Ecommerce Midterm Flashcards
Use of Internet to transact business
Includes Web, mobile browsers and apps
changing money
E-Commerce
Digital enabling of transactions and processes within a firm, involving information systems under firm’s control
Does not include commercial transactions involving an exchange of value across organizational boundaries
help with the transaction but not the actual business, where the money changes hands
E-Buisiness
any disparity in relevant market information among parties in a transaction
Information assymmetry
8 unique features of e-commerce tech
Ubiquity Global reach Universal standards Richness Interactivity Information density Personalization/Customization Social technologies
It is everywhere, smartphones-
Ubiquity
Can reach more places, more countries from one laptop
Global reach
Not everyone has to speak the same language
Universal standards
quality is much better, we know more before making decisions
(Information) Richness
can talk to you specifically, engaging with you often,
Interactivity
how much there is, there is more info available
Information density
Can be tailored to them with cookies, greet them by name
Personalization/Customization
Social media
Social technologies
Major types of e-commerce
B2C/B2B/C2C
Mobile e-commerce
Social e-commerce
Local e-commerce
displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between producers and consumers
Disintermediation
All participants receive value from the fact that everyone else uses the same tool or product (ex: telephone, windows), all of which increase in value as more people adopt them
Network effect
Internet vs WWW
Internet- Highway, environment in which entities exist
WWW- Vehicles on highway, part of internet
Major Trends in E-commerce
Business trends include:
All forms of e-commerce show very strong growth
Technology trends include:
Mobile platform has made mobile e-commerce reality
Societal trends include:
Increased online social interaction and sharing
Look alike audience, Facebook, things you like
Social e-commerce
Uber, yelp, look for things in YOUR area
Local e-commerce
Examples: Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Mobile e-commerce (M-commerce)
B2C- Target
B2B- Maker to Seller
C2C- Ebay
M-commere- works on ur phone
Invention of E-Commerce
Ideal:
- Friction free commerce- anyone could do anything, instant
- if your product was out there first you could win
Additional concepts include disintermediation, monopoly profits, switching costs, network effects, disrupting traditional channels.
1995–2000: Invention Sale of simple retail goods Limited bandwidth and media Euphoric visions of Friction-free commerce First-mover advantages Dot-com crash of 2000
Consolidation of E-Commerce
People who survived who returned on profitability
Venture capitalist left
2001–2006: Consolidation Emphasis on business-driven approach Traditional large firms expand presence Start-up financing shrinks More complex products and services sold Growth of search engine advertising Business web presences expand
Reinvention of E-Commerce
Rapid growth of everything after Iphone
2007–Present: Reinvention Rapid growth of: Web 2.0, including online social networks Mobile platform Local commerce On-demand service economy Entertainment content develops as source of revenues Transformation of marketing
Why Many early visions not fulfilled
Price dispersion
Information asymmetry
New intermediaries
Big brands can compete more aggressively
person who follows the first person who makes mistakes, usually succeeds
Fast Follower
Fast-follower advantages
Start-up costs
Impact of mobile platform
Emergence of on-demand e-commerce
Other surprises of E-Commerce
Technology:
Development and mastery of digital computing and communications technology
Business:
New technologies present businesses with new ways of organizing production and transacting business
Society:
Intellectual property, individual privacy, public welfare policy
Understanding E-commerce: Organizing Themes
• Eight key components of e-commerce business models (e.g. value prop, revenue model, etc.)
o Value proposition o Revenue model o Market opportunity o Competitive environment o Competitive advantage o Market strategy o Organizational development o Management team
“Why should the customer buy from you?”
Successful e-commerce ______:
Personalization/customization
Reduction of product search, price discovery costs
Facilitation of transactions by managing product delivery
Value proposition
“How will you earn money?”
o Revenue model
“What marketspace do you intend to serve and what is its size?”
Area of actual or potential commercial value in which company intends to operate
typically divided into smaller niches
o Market opportunity
“Who else occupies your intended marketspace?”
Other companies selling similar products in the same marketspace
Includes both direct and indirect competitors
Competitive environment
“What special advantages does your firm bring to the marketspace?”
