ECT 250: Survey of e-commerce technology

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ECT 250 Survey of e-commerce technology

• Marketing, sales, and promotion

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Building a presence

• An organizations presence is the public image
  it
• conveys to its stakeholders.
• The stakeholders include customers, suppliers,
• employees, stockholders, neighbors, and the
• general public.
• Physical world Create a store, factory,
  warehouse
• or office building and/or engage in advertising.
• On the Web Create a site, which may be the only
• point of contact for stakeholders, and/or engage
• in advertising.

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Web presence goals

• Attracting visitors to the site
• Making the site sticky so that visitors stay
• Convincing visitors to follow the sites links
  to
• obtain information
• Creating an image consistent with the desired
• image of the organization
• Reinforcing positive images that the visitor may
• already have about the organization

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Examples

• Commercial organizations
• Toyota
• Metra
• Museums
• Art Institute
• Field Museum
• Museum of Science and Industry

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Elements of a Web site

• History, statement of objectives, mission
  statement
• Information about products or services
• Financial information
• A way to communicate with the organization
• Usability matters
• Communication should be two-way
• Failure will result in a loss of competitiveness
• How can the design of the site be done
  effectively?

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Purposes for visiting a site

• Learning about products and services
• Buying products and services
• Obtaining information about warranties or
  service
• for previously purchased products
• Gaining general information about the
  organization
• Obtaining information for the purposes of
  investing
• or granting credit
• Identifying the people who manage the
  organization
• Obtaining contact information for an individual

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Difficulties in delivering content

• Varying visitor needs
• Differing experience levels
• Technological issues
• Data transmission speeds
• Web browsers
• Plug-in software

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Strategies

• Convey an integrated image
• Provide easily accessible facts both about the
• firm and any products or services it may offer
• Allow visitors to experience the site in a
  variety
• of ways and at different levels
• Provide meaningful, responsive, reliable, two-
• way communication
• Sustain visitor attention without detracting
  from
• the purpose and image of the site
• Find ways to encourage return visits

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Usability

• Design the site around how visitors will
  navigate
• the site, not around the organizations structure
• Allow quick access to the sites information
• Avoid using inflated marketing statements
• Avoid using business jargon
• Allow visitors with older browsers and slower
• connections to access the site -- this may mean
• building several versions of the site
• Be consistent in the use of design features and
• colors

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Usability

• Make sure that navigation controls are clearly
• labeled or otherwise recognizable
• Test text visibility on smaller monitors
• Check that color combinations do not impair
• viewing clarity for the colorblind
• Positive examples Webby Awards
• (See the Monterey Bay Aquarium)
• Negative examples Mud Brick Awards

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Finding and reaching customers

• Personal contact/prospecting
• Employees individually search for, qualify, and
• contact potential customers.
• Mass media approach
• Advertising and promotional material is created
• and then distributed via
• Television or radio
• Newspapers or magazines
• Highway billboards
• Mailings

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Types of interactions

• One-to-many
• Mass media
• Seller sends out carefully produced messages
• to a large audience.
• Seller is active buyer is passive.
• One-to-one
• Personal contact
• Salesperson interacts with customer directly.
• Trust building is important.
• Both seller and buyer participate actively.

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The Web

• Many-to-one
• Many active potential customers seek out
• information from resources produced by the
• seller. Example Book review sites, fan sites
• One-to-one
• E-mail contact with a seller
• Many-to-many
• Newsgroups and interactive Web sites
• Primary characteristic The buyer is active and
• controls the length, depth, and scope of the
• search.

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Effectiveness of mass media

• Mass media efforts are measured by estimates of
• audience size, circulation, or number of
  addresses.
• Money spent on mass media is in dollars per each
• thousand people in the estimated audience.
• This pricing metric is called cost per thousand
  and
• is often abbreviated CPM.

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Micromarketing
As mass media lost its effectiveness (new and
improved!), one approach was to divide a pool of
potential customers into segments. This
is called market segmentation. Targeting very
small market segments is called micromarketing.
Micromarketing is expensive using traditional
means, but more cost effective on the Web.
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Web-specific measures

• A visit occurs when a visitor requests a page.
• Immediate downloads of new pages are often
• counted as part of the same visit.
• A trial visit is the first one subsequent ones
• are called repeat visits.
• Each page loaded is a page view.
• If the page contains an ad it is an ad view.
• An impression refers to each banner ad load.
• If a visitor clicks a banner, it is a
  click-through.
• One CPM for banner ads is 1000 impressions.
• Charges range from 1 to 100 CPM.

