Chapter 1:
Past, Present, and Future
Review Questions
1. Define e-business and e-marketing.
E-business is the continuous optimization of a firm’s business activities through digital
or information technology. E-business involves attracting and retaining the right
customers and business partners. It permeates business processes, such as product
buying and selling. It includes digital communication, e-commerce, and online research,
and it is used by every business discipline.
E-marketing is the use of information technology in the processes of creating,
communicating, and delivering value to customers, and for managing customer
relationships in ways that benefit the organization and its stakeholders. More simply
defined, e-marketing is the result of information technology applied to traditional
marketing. Another way to view it is that e-marketing is the result of information
technology applied to traditional marketing.
2. What are metrics and why are they important?
Metrics (called “performance metrics” in Chapter 2) are specific measures designed to
evaluate the effectiveness and efficiency of the e-business and e-marketing operations.
The problem occurs in trying to sort through all of these data to identify metrics that
help marketers understand how consumer behavior translates to sales and profits—
without spending too much time or money collecting, analyzing, and reporting. Because
marketers are held accountable for the return on investment for their strategies, they
scramble to identify the best measures to indicate success during and after marketing
plan implementation.
3. How does technology change traditional marketing?
E-marketing affects traditional marketing in two ways. First, it increases efficiency and
effectiveness in traditional marketing functions. Second, the technology of e-marketing
transforms many marketing strategies. The transformation results in new business
models that add customer value and/or increase company. See question 5.
4. As a technology, how does the Internet compare with the telephone?
, Referring to the property descriptions, the telephone is a mediating technology, has
global reach, and has network externality. In contrast, the Internet has properties that
create opportunities beyond those possible with the telephone, television, postal mail,
or other communication media. It is these differences that excite marketers and have
them wondering how to best capitalize on them.
5. What are some of the marketing implications of Internet technologies?
Exhibit 1.5 highlights the marketing implications of Internet technologies in the
following categories: Bits not atoms, Mediating technology, Global reach, Network
externality, Time moderator, Information equalizer, Scalable capacity, Open Standard,
Market deconstruction, and Task Automation.
6. In the context of e-marketing, what does “the medium is not the appliance” mean?
Digital media are simply data that can be sent to viewers a number of ways. Television
programs, radio shows, news, movies, books, and photos are sent by their creators in
electronic form via satellite, telephone wires, or cable, and then viewed by the audience
on receiving appliances such as televisions, computers, radios, cell phones, PDAs, and
others. Contrary to popular usage, the receiving appliance is separate from the media
type. In other words, watching a television set doesn’t mean one must be viewing
television programming. Computers can receive digital radio and television
transmissions, and television sets can receive the Web.
7. Describe the important Internet properties that affect marketing.
This is another way of asking question 5, focusing on understanding of the properties
themselves (Exhibit 1.5).
8. What fundamental changes has the Internet brought to marketing?
The balance of power is shifting to buyers—one of the most fundamental changes to
marketing. Marketers have practically lost control of brand images due to blogs, online
bulletin boards, and other online communication, and must consistently under-promise
and over-deliver. Other changes are related to increases in customer engagement and
content marketing.
1. What is the difference between inbound and outbound marketing?
Outbound marketing is a new movement among companies to reach customers using
methods that are less intrusive than traditional inbound methods like telemarketing or
mass advertising. Inbound marketing suggests allowing customers to find the
company online through websites or social media rather than focusing their marketing
efforts outbound.
2. What are the key elements of Web 2.0?
, The key elements, as explained in the chapter in greater detail, are: A power shift from
sellers to buyers; search engine results now being considered reliable; market and
media fragmentation; the importance of online content; the importance of social
networking; the improved online and offline strategy integration; marketing
investment dollars moving online; high broadband adoption at home; refined tracking
metrics; intellectual capital and property; and the long tail, as explained by Chris
Anderson.
