MAR 6936902

1
MAR 6936-902

• E-Commerce Marketing
• Spring 2003Tampa
• Rich Gonzalez
• January 6, 2003

2
URLs

• lists.acomp.usf.edu
• www.wurlitzer-jukebox.com
• www.britannica.com/
• Ebay.com

3
Rich Gonzalez

• Doctoral programMarketing
• 20 years in the transportation bizaccounting,
  marketing
• B.S. Information Decision Sciences-- UIC
• Research Consumer Use of Product Information on
  the Internet

4
Agenda January 6, 2003

• Expectations of course
• Survey of course themes/concepts
• LISTERV
• Drucker
• Marketing Concept
• Porter
• Introduction Framework for E-C
• Blown to Bits
• Due for January 13

5
For January 13

• Chapter 1
• Chapter 2--- SKIM only (Especially WWW)
• Purchase WSJ Interactive (Do Not Install)
• Mini-Investigation of Product
• Subscribe to Listserv, Send Intro

6
Syllabus

• Lets review and answer questions
• Expectations/Grading
• Writing Assignments vs. Midterm

7
The Big Concepts

• Information
• Amplification
• Asynchronicity

8
Textbooks

• REQUIRED TEXT
•  E-Commerce Marketing
• Strategic Electronic Marketing Managing
  E-Business, Brad Kleindl, Thomson/South-Western
  (2003). ISBN-032417893-x
•  
• REQUIRED TEXT II
• Blown to Bits How the New Economics of
  Information Transforms Strategy, Harvard
  Business School Press, Evans Wurster (2000).
  ISBN 087584877x

9
Price Shopping On Books?

• ebay.com
• www.half.com
• bibliofind.com
• ebs.allbookstores.com
• www.bigwords.com

10
WSJ Interactive

• A Good Resource
• 4.95 for 60 Day Trial
• 10 Points
• Do not start up service yet.

11
Sources

• Textbook
• 1 Practitioner Oriented Book (HBS)
• Business Articles (BW, Fortune, Biz 2.0)
• Online (WSJ)
• Practitioner Journal (HBR)
• Marketing Journal (JAMS)

12
LISTSERV

• xhttp//lists.acomp.usf.edu
• No Password
• Sign on by Tuesday Evening
• Send Intro On Wednesday
• This is a class participation item

13
Course Grading
14
Weekly Analysis Papers

• Current Topic Will Be Selected
• 1.5 page Discussion Paper
• 6 WAP
• Scoring on 125 Points, Then Averaged
• Better than a Midterm Exam

15
Survey Writing

• Writing exercise5 minutes
• E-commerce is....Just your thoughts, what comes
  to mind.
• E-commerce is important...Just your thoughts,
  put yourself in the role of the businessperson
  and customer

Legibility!!
16
Why Is E-Commerce Important?
17

• Lets Look at Some Predictions

18
"I think there is a world market for, maybe, five
computers."
Prediction 1

• Thomas J. Watson,1943

19
There is no reason for any individual to have a
computer in their home.
Prediction 2

• Ken Olson, 1977

20
Prediction 3

• Business is going to change more in the next 10
  years than it has in the past 50.
• William H. Gates III, 2000

21
Prediction 4

• Everyone will have access to most of the worlds
  information.
• William H. Gates III, 2000

22
E-Commerce

• Digital technology has transformed the economy.
• Value Creation shifts from physical to
  information
• E-C is about exchange of information
• E-C is technology enabled
• E-C is technology mediated

23
E-Commerce

• ...technology-mediated exchanges between parties
  as well as the electronically based
  intra-organizational activities that facilitate
  such change

24
Exemplar Sites

• paypal.com
• cdbaby.com
• www.flyertalk.com
• orbitz.com
• etrade.com
• B2B sites

25
Mini-Basic Marketing Review
26
Drucker

• What is the purpose of a business?
• Two primary responsibilities of a business

27
Elements of the Marketing Mix within an
Environmental Framework
Competitive
Distribution
Product
Political-Legal
Target Market
Social-Cultural
Price
Promotion
Technological
Economic
28
Marketing Concept

• A managerial philosophy that on organization
  should satisfy customers needs through a
  coordinated set of activities that also allows
  the org to achieve its goals

29
Marketing Concept

• Target Market
•  Customer Needs Wants
•  Coordinated activities
•  Profitability

30
Why Is E-Commerce Important?

• SourcesInsightGartnerJupiterBiz Rate

31
Important Facts Jan 6

• 2002Q2 Internet Access165 million U.S.553
  million Worldwide
• Broadband Penetration
• 200113 million U.S. Households
• 200217 million U.S. Households
• 2007---37 million U.S. Households
• 2002--35 M AOL Worldwide Subscribers
• 2002--- 4 European Households
• 2002--- 7.8 M Users Online, Brazil

32
Important Facts Jan 6

• Nov-Dec 2002 Sales 13.1 B
• Increase over 2001 17
• Retail Sales Overall 1.5
• Main Reason For Big Increase?

Sources Jupiter Research, BizRate
33
Important Facts Jan 6

• Online Retail Sales in U.S.
• 2002Q1 10 B (23)
• 2002Q2 11 B (32)
• 2002Q3 10 B (37)
• 2002Q4 17 B (40)
• 2002B2C 48 B
  (34)Purchases 359 M (37)Avg.
  Purch. 134 (- 2)

34
Important Facts Jan 6

• 2002
• 98 Of Holiday 2001 Buyers Were Holiday 2002
  Buyers
• 22 Research Online, Shop Offline, Europe
• Q4 of Women Online Buyers?
• 60 Of Internet Users Buy Regularly Or
  Occasionally

35
Important Facts Jan 6

• Most Purchased B2C Products?
• Books, CDs, PCs, CE, Apparel
• Gift Buying OnlineAdult Clothing 53Toys
  49 Books 46Music
  43CE 40Cloth. Child
  36Home décor 32Food gifts
  31Appliances 7Auto related 5
• Source InsightExpress

36
Important Facts Jan 6

• Researches By Consumers
• 77 Do Researches On Products
• Travel 71Software 46Ent. Tix
  44Computer 40Books 39Invest.
  37Autos 35Videos 28
• What Is Missing?

