Introduction to Marketing in an Electronic Environment

1
Introduction to Marketing in an Electronic
Environment
E-Business and its Impact on the Global Economy
2
E-Business Boom

• 61 of North Americans own a PC
• Roughly 46 are online
• E-Commerce in US totals approx. 3 billion per
  month
• Worldwide, B2B e-commerce totals almost 3.5
  trillion.
• Double-digit growth rates are predicted far into
  the future

3
Forrester Online Retail Index
4
E-Contributions to Business

• e-Business facilitates market exchanges (online
  shopping)
• improves collaboration between business partners
  (online information exchange between supply chain
  partners)
• helps provide better customer care (24/7/365
  customer support)
• and most importantly, offers another way to gain
  strategic advantage.

5
E-Business The iceberg or the tip of the iceberg?
Web-based sales transactions
Web-based customer service information
Web-based marketing information
Product design system
Inventory control system
Financial system
Recruitment system
Order fulfillment system
Planning system
Alter, p.15.
6
Components of an E-Business System

• Technological Environment
• Communications
• Distribution
• Value Creation
• Diffusion Process
• Information collection and use
• Strategy
• Management
• Political, legal and ethical issues Kleindl, p.12

7
E-Tools for the E-Environment

• The tools of E- Environment include
• Telecommunication technology
• Internets, intranets, and extranets
• Electronic mail
• Electronic databases
• EDI
• Wireless technology
• And others
• What tools are used depends on whether you are
  conducting e-business, e-commerce, or e-marketing

8
Internet, Intranet, Extranet
Network Typical Type of Type
Users Access Information
9
Definitional Distinctions
Electronic Business
Electronic Commerce
Electronic Marketing
Electronic shopping, Virtual malls, etc.
10
Electronic Business

• Is the practice of performing and coordinating
  critical business processes such as designing
  products, obtaining supplies, manufacturing,
  selling, fulfilling orders, and providing
  services through the extensive use of computer
  and communication technologies and computerized
  data. Alter p.6
• The fusion of business processes, information
  technology (IT), and organizational
  infrastructure.
• Includes activities such as accounting services,
  financial management, business legal services,
  etc.

11
E-Commerce

• The use of electronic transmission mediums
  (telecommunications) to engage in the exchange,
  including buying and selling, of products and
  services requiring transportation, either
  physically or digitally, from location to
  location. Greenstein, Feinman, p 3.
• In other words it describes the buying and
  selling of products, services, and information
  via telecommunications networks.
• It is the exchange or transaction part of
  e-Business and includes activities that aid in
  this process customer contact, data mining,
  customer service

12
Electronic Marketing

• A further subset of e-business, and a subset of
  e-commerce
• E-Marketing refers to the use of electronic tools
  to promote, price, and distribute goods or
  services.
• Basically it is the use of technology to perform
  traditional marketing functions and includes
  activities electronic advertising, e-tailing,
  direct sales, online games/contest etc.
• The sexy side of e-business (ex. Nextel
  Ad,Expedia Ad )
• Greenstein p.3

13
Technical Limitations ofElectronic Business

• Lack of sufficient systems security,
  reliability, standards, and communication
  protocols
• Insufficient telecommunication bandwidth
• The software development tools are still evolving
  and changing rapidly
• Difficulties in integrating the Internet and
  electronic commerce software with some existing
  applications and databases

14
Non-Technical Limitations

• Lack of touch and feel online
• Many unresolved legal issues
• Rapidly evolving and changing EC
• Lack of support services
• Breakdown of human relationships
• Expensive and/or inconvenient accessibility to
  the Internet

15
Benefits ofE-Business for Organizations

• Expands the marketplace to more geographically
  dispersed customer base
• Low cost of entry lower sales and marketing
  costs
• Allows for customized marketing
• Decreases the cost of creating, processing,
  distributing, storing and retrieving otherwise
  paper-based information
• Procurement costs lowered
• Shorter cycle times
• Allows for reduced inventories and overhead by
  facilitating pull type supply chain management
• Greenstein, Feinman, p 3

16
Benefits to Customers

• Enables customers to do business 24/7/365 from
  almost any location
• Less expensive products and services due to
  facilitated competition and more choices
• Quicker delivery of products and services,
  especially with digitized products
• Customers can receive relevant and detailed
  information in seconds, rather than in days or
  weeks
• Makes it possible to participate in virtual
  auctions
• Interaction with other customers in electronic
  communities and exchange of ideas and experiences

17
Benefits to Society

• More individuals can work at home, travel less
  for shopping, resulting in less traffic on the
  roads, and lower air pollution
• People in Third World countries and rural areas
  can enjoy products and services which otherwise
  are not available to them
• Facilitates delivery of public services at a
  reduced cost, increases effectiveness, and/or
  improves quality
• Merchandise can be sold at lower prices due to
  increased competition, raising the standard of
  living

18
Benefits Summarized

• Internet and web-based electronic commerce is
  more affordable than traditional EDI.
• Internet and web-based electronic commerce allows
  more business partners to be reached than with
  traditional EDI.
• Internet and web-based electronic commerce can
  reach more geographically dispersed customer
  base.
• Procurement processing costs can be lowered.
• Cost of purchases can be lowered.
• Reductions in Inventories and lower cycle times.
• Better customer service and lower sales and
  marketing costs. Greenstein p.3
• The Lure of E-Commerce