dole commerce
TRANSCRIPT
-
7/28/2019 Dole Commerce
1/120
1
E-commerceE-commerce
Name : Dr. Nasim Z. Hosein
E-Mail : [email protected]
Phone number : 605-626-7724
-
7/28/2019 Dole Commerce
2/120
2
AgendaAgenda Marketing
Commerce History of Internet Computer, Networks Intro to E-commerce History of E-commerce
WWW What is E-commerce Forces shaping E-commerce E-commerce today Categories of E-commerce What is a web based business E-commerce marketing strategies Setting up for E-marketing (online) Benefits of E-commerce Strategy Formulation Business Model
-
7/28/2019 Dole Commerce
3/120
3
Definition of MarketingDefinition of Marketing
Philip Kotler
Social and Managerial process by which
individuals and groups obtain what they need
and want through creating, offering, and
exchanging products of value with others.This definition rests on the following core concepts:
needs, wants, demands, products, value, cost and
satisfaction, exchange and transactions,
relationships and networks, markets, marketers and
prospects.
-
7/28/2019 Dole Commerce
4/120
4
Definition (cont)Definition (cont)
Needs exist in biology they are notcreated by marketers i.e. shelter, food,clothing, safety, belonging, esteem
Wants Need food want hamburger, fries,coke.
Desire Wants for specific products
backed by an ability and willingness to buythem
-
7/28/2019 Dole Commerce
5/120
5
Definition of CommerceDefinition of Commerce
The exchange of goods and services formoney
Consists of:
Buyers - these are people with money whowant to purchase a good or service.
Sellers - these are the people who offer
goods and services to buyers.Producers - these are the people whocreate the products and services that sellers
offer to buyers.
-
7/28/2019 Dole Commerce
6/120
6
Elements of CommerceElements of Commerce
You need a Product or service to sellYou need a Place from which to sell the productsYou need to figure out a way to get people to
come to your place.
You need a way to accept orders.You also need a way to accept money.You need a way to deliver the product or service,
often known as fulfillment.
Sometimes customers do not like what they buy,so you need a way to accept returns.You need a customer service and technical
support department to assist customers withproducts.
-
7/28/2019 Dole Commerce
7/120
7
History of The InternetHistory of The InternetStarted as a US government project in
1969.The purpose was to create a net that can
function even if one center is destroyed in
a military attack.- Hub and spokes can be useless if the hub is
destroyed.
- Network can continue to be functional even ifsome nodes are destroyed, as long as
information can pass through other nodes.
Effective in 1971 with computers on both
coasts of the US.
-
7/28/2019 Dole Commerce
8/120
8
In the 1980sIn the 1980s
Personal computers or terminals wereconnected to a server.
The server was a mainframe, or connectedto a mainframe computer.
The mainframe was connected to anothermainframe of the company in anotherlocation via dedicated lines.
Only large companies could afford theexpense and investment in equipment.
-
7/28/2019 Dole Commerce
9/120
9
TodayToday
Connections across countries andcontinents made through dedicated fastlines.
A company may have one local network(LAN) in NY, which is connected to theInternet through a Regional network.
Well established in N.A., Europe andcertain Asian countries
-
7/28/2019 Dole Commerce
10/120
10
Computer classificationsComputer classifications
Mainframes:- term for very large computers
- used to handle large amount of data or
complex processes
- main advantage is reliability
Midrange:
- medium sized, less expensive and smaller
- usually a serverMicro-computer:
- work stations with computing capabilities
- single-users systems linked to form a network
-
7/28/2019 Dole Commerce
11/120
11
What is a networkWhat is a network
Series of points or nodes interconnected bycommunication paths
Node is a connection point for transmittingdata
Network can interconnect with other
networks to form global networks
-
7/28/2019 Dole Commerce
12/120
12
Benefits of a networkBenefits of a network
Facilitates resource sharingProvides reliability
Cost effectiveProvide a powerful medium across
geographical divide
-
7/28/2019 Dole Commerce
13/120
13
Different kinds of networksDifferent kinds of networks
Type of signalNature of connection
Types of physical linksTopology
Communication model
Geographical distance
-
7/28/2019 Dole Commerce
14/120
14
Geographical DistanceGeographical Distance
Local area network (LAN): small area,share a single server
Metropolitan area network (MAN): awider network, can bridge several LANs
Wide area network (WAN): a broader area
covered, can include several MANsInternet: a network of networks that covers
the entire globe
-
7/28/2019 Dole Commerce
15/120
15
TCP/IP ProtocolTCP/IP Protocol
Allows any two computers tocommunicate and exchange data.The Internet transfers data packets among
computers.Each packet is identified by the sender
address and a receiver address.
The senders computer transfers the data
packet to another computer on the Internet,which transfers it to a chain of othercomputers until it reaches the finaldestination.
