Yelena Claudia
Definition of Permission Marketing

In this modern era, the competition getting harder and marketer is have to try hard in getting people's attention is becoming increasingly difficult. That’s why many of marketing messages thrown at us daily in order to get our awareness. So the important part is to create the message get through and make connection with the intended audience.

Permission Marketing
is a term used in marketing in general and e-marketing. Marketers obtain permission before advancing to the next step in the purchasing process, so the audience doesn’t feel disturbed. They ask permission to send email newsletters to prospective customers. It is mostly used by online marketers, notably email marketers and search marketers, as well as certain direct marketers who send a catalog in response to a request.

Permission marketing is also described as the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them. It recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention.


Permission Type

Real permission is different from presumed or legalistic permission. Getting customer email address doesn't mean the company already has permission to send them marketing messages. And just because the customer doesn’t complain doesn't mean the marketer have permission.

Real permission works like this: if you stop showing up, people complain, they ask where you went. Ex: LV got a note from a LV Customer the other day. She was upset because for 2 weeks in a row, his LV newsletter hadn't come. She need to be informed the new bag’s model of her favorite brand. That's permission.

One of the key drivers of permission marketing, in addition to the scarcity of attention, is the extraordinarily low cost of dripping to people who want to hear from marketer. RSS and email and other techniques mean marketer doesn’t have to worry about stamps or network ad buys every time they have something to say.


Interruption Marketing vs. Permission Marketing

There is only one of important purpose of marketer, they need to get attention. Interruption Marketing is the enemy of anyone trying to save time. By constantly interrupting what we are doing at any given moment, the marketer who interrupts the target not only tends to fail at selling his product, but wastes our most coveted commodity, time. In the long run, therefore, Interruption Marketing is doomed as a mass marketing tool. The marketer will get the attention by doing this, but how about the audience perception? Are they feel convenience and respected? I don’t think so.

In Permission Marketing, every marketer must offer the prospective customer an incentive for volunteering. Permission Marketing guarantees that consumers pay more attention to the marketing message. It allows marketers to calmly and succinctly tell their story, without fear of being interrupted by competitors or Interruption Marketers. It serves both consumers and marketers in a symbiotic exchange. Permission Marketing encourages consumers to participate in a long-term, interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.

Permission Marketing and One-to-One Marketing is a natural synergy as these types is to bond relationship with customers.


Permission Marketing: Who use it? Who is the target?

Permission Marketing can be use by everyone. Everyone do the promotion of their product and service in website and blog, free to use this type of marketing.

There are some steps of doing permission marketing:
  1. Have vision and mission
    For doing permission marketing, marketer should have clear vision and mission why they need to do permission marketing. Generally, company does the permission marketing to create reputable image for politely as possible and not forcing. Beside, some company also wants to do customer retention in order to get repeatable purchase from its customer.

  2. Have Source on Internet
    The marketer has to have website, blog, and any other resources on Internet for looking for information, create attention, do the selection and collect e-mail address from target. The marketer also should to persuade the target so they want to give the data and information.

  3. Get Permission from the Target
    The target of permission marketing is the group of people that using internet regularly and likes to read e-mail messages. This is the duty of marketer who does the permission marketing so they not perceive as spammer. From many of people that the marketer already asked for their permission, they choose some that reply or welcoming the marketer message. Those of people that must be tracking by the marketer.

  4. Provide the Marketing Messages
    Marketer should use the appropriate marketing techniques and strategies to do the promotion, such as: newsletter, new product and service information, etc. In this term the marketer should concern to what their target really attractive in. This method is very important so the target unconsciously following the marketer purpose.





Permission Intensity and Models

Consumers define the boundaries of their relationship with firms in such businesses. In some cases, they give the business tremendous leeway and in others the firms are held on a tight leash. Formally, permission intensity is defined as the degree to which a consumer empowers a marketer in the context of a communicative relationship. High permission intensity is characterized by three factors: high information quantity, high information quality and information usage flexibility.

