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MAR 6936-902

• E-Commerce Marketing
• Spring 2003Tampa Downtown
• Framing Market Opportunity
• Rich Gonzalez
• January 23, 2003 (Week 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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Blown To Bits

• Everyone Has the Book
• (Not Quiteabout 6 people still dontWell
  assume they will get it by this weekendin time
  for them to read assigned portion and complete
  WAP 2 for next week)
• Please advise if anyone does not receive

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URLs

• http//www.boingo.com/
• www.paypal.com
• wsj.com
• www.carpoint.com
• www.winsupersite.com/showcase/tabletpc_preview.asp
  

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Agenda January 23, 2003

• WSJ Online Demo
• Class Exercise PayPal
• Business Models- Market Opportunity
• Blown To Bits Preview
• Porter
• Customer Orientation
• Diffusion
• Due For January 30
• Pics

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For Today January 23

• Chapter 8 The Market
• Weekly Analysis Paper 1
• Purchase the WSJ Online-- 60 Day DemoDo not
  start it up yet

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For January 30

• WSJ Assignment
• Blown to Bitsp.1 97
• Weekly Analysis Paper 2

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For Today January 23

• Chapter 8The Market
• Purchase the WSJ Online 60 Day Demo
• Weekly Analysis Paper 1-PayPal

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WSJ Online Demo

• Selectivity
• Information
• Customization

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Assignment For January 30 WSJ

• Start Service (Register)
• Spend 1 Hour (Familiarization)Do A Search
  (wi-fi, Dell, etc.)
• Set Upa) Industry Newsb) Topicsc) Portfolio

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Weekly Analysis Paper 2

• Subject Blown To Bits
• Length 1.5 Pages -------125 points
• Due on January 30
• Subjects (use bolded headings)1. Information
  Asymmetries2. Deconstruction3.
  Disintermediation

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Business Model

• Value Proposition
• What You Give and What You Get
• Value and Revenues
• How will the business win?

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Business Model

• 1. Value Proposition or Target Cluster
• 2. A Marketspace Offering
• 3. Unique and Defensible Resource System
• 4. Financial Model

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The C2C Example

• Pierre Omidyar
• Pez Dispensers
• New Marketspace

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ebay.com Mission

• Help anyone trade practically anything on earth.

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ebay.com

• How do they do this?
• 1. Technology
• 2. Customer Orientation
• 3. Information Usage
• 4. Value
• 5. Community
• 6. Fun

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PayPal.com

• How do they do this?

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The B2C Example

• One Word
• An Intermediary
• A New IdeaInnovative
• IRACS
• A Bank?

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Basic Components

• CriteriaBusiness ModelTechnologyMissionTarget
  Market
• Customer Benefits

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Business Model

• Cost effective solution to send/rec. payments in
  real time.
• Accommodating diverse banking needs (C2C, B2C)
• Eliminating physical/time/currencies barriers to
  payments
• Provide automated money transfers.

In Class Exercise
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Technology

• Simple access/registration
• Fraud Protection
• Encryption
• PayPal developer network
• Current Bank Infrastructure
• Credit Card Infrastructure
• Viral Marketing

In Class Exercise
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Mission

• To become the global standard for online
  payments.
• To become a one-stop payment gateway throughout
  the world.
• To let anyone with an e-mail address securely,
  conveniently and cost-effectively and receive
  payments online.

