Contribution of the E-Tailing Wars

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The E-Marketing Mix:
A Contribution of the E-Tailing Wars
Kirthi Kalyanam
Shelby Mclntyre
Santa Clara University
In the context of the wars between the upstart Internet retailers and the existing bricks-and-mortar retailers, many
e-marketing techniques were invented. This article develops a single unifying and theoretically based taxonomyfor
e-marketing techniques: the e-marketing mix. Drawing on
the paradigms of exchange, relationships, and digital interactions in networks, 11 e-marketing functions are identiffed thatform the elements of the e-marketing mix. Nine
of the 11 e-marketing functions are considered basic,
while 7functions moderate the effects of others and are
termed overlapping. The 11 e-marketing functions provide
a categorization of the e-marketing techniques. Compared
to the conventional marketing mix, the e-marketing mix
has more overlapping elements and directly represents
personalization, an aspect of segmentation, as a basic
function. The existence of multiple elements that are basic
and overlapping in the e-marketing mix indicates that integration across elements should be more commonplace
compared to the traditional marketing mix.
In the 5-year period beginning about April 1995 and
ending in April 2000, an era known as the boom,
hundreds of businesses that used the Internet as a primary
means of transacting with consumers (e-tailers) were
taken to initial public offerings (IPO). In what is referred to
as the bust, from April 2000 to December 2001,
the common stock issued by these companies, in virtually
all cases, was trading below its issue price. Subsequently,
many of these companies terminated operations or ceased
to exist as an independent entity. The dramatic fall of these
Journal of the Academyof MarketingScience.
Volume 30, No. 4, pages 487-499.
DOI: 10.1177/009207002236924
Copyright9 2002 by Academyof MarketingScience.
companies has been the focus of considerable attention
from the business press as well as scholarly research
(Mahajan, Srinivasan, and Wind 2002 [this issue]), However, in the short period of their existence, these e-tailers
developed and introduced new Internet-based marketing
techniques at a furious pace, essentially creating a new
world for marketing. While these techniques were mostly
developed in the context of e-tailing, they are being widely
used by other business-to-consumer and business-to-business organizations as well. In other words, the marketing
techniques that were pioneered by e-tailers have evolved
into e-marketing. Today, few if any marketing plans can be
complete without a blending of the e-marketing tools into
the traditional mix to form an effectivemarketing strategy.
A great deal has been written about e-marketing, and it
is widely felt to have high potential over the long run.
However, depending on the area of interest, the marketing
community has developed a very selective view of these
Internet marketing techniques. To Web developers and
technology integrators, Internet marketing is about building Web sites that are robust and scale with traffic (Frost
and Strauss 2002). To the advertising industry, it is about
Internet advertising and its impact on driving Web traffic and brand building (Breakenridge 2001). Auctionoriented sites such as eBay have grown through word of
mouth and have emphasized community building (Hagel
and Armstrong 1997). Customer relationship management (CRM) interest groups have emphasized personalization (Kasanoff, Peppers, and Rogers 2001). E-marketing
books (Coupey 2001; Hanson 2000; Strauss and Frost
2001) serve as a single source on various e-marketing topics. However, a core, unifyingconcept for e-marketing has
not emerged.
The lack of a common vocabulary, a categorization of
techniques, and an integrating framework creates fundamental problems for practitioners and academics, much as
was the case in the 1950s, before E. Jerome McCarthy
(1960) introduced the 4Ps (product, price, place, and promotion) standardization of the marketing mix as a core
unifying construct. First, there is the fundamental question, “What is e-marketing?” Second there is the follow-up
question, “How is e-marketing different?” Third, the lack
of a framework means that managers do not have a natural
starting point for developing the e-marketing aspects of
the strategy. Fourth, since the scope of marketing activities
is not well established, the specification and communication of the marketing plan, a key marketing activity (Winer
and Lehmann 1991), is more difficult. Fifth, it is hard for a
marketing manager to have an appropriate emphasis (and
budget) across all the elements in the marketing mix without a clear delineation of them. For example, customer
acquisition might be overemphasized relative to customer
retention. Sixth, the integration of the techniques might be
insufficient, leading to a marketing program that is disjointed from the consumer’s perspective. Also, without a
complete understanding of the scope of the marketing elements, it is difficult to identify how different strategies are
being implemented through a differential blending of the
marketing elements. Finally, it is not clear if the functions
identified in the original marketing mix are appropriate or
whether e-marketing entails new functions.
This article, therefore, focuses on e-marketing techniques that first emerged during the dot com boom and
e-tailing wars. The objective is to provide an approach to
organizing the Internet-based activities of a marketing
manager. Analogous to the “marketing mix,” attention is
focused on characterizing an e-marketing mix and
describing and motivating each element. As Niel Borden
(1964) said long ago, “To define the concept of a Marketing Mix is one way to define Marketing” (p. 3). Thus,
identifying the e-marketing mix actually answers the
question, “What is e-marketing?” Comparing the e-marketing elements to the traditional marketing mix can start
to address the question, “How different is e-marketing?”
In the next section, we review the e-marketing literature, identify the techniques involved in e-marketing, and
summarize the frameworks proposed and their limitations.
We then discuss some perspectives on how a marketing
taxonomy should be developed. These perspectives provide a theoretical framework based on which we develop
the e-marketing taxonomy. The e-marketing taxonomy is
used to categorize the e-marketing tools. The article closes
with a discussion of how the e-marketing mix compares to
the traditional marketing mix and the implications of our
Before proceeding, it is important also to describe what
is not within our scope. It is beyond our focus to prescribe
marketing strategies and programs for either traditional
businesses or Internet-based businesses. Thus, it is only
implicitly assumed that the e-marketing mix elements we
describe will be apart of the overall marketing program for
a firm and that a complete description of such programs
requires a holistic blending of the online aspects with
offiine ones. Also, we do not delve into when different
subelements should be used or how to use them. In short,
the treatment is not normative but descriptive.
