MAR 4933001

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MAR 4933-001

• E-Commerce Marketing
• Summer 2003
• E-Commerce and Critical Mass
• Rich Gonzalez
• University of South Florida
• May 29, 2003

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URLs

• www.deanforamerica.com
• http//www.boingo.com/
• www.paypal.com

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Agenda May 29, 2003

• Hot Spots and WiFi
• Critical Mass
• WAP 1 PayPal Final Words
• Chapter 6
• Business Models- Market Opportunity
• Value Propositions
• Traf-O-Data
• Due For June 3

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For Site/Model Evaluation

• Today and next 3 weeks Please peruse Nielsen
  Tahir bookHomepage Usability
• Pick a , Enter Name on the Form

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A Step Toward E-Commerce?
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802.11b Update

• Wi-Fi

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BandwithConsumer Context

• Dialup
• ISDN
• Cable
• DSL
• T1
• 802.11b (Wi-Fi)
• 3G

• 56 K
• 128 K
• 150 to 300 K
• 100 to 500 K
• 1400 K
• 300 to 500 K
• 144 K

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Wi-Fi

• Boingo Wireless
• www.boingo.com

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Wi-Fi

• Hot SpotsOffices, Cafes, Parks
• 4 Million Using Now, Worldwide
• Estimate 45 Million Business Laptops-- 2004
• Estimate 4.2 Million Households Have Wireless--
  2004
• Max Speed 11,000 K

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WAP 1

• Not Graded Yet

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Grading Criteria

• Start Out With 100 Points
• Areas for ImprovementQ Quality of AnalysisT
  ThoroughnessF Format (Cover page, Headings,
  etc.)L Late (10 a day)

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Customer Benefits

• Speed
• Low Cost
• Convenient
• Low Risk
• Trust
• Education
• Availabilitydifferent currencies
• Works also for B2B
• Information of transactions
• SPIFF

Completed, see 5/27 slides for rest of PayPal
Class Exercise
In Class Exercise
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PayPal Final Notes

• For Sending , For Personal Accounts.
• Price 0.00 per transaction and
• We deliver a product ideally suited for small
  businesses, online merchants, individuals and
  others currently underserved by traditional
  payment mechanisms.

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Services

• Relatively Intangible
• Simultaneous Production/Consumption
• Perishable
• Non-Standardized

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For June 3

• Amazon CEO Calls Success of Free Shipping a
  Surprise, May 28, 2003, Paula L. Stepankowsky
• The E-Biz Surprise, BusinessWeek, May 12, 2003
• Weekly Analysis Paper 2

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For Today May 29

• Online Fund Raising Pays Off, May 23, 2003,
  wsj.com
• Chapter 6 E-Commerce
• eBay Redraws Retailings Map, Paul Demery,
  internet retailer, January 2003(Handout)

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Online Fund Raising Pays Off

• wsj.com, 5/23/03
• Main Points?
• www.deanforamerica.com
• Innovator?
• Benefits of Using the Net to Raise Funds
• Public Adoption
• Using the Net For Other Tasks

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eBay Article Main Points

• eBay Doing Great
• Rev. Estimates Exceeded
• uBid, Amazon, Yahoo.
• Competition is Fleeing
• Innovations Buy it now, categories, half.com,
  paypal, TV commercials
• Anchor Stores
• Used Cars Market --Biggest Seller
• Testbed for new pricing efforts

In Class Exercise
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eBay Redraws Retailings Map

• Paul Demery, internet retailer, January 2003
• Main Points?
• Competitors?
• uBid, Amazon, Yahoo
• Performance?
• Innovations?
• Buy It Now eBay Stores, Brand
• Critical Mass

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Metcalfes Law

• def values the utility of a network as the
  square of its users
• Morse Code
• Telephone system
• Ethernet protocols
• Internet protocols

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Metcalfes Law
Net Utility
Nodes
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Moores Law
of transistors
1965Double every 12 months 1975---Double every
24 months-----Sometimes 18 months
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Another View of Law
YNI
Time

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Killer App

• def. a new good or service that establishes an
  entirely new category and, by being first,
  dominates, returning several hundred percent on
  the initial investment
• Generative or destructive?

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eBay Redraws Retailings Map

• uBid realized that it will be virtually
  impossible for any site to replicate eBays
  critical mass of C2C activity.
• uBid Sells Products It Owns

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Weekly Analysis Paper 2Due June 3, 2003

• Subject Name 3 ways that eBay changes
  commerce--And discuss.
• Length 1.5 Pages
• Due on June 3
• (use bolded headings)1. Way 12. Way 23.
  Way 3
• Quality of Analysisi.e., Mention Sales Numbers
  and Total Retail Sales (U.S.)

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LEARNING OBJECTIVES

• 1. Gain an understanding of the e-commerce
  process.
• 2. Outline why a multichannel approach is
  beneficial for a retailer.
• 3. Explain why newly formed pure-play Internet
  businesses may have a hard time gaining
  competitive advantages in the retail market.
• 4. Compare and contrast how e-commerce is being
  used as a strategic tool by e-retailers and
  traditional retailers.

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E-Commerce

• E-commerce is the process of allowing Web based
  technologies to facilitate commerce or trade.
• E-commerce can be retail, between an e-business
  and an end user, or it can be used for
  business-to-business transactions.

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Webvan ModelWhere Are My Groceries?

• Evaluate your grocery shopping. How often do you
  purchase the same products?
• Trust a grocer to pick out your meats, fruits,
  and vegetables?
• Which aspects of grocery shopping could be
  automated?
• Evaluate the business model for a traditional
  grocery and determine where its competitive
  advantage lies.
• What is the future of online grocery sales?

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E-Retailing

• Retail sales are shifting between various
  alternative sales channels.
• Sales channels are the models that businesses use
  to sell to their customers. These could include
  brick and mortar outlets, catalogs, direct
  marketing, or e-commerce.
• A destination site is a Web site that is designed
  to have the visitor return over and over.

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E-Retailing

• E-retailing will not necessarily result in an
  increase in overall retail sales instead,
  consumers are shifting purchases by adopting a
  multichannel approach and using alternative sales
  channels.

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Figure 6.5 E-Commerce Personalization
Personalization
Customer Profiling and Suggestion Selling
One-Click Automated Ordering
Knowledge Database
E-Mail Marketing
Order Tracking
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Figure 6.3 E-Business Model
Supply Chain
Extranet
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Figure 6.4 E-Commerce Value Chain

• E-Commerce Value Chain can give insight into the
  problems encountered by newly formed online-only
  e-commerce companies.

Promotion Need to develop customer base,
experience in targeting audience.
Distribution Channels Need locations, shipping
facilitators, payment systems, and return
policies and procedures.
Knowledge Management Need database on customer
and links to inventory and other business
processes.
Management Needs experience in field, knowledge
of process and industry, strong relationships
with employees, suppliers, and other
constituencies.
Supply Chain Develop and deploy inventory
systems, warehousing, extranets, etc.
Product and Pricing Strategies Develop
positioning strategy, image with market, etc.
Delivered Value to Customer
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Traf-O-Meter 1971

• Traffic Study Machines
• in Seattle
• Slow Manual System
• Software Hardware
• Success!Automatic Data Entry
• Cheaper Faster Than Big Companies
• Problem Govt. Funding Came In
• Failure...

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Microsoft
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End Here