EBUS400 eBusiness

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EBUS/400 eBusiness

• Randy Hill, PMP

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Agenda
1. Admin
2. Review
3. eBusiness Marketing
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Questions?
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Course Outline

• Week 1 eBusiness Strategy
• Week 2 eBusiness IT Infrastructure and Supply
  Chain
• Week 3 eBusiness Marketing
• Week 4 eBusiness Legal, Ethical, and Regulatory
  Issues
• Week 5 eBusiness Trends

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Objectives

• Explain marketing in eBusiness.

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Marketing

• Social and managerial process
• Individuals and groups obtain what they need and
  want through creating, offering, and exchanging
  products of value with others

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Products

• Anything that can be offered to satisfy a need or
  want
• People satisfy their needs and wants with goods
  and services

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Value, Cost, and Satisfaction

• How do consumers choose products that might
  satisfy a given need?
• A consumer has to decide which product will
  deliver the most total satisfaction
• The guiding concept is customer value

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Transactions and Relationships

• A transaction consists of a trade of values
  between two parties
• Monetary transactions
• Barter transaction
• Example eBay (C2C exchange)

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The Marketing Concept

• Determining the needs and wants of target markets
• Delivering the desired satisfactions more
  effectively and efficiently than competitors
• Therefore, the online marketing approach consists
  of
• Determining what our chosen customers need and
  want
• Planning how we are going to meet those needs
• Implementing our plan

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Marketing Strategy

• Therefore, the online marketing strategy becomes
• Focusing resources on those activities where the
  company can gain a competitive edge, which will
• Increase company competitiveness

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Marketing Mix

• Marketing mix is the set of marketing tools that
  a company uses to pursue its marketing objectives
  in the target market
• The 4Ps of the marketing mix are
• Product
• Price
• Place
• Promotion

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Activity

• Break into 3 groups
• Group 1 Music
• Group 2 Automobiles
• Group 3 Technology
• Take 10 minutes and discuss the industry assigned
  to your group. At the end of the discussion
  explain which of the 4 Ps is the most important.
• Product Price
• Place Promotion

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The 4Ps vs. 4Cs

• The 4Ps represent the sellers view of the
  marketing tools available for influencing buyers
• From a buyers point of view, each marketing tool
  is designed to deliver a customer benefit which
  corresponds to the 4Cs

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The 4Ps vs. 4Cs
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Promotion Tools

• The marketing communications mix, also called the
  promotion mix, consists of five major tools
• Advertising
• Direct Marketing
• Sales/Consumer Promotions
• Public Relations (PR)
• Personal Selling

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Advertising

• Is any paid form of non-personal presentation and
  promotion of ideas, goods, or services by an
  identified sponsor
• Examples
• Print and broadcast ads
• Packaging inserts
• Brochures and booklets
• Directories
• Billboards
• Symbols and logos

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Web Advertisement

• Why Internet Advertisement?
• Well educated, high-income Internet users are a
  desired target for advertisers
• Ads can be updated any time with a minimal cost,
  making them timely and very accurate
• Ads reach very large number of potential buyers
  all over the world
• Online ads are much cheaper in comparison to
  television, newspaper, or radio ads
• Web ads can be interactive and targeted
• The use of the Internet is growing very rapidly

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Market Projection

• According to Forrester Research (an independent
  technology research company)
• During the next five
• years, companies expect
• their Internet revenues to
• nearly double as a percent
• of overall revenues.

Retrieved 07/11/04, http//www.forrester.com/my/1,
,1-0,FF.html
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Demographics

• Over 50 million Americans are online at work (as
  of 02/20/04)
• equivalent to 37 of the total working population
• 70 have a college degree or higher
• 50 come from households earning 75K or more per
  annum
• 60 of consumer online dollars are spent in the
  workplace, compared to just 36 spent at home

Retrieved 07/11/04, http//www.nua.ie/surveys/inde
x.cgi?fVSart_id905358724reltrue
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How Many Online?

• The art of estimating how many are online
  throughout the world is an inexact one at best.
  Surveys abound, using all sorts of measurement
  parameters. However, from observing many of the
  published surveys over the last two years, here
  is an educated guess as to how many are online
  worldwide as of September 2002. And the number
  is 605.60 million.