We reviewed the popular business press, research
reports from industry analysts such as Forrester and Jupiter Communications, textbooks and the academic literature for e-marketing tools, perspectives, and frameworks.
In addition to manual searches, we performed electronic
searches on ABI/Inform, Amazon.corn, Google, and the
Harvard Business Press site for various keywords, including lnternet marketing, Web marketing, online marketing,
e-marketing, Internet retailing, e-commerce, and e-business. We also searched for keywords on tactical marketing
tools such as e-mail, banners, and so on. When the literature review did not provide adequate detail, additional
information and clarifications were gathered through indepth interviews of experts and practitioners. In the interests of space, we highlight the key findings and limit our
citations to key articles.
E-Marketing Tools and Terms
Our review identified more than 30 e-marketing tools
and terms. Table 1 provides a listing with a brief description and an example. As far as possible, we adopt standard
industry terminology in naming and describing these
tools. When multiple terms are in use, we prefer the term
that is used in the research reports of industry analysts. For
example the terms personalization and target marketing
are sometimes used interchangeably. However, most
industry analysts use the term personalization in their
reports, and we adopt this nomenclature.
We next review the literature to examine which frameworks and taxonomies have been proposed to classify
e-marketing tools. We summarize our findings into the following four categories: sources that provide perspectives on a specific aspect of e-marketing, trade books on
e-marketing, textbooks on e-commerce, and textbooks on
Perspectives on a Specific
Aspect of E-Marketing
Some authors have focused on specific aspects of
e-marketing. Hagel and Armstrong (1997) provided one
of the earliest perspectives when they identified the power
of virtual communities. Alba et al. (1997) discussed the
benefits of interactive home shopping and consumer,
Kalyanam, Mclntyre / E-MARKETING MIX 489
A Compendium of E-Marketing Tools and Terms
E-Marketing Tool~Term Description Example
Rules-based system
Collaborative filtering
or group
Privacy policy
Security policy
Navigation and
search tools
Web page
Configuration tools
Ordering tools
Planning and
layout tools
Usabihty and testing
Dynamic pricing
Forward auctions or
English auctions
Reverse auctions or
Dutch auctions
Name your price
Banner ads
Meta ads
Pop over and pop
under ads
Sponsored links
Outbound e-mail
Viral marketing
Remote hosting
Denotes any aspect of e-marketing that is modified to an
individual customer
Modification of what is presented based on preferences
that are set by the user
Modification of what is presented based on the user’s
exhibited behavior
Modification of what is presented based on rules set by experts
Modification of what is presented based on associating this
individual’s behavior with the behavior of a group
The policy addresses what information is being collected,
how it will be used, and whether the information will be
sold or shared with third parties and, if so, in what context,
including an option for customers to opt out from receiving
offers or updates.
The policy addresses which aspects of a site and transactions
are secure and which types of security measures are deployed.
The digital platform used to interact with customers
The first page that is seen on the Web site
The tools that customers use to navigate the contents of the
site and search its contents
A specific page on a site
The tools used to specify the combination of features that are
desired in a product
Tools that are used to purchase the product
Tools that are used to determine the fit of the product or the
quantities required against a particular context
Suggestions regarding complementary products
Procedures and tests that are used to evaluate how a site
performs in terms of certain criteria
A policy by which prices are changed continuously in response
to changing supp!y and demand conditions
A selhng approach in which prices are determined by the
highest bid from buyers, subject to any minimums stipulated
by the seller
A buying approach in which prices are determined by the
highest bid from sellers
A buying approach in which buyers, who are wdling to be
flexible, indicate the price they are willing to pay for a product
or service and are matched to sellers who can meet the price
The rectangular box that appears at the top of a Web page and
contains an advertisement
Banner ads that are tied to the content of the page or the
keyword that is being used in a search
Advertisements that open up in a separate browser window
over or under the Web page that is being viewed
Results on a search page that are presented to highlight a
particular sponsor
Electronic mails that are sent out to customers
An approach in which current customers drive the adoption
by prospective customers of a company’s product or service
Coupons or codes that are obtained from Digital Media
When one site mirrors another in a seamless manner
When Mary returns to the site, it responds,
“Hello Mary?’
My Yahoo!
We know that you buy e-marketing books. Would you
like us to give you advance notice of new titles?
This white linen shirt is a good complement to these
khaki pants.
The book recommendations on
See the extensive privacy notice page on
See the privacy and security notice on
A Web site, the software interface on a handheld
electronic organizer, or a cellular phone
eBay’s first page listing ~ts categories and features
The browse, search, and sitemap buttons on eBay
Any Web page
The tool used to select the amount of memory required
on a computer at
Shopping baskets and checkouts on any Internet
retailing site
The garden planner tool on
The recommendation on that says readers
who bought this book also bought this other title
See for sample procedures.
The revenue management that is implemented by the
airline industry
The typical auction on eBay
The type of auctions hosted by Free markets
The Name Your Own Price system at
The typical ad that appears on the top of any Web page
An ad for a Toyota Land Cruiser that appears when you
search for SUVs
The sponsored links that appear on a search on
An electronic message from listing the
items that are on sale for the summer season
Hotmail pioneered this technique when it launched a free
Web-based e-mad service with the tagline (at the bottom
of each e-mail), “Get your free e-mail at Hotmail.”
eCoupons provides a listing of various sources.
Yahoo hosting merchants on its shopping page
TABLE 1 (continued)
A relationshipbetweenan onlinemerchant(the company)
See the Associatessectionon
and anotherWeb site (the affiliate)in whichthe companypays
the affiliatea considerationfor each actiongenerated
A listingof frequentlyaskedquestions
The startingpage for customerhelp-related queries
Help desk
Userratings and
Wish list
Reputation scoring
Electronice-mailthat is receivedfromthe customer
A locationwheremultipleindividualspost regardinga
A locationwheremultiple individualsare participatingin
a common”space”to discussa prespecifiedtopic
Rating and reviewsof productsor servicesprovidedby users
A list of productsor servicesthat an individualis interested in
A list ofproductsand servicesthat a customeris interested in
receivingas a gift for an occasion
A summaryscore for an individualthat is derivedfromthe
feedbackobtainedfromother individuals
See the Help sectionon eBay.
