The e-Marketing Mix (part 2)

Principles of e-Marketing © Otilia OTLACAN

CHAPTER 3:

The e-Marketing Mix (part 2)

Part 2 – Relational Functions

Chap ter highlights:

- What differentiates e-marketing from offline marketing?

- the 2P + 2C + 3S relational functions of the e-marketing

- conclusions on the e-marketing mix

This chapter will introduce you the uniqueness of the e-marketing mix, given by the relational character of most online activities. We saw, in the previous chapter, how we adapt the classic marketing mix (4P’s + 3P’s) to the specifics of the internet-based activities. Now, we will see what gives e-marketing a distinctive look from the traditional offline marketing.

3.1. The Two P’s: Personalization, Privacy

Personalization

Establi shing relationships is a major objective of the e-marketing, therefore it is extremely important to identify customers at individual level and gather information about them. This is the fundamental concept of personalization, so we shall define “personalization” as any form of manifestation appeared as a consequence of recognizing / identifying a customer. For example, a cookie placed on the visitor’s computer can provide valuable information such as the connection speed: if it proves to be a slow dial-up connection, we might offer the visitor the possibility to access a website version with less graphics, flash-es, multimedia etc.

Personalization can be applied to any component of the e-marketing mix, therefore it is a moderating function, as it alters the effects of other functions.

Privacy

Collect ing information in order to achieve the goals of personalization is an extremely delicate issue. A marketer must inevitably take decisions about how exactly information will be used further on, and must establish the access policy – in other words, whoever collects personal information about customers must take decisions upon the privacy of the obtained information. It is inevitable for a marketer to face a privacy issue, as long as he / she collects information on individuals and stores them. Privacy should be seriously taken into account, since this kind of information is usually subject of legislative amendments.

3.2. The Two C’s: Customer Service, Community

Cust omer Service

Many concepts of the marketing mix include customer service activities among the support functions, necessary in order to perform a transaction (this is why we call it “transactional function” – supports and participates to transactions).

As soon as the time dimension has been added to the exchange paradigm, and considered a decisive factor of rolling towards the relational perspective, marketers were constrained to consider the necessity to offer support and assistance online. Consequently, the customer service function must be seen as an essential and continuous e-marketing mix. The service can address any aspect of product, price, promotion, place, therefore it has a moderating character.

Community

Metcalf’s Law

This law was named after Robert Metcalf and it states that the value or the power of a network raises with the square of the number of nodes the network has. In other words, if we have for example an intranet network of 4 computers, its value would be 4²=16. By adding one computer, the network value would raise to 5²=25.

The e-marketer must always have in mind the fact that the internet is actually a network. Therefore, accessing it automatically implies some level of interaction with the other individuals who are part of the network. Metcalf’s law iterates that the value of a network is proportional with the number or members the network has. Such an approach would eventually prove the positive benefits of being part of an interconnected group; the essence of this “externality” is commonly known in the networked world as “community”.

One could define the community as a series of interconnected relations, built on mutual interests with the purpose of satisfying needs of its members that cannot be satisfied at individual level.

The customers of an organization are members of a community where they interact permanently with each other (independent or influenced by the marketer). An example of benevolent interaction would consist in exchanging information about a product or, even simpler, contribution to the assembly of a FAQ’s list. We can see now that developing a community must have its place within the marketing management, even though it is not an essential, basic function.

Interac tions inside a community can refer to any other function of the e-marketing mix, therefore community is a moderating function.

3.3. The Three S’s: Site, Security, Sales Promotion

Site

Any relation taking place in a digital environment needs a digital location, accessible at anytime and from anywhere. Such a place is most commonly referred as a “site” – the most used in everyday language. We must specify that the “website” is only one of the site’s appearances. Another form of the site can be a handheld’s interface, for example a PalmPilot.

The site can be used in order to create interactions in all directions of a relational exchange: the consumer may obtain information on products, prices; may benefit the promotions or may solicit assistance of some kind.

This special place accessible through digital technologies, the site, moderates all e-marketing’s functions, therefore we will consider it a moderating function.

Security

Another essential function of the e-marketing is that of security, its necessity being obvious once we perform a transaction on the internet.

There are two major aspects of the security function:

security of performed transactions: we should ensure that no third party is in position to access a component of a developing transaction. Critical information is being submitted when buying online (such as credit card number) and the customer is exposed to major risks. Therefore, the marketer must gain customer’s trust in terms of securized payments, otherwise it is not possible to build efficient relations in a networked market.
The second aspect of security concerns the data collected and stored, containing details on the customers. A marketer must prevent third parties from accessing the database and must cooperate with the IT department in order to be aware of the systems’ security level. The marketing communications need to transmit clear and convincing, persuasive messages on security issues.

We are all aware of the continuous battle between creators of security systems and technologies, and the sophisticated means of the hackers. It is every marketer’s responsibility to keep ahead in this technology race. Even the smallest break of security, if maliciously exploited, can get an organization out of the market or at least out of the internet world.

Sale s Promotion

Sales promotion is not a specific instrument of the e-marketing only, it is a basic tool of traditional offline marketing as well, an efficient fast method to boost sales on short-term perspective.

The function of the sales promotion is based on the strategic thinking and creativity of the marketer, as well as on the ability to find more and more possibilities to develop an efficient online promotion plan. We must keep up with incoming technologies and internet applications and exploit their communication capabilities.

3.4. Conclusions to the e-Marketing Mix

We saw in the previous classes that the e-marketing is the result of the traditional marketing mix (the 4 P’s, or 4P + 3P if you consider the extended mix) and several functions specific for the e-marketing only, synthesized as 2P + 2S + 3C.

The traditional marketing mix reflects the transactional functions identified in accordance to the exchange paradigm, while the defining elements of the e-marketing are relational functions (2P + 2S + 3C).

Profess ors Kalyanam and McIntyre from Santa Clara University suggest the following graphic expression of the e-marketing mix:

The e-Marketing Mix

How to read the figure?

We notice the basic, situational functions are illustrated on top of the cube. They are static, non-moderating functions. The moderating functions lay at the bottom of the cube, suggesting they are acting as moderators of the functions above and also as moderators between each other. From the perspective of e-marketing, these last ones are the essential, defining functions.

Keywords: relational functions, personalization, privacy, community, customer service, site, security, sales promotions, Metcalf’s law.

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