In reality, we observe four business models below:

Model 1 can best be characterized as direct relationship maintenance. Consider an example. Consumers can sign on for sales alerts from United Airlines. Very little additional information is asked for and hence, there is no sophisticated targeting being conducted here. This is seen as an additional service offered to customers to maintain a strong relationship. Hence, this is characterized by low permission intensity, direct contact with advertiser and minimal targeting.




Model 2 can be described as a permission partnership. Here, the consumer provides a portal or media site with the permission to send him or her promotion al offers. After receiving this permission, the intermediary alerts its partners who wish to send out promotional offers. All consumers signed on receive all offers. Examples of this include nytimes.com and lycos.com. This is commonly used to increase traffic to websites. Hence, here we have low to medium permission intensity, contact through an intermediary and low targeting.




Model 3 can be described as an ad market. A consumer provides an infomediary with detailed information about his or her preferences and interests. The infomediary then uses this information to identify advertisers. The ads supplied by these advertisers are then carefully targeted to be consistent with the consumer’s tastes. Consumers win by reducing clutter and are paid to participate in the process, advertisers find target customers for their promotions with lower cost of targeting and the infomediary makes a profit by facilitating this exchange. Hence, here we have high permission intensity, contact through an infomediary and the potential for high targeting precision. Examples of this practice include mypoints.com and chooseyourmail.com.




Model 4 can be described as a permission pool. Here, different consumers provide different firms with the permission to send them promotional offers. These firms pool the information provided by the consumer and then promotional messages are sent out targeting this larger pool. Examples of this practice include yesmail.com.




The difference between model 1 and the rest is that in the former, an individual firm directly transacts with its customers while in Model 2, an intermediary such as a portal plays this role and in Models 3 and 4, an infomediary matches consumer demand for ads with firm ad supply. Naturally, since it may be inefficient for a consumer to sign up with several firms in the manner of model 1, the other models are likely to be more common.


Benefit of using Permission Marketing

There are a lot of advantages that permission email marketing gives a promoter as compared to spamming. Here are some of them:
  1. Legality
    As mentioned above, spamming is considered as an illegal activity and some states have developed laws and measures to be able to stop spammers. Permission-based email marketing is perfectly legal and this erases the risks and possible costs that are associated with being sued.

  2. Ethical
    Permission email marketing is seen as an ethical alternative to spamming. Even if one is not sued for spamming, it doesn’t imply that people are not irritated by the unsolicited emails. Sending marketing materials that are permitted by the receiver are given a “go-signal” and is considered totally ethical.

  3. Promotes a good image
    Companies which employ spamming activities to be able to market their products are instantly hated by the people who receive their emails. Permission-based email marketing gives a company and its product a good corporate image and therefore more appreciated by the targeted audience.

  4. Target audience
    Permission email marketing channels precious resources to the right audience. Spamming throws marketing efforts as if the promoter is blind. People who give their consent to receive emails regarding topics which are appealing to them are people who are willing to spend money for products in that field. Therefore, the right target market is reached rather than carelessly spreading the marketing message.

  5. Avoids costs
    Permission based email marketing avoids added costs. Aside from channeling resources to reach the right audience, permission marketing avoids costs that are associated by being sued by people who have been much irritated by spam emails. Other sanctions that are involved with spamming includes the loss of the company’s ISP.

  6. Appreciation
    Email marketing that is permitted is accepted by people with open arms. Spamming is not really accepted by the public and it is best that one does not engage in this activity.


Example:


Sources:
Yelena Claudia
Nowadays, the hospitality industry is a billion dollar industry that is directly related to the availability of leisure time and disposable income available in a given economy. A hospitality unit such as a standard hotel, extended stay hotel, a restaurant, etc, consists of multiple groups seen across all industries, such as facility maintenance, direct operations, marketing, human resources, and management.

The development of Hotel Industry is increasing and many new entrants enter this industry. So the player must prepare their best effort in order to get the best perception in public mind. Along with the development of information technology (internet), Hotel Industry using internet for create added value.

How the hotel industry can maximize their sources to keep the business exists and can compete with other using internet? By understanding current Internet marketing trends in hospitality hoteliers can enhance their web presence and utilize the Internet as the most cost effective and up-to-date sales and marketing channel.


