Tuesday, January 29, 2008

Chapter 4 Key Concept – Marketing on the Web

This chapter discusses the various methods that companies use to market their websites. It discusses the differences in product based and customer based marketing strategies and when each strategy is appropriate. In addition, the chapter explains the benefits and opportunities on the web for advertising and segmenting visitors. Finally, the strategies for measuring the effectiveness of ads are presented.

Web marketing strategies
-creating a marketing strategy you must consider the nature of the product and the nature of the potential customer.
-some managers think of their businesses in terms of the products they sell and makes sense when customers think of their needs in terms of product categories (ex: Staples)- product based organization (organize websites from an internal viewpoint)
-for customers looking to fulfill a specific need, companies should think as if they were the customer when designing web sites
-Customer based marketing strategies-Web creates an environment that allows firms to be flexible enough to meet the needs of many different users and companies can build sites to meet the specific needs of various types of customers
-building a customer based marketing strategy-identify groups of customers who share common characteristics
-Use of customer based marketing approaches was pioneered on B2B sites- customize product/service offerings

Communicating with different market segments
-First step: identifying groups of potential customers ; second step - selection of communication media.
-Media selection is critical for online firms because they don’t have a physical presence- only contact a customer has with firm may be the image projected through website.
Trust and media choices: the web is an intermediate step between mass media and personal contact and offers many advantages of personal contact selling and many of cost savings of mass media.
-Attempts to re-create mass media advertising on the web are likely to fail because many people ignore messages that lack content of any specific personal interest to them and mass media is more successful on passive state of minds while internet users have a more receptive state of mind and are more likely to actively evaluate messages (want to focus on trust building with the personal contact model -web log/blogs)

Market Segmentation
-Advertisers online responded to decrease in effectiveness of mass marketing by identifying specific portions of their markets and target then with specific advertising messages -micromarketing.
-the same person requires different combinations of products and services depending on the occasion-behavioural segmentation
-Online it is easier to design a single web site that meets the needs of visitors who arrive in different behavioural modes.
-usage based market segmentation-customizing experiences to match site usage behavior patterns of each visitor or type of visitor -common patterns of behaviour -categories that marketers use
1. Browsers: some visitors to a company’s web site are just surfing or browsing. Web sites intended to appeal to potential customers in this mode must offer them something that pique their interest Ex: trigger words.
2. Buyers: arrive in buyer mode are ready to make a purchase right way, offer a buyer is certainly that nothing will get in the way of the purchase transaction. The primary goal is to get the buyer to the shopping cart as quickly as possible
3. Shoppers: motivated to buy, but they are looking for more info before they make a purchase decision. A site should offer comparison tools, product reviews, and lists of features.

Customer relationship intensity and life cycle segmentation
-Good customer experiences can help create an intense feeling of loyalty. A five stage model of customer loyalty:
-Awareness: recognize the name of the company/product exists but have not had interaction with it. Advertising is highly used
-Exploration: potential customers learn more about the company or its products
-Familiarity: completed several transactions and are aware of the company’s policies regarding returns, credits, and pricing flexibility are in the familiarity stage are as likely to shop and buy form competitors as they are from the company.
-Commitment: experiencing number of highly satisfactory experiences and the customer develops a loyalty and preference and are willing to tell others about how happy they are with their interactions. Companies sometimes make concessions on price or terms.
-Separation: goal to move customers into the commitment stage at rapidly as possible and keep them there as long as possible.

Acquisition, conversion, and retention of customers
-benefits of acquiring new visitors vary depending on revenue models.
-total amount of money that a site spends to draw one visitor to the site is called the acquisition cost.
- total amount of money that a site spends, on average, to induce one visitor to make a purchase – conversion cost.
-The costs of inducing customers to return to a website-retention costs.
-The cost of acquiring a new customer is between 3 and 15 times the cost of retaining an existing customer.
-Funnel model: the wider the bottom of the funnel, the better the strategy, the more prospects are converted into loyal customers.

