MAR 6936798

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MAR 6936-798

• E-Commerce Marketing
• Spring 2003Downtown--MBA
• Blown To Bits II
• Rich Gonzalez
• February 6, 2003 (Week 5)

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URLs

• wsj.com (After the Bust)
• www.freshdirect.com
• www.fandango.com
• www.spyderchat.com
• www.carmax.com
• www.kbb.com
• www.carfax.com
• http//cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?Vi
  ewItemitem2402434367category15289

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Grading Criteria

• Start Out With 125 Points
• Areas for ImprovementF Format (Cover page,
  Headings, T ThoroughnessA AnalysisL Late
  (20 a day)

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Agenda February 6, 2003

• WSJ and BusinessWeek Articles
• CDP Example
• Due For February 13
• Blown To BitsDiscussion
• E-Ordering

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For Today February 6

• Blown to Bits, p.99 167
• Analysis Paper 3
• WSJ Online After the Bust, William Boston,
  WSJ Online, January 27, 2003
• BusinessWeekThe Start of A Dot-Comeback, BW,
  February 3, 2003http//www.businessweek.com/magaz
  ine/content/03_05/b3818061.htm

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For February 13

• Blown to Bits, p.221 229
• WSJ Online United Online Adds
  Subscribers,Swings to Profit in 2nd
  Quarter,February 6, 2003
• Hotels.com Triples Net IncomeBut Misses Lowered
  ForecastsFebruary 5, 2003
• Wrap UP Discussion Blown To Bits

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The Start of A Dot-Comeback, BusinessWeek,
February 3, 2003

• Web-Van vs. FreshDirectVisit site
• FandangoVisit site
• Red Envelope
• How Does a Start-Up Get Investment in 2003?
• Focus on the bottom line.
• Models that mimic eBay or trade in information.

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Strategy

• The essence of strategy is choosing to perform
  activities differently than rivals do.
• Must be flexible to respond rapidly to
  competitive and market changes. Michael E.
  Porter
• What Is Strategy?, Nov-Dec 1996, HBR

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After the Bust, William Boston, WSJ Online
January 27, 2003

• Strategy
• 200 Online Brokerages In 2000
• The difference with our previous strategy is
  that today we help the customer make investment
  decisions."
• MORE ServicesMore Consulting
• Searching For New Online Brokerage Model
• Self Trade and Cahoot
• How Many Will Fail?

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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.
• 3. The pace of transactions and customer needs
  for customer service will force firms to adopt
  digital processes---for survival.

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Stewart Brand

• Information wants to be free.

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Scientia Est Potentia

• Applied Problem CDP Stages For An Online/Offline
  Purchase
• Consumer Decision ProcessProblemInfo
  GatherEvaluatePurchaseUse
• What you dont know can hurt you.

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A Car

• MR2 Spyder
• Where Does One Get Info?
• Advocate Sourceswww.carmax.com
• Non-Advocate Sourceswww.spyderchat.com
• Independent Sourceswww.kbb.com

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Source

• Advocate Has an interest in primary transaction
  or related concerns
• Non-Advocate Has no financial interest in
  product or service informationi.e., fellow
  customer
• Independent Standard Issuer, Industry Evaluator,
  Data Provider, Regulator

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Independent Industry Data

• Numerous Sources
• www.kbb.com
• Site Visit

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Advocate For Sale Online

• Numerous Sources
• www.carmax.com
• Site Visit

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Non-AvocateSpyderchat

• InformationAmplificationAsynchronicity
• Site Visit

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For Sale Online

• Numerous Sources
• http//cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?Vi
  ewItemitem2402434367category15289

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Indy Support Data

• Numerous Sources Industry Data
• www.carfax.com
• Site Visit

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Stewart Brand

• Information wants to be free.
• Information wants to be expensive.

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Weekly Analysis Paper 3

• Subject Blown To Bits
• Length 1.5 Pages, Cover Page--125 pts
• Due February 6
• Subjects (use bolded headings)1. Competing on
  Reach2. Competing on Richness 3. Competitive
  Advantage

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Competing on Reach

• Bigger is betterNetwork effect
• Critical mass
• Reach is clutter without navigationi.e., of
  brands of cerealtoo dynamic
• Digital networks have allowed separation of
  navigation and the physical aspects of business
• Blowing up the reach/rich tradeoff creates race
  between suppliers, navigators, retailers
• Navigators facilitate choice but exert influence
  on buyers
• Companies can COMBINE to achieve critical
  masscould not do it alone

In Class Exercise
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Competing on Richness

• Competitors who do not/cannot reach critical mass
  HAVE to compete on richness
• Information can be rich about1) product2)
  customer
• Information on Brands
• Richness could create loyaltyeliminating need
  for navigators
• Richness of info by navigators could lessen need
  for brand as shortcut in evaluation stage
• Adding richness forestalls deconstruction
• Marketers have so much customer data that it
  could impinge on customer privacy

In Class Exercise
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Competitive Advantage

• Navigators CA is by affiliating with interests of
  consumersbuyers agent
• By breaking reach/richness constraint---you get
  the consumer affiliation
• Segment of 1 with data mining, db marketing
  mass customization --reduce cost of marketing
  increase effectiveness

In Class Exercise
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Deconstruction

• Dismantling and reformulation of traditional
  business structures.

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• Adding Richness Is the Best Way To Forestall
  Deconstruction

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(No Transcript)
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Change, Techno, Info, Process...

• The Only Sure Winner Is the Customer

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What Is Wrong With This?
More info, more SCA
Its Linear
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E W Say
SCA
More info, LOTS more SCA
Information
Not Linear
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Richness

• Bandwith
• Interactivity
• Accuracy, Validity (Reliability)
• Security
• Currency

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Reach

• Number of peopleat home or at workexchanging
  information.

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Richness vs. Reach
Encarta
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Richness

• Phonebook
• Ad Insert
• Mag. Ad
• Newspaper
• Radio Ad

• Salesman
• Website
• Experience
• WON

• Direct Marketing
• Website
• WOM
• RFP?

Richer
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Stewart Brand

• Information wants to be free.
• Information wants to be expensive.

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End Here