Background

In the past several years, we have all watched the remarkable growth of the online travel marketplace. With an increasing number of travel consumers doing travel research online (75% of adults in the US - TIA), gaining broadband Internet access at home and becoming more and more accustomed to doing business and transacting on the web, we will continue to see this growth across market segments at an ever increasing rate.


Past

Hotel Industry usually used internet for:
  1. Presenting the short information
    The information usually content the location and star rating. The information is text-based and less in graphics in order to maximize speed at that time.


  2. Contact number
    Hotel companies usually put the contact number in internet and let the visitor make direct contact (via phone) to book the rooms.


Present

Hotels are doing it today, and many more are on the verge of implementing these innovative technologies.

Hotel also leveraging these new tools for it advantages. The overall effects of these new tools on the hospitality business promises to be far-reaching. From the perspective of a hotel, these important advances have the potential to create more efficient and profitable businesses, and make hotel business more appealing to guests.

An estimated 1/3 of all hotel bookings will be done online in 2007, and another 1/3 will be directly influenced by online research and planning, but booked offline. By understanding current Internet marketing trends in hospitality, including travel consumer expectations and perceptions, hoteliers can enhance their web presence, and utilize the Internet as the most cost effective and up-to-date sales and marketing channel.

This year, 40% of all leisure and 35% of business travel bookings will be done online. By 2010 over 50% of leisure bookings are expected to be online. The percentage of meeting planners researching and booking online is also growing at a rapid pace. An estimated 89% of planners are researching event locations on the web, and by 2008, 41% of all groups and meetings travel revenues will come from the Internet. These are some activities that Hotel Industry done nowadays:

Hotel Example :

  1. Provide Detail and Update Information
    These days, Hotel Website already provides complete information for the visitor. Detail information, clear view of facilities, room description and privileges offered can be view by the website visitor. Also the hotel rate can be update at anytime. The other information such as: weather forecast, currency, regulation, and many more can be updated easily.


  2. Direct Online selling
    Direct online channel is the cheapest form of distribution. The shift from indirect to direct online distribution will continue to be a major trend in the next several years. In 2006 the major hotel brands enjoyed an above the average direct vs. indirect online ratio of 81.4% vs. 18.6%. With direct online selling, company can also maintain the interaction with the customer. The customer also will be able to manage the online booking schedule by themselves. This is the example of direct online selling from Ritz Carlton Hotel, Jakarta:


  3. The Indirect Online Channel
    Now is the time to start working with fewer third party intermediaries (TPI), and at drastically lower margins (e.g. 15%-18%). Smart hoteliers deal only with TPI’s that can access the hotel inventory electronically and not via manual extranets. These hoteliers work in strict rate parity, use dynamic TPI margins, and prohibit TPI’s from using trademarked property names for their PPC and search engine marketing campaigns. Other ways to shift consumers from TPI’s to the hotel website include unique product offerings found only on the hotel site and launching or enhancing the hotel loyalty program. Travel Agent is one of the TPI, which can help the hotel selling their rooms. This is the example of Indirect Online Channel (Avia Tour Indonesia) that selling hotel rooms in Jakarta with special rate and special offering:


  4. Customer Generated Media
    CGM continues to grow in importance and popularity. Discussion boards and forums, blogs, social networks, customer review sites like Trip Advisor, and hotel-specific blogs dominate the Internet today and have become an integral part of the travel planning process. In 2006, 28% of travel planners researched CGM sites vs. 4% in 2005. While hoteliers need to monitor and react quickly to CGM postings, and must establish a corporate policy regarding CGM, it is still important to make sure the hotel’s website is up to date, informative, optimized, and user friendly. The picture below is one of the example of customer review site (Trip Advisor) for Ritz Carlton Hotel – Pacific Place, Jakarta:


  5. eCRM and Building Interactive Relationships with Customers
    eCRM must be a vital component of a hotel’s Internet marketing strategy, as the majority of hotel customers are planning and booking their stays online. It is increasingly important to understand customer needs and their lifestyles, and build a marketing strategy based on those needs. Establishing mutually beneficial interactive relationships with your customers is the ultimate goal of any eCRM initiative. Building interactive relationships with the customer consists of three critical lifecycle stages: Nurture—Grow—Retain. In eCRM strategy in travel and hospitality hoteliers need to embrace new sophisticated tools and business practices in the following areas: increasing the knowledge they have about their customers, improving customer service at the online research/planning/booking phase, personalization of the marketing and service delivery, developing new and more efficient customer needs-based marketing, and building customer loyalty.