-
7/28/2019 Dole Commerce
16/120
16
Internet addressing systemInternet addressing system
Internet uses TCP/IP, therefore every computer on theInternet has an IP address
IP address is numerical, separated by dotsWorks with DNS:
- com: for commercial purposes
- net: for Internet Service Providers
- org: for non-profit, non-commercial groups
- gov: reserved for government- mil: reserved for military
- int: reserved for international organizations
-
7/28/2019 Dole Commerce
17/120
17
Assimilation of TechnologyAssimilation of Technology
Technology first adopted to increaseefficiency doing the same tasks fastere.g. word processing instead of typing
Technology next adopted to increaseeffectiveness doing tasks not only faster
but better e.g. spreadsheets transformedfinance and accounting (as well as scienceand other fields)
-
7/28/2019 Dole Commerce
18/120
18
Introduction to E-commerceIntroduction to E-commerce
E-Commerce, Web, Networks, InternetThe evolution of new businesses
The adoption of Brick and Mortarcompanies to the new economy
Market failures and economic explanations
for the new economy
-
7/28/2019 Dole Commerce
19/120
19
History of E-commerceHistory of E-commerce
EC applications firstdeveloped in the early1970s
- Electronic funds transfer
(EFT)
Limited to:
- Large corporations
- Financial institutions- A few other daring
businesses
-
7/28/2019 Dole Commerce
20/120
20
History of E-commerceHistory of E-commerce
Enlarged pool ofparticipants to include:
- Manufacturers
- Retailers
- Service providers
Electronic datainterchange (EDI)electronic transfer ofdocuments:
- Purchase orders
- Invoices
- E-payments betweenfirms doing business
-
7/28/2019 Dole Commerce
21/120
21
History of E-commerceHistory of E-commerce
EC Successes
- Pure online
eBay
VeriSign AOL
Checkpoint
- Click-and-mortar GE
IBM
Intel
Schwab
EC Failures
- E-tailors began to fail in
1999
- This does not mean thatECs days are numbered
- Large EC companies like
Amazon.com are
expanding but success or
failure is not certain
-
7/28/2019 Dole Commerce
22/120
22
E-Commerce MechanismsE-Commerce Mechanisms
Transformation of economic activity intodigital media
- Exchange information, content, agreements,
and services among parties that are connected
to through the Internet.
Enables new ways of creating, deliveringand capturing value to customers.
- Availability
- Convenience
-
7/28/2019 Dole Commerce
23/120
23
World Wide Web (WWW)World Wide Web (WWW)World Wide Web (Web):
- A collection of documents that reside on computers, andthat can be accessed by other computers on theInternet.
Multimedia documents:
- Text- Images
- Sounds
- Drawings
- VideoHypertext:
- Links to other documents
- Can begin execution of a program
-
7/28/2019 Dole Commerce
24/120
24
Web BrowsersWeb Browsers
Computer programs that can:- Display Web documents
- Follow links
- Execute other programs- Enhance applications such as real-time audio
or video
Netscape and Internet Explorer
The Microsoft legal trouble due to theExplorer.
-
7/28/2019 Dole Commerce
25/120
25
Web ServersWeb ServersComputers that run server software.A server waits for request to arrive from a
user.
- The request is typically for a document.
The server sends (serves) the document tothe requesting computer.
Sometimes the server allows a user to fill
in information on a document, and the thentransfers the information to anotherprogram or a server.
-
7/28/2019 Dole Commerce
26/120
26
Information on Users and SitesInformation on Users and Sites
Web log file
- User information
- Requested documents
Cookies
- Information stored on a PCs hard drive by the
site.
- Enables the site to identify the user.
- Enables profiling.
- Enables targeted advertising.
-
7/28/2019 Dole Commerce
27/120
27
WWW and InternetWWW and Internet
The World Wide Web (WWW) is not theInternet
Access to the Internet doesnt mean you
have e-commerceWWW works in HTTP
Web pages works in HTML
Web browser provide access toinformation on the WWW
-
7/28/2019 Dole Commerce
28/120
28
What is E-commerceWhat is E-commerce
Distributing, buying, selling and marketingproducts and services over electronic systems
E-business for commercial transactions
Involves supply chain management, e-marketing,online marketing, EDI
Uses electronic technology such as:
- Internet
- Extranet/Intranet
- Protocols
-
7/28/2019 Dole Commerce
29/120
29
Forces Shaping the Digital AgeForces Shaping the Digital Age
-
7/28/2019 Dole Commerce
30/120
30
Forces Shaping the Digital AgeForces Shaping the Digital Age
Digitalization &Connectivity
Intranets : connect people
within a company.
Extranets : connect a
company with its suppliers,
distributors, and outside
partners. Internet : connects users
around the world.
Internet Explosion
Explosive worldwide
growth forms the heart of
the New Economy.
Increasing numbers of
users each month.
Companies must adopt
Internet technology or riskbeing left behind.
-
7/28/2019 Dole Commerce
31/120
31
DefinitionsDefinitions Internet:
- A collection of computers that speak a common
language protocol
Intranet:
- Private version of the Internet
- Main purpose to share company informationand computing resources among employees
Extranet:
- Private network that users outside the companycan access
- Requires security and privacy
- Collaborate with other companies
-
7/28/2019 Dole Commerce
32/120
32
Forces Shaping the Digital AgeForces Shaping the Digital Age
New Types of Intermediaries:
Direct selling via the Internet bypassed
existing intermediaries (disintermediation).Brick-and-mortar firms became click-and-
mortar companies.
