Methods - SMU

keckdonkeyInternet and Web Development

Nov 18, 2013 (4 years and 7 months ago)









Q.1 What do you mean by e
marketing? Discuss its features and scope.


marketing, a
lso referred to as online marketing or internet marketing, is marketing that uses the Internet.
The Internet has brought many unique benefits to marketing, including low costs in distributing information
and media to a global audience. The interactive natu
re of Internet media, both in terms of instant response,
and in eliciting response at all, are both unique qualities of Internet marketing. E
marketing ties together
creative and technical aspects of the internet, including design, development, advertising

and sales. E
marketing methods include search engine marketing, display advertising, e
mail marketing, affiliate
marketing, interactive advertising and viral marketing. E
marketing is the process of growing and
promoting an organization using online media
. E
marketing does not simply mean ‘building a website’ or
‘promoting a website’. Somewhere behind that website is a real organization with real goals. E
strategy includes all aspects of online advertising products, services, and websites, includ
ing search engine
marketing, public relations, social media, market research, email marketing, and direct sales. The E
marketer selects the best of these vehicles, given the organization’s goals and audience.

Marketing can also be defined, as a subset of

Business that utilizes electronic medium to perform
marketing activities and achieve desired marketing objectives for an organisation. Internet Marketing,
Interactive Marketing and Mobile Marketing for example, are all a form of e

Scope and f
eatures of e

Advantages of E

Some of the benefits associated with E
marketing include the availability of information. Consumers can
access the Internet and learn about products, as well as purchase them, at any hour, any day. Companies

that use Internet marketing can also save money because of a reduced need for a sales force. Overall, E
marketing can help expand from a local market to both national and international market places. Compared
to traditional media, such as print, radio and

TV, Internet marketing can have a relatively low cost of entry.
Since exposure, response and overall efficiency of Internet media is easy to track, through the use of web
analytics for instance, compared to traditional "offline" media, E
marketing can off
er a greater sense of
accountability for advertisers.

Following are some of the other advantages of e

∙ Reduction in costs through automation and use of electronic media

∙ Faster response to both marketers and the end user

∙ Increased ability to

measure and collect data

∙ Opens the possibility to a market of one through personalization

∙ Increased interactivity

Limitations of E

Since E
marketing requires customers to use newer technologies than traditional media, not all people may
the message. Low speed Internet connections can cause difficulties. If companies build overly large or
complicated web pages, Internet users may struggle to download the information on dial up connections or
mobile devices. E
marketing does not allow shopp
ers to touch, smell, taste or try
on tangible goods before
making an online purchase. Some e
commerce vendors have implemented liberal return policies and in
store pick up services to reassure customers.

Disadvantages of e

∙ Lack of personal appr

∙ Dependence on technology

∙ Security, privacy issues

∙ Maintenance costs due to a constantly evolving environment

∙ Higher transparency of pricing and increased price competition

∙ Worldwide competition through globalization

Security concerns

For bo
th companies and consumers that participate in online business, security concerns are very important.
Many consumers are hesitant to buy items over the Internet because they do not trust that their personal
information will remain private. Recently, some c
ompanies that do business online have been caught giving
away or selling information about their customers. Several of these companies have guarantees on their
websites, claiming customer information will be private. By selling customer information, these
are breaking their own, publicized policy. Some companies that buy customer information offer the option
for individuals to have their information removed from the database (known as opting out). However, many
customers are unaware that their inf
ormation is being shared and are unable to stop the transfer of their
information between companies.

Security concerns are of great importance and online companies have been working hard to create
solutions. Encryption is one of the main methods for dealin
g with privacy and security concerns on the
Internet. Encryption is defined as the conversion of data into a form called a cipher. This cipher cannot be
easily intercepted unless the program or company, which completed the encryption, authorizes an
ual. In general, the stronger the cipher, the better protected the data is. However, the stronger the
cipher, the more expensive, encryption becomes.

Effects on Industries

E marketing has had a large impact on several industries including music, banking an
d book publishing not
to mention the advertising industry itself. In the music industry, many consumers have begun buying and
downloading music files (e.g. MP3s) over the Internet instead of simply buying CDs. More and more banks
are offering the ability t
o perform banking tasks online. Online banking is believed to appeal to customers
because it is more convenient than visiting bank branches. Online banking is now the fastest
Internet activity. The increasing speed of Internet connections is the ma
in reason for the fast

Internet auctions have gained popularity. Unique items that could previously be found at flea markets are
being sold on eBay instead. eBay has also affected the prices in the industry. Buyers and sellers often look
at prices

on the website before going to flea markets and the eBay price often becomes what the item is
sold for. More and more flea market sellers are putting their items up for sale online and running their
business out of their homes. The effect on the ad indust
ry itself has been profound. As Advertisers increase
and shift more of their budgets online, it is now overtaking radio in terms of market share.

The cost to acquire a customer is lower with E
marketing than with traditional marketing however cost are
ng as more companies take traditional budgets and push it to E
marketing avenues. Search engine
marketing for example, which is part of E
marketing, continues to grow at tremendous rates. Email
marketing also grows. Web analytics is a growing aspect of E
arketing, as there is more accountability
than in the history of advertising.

Q.2 Discuss the various e
business models with examples.

Ans.: E
business models

business models have been defined and categorized in many different ways. This is one attempt

present a comprehensive classification of business models observable on the web. Internet business models
continue to evolve. New and interesting variations can be expected in the future.

The basic categories of business models discussed in the table b
elow include

∙ Brokerage

∙ Advertising

∙ Infomediary

∙ Merchant

∙ Manufacturer (Direct)

∙ Affiliate

∙ Community

∙ Subscription

∙ Utility

These models are implemented in a variety of ways, as described below with examples. Moreover, a firm
may combine seve
ral different models as part of its overall Internet business strategy. For example, it is not
uncommon for some e
businesses to blend advertising with a subscription model.

Brokerage Model

Brokers are market makers. They bring buyers and sellers together
and facilitate transactions. Brokers play
a frequent role in business
business (B2B), business
consumer (B2C), or consumer
(C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula
for fees c
an vary. Brokerage models include:

1. Marketplace Exchange

offers a full range of services covering the transaction process, from market
assessment to negotiation and fulfillment. Exchanges operate independently or are backed by an industry
consortium. [
Orbitz, ChemConnect]

2. Buy/Sell Fulfillment

takes customer orders to buy or sell a product or service, including terms like
price and delivery. [CarsDirect,]

3. Demand Collection System

the patented "name
price" model pioneered by Pri
Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges
fulfillment. []

4. Auction Broker

conducts auctions for sellers (individuals or merchants). Broker charges the seller a
g fee and commission scaled with the value of the transaction. Auctions vary widely in terms of the
offering and bidding rules. [eBay]

5. Transaction Broker

provides a third
party payment mechanism for buyers and sellers to settle a
transaction. [Pay Pal

6. Distributor

is a catalog operation that connects a large number of product manufacturers with volume
and retail buyers. Broker facilitates business transactions between franchised distributors and their trading

7. Search Agent

a software agent or "robot" used to search
out the price and availability for a good or
service specified by the buyer, or to locate hard to find information.

8. Virtual Marketplace

or virtual mall, a hosting service for online merchants that charges s
etup, monthly
listing, and/or transaction fees. It may also provide automated transaction and relationship marketing
services. [ZShops and Merchant Services at]

Advertising Model

The web
advertising model is an extension of the traditional medi
a broadcast model. The broadcaster, in
this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM,
blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole
source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content
created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly

1. Portal

usually a search e
ngine that may include varied content or services. A high volume of user
traffic makes advertising profitable and permits further diversification of site services. A personalized
portal allows customization of the interface and content to the user. A niche

portal cultivates a well
user demographic. [Yahoo!]

2. Classifieds

list items for sale or wanted for purchase. Listing fees are common, but there also may be a
membership fee. [, Craig list,]

3. User Registration

based sites that are free to access but require users to register and provide
demographic data. Registration allows inter
session tracking of user surfing habits and thereby generates
data of potential value in targeted advertising campaigns. [NYTimes]

based Paid Placement

sells favorable link positioning

(i.e., sponsored links) or advertising keyed to particular search terms in a user query, such as Overture’s
trademark "pay
performance" model. [Google, Overture]

5. Contextual Advertising /

Behavioral Marketing

freeware developers who bundle ad ware with their
product. For example, a browser extension that automates authentication and form fill
ins, also delivers
advertising links or pop
ups as the user surfs the web. Contextual advertiser
s can sell targeted advertising
based on an individual user’s surfing activity.

6. Content
Targeted Advertising

pioneered by Google, it extends the precision of search advertising to
the rest of the web. Google identifies the meaning of a web page and th
en automatically delivers relevant
ads when a user visits that page. [Google]

7. Intromercials

animated full
screen ads placed at the entry of a site before a user reaches the intended
content. [CBS Market Watch]

8. Ultramercials

interactive online ads

that require the user to respond intermittently in order to wade
through the message before reaching the intended content. [Salon in cooperation with Mercedes

Infomediary Model

Data about consumers and their consumption habits are valuable, especia
lly when that information is
carefully analyzed and used to target marketing campaigns. Independently collected data about producers
and their products are useful to consumers when considering a purchase. Some firms function as
Infomediary (information int
ermediaries) assisting buyers and/or sellers understand a given market.

1. Advertising Networks

feed banner ads to a network of member sites, thereby enabling advertisers to
deploy large marketing campaigns. Ad networks collect data about web users that
can be used to analyze
marketing effectiveness. [Double

2. Audience Measurement Services

online audience market research agencies. [Nielsen//Net ratings]

3. Incentive Marketing

customer loyalty program that provides incentives to customers such
redeemable points or coupons for making purchases from associated retailers. Data collected about users is
sold for targeted advertising. [Cool savings]

4. Metamediary

facilitates transactions between buyer and sellers by providing comprehensive
mation and ancillary services, without being involved in the actual exchange of goods or services
between the parties. [Edmunds]

Merchant Model

These are Wholesalers and retailers of goods and services. Sales may be made based on list prices or
through au

1. Virtual Merchant

or e
tailor, is a retail merchant that operates solely over the web. []

2. Catalog Merchant

order business with a web
based catalog. Combines mail, telephone and online
ordering. [Lands' End]

3. Click and Morta

traditional brick
mortar retail establishment with web storefront. [Barnes &

4. Bit Vendor

a merchant that deals strictly in digital products and services and, in its purest form,
conducts both sales and distribution over the web. [Apple i
Tunes Music Store]

Manufacturer (Direct) Model

The manufacturer or "direct model", it is predicated on the power of the web to allow a manufacturer (i.e., a
company that creates a product or service) to reach buyers directly and thereby compress the dist
channel. The manufacturer model can be based on efficiency, improved customer service, and a better
understanding of customer preferences. [Dell Computer]

1. Purchase

the sale of a product in which the right of ownership is transferred to the bu

2. Lease

in exchange for a rental fee, the buyer receives the right to use the product under a “terms of
use” agreement. The product is returned to the seller upon expiration or default of the lease agreement. One
type of agreement may include a rig
ht of purchase upon expiration of the lease.

3. License

the sale of a product that involves only the transfer of usage rights to the buyer, in accordance
with a “terms of use” agreement. Ownership rights remain with the manufacturer (e.g., with software

4. Brand Integrated Content

in contrast to the sponsored
content approach (i.e., the advertising model),
integrated content is created by the manufacturer itself for the sole basis of product placement.

Affiliate Model

In c
ontrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate
model provides purchase opportunities wherever people may be surfing. It does this by offering financial
incentives (in the form of a percentage of
revenue) to affiliated partner sites. The affiliates provide
point click
through to the merchant. It is a pay
performance model if an affiliate does not
generate sales; it represents no cost to the merchant. The affiliate model is inherently w
ell suited to the
web, which explains its popularity. Variations include banner exchange, pay
click, and revenue sharing
programs. [Barnes & Noble,]

1. Banner Exchange

trades banner placement among a network of affiliated sites.