Retrieved 07/11/04, http//www.nua.ie/surveys/how_
many_online/index.html
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Advertisement Methods eMail

• Several million users may be reached directly
• Purchase e-mail addresses
• Send the company information (low cost)
• A wide variety of audiences (customer database)
• Target a group of people that you know something
  about
• Problems
• Junk mail
• Spamming

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Advertisement Methods URL

• Advantages
• Minimal cost is associated with it
• Submit your URL to a search engine and be listed
• Keyword search is used
• Disadvantages
• Search engines index their listings differently
• Meta tags can be complicated

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Advertisement Methods Chat Rooms

• Virtual meeting ground
• Free addition to a business site
• Allows advertisers to cycle through messages and
  target the chatter again and again
• Advertising can become more thematic
• Used for one-to-one connections

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Internet-based Ad Design

• Visually appealing
• Targeted to specific groups or to individual
  consumers
• Emphasize brands and a firms image
• Part of an overall marketing strategy
• Seamlessly linked with the ordering process

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Important Factors

• Page-loading speed
• Graphics and tables - simple, meaningful, and
  match standard monitors
• Thumbnail (icon, graphs) are useful
• Business content
• Clear and concise text with compelling page title
  and header text
• Minimal amount of information requested for
  registration

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Important Factors (contd)

• Navigation efficiency and compatibility
• Links well-labeled, accurate, meaningful
• Site compatible with browsers, software, etc.
• Security and privacy
• Security and privacy must be assured
• Must provide option for rejecting cookies
• Marketing Customer Focus
• Clear terms/conditions of the purchases
• delivery information, return policy, etc.
• Confirmation page after a purchase

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Advertisement Strategies

• Pull (Passive) Strategy
• Effective site provides helpful and attractive
  contents and display
• Effective and economical way to advertise,
  unidentified potential customers worldwide
• Yahoo - portal search engine site regarded as
  effective aid for advertisement
• Push (Active) Strategy
• Sending e-mails to relevant people
• Obtaining mailing list - process of identifying
  target customers
• Mailing list generation - uses agent technology,
  cookies, and questionnaires (filled out by
  customer)

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Questions

• Break into 3 groups take 10 minutes to answer
  the following
• Group 1
• How important is loyalty in Internet marketing?
• Group 2
• How can you establish trust online?
• Group 3
• How would you measure customers satisfaction
  from a web site?

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Market Segmentation Why Segment Markets?

• Not all markets are the same
• Many types of customers
• Different needs
• Once segmented
• Products can be targeted
• Product can be positioned and branded as unique
• Can differentiate their products
• Generate revenue by creating variations of the
  product
• price sensitivity

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
31
Market Segmentation

• Geographic Segmentation
• dividing the market into different geographical
  units, such as, nations, states, regions,
  counties, cities, neighborhoods
• Demographic Segmentation
• dividing the market into groups on the basis of
  demographic variables such as age, gender, family
  size, income, occupation, education, religion,
  race, and nationality
• demographic variables are the most popular bases
  for distinguishing customer groups
• Behavioral

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Major Types of Online RetailBusiness Models

• Virtual merchants
• Clicks and mortar
• Catalog merchants
• Online malls
• Manufacturers direct merchants

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
33
Virtual Merchants

• Single-channel Web firms (Internet only)
• Challenges
• Building business and brand name quickly
• cost of building website
• many competitors
• steep learning curve
• must achieve operating efficiencies quickly to
  preserve profit
• Example Ashford.com

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
34
Clicks and Mortar

• Physical store, but have begun online sales
• Challenges
• high cost of buildings and staff
• need to coordinate pricing over multiple channels
• handling cross channel sales returns
• building a credible website
• building rapid response order entry/fulfillment
  system
• Example JCPenny.com

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
35
Catalog Merchants

• National offline channel with online business
• Challenges
• high cost printing and mailing
• need to leverage existing assets to new
  technology environment
• handling cross-channel returns
• credible website
• hiring sales staff
• Example Landsend.com

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
36
Online Malls

• Variation of virtual merchant
• generate revenue by collecting rent
• Challenges
• building and maintaining a website
• substantial marketing expenses
• building a customer base
• depending on the retailers that they attract
• Example Fashionmall.com

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
37
Manufacturers Direct Merchants

• Single or multi-channel manufacturers who sell
  directly to customers
• Expected to play a large role in e-commerce, but
  this hasnt happened yet
• Challenges
• channel conflict
• developing a fast response online
  order/fulfillment system
• switching from a supply-push to a demand-pull
  model
• creating sales and service online
• Example Dell.com

Laudon, K.C. Traver, C.G, (2001). E-Commerce
business. technology. Society. (pg. 579). Boston
Addison Wesley,
38

• Marketing SWOT Analysis

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SWOT for Small Business -Advantages