Is your product superior to or cheaper to produce than your competitors’?
o Competitive advantage
“How do you plan to promote your products or services to attract your target audience?”
Details how a company intends to enter market and attract customers
Best business concepts will fail if not properly marketed to potential customers
o Market strategy
“What types of organizational structures within the firm are necessary to carry out the business plan?”
Describes how firm will organize work
Typically, divided into functional departments
As company grows, hiring moves from generalists to specialists
o Organizational development
“What kind of backgrounds should the company’s leaders have?”
o Management team
• B2C business models (be able to match the model with an example provided)
o Portal o E-tailer o Content provider o Transaction broker o Market creator o Service provider o Community provider
Search plus an integrated package of content and services (REV?)
Variations:
Horizontal/general (example: Yahoo, A O L, M S N)
Vertical/specialized (vortal) (example: Sailnet)
Search (example: Google, Bing)
o Portal
Revenue models:
Advertising, referral fees, transaction fees, subscriptions for premium services
online version of traditional retailer (REV?)
Variations: Virtual merchant Bricks-and-clicks Catalog merchant Manufacturer-direct
Low barriers to entry
o E-tailer
Sales rev model
Digital content on the Web:
News, music, video, text, artwork (REV?)
Variations:
Syndication
Aggregators
o Content provider
Revenue models:
Use variety of models, including advertising, subscription; sales of digital goods
Key to success is typically owning the content
Process online transactions for consumers
Primary value proposition-saving time and money
Industries using this model:
Financial services
Travel services
Job placement services
o Transaction broker
Revenue model:
Transaction fees
Create digital environment where buyers and sellers can meet and transact
Examples: Priceline, eBay
On-demand service companies (sharing economy): platforms that allow people to sell services
Examples: Uber, Airbnb
o Market creator
Revenue model: Transaction fees, fees to merchants for access
Online services
Example: Google-Google Maps, Gmail, and so on
Value proposition
Valuable, convenient, time-saving, low-cost alternatives to traditional service providers
o Service provider
Revenue models:
Sales of services, subscription fees, advertising, sales of marketing data
Provide online environment (social network) where people with similar interests can transact, share content, and communicate
Examples: Facebook, LinkedIn, Twitter, Pinterest
(REV?)
o Community provider
Revenue models:
Typically hybrid, combining advertising, subscriptions, sales, transaction fees, and so on
• B2B business models (be able to match the model with an example provided; note that some of these items are similar and these will NOT be used as answer choices in the same exam question)
Net marketplaces E-distributor E-procurement Exchange Industry consortium Private industrial network
Supplier of things businesses need, online store
Version of retail and wholesale store, M R O goods, and indirect goods
Owned by one company seeking to serve many customers
(REV?)
o E-distributor (Grainger, McMaster-Carr)
Revenue model: Sales of goods
Creates digital markets where participants transact for indirect goods
B2B service providers, S a a S and P a a S providers
Scale economies (REV?)
Builds access to digital markets; software that selling companies can use to create e-catalogs and buying companies can use to build internal mini-markets. Generally value-chain software
Example: Ariba
o E-procurement
Revenue model:
Service fees, supply-chain management, fulfillment services
Open market place
Not as popular as we thought (REV?)
Independently owned vertical digital marketplace for direct inputs
Create powerful competition between suppliers
Tend to force suppliers into powerful price competition; number of exchanges has dropped dramatically
Example: Go2Paper
Not as popular as anticipated. Giant digital marketplace owned by private companies (usually entrepreneurial) who bring lots of suppliers for a single industry together so that buyers can have a more streamlines buying process. Encourages price competition, making it unattractive for some vendors.
o Exchange
Revenue model: Transaction, commission fees
Industry-owned vertical digital marketplace open to select suppliers
More successful than exchanges
Sponsored by powerful industry players
Strengthen traditional purchasing behavior (REV?)