2. Pay

site that pays affiliates for a user click

3. Revenue Sharing

offers a percent
sale commission based on a user click
through in which the user
subsequently purchases a product.

Community Model

The viability of the community model is
based on user loyalty. Users have a high investment in both time
and emotion. Revenue can be based on the sale of ancillary products and services or voluntary
contributions; or revenue may be tied to contextual advertising and subscriptions for premium ser
vices. The
Internet is inherently suited to community business models and today this is one of the more fertile areas of
development, as seen in rise of social networking.

1. Open Source

software developed collaboratively by a global community of program
mers who share
code openly. Instead of licensing code for a fee, open source relies on revenue generated from related
services like systems integration, product support, tutorials and user documentation. [Red Hat]

2. Open Content

openly accessible conten
t developed collaboratively by a global community of
contributors who work voluntarily. [Wikipedia]

3. Public Broadcasting

supported model used by not
profit radio and television broadcasting
extended to the web. A community of users supports th
e site through voluntary donations. [The Classical
Station (]

4. Social Networking Services

sites that provide individuals with the ability to connect to other
individuals along a defined common interest (professional, hobby, romance). Social ne
tworking services
can provide opportunities for contextual advertising and subscriptions for premium services. [Flicker,
Friendster, Orkut]



Users are charged a periodic daily, monthly or annual fee to subscribe to a service. It is not u
ncommon for
sites to combine free content with "premium" (i.e., subscriber

or member
only) content. Subscription fees
are incurred irrespective of actual usage rates. Subscription and advertising models are frequently

1. Content Services

de text, audio, or video content to users who subscribe for a fee to gain access to
the service. [, Netflix]

2. Person
Person Networking Services

are conduits for the distribution of user
submitted information,
such as individuals searching
for former schoolmates. [Classmates]

3. Trust Services

come in the form of membership associations that abide by an explicit code of conduct,
and in which members pay a subscription fee. [Truste]

4. Internet Services Providers

offer network connectivit
y and related services on a monthly subscription.
[America Online]

Utility Model

The utility or "on
demand" model is based on metering usage, or a "pay as you go" approach. Unlike
subscriber services, metered services are based on actual usage rates. Trad
itionally, metering has been used
for essential services (e.g., electricity water, long
distance telephone services). Internet service providers
(ISPs) in some parts of the world operate as utilities, charging customers for connection minutes, as
opposed t
o the subscriber model common in the U.S.

1. Metered Usage

measures and bills users based on actual usage of a service.

2. Metered Subscriptions

allows subscribers to purchase access to content in metered portions (e.g.,
numbers of pages viewed). [Sla
sh dot]

Q.3. Explain the monitoring and evaluation of e
marketing activities.

Ans.: Monitoring and evaluation of e
marketing activities:

The e
marketing plan is built exactly on the same principles as the classical plan. There is no different
approach, b
ut there might be some formal differences given by the uniqueness of the Internet environment.
Many of these differences come from the necessity to ensure a high rate of responsiveness from the
customers, since the e
world is moving faster and requires fas
ter reaction from its companies, compared to
the traditional offline marketplace.

In a broad sense, e
Marketers generally start by analyzing the current micro

and macro economic situation
of the organisation. E
Marketers must observe both internal and ext
ernal factors when developing an e
Marketing plan as trends in both micro and macro environment affect the organization’s ability to perform
business. Examples of microenvironment elements are: pricing, suppliers, and customers. Examples or
macro environme
nt are: socioeconomic, political, demographic and legal factors. In order to produce a
viable e
Marketing solution, e
Marketers must first understand the current situation of the company and its
environment, profile, segment the target the right market and

then strategically position the products as to
achieve optimal response with the target market. This is generally achieved through SWOT analysis. By
assessing organization’s strengths and weaknesses and looking at current opportunities and threats one can

devise an e
Marketing strategy that can improve the organization’s bottom line.

Even though it is perfectly acceptable and is a common practice to use the 8
stage classic model for the e
marketing plan as well, you might want to consider the simplified ve
rsion , which identifies four major
steps to build the e
marketing plan:

Strategic analysis:

consists in continuous scanning of the macro

and microenvironment. The accent
should fall on the consumers’ needs that change very rapidly in the online market,

as well as on surveying
the competitors’ actions and evaluating the opportunities offered by new technologies.

With its open, free culture, the Web may seem an area that would bear little fruit for
legal matters. However, think
of the impact taxation would have on the Web. Consider the
possibility of government regulation of Web activity or commerce. Imagine no more Microsoft trying to
establish self
serving proprietary standards, as may happen if it gets broken up. Into this are
a could fall
certification of sites by some external authority. Many are striving to “control” the Web for their own
interests. It would be prudent to be part of any groups looking to set standards for an industry to make sure
you can live with the solutio


For years, the idea of perfect competition, which requires perfect information, lived only in
economic textbooks. Now, buyers can get huge amounts of information to make their decisions. The laws
of supply and demand apply on the Web as they
do anywhere else.

Consider how supply and demand works for the industry you are analyzing. We should not jump to any
conclusions about prices being driven down by the Web. We should remember there is a supply side to
things. What would happen to prices if
manufacturers said they would only make the amount wanted at a
certain price? Consider how a recession would affect the Web. We don’t know yet! In a recession, firms
often shift to other activities to keep busy and the Web opens new opportunities to do so.

In our analysis,
we should consider these issues to see if economics could impact the industry and our plans.

Consumer Behaviour:
We should sum up the consumer behaviour (or buyer behaviour for business) to
show what the key segments look like and what mo
tivates them in their purchases their ideal marketing
mix. By considering this from the perspective of consumers, we can understand what each segment is all
about before we try to match one to our firm. It is very helpful to prepare a table showing the key

and their ideal marketing mix the products/services they would like to see, the places they would expect to
find them, the level of pricing they would be prepared to pay and the message that would work for them.

By looking at the market as object
ively as we can, we come to understand the consumers who should be the
focus of our marketing. The same technique works in business some value speed, others want reliability or
relationships or some other differentiating factor. Typical business segmentati
on can get us into brand
conscious segments (the item has to work well), price
conscious buyers (think all offerings are the same)
and the value
use purchaser, who works out all of the costs of ownership and is more likely to pay more
initially for a lo
nger product life.

SWOT Analysis:

It’s perhaps the most famous acronym in business analysis

SWOT. Let’s look it over
and see how it fits into the world of Web analysis. Strengths and Weaknesses, the SW of the term, are
internal issues, meaning they are u
nique to the firm for whom the plan is being prepared. Opportunities and
Threats, the OT of the term, are external issues, things that apply to the entire industry. They should emerge
from your environmental analysis.

Issue Analysis:

Issue Analysis is whe
re the external and internal environments are first matched.
Essentially, what we are doing is looking at the external environment and determining which segment(s)
best match our strengths and weaknesses. If there is a small, specialized segment and we are

a small,
specialized firm, there could be a great match.

Of equal importance is showing which segments we will not pursue. For instance, “while the retired people
segment is appealing, it is being dominated by XYZ Corp.” Make your pick, support it and mov
e on.

Focus is the main feature of a good Issue Analysis section. It should distill all the information and ideas
gathered earlier into the essential ones, which really matter.

Another helpful way to view this section is to think of it as defining the prob
lem. Well
defined problems
have some indication of outcomes and the criteria that will be used to evaluate alternatives.

For Web marketers, this might typically look like this:

We need to develop a Web strategy that will:

∙ Build on our strengths as a reli
able, innovative supplier of …

∙ Deal with our weakness in Web distribution.

∙ Seize the opportunities in the new X segment.

∙ Avoid fighting with XYZ Corp.

The Marketing Strategy:
The key elements of a marketing strategy are the target market, position an

Target Market:
When we analyzed the environment, we saw that there were existing and emerging market
segments. When we identified opportunities, we saw some segments that seemed especially promising.
Finally, in our issue analysis, we picked the opp
ortunity, or segment, which best matched the strengths and
weaknesses of our firm.

Once we have chosen a segment, it becomes our target market, the group to whom we direct our marketing
efforts. Like a segment, it can be defined by demographics (females,
25 to 44, employed full
time, married
with children under 10), psychographics (highly involved in gardening, strongly agree that “I spend most
weekends in the garden”), geography (suburban residents in northeastern states) or product
related (drinks
two ca
ses of soft drinks a week).

Business markets can be similarly defined “small businesses with medium photocopy needs that place
particular value on reliability.” Large companies like Amazon, e Bay and AOL Time Warner are busily
gobbling up the “mass market”

and the high
traffic sites, so other marketers really need to know their stuff.
Only with a clearly defined specialized site will you be able to draw any traffic. Only if you understand the
people who would want to visit your site will you be able to attr
act them.

Nobody is going to stumble upon your site by accident. They are going to go to it believing it has
something of interest and value to them. If they are fanatical gardeners, they would probably be delighted
that you have more varieties of gardenin
g articles than anyone else in the world, and that you have
information on what shade they require, which plants should be planted in which geographic areas, and
detailed histories of each variety. On the Web, it’s not what you want to take that will draw
traffic; it’s
what you have to give.


Thanks to our deep environmental scan, thoughtful consumer behaviour analysis and solid
SWOT analysis, we have a very clear idea of where we fit into the marketplace. This allows us to define
our position. If
we do a good job here, the rest is relatively easy.

Your position is the distinctive image you want consumers to have of your company. (That may not match
the image they do have! Nike, for instance, may have a position of being the nice people who help yo
u get
and stay fit with great clothing and shoes; their image might be one of exploiters of third
world labour who
dupe consumers into paying too much for mediocre products through manipulative advertising.)

The 4Ps:

With a clear position, we can develop

the famous 4Ps of marketing. This refers to:

∙ Product, which includes the physical attributes, such as colour, shape and design, as well as intangibles
such as brand, reputation, customer service, warranties, return policies and support.

∙ Price, which m
ust match product positioning; if it is high quality, we expect a high price, while low prices
suggest low quality.

∙ Place, which is where people actually buy. It could be a store, the Web, through a sales rep or wholesaler.
It too must match the product
premium products sell through premium locations.

∙ Promotion, which includes everything from advertising and sales promotion through personal selling and
public relations.

Q.4 You are a marketing manager in ABC firm. You have taken some initiatives in e
arketing that will help your firm to compete in global markets. How will you go about it?

Ans.: Strategic Planning

Strategic Planning is the formal consideration of an organization’s future course. All strategic planning
deals with at least one of four key


1. "What do we do?"

2. "For whom do we do it?"

3. "How do we excel?"

4. "How can we beat or avoid competition?"

In many organizations, this is viewed as a process for determining where an organization is going over the
next year or more
lly 3 to 5 years, although some extend their vision to 20 years. In order to
determine where it is going, the organization needs to know exactly where it stands, then determines where
it wants to go and how it will get there. The resulting document is call
ed the "strategic plan".

It is also true that strategic planning may be a tool for effectively plotting the direction of a company;
however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will
surface in the co
ming days in order to plan your organizational strategy. Therefore, strategic innovation and
modifying the ’strategic plan’ have to be a continuous strategy for an organization to survive the turbulent
business climate.

2.3 Need for a Business Plan & a St
rategic Plan

There are many reasons why a Business plan & a strategic plan is a business requirement:

To acquire funding:

This is the usual reason why a business needs a business Plan & a strategic plan. An
existing firm may be seeking funding for an e
merce initiative from a bank, the financial markets (e.g.,
an initial public offering), a prospective business partner, or from an internal allocation of funds (i.e., a
business case scenario). A start
up company is likely to be looking for funding from an

angel investor, a
venture capitalist, or a bank. Even if especially, you are providing your own funds to start a business, you
should have a strategic plan.

To acquire other resources:

Sometimes it isn’t just a bank that wants to see a strategic plan. A p
landlord, equipment supplier, or application service provider may want to see a viable plan before entering
into a business partnership with business owners.