See the Helpsectionon eBay.Thispage is sometimes
calledcustomerserviceor customersupport.
Inbounde-mailscan originatefrom a supportpage on a
Web site (seethe contactsupportpage on eBay)or
fromthe customer’se-mailprogram.
The messageslink underYahoo!Finance
See the Communitysectionon eBay.
See the moviereviewsunder Yahoo!entertainment.
See the WishList sectionon the
See the Weddingand Gift Registrysectionon Wilhams
On eBayunder Help, underTop Questions,in the
subsectiontitledafter the Auction,go to What is
retailer, and manufacturer incentives to participate in electronic marketplaces. Godin (1999) introduced the notions
of permission marketing and viral marketing (Godin
2001). Frost and Strauss (2002) focused on building Web
sites that are robust and scale with traffic, and Breakenridge
(2001) examined cyberbranding. Consistent with their
focus on a particular aspect of e-marketing, these authors
did not provide a survey of e-marketing tools or offer a
framework for integrating them.
Strategic perspectives regarding the Internet have also
been a popular topic of enquiry. Ghosh (1998) provided a
perspective on making business sense of the Internet.
Bower and Christensen (1995) provided a disruptive technologies perspective. Evans and Wurster (2000) and Porter
(2001) analyzed how the new economics of information
transforms strategy. Fiore (2001) identified 10 rules for the
new economy and provided some discussion of specific
e-marketing tools. Wind, Mahajan, and Gunther (2002)
argued that the Internet has produced a hybrid consumer
who sits at the convergence of traditional and digital
media, and they also introduced the notion of convergence
Internet technologies and software applications have
been the focus of some authors. For example, Treese and
Stewart (1998) and Trepper (2000) provided a survey of
how systems should be designed for Internet commerce.
While the business objectives of e-commerce are briefly
reviewed, technology remains the key focus.
Trade Books on
E-Marketing Tools
Several books provide a survey of e-marketing tools.
For example, Collin (1999) took the perspective that “in
addition to the standard tool k i t . . , you now have direct
e-mail, your web site.” Collin’s book covers the different
ways of using these new e-marketing tools. Similarly Dan
Janal (2000), in Dan Janal’s Guide to Marketing on the
Internet, provided a survey of e-marketing tools. To facilitate the development of a business plan, Janal provided a
checklist of the reasons and benefits of being online. In
Guerrilla Marketing Online Weapons (1996), Jay Conrad
Levinson, author of the well-known Guerrilla Marketing
series, provided a survey of e-marketing. In addition to
reviewing several aspects of e-marketing such as advertising, service, and publicity, Levinson provided a discussion
of what he called “Guerrilla Attitudes.” Consistent with
their focus on the practitioner, these books emphasize
tasks such as creating a business plan and provide templates to achieve these tasks. E-marketing tools are surveyed in this context, and a “how to” is provided. Frameworks, theories, opposing perspectives, and empirical
evidence are not emphasized.
Textbooks on E-Commerce
In contrast to the trade books, several books have
appeared to serve the classroom audience. These books
Kalyanam, Mclntyre / E-MARKETINGMIX 491
attempt to provide a survey of e-commerce, including integrative frameworks, theoretical perspectives, and empirical evidence. Given the relevance to the focus of this article, the frameworks proposed in these books merit some
In their book on e-commerce, Turban, King, Lee,
Warkentin, and Chung (2002:12) provided a framework
for e-commerce. They argued that successful e-commerce
implementation is dependent on five major areas: people,
public policy, marketing and advertisement, business partners, and support services. These five areas are the pillars
of their framework. Underlying these pillars are infrastructure and support components. Marketing is one element of
the framework and consists of market research, promotions, and Web content. Rayport and Jaworski (2001:18)
provided a framework with six interrelated and sequential
decisions for determining and implementing an e-commerce strategy. The six decisions are market opportunity
analysis, business model, customer interface, market communications and branding, implementation, and evaluation. Given that marketing is one component of the focus
of these books, it is treated as part of an overall framework,
and a more detailed taxonomy for marketing is not
Textbooks on E-Marketing
In contrast to the e-commerce books, several books
focus directly on e-marketing. Hanson (2000) argued that
“the Web is fundamentally about individuals using a network to access digital products” (p. 22), and he offered
“DNI” as a mnemonic for this perspective. Hanson did not
provide a taxonomy of e-marketing tools. Coupey
(2001:38) offered a framework for integrating marketing
and the Internet. The framework looks at the Internet as an
environment for marketing exchange. Furthermore,
Coupey proposed that relationships serve as the vehicles
for effecting exchange. Coupey did not offer a visual or
mnemonic summary of the framework or provide a taxonomy of e-marketing tools.
Strauss and Frost (2001:17) proposed a framework that
relates the impact of Internet business models on the 4Ps of
the marketing mix. In addition to the 4Ps, they include
relationship marketing as a fifth element and categorize
CRM and community building under this element. These
five elements form the basis of their taxonomy of Intemet
business models but not of e-marketing tools. Mohammed,
Fisher, Jaworski, and Cahill (2002:13) described an
Internet marketing mix that consists of the 4Ps of the traditional marketing mix, plus two new elements–namely,
community and branding. They proposed that branding
moderates the other marketing elements and visually
depicted branding as a cloud around the other marketing
elements. In addition, they argued that interactivity and
individualization affect all aspects of the Internet marketing mix.
The literature review indicates that more than 30 e-marketing tools and terms are in use. At first blush, it seems
that there are a lot of new e-marketing tools and terms. It is
natural to inquire whether these are really new or simply
Web-based versions of existing techniques. Furthermore,
one wonders how these tools and techniques are related to
the 4Ps of the marketing mix. Finally, a theoretically based
construct that provides both a unified perspective of these
e-marketing tools and a taxonomy has not been developed.
