Opportunities and Challenges in the Internet Age

1
Opportunities and Challenges in the Internet Age

• Strategy, Choice and Conflict
• New Intermediaries, Why Go Online?
• Key to Customer Relationships
• Target Market
• Mistakes to Avoid, Success Factors
• Competitive Response

2
Strategy in the Internet Age

• The conventional business model.
• The Internet business model.
• Is the Internet an add-on to the existing
  marketing strategy (e.g, BarnesandNoble.com)or is
  it the differentiating aspect of a companys
  marketing strategy (e.g., Amazon.com)?

3
Choice and Conflict

• Channel Choice
• Traditional vs. Online
• Channel Conflict
• Goal Divergence, Responsibility Disputes,
  Differing Perceptions of Reality
  
• Exclusive Distribution (e.g., levi.com)

4
New Intermediaries

• Disintermediation (e.g., travelocity.com)
• Reintermediation (e.g., mysimon.com)
• Build to Order (e.g., dell.com)
• Real Time Marketing (e.g., landsend.com)
• Channel Contacts and Learning
• Future
• Selling Agents, Buying Agents

5
Why Go Online?

• Improving Corporate Image
• Customer Service
• Finding new prospects
• Completing transactions
• Expanding market
• Reducing costs

6
Promises Key to Customer Relationships
Keep the Promise Order Fulfillment
Make the Promise Advertising, Marketing,
Sales
Accept the Promise Electronic Servicescape
7
Target Market

• Strike a balance between what you want them to
  see, hear, learn, and do, and what they want to
  see, hear, read, learn, and do.
  
• Site Design
• Intuitive Navigation
• Interaction in the online experience
• Incorporating feedback from the user.
• Something people do, not read.

8
Site Design Mistakes to Avoid

• Poor Navigation
• No Contact Phone Number or Address
• Lack of Product or cant find product
• Dead-ends
• Slow Server Response
• Lack of Customer Service
• Wont Let You Pay for Items

9
Success Factors for Online Selling

• Having a well-designed, easy-to-use site
• Having a strong well-known brand
• Aggressively advertising/promoting the site
• Being a first-mover (or fast follower)
• Offering more competitive prices online

10
Competitive Response From Traditional Retailers

• Selective Discounts
• Late Adopter Segment
• Selling Experiences
• Transitioning to Virtual

11
Top Items Purchased Online in the Past Twelve
Months

• Software 38.9
• Books 19.4
• Computers 15.1
• Travel 11.2
• Music 10.2
• Food/Gifts 9.7
• Clothing 9.2
• Investments 6.3
• Electronics 4.5
• Auto/Accessories 3.5

12
Online Taxes (no charge)

• The product sold is delivered electronically to
  the consumer (it is a purely digital product)
  
• The merchant does not have a physical presence in
  the state where the product will be delivered (if
  the product is a tangible item)