Recruitment of senior management:

Anyone truly capable of leading a start
up or existin
g firm into the
digital future will want to see a business & strategic plan that explains the business idea. Pretend you are an
entrepreneur setting up your life
long dream business. You have just made an appointment with someone
who you think would be a s
uperb member of your management team. The first question in the mind of a
new recruiter at senior level will be the strategic plan of the firm.

To make a better business owner:

By committing the business ideas to paper, the ability to create and
manage th
e business will improve. The process of writing a plan, forces a person to think ahead, set goals,
anticipates problems, and set some measures for the success.

To make a realistic approach to the business:

Given human nature, at the start of any project we

are all
optimists, happily seeing a smooth road ahead to our destination. Writing a strategic plan puts a good dose
of realism into that picture. Strategic plan activities such as seeking out and analyzing competitors, figuring
out how to reach target mar
kets, and comparing projected revenue streams against realistic expense
statements increases awareness of the bumps in that road. Identifying problems is the first step to avoid or
minimize them and a strategic plan enables you to do that.

To decide not to

develop the business:
Sometimes the most successful outcome of a strategic plan is a
decision not to proceed. Researching and writing a plan can reveal the realities of tough competition, a
small target market, or an income and expense statement that is a
wash in red ink. Many owners of failed
businesses would have been saved considerable time, money, and heartbreak if a proper plan had been
worked out.

To keep one on track:

The process of writing goals, objectives, manufacturing plans, distribution plans,
and financial statements sets targets against which actual performance can be measured. By setting goals
and objectives in the plan, you take the first step to be able to compare actual results with anticipated goals.

From Strategy to Electronic strategy

ow is an e
strategic plan different from any other strategic plan? First, it must be said that there are far
more similarities than differences. Some of the differences that make writing an e
strategic plan different
from writing a strategic plan?

Speed of

Information Distribution

The Internet is unlike any other sales channel allows companies to distribute information at the speed of
light and at almost zero cost, to reach customers with both reach and range, to introduce new and
innovative business models
, to reduce costs and generate savings, and many more differences. However,
the Internet also creates more bargaining power for the customer, creates a more perfect information market
to the customer’s benefit, and makes it easier for competitors to invade

a company’s marketplace. So the
first, and biggest, difference in e
strategic planning is the need for the entrepreneur to recognize the
different and unique capabilities of the Internet and begin to think differently, and creatively, about the
ies and problems the Internet presents.

The Internet is global

Being on the Web means your business will be visible to an international audience. This introduces
complexity for payment options (e.g., show prices in US dollars or local currency?), distribut
ion channels,
Web site design, and returns.

24/7 Businesses

Web storefronts never close. Being on the Web means your store will be open 24 hours a day, 7 days a
week. Your e
strategic plan must account for this difference in Web hosting and customer servic


The Web allows greater opportunities for personalization of content, one
one marketing, and customer
service. Because the Web allows these and other customer service features, your competitors can make
them part of
their e
commerce strategy, so you must too.

Decisions at Internet Speed

commerce is conducted at Internet speed. This means Web site deployment must be planned in months,
or even weeks, not years. First
mover advantage will be lost if companies are unabl
e to move at Internet
speed, and business plan readers will know that.

Customer focused

Business has always been about "getting close to the customer" but that was in a world without the
potential of personalization, one
one marketing, data mining, conc
urrent reach and range, and customer
relationship management. The Internet, and the customer
oriented applications that the Internet makes
possible, means that the every

business must be totally focused on the customer. This belief is evident with requi
rements for clearly
defining the value proposition the business offers to the customer; identify target markets, and a competitor
analysis from a customer point

Q. 5 In which ways or forms e
marketing are done? Explain briefly.

Ans.: Way
s in which e
marketing are done:

Get Targeted

A fundamental but sometimes overlooked marketing tenet is to "fish where the fish are." In other words,
invest in those specific, targeted media where you know your customers and prospects will be exposed

your message. Research shows that virtually all engineering, technical and industrial professionals now use
the Internet throughout their work process.

The same holds true in most business
business markets. However, the Internet is vast, and the fis
h you
are looking for may be using specific Web sites where the content is directly related to their information
needs. Work with your media partners to identify and target those sites.

2. Measure Performance

While it's always the right time to purge m
arketing programs that don't perform, it may be time to scale
back any marketing plans whose results you can't measure or are unsure about.

In other words, reallocate and "right
size" marketing budgets to measurable programs. Online programs

which are b
uilt around delivering visibility, impressions, clicks, leads and customers

are easy to measure.

3. Think Integration

Integrated marketing means your marketing strategy takes advantage of multiple media, resources and
customer touch points to create

a whole that's greater and more effective than the sum of its parts.

The more that marketing efforts are integrated and comprehensive, the greater impact you can achieve in
gaining visibility in your market, qualified leads and sales.

4. Maintain Freque
ncies and Consistency

The benefits of regular visibility in the market tend to compound over time as more prospects recognize
your company. This improves your opportunity to get on a prospect's short list of potential vendors and also
shortens the sales

A consistent online presence where your customers and prospects are looking for information

Web sites, directories, search engines and e

will help your company stay visible as well as
provide measurable lead generation be
nefits via online contact.

5. Push and Pull Your Way to Success

Most marketing can be classified as either push or pull: companies push their message out through tactics
such as direct mail, advertisements and e
newsletters; and they also establish a p
resence in online
directories, Web sites and search engines to pull customers in real
time when prospects are searching for
information, products and services like those your company offers.

Rather than struggling over whether to allocate resources to push

or pull marketing, seek out a media
partner that has your target audience captive and can offer both push and pull programs under an integrated

6. Focus on Quality Over Quantity

If marketing efforts focus solely on quantity over quality, fewe
r leads will convert, more sales resources
will be wasted, and sales people will begin to distrust marketing's lead generation programs.

Commit to programs where quality is a key attribute: programs that can deliver interested prospects,
provide prospect c
ontact information, and offer reports of program performance.

7.Seek Assistance From Media Partners

The economy is likely forcing you to make harder and smarter decisions about allocating budgets. While
you may be facing challenges, you don't have to f
ace them alone. Ask media partners to demonstrate how
their marketing solutions help your company achieve the strategies mentioned above.

Ask them:

Do they have your target audience's attention?

Can they keep your company visible to prospects and custome
rs at all times?

Do they offer a variety of integrated marketing solutions aligned with your goals?

Can they provide both visibility and lead generation?

Do they deliver targeted; quality leads with full contact information?

Do they provide reports you can

use to measure the performance of your marketing and justify your
marketing investments?

During challenging times or when thing are going well, industrial marketers need to clarify goals and create
a tailored, integrated marketing solution that complement
s your current media mix and extends your
company's ability to compete and win business in the market.

Utilize a wide range of e
media advertising and marketing solutions. Consider keyword ads, e
marketing, searchable product catalogs, banner ad netwo
rks and industry
leading e
advertisements. Figure out the right combination, and you will deliver the right message at the right time to
the right audience and integrate with your traditional marketing efforts.

Q. 6. As an e
marketer, do you

think it is necessary to track customer behaviour and
responses in the e
markets? Give suitable reasons and examples.

Ans.: Importance of tracking customer behaviour:

Customer Behaviour in B2B E Marketing

based business
business (B2B) e
rce is conducted through industry
marketplaces and through private exchanges set up by large companies for their suppliers and customers.
Of course, companies also sell to business customers through their own Web sites.

In the early 2000s, indust
sponsored marketplaces (ISMs) accounted for only a small percentage of B2B
transactions. The main reason, according a survey of 25 ISMs published in the industry periodical B to B, is
that ISMs have had problems convincing buyers and sellers to use them
. For one thing, companies are
reluctant to acquire customized designs through marketplaces because they don’t want to reveal proprietary
information on a site that is shared by competitors. These companies fear they will give away too much
information abo
ut their competitive strategies simply by taking part in such a marketplace. ISMs also do
not necessarily level the playing field for small companies against larger competitors. As a result,
companies use such marketplaces mainly to purchase commodity good
s, manage their supply chains, and
conduct indirect procurement transactions not related to their core business.

business (B2B) e
commerce is significantly different from business
consumer (B2C) e
commerce. While B2C merchants sell on a firs
come, first
served basis, most B2B commerce is done
through negotiated contracts that allow the seller to anticipate and plan for how much the buyer will
purchase. In some cases B2B is not so much a matter of generating revenue as it is a matter of makin
connections with business partners.

B2B is far and away the largest sector of e
commerce. Comparing B2B with B2C e
commerce, the U.S.
Department of Commerce reported that B2B online sales accounted for 90 percent of all online
transactions. It attributed

the high percentage of B2B e
commerce sales to the longstanding use of
proprietary networks, such as EDI, in the B2B sector. The manufacturing industry was the leader in e

The Internet B2B transactions in industrial inputs such as steel, chemica
ls, automobile components, etc.
have been most successful. These businesses have been benefited in the following ways by such internet

∙ Reduced procurement costs by resorting to e
tendering, reverse auction, etc.

∙ Online ordering resulting
in substantial order cycle time reduction & increased customer satisfaction.

∙ Tighter inventory control & fewer out of stock situations due to rapid inventory adjustments.

business e
commerce is expected to grow at a compound annual growth ra
te (CAGR) of 59.1
percent in Asia
Pacific (excluding Japan) over the next four years, according to IDC. India is expected to
show the highest CAGR of 83.7 percent in e
commerce revenue, ahead of a CAGR of 81 percent expected
in China.

Impact of B2B e
rce on business processes:

B2B e
commerce impacts across key areas within a business although the level of impact may vary
according to the particular emphasis being given to an implementation. Some of these areas are as follows:

Procurement processes:

erest in e
procurement has been fueled by a number of developments, not all
of which have necessarily employed high technology solutions. For example, in much the same way that
companies used corporate credit cards to overcome an EDI inhibitor associated w
ith low value purchases,
so we have seen the emergence of e
procurement cards that can be used for secure payment from on

Innovative product and service suppliers, hoping to move into B2B, have found problems understanding
the complex rela
tionships that exist in the supply chain scenario and are increasingly looking towards
suppliers who have traditionally operated in this arena. Suppliers have found that the purchase of direct
materials is much more complex than indirect. There is no one r
eason but rather a whole range of issues
that make it more difficult, for example, for a car manufacturer to obtain sheet metal than it is for them to
obtain a new printer.

Technology alone cannot replicate the relationships between these companies and sof
tware vendors new to
this market have major problems understanding these relationships. This is why those B2B vendors looking
to extend their reach from indirect to direct procurement markets have established partnerships with supply
chain specialists.

rder Fulfillment:

Taking an order is the easy part of any e
commerce activity. The goods have then to
be delivered. Much of the B2C success has been associated with the ability to download products such as
music or learning material, directly from the web.

Although the same model can be applied to B2B, it is
more likely that there will be a need for physical delivery.

There is much talk about globalization and the ability of the Internet to give even the smallest business a
presence in the global market pla
ce. This vision is at odds with the real
world experience of many
businesses. Even large multinationals remain suspicious of the potential for e
commerce to support a one
world market theory. They still find that customers remain predominantly ‘local’ and
that the ability to
physically deliver the goods is a prime consideration.

It does, of course, depend on what products or services are being sold and indeed smaller companies, with
an easy
deliver product, can obtain significant new business opportuniti
es. The companies involved in
B2B deliveries have an advantage over those involved in B2C trading. They can design efficient routes
fairly easily since business customers tend to be clustered in areas. Shipments are typically much larger and
B2B shipments are usually two
three times less expensive than B2C deliveries.

Managing trading partner relationships:
The effective use of e
commerce can have a significant
impact on trading partner relationships. For some, B2B e
commerce is a signifi
cant enabler in their move
towards greater trading partner collaboration. E
commerce technologies have allowed even the smallest
companies to improve the processes for interfacing with customers. They are now able to develop services
for individual clients

rather than provide a standard service.

Services can be customized to meet individual trading partner needs. This includes the provision of
effective communications about the status of orders and delivery, together with the speedy resolution of
queries an
d post sales support issues.

