ebz week 3 lec

7/30/2019 EBZ Week 3 Lec

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EBZ437: E-Business

Week 3: E-Marketing


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Value creation Value created is the difference between theproduct and the firms cost of providing thatproduct. (J. and E. pg 96)

Perceived Benefit What the customer values in a product or

service

Cost All cost incurred in the provison of the

product or service

Value Difference between benefit and costs


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Porters Value Chain


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Value chain Primary activities Inbound logistics: receiving, storing,

Operations: necessary activities forcreating the goods or service

Outbound logistics: getting the goods tothe consumer can be physical or electronic

Mar eting an sa es: enticing customersto buy your product/ service

Service: after sales service


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The 5 Ps of Marketing Product

Price

Place

Promotion & People Packaging


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Product Has it?

w v u Is it?

A service (finance, travel etc)

In demand

Does it?

en se o new mar e ng s ra eg es

eg CreateSpace:https://www.createspace.com/

(formerly CustomFlix)


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Price Is it?

Affordable

Cheaper than physical shopfront

equivalent Can we?

Have special offers, incentives Reduce advertising costs

Get the customer to do most ofthe work


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Place Physical location of site not

mpor an Market is much larger global

Global -> more competition Consider geographic, legal and

cu ura oun ar es Consider marketplace (Are we easy

to find?)


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Promotion and People Internet site provides a window into an

- How to advertise?

Billboards etc

Radio and TV

Domain name

Staff - interaction with customers


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Packaging Cyber product must appeal to

cus omer Should look professional

Offer incentives Discounts

Club memberships


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Market Segmentation Market segmentation

y u r wmarkets - segments

target segments with advertising messages

Segments Usually defined in terms of demographic

characteristics a e ender income etc

Micromarketing Targeting very small market segments


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Market Segmentation Geographic segmentation (location)

Creating different combinations of marketing

efforts for each geographical group of customers,country, city, neighbourhood, etc

Demographic segmentation

Uses age, gender, family size, income, education,religion, or ethnicity to group customers needs andpreferences

Psychographic segmentation (lifestyle) Groups customers by variables such as social class,

personality, or their approach to life

Behavioural segmentation Based on usage rates of products and services

htt : www.anz.com default.as


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The Internet Customer (Lawrence et al, 2003) Any consumer of goods, services and/or

Readers of Web pages

Recipients of email

On-line subscribers Direct/indirect purchasers

Internet Retail:http://www.internetretailer.com/er

http://www.internetretailer.com/2010/09/08/mobile-

commerce-comes-together


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Reaching Internet Customers Not face-to-face, not local

us omer no pass ve, wa ng Early attempts

Hotlists, internet malls Advertising

-

Target advertisements - invitations

Sponsorship of search engines, other

pages


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Advertising on the Web Banner ad

u r Interactive marketing unit (IMU) ad

formats

Standard banner sizes that most Web siteshave voluntarily agreed to use

Coordinates ad sharing

Banner advertising network (DoubleClick:http://www.google.com/doubleclick/)

Acts as a broker between advertisers and Websites that carry ads


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Advertising on the Web

Cost per thousand (CPM)

Pricing metric used when a companypurchases mass media advertising

Trial visit

First time a visitor loads a Web site page

Page view

Each page loaded by a visitor Click-through

no. of times an ad is clicked on :

http://www.google.com/doubleclick/advertisers/richmedia.html


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Other Web Ad Formats Pop-up ad

r w w w w u ropens or closes a Web page

Ad-blocking software

Prevents banner ads and pop-up ads fromloading

between two other things) ad When a user clicks a link to load a page, the

interstitial ad opens in its own browser window


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AdBlock Adblock - removes ads

-. .