As a result, some click-only companies have
failed.
-
7/28/2019 Dole Commerce
33/120
33
Forces Shaping the Digital AgeForces Shaping the Digital Age
Customization and Customerization:
With customization, the company custom
designs the market offering for the customer.
With customerization, the customer designs
the market offering and the company makes it.
-
7/28/2019 Dole Commerce
34/120
34
E-commerce as the NetworkedE-commerce as the Networked
EconomyEconomy Create value largely through gathering, synthesizing and
distribution of information Formulate strategies that make management of the enterprise
and technology convergent
Compete in real time rather than in cycle time Operate in a world characterized by low barriers to entry,
near-zero variable costs of operation and shifting competition Organize resources around the demand side rather than supply
side Manage better relationships with customers through
technology
-
7/28/2019 Dole Commerce
35/120
35
E-commerce TodayE-commerce Today
The Internet is the perfect vehicle for e-commerce because of its open standards andstructure.
No other methodology or technology has provento work as well as the Internet for distributinginformation and bringing people together.
Its cheap and relatively easy to use it as a
medium for connecting customers, suppliers, andemployees of a firm.
No other mechanism has been created that alloworganizations to reach out to anyone and
everyone like the Internet.
-
7/28/2019 Dole Commerce
36/120
36
E-commerce TodayE-commerce Today
The Internet allows big businesses to act likesmall ones and small businesses to act big.
The challenge to businesses is to maketransactions not just cheaper and easier forthemselves but also easier and more convenientfor customers and suppliers.
Its more than just posting a nice looking Web
site with lots of cute animations and expectingcustomers and suppliers to figure it out
Web-based solutions must be easier to use andmore convenient than traditional methods if a
company hopes to attract and keep customers.
-
7/28/2019 Dole Commerce
37/120
37
Four Categories of E-Commerce
B2B
B2C
C2B
C2CConsumers
Business
And selling
to...
Business originating from...
Business Consumers
-
7/28/2019 Dole Commerce
38/120
38
Distinct Categories of E-CommerceDistinct Categories of E-Commerce
Business to Business (B2B) refers to the full spectrum of e-commerce that can occur between two organizations.
This includes purchasing and procurement, suppliermanagement, inventory management, channel management,
sales activities, payment management &service and support.Examples: FreeMarkets, Dell and General Electric
Business to Consumer(B2C) refers to exchanges between
business and consumers, activities tracked are consumersearch, frequently asked questions and service and support.
Examples: Amazon, Yahoo and Charles Schwab & Co
-
7/28/2019 Dole Commerce
39/120
39
Distinct Categories of E-CommerceDistinct Categories of E-Commerce(contd)(contd)
Peer to Peer(C2C) exchanges involve transactionsbetween and among consumers. These can include thirdparty involvement, as in the case of the auction websiteEbay.
Examples: Owners.com, Craiglist, Monster
Consumer to Business (C2B) involves when consumersband together to present themselves as a buyer in group.
Example: www.planetfeedback.com
C f C C iC f C C t i
-
7/28/2019 Dole Commerce
40/120
40
Convergence of e-Commerce CategoriesConvergence of e-Commerce Categories
Business originating from
Business Consumers
And
Sellin
gto
Consum
er
s
Busine s
s
Publishers order
paper supplies from
paper companies
Amazon orders
from publishers
Consumers search
out sellers, offers
and initiatepurchases from
Amazon
Consumers resell
copies on eBay
Consumers buy
thousands of Harry
Potter books from
Amazon
-
7/28/2019 Dole Commerce
41/120
41
What is a web-based businessWhat is a web-based business
Business that uses the WWW to fulfill itsbusiness process
Four basic business processes:
- information dissemination
- data capture
- promotions and marketing
- transacting with stakeholders
Business objectives interact with web basedapplications
-
7/28/2019 Dole Commerce
42/120
42
Information disseminationInformation dissemination
Can publish relevant informationCan be used in crisis mode
Identifying worst case scenarios andproviding details
-
7/28/2019 Dole Commerce
43/120
43
Data captureData capture
Collect information about customersTwo methods:
- manual input- automated
-
7/28/2019 Dole Commerce
44/120
44
Promotions and MarketingPromotions and Marketing
Banner advertisingAffiliate programs
Registration with directoriesTraditional marketing
-
7/28/2019 Dole Commerce
45/120
45
Transacting with stakeholdersTransacting with stakeholders
Can display products and servicesCross-selling can be implemented
Can customize websiteCan react to competition
Can improve relationship
-
7/28/2019 Dole Commerce
46/120
-
7/28/2019 Dole Commerce
47/120
47
Key Drivers of E-businessKey Drivers of E-business
Organizational culture- attitudes to R&D,willingness to innovate and use technology
Commercial benefits- impact on financialperformance of the firm
Skilled/committed workforce- willing and able toimplement and use new technology
Requirements of customers/suppliers- in terms ofproduct and service
Competition- stay ahead of or keep up withcompetitors
l f
-
7/28/2019 Dole Commerce
48/120
48
Appeal of E-commerceAppeal of E-commerce Lower transaction costs - if an e-commerce site is
implemented well, the web can significantlylower both order-taking costs up front andcustomer service costs
Larger purchases per transaction - Amazon offersa feature that no normal store offers
Integration into the business cycle People can shop in different ways. The ability to
build an order over several days The ability to configure products and see actual prices The ability to easily build complicated custom orders The ability to compare prices between multiple
vendors easily The ability to search large catalogs easily
Larger catalogs
Improved customer interactions - company.