Problems and inhibiting factors:

Cost, lack of a clear vision and the ever
changing view on just what e
commerce actually entails are just some of the reasons put forward for slowing the wider uptake of B2B.
However, possibl
y the major inhibitor at the moment is the issue of integration. This could be between an
line catalogue and its associated payment system and the existing internal financial system. While the
development of bespoke solutions is one way forward, signifi
cant support is increasingly being given to the
use of XML.


The Internet has added new dynamics to the traditional one
one model for business
transactions. Many vendors sell directly from their sites but more
sophisticated virtual mar
ketplaces seek to
bring buyers and sellers together in one place.

B2B vertical e
me diaries:

Some B2B marketplaces are vertically orientated, seeking to capture a large
share of a single industry’s transactions. Others are horizontal, offering for exampl
e, places where small
businesses can purchase telephone services, office supplies and insurance. Online markets where buyers
and sellers negotiate prices are called exchanges. They usually use some sort of bidding or reverse bid
system, and prices fluctuat
e based on demand. These types of exchanges work for commodity
type goods
that are easily definable.

Other B2B sites make comparison
shopping possible by bringing together catalogues from more than one
vendor. Typically, membership, subscription or transac
tion fees, along with revenue from adverts, support
these sites.

The benefits of CRM include:

∙ Increased revenue from better targeting.

∙ Increased wallet share with current customers.

∙ Retention of customers for longer time periods.

The cost of acquirin
g a new customer is typically 5 times higher than the cost o
f retaining a current

CRM has 3 facets:

∙ Sales force automation (SFA).

∙ Marketing automation.

∙ Customer service.

Used primarily in the B2B market, SFA helps salespeople to:

∙ Build, m
aintain, and access customer records.

∙ Manage leads and accounts.

∙ Manage their schedules.

Marketing automation software aids marketers in effective targeting, marketing communication, and
monitoring of customer and market trends. Software solutions incl
ude e
mail campaign management,
database marketing, and market segmentation. Most customer service occurs in the post purchase stage
when customers have questions or complaints. E
mail and Web self
service are often used.








Q.1 Give a detail note on search engine optimisation.


Search engine

) is the process of improving the visibility of a

or a
web page

search engines

via the
"natural" or un
paid ("
" or "algorithmic")
search results
. Other forms of
search engine marketing

(SEM) target paid listings. In general, the earlier (or higher on the page), and more frequently a site appe
in the search results list, the more visitors it will receive from the search engine's users. SEO may target
different kinds of search, including
image search
local search
video search
, news search and industry
vertical search

engines. This gives a website
web presence

As an
Internet marketing

ategy, SEO considers how search engines work, what people search for, the
actual search terms typed into search engines and which search engines are preferred by their targeted
audience. Optimizing a website may involve editing its content and

and associated coding to both
increase its relevance to specific keywords and to remove barriers to the
indexing activities

of search
es. Promoting a site to increase the number of
back links

or inbound links is another SEO tactic.

The initialism "SEO" can refer to "search engine optimizers," a term adopted by an indus
try of

who carry out optimization projects on behalf of clients, and by employees who perform SEO services in
house. Search engine optimizers may offer SEO as a stand
ne service or as a part of a broader marketing
campaign. Because effective SEO may require changes to the

source code of a site and site content,
SEO tactics may be incorporated into

development and
. The term "search engine friendly"
may be used to describe website designs,
content management systems
, images, videos,
, and other elements that have been optimized for the purpose of search engine exposure.

Another class of techniques, known as black hat SEO or
, uses methods such as
link farms
keyword stuffing

article spinning

that degrade both the relevance of search results and the quality of
experience with search engines. Search engines look for sites that employ these techniques in order to
remove them from their indices.


Getting i

The leading search engines, such as

, use

to find pages for their
algorithmic search results. Pages that are linked from other search engine indexed pages do not need to be
submitted because they a
re found automatically. Some search engines, notably Yahoo!, operate a paid
submission service that guarantee crawling for either a set fee or
cost per click

Such programs usually
guarantee inclusion in the database, but do not guarantee specific ranking within the search results.

major directories, the Yahoo Directory and the
Open Directory Project

both require manual submission and
human editorial review. Google offers
Google Webmaster Tools
, for w
hich an XML

feed can be
created and submitted for free to ensure that all pages are found, especially pages that aren't discoverable
by automatically following links.

Search engine

crawlers may look at a number of different factors when

a site. The search engines
x not every page. Distance of pages from the root directory of a site may also be a factor in whether or
not pages get crawled. Additionally, search engines sometimes have problems with crawling sites with
certain kinds of graphic content, flash files, por
table document format files, and dynamic content.

Preventing crawling

Main article:
Robots Exclusion Standard

To avoid undesirable content in the searc
h indexes, webmasters can instruct spiders not to crawl certain
files or directories through the standard

file in the root directory of the domain. Additionally, a
page can
be explicitly excluded from a search engine's database by using a
Meta tag

specific to robots.
When a search engine visits a site, the robots.txt located in the
root directory

is the first file crawled. The
robots.txt file is then parsed, and will instruct the robot as to which pages are not to be crawled. As a search
engine crawler may keep a cached copy of this file, it may on oc
casion crawl pages a Webmaster does not
wish crawled. Pages typically prevented from being crawled include login specific pages such as shopping
carts and user
specific content such as search results from internal searches. In March 2007, Google warned
masters that they should prevent indexing of internal search results because those pages are considered
search Spam.

Increasing prominence

A variety of methods can increase the prominence of a web page within the search results.

between pages of the same website to provide more links to most important pages may improve its
visibility. Writing content that includes frequently searched keyw
ord phrase, so as to be relevant to a wide
variety of search queries will tend to increase traffic. Updating content so as to keep search engines
crawling back frequently can give additional weight to a site. Adding relevant keywords to a web page's
Meta d
ata, including the
title tag and Meta description
, will tend to improve the relevancy of a site's search
listings, thus increasing traffic.
URL normalization

of web pages accessible via multiple URL, using the
Meta tag

or via
301 redirects

can help make sure links to different versions of the URL all
count towards the page's link popularity score.

As a marketing strategy:

SEO is not necessarily an appropriate strategy for every website, an
d other Internet marketing strategies
can be much more effective, depending on the site operator's goals.

This includes paid search advertising
which has its own
version of SEO called ATO (Ad Text Optimization). A successful Internet marketing
campaign may drive
organic traffic
, achieved through optimization techniques and not paid adve
rtising, to
web pages, but it also may involve the use of paid advertising on search engines and other pages, building
high quality web pages to engage and persuade, addressing technical issues that may keep search engines
from crawling and indexing those
sites, setting up analytics programs to enable site owners to measure their
successes, and improving a site's
conversion rate
. SEO may generate a
return on investment
. However,
search engines are not paid for organic search traffic, their algorithms change, and there are no guarantees
of continued referrals. (Some trading sites such as eBay can be a special

case for this; it will announce how
and when the ranking algorithm will change a few months before changing the algorithm). Due to this lack
of guarantees and certainty, a business that relies heavily on search engine traffic can suffer major losses if
e search engines stop sending visitors. It is considered wise business practice for website operators to
liberate themselves from dependence on search engine traffic. A top
ranked SEO blog has
suggested, "Search marketers, in a twist of irony, r
eceive a very small share of their traffic from search
engines." Instead, their main sources of traffic are links from other websites.

International markets

Optimization techniques are highly tuned to the dominant search engines in the target market. Th
e search
engines' market shares vary from market to market, as does competition. In 2003,
Danny Sullivan

that Google represented about
75% of all searches. In markets outside the United States, Goggle’s share is
often larger, and Google remains the dominant search engine worldwide as of 2007. As of 2006, Google
had an 85
90% market share in Germany. While there were hundreds of SEO firms
in the US at that time,
there were only about five in Germany.

As of June 2008, the market share of Google in the UK was
close to 90% according to
Hit wise
. That market share is achieved in a number of countries.

As of 2009, there are only a few large markets where Google is not the leading search engine. In most
cases, when Google is not leading in a gi
ven market, it is lagging behind a local player. The most notable
markets where this is the case are China, Japan, South Korea, Russia and the Czech Republic where
Yahoo! Japan


are market

Successful search optimization for international markets may require professional

of web pages,
registration of a domain name with a
top level domain

in the target market, and
web hosting

that provides a
IP address
. Otherwise, the fundamental elements of search optimization are essentially the same,
regardless of language.

Q.2 Identify the service facilitators in e marketing. How will they help in e marketing of
services and
to resolve problems encountered if any?

Ans.: Service facilitators in e marketing:

Channel intermediaries:

Channel intermediaries include:

∙ Wholesalers: who buy products from the manufacturer & resell them to retailers.

∙ Retailers (brick
mortar & o
nline): who buy products from wholesalers & sell them to consumers.

∙ Brokers: facilitate transactions between buyers and sellers without representing either party. They are also
called market makers.

∙ Agents: represent the buyer/seller & facilitate trans
actions between buyers and sellers but do not take title
to the goods. Manufacturer’s agents represent the seller & purchasing agents represent the buyer.

∙ For digital products (software), the entire distribution channel may be Internet based & the suppli
er can
deliver it over the Internet to the buyer’s computer.

∙ Non
digital products (flowers/wine) may be purchased online but must be delivered physically. The exact
location of that shipment can be tracked using a Web
based interface.

Length of the chann

The length of the channel represents the number of intermediaries between supplier and consumer. In a
direct distribution channel, there are no intermediaries & the manufacturer deals directly with the
consumer. For example, Dell Computer sells directly

to customers. In an indirect channel, the system
consists of one or more intermediaries’ like

suppliers, manufacturers, wholesalers, retailers & end
consumers. These intermediaries help to perform many important functions.

intermediation means elimin
ating traditional intermediaries. The Internet was predicted to eliminate
intermediaries. It can potentially reduce costs. Taken to its extreme, Dis
intermediation allows the supplier
to transfer goods and services directly to the consumer in a direct chan
nel. Complete Dis
intermediation is
an exception because intermediaries can handle channel functions more efficiently than producers.

Initially, the Internet was thought to eliminate costly intermediaries in USA. This line of reasoning failed to
some important facts. The U. S. distribution system is the most efficient in the world. Using
intermediaries allows companies to focus on what they do best. Traditional intermediaries have been
replaced with Internet equivalents.

Online intermediaries are
often more efficient than their brick
mortar counterparts since online
storefront has no rent, maintenance, and staff for retail space. Such marketing needs an inexpensive
warehouse, which is an acceptable storage location for goods sold online. Howeve
r, online stores involve
costs of setting up & maintaining their sites. These charges can be significant, but they do not outweigh the
savings realized by eliminating the physical store.

The Internet has added new types of intermediaries. For example

o! Broadcast aggregates multimedia
content & is a record store, audio bookstore, radio broadcaster, and TV broadcaster all rolled into one.
Other intermediaries are Shopping agents, buyer cooperatives, and Metamediary.

Functions performed by members of the


Many functions must be performed in moving products from producer to consumer. Internet based
distribution channel initially involves market deconstruction (removing distribution channel functions from
the players that normally perform them) & th
en reconstruction (reallocating those functions to other
intermediaries in novel ways).

Online retailers normally hold inventory and perform the pick, pack, and ship functions in response to a
customer order. Alternative scenario, the retailer might outsou
rce the pick, pack, and ship functions to a
logistics provider such as GATI or Blue Dart. In this system, the order is forwarded to a GATI warehouse
where the product waits in storage or GATI picks, packs, and ships the product to the consumer.

s perform many value
added functions. Some of them are:

Transactional Functions, which include:

∙ Making contact with buyers and using marketing communication strategies to make them aware of

∙ Matching product to buyer needs, negotiating price,

and processing transactions.

∙ Logistical Functions that include:

∙ Physical distribution activities viz. transportation or inventory storage &

∙ Product aggregation.