Software to turn off banner ads onWWW sites

Disables push technology, blockscookies, blocks pop-ups and pop-

unders Turns off sounds and freezes

multimedia, etc


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Shopping Agents

Return detailed description of item, price,

BestBookBuys: http://www.bestwebbuys.com/books/

cnet.com.au

Problems

Blocking access

Rebundling: (Product bundling is a marketing strategythat involves offering several products for sale as onecombined produc ing of goods)


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Site Sponsorships Web sites offer advertisers an

web site

Give advertisers a chance to promote

products, services, or brands in a moresubtle way - associates the sponsor with

,

Helps build brand images and developreputation rather than generate

immediate salesEuropean mGov conference:

http://www.mgovernment.org/events/mgov2008/home.html


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E-Mail Marketing Sending one e-mail message to a

the company already has the customerse-mail address

Conversion rate percentage of recipients who respond to an ad

Opt-in e-mail sending e-mail messages to people who

request information on a particular topic


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Affiliate Marketing Strategies

Affiliate marketing

r u r ,reviews, ratings, or other information about aproduct that is linked to another firms site

Affiliate site Obtains the benefit of the selling sites brand in

exchange for the referral

Cause marketing Affiliate marketing program that benefits a

charitable organization


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Brand Image Key asset for building customer loyalty

rgan sa ons can use e we o a rmor build corporate identity or brandimage

E.g:

Nokia

Coca cola Ferrari


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BrandingElements of branding include:

eren a on Company must clearly distinguish its product

from all others

Relevance Degree to which a product is useful to a

Perceived value Key element in creating a brand that has value


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Customer Relations Commonly little consultation with

cus omers regar ng we s e es gn Can be richer than buyer-seller

Provide related informationAttract other interested parties

Encourage participation in surveysE.g.Qantas:

http://www.qantas.com.au/travel/airlines/hom

e/au/en


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Customer Relationship Management

Customer focussed business

s ra egy or e us ness Creating value by

segmenting customers tailoring offerings

Many application packages nowavailable

OnContact: http://www.oncontact.com/

Electronic Customer Relationship


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Electronic Customer Relationship

Management Is about the use of the Internet and

customers.

Aims to:

Create long-term relationship with customersto help offset costs

Increase the share of revenue through crossselling and up selling

Increase profitability of low profit customers

Focus on high value customers

Motivations (Kalakota & Robinson


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Motivations (Kalakota & Robinson,

1999) It costs 6 times more to sell to a new

A typical dissatisfied customer will tell 8- 10 people about his/her experience

Increasing annual customer retention by5% can boost profits 85%

Odds of selling a product to a newcustomer is 15%; existing customer50%

70% of dissatisfied customers willreturn if roblem fixed uickl


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Why CRM? Customers drive e-business us omers wan

Prompt excellent service

Organisations need to understand their

customers/clients from a multi-facetedpoint of view

Improving customer satis actionincreasing revenue from existingcustomers is seen as critical for survival


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Customer relationship management

Customer selection: targeting the

Customer acquisition:

get new customers and

encourage old customers to move onto theInternet

customers into repeat customers andkeep them for as long as possible.

Customer extension: involves crossselling to existing customers


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Case Study - AMEX (Kalakota & Robinson, 1999)

A history of innovation

r , y r r , r r v , rcards & travellers cheques, financial services

1990s diversification into investment

banks & brokerages failed No customer focus

New e-business design focussing on CRM


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Case Study - Amex

Traditional Amex:

ro uc ocusse Functionally-oriented systems

cost reduction is key to success

Task oriented

E-bus Amex:

Customer focussed Integrated service applications

customer relationship is key to success Solution oriented


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Personalisation & CRM Customising products & services to fit

requires analysis of customer behaviourduring previous buying and inquiry

interactions eg what products were of interest?

Personalised web pages

Proactive notification of upgrades, promotionsetc


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References Jelassi and Albrecht (2005) Strategies for E. Business Creating

Value through Electronic and Mobile Commerce Concepts andases, ren ce- a ap ,

Turban, E., Lee, J.K., King, D., McKay, J. and Marshall, P.(2008). Electronic Commerce: A Managerial Perspective (5th ed.).Prentice Hall, New Jersey, Chap 2.

Schneider, G (2007). Electronic Commerce. Thomson Learning.Chapter 3

Lawrence, E., Newton, S., Corbitt, B., Lawrence, J., Dann, S. AndThanasankit, T. (2003) lnternet Commerce: Digital Models forBusiness 3rd edition, John Wiley & Sons, Brisbane, Chapter 7

Kalakota, R. and Robinson, M. (1999) e-Business: Roadmap forSuccess Addison-Wesley Longman, Reading, MA. Chapter 5

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