ECT 250 Survey of ecommerce technology

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ECT 250 Survey of e-commerce technology

• Internet Marketing

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Basic marketing concepts

• Marketing -- the strategies and actions firms
  take to establish a relationship with a consumer
  and encourage purchases of its products or
  services.
• GOAL Avoid pure price competition and create
  markets where return is above average
• Internet Marketing is using the Web -- as well as
  traditional channels -- to
• develop a positive, long-term relationship with
  customers
• create a competitive advantage for the firm by
  allowing the firm to charge a higher price for
  products or services than its competitors can
  charge.

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Product characteristics
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• Brand is a set of expectations that consumers
  have when consuming, or thinking about consuming,
  a product or service from a specific company.

Brand is an emotional shortcut b/w a company and
its customer
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The Web audience some statistics

• Number of users online in the United States
• around 170 million in mid 2001 (60)
• expected 215 million in 2005 (75)
• rate of growth has begun to slow
• Comparison
• 98 has TVs
• 94 has telephone

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The Web audience some statistics

• Intensity and scope of use (both increasing)
• 56 of adult users logging on in a typical day
• 49 use email
• 22 get news
• The range of online activities is increasing
• Email 93
• Use search engines 79
• Chatting 35
• Gambling 4

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The Web audience some statistics

• Demographics and access
• some demographic groups have much high percentage
  of Internet users
• different patterns of usage exist across groups
• Ethnicity
• Variation across ethnic groups not as wide as age
  groups
• 57 White
• 47 Hispanic
• 43 African American
• Hispanics and African Americans going online at
  higher rates

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The Web audience some statistics

• Education
• 82 of individuals with a college degree online
• 39 with high school education or less online
• Gender
• Men accounted for the majority of Internet users
  at first
• Women now outnumber men online

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The Web audience some statistics

• Lifestyle impact
• Intense Internet usage may cause a decline in
  traditional social activities
• Social development of children using Internet
  intensively instead of engaging in face-to-face
  interactions or undirected play out of doors may
  also be negatively impacted
• Media choices
• More time using the Internet
• Less time spent using traditional media

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A model for consumer behavior
online

• Web site capabilities -- the content, design, and
  functionality of a site. (interactive!!!)
• Consumer clickstream behavior -- the transaction
  log that consumers establish as they move about
  the Web and through specific sites

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Clickstream analysis

• 40 of online users purchase something entirely
  online
• 40 of online users research products on the
  Web, but purchase them offline
• Most online purchases involve small ticket items,
  with the top categories being books, music,
  apparel and accessories, software, and toys

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Clickstream analysis

• gt 85 of shoppers go directly to vendor sites by
  typing a product into a search engine, going
  straight to the merchants site, or entering a
  store or brand name in a search engine
• gt 80 of shoppers are shopping on the Web for
  specific products or items

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What we buyon the Web
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The consumer decision process
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Technology tools for marketing

• Web Logs a transaction log maintained by all web
  servers that records
• IP address, date and time stamp
• Pages and objects requested and visited
• Response of server, size of pages sent
• Name of page/site from which the customer came to
  the site
• Information about the browser/os used
• History of all pages and objects visited during a
  session

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Q. Answered with Web logs

• What are the major patterns of interest and
  purchase for groups and individuals?
• Where are visitors coming from? Where do they go
  after the home page?
• How can we make it easier for people to use our
  site so the can find what they want? (HCI)
• How can we change the design of the site to
  encourage visitors to purchase our high margin
  products?
• How can we personalize our messages, offerings,
  and products to individual users?

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Technology tools for marketing

• Cookies a small file that web sites place on
  visitors client computer.
• Identify the customer
• Understand the prior behavior at the site
• Web bugs tiny graphic files hidden in marketing
  email messages and web sites
• When you open the email/site a message is sent to
  the server calling for graphic info.
• This way the marketer knows the email has been
  opened, i.e. you are interested in the marketing
  message

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Relational databases
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Technology tools for marketing

• Data mining is a set of analytical techniques
  that look for patterns in the data of a database
  or data warehouse, or seek to model the behavior
  of customers.
• Query-driven is data mining based on specific
  queries.
• Model-driven involves the use of a model that
  analyzes the key variables of interest to
  decision makers.
• Role-based examines demographic and transactional
  data of groups and individuals at a Web site and
  attempts to derive general rules of behavior for
  visitors.

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Data mining

• Customer profile is simply a description of the
  typical behavior of a customer or a group of
  customers at a Web site.
• Collaborative filtering is where site visitors
  classify themselves into affinity groups
  characterized by common interests products are
  then recommended based on what other people in
  the group have recently purchased.

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Advertising networks

• Present users with banner advertisements based on
  a database of user behavioral data
• Ad server selects an appropriate banner ad based
  on the users previous purchases, interests,
  demographics, or other data in the profile

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Technology tools for marketing

• Customer Relationship Management System (CRM)
  information that records all the contacts that a
  customer has with a firm and generates a customer
  profile available to everyone in the firm with a
  need to know the customer.
• Product and usage summary data
• Demographic and psychographic data
• Contact history summarizing the customers
  contacts with the institution across most
  delivery channels
• Marketing and sales information containing
  programs received by the customer and the
  customers responses

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Web marketing strategies

• Permission marketing companies obtain permission
  from consumers before sending them information or
  promotional messages. Idea if they opt-in they
  are more receptive to the message. Offer
  incentives/rewards.
• Affiliate marketing one Web site agrees to pay
  another Web site a commission for new business
  opportunities it refers to the site. Downside
  too many unrelated links on a site could lead to
  brand confusion Amazon.com

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Web marketing strategies

• Viral marketing is the process of getting
  customers to pass along a companys marketing
  message to friends, family, and colleagues.
  Online version of word-of-mouthpeapod.com
• Leveraging brands refers to the process of using
  the power of an existing brand to acquire new
  customers for a new product or service Yahoo!

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Online marketing methods
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Types of banner ads
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Online marketing methods
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Search engines policies
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12 common marketing E-metrics (1-7)
Focus on success in achieving audience by
attracting eyeballs. In e-commerce I these
measures substituted for solid info on sales
revenues
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12 common marketing E-metrics (8-12)
This metrics focus on the commercial activities
at the site and help understand the conversion
from visitor to customer.
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Web site as marketing tool

• Domain names are the first communications an
  e-commerce site has with a prospective customer
• Search Engine Optimization
• register with as many search engines as possible
• ensure keywords used in the site description
  match keywords likely to be used as search terms
  by a user
• link the site to as many other sites as possible

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Web site functionalities

• Compelling experience interactive, entertaining,
  fun to use
• Fast download times quicker is better, if longer
  provide amusement
• Easy Product List navigation
• Few clicks to purchase the shorter the click
  list the greater the chance of a sale
• Customer choice agents recommendation agents to
  help the consumer make quick, correct choices
• Responsiveness automated e-mail response, 1-800
  phone capabilities shown on the site