• Inexpensive source of information
• Inexpensive way of advertising
• Inexpensive way of conducting market research
• Inexpensive way to build (or rent) a storefront
• Lower transaction cost
• Niche market, specialty products (cigars, wines,
  sauces) are the best
• Image and public recognition can be accumulated
  fast
• Inexpensive way of providing catalogs
• Inexpensive way to reach worldwide customers

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SWOT for Small Business -Disadvantages

• Inability to use EDI
• Lack of resources to fully exploit the Web
• Lack of expertise in legal issues, advertisement
• Less risk tolerance than a large company
• Disadvantage when a commodity is the product (for
  example, CDs)
• No more personal contact which is a strong point
  of a small business
• No advantage being in a local community

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Marketing Ideas/Strategies

• If you build it, they will come.
• only true in the movie

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eCommerce Strategies

• Get them there
• Keep them there
• Collect feedback
• Get your name out there
• Integrate the Web into your business
• Manage search engine listings

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Traffic Generation Techniques

• Search engine and directory registration
• Banner advertisement placement
• Keyword search engine banner placement
• Email marketing and list rental
• Viral marketing plans
• Affiliate marketing
• Contests and giveaways
• Loyalty and continuity programs
• Reciprocal links
• Cross pollination from other media
• Often overlooked simple techniques

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
44
Statistics on Search Engines

• 1B web pages worldwide
• More than 3M pages being added every day
• Best search engines track less than 20 of the
  Internets web pages
• Top 11 search tools only index 42 of the web

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
45
Search Engines

• Continually re-rank their listing as new sites
  are submitted
• Make sure your site keywords and metatags are
  kept current
• Monitor and update your keyword referrals, and
  search engine referrals/placement

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
46
Banner Ads

• Major revenue sources for most portals and
  content publishers
• Bought on a per activity basis, usually
  calculated based on a cost/thousand occurrences
  (CPM)
• Most common activities for banners
• times displayed
• of click-through's
• Purchases
• Registrations

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
47
Keyword Search Engine

• Can buy banners that are triggered by specific
  word(s) typed into search engines
• Example bought rental cars, banner would show
  up
• More expensive on a CPM basis, yet has the
  potential to provide a greater ROI

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
48
Email Marketing

• Email exceeded voice as the primary business
  communication medium in 1998
• SPAM only when it was unsolicited or irrelevant
• Permission marketing signed up to receive
  future communications
• Permission-oriented email can achieve 6-12 with
  well-targeted communication

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
49
Email List Rental

• Must ensure list is comprised of a targeted
  audience
• Estimated that up to 25 of any email list will
  be non-deliverable addresses if not cleansed or
  maintained within past 12 months

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
50
Viral Marketing Programs

• Spreads like a virus
• Pass it along to a friend
• Example
• Friends referral program
• Web sites will ask for a friends name and then
  send them a letter endorsed by you

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
51
Affiliate Marketing

• Paid for by the sponsor site receiving the
  traffic and user activity
• Payment is usually a of sales
• Code is included as part of the link to measure
  the visitor thru the activity
• As an affiliate, you must balance the potential
  revenue against sending a visitor out of your site

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
52
Contests and Giveaways

• The higher the perceived value and likelihood of
  winning, the greater the response rates and more
  you can ask of the visitor

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
53
Loyalty and Continuity

• Easier to do business with current customer than
  create business with new customer
• Example
• Airline frequent flyer program

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
54
Reciprocal Links

• Works best w/allied target audiences
• Services are non-conflicting
• Example
• Hotel chains and rental cars

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
55
Cross Pollination

• Integrating your traditional media with your Web
  site
• Web site is really an extension of your brand

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
56
Overlooked Techniques

• Put URL on everything you create and distribute
• Have hosting provider set up your web site to
  function with and without www in front of it
• Employees should all have the companyname.com as
  an email

Retrieved August 18, 2003 from www.marketingpower.
com, Driving Site Traffic article, American
Marketing Association
57
Promotion Tactics
Traditional Marketing
Internet Marketing

• Broadcast Marketing
• Direct Mail
• Press Releases
• Promotions
• Networking
• Word of Mouth

• Banner Ads
• E-Mail
• Web site pressroom
• Online events
• Chat rooms
• Viral Marketing

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Marketing Final Thought

• For your online business to grow and prosper,
  you must consider three factors
• Potential of your chosen market
• Your position in the market (relative to
  competitors)
• Your commitment to sales and marketing

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Marketing on the Web

• Web Marketing Review, a guide to online
  marketing and eBusiness strategies - Marketing
  Computers and Internet
• http//www.webmarketingreview.com/

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Questions?
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Next Workshop

• eBusiness Legal, Ethical, and Regulatory Issues

62

• Dont hesitate to call or email
• Have a great week!
• Now, go home!