Download - Online Marketing & E-Commerce session two MOGHIMI

E-MARKETING COURSESESSION Two

Lecturer: Bahman MoghimiDoctor of Business Administration

M.Sc. Of “Industrial Marketing & e-Commerce”

University of Georgia

What is Paradigm Shift?

Information Age

Buy-Side Market Place

Competitors

High Expectations

High Rate of Change in

Cultures & Behaviors

E-Life !!!!

B.M

oghimi@

yahoo.co.uk

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Old Economy V.S. New Economy

Old Economy New Economy

Organize by product units

Focus on profitable transactions

Look primarily at financial scorecard

Focus on shareholders

Marketing does the marketing

Build brands through advertising

Focus on customer acquisition

No customer satisfaction measurement

Over-promise, under-deliver

Organize by customer segments

Focus on customer lifetime value

Look also at marketing scorecard

Focus on stakeholders

Everyone does the marketing

Build brands through behaviorFocus on customer retention and growth

Measure customer satisfaction & retention

Under-promise, over-deliver

B.M

oghimi@

yahoo.co.uk

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Meeting Increasing Customer Needs

B.M

oghimi@

yahoo.co.uk

What is Marketing? …

... a a process by which companies create value process by which companies create value for customers and build strong customer for customers and build strong customer relationships in order to capture value relationships in order to capture value

from customers in return. from customers in return.

It involves building profitable, value It involves building profitable, value exchange exchange relationship with customers……. relationship with customers…….

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oghimi@

yahoo.co.uk

Simple Model of Marketing Process

[email protected] 8

Customer-Driven Marketing Strategy

What’s the target Market?– Market Segmentation…– Target Marketing…

What’s the value proposition?– Set of benefits & values to satisfy needs…– Differentiation & Positioning…

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oghimi@

yahoo.co.uk

Integrated Marketing PlanThe company’s

marketing strategy should

develop an integrated marketing

program that actually deliver the intended-value to target

customers

[email protected] 10

Building Customer Relationships

CRM is the overall process of building and

maintaining profitable customers relationships by

delivering superior customer value and satisfaction

Customer (Perceived) VLUE (customers evaluation of differentiation)

Customer SATISFACTION (Product Perceived Performance)

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oghimi@

yahoo.co.uk

?

The Changing Nature of Customer Relationships

More Carefully selected Customers Long-Term Relationships Connecting Directly

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oghimi@

yahoo.co.uk

Functions of markets

Three main functions of markets

– Matching buyers and sellers

– Facilitating the exchange of information, goods, services, and payments associated with market transactions

– Providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market14

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Definition of e-Commerce

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THE GROWTH OF E-COMMERCE

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Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed measurably. In 2010, e-commerce revenues are growing again at an estimated 12 percent annually.

Why e-commerce is different – 8 unique features

1. Ubiquity Internet/Web technology available everywhere: work,

home, etc., anytime.

Effect: – Marketplace removed from temporal, geographic locations

to become “marketspace”– Enhanced customer convenience and reduced shopping

costs

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B.M

oghimi@

yahoo.co.uk


2. Global reachThe technology reaches across national boundaries,

around Earth

Effect: – Commerce enabled across cultural and national

boundaries seamlessly and without modification– Marketspace includes, potentially, billions of

consumers and millions of businesses worldwide

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oghimi@

yahoo.co.uk


3. Universal standardsOne set of technology standards: Internet standards

Effect: – Disparate computer systems easily communicate with each

other– Lower market entry costs—costs merchants must pay to

bring goods to market– Lower consumers’ search costs—effort required to find

suitable products

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oghimi@

yahoo.co.uk


4. Richness Supports video, audio, and text messages

Effect: – Possible to deliver rich messages with text, audio,

and video simultaneously to large numbers of people– Video, audio, and text marketing messages can be

integrated into single marketing message and consumer experience

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oghimi@

yahoo.co.uk


5. Interactivity The technology works through interaction with

the user

Effect: – Consumers engaged in dialog that dynamically adjusts

experience to the individual– Consumer becomes co-participant in process of

delivering goods to market

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oghimi@

yahoo.co.uk


6. Information density Large increases in information density—the total

amount and quality of information available to all market participants

Effect:– Greater price transparency– Greater cost transparency– Enables merchants to engage in price discrimination