∙ Logistical functions are often outsourced to third
party logistics specialists. A big
problem for online
retailers is the expense of delivering small quantities to homes and businesses. Often the recipient is not
there to receive the product.

∙ 25% of deliveries require multiple delivery attempts.

∙ 30% of packages are left on doorsteps, wi
th possibilities for theft.

∙ Innovative firms are introducing solutions like 1)the Smart box, 2) Retail aggregator model i.e. delivery at
convenience stores or service stations, 3) E
stops & 4) Order online for offline retail delivery.

∙ Facilitating Func
tions (performed by channel members):

Market Research:

This is a major function of the distribution channel. This results in an accurate
assessment of the size & characteristics of the target audience. The Internet affects the value of market
research in

five ways:

1. Information available for free.

2. Research conducted from the office (limits travel expenses).

3. Information is timelier.

4. Information in digital form which e
marketers can easily load it into a spreadsheet or other software.

5. Because
so much consumer behavior data can be captured online, e
marketers can receive detailed

∙ Research requires investment in human resources to distill the material & firms need access to costly
commercial information.

∙ Financing: Financing purchas
es is an important facilitating function in consumer/business markets.
Intermediaries want to make it easy for customers to pay in order to close the sale. Online consumer
purchases are financed through credit cards or special financing plans. Consumers ar
e however concerned
about divulging credit card information online.

∙ Online merchants have to know they are dealing with a valid consumer using a legitimate credit card by
using Secure Electronic Transactions (SET).

Q.3 a. For a successful e
CRM, what b
uilding blocks are required?

Building Blocks for Successful eCRM

The Gartner Group model of eCRM covers 8 building blocks viz.
eCRM vision, eCRM strategy, Valued
customer experience, Organizational collaboration, eCRM processes, eCRM information, a
nd eCRM
technology & eCRM metrics.

CRM Vision: To be successful, the CRM vision must start at the top and filter throughout the company
to keep the firm customer focused. One key aspect of CRM vision is how to guard customer privacy. The
benefits of usin
g customer data must be balanced by the need to satisfy customers and not anger them.
Truste provides its seal and logo to any Web site meeting its privacy philosophies.

CRM Strategy: E
marketers must determine their objectives and strategies before buy
ing CRM
technology. Many CRM goals refer to customer loyalty. An important CRM strategy is to move customers
up the relationship intensity pyramid.

Another CRM goal involves building bonds with customers on 3 levels:

∙ Financial

∙ Social

∙ Structural

ued Customer Experience: Consumers are constantly bombarded by marketing communications and
unlimited product choices. According to Jadish Sheth (1995), the basic tenet of CRM is choice reduction.
Many consumers are “loyalty prone,” and will stick with the

right product as long as its promises are
fulfilled. Synchronous and asynchronous technologies can provide automated and human services that
solve customer problems.

Organizational Collaboration: Marketers collaborate within and outside the organization
to focus on
customer satisfaction. CRM, or “front
end” operations, can be linked with the entire supply chain
management system (SCM), or “back
end” operations. Customer service reps have access to inventories.
Producers and wholesalers constantly receive
data that can be utilized for production and delivery. The use
of extranets, two or more intranet networks that share information, allows CRM
SCM integration.

CRM Processes: Firms use specific processes to move customers through the customer care life cy
cle. E

CRM processes are used to:

∙ Identify customers.

∙ Differentiate customers.

∙ Customize the marketing mix.

∙ Interact with customers.

Firms can identify high value customers by mining customer databases and profiling customers in terms of:

∙ Re
gency of purchases.

∙ Frequency of purchases.

∙ Monetary value of purchases.

CRM Information: The more information a firm has, the better value it can provide to each current or
prospective customer. Firms gain much information by tracking behavior elec
tronically, by using Bar code
scanner data & also through software that tracks online movement, time spent per page, and purchase

CRM Technology: Technology greatly enhances CRM processes. Firms use company
side tools to push
customized infor
mation to users. Client
side tools allow the customer to pull information that initiates the
customized response from the firm. Company
side Tools include interactive point
sale terminals which
are located on a retailer’s counter and used to capture dat
a and present targeted communication. A firm
may also listen to users and build community by providing a space for user conversation on the Web site
like Chat sites & Bulletin boards. The following are some examples of how technology can be used for
ng up CRM.

Company side tools: Company side tools include the following:

∙ e
mail databases: Marketers use e
mail databases to build relationships by keeping in touch with useful
and timely information. E
mail can be sent to individuals or sent en masse u
sing a distributed e
mail list.

∙ Collaborative filtering: Collaborative
filtering software gathers opinions of like
minded users and returns
those opinions to the individual in real time.

∙ Real
time profiling: Real
time profiling occurs when special soft
ware tracks a user’s movements through
a Web site, then compiles and reports on the data at a moment’s notice.

∙ Data mining: Data mining involves the extraction of hidden predictive information in large databases
through statistical analysis.

∙ Web log a
nalysis: Every time a user accesses a Web site, the visit is recorded in the Web server’s log file.
This file keeps track of which pages the user visits, how long he stays, and whether he purchases or not.

∙ Cookies: Cookies are small files written to the
user’s hard drive after visiting a Web site. When the user
returns to the site, the company’s server looks for the cookie file and uses it to personalize the site.

side Tools: Some examples of Client side tools are as under:

∙ E
mail queries, compl
aints, or compliments initiated by customers or prospects comprise incoming e
mail, and are the fodder for customer service.

∙ Incoming e

∙ With fax
demand, customers telephone a firm, listen to an automated voice menu, and select options to
est a fax be sent on a particular topic.

∙ Fax

∙ Web form (or HTML form) is the technical term for a form on a Web page that has designated places for
the user to type information for submission.

∙ Web forms

∙ Wireless Web portals send data to

customer cell phones, pagers, and PDAs, such as the Palm Pilot.

∙ Wireless data services

∙ Personalized Web pages users easily configure at Web sites such as My Yahoo! and many others.

∙ Individualized Web portals

∙ Programs that perform functions on b
ehalf of the user, such as search engines and shopping agents.

CRM Metrics: E
marketers use numerous metrics to assess the Internet’s value in delivering CRM
performance. For example:


∙ Cost savings

∙ Revenues

∙ Customer satisfaction

One researc
h study named customer retention; ROI and customer lift (increased response or transaction
rates) as the most important metrics.

One very important CRM metric is customer lifetime value (LTV).

∙ The LTV calculation demonstrates the benefits of retaining cu
stomers over time and the need for building
wallet share.

∙ LTV also illustrates that no matter how good customer retention is, the firm must still focus on customer
acquisition activities.

b. Is it beneficial if CRM shifts towards e
CRM? Why or why not

Ans.: CRM & eCRM

Customer Relationship Management using the Internet and e
business to provide products and services and
information to customers requires that we really know and understand our customers’ needs. When
customers contact our traditional b
usiness by visiting the store or office or contacting someone personally
by phone, we have the opportunity to hear their questions and offer solutions based on personal
communication. If they have a misunderstanding about our product or a sales objection w
e can deal with it
immediately. When people visit our online business at your website, we will not even know they are there.
We do not have the opportunity to ask or answer questions. It is therefore vitally important that we
anticipate their questions and

concerns and provide the needed information in a way that makes it easy for
them to fully understand our offering. E Customer Relationship Management (eCRM) is a way to get the
maximum value from the e
business investment.

“C’ in CRM: For the purposes of
discussing CRM, we need to think of the "C" in “customer” in the
broadest sense. Our definition needs to include suppliers, partners, investors, employees, and others we deal
with in our definition. Each of these groups has specific and unique requirements

when dealing with our
organization. Customers need to be able to find out about our products and services and be able to make
purchases. We need to track each customer’s activity in order to make offers of complimentary products
and new products that we m
ay provide. Keeping in mind that eighty percent of our business will come from
twenty percent of our customers

the 80/20 principle it will be important for us to know who is among the
twenty percent when they visit our site.

Investors will have needs tha
t relate to the operation of the business and the performance of their
investment. Making some of that information available on the web site will accomplish two things: (1)
investors will be better informed, and they will be able to find out the informatio
n they require without
making specific inquires that take time to provide; (2) investors will get the same information at the same
time. Suppliers and partners want to be connected with the organization. Creating special places where
these strategic partne
rs can participate is valuable. Providing them with information, such as product
promotions, press releases, and advertising campaigns will build strong relationships.

The “E” Customer: Online customers are different from those who are able to contact us a
nd deal with us
directly. They have a unique set of expectations. Generally, they expect immediate service, either by
finding what they need on our site themselves; or, they may expect that the goods or services be delivered
without delay. It is also commo
n for prospective customers to have new or different levels of understanding
about our business. An example of this was found by a book printing company that moved to the web to
deliver a new “print to need” service. Their existing customers are those orga
nizations and individuals that
have books and manuscripts ready to print and simply required final printing service. What they found was
that individuals with books in progress or even those with the idea that they might want to write a book
were now visit
ing their site. These potential customers need information about the self
publishing process
before they are ready to buy services. It is important to provide information services to satisfy their
requirements, so they will use the book printing services w
hen they’re ready.

Benefits & Facets of CRM

The benefits of CRM include:

∙ Increased revenue from better targeting.

∙ Increased wallet share with current customers.

∙ Retention of customers for longer time periods.

The cost of acquiring a new customer i
s typically 5 times higher than the cost of retaining a current

CRM has 3 facets:

∙ Sales force automation (SFA).

∙ Marketing automation.

∙ Customer service.

Used primarily in the B2B market, SFA helps salespeople to:

∙ Build, maintain, and acc
ess customer records.

∙ Manage leads and accounts.

∙ Manage their schedules.

Marketing automation software aids marketers in effective targeting, marketing communication, and
monitoring of customer and market trends. Software solutions include e
mail campa
ign management,
database marketing, and market segmentation. Most customer service occurs in the post purchase stage
when customers have questions or complaints. E
mail and Web self
service are often used.

Q.4. Explain the positioning and differentiatio
n strategies meant for e


In marketing, positioning has come to mean the process by which marketers try to create an image or
identity in the minds of their target market for its product, brand, or organization. It is the ‘relativ
competitive comparison’ their product occupies in a given market as perceived by the target market. Re
positioning involves changing the identity of a product, relative to the identity of competing products, in
the collective minds of the target market.
positioning involves attempting to change the identity of
competing products, relative to the identity of your own product, in the collective minds of the target

The original work on Positioning was consumer marketing oriented, and was not as mu
ch focused on the
question relativity to competitive products as much as it was focused on cutting through the ambient
"noise" and establishing a moment of real contact with the intended recipient. In the classic example of
Avis claiming "No.2, We Try Hard
er", the point was to say something so shocking (it was by the standards
of the day) that it cleared space in your brain and made you forget all about who was #1, and not to make
some philosophical point about being "hungry" for business. The growth of hig
tech marketing may have
had much to do with the shift in definition towards competitive positioning.

Positioning is now defined as the process of creating a desired image among its competitors in the public’s
mind. Positioning helps to create a desired i
mage for a company and its products in the minds of a chosen
user segment, concerns, brands, the company itself, or individual products & helps to control brand image.
A position is the resulting view of the firm or brand from the consumer perspective. Pos
itioning is the
process of creating this image. To be successful, a company must differentiate itself and its products from
all others, & position itself among its competitors in the public’s mind to carve out its own market niche.
The e
marketer’s goal is

to build a position on one or more bases that are relevant and important to the

∙ Bases for Positioning on the Web: the firms for their positioning can use The following bases:

· Product or service attributes (“the smallest cell phone”),

∙ High
tech image (“our cell phones handle e

· Benefits (“fits in your pocket”),

· User categories (“best cell phone for college students”),

· Comparison with competitors (“our phone is less expensive than the Nokia”),

· Take an integrator position (“a fu
ll range of electronic products and services”).