Advertising on the web
-Banner ads: dominant advertising format in use on the web, a small rectangular object on a web page that displays a stationary or moving graphic and includes a hyperlink to the advertiser’s website. It is a versatile advertising vehicle
-Today, a variety of animated GIFs and rich media objects created using Shockwave, Java, or Flash are used to make attention grabbing banner ads. The standard banner sizes for websites -interactive marketing unit ad formats.
-Banner ad placement: three different ways to arrange for other web sites to display their banner ads. The first is to use a banner exchange network –coordinates ad sharing so that other sites run one company’s ad while the other company’s site runs other exchange members’ ads. The exchange requires each member site to accept two ads on its site for every one of its ads that appears on another members site. The exchange then makes its profit by selling the extra ad space to other businesses. The second way that businesses can place their banner advertising is to find websites that appeal to one of the company’s market segments and then pay those sites to carry the ads. A third way to place banner advertising is to use a banner advertising network (acts as a broker between advertisers and web sites that carry ads).

Measuring Banner Ad Cost and Effectiveness
-Mass media efforts are measured by estimates of audience size, circulation, or number of addresses, Cost per thousand.
-visit occurs when a visitor requests a page form the website.
-Each page loaded by a visitor counts as a page view. If the page contains an ad, the page load is called an ad view.
-Each time the banner ad loads is an impression. If the visitor clicks the banner ad -a click or click through.
-A pop behind ad is a pop up ad that is followed very quickly of a command that returns the focus to the original browser window.
-interstitial ad- when a user clicks a link to load a page, the interstitial ad opens in its own browser window instead of the page that the user intended to load. They open in a full size browser window, offer even more space-completely cover webpage
-Rich media ads/active ads generate graphical activity over the web page itself instead of opening in a separate window and contains moving graphics, audio and video elements.
-Site Sponsorships: web sites offer advertisers the opportunity to sponsor all or part of their sites. They give advertisers a chance to promote their products, services, or brands in a more subtle way than by placing banner or pop up ads on the sites.

-Permission Marketing-conversion rates on requested email messages range from 10 percent to more than 30 percent- much higher than the click through rates on banner ads. Opt in email, permission marketing
-One strategy for getting email accepted by customers is to combine content with an advertising email message.

Technology-Enabled Customer Relationship Management
-The info that a website can gather about its visitors is called a clickstream.
-Technology enabled relationship management occurs when a firm obtains detailed info about a customer’s behaviour, preferences, needs, and buying patterns, and uses that info to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize its entire relationship with that customer.

Creating and Maintaining brands on the web
-Key elements of a brand are differentiation, relevance and perceived value.
-Brand is an emotional shortcut between a company and its customers. Emotional appeals are difficult to convey on the web because it is an active medium controlled to a great extent by the customer.
Marketers are attempting to create and maintain brands on the web by using rational branding. The offer to help web users in some way in exchange for their viewing an ad-cognitive appeal of the specific help offered.
-extend their dominant positions to other products and services, a strategy called brand leveraging.
-affiliate marketing one firm’s web site –affiliate firm-includes descriptions, reviews, ratings, or other info about a product that is linked to another firm’s site that offers that item for sale. For every visitor who follows a link, the affiliate site receives a commission. The affiliate site also obtains the benefit of the selling site’s brand in exchange for the referral.
-Affiliate commissions can be based on several variables: pay per click model the affiliate earns a commission each time a site visitor clicks the link and loads the seller’s page. Pay per conversion model, the affiliate earns a commission each time a site visitor is converted from a visitor into either a qualified prospect or a customer. An affiliate program broker is a company that serves as a clearinghouse or marketplace for sites that run affiliate programs and sites that want to become affiliates-often provide software, management consulting, and brokerage services to affiliate program operators.

Search engine positioning and domain names
-A search engine is a web site that helps people find things on the web. It contains three major parts:
-spider/crawler/robot is a program that automatically searches the web to find web pages that might be interesting to people. When the spider finds web pages it collects the URL of the page and info contained on the page. The spider returns this info to the second part of the search engine to be stored - the index or database (checks to see if info about the web page is already stored). The third part of the search engine is the search utility (visitors provide search terms and the search utility takes those terms and finds entries for web pages in its index that match them).
-Search engine placement brokers-companies that aggregate placement rights on search engines and sells combination packages
Web site naming issues
-URL brokers – business of selling, leasing, or auctioning domain names that they believe others will find valuable (ICANN)
-Domain name parking (aka domain name hosting) is a service that permits the purchaser of a domain name to maintain a simple website so that the domain name remains in use. The fees charged are lower than those for hosting an active website.

