ELC 310

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ELC 310

• Day 26

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Agenda

• Questions?
• Exam 4 on Friday, December 8
• 10 Short essays
• Plus one extra credit essay
• Entire class period
• Albert Chapters 1-14
• Case study Analysis
• 3 As, 2 B s and 1 B
• Did use student grading even though some of the
  input was flawed
• Eliminated bad inputs
• Student prepared Case Studies
• 16 of Overall Grade
• Written due December 14, email in WebCT
• Presentation due December 14 at 1-3 PM, email in
  WebCT prior to 1 PM
• Lecture/Discuss Evaluation Methodology and
  Research in E-Commerce

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Schedule for last days of class

• Today
• Albert Chap 13 14
• December 8
• Quiz 4
• December 14, 1 3 PM
• Written Case study presentations Due
• Please send me your PowerPoint's prior to any
  presentation so I may load them up on the web
  server

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Case Study Recap
Case Industry Marketing Challenge
1 Insulation Manufacturer Integrated marketing Communications
2 Steel Mill Pricing Decision Process
3 Hardware Distributor Business Strength matrix
4 Utility Company Branded Customer experience
5 Not for Profit Branding Strategies
6 Consumer packaged goods Service Marketing Model
7 Insurance Company Disintermediation Reintermediation
8 Financial Service New Product Development
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Chapter 13Customerization--a future online
opportunity
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What is Customerization?

• Customerization defines the exchange process of
  marketing in the context of complete
  customer-control.
• Natural fit with the electronic environment
• Entices customers to remain loyal

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Overview of the Model

• Customerization is a buyer or customer-centric
  marketing model.
• Develops a relationship between
• One-to-one marketing
• Mass customization
• Internal operations must have the capability to
  customize
• Build to order process

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Characteristics

• Flexible
• Requires database integration, operations, and
  production for success
• Relies on a number marketing approaches
• traditional
• mass marketing
• targeted
• direct marketing

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8 Enhanced Marketing Outcomes

1. Develop/Deepen Customer Relationship
2. Transitioning Experienced-Based Decision
3. Customizing the Interaction
4. Co-develop Products and Services
5. Premium Pricing Acceptance
6. Interactive Information Exchange
7. Distribution Channel Choice
8. Personal Brands

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I. Developing/Deepening Customer Relationship

• Capitalizes on relationship building
• E-business component demonstrated
• CRM
• Value Bubble Steps involved
• Attract, Engage, Retain, Learn, Relate

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II. Transitioning Experienced-Based Decisions

• Design and Discover Process
• allows user to see the outcome
• provides the experience that is necessary to make
  purchase decision
• E-business component demonstrated
• CRM and SCM
• Value Bubble Steps involved
• Engage, Retain

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III. Customizing the Interaction

• Relies on accurate databases that integrate all
  customer information a firm possesses.
• Segmentation and Microsegmentation
• E-business component demonstrated
• CRM and BI
• Value Bubble Steps involved
• Learn and Relate

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IV. Co-Develop Products and Services

• Collaborate with customers to develop a new
  product or service
• part of market research and NPD
• E-business component demonstrated
• BI, CRM
• Value Bubble Steps involved
• Engage

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V. Premium Pricing Acceptance

• Increases value beyond competition
• creates customer satisfaction and loyalty
• E-business component demonstrated
• E-Commerce or the transaction
• Value Bubble Steps involved
• Learn and Relate

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VI. Interactive Information Exchange

• Leverages information about the products and
  services it provides
• E-business component demonstrated
• CRM
• Value Bubble Steps involved
• Engage and Retain

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VIII. Personal Brands

• Transfers the brand from the company to the
  customer
• allows for total customer empowerment
• E-business component demonstrated
• CRM
• Value Bubble Steps involved
• Engage and Retain

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Original Article

• Evolution
• mass customization
• personalization
• 11 marketing
• Customerization
• buyer-centric
• mass customization with customized marketing

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11 and Personalized

• Know thy customer
• Controlled by the firm
• Customerization
• more than customized products/services
• internal processes
• supply chain partnerships
• what if significant costs are involved?