This is the focus of the next section.
In this section, we use a deductive process to build a
classification apart from analyzing any specific set of data.
This method is called logical partitioning, and it “presupposes a fairly sophisticated understanding of the phenomena being investigated” (David Harvey, cited in Hunt
Hunt’s (1991) review of scientific theory outlines the
following criteria for evaluating a classification schema
(e.g., developing a taxonomy):
(a) selecting the phenomenon (e.g., marketer-controlled
digital tools),
(b) determining the characteristic on which classification
will be based (e.g., classifying by function, not by
(c) developing mutually exclusive and collectively exhaustive bins (e.g., identify a list of categories or elements based on e-marketing functions that are
mutually exclusive and collectively exhaustive),
(d) determining the usefulness of the results (e.g., check
the face validity of the apparent usefulness of the
van Waterschoot and Van den Bulte (1992) were the first to
apply these criteria to evaluate the traditional 4Ps characterization of the marketing mix. We follow their lead and
develop the e-marketing mix with these criteria in mind.
Scope of the Phenomenon
Being Classified
The first step is to define the scope of the underlying emarketing tools. We confine the scope to be marketing
tools that enable interactions with individuals in digitally
networked environments (Hanson 2000). Negroponte
(1995) defined digital interactions as interactive communications using digital media. Web-based interactions are
a form of digital networked interactions. An Internetbased tool such as text e-mail is also digital and enables
interactions with a network. Such interaction can be about
any aspect of a potential marketing relationship or a specific transaction. The interaction can extend to the actual
delivery of the product for a growing number of categories
(e.g., maps, art, news, software, photographs, tickets, written materials, information, music, movies, etc.) and communication-related services for most products (e.g., product configuration, pricing, store locations, inventory
levels, product features, product ratings, etc.). Digital
interaction also encompasses what Hoffman and Novak
(1996) have called marketing in “computer-mediated
environments.” Digital interactions thus would include
reading a marketing e-mail offline on a handheld device.
It is also important to clarify what is not included in the
scope of our definition. A consumer watching digital TV
would not be included (since no two-way digital interaction takes place). Even if the consumer uses a digital
remote control for changing channels, this would not constitute a digital interaction. However, if the consumer is
able to use that remote to inspect a product on the screen or
interact with the program in any “marketing-oriented
way,” then it would constitute a digital interaction in our
framework. Also, a mobile consumer who is in the supermarket and receives, on a shopping cart-based screen, a
coupon message about Cheerios while walking past the
box on the shelf would not constitute digital interaction
(since the communication is one-way). But a two-way
device that is on the shopping cart that the consumer uses
to enable in-store activities would be included.
In summary, the scope of the phenomena to be classified is the set of digital tools that enable interactive communications with a network.
Properties or Characteristics
for Classification
The ExchangePerspective
The next step is to identify a conceptualization of marketing to better identify the activities and criteria for classification. Recently, van Waterschoot and Van den Bulte
(1992), following Bagozzi (1975), took the view that marketing is about facilitating exchange. Based on early transaction theory and Kotler (1972), the core functions necessary for an exchange are identified to be the following:
configuration, valuation, facilitation, and symbolization.
Kotler (1972:50) mapped these functions directly to the
4Ps classification of product, price, place, and promotion.
The promotion function has traditionally been broken
out into advertising, personal selling, public relations, and
sales promotion. However, in analyzing the sales
promotion category of the traditional marketing mix, van
Waterschoot and Van den Bulte (1992) pointed out that the
components of “communication” address “barriers to
wanting,” whereas the sales promotion function addresses
“barriers to acting.” They observed that “triggers to customer action” seem necessary in certain situations to
induce the exchange. Hence, they termed sales promotion
a “situational” function. On the basis of these distinctions,
the marketing mix can be reclassified into the “basic mix”
and the “situational mix.” In addition, since the sales promotion mix can apply across the full spectrum of the basic
mix (e.g., the rest of the traditional marketing mix), it is
considered by van Waterschoot and Van den Bulte to be
The developments in van Waterschoot and Van den
Bulte (1992) can be summarized in the form of the following axioms:’
Axiom 1: Marketing functions are the appropriate properties for the classification of marketing tools.
In view of the marketing management perspective involved, only those functions whose fulfillment is at the
marketer’s discretion must be considered. In marketing
theory, these are known as marketing functions.
Axiom 2: Some functions are essential and others are situational in nature.
Given that the taxonomy is to help structure marketing
decision making and management, it is suggested by van
Waterschoot and Van den Bulte (1992) that one must identify the “essential marketing functions” to be those “necessary for an exchange to take place.” For example, sales
promotion, which is typically meant to overcome procrastination, is not considered essential but only situational.
Axiom 3: Some functions have a moderating effectacross
other marketing functions and are called overlapping functions.
As van Waterschoot and Van den Bulte (1992) noted,
the sales promotion function can be applied across the basic functions. For instance, a sales promotion can involve a
temporary price reduction or a product giveaway.
Axiom 4: Functions are accomplished by marketing
From a taxonomy point of view, it is important to establish the concept of marketing tools, which is a term used to
identify marketing tactics, techniques, or activities that are
alternatives for achieving the basic and situational functions. For instance, a banner ad on a Web page would be a
tool, as would a promotional e-mail.
Kalyanam,McIntyre/ E-MARKETINGMIX 493
Axiom 5: A tool can serve one or several functions.
It is a beneficial fact that a marketing tool can be used to
address one or several marketing functions. For example,
the e-mail tool can be used to offer a sales promotion, provide customer support, or receive a customer query. Also,
e-mail is often categorized as outbound to refer to promotional or communicational e-mail and inbound to refer to
customer support-related e-mall. So tools that can perform multiple functions are further designated as in the
case of inbound and outbound e-mail and categorized by
Generalizing the Exchange
Perspectives to E-Marketing
Since exchange remains an important focus of marketing (including e-marketing) and the logical culmination of
marketing efforts, the functions identified under the exchange paradigm are also e-marketing functions. Hence,
the axioms described in the previous section, which are
also applicable to the development of the e-marketing taxonomy, are summarized in the following propositions:
Proposition I: Configuration, valuation, facilitation and
symbolization are basic e-marketing functions that
map into product, price, place, and promotion as the
respective e-marketing elements.