3. What are the key elements of Web 3.0?
There are significant and realized key elements to Web 3.0 that focus on the
convergence of technologies in everyday life. Smart appliances and products are
merging technology and the products that consumers used on a daily basis. This
convergence leads to energy savings, increased shopping conveniences, instant
communication capabilities, and entertainment possibilities at nearly every location
during a normal, average day. Appliance convergence, the convergence of social media
and traditional media, the abundance of wireless networking, and the semantic Web are
all key elements explained within the chapter in greater detail.
Discussion Questions
4. The Barack Obama Campaign Story. Explain how Obama’s 2008 and 2012 campaign
capitalized on Web 2.0’s properties and trends.
Barack Obama’s campaign selected an important target market, made it
all about them (the customers), reached them via the media they prefer
(social media and mobile), and created a dialog with them, often initiated
by them. The 2008 campaign successfully mobilized voters to start the
conversations themselves and build their own groups (both online and
offline) in a perfect example of creating brand advocates. Also, the
campaign used performance metrics to measure the success of its
strategies and tactics. In 2012, Obama dug more deeply into social media,
enabling even more personal communication targeting.
5. The Barack Obama Campaign Story. In 20 years, when Web 3.0 is a reality, what
additional tactics will political campaigns use? (also refer to Exhibit 1.12)
It is almost certain that the semantic Web will play a major role in identifying and
communicating with potential supporters and voters – and then enabling those people
to get involved with campaigns more easily than ever. Tools such as wearable computer
devices, big data to create key voter insights, apps such as Google Wallet to make
campaign donations, and cloud computing to store and retrieve demographic data can
all be used to candidates’ advantage. Throughout, the key challenge will be to remain
human and communicate effectively across all channels.
, 6. What are the implications of the differences in various countries’ internet adoptions?
Digital information enhances economies through more efficient markets, more jobs,
information access, communication globalization, and lower barriers to foreign trade
and investment. However, the issue of the “digital divide” is a troubling one. The idea is
that internet adoption occurs when folks have enough money to buy a computer, the
literacy to read what is on Web pages, and the education to be motivated to do it.
Internet critics are justifiably concerned that class divisions will grow, preventing the
upward mobility of people on lower socioeconomic levels and even in entire developing
countries. In addition, as countries grapple with their increasingly advanced neighbors,
differing internet adoption rates can lead to an increased gap between their economy
and the economies of those countries adopting at a greater rate.
15. As a consumer, what difference does it make if e-business is “just
business?” Explain your answer.
Major corporations such as Microsoft and Sony recognize this eventual online
integration of e-business into everyday life. Thus the fierce competition to capture the
entertainment system market as a gateway into the home market. Soon every device
will become an interactive, customizable conduit for sales. This ubiquitous existence of
technology will create a highly specialized market for consumers allowing them to find
specialized products with greater ease. Very likely consumers’ buying habits, likes-
dislikes, and other data will be recorded thus leading to privacy issues. This practice is
already done by major credit card companies like Master Card, Visa, and American
Express. Some students may be surprised to know that they are already being tracked
by their CPU ID’s for any Pentium III processors or better. The just business part will
seamlessly come as more and more users adopt the technology of the future. (Look at
how telephones and tv changed marketing!)
1. Some economists suggest that the increase in e-commerce within the business to
business B2B market will lead to greater competition and more goods and services
becoming commoditiesmeaning they compete solely on price. How do you think this
competition is likely to affect buyers within the B2B market? How would it affect
sellers?
Competition might increase because purchasing firms can easily and quickly check
prices for competing selling firms simply by visiting their Web sites. In fact, the selling
firm will send e-mail and provide customized Web pages to make it even easier for
buyers. Sellers can similarly view competitors prices and thus may try to match them. In
this environment, firms must differentiate their products on some basis other than price
that is important to buyers: non-price competition. They can use the Web to help them
by conducting market research to see what customers want, how they perceive various
competitive products, and by using these data to modify product offerings. They further
can use the Web to customize communication to buyers thus adding value.