Application
Facebook is a social networking system that has been growing in popularity. Recently, companies have been directing efforts towards taking advantage of the opportunities available with advertising their products and services. Facebook now offers a variety of advertising options for firms that are some-what targeted. Various ads are placed on different groups and networks on Facebook to provide a more targeted segment for advertisers. Companies also have the opportunity to create their own profile. This provides an opportunity for companies to take on customer-based (personal) strategy with potential customers.

Wednesday, January 23, 2008

Key Concept - Chapter 3 – Selling on the web: Revenue models and building a web presence

REVENUE MODELS
1. Web Catalog Revenue Models
-Online retailers using a variation of the mail order catalog revenue model - establish a brand image, uses the strength of that image to sell products/services with product info on websites and customers can place orders through website or phone
-Types of businesses using the Web catalog sellers:
1. Computers and consumer electronics: ex: Dell creates value by offering flexibility to customers and various ways to access info
2. Books, music, and videos: most visible examples of e-commerce
3. Luxury goods: providing heavy use of graphics, animation, and info versus generating revenue
4. Clothing retailers: customers examine clothing and place orders through website. Problem: color settings on computer monitors.
5.Flowers and gifts
6.General Discounters: many new companies have started on the web with no bricks and mortar presence – capitalize on the benefits of internet and charge lower prices. Many web discount retailers originally sold advertising on sites to subsidize low product prices.

2. Digital Content Revenue Models
-Use the web as a new and efficient distribution method.

3. Advertising supported revenue models
-was declining from 2000-2002 but has started to grow at a slower pace. Successful sites attract specific groups for direct messages.
-Success hampered by: (1)no consensus on how to measure and charge; (2)Few sites have enough visitors to interest large ad firms.
-Web portals: Web directory is a listing of hyperlinks to web pages. A portal/web portal -site that people use as a launching point and often includes a web directory and search engine
-Newspaper publishers: publish print content on web-greater exposure, large audience, but can take away sales from print editions.
-Targeted classified advertising sites: sites that target niche markets have been more successful. Ex: web employment advertising.

4. Advertising subscription mixed revenue models
-subscribers pay a fee and accept a level of advertising.
-Some newspapers including The Washington Post and the Los Angeles Times use a variation of the mixed revenue model-don’t charge subscription fees for access to web sites but offer current stories free of charge, but require visitors to pay for articles retrieved from archives. In general, newspaper sites today are relying on advertising to provide revenue.

5. Fee for Transaction Revenue Models
-businesses offer services and charge a fee based on the number/size of transactions processed.
-Disintermediation: removal of an intermediary from a value chain. Re-intermediation: introduction of a new intermediary.
-Travel agent: earn commissions on each transaction. The value added by a travel agent is information consolidation and filtering. Many travel agents now charge their customers a flat fee for processing a ticket.
-Automobile sales: removes the salesperson provides an information service to car buyers – implements the fee for transaction revenue model. Locate dealers willing to sell the car specified by the buyer for a small premium over the dealer’s nominal cost.
-Stockbrokers: charge customers a commission for each trade executed. Ex: ETRADE
-Event tickets: sell tickets from one virtual location
-Real estate and mortgage loan brokers
-Online banking and financial services: important feature offered is account aggregation - ability to obtain bank, investment, loan, and financial account information from multiple web sites and display it all in one location at the bank’s website. A bill presentment service provides an electronic version of an invoice or billing statement.

6. Fee for Service Revenue Models
-Companies are offering a variety of services on the web for which they charge a fee based on the value of the service.
-Online games: many sites relied on advertising revenue in the past, a growing number now include premium games.
-Concerts/films: selling subscriptions for delivery of videos to computers through cable modem and DSL connections.
-Professional services: laws can prevent practicing professions on the web because patients/clients could be located else where

REVENUE STRATEGY ISSUES
Channel Conflict and Cannibalization
-Channel conflict: sales activities on a company’s web site interfere with its existing sales outlets-aka cannibalization because the web site’s sales consume sales that would be made in the company’s other channels.
-Giving customers access to products through coordinated channels-channel cooperation.