http://computer.howstuffworks.com/framed.htm?parent=ecommerce.htm&url=http://www.amazon.com/exec/obidos/redirect-home/howstuffworkshttp://computer.howstuffworks.com/framed.htm?parent=ecommerce.htm&url=http://www.amazon.com/exec/obidos/redirect-home/howstuffworks -
7/28/2019 Dole Commerce
49/120
-
7/28/2019 Dole Commerce
50/120
50
Technical limitationsTechnical limitations
There is a lack of universally accepted standardsfor quality, security, and reliability
The telecommunications bandwidth isinsufficient
Software development tools are still evolving There are difficulties in integrating the Internet
and EC software with some existing (especiallylegacy) applications and databases.
Special Web servers in addition to the networkservers are needed (added cost).
Internet accessibility is still expensive and/orinconvenient
-
7/28/2019 Dole Commerce
51/120
51
Web based technologyWeb based technology
WebsitesE-mail
Search enginesInteractive communications
-
7/28/2019 Dole Commerce
52/120
52
Old Economy FirmsOld Economy Firms
Brick and Mortar companies need to adoptto the new economy
- Create a new Internet company.
- Create a new subsidiary.- Invest in an Internet competitor.
- Buy the technology from a consultant.
- Work with other firms to create an exchange.- Integrate with suppliers and or customers.
-
7/28/2019 Dole Commerce
53/120
53
Old Economy FirmsOld Economy Firms
Failure of old economy companies to adoptmay result in:
- Loss of market share.
- Inability to meet new economy competitors
prices.
- Reduced profits and cash flows.
- Inability to raise new financing.
- Loss of control in an acquisition by a neweconomy firm.
-
7/28/2019 Dole Commerce
54/120
54
Business OpportunityBusiness Opportunity
The Internet revolutionized ways of doingbusiness
Entrepreneurs found ways to exploitmarket failures and earn economic rents
New businesses were created that were notfeasible earlier
The new economy poses threats to old
economy firms that do not wish to adaptThe transformation is still in process. The
evolution continues
-
7/28/2019 Dole Commerce
55/120
55
Benefits and Challenges of E-commerceBenefits and Challenges of E-commerce
BenefitsBenefits
Persistent connection with customers
New value for customers
Access to new customers
Scalability
Persistent connection with customers
New value for customers
Access to new customers
Scalability
ChallengesChallenges
Cannibalization
Channel conflict
Customer confusion
Investor confusion
Cannibalization
Channel conflict
Customer confusion
Investor confusion
F t d tF t d t
-
7/28/2019 Dole Commerce
56/120
56
Front end systemsFront end systems
Direct user interface with business processesAccessible via WWW
Front-end systems:
- e-CRM- e-marketing
- e-services
- e-marketplace
- e-auction
k i i h i i l
-
7/28/2019 Dole Commerce
57/120
57
Marketing Strategy in the Digital AgeMarketing Strategy in the Digital Age
Requires a new model for marketing strategyand practice
Some suggest that all buying and selling willeventually be done electronically
Companies need to retain old skills andpractices but add new competencies
-
7/28/2019 Dole Commerce
58/120
58
E-Business in the Digital AgeE-Business in the Digital Age
Involves the use of electronic platforms toconduct company business.
Web sites for selling and customer relationsIntranets for within-company communication
Extranets connecting with major suppliers and
distributors
-
7/28/2019 Dole Commerce
59/120
59
E-Commerce in the Digital AgeE-Commerce in the Digital Age
More specific than e-business.Involves buying and selling processes
supported by electronic means, primarilythe Internet.
Includes:
e-marketing
e-purchasing (e-procurement)
-
7/28/2019 Dole Commerce
60/120
60
E-commerce vs. E-businessE-commerce vs. E-business
E-commerce is about doing businesselectronically
E-commerce conducting financial
transactions electronically
E-business is conducting business on the
InternetE-business is the transformation of
business processes through the Internet
-
7/28/2019 Dole Commerce
61/120
61
E-Marketing in the Digital AgeE-Marketing in the Digital Age
The marketing side of e-commerce.Includes efforts to communicate about,
promote, and sell products and services over
the Internet.E-purchasing is the buying side of e-
commerce.It consists of companies purchasing goods,
services, and information from online suppliers.
T f M k tTypes of e Marketers
-
7/28/2019 Dole Commerce
62/120
62
Types of e-MarketersTypes of e-Marketers
-
7/28/2019 Dole Commerce
63/120
-
7/28/2019 Dole Commerce
64/120
64
Reasons for dot.com FailuresReasons for dot.com Failures
Poor research or planning.Relied on spin and hype instead of
marketing strategies.Spent too heavily on brand identities.