    With using internet, Hotel Industry could do customer retention activities, which is really important for keeping the customer from the competitor. For example, Ritz Carlton Hotel can cover their customer profile and make them available to give their best service to the customer. Using internet, Ritz Carlton try to cover what the customer needed personally.

  6. Building Customer Loyalty on the Internet
    Existing customers are not only less costly to retain, but they also respond 4-5 times more readily to promotions and e-mail campaigns than new customers. It is important to extract more wealth out of your existing customer base by understanding customer needs and their lifestyles, and building a marketing strategy based on those needs. Knowing the customer, sending personalized messages, being there at every touch-point (planning, purchasing, service consumption and post-stay), and providing a unique value proposition leads to increased customer loyalty.

  7. Behavioral Marketing
    The Internet allows an unprecedented level of behavioral marketing. We can now monitor consumer behavior in all stages of the life cycle and personalize the brand message based on this behavior. Hoteliers can now target their marketing messages according to specific customer behavior, specific demographics, specific customer locations, and specific feeder markets.




Future

In the future, the internet user can experience faster download times, faster searches, more sites and pages viewed, and more rich media and applications possible. Hotel websites must offer better imagery, higher display resolutions, and rich media more than ever. These are some suggestion for Hotel’s Website:
  1. 3D View of Hotel Detail and Virtual Guide
    Using internet, the customer can see the real view with moving effect of rooms according to its types. Besides, there will be virtual tour guide who can explain everything we need to know about the hotel facilities. Like virtual games, visitor could like walking inside and around the Hotel like real, only with directing the mouse.
  2. Room Customization according to guest request
    For maintaining customer satisfaction, Hotel will be able to let the customer set the room according to their preference. After customer design the room on the website, the hotel will prepare the room exactly like what they already design.
  3. GPS System for Hotel’s Location and Direction There will be internal GPS system that can be used in Hotel Area. This system will be appears in mobile phone or Visual Card (the same card that used for Room Key). The GPS system can be set according to guest request. For example: Someone can detect his/ her friends location (according to the dealing at check-in time), but that visitor GPS can’t detect another person in that Hotel. The Visual Card also can be a map that will direct the guest to each location in the hotel. Beside, the card could also access the information and occupancy of facility that will be used by the guests. For example: Restaurant, Spa, etc.


The Hotel Industry is one of the potential businesses to develop, so it must enable to implementing information technologies development to cover the customer needs and build the most excellence customer’s experience and prove their selves as the most appealing one.

source :

Yelena Claudia
Definition of e-Procurement

Electronic Procurement (also known as e-Procurement) is the way of using internet to make easier, faster, and less expensive B2B (business-to-business) purchase and sale of supplies and service over the Internet.

E-Procurement is more than just a system for making purchases online. A properly implemented system can connect companies and their business processes directly with suppliers while managing all interactions between them. This includes management of correspondence, bids, questions and answers, previous pricing, and multiple emails sent to multiple participants.

Well e-procurement system helps a firm organize its interactions with its most crucial suppliers. It provides those who use it with a set of built-in monitoring tools to help control costs and assure maximum supplier performance. It provides an organized way to keep an open line of communication with potential suppliers during a business process. The system allows managers to confirm pricing, and leverage previous agreements to assure each new price quote is more competitive than the last one.