Example: SupplyOn
similar to an exchanges, but owned by group of major industry players. More successful than private exchanges
o Industry consortium
Revenue model: Transaction, commission fees
Digital network used to coordinate among firms engaged in business together
Typically evolve out of large company’s internal enterprise system
Key, trusted, long-term suppliers invited to network
Example: Walmart’s network for suppliers
Be able to recognize this model: Created by super-large companies to make their buying process more efficient. Open only to trusted long-time suppliers, companies like Walmart create these private networks to coordinate communication, ordering overall inventory management. Company pays for network but saves in creating a much more efficient procurement network
Private Industrial Network
Business strategy (definition and five key types)
o Differentiation Commoditization (opposite of differentiation o Cost competition o Scope strategy o Focus/market niche strategy o Customer intimacy
Plan for achieving superior long-term returns on capital invested: that is, profit
Business Strategy
making ur product stand out
Differentiation
No difference in products, only difference is price
Commoditization (opposite of differentiation
Firm has an advantage so they can charge less
Cost competition
Compete globally
Scope strategy
connect with small niche of ppl
Focus/market niche strategy
create strong ties with customer
Customer intimacy
Number and size of active competitors
Each competitor’s market share
Competitors’ profitability
Competitors’ pricing
Competitive Environment Influences
Asymmetries First-mover advantage, complementary resources Unfair competitive advantage Leverage Perfect markets
Competitive Advantage Important Concepts
Can make the business model work
Can give credibility to outside investors
Has market-specific knowledge
Has experience in implementing business plans
Strong management team
Raising Capital
Seed capital Elevator pitch Traditional sources - Incubators, angel investors - Commercial banks, venture capital firms - Strategic partners Crowdfunding - J O B S Act
easier to get into for new businesses, time varies
Incubators-
high standards, highly competitive, for more established businesses
Exrelerators-
allows equity crowdfunding (selling stocks)
Jobs ACT-
When you donate, you get something back
Reward crowdfunding
Fails visibly
If you win, they support your business
Crowdfunding
SaaS-
Software as a Service
SaaS-
Software as a Service
Rivalry among existing competitors Barriers to entry Threat of new substitute products Strength of suppliers Bargaining power of buyers Industry structural analysis
E-commerce changes industry structure by changing:
Set of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services
All of the steps that move the og stuff in the product/service into the stuff you sell
Every step should add value
Industry Value Chains
Activities that a firm engages in to create final products from raw inputs
Firm Value Chains
Networked business ecosystem
Strategic partnerships as part of value chain, amazon
Firm Value Webs
Disruptors introduce new products of lower quality
Disruptors improve products
New products become superior to existing products
Incumbent companies lose market share
Disruptive changes stages
Set of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services
All of the steps that move the og stuff in the product/service into the stuff you sell
Every step should add value
Industry Value Chains
Disruptors introduce new products of lower quality
Disruptors improve products
New products become superior to existing products
Incumbent companies lose market share
Disruptive changes stages
initial purpose was to link large mainframe computers on different college campuses
Key building blocks were created (even if not fully implemented at the time)
!!!!Packet switching
• Email invented
!!!!!Client/server computing invented
!!!!!!TCP/IP invented
Innovation of Internet (1961-1974)
Department of Defense and National Science Foundation (NSF) fund further development and deployment.
1986 NSF given task to create civilian Internet for $200 million
First personal computers are introduced
!!!!!! Domain Name System (DNS) introduced so we don’t need to remember IP addresses
Start of e-commerce
o Institutionalization (1975-1995)
The fully civilian, commercial internet is born becomes widely adopted
Commercialization (1995-present)
is a set of standards/rules that unify formatting, compression, error checking, speed and confirmation of sent/received messages
TCP
transmission control protocol
initial purpose was to link large mainframe computers on different college campuses
Innovation of Internet (1961-1974)
Invented
Slices digital messages into packets
Sends packets along different communication paths as they become available
Reassembles packets once they arrive at destination
Uses routers
Less expensive, wasteful than circuit-switching
Packet switching
Department of Defense and National Science Foundation (NSF) fund further development and deployment.
