Class Introductions

1
Class Introductions

• Name
• Major area of study
• Computer Experience
• Extra curricular activities/jobs
• Career aspirations
• Favorite vacation spot

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Introduction to Marketing in an Electronic
Environment
E-Business and its Impact on the Global Economy
3
E-What?

• E-Business The fusion of business processes,
  information technology (IT), and organizational
  infrastructure.

• E-Commerce It is the exchange or transaction
  part
• of e-Business and includes activities that aid in
  this process customer contact, data mining,
  customer service

• E-Marketing refers to the use of electronic
  tools to
• promote, price, and distribute goods or services.
  (4 Ps product, price, promotion, place)

• E-Tools fax machines, computers, telephones,
• networks, wireless technology, EDI

The Elements of Commerce
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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.
5
Definitional Distinctions
Electronic Business
Electronic Commerce
Electronic Marketing
Electronic shopping, Virtual malls, etc.
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The Worldwide Web

• The Internet
• A global collection of computer networks linked
  together to exchange data and information
• Over 173 million U.S. users
• Intranets
• Internal organizational networks that allow those
  within an organization to communicate with each
  other and gain access to organizational
  information
• Extranets
• Organizational networks that allow communication
  between an organization and selected users
  outside the firm

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Who is on the Net? The Boom

• Over 61 of North Americans own a PC
• Roughly 46 are online, 50 of those are
  high-speed (U.S)
• Historically, young, well educated, professional,
  upper middle classnow more older folks, more
  diversity, less affluent - more like average
  consumer
• Worldwide, B2B e-commerce to exceed 5.2 trillion
  in 2004 (2000 estimate 3.5 trillion.)
• Forrester Research predict U.S. e-commerce sales
  to go from 144 billion in 2004 to 316 billion
  in 2010
• Double-digit growth rates are predicted far into
  the future

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Why are they on the Net? (functions of the
Internet)

• Communications, ex. Email, chat, instant
  messaging
• Information, ex. Portals, search engines
• Entertainment, ex. Music, games, movies
• E-Commerce, ex. Online malls, retailers

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Genesis of Online Business Models

• Business Models The basic process flow
  indicating how a business operates, and how it
  makes money.
• Technology-created vs. Technology-enhanced Models
• Technology-created business model that did not
  exist or was in a substantially different form
  prior to e-business. (could not survive without
  electronic presence).
• Technology-enhanced traditional business model
  that has been altered, improved, or transformed
  as a result of e-business. (simply improved the
  value chain through technology).

10
Strategic Marketing and the Internet
Marketing Mix (4 Ps)

• Product ex. eBay , Lands End
• Price ex. Hotwire, Travelocity, Priceline
• Promotion ex. Hotmail, AOLs instant message,
  Amazon.com Associate Program
• Place (distribution) ex. Fedex, UPS, Photoworks,
  Dell direct

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E-Commerce Capabilities
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Who Benefits?
Organizations, Consumers

• 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

• Consumers
• 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

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Limitation

• Technical
• 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

• Non-Technical
• 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

14
Consumer Behavior

• What gets consumers online?

Better product selections Cost savings/Price Tradi
tional Mass Marketing/promotion Convenience of
ordering and delivering 4Ps?

• What is determines consumer behavior online or
  gets people to their favorite sites?

• Navigation/Ease of use 66
• Quick download 58
• Frequent updates 54
• Coupons and incentives 14
• Favorite brands 13
• Cutting-edge technology 12
• Games 12
• Purchasing capabilities 11
• Customizable 10
• Chat 10
• Kleindl, p. 70/Forrester Research NUA Internet
  Surveys

• What gets consumers to come back?

Customer Satisfaction
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Determinants of Online Purchasing Behavior
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Types of Advertising Metrics

• Impressions or Exposures
• Site Stickiness
• Cost-per-thousand (CPM)
• Click-through-rate (CTR)
• Cost-per-visitor (CPV)
• Cost-per-order (CPO)

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Benefits of Online Consumer Marketing Leading to
better business and customer satisfaction

• Relationship Building
• Crucial to success
• Onlines personalization helps
• Easier for small businesses with small budgets
• Customer service is the key
• Increased Efficiency
• Greater profit margins
• Educating customers online frees salespeople from
  answering routine questions
• Cost Reductions
• Reduced start-up costs
• Reduced operating costs
• Frees funds for new marketing efforts
• A More Level Playing Field
• Even small firms with small budgets can compete
  in the global marketplace
• Helps eliminate discrimination and allow minority
  businesses to succeed on their own merits

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The Rest of the Story

• Will the Internet render old rules about how to
  conduct business, how to compete, and how to
  strategize obsolete?
• Michael Porter of Harvard, The Internet is an
  enabling technology that can be used, wisely or
  unwisely, in almost any industry and part of
  almost any strategy. Successful organizations
  will use the Internet as a complement to, not a
  cannibal of, traditional ways of competing.
  Strategy and the Internet, McKinsey Award
  winner Michael Porter, 2001
• Who of you will leverage from these enabling
  technologies and be the next Michael Dell, Pierre
  Omidar (eBay) or Jeff Bezo (Amazon)?