Strategic alliances and channel distribution management
-Strategic Alliances: 2+ firms join forces to undertake an activity over a long period -operating in the network form of organization.
-Channel distribution managers (fulfillment managers/category managers) take over responsibility for a particular product line within a retail store. They provide more knowledge about the product line.
-Mobile Commerce: capitalize on increased bandwidth of wireless devices could be successful if the audience would be willing to pay a subscription fee or view ads.

CREATING AN EFFECTIVE WEB PRESENCE
-An organization’s presence is the public image it conveys to its stakeholders.
-Stakeholders: customers, suppliers, employees, stockholders, neighbors, and the general public.

Achieving web presence goals
Effective sites create an attractive presence that meets the objectives of the business or organization. These objectives include:
1) Attracting visitors to web site
2) Making the site interesting so visitors stay and explore
3) Convincing visitors to follow site’s links
4) Creating an impression consistent with the organization’s desired image
5) Building a trusting relationship with visitors
6) Reinforcing positive images that the visitor might already have about the organization
7) Encouraging visitors to return to the site

Not for profit organizations
-Use their websites as a central resource for communications
-A key goal for the web sites is information dissemination.
-Web allows info integration and dissemination and provides a communication link

WEB SITE USABILITY
Meeting the needs of web site visitors
-Every visitor is a potential customer so there is variation in visitor characteristics.
-Visitors are connected through different channels with different bandwidths and web browsers.
–Build flexibility by offering separate versions with and without frames and give visitors the option of choosing either one

Trust and Loyalty
-Create value in a relationship with a customer by developing customers’ trust into loyalty.
-Common weak spot is the lack of integration between the companies’ call centers and web sites and Email responsiveness

Usability testing
-Learn about visitor needs, watching different customers navigate test designs-cost of testing is low compared to the total cost of site
-Putting the customer at center of site designs -customer centric approach
-Design site around how visitors will navigate, allow visitors to access information quickly, avoid using inflated statements in product descriptions, avoid jargon, build site to work for visitors using old software, be consistent in use of design features, navigation controls clearly labeled, test text visibility on smaller monitors, make sure color combinations don’t impair viewing, conduct usability tests by having potential site users navigate through versions of site

The Nature of Communication on the web
-Two approaches called communication modes: personal contact and mass media.
-Personal contact model, the firm’s employees individually search for, qualify, and contact potential customers-prospecting.
-Addressable media are advertising efforts directed to a known addressee and include direct mail, telephone calls, and email. The internet isn’t a mass medium or a personal contact tool-the web is a tool for reaching the hard middle-markets that are too small to justify a mass media campaign yet too large to cover using personal contact.

Application
There are a variety of companies using different revenue models online to generate revenues and conduct business. For example: Ikea, a traditional bricks and mortar company that also uses a catalog revenue model, has capitalized on the benefits of the internet and has brought its catalog online. The company allows customers to view the catalog online, create a shopping cart of desired products, and purchase these products directly from the website. Ikea has extended its traditional mail-order catalog model onto the web which has helped the company reduce costs and extend its customer reach. Other companies, like MaCorr Inc have incorporated a fee for service revenue model. The company conducts market research for companies and charges a fee for the service provided.

Monday, January 21, 2008

Chapter 3 class notes: Selling on the web

REVENUE MODELS-before the sale-how is the transaction going to take place

Web Catalog (putting product info/inventory lists on the web)
Books and CDs:
Clothing and Apparel:
Computers and electronics:
Luxury goods:
Flowers and gifts:
General discounters:

Digital Content (IP) (intellectual property – stuff you own the copyright too or licensed the copyright too – you have the right to distribute)
Journal articles
Research studies
Industry reports

Advertising Supported (attach to search engines and high traffic sites)
Web directories/portals
Search engine
Shopping directories
White/yellow pages
Free email/chat rooms
Games
Calendars
Newspaper publishers (advertising appear on content pages)
Classified advertising sites

Mixed model advertising-subscription supported
-advertising fees as well as subscription fees for content products (fee for access to product – must have something to offer/sell to customers)

Fee for transaction (every single sale or transaction – a piece of the profit goes to the website or e-commerce site – getting paid based on each transaction or the number of transactions-doesn’t matter the size of the purchase at the time-flat fee)
Travel agents
Automobile sales
Insurance brokers
Stock brokers
Event tickets
Real estate brokers
Online banking
Online music
Examples