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Comparisons

• The Web has
• Better effectiveness than mass media
• More trust than mass media
• Lower cost than personal contact
• Less trust than personal contact
• It is believed that a move toward the side
• of personal contact is more effective.
• Increase the trust level
• Increase the personalization

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Technology and marketing

• Technology-enabled relationship management is
• when a firm obtains detailed information about
• customer preferences, needs, behavior and buying
• patterns and uses that information to
• set prices
• negotiate terms
• tailor promotions
• add product features
• customize its relationship with the customer.

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Branding

• A known and respected brand presents a powerful
• statement about quality, value, and other desired
• qualities to potential customers.
• Branded elements are easier to promote.
• The key elements of branding are
• Differentiation
• Relevance
• Perceived value
• This makes branding for commodity products like
• salt or plywood more difficult.

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Differentiation

• A characteristic that sets the product apart from
• similar products.
• Examples
• Ivory soap It floats
• Dove soap 1/4 moisturizing creme
• Palmolive dish soap Mild on your hands
• Dawn dish soap Takes grease out of your way
• Antibacterial soaps

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Relevance

• The degree to which the product offer utility to
  a
• potential customer. The customer must be able to
• see themselves purchasing and using the product.
• Examples
• Cadillac
• Hyundai
• Minivans

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Perceived value
The product must have some identified
value. Products can be different than others and
people can see themselves using it, but it may
not have values that they desire. Example
Subway sandwich ads comparing fat values of
their product to those found in BigMacs.
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Emotional branding
Ted Leonhardt Brand is an emotional
shortcut between a company and its
customer Emotional appeals work well on
television, radio, billboards, and print media
since the viewer is a passive recipient of
information. On the Web it is easy to click away
from emotional appeals.
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Rational branding

• Rational branding offers to help Web users in
  some
• way in exchange for their viewing an ad.
  Functional
• assistance replaces emotional appeals.
• Examples
• Free e-mail services such as HotMail
• Free Web hosting such as HyperMart
• ShopSmart! program from Mastercard

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Other branding strategies

• Leverage success in one area into another area.
• Example Yahoo!
• Affiliate marketing Descriptions, reviews or
  other
• information about a product on one site are
  linked
• to pages on another site allowing you to purchase
• that item.
• Example Amazon.com
• Serving as a market intermediary between buyers
• and sellers.
• Example Wedding Channel

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Costs of branding

• Transferring existing brands to the Web or using
• the Web to maintain an existing brand is easier
• and less expensive than creating a new brand.
• Example Catalog sales companies
• Attempting to create a brand on the Web may
• involve spending on traditional mass media
• such as television, print, and radio.
• Example In 1998 Amazon.com spent 133
• million and BarnesandNoble.com spent 70
• million, much of it on traditional advertising.

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Business models for the Web

• Selling goods and services
• Based on the mail order catalog business
• Selling information or other digital content
• Can be used to expand markets and cut costs
• Advertising supported
• Used by American network television
• Advertising-subscription mixed
• Supported via both fees and advertising
• Fee-for-transaction
• The use of information filtering for profit

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Selling goods and services

• Used for apparel, computers, electronics, and
  gifts.
• The printed catalog is replaced or supplemented
  by
• information on the Web site.
• Customers may purchase via phone. (Why?)
• Fabric swatches are usually available. (Why?)
• Examples
• Dell computers Flexibility
• Lands End Overstocks
• FTD Florists Traditional advertising
• Buy.com Discounting

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Selling digital content

• The Web is an efficient means for selling
  information.
• Legal research Lexis Publishing
• Digital copies of documents ProQuest
• Electronic versions of journals ACM Digital
  Library
• Adult entertainment
• Reference materials Encyclopedia Britannica

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Advertising supported

• The success of Web advertising has been hampered
• by two major problems
• There is no consensus on how to measure and
• charge for site visitor views.
• Examples Number of visitors, number of unique
• visitors, number of click-throughs.
• Very few Web sites have sufficient number of
  hits
• to interest large advertisers.
• Targeted advertising requires that demographics
• be collected, a sensitive privacy issue.
• One success Employment advertising

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Advertising-subscription mixed

• Subscribers are subject to less advertising and
  have
• greater access to the resources of the site.
• Popular with online newspapers.
• Examples
• The New York Times
• The Wall Street Journal
• Reuters
• ESPN

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Fee-for-transaction

• Value-added services are sold in exchange for a
• commission.
• Travel agencies
• Travelocity
• Expedia
• Automobile sales
• Autobytel An example of disintermediation
• Stockbrokers
• Insurance companies