Marketer's Toolkit (11)- Interactive Marketing - New Channel, New Challenge(Harvard Business School HBS Note).pdf
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Interactive Marketing:
New Channel,
New Challenge
EXCERPTED FROM
Marketer’s Toolkit:
The 10 Strategies You Need to Succeed
Harvard Business School Press
Boston, Massachusetts
copying or posting is an infringement of copyright. permissions@hbsp.harvard.edu or 617.783.7860
ISBN-10: 1-4221-0264-5
ISBN-13: 978-1-4221-0264-0
2645BC
Copyright 2006 Harvard Business School Publishing Corporation
All rights reserved
Printed in the United States of America
This chapter was originally published as chapter 11 of
Marketer’s Toolkit
,
copyright 2006 Harvard Business School Publishing Corporation.
No part of this publication may be reproduced, stored in or introduced into a retrieval system,
or transmitted, in any form, or by any means (electronic, mechanical, photocopying,
recording, or otherwise), without the prior permission of the publisher. Requests for
permission should be directed to
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,
or mailed to Permissions,
Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
copying or posting is an infringement of copyright. permissions@hbsp.harvard.edu or 617.783.7860
11
Interactive Marketing
New Channel, New Challenge
Key Topics Covered in This Chapter
•
The rising tide of online commerce
•
E-mail campaigns and best practices
•
Web-based merchandising best practices
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uses the Internet to advertise and sell goods and services
to consumers, business, or nonprofit organizations and
government. At the highest level, the traditional issues of marketing
apply. Like their offline cousins, online marketers must give the same
attention to product, price, and promotion. They must think just as
deeply about segmenting, targeting, positioning, creating awareness,
building traffic, and motivating people to buy.
As one Web marketing expert put it, Internet marketing is “a
daily grind of doing lots and lots of simple things well. It’s about
being useful. It’s about creating a Web site that is convenient and
fast.”
1
The element that differs more than anything else from tradi-
tional marketing is “place,” for the Internet represents a new and
unique channel of distribution. This chapter examines the two key
forms of Internet marketing: e-mail and Web-based merchandising.
Growing Online Sales
The online sales of consumer and business products have grown
tremendously in recent years, and that growth is forecast to continue
(see “Areas of Fastest Online Retail Growth”). On the retail side,
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T
HE TERM
Internet marketing
refers to any activity that
Interactive Marketing
3
Areas of Fastest Online Retail Growth
A study conducted by Forrester Research on behalf of Shop.org,
a unit of the National Retail Federation, projected the most rap-
idly growing categories of retail online sales for 2005.
Projected
Projected total
growth rate
sales (2005)
Tr avel
20%
$62.8 billion
Cards and gifts
30%
$4.8 billion
Cosmetics and fragrances
33%
$1.6 billion
Jewelry and luxury items
28%
$3.2 billion
SOURCE: Mylene Mangalinda, “Online Retail Sales Are Expected to Rise to $172 Billion This Year,”
Wall Street Journal
,May 24, 2005, D5.
2004 U.S. online retail sales reached more than $89 billion—$26 bil-
lion during the Christmas holiday season alone—and Jupiter Research
has forecast that those sales will continue to grow at a compound an-
nual rate of 17 percent through 2008. Others forecast an even
higher rate of growth. As if to confirm that rosy outlook, first-quar-
ter 2005 online sales in the United States leaped 24 percent above
sales during the same period of 2004, according to the U.S. De-
partment of Commerce.
Although 2004 Internet sales account for only about 5 percent
of total U.S. retail sales for that year, they may represent only the tip
of the iceberg as far as the Internet’s influence on buying behavior is
concerned. It is generally believed that 30 percent of all purchases
made in bricks-and-mortar retail stores are influenced by prepur-
chase research conducted on the Internet. In other words, millions
of consumers obtain information, read product descriptions and re-
views, and compare prices online before they go to a store to make
a purchase.
2
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