MAR 4933001

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MAR 4933-001

• E-Commerce Marketing
• Summer 2003
• Value Strategies and Customer Orientation II
• Rich Gonzalez
• University of South Florida
• June 26, 2003

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URLs

• www.restaurant.com
• www.wellsfargo.com
• http//coba.usf.edu/departments/marketing/grads/go
  nzalez/Summer2003/Drucker_The20Purpose20of20a2
  0Business.htm

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Agenda June 26, 2003

• Net Success Stories
• Participation Event
• Customer Interface--Finish
• Chapter 5
• Due For July 1

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For Today June 26

• Handouts (2)
• Your Ad Could Be Here!, Andy Raskin, Business
  2.0, May 2003
• How to Make Money on the Net, Mark Athitakis,
  Business 2.0, May 2003
• Online Job Hunting Is Tough. Just Ask Vinnie.,
  Kris Maher, wsj.com, June 24, 2003

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For July 1

• Master of Design, Interview With Tim Brown,
  Technology Reviewhttp//www.technologyreview.com
  /articles/wo_brown062503.asp
• This Will Help You Think About Importance of
  Design.
• Web Site/Business Model Evaluation (See
  Explanatory Slides In This Presentation)

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Handout

• IBAii Tech Association, Tampa
• SeminarUsability and Web Customers

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Online Job Hunting

• Takeaway?
• Complicated Process
• Uncertainty
• Vinnie Boombatz
• Internet Promise Falls Short
• Can Be A Black Hole

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Business 2.0

• You are what your customers need you to bea
  bank or a retailer or a service outfit or a
  marketerand the Internet is merely your tool.
• Its still Business 101.
• Who are my customers, what do they value and how
  do I give it to them?

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Participation Event

• 3 Questions
• Q1 What is the Marketing Concept?
• Q2 Who said It is the customer who determines
  what a business is.
• Q3 Name any one of the 3 Fundamental Shifts in
  commerce that Prof. Gonzalez keeps showing you
  every week.

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Marketing Concept

• Target Market
•  Customer Needs Wants
•  Coordinated activities
•  Profitability

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3 Fundamental Business Shifts
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• 1. Most transactionsB2C, B2B, C2C and G2C are
  becoming self-service digital transactions.
• 2. Customer service is becoming the primary
  value-added function in every business.
  Personalization and customization are ways to do
  this.
• 3. Customer service requirements force firms to
  adopt digital processes---to meet and/or beat
  competition.

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Wells Fargo

• Takeaway?
• Steve Ellis, Direct of Cash Mgmt.
• Proposes (1999) Reinvention
• All Wholesale Customers Online
• Uncertainty and InnovationCustomer
  NeedsConvenienceInstant InformationSecurity,
  Access Control
• Steve Ellis, VP Wholesale Services

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Restaurant.com

• Business Model?
• People Want Information
• Dining Portal Menu Information, Restaurant
  Information, Orders, Reservations...
• Drive Customers to Restaurants, Get Referral
  Revenue Stream
• Fatal Flaw
• Reinvention
• 75,000 Gift Certificates/Month ebay
• People Want a Bargain

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Customer Orientation

• A philosophy incorporating the marketing concept
  that emphasizes first identifying unmet needs,
  then satisfying them.

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Web Site/Business Model Evaluation Assignment

• 100 Points
• 50 Summary Paper
• 50 Presentation
• Critique/Description1. Web Site Usability2.
  Business Model
• Due July 1, 2003

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Site/Model Evaluation Assignment

• Paper
• 2 Pages BulletsOne Summary Section
• Cover Sheet
• 19 Copies for Other Students
• In Class Presentation
• 8 to 10 Minutes Overview, Pick a Few Main Points
  and Demo the Site
• Due July 1
• Presentations on July 1, 3

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Site/Model Evaluation Assignment

• Grading
• 50 Points for Paper
• 50 Points for Presentation
• Advisory Rating of Presentation Done by All
  Students
• Presentations Will Be Assigned By RG on Some Fair
  and Unpredictable Basis

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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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Finish From Tuesdays Presentation
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Connection

• ConnectionsAffiliatesRevenue
  SharingMarketingComplementary ProductsCustomer
  Acquisition
• Can Be Distracting

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Commerce

• Selection
• Pricing...Shipping
• The Shopping Cart
• Approval and Payment
• Can you avoid this experience? (browsing,
  selection, approving, paying?)
• Half.com pre-orders

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Components of a Business Model
Developing a business model in the networked
economy requires four key choices on the part of
the senior management
Value Cluster

• Specify the value proposition or the value
  cluster for the business

Marketspace Offering

• Articulate the online product, service and
  information offer

Resource System

• Define how the company needs to align its
  resources to deliver the value proposition

• Define and select the most appropriate revenue
  model to pursue

Financial Model
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Value Proposition/Cluster
The first step in the articulation of the
business model is clearly specifying the value
proposition or the value cluster for the
business

• Defining the value proposition or the value
  cluster requires answering the following
  questions
• Which target segments should the company focus
  on?
• What is the combination of customer benefits
  that is offered?
• What makes the firm and its partners better
  positioned to deliver the offering than anybody
  else?

Value Cluster
Marketspace Offering
Resource System
Financial Model
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Creating Value

• Businesses create value for their customers by
  providing quality goods and services at
  acceptable prices.
• A business model is the basic process by which a
  business obtains its inventory, produces the good
  or service, and how they deliver that to the
  customer.
• A business model that provides more benefits to
  its customers and/or sells at a lower the price
  will take market share away from competitors.

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Seven Value Creation Strategies

• Online purchasing strategy allows for buying and
  selling of products and information on the
  Internet and other online services.
• Digital communication strategy allows for
  delivery of digital information, products,
  services, or payments online.
• Service strategy allows for the cutting of
  costs, improving of the quality of goods, and
  increasing the speed of service.
• Business process strategy allows automation of
  business transactions and work flows.

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Seven Value Creation Strategies
www.amazon.com

• Market-of-one strategy allows for developing
  products for a single customer with close to the
  same costs as mass production.
• Auction based strategy allows automation of
  bidding for products or customers online.
• Pricing Strategy Allows businesses to pursue
  market share by selling at low prices or giving
  away products and services for free.

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Figure 5.2 Model of E-Business Value Creation
Delivered Value
Auction Strategy
Pricing Strategy
Market -of -One Strategy
Online Purchasing Strategy
Business Process Strategy
Digital Communication Strategy
Service Strategy
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Creating Value
Online Purchasing
Market-of- One
Digital Communication and Service
Business Process
Pricing
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Participation In Class Event

• 1. Optimum Percentage of
• Multiple Choice
• True False
• FIB
• 2. Take Home vs. In Class

In Class Exercise
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The End