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oghimi@

yahoo.co.uk


7. Personalization/CustomizationTechnology permits modification of messages,

goods

Effect– Personalized messages can be sent to individuals

as well as groups– Products and services can be customized to

individual preferences

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oghimi@

yahoo.co.uk


8. Social technology The technology promotes user content generation

and social networking

Effect– New Internet social and business models enable user

content creation and distribution, and support social networks

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oghimi@

yahoo.co.uk

Types of e-commerce

• Business-to-consumer (B2C)

• Business-to-business (B2B)

• Consumer-to-consumer (C2C)

• Mobile commerce (m-commerce)

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oghimi@

yahoo.co.uk

E-commerce business models

Portal

E-tailer

Content Provider

Transaction Broker

Market Creator

Service Provider

Community Provider27

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oghimi@

yahoo.co.uk

E-Market-space

A marketplace in which sellers and buyers

exchange goods and services for money (or

for other goods and services), but do so

electronically.

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oghimi@

yahoo.co.uk

E-Commerce

Website selling products/info is a useful service to customers Serves 2 purposes:

Marketing Allowing consumers to shop when on their own time

– If you don’t sell online, you might be missing an opportunity to serve your customers

Some E-Commerce sites are replacing high-street shops

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oghimi@

yahoo.co.uk

What is E-Marketing & E-Business? 1

EB=EC+BI+CRM+SCM+ERP– EB = E-Business– EC = E-Commerce– BI = Business Intelligence– CRM = Customer Relationship Mgmt – SCM = Supply Chain Management– ERP = Enterprise Resource Planning (SAP)

B.M

oghimi@

yahoo.co.uk

E-Marketing– Increases efficiency in

traditional marketing functions.

– Technology of e-marketing transforms marketing strategies. This results in new business models that add value and profits.

Activity

Business Process

Enterprise

PurePlayBusiness transformation

(competitive advantage,industry redefinition)

Effectiveness(Incremental sales,customer retention)

Efficiency(Cost

reduction)

Pure dot-com(E*Trade)

Click and Mortar(eSchwab)

Customerrelationshipmanagement

Brochureware,Order processing

Leve

l of b

usin

ess

impa

ct


B.M

oghimi@

yahoo.co.uk


Level of commitment to E-Biz can vary– Individual Business Activity - aim for efficiency

(cost reduction) Ex. Website for brochure-ware– Business process - aim for effectiveness

(incremental sales, retention) (ex. CRM)– Enterprise - the firm automates many business

processes in a unified system(ex. Click+Mortar)– Pure Play-business transformation (dot.com)

(competitive advantage, industry redefinition)

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oghimi@

yahoo.co.uk

The challenges/ opportunities with E-Marketing

Consumers Empowered– Consumers now have more control. They want:

Speed (ex. answer emails quick) Privacy, safeguards, permission to contact and use

information Low prices, convenience, self-service Service, personal attention/personalization (treat

customers important) Value (exceed expectations) Mass customization (adds value and can be

automated). 33

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oghimi@

yahoo.co.uk


Consumers want in a website:– 1 stop shopping with integrated solutions.– Effective web navigation– Quick downloads– Clear site organization– Attractive/useful site design– Secure and private transactions – Free information/services - consumers used to

online culture of getting something for free.34

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oghimi@

yahoo.co.uk


Businesses must address:– Competition, changing value chain structures, conflict,

and coordinating the front/back end. Technology

– Costly and changing, but may offer LR savings But can offer value to both firms and consumers if done

right:– Benefits of customization, personalization – Decrease Costs - 24/7 convenience, self-service

ordering and tracking, one stop shopping.

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B.M

oghimi@

yahoo.co.uk

E-Bay an example of E-Marketing success

Still successful despite slowing economy as both consumers and firm searching for stuff to sell.

E-Bay takes a cut of every transaction - low risk as they don’t have to address inventory, warehousing, or fulfillment issues.

37.6 million users in 200 countries. 1/2 of users referred to by other users.

E-Bay on track for $8 billion in revenues in 2008 and 70% earnings growth in next 2-3 years.

Has 85% of online consumer auction market. Firms also set up shops to sell at fixed prices.

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oghimi@

yahoo.co.uk

Size of the Internet?

The Internet is a big place. How big? Try gigantic. The attempts to visually representing some of the mind-boggling numbers that defined the Internet circa 2010 , still not very easy to wrap your head around.

