Chapter Six

1
Chapter Six

• Case Study Two

2
Company Two

• Background
• Steel Manufacturer
• Mini-mill concept
• Management owned
• Distribution Channel
• Through intermediaries
• Customer base
• Trade area localized
• Suppliers
• Distributors
• Pre-fabricators
• Industry trends-global factors
• Large manufacturers
• Foreign pressures dumping
• Asian financial Crisis
• Flat prices-increasing demand
• Company Challenges
• Competing in a Commoditized market
• Customize product and CRM

3
E-Business Marketing Goal

• E-Commerce
• Pricing
• Lower cost of Sale and production
• CRM
• Relationship enhancement
• Creating a Valuable exchange
• Six step pricing decision process employed
• Hut and Speh 1998

4
Pricing Decision Process

• Pricing Objectives
• Demand analysis
• Cost analysis
• Competitive analysis
• Impact on firms other products
• Legal Considerations

5

• Step One Pricing objectives
• Pre-determined return
• Increase Market share
• Competing on price
• Step Two Demand Analysis
• Evaluate the marketplace
• Customer segments
• Price sensitivity versus Size of Distributor
• Customers perceptions of value
• Delivery, quality and locality
• Step 3 Cost Analysis
• Issues and decision
• Under-price competition??
• Provide volume loyalty incentives
• Customer service

6

• Step 4 Competition
• differentiation strategies
• Increased service
• Lower production costs
• Harder to duplicate
• Step 5 Impact on product mix
• commodity vs. customized
• Job order manufacturing
• Step 6 Legal
• executive suite involvement
• Robinson-Patman Act
• Pricing in commodity markets

7
Stakeholders

• Stakeholders
• customers (existing and potential)

8
Value Bubble

• Attract phase
• offline focus
• Small marketing budget
• Localized and easily targeted customer base
• Links
• Trade organizations
• Web designer issues
• Brochure-ware
• Antialiasing
• Color mix
• Impact on the attract phase
• Fix-able

9
Value Bubble

• Engage (Step 2)
• 3-click order process
• online support
• Availability of inventory
• Library of Case Histories (PDF)
• conversion charts (static)
• Retain (Step 3)
• Site Personalization
• order status delivery tracking
• billing
• refresh content with announcements
• Link hell
• No e-mail

10
Value Bubble

• Learn (Step 4)
• pop-up survey feedback form
• Clickstreams and log files possible but not
  implemented
• Online orders drive production data
• No database
• Relate (Step 5)
• personalization
• integration of offline/online customer databases
• Ultimate goal
• Competitive pricing in the online environment

11
Summary

• Success ??
• Not likely
• Good strategy bad actualization
• Limited budget
• Adds value to existing customer base with little
  opportunity to increase market share
• Marketing Theme
• Valuable exchange process
• Questions