Devoted too much effort to acquiring new
customers instead of building loyalty.
Click and Mortar CompaniesClick and Mortar Companies
-
7/28/2019 Dole Commerce
65/120
65
Click-and-Mortar CompaniesClick-and-Mortar Companies
Most established companies resisted adding Websites because of the potential for channel conflictand cannibalization.
Many are now doing better than click-only
companies. Reasons:
Trusted brand names and more resources
Large customer bases
More knowledge and experience
Good relationships with suppliers
Can offer customers more options
Setting Up for E-MarketingSetting Up for E-Marketing
-
7/28/2019 Dole Commerce
66/120
66
Setting Up for E MarketingSetting Up for E Marketing
Online MarketingOnline Marketing
-
7/28/2019 Dole Commerce
67/120
67
Setting up for E-MarketingSetting up for E-Marketing
Corporate websites
Build goodwill and
relationships; generate
excitement
Marketing websites
Engage consumers
and attempt to influence
purchaseWebsite design
7 Cs of effective website
design
OptionsOptions
Creating websites
Placing online ads andpromotions
Creating or using Webcommunities
Using E-mail
-
7/28/2019 Dole Commerce
68/120
68
Seven Cs of Website DesignSeven Cs of Website Design
Conducting E-CommerceConducting E-Commerce
ContextContent
Community
CommunicationConnectionCommerce
Customization
The 7Cs of Website designThe 7Cs of Website design
-
7/28/2019 Dole Commerce
69/120
69
The 7C s of Website designThe 7C s of Website design
Context
Sites layout and design
Commerce
Sites capabilities to enablecommercial transactions
Connection
Degree site is linked to othersites
Communication
The ways sites enable site-to-
user communication or two-way
communication
Customization
Sites ability to self-tailor todifferent users or to allow users
to personalize the site
Community
The ways sites enable user-to-user communication
Content
Text, pictures, sound and videothat web pages contain
Fit and Reinforcement of CsFit and Reinforcement of Cs
-
7/28/2019 Dole Commerce
70/120
70
Fit and Reinforcement of CsFit and Reinforcement of Cs
ContextContext ContentContent CommunityCommunity CustomizationCustomization CommunicationCommunication ConnectionConnection CommerceCommerce
Business ModelBusiness Model
Consistent Reinforcement
Individually Supporting Fit
-
7/28/2019 Dole Commerce
71/120
Web AdvertisingWeb Advertising
-
7/28/2019 Dole Commerce
72/120
72
Web AdvertisingWeb Advertising Banner ads: allows for more targeted advertising
Pop-up ads: pop-under ads are displayed in a separatebrowser window beneath your main browser window
and remain there until you close them
Skyscrapers: An advertisement on a Web site that isvertically oriented on the page and larger than the
typical banner ad
This is a pop-up ad
Click here to close me
-
7/28/2019 Dole Commerce
73/120
73
Web AdvertisingWeb Advertising
Interstitials: are usually full-page ads displayed while a user isin transit from one page to another, triggered by code included in the
link
-
7/28/2019 Dole Commerce
74/120
74
Web AdvertisingWeb Advertising
Content Sponsorship: are sites that pay for placement in searchresults on keywords that are relevant to their business
The upper: This is the part of the shoe that wraps around and over the top of the foot. It may be made of leather or a synthetic material that is lighter and breathable (to reduce heat from
inside the running shoe). The tongue of the upper should be padded to cushion the top of the foot against the pressure from the laces. Often, at the back of the running shoe, the upper is
padded to prevent rubbing and irritation against the achilles tendon.
The heel counter: This is a firm and inflexible cup which is built into the upper of running shoes and surrounds the heel. It is usually very firm so that it can control motion of the rearfoot.
Post or footbridge: This is the firm material in the midsole which increases stability along the inner side (arch side; medial side) of the running shoe.
Web AdvertisingWeb Advertising
http://www.qksrv.net/click-1452744-10296776 -
7/28/2019 Dole Commerce
75/120
75
Web AdvertisingWeb Advertising
Microsites: limited areas on the Web managed andpaid for by external companies
http://www.autotrader.com/
Vi l M k tiViral Marketing
http://www.autotrader.com/http://www.autotrader.com/ -
7/28/2019 Dole Commerce
76/120
76
Viral MarketingViral Marketing
Gillette used viral marketing tointroduce the 3-bladed Venusrazor for women, greatlyexpanding the audience reachedby its Reveal the Goddess inYou truck tour and beach-site
promotions.
