CONTENTS PART 1 A FRAMEWORK FORINTERNET MARKETING ... 1 CHIPTER 1 Introduction ... 2 The Original WWW ... 2 Commercial Beginnings of the Web ... 4 The Noncommercial Net : 1969-1994 ... 4 The Web Takes Off ... 6 The Virtuous Web Cycle ... 6 A.Com World ... 8 Dramatic Growth ... 8 Innovative Applications ... 10 Consumer-to-Consumer Commerce ... 14 Customers as Partners ... 17 20th Century Marketing and Technology ... 17 An Internet Marketing Methodology ... 21 Our Approach ... 24 Book Material ... 24 Endnotes ... 26 CHAPTER 2 The Digital World ... 30 Better, Faster, Cheaper ... 30 Being Digital ... 32 Digital Technology ... 32 Digital Benefits for Marketing ... 33 Moore's Law and Digital Costs ... 33 What Is Moore's Law? ... 33 The Power of Exponential Changes ... 35 Using Moore's Law ... 36 Will Moore's Law Continue? ... 38 Digital Environments ... 39 The Folly of Business-as-Usual ... 39 Murray's Digital Storytelling Framework ... 39 Digital Convergence ... 46 Interactive Multimedia ... 46 How Digitizing Works ... 50 Digitizing Marketing Processes ... 54 Steps in Digitizing Marketing ... 54 Using the Business Process Point of View ... 55 Endnotes ... 58 CHAPTER 3 Neworks ... 60 The Global Matrix ... 60 Marketing with Networks ... 62 Networks Are a Social Technology ... 62 Ubiquity ... 63 Self-Fulfilling Expectations, Network Size, and Hype ... 68 Sharing ... 69 Specialization ... 7j Virtual Value Activities ... 72 Why the Internet Works ... 74 In the Beginning : Reliability and Efficiency ... 74 A Key to Growth : Scalability Through Standards ... 78 When the Internet Stumbles ... 79 Breakdowns and Outages ... 79 Delay and Lags ... 80 Networks Inside Companies ... 85 Endnotes ... 88 CHAPTER 4 Individuals Online ... 92 The Dell Triangle ... 92 Online Marketing to Individuals ... 94 Interactivity and Customer Contacts ... 94 Direct Communication ... 95 Individual Choice ... 99 Friendly Technology ... 101 Online Consumer Behavior ... 104 The Media Equation ... 105 Social Cues ... 106 Quality Cues ... 108 Cognitive Difficulty ... 110 Flow ... 113 Web Users ... 114 Income and Internet Access ... 114 Other Important Demographic Variables ... 117 Language and Culture ... 119 Endnotes ... 121 CHAPTER 5 Web Business Models ... 124 Do You Yahoo? ... 124 Web Benefits to Firms ... 126 The Range of Web Benefits ... 126 Improvement-Based Benefits to Firms ... 126 Revenue-Based Business Models ... 131 Closed Loop Marketing ... 139 Marketing Actions and Responses ... 139 Web Chains ... 141 Evaluating Web Chains ... 144 Endnotes ... 149 PART 2 ONLINE MARKETING THEMES ... 151 CHAPTER 6 Customer Support and Online Quality ... 152 Solving Problems Online ... 152 Lower Costs ... 154 Online Publishing ... 154 Electronic Distribution ... 155 Virtual Problem Solving ... 156 Inexpensive Communications ... 157 Online Quality Enhancements ... 160 Quality and Virtual Value Activities ... 160 Customer Satisfaction and Online Support ... 163 Justifying Online Customer Support ... 167 Market Versus Customer Methods ... 167 The Cost-Quality Tradeoff ... 168 Closed Loop Web Enhancements ... 171 Profitable Web Enhancements ... 174 Co-Production ... 180 Endnotes ... 181 CHAPTER 7 Perseimaflzatlon ... 184 The Daily Me ... 184 Personalization and Marketing ... 186 Choice Assistance ... 186 Customization ... 187 Relationship Marketing ... 188 Personalization and the DNI Framework ... 189 Personalization and Consumer Benefits ... 190 The "Democracy of Goods" ... 190 Turning Experience Goods into Search Goods ... 191 Personalization and the Total Product ... 193 The Total Product in Banking ... 193 The Personalization Balance ... 195 Implementing Personalization ... 197 Online Mass Customization ... 198 Transparent Customization ... 201 Collaborative Customization ... 202 The Critical Role of an Address ... 202 Personalization Methodologies ... 204 Endnotes ... 