EBUS/520 2/16/05- Joanne T. Witt 1

EBUS 520e-Marketing Theory and

ApplicationWeek One

Instructor: Joanne T. Witt

February 16, 2005

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Goal

• Learn about the theory and application of electronic marketing– What new tools or approaches are available,

because of the internet, as a means for delivery and capture of information?

– How does e-marketing differ from classical marketing?

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Introductions

• Who am I?– Joanne T. Witt

• Who are you?– Name– Current position and company– How has the internet changed the way you

live and work?

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Class Information

• Name cards• Course schedule – course ends 10/6• All materials can be found on the

resource page• All presentations can be found at

www.joannewitt.com • Review topics• Breaks – 7:00 /7:15 for 30 minutes and

at 9:00 p.m.

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Class Information

• Assignments

• Grading

• Learning teams

• Breaks – 7:00 /7:15 for 30 minutes and at 9:00 p.m.

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Moore’s Law

Metcalfe’s law

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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DIFFUSION OF INNOVATIONS

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Growth of Various Media

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Timeline

• History:– http://www.zakon.org/robert/internet/

timeline/

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Internet

• How do you and your family and friends use the internet?

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e-Marketing Implications

• CRM

• Response Time – Expectations

• Information Integration

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THE CUSTOMER HAS NO MORE TIME

• The Struggle to Acquire Customers is Exceeded Only by the Struggle to Retain Them.

Marketer

Visitor

• Internet Time is not Readily Devoted to the Advertising There.

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Organizational Transformation

• Focus: Customer

• MIS

• Managing and Using Knowledge

• Marketing Intelligence

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External Environmental Factors

• Social and Cultural

• Political and Legal

• Competitive

• Technological

• Environmental

• Demographic

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UNIQUE CHARACTERISTICS/BENEFITS

• Common Platform

• Perfect Information

• Interactive

• Global

• Distance Is No Longer Relevant

– Size Is Relevant to Brand Strength and Resources

• Always on

• Many-to-many

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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IT IS POSSIBLE TO CALCULATE DEMAND WITH PRECISION

• Information Flows– Quickly– Freely

Up and Down the Value Chain

• Winners and Losers Can be Spotted Quickly

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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COSTS FOR MANY PRODUCTS FOLLOW A MODEL OF HIGH FIXED DEVELOPMENT

COSTS AND VIRTUALLY NO VARIABLE COST OF PRODUCTION.

• High Up-Front Costs for

Necessary Technology

• Serving An Incremental

Customer Almost Cost-

Free Except for

Distribution

• Stair-Step Fixed Costs

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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SCALE IS MORE LIKELY TO BE DEFINED BY NUMBER OF CUSTOMERS

THAN BY PRODUCTION CAPACITY.

• Fewer Resources Devoted

to Physical Production

• Serving a Large Customer

Base is Cost Effective

• BUT It is Important to

Devote Sufficient Resources

to Distribution and Customer

Service

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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REVENUE MODELS

• What are they?

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ECONOMICS OF E-BUSINESS

1. Shift From An Economy of Scarcity to One of Abundance.

2. Both Businesses and Consumers Have a Glut of Marketplace Choices.

3. Transaction and Coordination Costs are Disappearing.4. It is Possible to Calculate Demand With Precision.5. Switching Costs Approach Zero in the Absence of

Actions by Marketers.6. Costs for Many Products Have High Fixed Costs of

Development and Virtually No Variable Cost of Production.

7. Scale is More Likely to be Defined by Number of Customers Than by Production Capacity.

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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SHIFT FROM AN ECONOMY OF SCARCITY TO ONE OF ABUNDANCE

Amazon is a Good Example of Information

Becoming More Valuable As It Is Shared

• Broad and Deep Assortment of Products• Abundance of Content Provided by Visitors• Use of Data to Provide Personalized • Purchase Recommendations

• Customer Behavior on Site• Behavior of Similar Customers

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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TRANSACTION AND COORDINATION COSTS ARE DISAPPEARING

Affiliate Marketing

as Portrayed

By Amazon

Used with permission of Amazon.com

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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External Environmental Factors

• Social and Cultural• Political and Legal• Competitive• Technological• Environmental • Demographic

Which one of these impacts your organization?

Which one impacts your job?

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B2B

• Supply ChainBusiness Suppliers

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FORECASTS OF B2B E-COMMERCE

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Horizontal versus Vertical

• http://www.gxs.com/index.jsp,

• http://www.neoforma.com/corp/index.html

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• Programmed

• Relationship

• Transactional

• Bargain Hunter

B2B CUSTOMER SEGMENTS

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B2B INTERNET MARKET SEGMENTS

www.accenture.com

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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B2B INTERNET MODELS

• Marketplace/Exchange

• Application Service Provider

• Infomediary

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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B2C

• Portals

• Communities

• Search Engines

• Product

• Service

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MARKETPLACE SUCCESS FACTORS

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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MANY MARKETPLACES HAVE FAILED

‘LIQUIDITY’ IS MAJOR REASON

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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B2E

• Intranets– Best Designed Intranets of 2003 – Jakob

Nielsen

http://www.useit.com/alertbox/20031013.html

• eRoomhttp://www.documentum.com/solutions/collaboration/

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Genesis:From An Internal System

To A Successful Information Product

Used with permission of Sabre.

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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ORGANIZATIONS IN THE NETWORKED ECONOMY

The Flexible, Market-Focused Organization

© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

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G2C

• City Government – Houstonhttp://www.tax.co.harris.tx.us/

• County Governmenthttp://www.hcad.org/

• State Governmenthttp://www.state.tx.us/

• US Governmenthttp://www.firstgov.gov/

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C2C

• Auctions– http://www.ebay.com/

• Bulletin Boards – http://groups.yahoo.com/

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Mohan Sawhney’s Pyramid

• Activity

• Business Process

• Enterprise

• Pure Play

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Discussion Questions

• How has your organization integrated e-marketing into its marketing activities? – If it hasn’t, why hasn’t it? – What recommendations would you have for

integrating e-marketing?

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Discussion Questions

• What external environmental factors effect e-marketing? – How?

• How do you determine the appropriate level of organizational commitment to e-business?– What factors would you consider in your

evaluation?– Why?

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E-Marketing Challenges

• Two teams: Profit, Non-Profit or Government e-marketing

• In team: Discuss the e-Marketing challenges and trends specific to your sector