MAR 4933002

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MAR 4933-002

• E-Commerce Marketing
• Fall 2002Tampa
• Customer Interface
• Rich Gonzalez
• October 21, 2002 (Week 9 Monday)

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URLs (Well probably Visit Today)

• www.cdbaby.com
• Various Others, see slides

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Agenda October 21, 2002

• Customer InterfaceChapter 6
• Due For October 23

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For Today October 21

• Prices Just Keep Plunging, p38, BusinessWeek,
  October 21, 2002
• Chapter 6Customer Interface
• F2F to S2F???
• Find one website and make a comment on it (on
  listserv) per Chapter 6

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Suggested Sites

• www.disney.com
• www.bbc.co.uk
• www.dillards.com
• www.cdnow.com
• www.gap.com
• www.ae.com
• www.shockwave.com

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For October 23

• The Power of Optimal Pricing, p68, Business
  2.0, July 21, 2002
• Chapter 6Customer Interface

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Article Handout on Pricing
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BusinessWeek Prices

• Prices Rising?
• Increases Down, CPI Down
• Disinflation
• Profits Squeezed
• Southwest
• Decrease Costs
• Differentiation Pricing Power
• Any Prices Rising?

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Last Time

• Revenue Models
• Information-- Restaurant Info

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Revenue Models
Some used most frequently
Advertising

• Advertising revenues can be generated through
  the selling of ads, site sponsorships, event
  underwriting, etc. (e.g., Yahoo, AOL,
  Business2.com)

Product, Service, Information

• Revenues can be generated from the sales of
  goods and services (e.g., Amazon, CDNow, Google
  Answers)

Transaction

• Revenues can be accrued from charging a fee or
  taking a portion of the transaction sum for
  facilitating a customer-seller transaction (e.g.,
  eTrade, eBay)

Subscription

• Website can gain revenues by offering
  subscription services for information (e.g.,
  FT.com, NYTimes.com)

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Porter Strategy Model
Three basic strategies, each implies different
business model Only one strategy at the time
Possible Strategies
Differentiation
Cost
Niche

• Requires constant innovation and leadership on
  the benefits that matter most to the customer

• Focus on gaining competitive advantage on costs
  while maintaining parity level on differentiation

• Focus the business on a particular segment of
  the market and then pursue either differentiation
  or cost strategy

Business Model
Networked Economy Example

• Travelocity.com

• Lowestfare.com

• Lastminute.com

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RJS Model Business Classifications

• Key concepts
• 2x2 table to categorize businesses based on the
  Source of Content Origination and the Focus of
  Strategy
• Four pure-play approaches, and hybrid approaches

Source of Content Origination
Multiple Brand
Single Brand
Supply-Side
Demand-Side
Focus of Strategy
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Porter/Strategy/SCA
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Strategy

• Is about planning, direction, preparedness.

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Porter

• Doesnt like the new economy

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Porter

• Internet An Enabling Technologya Powerful Set
  of Tools For Almost Any Industry and Strategy

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Strategy and the InternetThe Internet...

• Rarely nullifies the most important competitive
  advantages

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Porter Value

• Economic value is created PROFITS
• The metric is
• Price minus costs
• How does an industry create value?What are the
  factors?
• Industry Structure
• Sustainable Competitive Advantage

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End Here
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Porter Distorted Market Signals

• 1. Sales/Revenues3 reasons
• 2. Costs
• 3. Stock as payment
• Rampant Experimentation

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Strategy and the InternetThe Internet...

• Tends to weaken industry profitability
• Should be viewed as a complement to traditional
  ways of competing
• Doesnt change everything
• Not a blessing
• Has a leveling effect on industry

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Porters Most Interesting Question

• Will all the values end up going to customers, or
  will companies be able to reap a share of it?

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Porter Predictions

• Most industries will likely end up with more
  competitors
• More low-cost bandwith
• BP of customers?
• SCA is only way to above average profitability

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Porter Conclusion

• The Internet will rarely be a competitive
  advantage.

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Criticism of Porter

• Companies can compete on both differentiation and
  low-cost.
• Companies are not limited online to one industry
  domain.

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Customer Interface
Technology-mediated interface
People-mediated interface
Face-to-face interaction
Screen-to-face interaction
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3 Fundamental Business Shifts

• 1. Most transactionsB2C, B2B, C2C and G2C will
  become self-service digital transactions.
• 2. Customer service will become the primary
  value-added function in every business. Personal
  consultancy not routine services.
• 3. The pace of transactions and customer needs
  for customer service will force firms to adopt
  digital processes---for survival.

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No Frills Discounter

• www.overstock.com
• Kind of like outlet malls
• www.cdbaby.com

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Rich E-tailer

• www.FAOschwarz.com
• www.barneys.com
• www.disney.com
• Less Selling, More Content

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Design Principles

• FitHow do the 7Cs support the business model?
• ReinforcementDegree of consistency between each
  of the Cs

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Jakobs Law of Internet User Experience

• Users spend most of their time on sites other
  than on yours.

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Jakobs Nielsens Homepage Guidelines

• Generally apply also to the entire website.
• Has Several. Well Use Only 8

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Jakobs Nielsens Homepage Guidelines

• 1. Communicating the Sites Purpose
• 2. Communicating Information About the Company
• 3.Content Writing
• 4. Navigation
• 5. Search
• 6. Graphics and Animation
• 7. Customization
• 8. Fostering Community

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Customer Interface

• Virtual Representation of Firms Value
  Proposition
• Information
• Navigation
• Is the site worth spending time at?

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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that
webpages contain
Commerce Sites capability to enable commercial
transactions
Community The ways sites enable user-to-user
communication
Connection Degree site is linked to other sites
Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-user
communication or two-way communication
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7Cs Framework

• of Interface Design

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Dimensions of Context
The context of a site can take many different
forms the two key context dimensions are
function and aesthetics
Function
Aesthetics

• The layout of the site
• Section breakdown
• Linking structure
• Navigation tools
• The performance of the site
• Speed
• Reliability
• Platform independence
• Media accessibility
• Usability

• The aesthetic nature of the site
• Color scheme
• Visual themes

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Context Archetypes

Content archetypes refer to broad, generic
approaches to context design
Aesthetically Dominant
Functionally Dominant
Integrated

• High form low function
• Look-and-feel of the site is the primary emphasis
• The site is slow to load, limited in information

• Low form high function
• Focused on the display of textual information
• The visual design is limited
• Pure text no graphics, sound or animation

• Balance of form and function
• Attractive and easy-to-use interface
• The use of a clear design theme, small images and
  plenty of white space

LandsEnd.com vs. LuckyJeans.com
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Five Content Archetypes

• One-stop shop with a wide range of goods in
  multiple product categories

Superstore
Offering Dominant

• Exclusive provider of products and services
  within the specific category

Category Killer

• Focus on exceptional quality and exclusivity
  while selling single or multiple categories of
  products

Specialty Store

• Provider of information goods although physical
  products can be purchased as a complement
• Sites are generators, sources or aggregators of
  content

Information Dominant
Market Dominant

• Provider of place for transactions, where
  buyers and sellers come together to conduct
  business

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Content Archetypes Ex.

• Superstore amazon.com
• Category Killer petsmart.com
• Specialty Store Williams-Sonoma
• Information Dominant Business 2.0
• Market Dominant

www.barneys.com