Fee for service (paying for the value of the service provided – usually professional services, etc)
Online games
Concerts and films
Professional services
Examples

Web usability
-usability tests, flow of website-easy to navigate

Web presence
Attractive and easy to use
Ranks high on stickiness (not only attracting web visitor to website but also retaining them and getting them to do further shopping - ex: having a site load quickly to ensure customers do not get frustrated and leave)
Provides quick links/content
Provides help and support
Portrays consistent image
Reinforces positive image
Builds trusting relationship ** - GOAL - meet expectations
Engages for return ability - updated content - social presence sites (forums) - have new and exciting information so people are encouraged to come back and check it out

Strategic issues – sale has already occurred – how is the transaction going to affect the back end processes/stakeholders
Channel conflict/cannibalization
Alliances/distribution management
Mobile commerce

Thursday, January 17, 2008

Chapter 2 – Technology Infrastructure

This chapter explains the origin of the internet and the events that have made the internet what it is today. The author also goes into depth about the components of the internet and the developments that have occurred over the past years to improve its efficiency. Networks, protocols, connections, e-mail, and markup languages are touched on and explained. In addition, Internet2 and the Semantic Web are discussed to present a picture of the future of e-commerce.

The Internet and the World Wide Web
A computer network -technology that allows people to connect computers to each other
Internet: connects computer networks around the world
World wide web: subset of the computers on the internet that are connected to each other

Origins of the Internet
-1960s- US Defense concerned about nuclear attacks on facilities wanted coordinated system and looked for ways to connect computers
-Defense was concerned about risk of a single telephone channel and developed a multiple channel system that allowed files to be broken into packets that were labeled electronically with codes of origin, sequences, and destinations.
-In 1969, Defense Department researchers (Advanced Research Projects Agency) connected 4 computers into a network - ARPANET.
-1972- first email system was developed by Ray Tomlinson
-1974- TCP/IP – Vint Cert known as the grandfather of the internet developed protocols (common language, rules for transferring data)
-1979- Usenet was developed to provide a news group network – email for groups
-1980s-National Science Foundation (NSF) funded by government - provide access to the resources of the government
-1991 the NSF (national science foundation) eased restrictions on commercial internet use to privatize internet completed in 1995 when NSF turned the main internet connections to a group of privately owned firms- new structure based on four network access points
-Network access providers-sold internet access to large customers and indirectly to smaller firms through internet service providers.
-Internet hosts-computers directly connected to the internet.

Emergence of the WWW
-web-software on computers connected to the internet. Two key elements of the web: hypertext and graphical user interfaces
-1945: Vannevar Bush – wrote a book that talked about a machine (Memix) that stored memory items that could be retrieved
-1960s: Tex Nelson created the term hypertext
-Hypertext: text on one page links to text on another
-1989-Tim burners-lee (father of the web) - hypertext to provide data sharing and developed a code for hypertext server-a computer that stores files written in hypertext markup language and allows computers to connect and read filesà aka web servers.
-Hypertext Markup Language (HTML): language that includes a set of codes attached to text and graphics that describe the relationships among text. Hypertext link/hyperlink points to another location in the same or another document
-Web browser: software to help read HTML documents and move among documents through text formatted with hypertext link tags. Presents HTML documents in an easy to read format.
-1993: Mosaic – first web browser
-1994: Netscape (formed by the merger of Andreesen and Clark)

Packet Switched Networks
-Local area Network: network of computers that are located close together
-Wide area Network (WAN): networks of computers connected over greater distances-early models were circuits of phone companies.
-Internet uses packet switching network to move data between two points -files are broken down (packets) labeled electronically with their origins, sequences, and destination addresses and travel along interconnected networks until they reach destinations.