Product or service attributes:

Attributes are the product or service features such as size, color,
ingredients, speed, and so forth. A patented product or process, such as Amazon’s one
click checkout
, is an ideal basis for positioning. Another example is that of iVillage (, which
allows users to build their own meal menus at its site using criteria such as ingredients and calorie, counts.
Pillsbury adds value through ideas, recipes.

tech image:

Positioning on the basis of technology shows that a firm is having the cutting edge
technology. For example at the Lands’ End Web site, women can build virtual models based on their
physical features such as hair color, skin tone, hair sty
le, and face shape. Users can then see how Lands’
End apparel would look on themselves by trying virtual outfits on the model. The model can be rotated for
front, side, and back views. Another example is of the American Airlines site which offers various t
ools to
allow customers to manage their flight arrangements: Frequent flier account management, personalized
travel planning, and personalized seat selection when booking flights. Customers can store user
information on preferred destinations, seat
ing preference, companion travelers, and frequent flier rewards
status and billing.

Benefits are the flip side of attributes the customers’ perspective of what the feature will do for
them. Benefit positioning is generally a stronger basis for p
ositioning, because it answers the consumer
question: What will this do for me? For example, the Polo Web site focuses on how its products shape an
entire lifestyle & its products are designed to help customers contemplate a dream world of adventure,
, and culture. Another example is that of the Miller Lite Beer Web site which offers a software
package that can be downloaded and used as a social organizer for arranging meetings, mostly for
entertainment. The Miller icon is then permanently present on t
he desktop, reminding the customer about
the brand on a daily basis.

User categories:
This positioning relies on customer segments. It is successful when the segment has some
unique quality that ties product benefits more closely to the group than to othe
r segments. For example,
Kellogg’s has set up an interactive Web site for children where they can register online and enter code
numbers found on Kellogg’s cereal packages, then use the codes as “money” on related Web sites or even
earn interest in a “spec
ial” bank. Another example is Yahoo! Geo Cities which hosts Web user pages that
are organized into neighborhoods based on specific interests & consumers can connect with others who
share the same interests.

∙ Comparison with competitors: Many firms positio
n by touting specific benefits that provide advantages
over competitive offerings. Online or offline companies often position themselves in the following ways:

· Against an entire industry (“I Can’t Believe It’s Not Butter” margarine),

∙ Against a particul
ar firm ( for toys),

∙ According to relative industry position (AOL is the ISP connection leader and Earthlink a challenger).

Take an integrator position:

Some companies want to be known for providing everything a consumer
needs in a particular
product category, industry, or even in general (e.g., Wal
Mart). This is a particularly
important strategy online because busy consumers want convenience and one
stop shopping. For example
Martha Stewart’s Web site brings together a wide spectrum of busine
ss units in one place, effectively
communicates the core identity of the brand improving the quality of living in the home and encouraging
yourself ingenuity. It is linked to Kmart’s site, where Martha Stewart’s branded domestic products are

epositioning on the Web:

Repositioning is the process of creating a new or modified brand, company, or
product position. It is a long
term challenge when attempting to change the way customers perceive their
brands. Companies can easily check on progress b
y tracking customers’ preferences and habits on the
Internet. One example is that of Amazon has repositioned itself within the last few years.
Originally Amazon was positioned as the world’s largest bookstore. Today it promises the “Earth’s big
selection” of a variety of products from music to electronics and more.

Niche Marketing:
Often business owners view a niche market as narrowing their sales or cutting into a
profit margin. The truth is a niche market could be defined as a component t
hat gives any business the
POWER. A niche market allows us to define who we are marketing to. When we know whom we are
marketing to, it is easy to determine where our marketing energy and funds should be spent.

There is even a greater importance in having

a well
defined niche market when planning the Internet
Marketing strategy to achieve Internet Success. The most common misconception about online marketing
is that if you build it they will come or having an online business will make you wealthy. Truth is

we have
to find our niche market to get them to come and we must offer a product or service that they are
demanding to reach a level of financial success via the Internet. Defining our niche market before we
embark on our Internet marketing strategy is im
portant for the following 5 reasons.

1. We will have the ability to maximize our marketing budget by targeting a defined niche market. We will
know exactly where to advertise. We will also know where to look to find ezines and related sites that are
ng to our market. This gives us a starting point.

2. The site can then be optimized for search engines so that our niche market can find us easily.

3. We will be able to cater our site to our niche market. We can develop our site to guide our viewers and
elp them find solutions or products that we offer that are specific to the problems that our niche market

4. A defined niche market makes it easier to develop ideas for new products or services that inherently
appeal to the specific niche.

5. W
e will have an upper
hand in establishing ourselves as a leader in our industry.

Aim of Positioning:
The aim of positioning is to develop a perceived differential advantage over rivals’
products. In an e
marketing context the differential advantage and po
sitioning can be clarified and
communicated by developing an online value proposition (OVP). This is similar to a unique selling
proposition, but is developed for e
commerce services. For maximum effectiveness the OVP should clarify:

∙ A clear differentiat
ion of the online proposition compared to the company’s conventional offline

∙ A clear differentiation of the online proposition from competitors based on cost, product innovation or
service quality.

∙ Target market segment(s) that the proposi
tion will appeal to.

∙ How the proposition will be communicated to site visitors and in all marketing communications.

∙ How the proposition is delivered across different parts of the buying process

∙ How the proposition will be delivered and supported by r

is the proposition genuine?

Strategies for Differentiation

Differentiation strategies are particularly important for e Marketing. Internet marketing strategy revolves
around company image and product information available on the Web. Specific
strategies may include:

∙ Being the first to enter the market.

∙ Owning a product attribute or quality in the mind of the consumer.

∙ Demonstrating product leadership.

∙ Utilizing an impressive company history or heritage.

∙ Supporting and demonstrating th
e differentiating idea.

∙ communicating the difference.


marketing strategy revolves around the image and product information available on the Web. A strong
brand image helps to attain “ownership” of a product. (Example: Customers are drawn

brands they trust, an attraction that is enhanced by a positive company history. has essentially
gained ownership of online job searches.

There are many advantages while developing the Internet
Specific Differentiation Strategies. Some of t

∙ Customer tracking

∙ Seamless communication

∙ Greater relationship efficiency

∙ Be aware of competitor pricing

∙ Potential customer savings

∙ Deliver what is promised to customers

∙ Deliver in a timely manner

Many traditional strategies still ap
ply to e marketing. But some differentiation strategies are unique to
marketing on the Web. There are six differentiation strategies unique to online businesses like:

∙ Site Environment/ Atmospherics

∙ Make tangible, the Intangible

∙ Build Trust

∙ Efficie
ncy and Timeliness

∙ Pricing

∙ Customer Relationship Management

Site Environment/ Atmospherics: Atmospherics are the in
store ambiance created by brick
retailers. Providing visitors with a positive environment to visit, search, purchase, and so

forth can
differentiate web sites. Visitors want a site that easily downloads, portrays accurate information, clearly
shows the products and services offered & are easily navigated. If customers like the home page, they will
view additional pages and ulti
mately become a paying customer.

Make tangible, the intangible: An online product or service cannot be seen except by an image or
description. The goal is hence to make offerings seem more tangible by showing them in a realistic and
friendly manne
r, using virtual tours, 3
D images, product image enlargements, trial downloads &
customer reviews.

Build trust: Trust is a key issue on the Internet since customers are expected to pay online & their
information is tracked for personalized service or supp
ly chain management. Hence trust
building should
be an integral part of a Web site’s marketing strategy. Trust may be built in as a by
product of strong brand
recognition. Company sites with lower brand recognition must project a secure environment. They s
clearly define company’s privacy policy & strictly enforce it. They should use a safe and encrypted
payment process for transactions. They should also ensure that a live person can be contacted if customers
encounter problems on the Web site, require

personal assistance, or need to exchange or return a purchase.

To foster online commerce by helping businesses and other online organizations build trust with customers
by self
regulating privacy concerns, the Electronic Frontier Foundation (EFF) and Comm founded
an organisation named as TRUSTe in 1997. TRUSTe is an independent non
profit organization best known
for its Web Privacy Seal. TRUSTe runs the world’s largest privacy seal program, with more than 2,000
Web sites certified, including the ma
jor Internet portals and leading brands such as IBM, Oracle
Corporation, Intuit and eBay. TRUSTe states its purpose is to establish trusting relationships between
individuals and online organizations based on respect for personal identity and information i
n the evolving
networked world. TRUSTe is headquartered in San Francisco with an office in Washington D.C.

TRUSTe’s programs include 1) Trusted Download Program, 2) Web Privacy Seal, 3) Watchdog Dispute
Resolution & 4) Email Privacy Seal.

Trusted Download

TRUSTe’s newest initiative, the Trusted Download Program, combats ad ware and spy ware. The Trusted
Download Program promotes ethical behavior from ad ware and other software companies by publishing a
white list of certified applications. The white

list will be used by companies

beginning with program
sponsors such as Yahoo!, AOL, Computer Associates, CNET Networks and Verizon

as a tool to make
business decisions about advertising, partnering or distributing software products.

Web Privacy Seal

Trustee’s most recognizable program, the Web Privacy Seal, aids consumer choice by identifying
businesses with trustworthy online privacy policies. 100% of prospective seal holders have had to alter
their privacy policies in some way and, in many cases, po
tential seal holders are not able to complete
certification because of Trustee’s requirements or legal agreements.

Watchdog Dispute Resolution

Truste offers third
party dispute resolution services through its Watchdog Dispute Resolution program.

this program, Truste ensures consumer satisfaction with seal holders’ privacy, non
intrusive email
and download practices. If a consumer has an unresolved privacy issue with a Truste seal holder, he or she
can fill out an online Watchdog complaint form. T
ruste will investigate the complaint and mediate a

Email Privacy Seal

The Email Privacy Seal Program enables companies willing to abide by strict standards for commercial
email to demonstrate their commitment by posting the Truste “We Don’t Spam
” seal. The Truste Email
Privacy Program encourages permission
based email marketing, going beyond the requirements of the
SPAM Act by requiring a recipient’s consent before any commercial or promotional email message
can be sent to him or her.

ent and timely order processing

One of the strongest motivators for customers who make Web
based purchases is the ease of ordering.
Organizations must market their alliances and delivery timeliness as an important benefit. By following its
promises, the
company will build customer loyalty & also receive referrals from satisfied customers.

: Pricing as a method of differentiation has come under scrutiny. When products were first offered
on the Web, companies tended to offer price discounts as an in
centive. Today, prices are relatively
comparable on the Web. The majority of firms are choosing to differentiate themselves using methods
other than pricing. Pricing is easy to imitate and non
price differentiation is more enduring for all but the
price le

Customer Relationship Management
: Price is less used for differentiation & the barriers to entry are
decreasing on the Internet. Hence customer relationship management is becoming more predominant as a
means of differentiation. One of the successful

companies adopting the CRM differentiating strategy is
‘Netflix’. Netflix rents movies on DVD by mail. The customers can set up personal lists of the movies they
want to rent & they can rent three or more DVD movies at one time with no return deadlines or

late return
penalties. After viewing a movie, customers slip it into the prepaid return envelope to mail it back to
Netflix. A few days later, they receive the next DVD on their list. Thus Netflix builds customer
relationships one at a time through custom
driven personalization and convenience.

Marketing Opportunity Model”: “E
Marketing Opportunity Model” developed by Fenny helps
companies define their customers and products in order to determine the degree of differentiation required.
According to t
his model there are three e
marketing opportunities:

∙ Enhancing the selling process,

∙ Enhancing the customer buying process,

∙ Enhancing the customer usage experience.

Online differentiation involves creation of a distinctive customer experience & devel
opment of one
relationships with customers. Depending on the perceived product differentiation and frequency of
purchase E
marketing firms can choose the best strategies.

Q. 5 Amba Ltd. is a small company that helps IT companies to reso
lve issues concerned
with cyber crimes. A young marketing student wants to prepare a report on how the
company handles different types of cyber crimes. But before that, she wants to make a note
of cyber crimes, its nature and laws pertaining to it. You are

requested to help her.