Proposition 2: Direct inducement to overcome barriers
to action is a situational e-marketing function, with
sales promotion as the corresponding e-marketing
However, in generalizing these marketing functions to
e-marketing, it is useful to highlight some unique aspects
of e-marketing.
Product. The configuration function maps to the product element of the marketing mix. However, in the e-marketing context, the concept of product configuration can
become quite literal through the mechanism of a configuration engine. For instance, Detl Computer offers a configuration engine at its site that can be used by the customer to
designate changes to a basic computer model to include a
different disk drive size, processor speed, screen size,
memory size, operating system, software footprint, and so
on. AII of these settings represent hundreds of potential
configurations that would be very costly to stock in a
bricks-and-mortar retail setting.
In addition, many Web sites include digital offerings or
services, such as a consumer printing out a map obtained
through the Web site or viewing financial
information about the stock market. Such digital delivery
is a paradigm-shifting capability for many product categories, including music, video, jokes, maps, stock quotes,
software, art, tickets, photos, and all fashions of written
materials and thus a huge array of products and services.
These deliveries can be direct (e.g., without intermediaries) and provide both enormous cost savings and
substantial anytime, anywhere benefits to consumers.
Price. The valuation function maps to the price element
of the marketing mix. Price is broadly conceived of as
what the consumer gives up to receive the product or continue the relationship, which may be time, effort, money,
or some other consideration (perhaps a referral permission
or simply permission to be contacted again later). Aspects
of this broader conception of price, such as referral permission, are more salient in the e-marketing environment.
Also, the e-marketing environmentenables large-scale use
of certain pricing mechanism, such as forward auctions,
reverse auctions, dynamic pricing, and “name your own
price” that are otherwise not widely feasible.
Place. The facilitation function maps to place in the
marketing mix, and in the e-marketing context, it connotes
the facilitation and location of the transaction. In traditional marketing, facilitation typically occurred at a location controlled by a third party such as a distributor or a
retailer. However, in the context of e-marketing, facilitation can occur at the Web site of the manufacturer. This
presents the opportunity for a “manufacturer direct-tocustomer’ approach, a strategy that has received considerable attention from manufacturers (Kalyanam and
McIntyre 1999) and that the popular business press has
termed disintermediation.
Promotion. The symbolization function maps to promotion in its communication sense. While it is tempting to
use communication as the element name, we stick with the
termpromotion to maintain continuitywith the widely recognized and standardized 4Ps framework. Online advertising (e.g., a banner ad or a popup ad, etc.) has been a
natural extension of offline promotion. Some of the newer
digital tools and techniques include sponsored links on
search engines, outbound e-mail, and viral marketing
(Godin 2001).
Sales promotion. Some marketing activities, such as
e-coupons, are undertaken as special inducements to encourage the relationship partner to undertake a specific act
by a certain time. For instance, an e-coupon might be good
for a 20 percent discount if used by the end of the month.
These inducements help consumers to overcome the natural human tendency to procrastinate and are considered,
therefore, to serve a separate function for the marketing
manager. These inducements are termed situational because they are applied as an exception or temporary
suboffer to the basic ongoing marketing plan relative to
that specific act.
The Relationship Perspective
At least two broad trends suggest that the exchange paradigm is a limiting way of characterizing e-marketing.
First, during the 1990s, marketing theory moved toward
the relational exchange paradigm. In an influential article,
Berry (1983) noted that marketing has historically overemphasized customer acquisition when compared to customer retention. Reichheld (1996) presented evidence
regarding the economic importance of the loyalty effect
flowing from customer retention. Others have synthesized
these perspectives into the notion of relationship marketing (Sheth and Parvatiyar 2000), including the need for
one-to-one interactions (Peppers and Rogers 1993, 1997).
As Kotler’s (2003) leading marketing management text
now states, “Transaction marketing is part of a larger idea
called relationship marketing” (p. 13). This larger perspective views marketing as a relationship made up of a continuing series of collaborative interactions with each customer individually.
The second trend is the reality of Web-based interactions, which are one of the most common forms of digital
interactions. In the Web-based environment, customers
can initiate an interaction at any time and from anywhere,
as well as before, during, or after the exchange, making the
exchange paradigm very limiting when thinking about
e-marketing. Furthermore, most Web-based interactions
tend to be personalized, at least in some minimal way, such
as recognizing a visitor using a cookie. As Peppers and
Rogers (1999) pointed out, “Relationship marketing has
only recently become practical and cost-efficient on a
large scale because of database technology and the
internet” (p. 122). These technologies allow an enterprise
to track its customers individually across all touch points
and transaction types. Digital interaction on Web sites, at
call centers, and through sales force automation tools now
provides an automated connection to the firm. Mass customization technology permits a firm to configure its
offerings digitally–in effect, mass-producing in lot sizes
of one. This interaction is then likely to become part of an
ongoing series of linked interactions, building a rich and
individualized context for the relationship over time. With
each interaction, the offering can more closely meet the
customer’s needs. The relationship tends to get smarter
and smarter, in what is called a “learning relationship”
(Peppers and Rogers 1999).
These trends can be summarized in the following
proposition, which combines the notion of exchange with
Proposition 3: The marketing functions should be defined from a relational exchange perspective rather
than a transactional perspective.
Furthermore, these trends identify personalization, security, privacy, site (e.g., anytime, anywhere access), and
customer service as relational exchange functions. These
functions are now discussed in detail.