Routing Packets
-Routers: decide best method to get packets to where they need to be- connect networks. Include rules called routing algorithms
-Network devices that move packets from one part of a network to another - hubs, switches, and bridges. When packets leave a network to travel on the internet they must be translated into a standard format. Routers perform this.
-Internet has routers that handle packet traffic along main connecting points- internet backbone

Internet Protocols
-A protocol -collection of rules for formatting, ordering, and error checking data sent across a network. Two main protocols: Transmission Control Protocol -controls disassembly of a file into packets before transmitted over the internet, controls reassembly of packets into original formats at destinations.
-IP specifies details for each packet, labeling each with origin and destination addresses.
o Internet Protocol version 4 (IPv4)-uses a 32 bit number to identify computers connected to the internet.
o Subnetting-stretch the supply of IP addresses-the use of reserved private IP addresses within LAN/WANs to provide additional address space. Private IP addresses-IP numbers not allowed on packets that travel on internet. Network address translation (NAT) device converts private IP addresses into normal addresses when packets travel over internet.

Domain names
-Top level domain: .com. since 1998, the internet corporation for assigned names and numbers has been responsible in managing. Sponsored top level domain: organization other than ICANN is responsible.

Web page request and delivery protocols
-Web client computers send requests for web page files to web servers which receive requests and sends files back. Web client computer’s software transform files into webpages. Purpose of a web server is to respond to requests for web pages from web clients.
-The set of rules for delivering web page files over the internet is in a protocol called the hypertext transfer protocol (HTTP). The combination of the protocol name and the domain name is called the uniform resource locator.

Electronic Mail Protocols
-Simple Mail transfer protocol specifies format of a mail message and describes how mail is administered and transmitted on internet.
-Post office protocol -tell email server to send mail to user’s computer and delete it
-Interactive Mail access protocol-newer, similar to POP but includes more features -don’t have to download messages to computer)

Markup Languages and the web
-Text markup language: specifies a set of tags inserted into text, provides formatting instructions that web software can understand to turn text in the files into web page.
-Standard Generalized Markup Language (SGML)-markup language and a meta language (language that can be used to define other languages). Used when creating documents to be printed in different formats
-Extensible Markup Language (XML) is used to mark up info that companies share with each other over the internet.
-XHTML: allows tag customization- XML differs from HTML in two ways: (1) XML isn’t a markup language with defined tags. It is a framework in which people can create their own set of tags. (2) XML tags don’t specify how text appears on a web page; the tags covey the meaning (the semantics) of the info included within them.
-HTML includes tags that define the format and style of text in an electronic document and has tags that can create relationships among text within one document or among several documents- hypertext elements.
-HTML Tags-HTML document that is interpreted by web browsers and used to format the display of text enclosed by tags.
-Cascading style sheets (CSS)-instructions-let designers define formatting styles that can be applied to multiple web pages.

Intranets and Extranets
-Intranet: interconnected network that doesn’t extend beyond the organization that created it. -Extranet: an intranet extended to outside entities-ex: suppliers. Participants have access to databases, files, etc.
-Virtual private network (VPN) extranet using public networks and protocols to send sensitive data using IP tunneling or encapsulation - (private passage that provides secure transmission with encrypted packets that are put inside another packet)

Internet Connectivity overview
-Bandwidth amount of data that can travel through a communication line per unit of time.
-Symmetric connections provide the same bandwidth in both directions. Asymmetric connections provide different bandwidths for each direction. Upstream bandwidth (also called upload bandwidth) amount of info that can travel from the user to the internet. Downstream bandwidth -amount of info that can travel from the internet to a user
-Broadband-connections that operate at speeds of greater than about 200 Kbps
-Asymmetric digital subscriber line-provide broadband range & transmission bandwidths
-DSL is a private line with no competing traffic
-Bluetooth one of the first wireless protocols for personal use over short distances
-Ultra Wideband (UWB) provides wide bandwidth connections over short distances developed for short range secure communications
-Wi-Fi (Wireless Ethernet/ 802.11b)- communicate through a wireless access point connected to a LAN to become part of the LAN.
-Wireless access point (WAP) transmits network packets between Wi-Fi computers and other devices within its range.
-Roaming shifting from one WAP to another, without requiring intervention by the user.

Internet2 and the semantic Web
-Internet2: test bed for new network technologies -high bandwidth backbone
-Semantic web-words on web pages being tagged (using XML) with their meanings. People could use intelligent programs called software agents to read the XML tags to determine the meaning of the words in their contexts.