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Customerization

• Why?
• Changing customer
• ability/competency to co-produce
• technological and operational capabilities
• Customer-centric
• active participant
• drive process
• building/solidifying relationships

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Potential Benefits

• Customer
• better meet needs
• worth premium price
• higher satisfaction

• Firm
• reductions in inventory
• enhance loyalty
• avoid commoditization
• better channel mgmt.

Online environment reconfigurable, and easier
identification of preferences
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Company Examples

• Dell (build to order)
• inventory 273 million/sales of 18.2 billion
  (1.5)
• Compaq (build to stock)
• inventory 2 billion/ sales of 38.5 billion
  (5.2)
• 1999 figures

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Marketing Implications

• Relationship Marketing
• passive to active participants
• What can you do with us?
• adoption of MP3 by music industry
• Focusing on Unarticulated Needs
• guides customer through design discovery
• product use experiences (search vs. experience)
• Andersen Windows
• Tailoring the offer
• only relevant options (db, software, ask)

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Marketing Implications

• New Products
• interactive process (no longer laboratory only)
• Acumin
• company no longer manufacturer but service
  provider
• Customized vitamin packs
• TI specs for new calculator
• high school teachers web reviews
• pre-sold
• copycat product from competitor reaction

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Marketing Implications

• Price is Negotiable Global Bazaar
• more fluid
• tailored to specific users based on elasticity
• customer acceptance issues
• dynamic pricing evolves
• prices dont go down
• value-added services
• price becomes less important
• Interactive Edu-tainment
• mix what you know with what you offer
• DuPont
• customer selects information

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Marketing Implications

• Distribution off-the-shelf
• direct channel
• channel conflict
• customer has choice
• reverse portals
• aggregate and coordinate final distribution

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Marketing Implications

• Competitive Advantage Power of Finesse
• instead of brute strength
• high customer value wins
• levels playing field
• street likes finesse and flexibility
• big will not eat the smallthe fast will eat the
  slow
• E-volve-or-Die.Com

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Marketing Strategies/Implications

• Customerization--additional strategy
• determine optimal portfolio
• mass marketing
• direct marketing to target segments
• interactive customized marketing
• E-businesses have advantage
• Amazon vs. General Motors
• Technology is easy
• strategic and organizational decisions more
  complex and expensive.

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Researching E-Business

• Chapter 14

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E-business Market Research

• Business Intelligence
• Web Site Focus
• Results impact
• E-Commerce
• Customer relationship management
• Supply chain management
• Enterprise resource planning

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Traditional Marketing Research Process

• 5 steps
• Define the issue or challenge
• Develop the research plan
• Collect information
• Analyze the information
• Actions

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Defining the issue or challenge

• Indicators
• Declining market share
• Sales reduction
• Profits
• Order reduction
• Increased complaints
• Competitive actions
• Develop research objectives

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Developing the Research Plan

• 5 Steps (for step two)
• Deciding on the research design
• Determining the types of information needed and
  sources
• Evaluating different data Collections options
• Developing the data collection device
• Deciding who and how many will participate

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Research Design

• Exploratory research
• Devine patterns
• Look for connections
• Independent variables (cause)
• Dependant variables (effect)
• Multivariate analysis
• Experimental research
• Experimental group
• Control group
• Data sources
• Primary
• Secondary
• Skewed Populations

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Collecting the Information

• Face-to-Face
• Telephone
• On-line
• Representative samples?

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Analyzing the Data

• Begin with research objectives
• Address the issue, opportunity or challenge
• Analysis leads to
• Recommendations
• Actions
• Must be supported by quantifiable evidence

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3 Strategies for an Initial Web Launch

• Setup Strategies
• Maintenance strategies
• Evaluation Strategies

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Setup Strategies

• Attract customers applicable to offerings
• 3 components
• Web Site Quality
• Frequency of updates
• Speed
• 56K10 secs
• Value bubble
• Attract, Engage Retain

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Maintenance Strategies

• Create Site Loyalty and Facilitate Sales
• GIST
• Gather
• Infer
• Segment
• Track
• Measure Sales
• Value bubble
• Learn Relate

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Evaluation Strategies

• Site-Centric (automated)
• Daily, weekly and monthly reports (hits)
• Length of time spent (stickiness)
• Frequency of visits for each page and/or sections
• Customer-Centric (still new)
• Clickstreams
• Core Services aspects
• Recovery aspects