Site (anytime, anywhere digital access point). A digital
media-based relationship requires an anytime, anywhere
digital access point. We use the term site, which is commonly understood industry parlance, as the e-marketing
mix element that designates this function. We recognize
that a Web site is only one manifestation of site. The interface on a handheld personal digital assistant (e.g., Palm Pilot) is another manifestation. The access point can be used
to interact about any aspect of a relational exchange. A
customer can obtain product information and pricing, access the latest sales promotion, or request customer support. Since the access point moderates all e-marketing
functions, site is considered an overlapping function.
Personalization. Once a relationship is the marketing
goal, an important step is to identify individual customers
(Peppers and Rogers 1993) and to gather information
about them, which is the foundationalconcept of personalization (Peppers and Rogers 1997). Personalization, then,
is defined to be any form of customization that occurs because of specific recognition of a given customer. For example, a cookie placed on the visitor’s computer can allow
a site to deliver a homepage low in graphical content if the
user appears to be on a slow dial-up modem. Such personalization is a matter of degree. Kamran Parsaye2has developed a conceptual personalization quotient (PQ) based on
the degree that the Web site exercises:
(a) customization–the system’s ability to customize
items by allowing individual users to set their own
(b) individualization–the system’s ability to customize
itself to the user based on the user’s exhibited behavior, and
(c) group characterization–the system’s ability to customize itself to the user based on the preferences of
other users with similar interests.
In addition, personalization can be done based on rules
provided by experts. For example, if the customer buys
shirt A, then recommend pant B, or if the customer is from
corporation X, then provide a discount of Y percent, and so
on. From this discussion, it is apparent that personalization
can be applied across any aspect of the e-marketing mix
and is, therefore, overlapping and moderating with regard to the effect those other functions have on the customer experience.
Privacy. The collection of information for personalization forces the marketer to decide how this information is
to be used, particularly regarding access to it–thus the basic decision about privacy. Note that privacy-related decisions are inescapable (or, in the terms of this literature,
“basic”) once the marketer collects information about individuals and stores it. Furthermore, privacy considerations are well recognized by the policy-making forces in
Kalyanam,Mclntyre/ E-MARKETINGMIX 495
society and often carry the force of laws, which increases
the complication of managing this aspect of the marketing
mix internationally.
Security. Another “essential” function of e-marketing,
once we move beyond the concept of simply a transaction,
is the issue of security. There are at least two aspects to security, the first being security during the transaction. An
example of the first type of security is to ensure that a third
party is not hijacking aspects of the transaction. The need
for credit card numbers and other critical information on
the Internet exposes the customer to risks beyond just the
current transaction and therefore involves a trust in the
marketer that goes well beyond just the probity and punctuality of the current transaction, heightening the relationship nature of these digital interactions. This trust now
encompasses beliefs about the security-related diligence
of the marketer. The second aspect of security is regarding
the data that are being recorded about the individual (e.g.,
providing adequate security to the consumer that a third
party cannot break into the database). There is a constant
battle between methods of security (e.g., encryption) and
the sophistication of hackers. It is the marketers’ responsibility and competitive necessity to keep ahead in this technological race. A lapse in the security domain could easily
be the end of a company.
Customer service. Many early marketing mix taxonomy specifications (e.g., Borden 1964) included customer
service as a support function often needed to make a transaction happen (and therefore a situational function). The
introduction of “time” into the exchange paradigm (the
driving factor in moving to a relationship perspective)
means that the marketer is forced to consider providing
support to the customer over time. This necessitates consideration of customer service (in its broadest sense) as an
ongoing and essential function. Interestingly, customer
service is typically shown as a necessary function (a key
element) in the retail mix (Levy and Weitz 2001). This suggests that an ongoing direct interaction with customers requires support as an essential function. Furthermore, the
support can be about any aspect of the e-marketing mix. It
can be an issue about product availability, service plans,
pricing, or promotions. Hence, customer support is an
overlapping function.
The preceding discussion regarding e-marketing functions can be summarized into the following proposition:
Proposition 4: The basic relational e-marketing functions are anytime, anywhere access; personalization; security; privacy; and customer service.
These functions map into the following e-marketing elements, respectively: site, personalization, security, privacy, and customer service.
The Network Perspective
In addition to perspectives on relationships and
exchanges, another perspective on e-marketing focuses on
the fact that the Internet is a network (Hanson 2000).
Access to the Internet also means access to other individuals who are a part of the network. Metcalf’s law states that
a network is valuable in proportion to the number of individuals involved in the network. This phenomenon
emphasizes a positive externality evolving from participation in a networked group. The essence of this externality
leads to the value of what has been called community on
the Internet.
Mohammed et al. (2002) defined a community as a set
of interwoven relationships built on shared interests that
satisfies members’ needs, which are otherwise unattainable individually. Customers are members within a community (Mohammed et al. 2002) who interact with one
another over time (either independently or under some influence from the marketer). A marketer-influenced interaction can be to exchange support informationabout the product or to provide something as simple as frequently asked
questions (FAQs). Hence, community building is now recognized as an important function to be addressed by marketing management (Armstrong and Hagel 1996; Young
and Levine 2000). However, it is viewed as a situational
functionrather than a basic one. Since the interactions in the
community can be about any of the other functions, community moderates other functions and is an overlapping
function. This leads to the following proposition:
Proposition 5: Community is an e-marketing function
that is situational in nature.
Following van Waterschoot and Van den Bulte (1992),
it is important to realize that while all of the marketing mix
elements are to be coordinated in terms of their interacting
and potentially synergistic influence on the customer experience, some functions take place mostly through their
interaction with other more basic functions and very much
moderate the effect of those basic functions. These functions are termed overlapping functions and lead to the
sixth proposition:
Proposition 6: Site, customer service, personalization,
privacy, security, sales promotion, and community
moderate e-marketing mix functions and are designated overlapping.
The Resulting E-Marketing
Mix Taxonomy
The preceding propositions lead to the e-marketing taxonomy portrayed on a cube in Figure 1. Functions that do
not moderate other functions as much (nonoverlapping)
are shown on the surface of the cube. The overlapping
functions are placed in the lower part of the cube to convey
that they operate mainly by moderating any of the functions on the surface in addition to moderating each other.
