Digital Marketing Strategy Text and Cases

9780131831773

0131831771

This book began in 1999 as the impact of the Internet was becoming clear. I initiated a course on Internet marketing strategy with the intent of inserting the Internet's potential within a framework of strategic marketing. Although initially some argued that the Internet was a revolution and that "old" marketing would be replaced with new concepts and methods, it soon became clear that the Internet would not be a substitute but rather a complement to existing strategic marketing practices. I remember in 1999, after I gave a lecture stressing the fundamental concept of understanding customer needs and building a viable business model, a student raised her hand and said, "Professor Urban, you do not get it! It's all about the new game, seizing the high ground and capturing eyeballs." I responded that that may be true but that it was my feeling that fundamentals would rule and that she should "stay tuned" to developments over the next year. To her credit, at the end of 1999 when it was evident that the dot-corns were in trouble, this student e-mailed me, saying, "Well, that was not such a bad course! Could you send me the lecture notes again?" We have gone from the optimism of 1999 to a crash of expectations about the Internet in 2001. If the Internet was too hyped and expectations were too high, now the opposite has occurred. Students' expectations are unrealistically low. However, all measures of digital impact are up--even on-line retailing is up over 25 percent per year for the past three years and up even when traditional retail sales were often flat. In 2002, after the same general lecture on customer needs and business models, a hand went up in the classroom, and I thought, "Oh no, not again!" But this time the student wanted to know why I did not teach these fundamental ideas to those who jumped into Internet start-ups and dramatically failed. Students are now open to learning the essential principles of marketing within a technological environment. They have a more realistic view of both the potential and the limitations of -digital technologies. Large companies were not fooled by the hype and crash of dot-corns. Since 2000, they have consistently allocated more resources to utilizing the Internet and other digital technologies. The impact has been to improve the efficiency and effectiveness of marketing. Digital technologies have become a powerful method of improving marketing practice in a multichannel environment. As I began the course in 1999, I found a shortage of up-to-date cases on digital marketing and few texts that stressed a strategic perspective of utilizing the new technologies. Therefore, I set out, with the help of my teaching assistants, to write a .,set of new cases. Fourteen cases were created, and nine are included in this book. I have abstracted the text notes from my lectures and from the comments of guest speakers and managers directly involved in the cases. The structure of the book draws on the strategic framework fromAdvanced Marketing Strategyby Glen Urban and Steve Star, but the digital focus and cases are all new. During the past four years, I was codirector of the eBusiness Center at The Massachusetts Institute of Technology (MIT), so I benefited from discussions with our sponsors, who include Hewlett Packard, Intel, General Motors, British Telecom, United Parcel Service, Mastercard, Merrill Lynch, Cisco, Dell, Price waterhouseCoopers, and the Interpublic Group. This center contained few dot-com companies, but the major gains from the Internet have accrued to existing firms. Although some new companies like eBay, Travelocity, and Amazon have been successful, the majority of gains have occurred in the improvement of marketing in large established companies. This book discusses the concepts of understanding customer needs and behavior, formulating a strategy to fill needs, implementing effectively and efficiently, and building a trusting relations