MAR 6936902

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MAR 6936-902

• E-Commerce Marketing
• Spring 2003Tampa--MBA
• Blown To Bits II
• Rich Gonzalez
• February 10, 2003 (Week 6)

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URLs

• wsj.com (After the Bust)
• www.freshdirect.com
• www.fandango.com
• www.spyderchat.com
• www.carmax.com
• www.kbb.com
• www.carfax.com
• http//cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?Vi
  ewItemitem2402434367category15289
  

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Grading Criteria

• Start Out With 125 Points
• Areas for ImprovementF Format (Cover page,
  Headings, T ThoroughnessA AnalysisL Late
  (20 a day)
  

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Agenda February 10, 2003

• WSJ and BusinessWeek Articles
• Consumer Decision ProcessApplied Example
• Due For February 17
• Blown To BitsDiscussion

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For Today February 10

• Blown to Bits, p.99 167
• Analysis Paper 3
• WSJ Online After the Bust, William Boston,
  WSJ Online, January 27, 2003
  
• BusinessWeekThe Start of A Dot-Comeback, BW,
  February 3, 2003http//www.businessweek.com/magaz
  ine/content/03_05/b3818061.htm

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For February 17

• Blown to Bits, p.221 229
• Wrap UP Discussion Blown To Bits
• WSJ Online United Online Adds
  Subscribers,Swings to Profit in 2nd
  Quarter,February 6, 2003Hotels.com Triples
  Net IncomeBut Misses Lowered ForecastsFebruary
  5, 2003

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The Start of A Dot-Comeback, BusinessWeek,
February 3, 2003

• Web-Van vs. FreshDirectVisit site
• FandangoVisit site
• Red Envelope
• How Does a Start-Up Get Investment in 2003?
• Focus on the bottom line.
• Models that mimic eBay or trade in information.

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After the Bust, William Boston, WSJ Online
January 27, 2003

• Strategy

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Strategy

• The essence of strategy is choosing to perform
  activities differently than rivals do.
  
• Must be flexible to respond rapidly to
  competitive and market changes. Michael E.
  Porter
  
• What Is Strategy?, Nov-Dec 1996, HBR

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After the Bust, William Boston, WSJ Online
January 27, 2003

• Strategy
• 200 Online Brokerages In 2000
• The difference with our previous strategy is
  that today we help the customer make investment
  decisions."
  
• MORE ServicesMore Consulting
• Searching For New Online Brokerage Model
• Self Trade and Cahoot
• How Many Will Fail?

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3 Fundamental Business Shifts

• 1. Most transactionsB2C, B2B, C2C and G2C 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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Stewart Brand

• Information wants to be free.

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Scientia Est Potentia

• Applied Problem CDP Stages For An Online/Offline
  Purchase
  
• Consumer Decision ProcessProblemInfo
  GatheringEvaluatePurchaseUse
  
• What you dont know can hurt you.

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A Car

• MR2 Spyder
• Where Does One Get Info?
• Advocate Sourceswww.carmax.com
• Non-Advocate Sourceswww.spyderchat.com
• Independent Sourceswww.kbb.com

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Source

• Advocate Has an interest in primary transaction
  or related concerns
  
• Non-Advocate Has no financial interest in
  product or service informationi.e., fellow
  customer
  
• Independent Standard Issuer, Industry Evaluator,
  Data Provider, Regulator

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Independent Industry Data

• Numerous Sources
• www.kbb.com
• Site Visit

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Advocate For Sale Online

• Numerous Sources
• www.carmax.com
• Site Visit

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Non-AvocateSpyderchat

• InformationAmplificationAsynchronicity
• Site Visit

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For Sale Online

• Numerous Sources
• http//cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?Vi
  ewItemitem2402434367category15289
  

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Indy Support Data

• Numerous Sources Industry Data
• www.carfax.com
• Site Visit

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Stewart Brand

• Information wants to be free.
• Information wants to be expensive.

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HQI High Quality Information

• Current
• Relevant
• Affordable
• Assimilable
• Power

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Kris Decker Columbus OH

• 1998 Chevy Truck, 10,080, Ft. Worth
• I am a fairly conservative shopper. but in
  retrospect, I had more information about this
  vehicle than if I had gone onto a dealers lot
  and started haggling over price.
• 2002300,000 Used Car Sales
• 2000--- 400 M
• 2001---1400 M
• 2002---2800 M
• 100 Million in Revenues

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Kris Decker Columbus OH

• We are supply constrainedwe need more cars. -
  Meg Whitman
  
• AutoTrader.comAuction Model
• EBay Is Emerging As Unlikely Giant In Used-Car
  Sales, Wingfield Lundegaard, February 7, 2003
  

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For Today October 3

• Blown to Bitsp.169 229Deconstructing Supply
  Chains and the Organization
  
• Analysis Paper 2

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Weekly Analysis Paper 3

• Subject Blown To Bits
• Length 1.5 Pages, Cover Page--125 pts
• Due February 10
• Subjects (use bolded headings)1. Competing on
  Reach2. Competing on Richness 3. Competitive
  Advantage

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Competing on Reach

• Battle for customer relationships
• Importance of navigatorsallows reach to be a
  competitive factor
  
• Allays Consumers Confusion/Overload
• Orders of magnitude difference in reach of
  e-commerce
  
• Specialized navigators
• Solving customer problems not just promoting a
  product

In Class Exercise
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Competing on Richness

• Richness is a differentiator, the less important
  reach becomes
  
• Richness in information about customers is a
  precious assetstrategic
  
• Use privacy as a competitive advantage
• The more richness, the more your customers can be
  your competitors---What can I do for customer
  that he cannot do for himself?
  
• Product richness can be experiential, not
  necessarily highly technical
  
• Add richness to forestall deconstruction

In Class Exercise
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Competitive Advantage

• Navigators are becoming more customer-oriented
• Privacy can be used as a CA
• Suppliers, retailers, coming together to reach
  critical mass

In Class Exercise
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• Adding Richness Is the Best Way To Forestall
  Deconstruction

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(No Transcript)
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Change, Techno, Info, Process...

• The Only Sure Winner Is the Customer

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What Is Wrong With This?
More info, more SCA
Its Linear
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E W Say
SCA
More info, LOTS more SCA
Information
Not Linear
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Richness

• Bandwith
• Interactivity
• Accuracy, Validity (Reliability)
• Security
• Currency

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Reach

• Number of peopleat home or at workexchanging
  information.

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Richness vs. Reach
Encarta
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Richness

• Phonebook
• Ad Insert
• Mag. Ad
• Newspaper
• Radio Ad

• Salesman
• Website
• Experience
• WON

• Direct Marketing
• Website
• WOM

Richer
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Stewart Brand

• Information wants to be free.
• Information wants to be expensive.

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For February 17

• Blown to Bits, p.221 229
• Wrap UP Discussion Blown To Bits
• WSJ Online United Online Adds
  Subscribers,Swings to Profit in 2nd
  Quarter,February 6, 2003Hotels.com Triples
  Net IncomeBut Misses Lowered ForecastsFebruary
  5, 2003
• Take a look at the website(s)

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End Here