during low demand and optimize profit during high demand
Respond quickly to competitor pricing or market trends
Example
Airlines: Ticket prices increase as flight date approaches or seats sell out
E-commerce: Online stores adjust product prices based on competitor prices and stock levels
BEHAVIORAL PROFILING & PRIVACY CONCERNS
Definition
Behavioral profiling: collecting and analyzing user data to understand preferences, habits, and behaviors
Data comes from:
Browsing history
Clicks & search queries
Social media activity
Purchase history
Goal: personalize marketing and improve targeting
Purpose / Benefits
Targeted marketing: show users ads or offers they’re most likely to engage with
Increased sales and conversion rates
Improved customer experience: personalized recommendations and content
Helps businesses optimize marketing budgets by focusing on likely buyers
Example
E-commerce: showing products based on past searches or purchases
Streaming services: recommending movies based on viewing history
Social media: ads targeted based on likes, clicks, or interests
amazon