Setting up for E-MarketingSetting up for E-Marketing
-
7/28/2019 Dole Commerce
77/120
77
Web communities allow
members with specialinterests to exchange views
Social communities
Work-related
communitiesMarketers find well-defined demographics andshared interests useful whenmarketing
Creating websitesPlacing online adsand promotions
Creating or using
Web communitiesUsing E-mail
Setting up for E-MarketingSetting up for E-Marketing
OptionsOptions
Setting up for E-MarketingSetting up for E-Marketing
-
7/28/2019 Dole Commerce
78/120
78
E-mail marketing
Key tool for B2B andB2C marketing
Clutter is a problem
Enriched forms of
e-mail attempt to breakthrough clutter
Spam is a problem
Creating websites
Placing online ads andpromotions
Creating or using Webcommunities
Using E-mail
Setting up for E-MarketingSetting up for E-Marketing
OptionsOptions
-
7/28/2019 Dole Commerce
79/120
79
Benefits of E-commerceBenefits of E-commerce
To consumers: 24/7 access, more choices, pricecomparisons, improved delivery, competition
To organizations: International marketplace
(global reach), cost savings, customization,reduced inventories, digitization ofproducts/services
To society: flexible working practices, connectspeople, delivery of public services
fiB fi C
-
7/28/2019 Dole Commerce
80/120
80
Benefits to ConsumersBenefits to Consumers
Convenience
Buying is easy and private
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate
fi O i iB fit t O i ti
-
7/28/2019 Dole Commerce
81/120
81
Benefits to OrganizationsBenefits to Organizations
Powerful tool for building customer relationships
Can reduce costs
Can increase speed and efficiency
Offers greater flexibility in offers and programs
Is a truly global medium
B fi S iB fit t S i t
-
7/28/2019 Dole Commerce
82/120
82
Benefits to SocietyBenefits to Society
More individuals can work from home
Benefits less affluent people
Third world countries gain access
Facilitates delivery of public services
i i i
-
7/28/2019 Dole Commerce
83/120
83
Discussion Questions
What features do you look for on aWeb site that you feel make the siteappealing?
What are your major concerns aboutmaking online purchases?
What types of things can an onlineretailer do to create a more securebuying environment?
li d d i
-
7/28/2019 Dole Commerce
84/120
84
Online Ads and PromotionOnline Ads and Promotion
Forms of online advertising & promotion:
Banner ads & tickers (move across the screen)
Skyscrapers (tall, skinny ads at the side of a page)
Rectangles (boxes that are larger than a banner)
Interstitials (pop up between changes on Web site)
Content sponsorships (sponsoring special content)
Microsites (limited areas paid for by an external company)
Viral marketing (Internet version of word-of-mouth)
B i PB i P
-
7/28/2019 Dole Commerce
85/120
85
Business PressuresBusiness Pressures
The term business environmentrefers tothe social, economic, legal,technological, and political actions thataffect business activities
Business pressures are divided into thefollowing categories:- Market (economic)
- Societal- Technological
Major Business Pressures & the RoleMajor Business Pressures & the Rolef
-
7/28/2019 Dole Commerce
86/120
86
of ECof EC
Organizational ResponsesOrganizational Responses
-
7/28/2019 Dole Commerce
87/120
87
Organizational ResponsesOrganizational Responses Strategic systems
- Provide organizations with strategic advantages, enablingthem to: Increase their market share Better negotiate with their suppliers Prevent competitors from entering into their territory
Continuous improvement efforts- Many companies continuously conduct programs toimprove: Productivity Quality
Customer service Business process reengineering (BPR)
- Strong business pressures may require a radical change
- Such an effort is referred to as business processreengineering (BPR)
-
7/28/2019 Dole Commerce
88/120
Or ani ational Re pon eOrganizational Responses
-
7/28/2019 Dole Commerce
89/120
89
Organizational ResponsesOrganizational Responses
Reduction in cycle time and time to market- Cycle time reductionshortening the time it
takes for a business to complete a productive
activity from its beginning to end
- Extremely important for increasing
productivity and competitiveness
- Extranet-based applications expedite steps in
the process of product or service development,testing, and implementation
Strategy FormulationStrategy Formulation
-
7/28/2019 Dole Commerce
90/120
90
Strategy FormulationStrategy Formulation
Porters three generic strategies forbusiness:
- focus
- low cost leadership- differentiation
Differentiation in the new e-commerce
sector is the key to success
Classic Framework for Strategy ManagementClassic Framework for Strategy Management
-
7/28/2019 Dole Commerce
91/120
91
Mission
Goals
Implementation
Control and
Monitoring
Strategy
FormulationCorporate
Business-unit
Functional
Operating
External
Analysis
Internal
(Company)
Analysis
E commerce and OrganizationsE commerce and Organizations
-
7/28/2019 Dole Commerce
92/120
92
E-commerce and OrganizationsE-commerce and Organizations
Organizations that undertake e-commerce do sofrom two possible starting points:
- new online organizations
- traditional established organizationsFactors for success:
- first-mover advantage
- differentiation in the marketplace- flexibility and agility in the electronic
marketspace
Seven dimensions of E-commerce StrategySeven dimensions of E-commerce Strategy
-
7/28/2019 Dole Commerce
93/120
93
Seven dimensions of E-commerce StrategySeven dimensions of E-commerce Strategy
Four positional factorsFour positional factors
Technology: goal must be
understood within its market and