The resulting e-marketing mix is expressed in the following acronym: 4Ps + p2C283, where P stands for product,
price, place, promotion, personalization, and privacy;
C stands for customer service and community; and S
stands for site, security, and sales promotion. The product,
price, place, promotion, and sales promotion functions
(following the distinctions drawn in van Waterschoot and
Van den Bulte I992) are as described in the traditional
marketing mix. We note that most of the new elements are
considered essential from an e-marketing perspective and
overlap across the other elements.
Mutually Exclusive
The schema proposed can be tested against the criterion
that none fits within the domain of another (e.g., that they
are mutually exclusive) and that there are not other important functions of marketing that are omitted (e.g., that they
are collectively exhaustive).
With regard to being mutually exclusive, certain
macro-level elements, particularly the site, draw questions
as to whether they are mutually exclusive of the other elements. Some observers want to place site under product,
while others want to place it under promotion. The reason
for this tendency for “misclassification,” in our view, is
almost always because of an inadequate recognition of the
underlying function of the site element. We take site to be
an anytime, anywhere relationship touch point between
the customer (or prospect) and the company, whereas the
individual wanting to classify site under promotion will
invariably be defining the role of the site design in a different, more communication-oriented way. Hence, we
conclude that the functions of product and promotion do
not fulfill this now essential role. This kind of
misclassification is understandable, but on further reflection, our functional view of site usually leads to an agreement of it being a distinct function.
Similarly, there are those who might argue that customer service is a part of the product (the extended product). But actually, customer service in e-marketing is primarily about supporting the customer at the access point.
Customer service might have nothing to do with the product, per se, and should not really be treated as a part of the
product or configuration function, tn fact, many of the
other marketing mix suggestions (e.g., Borden 1964)
included as an element of the marketing mix the top-level
element of customer service. Also, it is clear that customer
service emerges as a clear function due to the relationship
and time-oriented perspective on the marketing endeavor
that was not so prevalent during the 1960s.
The E-Marketing Mix = 4Ps + P2C=S~
~ Product P r i c e ~
tion P l a c e /
Person~dizatton 1
c 2
s~ Security Promotion
Mapping the E-Marketing Tools
Another test of a taxonomy is to accomplish the purpose of mapping the tools in the e-marketing compendium
(see Table 1) into the taxonomy developed. If the mapping
is successful, no tool to be classified fails to find a “home”
for it, and no tool satisfies some “unidentified” function.
However, it is important to note that these tools can accomplish or impinge on several different e-marketing mix
functions, oftentimes even simultaneously. For instance,
e-mail can address the function of(a) customer service and
(b) community all within the same e-mail message. This
would be the case, for instance, if Amazon.corn sent an email containing a user review of a book posted by another
customer (community) in response to an enquiry (customer service). Hence, classifying tools by function provides a robust approach. Consequently, e-mail can be classified as outbound, a subelement of communication; as
inbound, a subelement of customer support; and under
This criterion also is a test that we have applied with
positive results. We are able to classify all e-marketing
tools based on their function to one of the e-marketing mix
elements. Figure 2 presents this classification. The e-marketing functions allow the categorization of tools that are
otherwise hard to categorize or have a tendency to be arbitrarily categorized. For example, consider registries and
wish lists. Many retailers consider these “services” that are
offered to the customer. However, as per our analysis, registries and wish lists allow customers to communicate their
preferences to other customers; in other words, they are a
community function. Merchants and buyers often provide
recommendations based on their expert judgment and
Kalyanam, Mclntyre / E-MARKETING MIX 497
Classifying the E-Marketing Tools
~ i sonment Product Price 9
9 ConfigurationEngine 9 ForwardAuction,
9 Planning & Layout 9 Re~er~eAuction,
o n
9 OnlineAds
9 Spon~redLtnks
9 OutboundEmad
9 ViralMarketing
9 Name yourprice
9 Alhhate,
9 Remote
cIndtvlduahTatlon ………… I ]Persomll=t~m
Collaborat,~e Filtering / P z ~
FAQ’~& Help
Cha, Mgmt
C ~
~ r
Home Navtgauon Page I & Search
PageDe,lgn & Layom
~, Se~dty
]~ ChatRooms
U~r Ratings &
( , , , ~ H I U f f d t ~
9 Reglsmes &
9 Reputation
E Coupons
knowledge, and retailers tend to classify them under
assortment. However, our analysis suggests that these are
simply communications and hence should be classified
under the promotion element. Furthermore, even if a recommendation were personalized, it would still be a communication, except with personalization moderating it.
Again, thinking in terms of e-marketing functions provides a basis for the categorization9Finally, we do not
include e-marketing techniques such as site testing or
usability in our taxonomy. We recognize these as enabling
processes and hence do not include them in the taxonomy9
In the introduction, several problems were identified,
including the lack of a common vocabulary regarding
e-marketing, an inability to define and compare e-marketing with traditional marketing, and difficulty in specifying
an e-marketing plan because of unclear scope. The analysis and the e-marketing mix construct presented in this
article help toward resolving these problems9
First, the propositions in this article collectively offer
the following definition of e-marketing:
E-marketing enables relational exchanges in digital, networked, interactive environments.
Second, 11 e-marketing functions have been identified
and are represented by the mnemonic 4Ps + p2C253. These
functions provide another perspective to the question,
“What is e-marketing?” By demarcating the most widely
recognized version of the traditional marketing mix, the
4Ps + p2C2S3 mnemonic directly answers the question,
“How is e-marketing different?”The next section contains
a more detailed discussion of this issue9Another problem
that was identified in the introduction was the lack of a
common vocabulary for e-marketing. The 11 e-marketing
functions provide a common vocabulary.
The e-marketing mix designates which functions need
to be considered in the marketing plan. Thus, it provides a
natural starting point for the specification of the e-marketing plan. The e-marketing mix is a simplifying tool.