Definition of e-Procurement

Implementing an electronic procurement system offers a company many benefits to the company, such as:
  1. E-procurement helps with the decision-making process by keeping relevant information neatly organized and time-stamped.
    Most are template-driven which makes all transactions standardized and track able. Keeping track of all bids means leveraging your knowledge to obtain better pricing. Companies can focus on their most lucrative trading partners and contracts.
  2. Well-managed e-procurement helps reduce inventory levels.
    Knowing product numbers, bid prices and contact points can help businesses close a deal while other suppliers are struggling to gather their relevant data.
  3. E-Procurement systems that allow multiple access levels and permissions help managers organize administrative users by roles, groups, or tasks. Procurement managers do not need to be as highly trained or paid because such systems are standardized and easy to learn.
  4. With e-procurement all purchases are easier to track because they are done over the Internet and the company's managers can easily see who made which purchases without having to wait to receive a monthly revolving credit statement. Furthermore, many companies incorporate product specifications into their e-procurement systems, so an employee wanting a laptop might only be able to purchase a certain brand with specific features, memory capacity, and software.
  5. E-procurement saves times.
    Buyers do not need to leave their desks or make phone calls to suppliers in order to place orders; they simply go through the Internet. And, because suppliers receive the order almost immediately, they can also fulfill and ship it much faster than with the traditional procurement methods.



There are some real benefits that experienced by some companies that use electronic purchase method (e-procurement):
  1. Lower price of purchasing (5%-20%)
    • More supply resources that can be access
    • New supplier will be easier to get
    • Competitive price
    • Broader the geographic scope
  2. Time Efficiency of Purchasing Process (20-30%)
    • Faster to look the sources
    • Faster to ask for offering request
    • Faster to send the requested list
    • Faster the offering evaluation
    • Faster the release the requested item
    • Faster the follow up
    • Easier to detect the offering
  3. Reduce the time limit for claim and payment.
    • Potentially get the price reduction
    • Reduce the potential mistakes that can be happen in term of offering document, receiving documentations, and billing.
  4. Reduce the administration fee
    • Reduce the manual jobs and paper work
    • Increase the buyer productivity
  5. Develop the ability to create/ manage the optimal supply basis
    • Fix the market data
    • Avoiding the effect of high demand level
  6. Expedite the communication between buyer and seller
    • Faster and more accurate
    • More faster in detecting problem and problem solving
  7. Just-in-time purchasing
    • Daily request communication
    • Daily delivery communication
  8. Supply Chain Management
    • Transparent communication and information delivering in supply chain in real time
    • Synchronization and automatic payment
  9. Support the partnership practice.
    • Support daily, fast, and accurate communication
    • Support transparency between partners.

E-Procurement cause the lower cost with many ways. For example: sale price, admistration fee, inventory cost, and other cost, and that’s why e-procurement can increase company ROI (return on investment). With all the benefit that achieved from E-Procurement, the company can significantly increase ROE (return on equity) dan ROI (return on investment). The price can be reducing directly from the sales price from selling process expense.

Real Example of E-Procurement Implementation in the company
Case of : Starbuck Company



The struggling world economy has some wondering if we - consumers and businesses alike - have raised expectations in the area of sustainability higher than we can afford. It’s a fair question since past environmental movements have stalled when the economy turned sluggish, as it did in the early 1990s.
Starbucks CEO Howard Schultz wrote an interesting piece on this subject last week on The Huffington Post. His take:
Now is a time to be bold. Now is a time to invest, truly and authentically, in our people, in our corporate responsibility and in our communities. The argument–and opportunity–for companies to do this has never been more compelling.

Schultz, in describing their recently stepped up efforts, wrote:
We also announced a set of ambitious but realizable goals for the way we source our coffee, how we help to sustain our environment, and what we can do to work with, and continue to contribute to, the communities in which we do our business and the world as a whole. Consumers are spending less and will more closely scrutinize products; they will embrace only the companies and brands they trust and with which they identify.

In other words, consumers expect companies they know and trust to continue, and even, enhance their sustainability initiatives. Doing anything less would harm the brand and bottom line. So the sourcing and procurement operations will be relied on to drive savings of sustainably sourced direct goods.

That’s why Starbucks decided to become customer of Perfect Commerce that supply the solution for better information technology provider. Perfect Commerce positioned themselves as the company that offers world-class sourcing and procurement solutions for companies of all sizes.

"We needed a provider who offered more than point solutions, and we needed a partner that could provide the flexibility and accelerated implementation of an On-Demand offering. Perfect Commerce delivered on all accounts."
Peter Lohri, Director, Corporate Procurement and Supplier Diversity at TIAA-CREF


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