ECommerce and Online Marketing Strategies

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2nd Annual Micronesian Tourism Executives
Conference Visitor Satisfaction Creating
Expectations Meeting Them

• E-Commerce and Online Marketing Strategies
• for the Tourism and Hospitality Industry
• Max Palisson, Ph.D.ITE - Talaya Internet
  ServicesEmail maxpat_at_ite.net

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Outline

• Introduction What is E-Commerce ?
• E-Business or B2B
• Recent Internet traffic and usage statistics
• Trends in the Travel and Hospitality Industry
• Web Marketing Strategies
• Web vs. traditional media
• Establishing an online presence
• Knowing Your Audience
• Keys to a Successful Presence
• Start an E-commerce site
• Lets Go Online
• Conclusion

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What is E-Commerce ?

• E-commerce, or electronic commerce can be defined
  as the way to conduct financial transactions
  electronically.
• With the explosive growth of the Internet,
  E-commerce now often refers to purchases made
  from websites with online stores
• Global e-commerce transactions expected to reach
  9 billion in 2000 and 30 billion in 2005

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E-Business or B2B

• Describes how companies are changing the way they
  buy and sell products from each other, by doing
  online transactions and sharing information over
  the Internet.
• The value of transactions conducted on-line
  between companies will reach 1.5 trillion by
  2004 (source Goldman Sachs Investment Research)
• Recommended lecture B2B Exchanges The Killer
  Application in the Business-to-Business Internet
  Revolution by William W. Woods, Arthur Sculley

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Internet Traffic UsageRecent Statistics

• World
• about 200 million Internet users
• Japan
• 21 million Internet users (Mar. 2000) 10 of
  the worlds users !
• Users spend an average of 2 hours 30 minutes
  online over 5 sessions every week.
• They visit 6 unique sites each and view 49 pages
  per session.
• Most visited sites in February 2000 Yahoo!
  websites, NEC, MSN, Sony Online, Geocities, Dream
  Train Internet, Nifty Corporation, Lycos Network,
  Hi-Ho Internet Service and Goo.
• Guam
• 25,000-30,000 Internet/e-mail accounts with local
  ISPs on Guam and Saipan
• an estimated 6,000-8,000 additional accounts with
  UoG, GovGuam and private companies

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Online Trends for the Travel and Hospitality
Industry

• Business travel bookings online have doubled in
  the past 6 months
• 28 of business travelers make airline
  reservations over the Internet, vs. 33 who
  book on the telephone(source Greenfield Online
  3-28-2000)
• Travel Sites Could Be Easier To Use To be
  successful, online travel sites must be easy to
  navigate and keep graphics compressed with small
  size(source WebCriteria.com, 3-21-2000).
• 52.2 Million Online Travelers Use Internet For
  Planning
• 16.5 Million Online Travelers Use Internet To
  Book Reservations
• Compared to all travelers, online travelers are
  more likely to be younger, have an annual
  household income above 75,000, be
  college-educated, and work in a
  professional/managerial occupation(source TIA,
  Feb. 2000, http//www.tia.org/press/020800int.stm)

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Marketing Strategies Web vs. traditional media

• Most Marketing strategies still apply to the Web
  as a new media
• Advantages of the Web as a new media
• Media available 24x7 from virtually anywhere in
  the world
• Easy and immediate distribution of information to
  masses
• Expand your market reach to a global -worldwide-
  audience
• Potential to present multimedia information, and
  to interact with visitors
• Enhance customer services (offers information of
  services, feedback forms)
• Can be used to gather information about customers
  via online contests

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Marketing Strategies Before Establishing your
Online Presence

• Identify your goal(s) before starting
• - Advertisement or simply information
• - Online sales
• - Online reservations
• - Customer feedback
• Identify your targeted market audience
• - Current and prospective customers
• - Specific groups/categories visitors from
  Japan, Korea, companies, new markets (ex India)
• - Business partners (B2B)

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Marketing Strategies Know Your Audience

• Occasional visitors may browse your pages and
  never return
• Regular visitors may return repeatedly to obtain
  some service
• Frequent visitors, such as your sales people, may
  use your pages for personal use, or to refer
  customers to the latest, always available
  information on your products and services.
• How to adjust contents to your visitors ?
• gt Implement a reward strategy to let you know
  about them

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Marketing StrategiesKeys to a Successful
Presence

• Interactivity, search functions, feedback forms
• Start small and grow
• Dedicate adequate resources designing a website
  is not a one-time task !
• Provide links to other sites that relate to yours
  (tour operator sites, TIA)
• Respect your visitors time with fast loading
  pages and graphics
• Update your site regularly
• Sponsor contests and online-only promotions
  (online sales, discount coupons, interactive
  contests)

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Marketing StrategiesKeys to a Successful
Presence (2)

• And dont forget to
• Promote your website address !
• - Put it on all of your stationery and public
  documents
• - Mention it in all commercials and traditional
  advertisements
• - Register your site with Internet search
  engines and directories
• (50 of visitors usually come from a search
  engine)

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What you should do

• Register your own domain name
• Use distinctive email addresses.
• Provide adequate staff training on both the
  Internet in general and the specific resources
  with which you provide them access.
• Capitalize on your investment. Once you have
  invested your time and money into creating an
  Internet presence, be sure to capitalize on it.