• Source AOL/Roper

37
Important Facts Jan 6

• G2C
• E-File2001 47 M2002 54 M (est.)
• New For 2003"Where's My Refund" Section

38
Porters Competitive Business Model
New Entrants
BP of Sellers
BP of Buyers
Intraindustry Rivalry
Substitutes
39
3 Fundamental Business Shifts

• 1. Most transactionsB2C, B2B and G2C will become
  self-service digital transactions.
• 2. Customer service will become the primary
  value-added function in every business. Personal
  consultancy not routine services.
• 3. The pace of transactions and customer needs
  for customer service will force firms to adopt
  digital processes---for survival.

40
Environmental Backdrop of Course Content

• Technology and Economic Forces
• Digitization
• Explosive Innovation---Networks
• Knowledge/Education
• Productivity
• Quality of Life
• Westernization/Globalization

41
10 Minute Break

• About 740 PM

42
Example of Digitization Effect

• Atoms vs. Bits
• Bits vs. Atoms

43
February 2002
44
WurlitzerA Digital Product?

• JukeboxA growing business?
• 250,000 in U.S. Sales 15,000/yr
• MP3 source files from MP3.com
• DSL Connection
• 500,000 songs
• 150/month or 5,000
• All royalties paid
• Surf net, send e-mail, send songs

45
(No Transcript)
46
Another Example --eBay

• New Business Model
• New Consumer Behavior
• Unpredictable

47
eBay

• Lots Of New Behavior
• Generative of Innovation
• Spreading Information
• Demo (if time)

48
Encyclopaedia Britannica

• 1768Edinburgh, Scotland
• 15 Editions
• 1920 Sears Purchases
• EB Is MostComprehensiveAuthoritativePrestigiou
  s

49
Encyclopaedia Britannica contd

• EB 40 Million Words
• Superior Sales ForceAggressive Successful
• Revised Every 4-5 Years
• 1990 Sales 650 Million
• Set Price 1400 to 2200
• EB Dominant Market Share .
• 1990-95 Sales went down by 80
• EB Sold in 1996
• Why?

50
Encyclopaedia Britannica contd

• CD-ROM
• Encarta, Grolier, Compton marketed a CD product
• Price 50-75
• Quality of CD vs. Britannica?
• So What Happened?

51
Encyclopaedia Britannica contd

• IRACS
• IgnoreRidiculeAttackCopySteal

52
Encyclopaedia Britannica contd

• Strategic Competitive Advantage
• Quality Volume
• Sales Force
• 1,500 PriceLarge Margins
• Thoroughness

• Strategic Competitive Disadvantage
• Too Big For CD
• Commissions
• 75--50--0
• Too Slow To React

53
Encyclopaedia Britannica contd

• Encyclopaedia Britannica 2003 Ultimate Reference
  Suite
• Contains32 Volume EB, 75,000 articles, 3
  encyclopedias, 2 dictionaries, World Atlas...
• Price 69.95
• Online Premium Services (30)
• http//www.britannica.com/

54
Elements of the Marketing Mix within an
Environmental Framework
Competitive
Distribution
Product
Political-Legal
Target Market
Social-Cultural
Price
Promotion
Technological
Economic
55
Its Not Just About Marketing

• Impact of technology and change wide
• Business
• Society
• Culture
• Nations
• Classes

56
Four Categories of E-Commerce

• Business originating from . . .

• Business

• Consumers

• B2B

• C2B

• Business

• And selling to . . .

• B2C

• C2C

• Consumers

57
The Challenges

• Understanding Customer Evolution
• Tablestakes or cost of doing business
• Market research to understand how customer needs
  are evolving
• Charting Changing Technology
• Choosing the right technologies matching
  consumer tastes to technology choices
• Balancing Irrational Exuberance and Irrational
  Doom
• Estimating the impact of technology
• Weathering the storm reassuring stakeholders

58
Moores Law
of transistors
1965Double every 12 months 1975---Double every
24 months-----Sometimes 18 months
59
Metcalfes Law

• def values the utility of a network as the
  square of its users
• Morse Code
• Telephone system
• Ethernet protocols
• Internet protocols

60
Metcalfes Law
Net Utility
Nodes
61
The Big Concepts

• Information
• Amplification
• Asynchronicity

62
3 Fundamental Business Shifts

• 1. Most transactionsB2C, B2B, C2C and G2C are
  becoming self-service digital transactions.
• 2. Customer service is becoming the primary
  value-added function in every business. Personal
  consultancy, not routine services.
• 3. Pace of transactions and customer needs for
  customer service forces firms to adopt digital
  processes---for both superior performance
  survival.

63
Intel PVPCES January 2002
4 Inch Screen and 10 Hour Capacity
64
Intel PVPCES January 2002

• KVH Satellite TV Antenna 2,000
• Telematics

4 Inch Screen and 10 Hour Capacity
65
A Step Toward E-Commerce?
PDA, Wireless Office, E-mail, WWW Access,
Messaging
66
Nokia 9290

• For January 13
• Find out 3 or four things about it.
• Well discuss at the beginning of class

67
For January 13

• Chapter 1
• Chapter 2--- SKIM only (Especially WWW)
• Purchase WSJ Interactive (Do Not Install)
• Mini-Investigation of Product
• Subscribe to Listserv, Send Intro

68
Stop Here