219 CHAPTER 8 New Product Development and the Net ... 222 High-Tech Battles and the Browser Wars ... 222 The Need for Speed ... 224 Internet Time ... 224 Business Implications of Internet Time ... 225 Rapid New Product Development ... 228 Traditional New Product Development ... 228 Rapid New Product Development ... 229 Early Feedback ... 233 Rapid Release ... 235 Standards Marketing ... 236 The Importance of Standards ... 236 The Two Types of Standards ... 237 Standards Strategy ... 241 Information Acceleration ... 245 Information Acceleration in Market Research ... 245 Does Information Acceleration Work? ... 246 Endnotes ... 248 CHAPTER 9 TraIls and Brand Building ... 252 Smart Browsing ... 252 The Battle for Web Traffic ... 254 Value and Scarcity ... 254 Elements of a Web Traffic Plan ... 256 Traffic Builders ... 260 Domain Names ... 261 Domain Name Goals ... 261 Defining Domain Names ... 262 The Brand-Domain Connection ... 263 Portal Presence ... 267 The Importance of Gateways ... 267 Portal Problems ... 267 Managing Portal Presence ... 267 The Emergence of Specialized Portals ... 270 Publicity and Word of Mouth ... 270 Electronic Word of Mouth and Diffusion ... 270 Opinion Leaders Online ... 273 URL Placement ... 274 Banners and Buttons ... 275 The Rise of Interactive Advertising ... 275 Online Advertising Effectiveness ... 278 Online Advertising May Not Fit All Companies ... 281 Evaluating Traffic Sources ... 283 Measuring the Returns of Traffic Sources ... 283 Online Traffic Tracking Capabilities ... 284 Endnotes ... 287 CHAPTER 10 Online Community ... 290 Your Family Tree ... 290 Community Goes Online ... 292 Net Gain or Silicon Snake Oil? ... 292 Defining Online Community ... 295 Fundamentals of Online Community ... 297 Online Tools ... 297 Rules ... 301 Collaboration ... 303 Repeat Use ... 308 Community, Private, and Public Goods ... 309 Launching Online Communities ... 311 Building Hybrid Communities ... 311 Mirror Existing Community Benefits ... 314 Emphasize Growth First ... 320 Endnotes ... 325 CHAPTER 11 Pricing in an Online World ... 328 The Power of Pricing ... 328 Price Sensitivity and the Internet ... 330 The Standard Pricing Answer ... 330 Price Sensitivity and Online Information ... 331 Real-Time Pricing ... 338 When Simple Pricing Approaches Fail ... 338 Lessons from Other High-Speed Markets ... 339 Auctions ... 339 Online Rental Markets ... 344 Yield Management ... 345 Bundling ... 348 Endnotes ... 352 CHAPTER 12 E-Commerce ... 356 Xmas.com ... 356 E-Commerce Takes Off ... 358 E-Commerce Influence, Ordering, and Buying ... 358 F-Commerce Impact on Web Sites ... 359 Expands Web-Site Scope ... 362 The Pace of E-Commerce ... 367 E-Commerce Buying ... 367 Price ... 368 Assortment and Convenience ... 372 Entertainment ... 374 E-Commerce and Distribution Strategy ... 376 Channel Choice with F-Commerce ... 376 Channel Conflict ... 377 E-Commerce and the Proper Distribution System ... 379 An E-Commerce Case Study ... 384 An E-Commerce Analysis ... 384 Salute.com ... 384 Competing Against the Net ... 390 Traditional Retailers ... 390 Transitioning to Virtual ... 393 Endnotes ... 394 PART 3 IMPLEMENTATION AND ORGANIZATION ... 397 CHAPTER 13 Internet Marketing Plans ... 398 The Strange Case of K-Tel ... 398 Internet Marketing Plans ... 400 Endnotes ... 401 CHAPTER 14 Organizing for the Net ... 402 E-Schwab to Schwab ... 402 Internet Marketing Matures ... 404 Aligning Structure and Strategy ... 404 Avoiding Legal Pitfalls ... 406 Internet Marketing Departments ... 408 Real-Time Marketing ... 408 Information Management ... 417 Potential Legal Problems ... 423 Online Marketing and the Law ... 423 Strategic Legal Issues for Marketers ... 424 Real-Time Legal Issues for Marketers ... 428 Looking Forward ... 433 Ending Centuries ... 433 Thirty More Years of Digital Power ... 435 Endnotes ... 438 GLOSSARY ... 441 INDEX ... 445