industry
Market: must determine itstarget market and whether it is
still open to new entrantsService: must know its
customers expectationsBrand: must understand if it has
the ability to create a strong
brand
Technology: goal must be
understood within its market and
industryMarket: must determine itstarget market and whether it is
still open to new entrantsService: must know its
customers expectationsBrand: must understand if it has
the ability to create a strong
brand
Three bonding factorsThree bonding factors
Leadership: vision of CEO for e-
commerceInfrastructure: technology
support for new model ofbusiness
Organizational Learning: does
the organization support internal
learning
Leadership: vision of CEO for e-
commerceInfrastructure: technology
support for new model ofbusinessOrganizational Learning: does
the organization support internal
learning
Technology LeadershipTechnology Leadership
-
7/28/2019 Dole Commerce
94/120
94
Technology LeadershipTechnology Leadership
Involves more than hardware and software Seven major areas:
- strategy: focus upon alignment and planning
- structure: focus upon becoming an e-organization- systems: technology integration
- staffing: developing a strong pool of skills
- skills: developing the necessary knowledge
- style: add value to customers
- shared values: must build value to the organization
Service LeadershipService Leadership
-
7/28/2019 Dole Commerce
95/120
95
Service LeadershipService Leadership
Established strategies of customer still applyInternet service strength derived from providing
additional information to the customer
Internet provides a low-cost, high-qualityservice channel with a global reach
Call centre strategy must be defined
E-mail interface channel must be defined
Brand LeadershipBrand Leadership
-
7/28/2019 Dole Commerce
96/120
96
Brand LeadershipBrand Leadership
Branding strength comes from being a firstmover
Brand reinforcement is a continuous task
Brand positioning can be defined using theInternet service value chain
Brand followers need to reposition as
quickly and effectively as possibleFour brand
Developing a Winning E strategyDeveloping a Winning E strategy
-
7/28/2019 Dole Commerce
97/120
97
Developing a Winning E-strategyDeveloping a Winning E-strategy
Ensure that the project is backed by senior management
Develop a strategy before a Web presence
Develop a strategy by focusing on technology,
branding, marketing and service Identify and use knowledge in the organization
Strategy must add value for customers and must changeas the requirements of the customers change
The Three Approaches to StrategyThe Three Approaches to Strategy
-
7/28/2019 Dole Commerce
98/120
98
The Three Approaches to StrategyThe Three Approaches to Strategy
Position approach: Where should we be vs. ourcompetition?
Resources approach: what resources should wepossess?
Simple rules approach: What processes should we
follow?
Three Approaches to StrategyThree Approaches to Strategy
-
7/28/2019 Dole Commerce
99/120
99
pp gypp gyPosition Resources SimpleRules
Strategic Logic
Strategic Steps
Strategic Question
Source of
Advantage
Works Best In
Duration ofAdvantage
Risk
Performance Goal
Establish position Leverage resources Pursue opportunities
Identify an attractivemarket
Locate a defensibleposition
Fortify and defend
Establish a vision
Build resources
Leverage across markets
Jump into the confusion
Keep moving
Seize opportunities
Finish strong
Where should we be? What should we be? How should we proceed?
Unique, valuable position
with tightly integrated
activity system
Unique, valuable,
inimitable resources
Key processes and
unique simple rules
Slowly changing, well-
structured markets
Moderately changing, well
structured markets
Sustained
It will be too difficult to
alter position as conditions
change
Sustained Unpredictable
Company will be too slow
to build new resources as
conditions change
Managers will be too
tentative in executing on
promising opportunities
Profitability Long-term dominance Growth
Rapidly changing,
ambiguous markets
-
7/28/2019 Dole Commerce
100/120
100
Business ModelBusiness Model
-
7/28/2019 Dole Commerce
101/120
101
Business ModelsBusiness Models
A method of doing business by which acompany can generate revenue to sustainitself
Spells out where the company is positionedin the value chain
Business models are a component of a
business plan or a business case
-
7/28/2019 Dole Commerce
102/120
102
Business Plans & Business CasesBusiness Plans & Business Cases
Business plan:
- A written documentthat identifies the
business goals andoutlines the plan ofhow to achieve them
Business case:
- A written documentthat is used by
managers to garnerfunding for specificapplications orprojects; its major
emphasis is thejustification for aspecific investment
Th C t t f B i PlTh C t t f B i Pl
-
7/28/2019 Dole Commerce
103/120
103
The Content of a Business PlanThe Content of a Business Plan
Mission statement andcompany description
The management team
The market and thecustomers
The industry andcompetition
The specifics of theproducts and/or services
Marketing and salesplan
Operations plan
Financial projectionsand plans
Risk analysis
Technology analysis
-
7/28/2019 Dole Commerce
104/120
Business Models in E-commerceBusiness Models in E-commerce
-
7/28/2019 Dole Commerce
105/120
105
Business Models in E-commerceBusiness Models in E-commerce
Method of doing businessWell-planned model gives a competitive
advantage
Impacts on sustainability and growthThree areas:
- value stream
- revenue stream- logistical stream
Transaction costsTransaction costs
-
7/28/2019 Dole Commerce
106/120