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What you should NOT do

• Send junk or unsolicited email.
• Disclose customer information.
• Forget that the Internet is a global medium with
  a multi-cultural audience (different language,
  culture and response).
• Approach Internet marketing without appropriate
  resources or adequate planning.
• Approach Internet marketing with a
  make-money-fast mentality.

NO
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Start an E-commerce siteMajor Steps

• If you want to offer credit card transactions,
  apply for a merchant bank account and consider a
  real-time credit card authorization system such
  as CyberCash (http//www.cybercash.com/) (Note
  that Japanese people are wary of credit card
  fraud and loss of privacy and prefer to make cash
  payments).
• Decide on E-commerce package vs. custom
  programming (in-house or outsourced)
• Choose a web hosting company, based on features
  (Frontpage support, database integration, SSL
  secure transactions), platform (UNIX, NT), costs,
  reputation of security and reliability.
• Pick your own domain name and register it
• Get a site certificate for secure transactions
  (SSL)

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E-Commerce Applicationsfor the Travel and
Hospitality Industry

• Plane ticket booking
• Travel package booking with/without travel
  insurance
• Hotel room reservation / e-mail inquiries
• Restaurant review with online feedback
• Shopping with shipping / delivery or pickup
• Marketing Research through online
  surveys/feedback with coupons, discounts or other
  incentives

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IHRAs THINK- TANK VISIONSTHE FUTURE OF
HOSPITALITY TECHNOLOGYLausanne, Switzerland,
from 14-15 February 2000 - http//www.ih-ra.com/ne
wsroom/press/

• The hospitality industry must overcome its
  general reluctance to invest in new ideas and
  technologies and look for applications that will
  drive the bottom line.
• E-commerce
• In order to generate increased revenues - while,
  at the same time, reducing costs - the Think Tank
  concluded that there were two key plans of
  action
• Attracting new business and ensuring incremental
  business from existing clients, ie increasing
  their lifetime value.
• Greater focus on customer relationship management
  and loyalty building.
• At the same time, E-commerce also means business
  transacted with suppliers and, as an example,
  supply-chain economies of scale through bulk
  purchasing.

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Search Engine RegistrationExample Yahoo search
for guam hotel
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Directory Listing Online PromotionsExample
LodgingDiscounts.com
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Listing with Tour AgenciesExample Japan Travel
Bureau
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Reduce costs and develop partnershipsExample
http//www.hotel-online.com

• Reduce your hiring and job advertising costs
  while reaching a larger market
• Find business opportunities and discounts
• Develop partnerships

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Get Electronic Shelfspace on the Global
Distribution Network - Example GDS

• A 'GDS' is a Global Distribution System, aka a
  Central Reservation System (CRS).
• There are 4 main systems
• Amadeus owners include Lufthansa, Air France,
  Iberia
• SABRE owned by American Airlines
• Galileo owners include United Airlines, BA,
  KLM, USAir, Swissair
• WORLDSPAN owners include TWA, NorthWest and
  Delta airlines
• These systems dominate the world of airline
  bookings. When these systems expanded to accept
  hotel and car rental bookings worldwide, they
  became global.Now, travel agents can book air
  tickets, hotel rooms and rental cars all at the
  same time from the one terminal.
• This requires to regularly load the inventory
  (eg. hotel description, rates) into these
  systems.
• For more info. http//www.hotel-online.com/Neo/Tr
  ends/Andersen/1998_GDNShelfSpace.html

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The Travel and Hospitality Industry the
WebInternational Tourism Exchange 3-20-2000

• Leading travel industry executives attending the
  International
• Tourism Exchange were debating ways to turn a
  profit from the Internet.
• While thoughtful use of the Internet can help
  travel companies to save on marketing expenses
  and travel agent commissions, industry executives
  are concerned at the low numbers of Internet
  surfers that actually book online.
• An executive from one German travel company said
  that only 0.2 percent of visitors to their site
  book online, while another said that only 3
  percent of European hotels are now booked online.
  
• Those in the online travel business admit that
  the Internet is currently only suitable for
  simple and straightforward bookings.
• Those wishing to plan a complicated journey
  invariably turn to a travel agent for assistance.

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In conclusion

• E-Commerce and Online Marketing can
• - Increase your visibility and accessibility in
  the worldwide market
• - Increase your sales leads
• - Reduce your administrative costs through B2B
• - Add a new dimension to your marketing
  promotions
• - Help you get closer to your customers (customer
  service), and understand them better (market
  research)
• - Help you survive in a very competitive market

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The End

• Thank you for your attention
• Any questions ?