Marketing

19

Internet
Marketing
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Learning Objectives
Explain how the Internet affects the traditional marketing mix Describe how marketers are leveraging the power of online technology Discuss the legal and privacy issues surrounding Internet-based commerce Explain how marketers can measure the effectiveness of an online marketing campaign Discuss the effects of the Internet on marketingobjectives and strategy

© FOREST JOHNSON / CORBIS

Before the start of his freshman year in 1998, Ryan Garman drove for 13 brutally hot hours from Las Vegas, Nevada, to the University of Santa Clara only to have to get up at 5:00 AM the next morning to stand with 2,400 other students to wait to move his belongings into his dormitory. Aggravated and exhausted, Garman was convinced that therehad to be a better approach to that tiring and inefficient process. After much deliberation, he arrived at the idea for what is now one of the Internet’s hottest success stories, AllDorm.com. AllDorm is a virtual store that sells furnishings, accessories, and personalcare items to dorm-bound college students. With thousands of items to choose from, ranging from lava lamps and dry-erase messageboards to futons and electrical appliances such as combination minirefrigerator/microwaves, shoppers can skip costly truck rentals and last-minute shopping trips to mega-marts in unfamiliar places. Instead, they can visit http:// www.alldorm.com and order beds, bedding, chairs, desks, chest of drawers, shower kits, laundry kits, snack-filled care packages, and alarm clocks and have them shippeddirectly to their dormitory. AllDorm works directly with colleges and universities to ensure that those shipments are timed to arrive on or soon after any student’s given move-in date. AllDorm’s mission from day one has been to supply students and their parents

with a convenient and cost-effective method for moving into and completely equipping a dorm room. With that as his guiding force, RyanGarman took only two years to test his idea, recruit a management team, and launch his first Web site. By the end of its first full year in business, AllDorm had earned a few hundred thousand dollars in revenues and the attention and respect of the university and local business community. Since that first year, AllDorm has surpassed all expectations. The company has achieved profitability and watchedits revenues grow by approximately 500 pecent each year, resulting in total revenues of $25 million in 2004. Operations have expanded to accommodate East Coast institutions, and AllDorm now holds service contracts with over 250 colleges and universities nationwide. Its Web-based storefront is supported by direct mail catalogs that it sends to a targeted list of 2 million graduating high schoolseniors. By agreements with partner schools, it also places advertisements in the orientation packets sent to incoming freshmen and returning students. Those initiatives allow AllDorm to reach customers who might be uncomfortable with technology and would prefer to place orders over the telephone. Regardless of how orders are placed, the company uses proprietary Web-based software to manage incomingorders and all activity on its Web site. Since AllDorm has no physical warehouse or retail location, it uses digital tools to free itself from the costs of carrying inventory. The man-

agement team’s core strategy is to coordinate relationships with a network of suppliers who, once notified of an order placed through AllDorm, ship purchased items directly to students’ dorms. AllDorm also employssoftware developed by partner Ecommstats to monitor its Web site activity and collect data on visitors’ traffic patterns, navigation techniques, search queries, click paths, and commerce activities. Ecommstats then applies advanced analytics to evaluate the data, measure return on investment (ROI), and help AllDorm develop customer-driven marketing campaigns and Web site redesigns. And to make...