1986 NSF given task to create civilian Internet for $200 million
First personal computers are introduced
!!!!!! Domain Name System (DNS) introduced so we don’t need to remember IP addresses
Start of e-commerce
o Institutionalization (1975-1995)
Used by department of defense and university
The fully civilian, commercial internet is born becomes widely adopted
Commercialization (1995-present)
Used by everyone and businesses
is a set of standards/rules that unify formatting, compression, error checking, speed and confirmation of sent/received messages
Establishes connections among sending and receiving Web computers
Handles assembly of packets at point of transmission, and reassembly at receiving end
intermediatery between 2 computers, structure that they’ve adopted, we can speak the same language
TCP
transmission control protocol
(Internet of things)
IoT
32-bit number
Four sets of numbers marked off by periods: 201.61.186.227
Class C address: Network identified by first three sets, computer identified by last set
IPv4 Internet Address
128-bit addresses, able to handle up to 1 quadrillion addresses (I P v4 can handle only 4 billion)
know that this was created to respond to shortage of available IPv4 addresses.)
• IPv6 Internet Address
know that it stands for a numeric IP address
!!!I P address!!! expressed in natural language
Domain name
know that it also uses a domain name as part of the URL
Address used by Web browser to identify location of content on the Web
URL (uniform resource locator)
that client computers (e.g. desktops) are connected/networked with servers (dedicated to functions that the client computers need)
Powerful personal computers (clients) connected in network with one or more servers
Servers perform common functions for the clients
• Client/Server Computing (DEF)
Firms and individuals obtain computing power and software over Internet
Three types of services
• Cloud computing
owned and maintained by CPS like Amazon, HP, and made available to multiple customers who pay only for the resources they use.
Good at cost saving, you don’t own the infrastructure, good for smaller companies
Public cloud
operated solely for the benefit of a single tenant, may be managed by a 3rd party
higher security, retain control over it
Private cloud
own infrastructure for their most essential core activities and adopt public cloud computing for less essential or during peak hours
Large firms
Hybrid cloud
Telephone-based wireless Internet access
Currently based on 3G and 4G technologies
_____ will provide higher bandwidth with speeds reaching 10 G b p s or more
• 5G
High-speed, fixed broadband wireless L A N (W L A N)
Wireless access point (“hot spots”)
Limited range but inexpensive
• WiFi (basic definition; don’t need to memorize diagram)
Modest speed, low power, short range, connection of digital devices
Bluetooth
(Internet of things)
Objects connected via sensors/R F I D to the Internet
“Smart things”
Interoperability issues and standards
Security and privacy concerns
Smart accessories are adding up
What’s gonna happen with that data? Who has it?
IoT
3 types of Cloud computing services
Infrastructure as a service (I a a S)
Software as a service (S a a S)
Platform as a service (P a a S)
Drawbacks and benefits of cloud computing
Drawbacks:
Security risks
Shifts responsibility for storage and control to providers
Radically reduces costs of:
Building and operating websites
Infrastructure, I T support
Hardware, software
Regional hubs where Tier 1 I S P s physically connect with one another and with regional Tier 2 I S P s.
Tier 2 I S P s provide Tier 3 I S P s with Internet access.
Originally called Network Access Points (N A P s) or Metropolitan Area Exchanges (M A E s).
Internet Exchange Points (I X P s)
Local area networks operating within single organization, such as N Y U or Microsoft Corporation
Lease Internet access directly from regional and national carriers
Campus/Corporate Area Networks
Two basic types of wireless Internet access:
Telephone-based (mobile phones, smartphones)
Computer network-based (wireless local area network-based)
area has wifi
WiMax
area has wifi
WiMax
area has wifi
WiMax
Text formatted with embedded links
Links connect documents to one another, and to other objects such as sound, video, or animation files
Hypertext
Fixed set of pre-defined markup “tags” used to format text
Controls look and feel of web pages
Hypertext Markup Language (H T M L)
Designed to describe data and information
Tags used are defined by user
eXtensible Markup Language (X M L)
Enables a computer to deliver web pages to clients on a network that request this service by sending an H T T P request
Basic capabilities: Security services, F T P, search engine, data capture
Web server software
May refer to either web server software or physical server
Specialized servers: Database servers, ad servers, and so on
Web server
Any computing device attached to the Internet that is capable of making H T T P requests and displaying H T M L pages
Web client
Any computing device attached to the Internet that is capable of making H T T P requests and displaying H T M L pages
Web client
• Considerations to address before building your site/app
o Vision of website o Business and Revenue model o Target audience o Understand the Marketplace o Where does the content come from o SWOT Analysis o E-Commerce Presence Map; o Timeline/Milestones o Costs
What’s the Idea?