Application
The internet has changed the way in which people communicate. The transition for web 1.0 to web 2.0 allowed us to go from just reading content passively to actually being actively involved in the creating of the content at that very instance. Rather than just sending messages back and forth through email we can now use blogs and communities to instantaneously talk back and forth. This new communicate mode provides more control over information, provides quicker and more efficient communicate and information sharing and collaboration. For businesses on line, web 2.0 can provide more information about customers and easier access to help build relationships. Ex: having a blog on a company website can help customers share information about the products and encourages feedback that can help the company better understand their customers.

Sunday, January 13, 2008

Ch. 1 Key Concept

Chapter 1 Intro to E-commerce

Revenue model: sales aspect, bringing money into the company; creating one channel to bring in sales and take advantage of the opportunities. Identifying customers, marketing to customers, value added merchandising
Business model: focused on all the strategic elements of your business and what it does; bottom line driven. Terms to know --> Globalization versus localization; translation

Sound bites:
-dot comes and dot bombs (ex: e-toys, flooz, kozmo.com, pets.com, webvan)
-fortunes have been made and lost
-still riding the learning curve on what works and what doesn't (trial and error especially true for early adopters)
-being first to market isn't that important anymore
-EDI and EFT have been around since the 1960s***
-60% of Internet content is in English; more than 50% of internet users don't read English, more than 75% of internet users live outside of the US

E-commerce defined:
· E-commerce is the exchange of info across electronic networks at ANY STAGE IN THE SUPPLY CHAIN whether within an organization, between businesses, between business and consumers, or between public and private sectors whether paid or unpaid
· Ecommerce is commerce but it is accelerated and enhanced by IT
· More important part of supply chain à exchange of info
· TRANSACTIONS

E-business:
· Transformation of key business processes through the use of internet technologies
· It includes e-commerce à includes the front and back office applications that form the engine for modern business.
· It’s not just about e-commerce transactions but about redefining old business models with the aid of technology to max value to customers
· SUPPORTING PROCESSES - All supporting infrastructure

E-commerce and e-business (views)
1. Some degree of overlap
2. They are the same
3. E-commerce is a subset of e-business (ex: IBM’s vision as explained above)
**tends to vary based on size of firm**

E-commerce categories
1. B2B (supply chain, value chain, ex: dell)
2. C2B (demand aggregation, ex: consumer groups-consumers get together and join together and approach a vender to get volume discounts)
3. B2C (commerce over the net, ex: Amazon)
4. C2C (community groups, ex: eBay)

B2B-growth in markets online (electronic market places in which companies (including competitors) working together. Ex: Ford’s auto-xchange. Disintermediation is getting rid of the middle man. Competitors using the same suppliers and using the same materials

First Wave Characteristics
-dominant influence of US
-extensive use of English
-many new companies started out with outside investor money
-piracy, hacking, and security troubles
-over emphasis on advertising as a revenue source
Second Wave Characteristics
-global enterprises (multi culture and lingual)
-established companies fund electronic commerce initiatives with own capital
-integration with key business processes
-many customers are linking to broadband

Product/process suitability for online purchasing and selling
Commodity item
- hard to distinguish from rivals products/services
Shipping profile - how easily can a product be packaged and delivered
High value to weight ratio - what is the ratio of shipping costs to the selling price
Digital products

Advantages of e-commerce
1. Increase sales through enhanced customer services
2. Decrease costs of handling inquiries and transactions
3. Reach potential customers in very country
4. Increase purchasing opportunities/options for buyers
5. Can make negotiating price and delivery terms easier
6. All transactions easier, quicker, with an audit trail ****
7. Reach ***
Disadvantages
1. Perishable products are harder to sell online
2. Difficult to calculate ROI
3. Companies become myopic and are sucked into the concept that their business is centered around e-commerce (the excitement) versus whether they are actually making money

Global Nature of e-commerce
1. Trust issues – use brand recognition and image to connect to customers
2. Language issues – focus on localization which considers multiple elements of the local environment. **Translation is word by word whereas localization considers customs and values, etc.
3. Cultural issues (expectations of parties and how each will react-values/customs)
4. Infrastructure issues

Monday, January 7, 2008

Hey yall, welcome to my blog!

My name is Jenelle. I am a 4th year marketing student at Okanagan College with only 14 weeks until I complete my program! I am currently taking 4 classes and work part time. My long term goals are to travel around the world and obtain a job in hospitality marketing.