Ans.: Note on Cyber crimes:

The Internet is a growing and a continually evolving creature that will live on in perpetuity. As such, it
would be wise to ponder the e business legal and Internet marketing ethical issues of b2b & b2c.

is written and published online will be there forever. Imagine the billions upon billions of text information
pages that are and will be stored for a long time. There is even a site where you can go Way Back to check
out archives of other website
s and view pages that were created at the beginning of their infancy.
Additionally, video, films, movies, and audio in various applications formats are also viewable.

Now, with the new wireless web mail from cell phones and other pda communication devices,

the Internet
will be affecting more lives than ever before. Security and privacy concerns along with e
regulatory issues will become more prevalent. It will become more difficult to figure out who you can trust
online; with all the unethical, ill
egal, and Internet marketing and online advertising frauds and E business
email scams.

Important E
Business Legal Issues

If you are writing copy and maintaining a client’s e business or ecommerce website consider the following
consumer privacy and legal m

What you say when copywriting and publishing for a client is a reflection of how they are viewed to the
rest of the world. Negative or defamatory articles published about various people and companies on other
websites, if not properly researched, c
ould possibly have legal consequences of libel that can stretch across
countries. Additionally, consider carefully what is published on Web logs or Blogs for short. A blog is
simply a website where daily, weekly, or monthly personal or corporate thoughts,
ideas, and happenings
can be published and shared with others. Interaction with readers can be set up in the form of comments
from visitors.

If webmasters perform unethical optimization of a client’s website, it could have long lasting negative
business c
onsequences for that client that can not be easily repaired
consequences that at first glance may
seem insignificant. People are getting more savvy online. They are starting to see the e business false
advertising that is upon us. Although most of these la
ws are only pertaining to USA, it will not be long
before these are implemented in India also.

Intellectual Property

When dealing with ethics in a B2B Company and B2C clients there is a major degree of trust and
responsibility that is imparted to a person

or group that maintains the Web site. It is very important from
both an ethical values based e business and legal B2B and B2C perspective to make sure that the written
words and what is portrayed about a company are factual. Because issues arise involving

marketing ethics
and the importance of understanding a business for Internet marketing issues and advertising purposes,
there are potential areas for revealing trade secrets or intellectual property if proper B2B ethical behavior is
not followed.

Email co
rrespondence should be private and confidential. While certain individuals might not see any harm
quoting it on the Web from an email sent, it is always advisable to get a person’s consent prior to
publishing anything. While the person might give consent,
they might not realize the full implications, on
line privacy issues, or impact of having it published online. Therefore, it would be wise to consider it very
carefully before even asking for their approval.

Copyright on the Internet

Copyright gives autho
rs, artists and others the right to exclude others from using their works. Federal rights
arise automatically when a protected work has been fixed in a tangible medium such as a floppy disk or
hard drive. A poem or picture is as much protected on a disk as

on a piece of paper or canvas. There are
however certain limits to Copyright as under:

∙ Copyright is the right to exclude, not to publish: Copyright does not give its owners the right to sell or
distribute, for example, libelous email messages. Also, of
course, works that are obscene or invade
another’s rights of privacy or publicity are not publishable just because they happen to be covered by

∙ Basic limits to copyright: Although email messages and web pages may enjoy copyright protection, ri
are subject to several fundamental limits. For example, only expression is protected, not facts or ideas.
Also, later works that merely happen to be very similar (or even identical) to earlier works do not infringe
if they were, in fact, independently

created. Sources of general information on those topics are listed below:

∙ Fair use: Fair use is one of the most important and least clear cut, limits to copyright. It permits some use
of others’ works even without approval. But when? Words like "fair" o
r "reasonable" cannot be precisely
defined, but here are a few benchmarks.

∙ Uses that advance public interests such as criticism, education or scholarship are favored particularly if
little of another’s work is copied. Uses that generate income or interfe
re with a copyright owner’s income
are not. Fairness also means crediting original artists or authors. (A teacher who copied, without credit,
much of another’s course materials were found to infringe.)

· Commercial uses of another’s work are also disfavore
d. For example, anyone who uses, without explicit
permission, others’ work to suggest that they endorse some commercial product is asking for trouble! Yet,
not all commercial uses are forbidden. Most magazines and newspapers are operated for profit; they a
re not
automatically precluded from fair use.

· Licenses implied in fact: Fair use allows limited uses of another’s work without approval, but other uses
may be approved by implication. For example, when a message is posted to a public email list, both
rwarding and archiving seem to be implicitly allowed. It is reasonable to assume that such liberties are
okay if not explicitly forbidden. However, when forwarding, archiving or, say, using part of a prior
message to respond to an earlier message, is caref
ul not to change the original meaning. No one implicitly
authorizes another to attribute to him or her embarrassing (or worse) message they did not write!

The Digital Millennium Copyright Act (DMCA) is a United States copyright law which implements two
6 WIPO treaties. It criminalizes production and dissemination of technology, devices, or services that
are used to circumvent measures that control access to copyright works (commonly known as DRM) and
criminalizes the act of circumventing an access contro
l, even when there is no infringement of copyright
itself. It also heightens the penalties for copyright infringement on the Internet. Passed on October 8, 1998
by a unanimous vote in the United States Senate and signed into law by President Bill Clinton o
n October
28, 1998, the DMCA amended title 17 of the U.S. Code to extend the reach of copyright, while limiting the
liability of Online Providers from copyright infringement by their users.

On May 22, 2001, the European Union passed the EU Copyright Direct
ive or EUCD, similar in many ways
to the DMCA.

Safe Harbor Principles:

The US Safe Harbor Arrangement is a streamlined process for US companies to
comply with EU Directive on the protection of personal data, developed by the US Department of
Commerce in co
nsultation with EU.

US companies can opt into the program as long as they adhere to the 7 principles outlined in the Directive.
These principles must provide:

∙ Notice

Individuals must be informed that their data is being collected and about how it will
be used.

∙ Choice

Individuals must have the ability to opt out of the collection and forward transfer of the data to
third parties.

∙ Onward Transfer

Transfers of data to third parties may only occur to other organizations that follow
adequate data pro
tection principles.

∙ Security

Reasonable efforts must be made to prevent loss of collected information.

∙ Data Integrity

Data must be relevant and reliable for the purpose it was collected for.

∙ Access

Individuals must be able to access information

held about them, and correct or delete it if it is

∙ Enforcement

There must be effective means of enforcing these rules.

Companies must also re
certify every 12 months. They can either perform a self
assessment to verify they
comply with the
se principles, or hire a third
party to perform the assessment. There are also requirements
for ensuring that appropriate employee training and an effective dispute mechanism is in place.

Other miscellaneous legal issues:

There are a number of laws already

enacted by developed countries &
many more are under implementation. Some of these are discussed here:

Email Marketing:

Email has a number of regulations implemented by the US government.[ "CPACSA"
[Consumer Protection Against Computer Spyware Act]. Email

marketing (opt
in Vs. opt
out, Vs. double
in) View IAB, Interactive Advertising Bureau Standards and Guidelines

email Guidelines. Share your
comments at unsolicited b2b and b2c emails "The Email Junk Mail Trash Heap" Pop up ads, email, instant
ngers, consumer privacy information, and online security threats. Ads that make you double click at a
wrong location and the very click installs some sort of adware, spy ware, or malware on your computer.

Consumers Survey Scams and Hoaxes:
This covers Phon
e "Survey" Scams, "Charity" Appeals for Chain
mail, online security, and spam. Another area that can be a real pain, is "The Never
Ending Hoax Viruses".

Website Issues:

Unethical redirects to other pages with completely different information than what wer
shown in the search results. Accidental duplicate B2B versus B2C marketing pages or others, OR
additional search engine spam (repetitive results fed back in to self) AND the copying of search engine
results should be deleted.

Advertising and Keywords Sca

Unethical spyware/adware companies are promoting themselves as:
"get to the top of Google, Yahoo, and MSN search guaranteed for your keywords." These companies are
using the term "Search Engine Data Merging." Spy ware and ad ware is installed on some u
ser’s computers
then they sell keywords to professionals for thousands of dollars a year. This is a huge money making scam
which is illegal.

Cyber squatting:

Cyber squatting is registering, trafficking in, or using a domain name with bad
intent to pr
ofit from the goodwill of a trademark belonging to someone else. The cyber squatter then offers
to sell the domain to the person or company who owns a trademark contained within the name at an inflated
price. The term is derived from "squatting," which is
the act of occupying an abandoned or unoccupied
space or building that the squatter does not own, rent or otherwise have permission to use. Cyber squatting
however is different in that the domain names that are being "squatted" are (sometimes but not alway
being paid for through the registration process by the Cyber squatters. Cyber squatters usually ask for
prices far greater than that at which they purchased it. Some cyber squatters put up derogatory remarks
about the person or company the domain is mea
nt to represent in an effort to encourage the subject to buy
the domain from them. Others post paid links via Google and other paid advertising networks to the actual
site that the user likely wanted, thus monetizing their squatting. As with many controver
sial issues, some
argue that the dividing line of cyber squatting is difficult to draw, or that the practice is consistent with a
capitalistic and free market ethos.

Cyber squatting is one of the most loosely used terms related to domain name intellectual
property law and
is often incorrectly used to refer to the sale or purchase of generic domain names such as

Web Scraping & Web Spidering:

Web scraping generically describes any of various means to extract
content from a website over HTTP for t
he purpose of transforming that content into another format suitable
for use in another context. A typical example application for web scraping is a web crawler that copies
content from one or more existing websites in order to generate a scraper site. The

result can range from
fair use excerpts or reproduction of text and content, to plagiarized content. In some instances, plagiarized
content may be used as an illicit means to increase traffic and advertising revenue.

Although scraping is against the terms

of use of some websites, the enforceability of these terms is unclear.
Outright duplication of original expression is, of course, illegal, but the US courts have ruled that
duplication of facts is allowable. U.S. courts have acknowledged that users of "sc
rapers" or "robots" may
be held liable for committing trespass to chattels, which involves a computer system itself being considered
personal property upon which the user of a scraper is trespassing. However, to succeed on a claim of
trespass to chattels,
the plaintiff must demonstrate that the defendant intentionally and without
authorization interfered with the plaintiff’s possessory interest in the computer system and that the
defendant’s unauthorized use caused damage to the plaintiff. Not all cases of
web spidering brought before
the courts have been considered trespass to chattels.

E mail Spoofing:
mail spoofing is a term used to describe fraudulent email activity in which the sender
address and other parts of the email header are altered to appear a
s though the email originated from a
different source. E
mail spoofing is a technique commonly used for spam e
mail and phishing to hide the
origin of an e
mail message. By changing certain properties of the e
mail, such as the From, Return
and Reply
To fields (which can be found in the message header), ill
intentioned users can make the e
appear to be from someone other than the actual sender. It is often associated with website spoofing which
mimic an actual, well
known website but are run by an
other party either with fraudulent intentions or as a
means of criticism of the organization’s activities. The result is that, although the e
mail appears to come
from the email indicated in the "From" field (found in the email headers) it actually comes f
rom another e
mail address, probably the same one indicated in the "Reply To" field; if the initial e
mail is replied to, the
delivery will be sent to the "Reply To" e
mail, that is, to the spammer’s email.

Meta elements or Meta tags and Key words:

These a
re used for search engine optimization to improve
ranking on search engines like Google or Yahoo. Meta elements are HTML or XHTML elements used to
provide structured metadata about a web page. Such elements must be placed as tags in the head section of
HTML or XHTML document. Meta elements can be used to specify page description, keywords and any
other metadata not provided through the other head elements and attributes.

They have been the focus of a field of marketing research known as search engine opt
imization (SEO),
where different methods are explored to provide a user’s site with a higher ranking on search engines. In
the mid to late 1990s, search engines were reliant on meta data to correctly classify a web page and
webmasters quickly learned the c
ommercial significance of having the right meta element, as it frequently
led to a high ranking in the search engines and thus, high traffic to the web site.

