© copyright 2006, thomson south-western, a division of the thomson corporation internet marketing...

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Internet Marketing & e-CommerceWard HansonKirthi Kalyanam

Requests for permission to copy any part of the material should be addressed to:

PERMISSIONS DEPARTMENTTHOMSON BUSINESS and ECONOMICS

5109 Natorp BoulevardMason, OH 45040

Phone: (800) 423-0563


Part Two: Chapter 11Innovation and the Net

“Nothing endures but change.”

Heraclitus (540-480 BC)


Competition and the Need for Speed

• Traditional business rivalries have been bitter, enduring battles

• Coke vs. Pepsi

on the front lines

of the Cold War

SOURCE: ©Bettman/CORBIS: Vice President Richard Nixon and Soviet Premier Khrushchev share a Pepsi, 1959



• In high-tech markets, rivalries burn bright but fast – IBM vs. Apple in personal computers – Digital vs. Data General in minicomputers

• Most prominently: the Browser Wars– Microsoft vs. Netscape in late 1990s– Now, Microsoft vs. upstart(暴發戶的 )Firefox



• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity



• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability



• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness



• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances


☆ Competition and the Need for Speed

• On “Internet Time” marketers face strain 拉緊 of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances– Market leaders can set industry or product

standards and gain dominance


Standards Marketing

• Open Standards: Formed by process of official debate and consensus(一致 )

– Widespread adoption and innovation, but also greater competition

• Example: WiFi


Standards Marketing

• Open Standards: Formed by process of official debate and consensus– Widespread adoption and innovation, but

also greater competition• Example: WiFi

• De Facto (事實上的 )Standards: Based on market acceptance, but proprietary (專屬的 )

– Harder to establish, but more profitable• Example: Xbox and Playstation


Standards Marketing

Growth in certified Wi-Fi product types, according to the Wi-Fi Alliance


Product Development Online

• Understanding the Idea Funnel 漏斗– Dual goals of identifying unmet needs and

weeding 雜草 out costly ideas early in process

– Few ideas make it through the funnel, but process still can be costly



The Idea Funnel for event-driven new products



• Understanding the Idea Funnel– Dual goals of identifying unmet needs and

weeding out costly ideas early in process– Few ideas make it through the funnel, but

process still can be costly

• Improving the Idea Funnel– Online market research screens concepts– Virtual setting facilitates consumer-

assisted design



• Not all products fit easily into preexisting product categories




• Simulation and digital environments offer realistic market research settings




• Simulation and digital environments offer realistic market research settings

• Information Acceleration (IA)– Places consumer in virtual buying

environments– Can replace expensive prototypes, spot

importance of valuable new features


Modular Product Development

• Products divided into subsystems for more focused development

– Visible design rules: describe how different modules fit together

– Hidden design parameters: offer flexibility– One example: Wikipedia


Modular Product Development



• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input




consumer input– Prerelease of products for swift

prototyping and testing





prototyping and testing• Alpha release – trusted lead users, such as

company employees






company employees• Beta release – wider public sampling at lower

price or for free






company employees• Beta release – wider public sampling at lower

price or for free

– Speed to market drives profitability

© copyright 2006, thomson south-western, a division of the thomson corporation internet marketing...

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speed slide

new products

moment of new opportunity

dominance slide

wifi slide

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