Past, Present, and Future
Review Questions
1. Define e-business and e-marketing.
E-business is the continuous optimization of a firm’s business activities through digital
or information technology. E-business involves attracting and retaining the right
customers and business partners. It permeates business processes, such as product
buying and selling. It includes digital communication, e-commerce, and online research,
and it is used by every business discipline.
E-marketing is the use of information technology in the processes of creating,
communicating, and delivering value to customers, and for managing customer
relationships in ways that benefit the organization and its stakeholders. More simply
defined, e-marketing is the result of information technology applied to traditional
marketing. Another way to view it is that e-marketing is the result of information
technology applied to traditional marketing.
2. What are metrics and why are they important?
Metrics (called “performance metrics” in Chapter 2) are specific measures designed to
evaluate the effectiveness and efficiency of the e-business and e-marketing operations.
The problem occurs in trying to sort through all of these data to identify metrics that
help marketers understand how consumer behavior translates to sales and profits—
without spending too much time or money collecting, analyzing, and reporting. Because
marketers are held accountable for the return on investment for their strategies, they
scramble to identify the best measures to indicate success during and after marketing
plan implementation.
3. How does technology change traditional marketing?
E-marketing affects traditional marketing in two ways. First, it increases efficiency and
effectiveness in traditional marketing functions. Second, the technology of e-marketing
transforms many marketing strategies. The transformation results in new business
models that add customer value and/or increase company. See question 5.
4. As a technology, how does the Internet compare with the telephone?
, Referring to the property descriptions, the telephone is a mediating technology, has
global reach, and has network externality. In contrast, the Internet has properties that
create opportunities beyond those possible with the telephone, television, postal mail,
or other communication media. It is these differences that excite marketers and have
them wondering how to best capitalize on them.
5. What are some of the marketing implications of Internet technologies?
Exhibit 1.5 highlights the marketing implications of Internet technologies in the
following categories: Bits not atoms, Mediating technology, Global reach, Network
externality, Time moderator, Information equalizer, Scalable capacity, Open Standard,
Market deconstruction, and Task Automation.
6. In the context of e-marketing, what does “the medium is not the appliance” mean?
Digital media are simply data that can be sent to viewers a number of ways. Television
programs, radio shows, news, movies, books, and photos are sent by their creators in
electronic form via satellite, telephone wires, or cable, and then viewed by the audience
on receiving appliances such as televisions, computers, radios, cell phones, PDAs, and
others. Contrary to popular usage, the receiving appliance is separate from the media
type. In other words, watching a television set doesn’t mean one must be viewing
television programming. Computers can receive digital radio and television
transmissions, and television sets can receive the Web.
7. Describe the important Internet properties that affect marketing.
This is another way of asking question 5, focusing on understanding of the properties
themselves (Exhibit 1.5).
8. What fundamental changes has the Internet brought to marketing?
The balance of power is shifting to buyers—one of the most fundamental changes to
marketing. Marketers have practically lost control of brand images due to blogs, online
bulletin boards, and other online communication, and must consistently under-promise
and over-deliver. Other changes are related to increases in customer engagement and
content marketing.
1. What is the difference between inbound and outbound marketing?
Outbound marketing is a new movement among companies to reach customers using
methods that are less intrusive than traditional inbound methods like telemarketing or
mass advertising. Inbound marketing suggests allowing customers to find the
company online through websites or social media rather than focusing their marketing
efforts outbound.
2. What are the key elements of Web 2.0?
, The key elements, as explained in the chapter in greater detail, are: A power shift from
sellers to buyers; search engine results now being considered reliable; market and
media fragmentation; the importance of online content; the importance of social
networking; the improved online and offline strategy integration; marketing
investment dollars moving online; high broadband adoption at home; refined tracking
metrics; intellectual capital and property; and the long tail, as explained by Chris
Anderson.
