MAR 4933001

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MAR 4933-001

• E-Commerce Marketing
• Summer 2003
• E-Commerce Chapter 6
• Rich Gonzalez
• University of South Florida
• June 3, 2003

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URLs

• amazon.com
• pets.com (no longer)
• www.segway.com

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Agenda June 3, 2003

• Site Selection Priority
• Value Chain
• WAP 2 E-Commerce Change Discussion
• Chapter 6
• Value Propositions
• Due For June 5

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For Site/Model Evaluation

• Today and next 2 weeks Please peruse Nielsen
  Tahir bookHomepage Usability
• Pick a , Enter Name on the Form

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For Today June 3

• Amazon CEO Calls Success of Free Shipping a
  Surprise, May 28, 2003, Paula L. Stepankowsky
• The E-Biz Surprise, BusinessWeek, May 12, 2003
• Weekly Analysis Paper 2

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For June 5

• Renting Software Online, June 3, 2003, Don
  Clark, wsj.com
• Post a Comment To Listserve About This

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Grading Criteria

• Start Out With 100 Points
• Areas for ImprovementQ Quality of AnalysisT
  ThoroughnessF Format (Cover page, Headings,
  etc.)L Late (10 a day)

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Grading Criteria Guidance

• Use Quotes If Necessary
• Class Discussion Identifies Major Points
• Follow Format
• Bullets OK
• Opinions!
• internet or Internet?
• Business Model Give and Get

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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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Technology
Note Use As Examples For Grading On All WAP

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

In Class Exercise
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Customer Benefits

• Speed
• Low Cost
• Convenient
• Low Risk
• Trust
• Education
• Availabilitydifferent currencies
• Works also for B2B
• Information of transactions
• SPIFF

In Class Exercise
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Customer Benefits

• Sample Exam Question
• What is the most important customer benefit
  afforded by the PayPal service?

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Free Shipping

• Jeff Bezos Amazon.com
• A Book Seller?
• Duh?
• 3rd Party Sales
• 19 of Sales
• Customers Like To Choose!
• Other Issues Sales Tax
• Site Visit

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Table 6.2 Benefit Analysis for Amazon.com (1)
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Table 6.2 Benefit Analysis for Amazon.com (2)
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Weekly Analysis Paper 2Due June 3, 2003

• Subject Name 3 ways that eBay changes
  commerce--And discuss.
• Length 1.5 Pages
• Due on June 3
• (use bolded headings)1. Way 12. Way 23.
  Way 3
• Quality of Analysisi.e., Mention Sales Numbers
  and Total Retail Sales (U.S.)

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How Has eBay Changed Commerce?

• Convenience/Availability From Home Asynchronicity
• No Direct Physical Contact Buyer and Seller
• Customer Sets Price/ Negotiated Prices/ Dynamic
  Price Changes/ Market Price

In Class Exercise
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How Has eBay Changed Commerce?

• Lots more Selection12 Million Items
• Allows for related biz Hammertap.com, etc.
• Personalization
• LoyaltyAnything Points
• Trust based marketing
• Middleman ---cut out--Disintermediation

In Class Exercise
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3 Fundamental Business Shifts
03

• 1. Most transactionsB2C, B2B, C2C and G2C are
  becoming self-service digital transactions.
• 2. Customer service is becoming the primary
  value-added function in every business.
  Personalization and customization are ways to do
  this.
• 3. Customer service requirements force firms to
  adopt digital processes---to meet and/or beat
  competition.

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The E-Business Surprise

• BusinessWeek, May 12, 2003

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Major Impacts of E-Commerce

• E-Business is Part of E-Commerce
• B2B Most of E-Commerce
• B2C 100 B
• Connecting P2P and B2P and B2B
• Reducing Business Costs
• Improving Productivity
• Accelerating Innovation

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Major Impacts of E-Commerce

• Advertising Is Up (From 2001)

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E-Commerce Profits

• 1997-2000 No Profits
• 2000-2002 Very Tiny Profits
• Late 2002 Increasing Profits
• How Many

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e-failures.com
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E-Failures

• pets.com
• webvan.com
• Lycos, Alta Vista, Netscape
• 6,000 StartupsHow Many Left?

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Metcalfes Law
Net Utility
Nodes
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Big Changes

• Travel
• Information, Information, Information
• Online SystemsSelf Service
• Expedia Is the Big Winner
• 13 of Traditional Firms End In 2002
• Critical Mass

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Big Changes

• Computers
• Information, Information, Information
• Online SystemsSelf Service
• Dell Is the Big Winner
• Competitors Cannot Be Profitable
• Critical Mass

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Figure 6.6 Dells Business Model
Suppliers linked through Extranet deliver
just-in-time. Lowers inventory costs.
Product delivered through independent shippers
such as UPS. Contract low shipping rates, no
fixed costs in assets.
Customer gathers information and purchases
through Web page. Lowers communication costs.
Dell manufactures customized PC and sell at low
price.
Web page provides information and
ordering. Lowers ordering costs.
Payments are made online through Web page credit
card or invoice. Lowers bad debt expense and
credit risks.
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Elements of the Marketing Mix within an
Environmental Framework
Competitive
Distribution
Product
Political-Legal
Target Market
Social-Cultural
Price
Promotion
Technological
Economic
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Marketing Experience
Pre-Purchase
Post-Purchase
Purchase
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Figure 6.4 E-Commerce Value Chain

• E-Commerce Value Chain can give insight into the
  problems encountered by newly formed online-only
  e-commerce companies.

Promotion Need to develop customer base,
experience in targeting audience.
Distribution Channels Need locations, shipping
facilitators, payment systems, and return
policies and procedures.
Knowledge Management Need database on customer
and links to inventory and other business
processes.
Management Needs experience in field, knowledge
of process and industry, strong relationships
with employees, suppliers, and other
constituencies.
Supply Chain Develop and deploy inventory
systems, warehousing, extranets, etc.
Product and Pricing Strategies Develop
positioning strategy, image with market, etc.
Delivered Value to Customer