Mission statement Target audience Intended market space Strategic analysis Marketing matrix Development timeline Preliminary budget
o Vision of website
Where’s the Money?
? [Is it Sustainable?] Business model(s) Revenue model(s)
Business & Revenue Model
[Do trends support this?]
demographics, lifestyle, consumption patterns, etc.
o Who & where is the Target audience?
What is the Ballpark? Characterize the ____
Size, growth, demographics, structure
o Understand the Marketplace
Where is the ____ coming from?
o Where does the content come from; understand static/dynamic/user generated
Know yourself Strengths Weaknesses Opportunities Threats
o SWOT Analysis
Develop a _______
what platforms will you tackle when?
Where are you present on? What media sites?
o E-Commerce Presence Map
Where would you like to be X from now?
o Timeline/Milestones
How much will it ____?
Simple website: up to $5000
Small startup: $25,000 to $50,000
Large corporate website: $100,000+ to millions
o Costs
Systems Development Life Cycle
- Systems analysis/planning
- Systems design
- Building the system
- Testing
- Implementation/Service delivery
Business objectives:
List of capabilities you want your site to have
System functionalities:
List of information system capabilities needed to achieve business objectives
Information requirements:
Information elements that system must produce in order to achieve business objectives
Systems analysis/planning
System design specification:
Description of main components of a system and their relationship to one another
Two components of system design:
Logical design
Data flow diagrams, processing functions, databases
Physical design
Specifies actual physical, software components, models, and so on
Systems design
Outsourcing
Building your own
Host your own
Building the system
Unit testing System testing Acceptance testing A/B testing (split testing) Multivariate testing
• Testing e.g. multivariate, A/B or split testing, acceptance testing (often under-funded)
Most important management challenges to building e-commerce site
Developing a clear understanding of business objectives
Knowing how to choose the right technology to achieve those objectives
Management Hardware architecture Software Design Telecommunications Human resources
Main factors to consider building e-commerce site
Methodology for understanding business objectives of a system and designing an appropriate solution
The Systems Development Life Cycle
Systems break down unpredictably
Maintenance is ongoing
Maintenance costs: Similar to development costs
A $40K e-commerce site may require $40K annually to upkeep
Benchmarking
• Implementation/Service delivery (recognize ongoing costs to maintain)
Website scaled down to in content and navigation to quickly purchase
Responsive Web design
Less expensive
Resizing existing website for mobile access is least expensive
• Mobile website
Built to run on the mobile web browser on phone or tablet
Less expensive
Can utilize browser A P I
• Mobile web-app
Application built to use the device’s internal hardware, can connect to internet
Can use device hardware, available offline
Most expensive; requires more programming
• Native app
Create mobile 1st and then add elements for desktops
Most efficient
Desktop website design after mobile design
• Mobile first design
Server delivers different templates or versions of site optimized for device
Adaptive web design
Test the site on a test internet server, key personnel
Acceptance Testing
Showing 2 versions of site to ppl and seeing which they prefer better
A/B Testing (Split testing)
Test all possibilities to see which design does things best
Multivariate Testing
Test all possibilities to see which design does things best
Multivariate Testing
A $40K e-commerce site may require ____ annually to upkeep
$40K
Arrangement of software, machinery, and tasks in an information system needed to achieve a specific functionality
System architecture
Web server and database server
Two-tier
Web application servers
Backend, legacy databases
Multi-tier
Basic tools included in all web servers
Verify that links on pages are still valid
Identify orphan files
Site Management Tools
Contents stored in database and fetched when needed
Dynamic page generation:
Provide specific business functionality required for a website
Web application servers:
Provides basic functionality for sales
Online catalog
List of products available on website
Shopping cart
Allows shoppers to set aside, review, edit selections, and then make purchase
Credit card processing
Typically works in conjunction with shopping cart
Verifies card and puts through credit to company’s account at checkout
E-commerce Merchant Server Software
Provides basic functionality for sales
Online catalog
List of products available on website
Shopping cart
Allows shoppers to set aside, review, edit selections, and then make purchase
Credit card processing
Typically works in conjunction with shopping cart
Verifies card and puts through credit to company’s account at checkout
E-commerce Merchant Server Software
Integrated environment that includes most of functionality needed
Merchant Server Software Packages
Underlying computing equipment needed for e-commerce functionality
Hardware platform:
Ability to treat people based on personal qualities and prior history with site
Personalization
Ability to change the product to better fit the needs of the customer
Customization
Set of public statements declaring how site will treat customers’ personal information that is gathered by site
Privacy policy
Set of design objectives that ensure users with disabilities can effectively access site
Accessibility rules
C S S site adjusts layout of site according to device screen resolutions
Responsive web design (R W D)
C S S site adjusts layout of site according to device screen resolutions
Responsive web design (R W D)
need reassurance, to trust brand, referenced by friends, similar purchase patterns as friends
10-15% want to be hipster and get something not everyone has
“Connectedness”
Five stages in consumer decision process
Awareness of need Search for more information Evaluation of alternatives Actual purchase decision Post-purchase contact with firm
Awareness
Comparison search, search for competition
Compare competition
Buy it
Cognitive dissonance: Was this worth it?: Make sure they loved it
User characteristics
Product characteristics
Website features: latency, usability, security
Attitudes toward online purchasing
Perceptions about control over Web environment
Clickstream behavior
General online behavior model
Highly intentional, goal-oriented
Search engines
Marketplaces (Amazon, e Bay)
Specific retail site
How shoppers find online vendors
Two most important factors shaping decision to purchase online:
Utility:
Better prices, convenience, speed
Trust:
Perception of credibility, ease of use, perceived risk
Sellers develop trust by building strong reputations for honesty, fairness, delivery
More personalized
More participatory
More peer-to-peer
More communal
Features of Internet marketing (versus traditional)
More personalized
More participatory
More peer-to-peer
More communal
Features of Internet marketing (versus traditional)
Massive, but growth is slowing.
Digital divide is not as big as once feared, but still work to be done.
Biggest gaps are income (15% gap) and level of education (65% less than high school/97% college degree+/93% some college)
Rural/older/low levels of education/low household income/African Americans/Latinos all less likely to have home broadband connection.
May access in other places with public wifi.
Peer groups influence
Consumers Online: The Internet Audience and Consumer Behavior
looks at how people behave on your site. What do they actually click on and in what order? What did they mouse over? How long between clicks? How many clicks to purchase? More than X clicks = abandon? Analysis can yield predictive results that help you make product recommendations and created more targeted offers.
what do they click on in what order, time mouse stayed there
What parts of site are effective
Clickstream behavior & Analysis
If you are a clicks-and-bricks firm,
make sure that they reinforce each other for additive effect.
How Consumers Shop
Most come through search engines
8% don’t shop online bc of trust & Hassle
Need multiple layers of marketing
Multi-Channel Marketing Plan
How do you measure and compare metrics from different platforms?
How do you link each to sales revenues?