Search engines such as Info seek and AltaVista popularized the keywords attribute in 1995, and its

popularity quickly grew until it became one of the most commonly used Meta elements. By late 1997,
however, search engine providers realized that information stored in meta elements, especially the keyword
attribute, was often unreliable and misleading, a
nd at worst, used to draw users into spam sites.
(Unscrupulous webmasters could easily place false keywords into their Meta elements in order to draw
people to their site.)

While search engine optimization can improve search engine ranking, consumers of su
ch services should
be careful to employ only reputable providers. Given the extraordinary competition and technological
craftsmanship required for top search engine placement, the implication of the term "search engine
optimization" has deteriorated over t
he last decade. Where it once implied crafting a website into a state of
search engine perfection, for the average consumer it now implies something on the order of making a
website search engine tolerable.

Click Fraud:

Click fraud is a type of internet cr
ime that occurs in pay per click online advertising when a
person, automated script, or computer program imitates a legitimate user of a web browser clicking on an
ad, for the purpose of generating a charge per click without having actual interest in the t
arget of the ad’s
link. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks
being a key beneficiary of the fraud.

Use of a computer to commit this type of Internet fraud is a felony in many jurisdictions
, for example as
covered by Penal code 502 in California, USA, and the Computer Misuse Act 1990 in the United Kingdom.
There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a
competitor’s advertising budget.

Pay per click advertising or PPC advertising is an arrangement in which webmasters (operators of web
sites), acting as publishers, display click able links from advertisers, in exchange for a charge per click. As
this industry evolved, a number of advertis
ing networks developed which acted as middlemen between
these two groups (publishers and advertisers). Each time a (believed to be) valid web user clicks on an ad,
the advertiser pays the advertising network, which in turn pays the publisher a share of thi
s money. This
revenue sharing system is seen as an incentive for click fraud.

The largest of the advertising networks, Google’s AdWords/AdSense and Yahoo! Search Marketing, act in
a dual role, since they are also publishers themselves (on their search engi
nes). According to critics, this
complex relationship may create a conflict of interest. For instance, Google loses money to undetected click
fraud when it pays out to the publisher, but it makes more money when it collects fees from the advertiser.
e of the spread between what Google collects and what Google pays out, click fraud directly and
invisibly profits Google.

Click Wrap Agreement:

A click wrap agreement (also known as a "click through" agreement or click
wrap license) is a common type of agr
eement (often used in connection with software licenses). Such forms
of agreement are mostly found on the Internet, as part of the installation process of many software
packages, or in other circumstances where agreement is sought using electronic media. T
he name "click
wrap" came from the use of "shrink wrap contracts" in boxed software purchases, which "contain a notice
that by tearing open the shrink
wrap, the user assents to the software terms enclosed within".

wrap is the electronic equivalent of

the shrink
wrap method, which allows users to read the terms of
the agreement before accepting them. The content and form of click wrap agreements vary widely. Most
click wrap agreements require the end user to manifest his or her assent by clicking an "o
k" or "agree"
button on a dialog box or pop
up window. A user indicates rejection by clicking cancel or closing the
window. Upon rejection, the user can no longer use or purchase the product or service. Classically, such a
it contract was
described as a "contract of adhesion, which is a contract that lacks
bargaining power, forcing one party to be favored over the other". The terms of service or license do not
always appear on the same web page or window, but they are always accessible befo
re acceptance. If the
terms of service are not visible, courts have found the notice requirement to be lacking.


Spamming (’Spam’ is short for stupid, pointless, annoying message) is the abuse of electronic
messaging systems to indiscriminately se
nd unsolicited bulk messages. While the most widely recognized
form of spam is e
mail spam, the term is applied to similar abuses in other media: instant messaging spam,
Usenet newsgroup spam, Web search engine spam, spam in blogs, wiki spam, mobile phone
spam, Internet forum spam and junk fax transmissions.

Spamming is economically viable because advertisers have no operating costs beyond the management of
their mailing lists, and it is difficult to hold senders accountable for their mass mailing
s. Because the barrier
to entry is so low, spammers are numerous, and the volume of unsolicited mail has become very high. The
costs, such as lost productivity and fraud, are borne by the public and by Internet service providers, which
have been forced to
add extra capacity to cope with the deluge. Spamming is widely reviled, and has been
the subject of legislation in many jurisdictions.

Concept of Open Data:

Open Data is a philosophy and practice requiring that certain data are freely
available to everyone
, without restrictions from copyright, patents or other mechanisms of control. It has a
similar ethos to a number of other "Open" movements and communities such as Open Source and Open
access. However these are not logically linked and many combinations of

practice are found. The practice
and ideology itself is well established but the term "Open Data" itself is recent. Much of the emphasis in
this entry is on data from scientific research and from the data
driven web. In some cases Open Data may
be conside
red as more properly Open Metadata and there is not yet a consistent formalization.

Open Data is often focused on non
textual material such as maps, genomes, chemical compounds,
mathematical and scientific formulae, medical data and practice, bioscience an
d biodiversity. Problems
often arise because these are commercially valuable or can be aggregated into works of value. Access to, or
use of, the data are controlled by organisations, both public and private. Control may be through access
restrictions, l
icenses, copyright, patents and charges for access or re
use. Advocates of Open Data argue
that these restrictions are against the communal good and that these data should be made available without
restriction or fee. In addition, it is important that the
data are re
usable without requiring further permission,
though the types of re
use (such as the creation of derivative works) may be controlled by license.

Identity Theft & Internet Fraud:

Identity theft on the internet is a major problem. This issue is r
elated to
online B2C ethical business issues and legal issues.

Identity theft on the internet happens in following ways:

· Financial Identity Theft (using another’s name and identity to obtain goods and services)

· Identity Cloning (using another’s inform
ation to assume his or her identity in daily life)

· Business/Commercial Identity Theft (using another’s business name to obtain credit)

The following techniques are used for obtaining relevant information for identity theft:

∙ Stealing mail or rummaging t
hrough rubbish (dumpster diving)

∙ Stealing payment or identification cards or the information on them ("drive
by" scanning of RF

∙ Eavesdropping on public transactions in ATMs & internet cafes to obtain personal data (shoulder surfing)

∙ Stealing personal information in computer databases (Trojan horses, hacking)

∙ Infiltration of organizations that store large amounts of personal information on computer systems

∙ Impersonating a trusted organization in an electronic communication (phis

∙ Browsing social network (My Space, Face book, Bebo etc) sites, online for personal details that have been
posted by users

∙ Simply researching about the victim in government registers, at the internet, Google, and so on.

E Commerce Laws in India:

he laws pertaining to E

Commerce have been included in The Information Technology Act 2000 (ITA
2000) as amended by The Information Technology Amendment Act 2006. The objects & reasons of this act
as stated by the Govt. of India are as under:

1. The Infor
mation Technology Act was enacted in the year 2000 , with a view to give a fillip to the growth
of electronic based transactions, to provide legal recognition for e
commerce and e
transactions, to
facilitate e
governance, to prevent computer based crimes a
nd ensure security practices and procedures in
the context of widest possible use of information technology worldwide.

2. With proliferation of information technology enabled services such as

governance, e
commerce and e
transactions, protection of per
sonal data and information and
implementation of security practices and procedures relating to these applications of electronic
communications have assumed greater importance and they require harmonization with the provisions of
the Information Technology
Act. Further, protection of Critical Information Infrastructure is pivotal to
national security, economy, public health and safety, so it has become necessary to declare such
infrastructure as a protected system so as to restrict its access.

3. A rapid in
crease in the use of computer and internet has given rise to new forms of crimes like
publishing sexually explicit materials in electronic form, video voyeurism and breach of confidentiality and
leakage of data by intermediary, e
commerce frauds like imper
sonation commonly known as Phishing,
identity theft and offensive messages through communication services. So, penal provisions are required to
be included in the Information Technology Act, the Indian Penal Code, the Indian Evidence Act and the
Code of Cr
iminal Procedure to prevent such crimes.

4. The United Nations Commission on International Trade Law (UNCITRAL) in the year 2001 adopted the
Model Law on Electronic Signatures. The General Assembly of the United Nations by its resolution No.
56/80, dated 1
2th December 2001, recommended that all States accord favourable consideration to the said
Model Law on Electronic Signatures. Since the digital signatures are linked to a specific technology under
the existing provisions of the Information Technology Act,

it has become necessary to provide for alternate
technology of electronic signatures for bringing harmonization with the said Model Law.

5. The service providers may be authorized by the Central Government or the State Government to set up,
maintain and
upgrade the computerized facilities and also collect, retain and appropriate service charges for
providing such services at such scale as may be specified by the Central Government or the State

This Act covers the following areas:

∙ Digital and

Electronic Signature

∙ Electronic Governance

∙ Attribution, Acknowledgement Despatch of Electronic Records

∙ Secure Electronic Records and Secure Digital Signatures

∙ Regulation of Certifying Authorities

∙ Electronic Signature Certificates

∙ Duties of Sub

∙ Penalties, compensation and Adjudication

∙ The Cyber Appellate Tribunal

∙ Offences

∙ Network Service Providers Not to be liable in certain cases

∙ Examiner of Electronic Evidence

Q. 6 What are the major challenges in e marketing?

Challenges in e marketing

A bad reputation
: A lot of money spent on Internet marketing over the past few years was wasted. Why?
One big reason is that the stock market distorted company valuations and rewarded (or at least failed to
penalize) pro
fligate attempts to drive traffic or acquire customers

even if only temporarily.

Now e
marketing has a bad reputation. And half
baked metrics such as click
through rates (CTRs) still
paint a picture of inefficacy and failure. Plenty of evidence shows t
hat the Web is the most cost
branding medium available, but the Net's reputation will need to be rebuilt one success at a time.

Marketing integration
: Most major marketing efforts utilize multiple channels, on

and offline. Email,
Web advertisin
g, and viral Internet marketing should serve concrete, measurable objectives as part of an
integrated campaign.

But coordinating e marketing with other marketing efforts is an underdeveloped art. Some companies have
successfully linked the Net to under
cap promotions or to teaser campaigns for new product launches.
But all too often the Internet is tacked on at the end of a marketing plan. Determining the strengths (and
weaknesses) of the Net relative to other channels is a project we all should be wor
king on.

: Imagine recognizing the needs of customers as they enter your site. Over time, through implicit
and explicit data, you learn about the preferences of each and can serve customers based on their habits,
needs, and purchase drivers. You buil
d deep loyalty, and you increase your share of your customers'

: Things have quieted down somewhat since Double
Click backed away from its plans to merge its
online data with offline Abacus data. But the industry's privacy issues have not
been sufficiently resolved.

In developing countries, respondents painted a much different picture.

Respondents in emerging countries
listed the following as major obstacles:

Insufficient local content

Costs associated with domestic plans

associated p
erformance and costs

Lack of content in native language

Internet security
: There are few obstacles in selling product online. Based on the research done by
Christina (1997), they have summarize a few problems will arise in using internet as a shopping medi
One of the problems is security. The issues of security are major obstacles in online transactions. For
example, MasterCard had expressly discouraged the use of credits card to buy goods and the internet
because it is a public network and the flow of c
redit information is vulnerable to computer hackers. The
main obstacle that prevents Internet users from transacting over the Internet is security. This issue is not
only the major concern among Malaysian consumers but of users worldwide. Regardless of the

security issues have been creating unnecessary anxieties for many businesses and consumers

A survey conducted early in 2000 revealed that, while the number of online shoppers is expected to
increase in the foreseeable future, security or financ
ial transactions remain a key concern to consumers.
Shoppers who have purchased online only once recorded a higher concern with this medium, although this
trepidation decreases slightly with repeat purchases. It is interesting to note that „computer viruse
s and
„response times are of greater concern to online shoppers than „financial transaction security. Perhaps
indicative of the future trend of online shopping, the primary concerns of those who purchased more than
once are „response time and „junk mail/in
trusive marketing.