3. What are the key elements of Web 3.0?
There are significant and realized key elements to Web 3.0 that focus on the
convergence of technologies in everyday life. Smart appliances and products are
merging technology and the products that consumers used on a daily basis. This
convergence leads to energy savings, increased shopping conveniences, instant
communication capabilities, and entertainment possibilities at nearly every location
during a normal, average day. Appliance convergence, the convergence of social media
and traditional media, the abundance of wireless networking, and the semantic Web are
all key elements explained within the chapter in greater detail.
Discussion Questions
4. The Barack Obama Campaign Story. Explain how Obama’s 2008 and 2012 campaign
capitalized on Web 2.0’s properties and trends.
Barack Obama’s campaign selected an important target market, made it
all about them (the customers), reached them via the media they prefer
(social media and mobile), and created a dialog with them, often initiated
by them. The 2008 campaign successfully mobilized voters to start the
conversations themselves and build their own groups (both online and
offline) in a perfect example of creating brand advocates. Also, the
campaign used performance metrics to measure the success of its
strategies and tactics. In 2012, Obama dug more deeply into social media,
enabling even more personal communication targeting.
5. The Barack Obama Campaign Story. In 20 years, when Web 3.0 is a reality, what
additional tactics will political campaigns use? (also refer to Exhibit 1.12)
It is almost certain that the semantic Web will play a major role in identifying and
communicating with potential supporters and voters – and then enabling those people
to get involved with campaigns more easily than ever. Tools such as wearable computer
devices, big data to create key voter insights, apps such as Google Wallet to make
campaign donations, and cloud computing to store and retrieve demographic data can
all be used to candidates’ advantage. Throughout, the key challenge will be to remain
human and communicate effectively across all channels.
, 6. What are the implications of the differences in various countries’ internet adoptions?
Digital information enhances economies through more efficient markets, more jobs,
information access, communication globalization, and lower barriers to foreign trade
and investment. However, the issue of the “digital divide” is a troubling one. The idea is
that internet adoption occurs when folks have enough money to buy a computer, the
literacy to read what is on Web pages, and the education to be motivated to do it.
Internet critics are justifiably concerned that class divisions will grow, preventing the
upward mobility of people on lower socioeconomic levels and even in entire developing
countries. In addition, as countries grapple with their increasingly advanced neighbors,
differing internet adoption rates can lead to an increased gap between their economy
and the economies of those countries adopting at a greater rate.
15. As a consumer, what difference does it make if e-business is “just
business?” Explain your answer.
Major corporations such as Microsoft and Sony recognize this eventual online
integration of e-business into everyday life. Thus the fierce competition to capture the
entertainment system market as a gateway into the home market. Soon every device
will become an interactive, customizable conduit for sales. This ubiquitous existence of
technology will create a highly specialized market for consumers allowing them to find
specialized products with greater ease. Very likely consumers’ buying habits, likes-
dislikes, and other data will be recorded thus leading to privacy issues. This practice is
already done by major credit card companies like Master Card, Visa, and American
Express. Some students may be surprised to know that they are already being tracked
by their CPU ID’s for any Pentium III processors or better. The just business part will
seamlessly come as more and more users adopt the technology of the future. (Look at
how telephones and tv changed marketing!)
1. Some economists suggest that the increase in e-commerce within the business to
business B2B market will lead to greater competition and more goods and services
becoming commoditiesmeaning they compete solely on price. How do you think this
competition is likely to affect buyers within the B2B market? How would it affect
sellers?
Competition might increase because purchasing firms can easily and quickly check
prices for competing selling firms simply by visiting their Web sites. In fact, the selling
firm will send e-mail and provide customized Web pages to make it even easier for
buyers. Sellers can similarly view competitors prices and thus may try to match them. In
this environment, firms must differentiate their products on some basis other than price
that is important to buyers: non-price competition. They can use the Web to help them
by conducting market research to see what customers want, how they perceive various
competitive products, and by using these data to modify product offerings. They further
can use the Web to customize communication to buyers thus adding value.