How do you allocate resources & Prioritize
Establish brand identity and customer expectations Differentiating product Anchor the brand online Central point for all marketing messages Inform and educate customer Shape customer experience
Website functions to:
Need multiple layers of marketing
All the different ways your customer is exposed to your brand
Multi-Channel Marketing Plan
Establish brand identity and customer expectations Differentiating product Anchor the brand online Central point for all marketing messages Inform and educate customer Shape customer experience
Website functions to:
Advantages to online marketing
18-34 audience is online
Ad targeting to individuals
Price discrimination
Personalization
Search engine marketing and advertising (best) Display ad marketing E-mail marketing Affiliate marketing Viral marketing Lead generation marketing
Traditional Online Marketing and Advertising Tools
Use of search engines for branding
Search engine marketing (S E M)
Use of search engines to support direct sales
Search engine advertising
Paid inclusion
Pay-per-click (P P C) search ads
Keyword advertising
Network keyword advertising (context advertising)
Types of search engine advertising
competition will hire people to click your ad to rack up a huge click bill
Click fraud
Utilizes social contacts and social graph to provide fewer and more relevant results
Social search
Search engine issues
Paid inclusion and placement practices
Link farms, content farms
Click fraud
Banner ads Rich media ads Interstitial ads Video ads Far more effective than other display formats Sponsorships Native advertising Content marketing Advertising networks Ad exchanges, programmatic advertising, and real-time bidding (R T B)
Display Ad Marketing
Ad fraud
Viewability
Ad blocking
Display advertising issues
Messages sent directly to interested users
E-mail Marketing
Inexpensive
Average around 3% to 4% click-throughs
Measuring and tracking responses
Personalization and targeting
Email Marketing Benefits
Spam
Anti-spam software
Poorly targeted purchased e-mail lists
Email marketing Challenges
Efforts to control spam have largely
failed
Commission fee paid to other websites for sending customers to their website
Affiliate marketing
Marketing designed to inspire customers to pass message to others
Viral marketing
Services and tools for collecting, managing, and converting leads
Lead generation marketing
Use of online social networks and communities
Social marketing and advertising
Use of mobile platform
Influence of mobile apps
Mobile marketing and advertising
Geotargeting
Display ads in hyperlocal publications
Coupons
Local marketing
It’s better to have a ________ audience than a _______ audience
Smaller; larger
All the different ways your customer is exposed to your brand
Integration of online and offline marketing
Reinforce branding messages across media
Multi-Channel Marketing
One-to-one marketing (personalization)
Behavioral targeting (interest-based advertising)
Retargeting
Customer retention strategies
F A Qs
Real-time customer service chat systems
Automated response systems
Customer service
integral part of marketing strategy
Pricing:
Traditional pricing based on
fixed costs, variable costs, demand curve
Base level is free, advanced is more
Free:
no ads if you pay for it
Freemium:
lower vs higher features
Versioning:
Auctions
Yield management
Surge pricing
Flash marketing
Dynamic pricing
Internet allows for sales of obscure products with little demand
Long Tail Marketing
Near zero inventory costs
Little marketing costs
Search and recommendation engines
Long tail marketing Substantial revenue because
The incremental cost of producing the next product
Marginal costs
Revenue incrementally firm receives for each item sold
Marginal Revenue
Scope of marketing communications broadened
Richness of marketing communications increased
Information intensity of marketplace expanded
Always-on mobile environment expands marketing opportunities
Internet’s main impacts on marketing:
Built into web server software
Record user activity at website
Provides much marketing data, especially combined with:
Registration forms
Shopping cart database
Answers questions such as:
What are major patterns of interest and purchase?
After home page, where do users go first? Second?
Web Transaction Logs
cookies that can’t be deleted like normal cookies
Supercookies
Cookies Flash cookies Web beacons (“bugs”) Tracking headers (supercookies) Other tracking methods Deterministic cross-device tracking Probabilistic cross-device tracking
Types of tracking files
Enable profiling
Store records and attributes
Database management system (D B M S):
Relational Databases
Databases
Industry-standard database query and manipulation language used in a relational database
S Q L (Structured Query Language):
Collects firm’s transactional and customer data in single location for offline analysis by marketers and site managers
Data warehouse:
Analytical techniques to find patterns in data, model behavior of customers, develop customer profiles
Data mining:
Query-driven data mining
Model-driven data mining
Rule-based data mining
Types of data mining
Manage relationship with customers once purchase is made
Create customer profiles
C R M systems
Develop and sell additional products
Identify profitable customers
Optimize service delivery, and so on
Customer data used to:
Use ____ to measure ad campaign
ROI (return on investment)
Pricing models of online advertising
Barter, cost per thousand (C P M), cost per click (C P C), cost per action (C P A), hybrid, sponsorship
Correlating online marketing to online or offline sales
In general, online marketing is more expensive on C P M basis, but more efficient in producing sales
Effective cost-per-thousand (e C P M)
Measuring issues of online advertising
Software that analyzes data at each stage of the customer conversion process
Helps managers
Optimize R O I on website and marketing efforts
Build detailed customer profiles
Measure impact of marketing campaigns
Marketing Analytics
