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MAR 6936-902
E-Commerce Marketing
Fall 2002—Tampa--MBAFraming Market OpportunityRich GonzalezSeptember 12, 2002 (Week 3)
Draft
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For Site/Model Evaluation # 1 Thiboult # 3 Heather # 4 Elio # 5 Mike C. Today:
Please peruse Nielsen & Tahir book:Homepage Usability
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URLs http://www.boingo.com/ ebay.com www.paypal.com www.carpoint.com wsj.com
www.winsupersite.com/showcase/tabletpc_preview.asp
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Agenda September 12, 2002
WSJ Online Demo Customer Orientation Porter Market Opportunity Business Models—Preview ebay.com Demo Due For September 19 PC Tablet???
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For Today: September 12 Chapter 4
Purchase the WSJ Online 60 Day Demo
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WSJ Online Demo
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For September 19
Blown to Bitsp.1 - 97
Weekly Analysis Paper # 1
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Weekly Analysis Paper # 1 Subject: Blown To Bits Length: 1.5 Pages -------125 points Due on September 19 ------Hard Date Subjects: (use bolded headings)
1. Information Asymmetries2. Deconstruction3. Disintermediation
4. You Pick One (i.e., 5 forces, killer app, standards, etc.
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Moore’s Law
# of transistors
Speed
Time1965—Double every 12 months
1975---Double every 24 months-----Sometimes 18 months
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Metcalfe’s Law
def: values the utility of a network as the square of its users
Morse CodeTelephone systemEthernet protocolsInternet protocols
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Metcalfe’s LawNet Utility
Nodes
Critical Mass
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802.11b Update Wi-Fi
COBA
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Wi-Fi Hot Spots—Offices, Cafes, Parks
4 Million Using Now, Worldwide Estimate: 45 Million Business Laptops--
2004 Estimate: 4.2 Million Households Have
Wireless-- 2004
Max Speed = 11,000 K
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Bandwith:Consumer Context Dialup ISDN Cable DSL T1 802.11b 3G
56 K 128 K 150 to 300 K 100 to 500 K 1400 K 300 to 500 K 144 K
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Wi-Fi Boingo Wireless
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Porter’s Competitive Business Model
Intraindustry Rivalry
New Entrants
BP of Sellers
Substitutes
BP of Buyers
Which is affected?
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Marketing Concept What is it?
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Customer Orientation A philosophy incorporating the
marketing concept that emphasizes first identifying unmet needs, then satisfying them.
Marketing Mantra:
Know your customer(s).
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Customer Oriented?
Access denied: -ERR mail storage services unavailable, wait a few minutes and try again.
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Customer Orientation Metrics:
Customer AcquisitionMarket ShareCustomer SatisfactionCustomer Profitability
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Customer Satisfaction Definition?
Performance - Expectations =Customer Customer SatSat
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Quote and Revision “There is only one boss: the customer.
And he can fire everybody in the company...by spending his money somewhere else.” Sam Walton
“Only one person controls the mouse: the customer. And he can fire everybody in the company...by clicking and going to some other site to spend his money.” R. Gonzalez
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Customer Decision Process Origination (Recognize Problem) Information Gathering Evaluation Purchase Decision Postpurchase Results
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1 to 1 Marketing
Personalization
Customization
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3 Fundamental Business Shifts
1. Most transactions—B2C, B2B, C2C and C2C 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.
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Business Model Value Proposition What you give and what you get Value and Revenues
“How will the business win?”
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Business Model 1. Value Proposition or Target Cluster 2. A Marketspace Offering 3. Unique and Defensible Resource
System 4. Financial Model
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RAF vs. FRA Ready, Aim, Fire!
Fire, Ready, Aim
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eBay What is it? Why is it important? Who are the customers? What are the effects?
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The C2C Example
Pierre Omidyar Pez Dispensers New Marketspace
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ebay.com Mission: “Help anyone trade practically
anything on earth.”
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ebay.com How do they do this?
1. Technology 2. Customer Orientation 3. Information Usage 4. Value 5. Community 6. Fun
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Demo of ebay.com
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The B2C Example
An Intermediary A New Idea—Innovative IRACS
A Bank?
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Basic Components Criteria:
Business ModelTechnologyMissionTarget MarketCustomer Benefits
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PayPal.com How do they do this?
1. 2. 3. 4. 5.
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Demo of PayPal.com
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Table 1–1: Four Categories of E-Commerce
B2B B2B C2B C2B
B2C B2C C2C C2C
Business Consumers
Business originating from . . . B
usi
nes
s C
on
sum
ers
An
d s
elli
ng
to
. .
.
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Framework for MO: Microsoft CarPoint Example
Leverage the Internet to Improve the Consumer Car-Buying Process
Leverage the Internet to Improve the Consumer Car-Buying Process
Car Buyers Are Dissatisfied With Current Retail Car Buying Process
Car Buyers Are Dissatisfied With Current Retail Car Buying Process
Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way
Microsoft’s Software and Free Placement on All Its Websites
Microsoft’s Software and Free Placement on All Its Websites
How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors?
How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors?
Make Go / No-Go AssessmentMake Go / No-Go Assessment
• MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry
• The retail car-buying process was frustrating and inefficient:
• Little information available to the consumer• Bargaining with salesperson viewed as a hassle• Long process overall
• MSN CarPoint selected two primary target segments for its service:
• “The intimidated by the process”• “The information seekers”
• MSN CarPoint could leverage Microsoft’s expertise in software development, the Microsoft brand name and its multitude of online properties
• Competition was getting fierce with more and more online car services entering the market• But the financial opportunity was large: 66% of new car buyers used online services in 2000
• In 1996 the first version of CarPoint was shipped• By 1998, CarPoint was driving $5 million in car sales a day
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Exhibit 1–6: A Flow Diagram of the Strategic Responsibilities
Set VisionSet Vision
Establish GoalsEstablish Goals
Formulate Strategy
Formulate Strategy
Drive Implementation
Drive Implementation
Be Accountablefor Performance
Be Accountablefor Performance
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Online Retailing Fact 65% of (virtual) shopping carts are
abandoned before checkout
Why?
You have to find out why potential customers are a) Leaving your “store”b) Not trying your “store”
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End Here