How, for example, does one simply imagine the 2 billion videos being watched on YouTube each and every day? How is it possible that 35 hours of video can be uploaded to the site every minute? What do 36 billion photos look like? Ask Facebook; that's how many photos are uploaded to the site each year. 107 trillion e-mails (!) are sent on year 2010!

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oghimi@

yahoo.co.uk

E-Marketing Primary Strategies

The essential issues of marketing are also referred to as the four Ps of marketing mix:

Product: Physical item or service that a company is selling

Pricing: Amount the customer pays for the product

Placement: How the product/service gets to the customer, sometimes called “place” referring to “where” a product/service is sold

Promotion: Any means of spreading the word about the product40

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oghimi@

yahoo.co.uk

E-Marketing Primary Strategies (Cont)

There are extra 3Ps as the extended marketing mix:

People: Right person, trained well, motivated

Process: Providing services to customers

Physical evidence: Case studies, testimonials

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B.M

oghimi@

yahoo.co.uk

Revision – Rules for Success

Rule #Rule #1 1 –– Selling Selling AnywhereAnywhere

Anywhere Means technologically (on wired and portable wireless devices) and geographically (selling anywhere in the world).

With Internet this is a reality.

Your local market is the global market.

If you are not selling everywhere, you are selling nowhere.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #1 1 –– Selling AnywhereSelling AnywhereSelling globally means that you have understand the culture of the customer you are selling to.

You have to face the challenges of language, regulatory challenges of import and export rules, taxation, social and political issues, fulfillment and customer services problems.

Any of these items, If mishandled, can quickly torpedo your global marketing efforts and furthermore your investment.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #2 2 –– Selling AnythingSelling Anything

The message is

“Find a need and fill it”

Once a need is found, the Internet makes it easy to serve it.

What is offered to consumers on the net is limited only by the company’s imagination and the Internet technology that you can create to deliver it.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #2 2 –– Selling AnythingSelling Anything

Trying to have the next big thing for the net, keep three major human motivations in mind:

• Information• Economic• Entertainment

If your idea can satisfy these motivation then Internet can translate the idea to money.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #3 3 –– Selling AnytimeSelling Anytime

One of the unique advantage of Internet:

It allows companies to conduct business 24/7

But don’t forget:

Anytime, means that the user can use many different devices to access the Internet with different capabilities each one

And secondly, your visibility on the Net is limited by having a single Web site, thus the marketing costs of driving qualified buyers to a Web site are a huge cash drain on dot-coms, leading to bankruptcy.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #3 3 –– Selling AnytimeSelling Anytime

One way to become known in the Internet and minimizing the marketing costs is through affiliate marketing

This type of marketing rely on affiliate programs. These are programs that a web site joins in which a merchant pays a commission to an affiliate for generating clicks, leads, or sales from a graphic or text link located on the affiliate’s site.

Strongly introduced by Amazon.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #4 4 –– Selling AnywaySelling Anyway

The new technological capabilities of the Internet are changing the face of EC.

Customers will use personal shopping services

These services will send their requests out for bid

Return with merchants offers in the form of multimedia “advertorials” on a product or service.

www.geek.com

www.respond.com

www.radicalmail.com

www.entrypoint.com

B.M

oghimi@

yahoo.co.uk


Rule #Rule #4 4 –– Selling AnywaySelling AnywayDigital cash – or e-cash – will eventually become the dominant way of paying for products and services on the Internet.

Although payment will come from consumer’s credit card or bank account, how payment is made on the Net can take a variety of forms as:

A prepaid payment option

A person-to-person (P2P) service, or

In the form of an Internet escrow service.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #5 5 –– Selling at Any Selling at Any PricePrice

In e-commerce, The customer is in control.

The “One price fits all” model is obsolete.

Pricing will get personal.

Not just preferred pricing for repeat customers, but the delivery of customized price offers to each and every buyer.

Schemes of dynamic pricing will be dominant.

B.M

oghimi@

yahoo.co.uk


Rule #Rule #5 5 –– Selling at Any Selling at Any PricePrice

Dynamic pricing is difficult in real world

However on the Net prices can be changed in a second.

Dynamic pricing schemes contain factors as

•Product selection

•Convenience factors

•Customer service and purchase guarantee information

•Rebates

•Personalized services

B.M

oghimi@

yahoo.co.uk

Download - Online Marketing & E-Commerce session two MOGHIMI

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