106
Transaction costsTransaction costs
Cost of providing some good or service throughthe market
Effects of e-commerce and the internet thatimpacts the business model
Searching for an obtaining information Participating in a market
Policing and enforcing transactions
Bargaining and decision costsActual cost of buying or selling the product
Value StreamValue Stream
-
7/28/2019 Dole Commerce
107/120
107
Value StreamValue Stream
Create long-term sustainabilityBenefit for business stakeholders
Can be achieved in four ways:
- creation/participation in an e-marketplace- creation/participation of virtual communities
- additional value offers
- exploitation of offers
Creation/participation in an e-marketplaceCreation/participation in an e-marketplace
-
7/28/2019 Dole Commerce
108/120
108
Creation/participation in an e marketplaceCreation/participation in an e marketplace
Reduce transaction costs directly/indirectly Economics of e-market similar to traditional market
Can be setup by supplier/buyer or run independently
Buyer value:
- reduced costs- improved service
- convenience
Supplier value:
- reduced costs- differentiation
- reduced lead time
Creation/participation of virtualCreation/participation of virtual
-
7/28/2019 Dole Commerce
109/120
109
Creation/participation of virtualCreation/participation of virtual
communitiescommunities
Bringing together members of a community
Larger communities mean larger sources
Improves customer service
-
7/28/2019 Dole Commerce
110/120
-
7/28/2019 Dole Commerce
111/120
111
Exploitation of offersExploitation of offers
E-commerce/Internet economy founded oninformation
Value can be added by using this informationTarget customers demographically
Can bridge the uncertainty gap
Can post RFPs
Revenue StreamRevenue Stream
-
7/28/2019 Dole Commerce
112/120
112
Revenue StreamRevenue Stream
Short-term realization of value propositionDirect:
- cost reduction
- free offerings of service/products- pricing strategies
Indirect:
- internet advertising
- selling customer information
- joining affiliate programs
Logistical streamLogistical stream
-
7/28/2019 Dole Commerce
113/120
113
Logistical streamLogistical stream
Examines organization restructure todeliver value added and revenue streams
Issues such as:
- organizational culture- pre/post restructuring
- implementing information
- communication and training- reward systems for motivation
Restructure value systemsRestructure value systems
-
7/28/2019 Dole Commerce
114/120
114
Restructure value systemsRestructure value systems In order to realize value and revenue streams
Disintermediation: the removal of one or more layers in thevalue chain to increase efficiency, improve responsiveness,reduce costs
Re-intermediation: reassembly of buyers, sellers and other
partners in the value chain in new ways Infomediation: overabundance of knowledge on the WWW
marketspaces Digitization: Digital goods are much cheaper to produce in the
long run with little or no distribution costs compared totraditional channels. Digital goods also provide relatively cheapand efficient channels for merchants who otherwise could notafford to reach customers on a global scale
-
7/28/2019 Dole Commerce
115/120
115
Kinds of business modelsKinds of business models
Brokerage: market makers bring togetherbuyer and sellers
Advertising: web advertising providingadvertising messages
Infomediary: collecting and disseminatinginformation
Assessing a business modelAssessing a business model
-
7/28/2019 Dole Commerce
116/120
116
Assessing a business modelAssessing a business model
Can be assessed by looking at themarketing strategy
Can also be assessed by technology
- imitation- complementary assets
Financial measures
Competitor benchmarkingMarket analysis
Traditional vs. New BusinessTraditional vs. New Business
ModelsModels
-
7/28/2019 Dole Commerce
117/120
117
ModelsModelsTraditional New Business
Production Mass Personalized
Manufactures push Customer Pull
Distribution Middleman Direct
Communications Closed Open
Finance Slow Fast
Difficult EasierMarkets Local Global
Mass Niche
Assets Physical Virtual
Consumer Decision ProcessConsumer Decision Process
-
7/28/2019 Dole Commerce
118/120
118
DisposalDisposal
LoyaltyLoyalty
SatisfactionSatisfaction
Purchase DecisionPurchase Decision
Evaluation of AlternativesEvaluation of Alternatives
Information SearchInformation Search
Problem - RecognitionProblem - Recognition
PRE-PURCHASE
PURCHASE
POST-PURCHASE
Consumer Decision Process Flower ExampleConsumer Decision Process Flower ExampleFlowers
-
7/28/2019 Dole Commerce
119/120
119
Flowers
DisposalDisposal
LoyaltyLoyalty
SatisfactionSatisfaction
Purchase DecisionPurchase Decision
Evaluation of AlternativesEvaluation of Alternatives
Information SearchInformation Search
Problem - RecognitionProblem - Recognition
Pre-Purchase
Purchase
Post-
Purchase
Need recognition, potentially triggered by a
holiday, anniversary or everyday events
Search for ideas and offerings, including: Available on-line and off-line stores Gift ideas and recommendations Advice on selection style and match
Evaluation of alternatives along a number of
dimensions, such as price, appeal, availability, etc.
Purchase decision Message selection (medium and content)
Post-sales support Order tracking Customer service
Education on flowers and decoration Post sales perks
MetricsMetrics
-
7/28/2019 Dole Commerce
120/120
MetricsMetrics
Response times
Site availability
Download times Timeliness
Security and privacyOn-time order
fulfillment
Return policy
Navigability
Measures of performance; may be quantitative
or qualitative
Metrics: If it moves, measure it!