Intro_4_b - WWW.SBS.OXFORD.EDU EDUCATING LEADERS FOR 800...

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1 SAID BUSINESS SCHOOL H8. MARKETING AND THE INTERNET Dr. Jonathan Reynolds Introduction to Management WWW.SBS.OXFORD.EDU EDUCATING LEADERS FOR 800 YEARS © Jonathan Reynolds, 2008 MARKETING AND THE INTERNET The early rhetoric “The Internet is a nearly perfect market because information is instantaneous and buyers can compare the offerings of sellers worldwide. The result is fierce price competition, dwindling product differentiation, and vanishing brand loyalty.” (Kuttner, Business Week, 1998) “.. All of this brings you closer to the efficient market. .” (MacAvoy, Eastman Consulting, 1998)
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2 © Jonathan Reynolds, 2008 MARKETING AND THE INTERNET Outline Rhetoric and reality Digerati rule OK? Unravelling the long tail Effects on consumer decision processes How do we buy? Life cycle segmentation Business models on the web The merchant model: case of grocery retailing Place and play New places for consumption © Jonathan Reynolds, 2008 MARKETING AND THE INTERNET Digerati rule OK? Rhetoric Resurgence of electronic commerce: $313bn global ecommerce opportunity 2005 Social networking growth (web 2.0) 112mn blogs; +175,000 per day 215mn pieces of tagged social media 203mn registered users of eBay, generating $12.9bn in sales Podcasts, vodcasts, Skype video, IPTV . . Reality Only 8% internet users have created their own blog Only 14% have created their own web page Over 30% have rated a brand, service or person using an online system Over 39% US Internet users read blogs 58% people have either never heard of or don’t know what podcasting is 70% have never heard of IPTV Sources: Netratings, Pew Internet Project, Technorati, 2007
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3 © Jonathan Reynolds, 2008 MARKETING AND THE INTERNET Long tail: the democratisation of commerce? ‘Democratisation of commerce’ 1. Make everything available. 2. Help me find it. Chris Anderson, The Long Tail the market for lots of items that sell a few units is often as large as the market for a few items that sell a lot of units the profitably of selling a few units of a lot of items may exceed the profitability of selling a lot of units of a few items Critique Only 100% digital products? Segment focus? Costs –production, inventory, search, transaction, distribution, post-sale service etc etc ‘Good, fast, cheap and infinite” Really? Implications for retailers? Effect on bestsellers Editorial role Consumer insight Sources: Brynjolfsson et al; http://blog.guykawasaki.com/2006/07/the_wrong_tale_.html © Jonathan Reynolds, 2008 MARKETING AND THE INTERNET Effects on consumer decision processes “the actual value of transactions currently concluded online is dwarfed by the extraordinary influence the internet is exerting over purchases and behaviour carried out in the offline world” (Economist) Need recognition/problem awareness Learning about new things Need inhibitors
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Intro_4_b - WWW.SBS.OXFORD.EDU EDUCATING LEADERS FOR 800...

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