In Class Exercise
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Target Market

• Small businesses
• Auction Participants
• Users of e-commerce sites
• Offline Professionals Needing a new payment
  option
• College Students
• Intl Money transfers
• Vendors of E-Cards

In Class Exercise
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Customer Benefits

• Security of money
• Time saving
• Convenience
• Cost-effective
• Payment System Option
• Universal, Ubiquity
• Small Biz Can Compete With Big BIz

In Class Exercise
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Demo of PayPal.com
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Class Exercise

• Name 3 Strategic Value-Producing Assets of
  PayPal(Strategic Success Factors)
• Name 3 Major Problems (Strategic Failure Factors)

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Big Concepts

• Information
• Amplification
• Asynchronicity

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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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Weekly Analysis Paper 2

• Subject Blown To Bits
• Length 1.5 Pages -------125 points
• Due on January 30
• Subjects (use bolded headings)1. Information
  Asymmetries2. Deconstruction3.
  Disintermediation

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End Here
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Skipped These Due To Time

• will cover next week---RG

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

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Economics of Things

• Seller Ceases To Own
• Replicate By Manufacture
• Deteriorate
• Requires Perfect Markets

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Economics of Information

• Sell, Yet Still Owned?
• Replicated at cost of ?
• Limit?
• Never Wears Out
• Requires Imperfect Markets

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Porters Competitive Business Model
New Entrants
BP of Sellers
BP of Buyers
Intraindustry Rivalry
Substitutes
Which is affected?
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Marketing Concept

• What is it?

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Customer Orientation

• A philosophy incorporating the marketing concept
  that emphasizes first identifying unmet needs,
  then satisfying them.
• Marketing MantraKnow your customer(s).

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Customer Oriented?

• Access denied -ERR mail storage services
  unavailable, wait a few minutes and try again.

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Customer Orientation

• MetricsCustomer AcquisitionMarket
  ShareCustomer SatisfactionCustomer Profitability

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Customer Satisfaction

• Definition?

Expectations
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Quote and Revision

• There is only one boss the customer. And he can
  fire everybody in the company...by spending his
  money somewhere else. Sam Walton
• Only one person controls the mouse the
  customer. And he can fire everybody in the
  company...by clicking and going to some other
  site to spend his money. R. Gonzalez

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Customer Decision Process

• Recognize Problem
• Information Gathering
• Evaluation
• Purchase Decision
• Postpurchase Results

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1 to 1 Marketing

• Personalization
• Customization

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Luddites
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Diffusion of Innovations

• Innovation
• Discontinuous vs. Continuous
• WWW? (Figure 8.5) p227
• Adoption Factors p228
• Killer App
• Marketers As Change Agents

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Follow-On Innovations

• www.hammertap.com

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3 Fundamental Business Shifts

• 1. Most transactionsB2C, B2B, C2C and C2C will
  become self-service digital transactions.
• 2. Customer service will become the primary
  value-added function in every business.
• 3. The pace of transactions and customer needs
  for customer service will force firms to adopt
  digital processes---for survival.

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Framework for MO Microsoft CarPoint Example

• MSN CarPoint identified an opportunity to
  leverage the Internet to deliver customer value
  in the car industry

Leverage the Internet to Improve the Consumer
Car-Buying Process

• The retail car-buying process was frustrating
  and inefficient
• Little information available to the consumer
• Bargaining with salesperson viewed as a hassle
• Long process overall

Car Buyers Are Dissatisfied With Current Retail
Car Buying Process

• MSN CarPoint selected two primary target
  segments for its service
• The intimidated by the process
• The information seekers

Shoppers Who Feel Intimidated by Sales People and
Look for More Efficient Way
Microsofts Software and Free Placement on All
Its Websites

• MSN CarPoint could leverage Microsofts
  expertise in software development, the Microsoft
  brand name and its multitude of online properties

• Competition was getting fierce with more and
  more online car services entering the market
• But the financial opportunity was large 66 of
  new car buyers used online services in 2000

How Big Is the Online Car-Buying Market? Who Are
CarPoints Main Competitors?

• In 1996 the first version of CarPoint was
  shipped
• By 1998, CarPoint was driving 5 million in car
  sales a day

Make Go / No-Go Assessment
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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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Four Categories of E-Commerce

• Business originating from . . .

• Business

• Consumers

• B2B

• C2B

• Business

• And selling to . . .

• B2C

• C2C

• Consumers