Instead, of a mental model that encompasses more than 30
e-marketing tools, the manager can work with a simplification that involves only 11 functions. Since the manager
has a simplified construct of 11 elements along with a
mnemonic device and a visual that provides a holistic
view, it is less likely that the marketing plan will be unbalanced, overemphasizing some functions at the expense of
others due to oversight9Furthermore, the e-marketing mix
maps the e-marketing tools into e-marketing functions.
The manager can formulate strategy by specifying differential emphasis on the various functions and map the strategy directly into tactical implications for the tools9Conversely, limitations of the tools might indicate the
limitations of a particular strategy9The e-marketing mix
serves as a unifying construct and focal point for this topdown or bottom-up exercise.
Apart from these practical considerations, the new taxonomy serves to move the marketing mix framework
beyond the transaction paradigm to the more viable relationship paradigm. In addition, the e-marketing mix can
better describe the modem marketing strategy, which now
almost always entails a role for e-marketing tools, particularly a Web site. The Web address is often found on the
packaging, on the product itself, in the user’s manual, on
the company letterhead, on the sales person’s business
card, and so on, making it an element of the marketing
strategy that may not be essential for a transaction but is
competitively necessary in the customer relationship battle that is today’s marketing environment.
The premise of the marketing mix has been the
exchange paradigm in a physical world. The premise of emarketing is relational exchanges in a networked world
predominantly made up of bits and bytes.3The 4Ps + mnemonic shows that there is continuity with the 4Ps of marketing. The e-marketing mix has the following additional
elements: site, personalization, security, privacy, community, and customer support. But there is much more to
e-marketing because these additional functions are considered overlapping. Since overlapping functions moderate other functions, planning and implementing an overlapping function involves coordination and integration
with other functions. Figure 1 shows that in the e-marketing mix, there are more overlapping functions than standalone functions. Naturally, one expects more and deeper
integration and coordination across elements in e-marketing compared to the traditional marketing mix.
The consideration of the individual leads us to the issue
of segmentation, which is typically treated as a process
outside the traditional marketing mix. The e-marketing
mix, with its focus on relational exchanges, makes consideration of the individual customer through personalization
a necessary function. To put it differently, fine-grained
segmentation in the form of personalization is now endogenous to the mix. This is more intuitive and conceptually
While the e-marketing mix has been motivated in the
context of e-marketing tools, it is of interest to examine
whether this taxonomy generalizes to other contexts. The
e-marketing mix was motivated on the premise of relational exchanges in digital environments. However, the
functions identified are based on the relational exchange
paradigm. If marketing were to accept a relational
exchange definition, then the e-marketing mix should be a
good starting point for thinking about marketing under
such a new definition. Perhaps the taxonomy presented
can be thought of as notjust an e-marketing mix but also a
relationship marketing mix.
This article developed the e-marketing mix, a construct
that identifies e-marketing functions and provides a taxonomy of e-marketing tools. The article posits that
e-marketing is about enabling relational exchanges in digital networked and interactive environments. The taxonomy has face validity when assessed against the criteria
identified by Hunt (1991). The e-marketing taxonomy
enables the development of the e-marketing strategy by
enabling the holistic consideration of various e-marketing
functions. Mapping the functions into e-marketing tools
facilitates implementation. In this manner, the e-marketing mix serves as a core, unifying construct. Comparison
to the traditional marketing mix indicates that the e-marketing mix provides continuity to the 4Ps, contributes several new elements, and directly represents personalization,
a form of segmentation as an endogenous function. Many
of the new elements moderate the other elements, and this
suggests that integration across elements must become
While the taxonomy seems robust in its ability to classify extant e-marketing tools, its robustness in the face of
other yet to be identified tools remains an open issue. Will
e-marketing programs be more integrated across various
elements compared to traditional marketing? Will the
4Ps + p2C2S3 mnemonic serve the marketing community
as well as the 4Ps has? Does the e-marketing mix generalize to relationship marketing? Is it really synonymous with
the relationship marketing mix? These questions will benefit from further assessment and research.
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Kirthi Kalyanam is the J. C. Penney Research Professor in the
Department of Marketing and the director of E’Business Initiatives at the Leavey School of Business at Santa Clara University.
The Leavey Schoot offers the premierM.B.A. program for working professionals in Silicon Valley. He teaches e-business,channel marketing, and retailing in the EMBA, M.B.A., and
undergraduate programs. His research interests are in e-business,
retailing, and pricing. His publicationshave appeared as lead articles in Marketing Science, Journal of Marketing Research,
Marketing Letters, Journal of Retailing, and Journal of Interactive Marketing. His research paper, published in the Journal of
Marketing Research on GeoDemographic Marketing, was selected as a finalist for the American Marketing Association’s
Paul E. Green Award for impact on the practice of marketing.
Professor Kalyanamhas received the dean’s award for outstanding teaching and/or research contributions.He has also taught at
the Graduate School of Business at Stanford University, the
Krannert School of Management, and the Department of Consumer Sciences and Retailing at Purdue University and at
DePaul University in Chicago. He received his Ph.D. in business administrationfrom the Krannert School of Management,
Purdue University.
Shelby McIntyre is a professor of marketing at the Leavey
School of Business, Santa Clara University. He is also a research
associate at the Retail Workbench, a research and educationcenter dedicated to applyingadvanced informationtechnology to the
problems of retailing. He earned a B.S. in engineering(1965), an
M.B.A. (1973), and a Ph.D. (1979), all from Stanford University.
He has subsequentlypublished more than 50 articles in leading
marketingjournals, including5 in the Journal of Marketing Research, 2 in Management Science, and 11 in the Journal of Retailing. He is on the editorial board of the Journal of Marketing.
He has twice received the annual award from the Journal of Retailing for the article “Best Contributingto Theory and Practice
in Retail Marketing?’He teaches marketinginformationsystems,
marketingresearch, brand management,and marketing management and was the chair of the Marketing Department at Santa
Clara Universityfrom 1983 to 1991. His research interests currently focus on decision support systems, retaiI-related decision
models, and e-commerce.

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