ebus 400 ecommerce joseph lewis aguirre. ebusiness strategy define ebusiness. describe the strategy...

EBUS 400

eCommerceeCommerce

Joseph Lewis Aguirre

eBusiness StrategyDefine eBusiness.Describe the strategy component of eBusiness. eBusiness IT Infrastructure & Supply ChainDescribe the IT infrastructure component of eBusiness.Examine the supply chain component of eBusiness. eBusiness MarketingExamine the marketing component of eBusiness. eBusiness Legal, Ethical, and Regulatory IssuesExamine the legal, Ethical, and regulatory component of eBusiness. eBusiness TrendsExamine eBusiness trends

OBJECTIVESOBJECTIVES


Human Computer InteractionHuman Computer Interaction Human Computer InteractionHuman Computer Interaction

Value of InformationValue of InformationTimeliness - is it available soon enough for it to be

meaningful?

Sufficiency - completeness. Is there adequate information for the purpose intended. Issues: sample size; time horizon

Level of Detail or Aggregation - are the data broken down into meaningful units

Redundancy - this can be a problem if there is too much redundancy or too little redundancy

Understandability • practicality

• simplicity

• minimization of perceptual errors

• difficulty with encoding

Value of InformationValue of Information

Freedom from Bias

Reliability - is information is correct and verifiability

Decision-Relevance - predictive power, significance

Cost-efficiency - need to consider the change in the decision behavior after obtaining the information minus the cost of obtaining it

Cost-effectiveness

Comparability

consistency of format

consistency of aggregation

consistency of fields

Value of InformationValue of Information

Quantifiability

Appropriateness of format , medium of display

ordering of the information

graphical vs. tabular display

Quantity: more is not better!

• Human Computer Interaction– Human-Computer Interface– Man-Machine Interface– Human Factors

• Must design systems so that they fit with users needs.– Particular people use particular systems to

perform particular tasks in a particular context.

HCIHCI

U/I ComponentsU/I Components

•Metaphors

•Navigation

•Mental models

•Interaction

•Appearance

•Usability

Usability Evaluation TechniquesUsability Evaluation Techniques

Applicability in Phase All All Design

Required Time Low Med High

Needed Users None None None

Required Evaluators 3+ 3+ 1-2

Required Equipment Low Low Low

Required Expertise Med High High

Intrusive No No No

Heuristic Cognitive Action Evaluation Walkthrough Analysis

INSPECTION METHOD

Usability Evaluation TechniquesUsability Evaluation Techniques

Applicability in Phase Design Final Test All

Required Time High Med Low

Needed Users 3+ 20+ 30+

Required Evaluators 1 1+ 1

Required Equipment High Med Low

Required Expertise Med High Low

Intrusive Yes Yes No

Thinking Field Question Aloud Observation

TEST METHODS

• Ken Olsen, (founder and CEO of Digital Equipment), confessed that he couldn’t figure out how to heat coffee in the company’s microwave

• P.O.E.T. is– Psychology Of Everyday Things– Book by Don Norman

• Contains– examples of poorly designed everyday objects– discussion of design processes

Common U/ICommon U/I

‘If I were placed in the cockpit of a modern day jet airliner my inability to perform gracefully and smoothly would neither surprise nor bother me. But I shouldn't have trouble with doors and switches, taps and cookers.’ (Norman, p. 2)


• ‘A friend’ told Don N. of the time ‘he’ got trapped in the doorway of a post office.

• The entrance was an imposing row of perhaps six glass swinging doors, followed immediately by a second, identical row.

• (That's a standard design — it helps reduce the airflow and maintain the indoor temperature of the building).


‘If I were placed in the cockpit of a modern day jet airliner my inability to perform gracefully and smoothly would neither surprise nor bother me. But I shouldn't have trouble with doors and switches, taps and cookers.’ (Norman, p. 2)


• ‘A friend’ told Don N. of the time ‘he’ got trapped in the doorway of a post office.

• The entrance was an imposing row of perhaps six glass swinging doors, followed immediately by a second, identical row.

• (That's a standard design — it helps reduce the airflow and maintain the indoor temperature of the building).


•Kitchen Timer

•Door traps

HCI - ExamplesHCI - Examples

•Fridge

•File Cabinet

HCI - ExamplesHCI - Examples

Birthdate:

Telephone Number:

4/21/81

510-642-5117

Birthdate:

Telephone Number:

/ /( -)

HCI ChoicesHCI Choices

HCI ChoicesHCI Choices


Marketing ConceptMarketing Concept Marketing ConceptMarketing Concept

4Ps + 2Is

Strategy

Domain Name

Viral Marketing

Stickiness Index

Affinity Groups

WS3: Marketing ConceptWS3: Marketing Concept

Stickiness IndexStickiness Index

AltaVista

Alltheweb

Google

MSN

Infoseek

Hotbot

Fast

ProfitsCustomer Satisfaction

Company Effort

The Marketing ConceptThe Marketing Concept

eBusiness Planning FrameworkeBusiness Planning Framework

Environment Competition Objective Technology Customers

STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS, TRENDS (SWOTT)

SEGMENTATION TARGETING POSITIONING

PRODUCT PRICE PROMOTION PRICE

Strategy: Growth MatrixStrategy: Growth Matrix

Market Develop.

Product Develop.

Market Penetration

Diversify.

PRESENT FUTURE

PRESENT

FUTURE

PRODUCT MARKET

Ansoff’s Product Market Matrix

“It’s all about VISION, because…

In the absence of Vision we default to Organization...

In the absence of Organization we default to Activity...

In the absence of Activity we default to Meetings...

In the absence of Meetings we default to reports…”

The Vision ThingThe Vision Thing

–CokeCoke: “A coke within an arm’s length of everyone on the planet”

–IntelIntel: “It’s what’s inside that counts”

–NikeNike: “Just Do It!”

–Disney: “Can it wear ears?”

Visions that workVisions that work

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 an 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, its 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 were estimated to use 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

Framework for Market OpportunityFramework for Market Opportunity

Segmentation Type Description Examples of Variables

Geographics Divides market into geographical units

Country, region, city

Demographics Divides market on the basis of demographic values

Age, gender, income, education

Firmographics Divides market on the basis of company-specific variables

Number of employees, company size

Behavioral Divides market based on how customers actually buy and use the product

Website loyalty, prior purchases

Occasion (Situational) Divides market based on the situation that leads to a product need, purchase or use

Routine occasion, special occasion, part of day

Psychographics Divides market based on lifestyle and/or personality

Personality (laid-back, type A), lifestyle

Benefits Divides market based on benefits or qualities sought from the product

Convenience, economy, quality

SEGMENTATION OPTIONSSEGMENTATION OPTIONS

MeaningfulMeaningful

ActionableActionable

SubstantialSubstantial

MeasurableMeasurable

Customers must demonstrate needs, aspirations or behavioral patterns that are similar within a segment and different across segments

– A distinction between a price-sensitive and a quality-seeking segment is meaningful, since the two segments demonstrate distinguishable sets of needs

A company must be able to reach customers within each segment through effective and targeted marketing programs

– A customer segment consisting of customers with blue eyes is not actionable, since it is very hard to identify and reach only customers with blue eyes

Segments must be large and profitable enough to make the investment in serving them worthwhile

– MyCFO.com is targeted toward high-net-worth individuals, helping them manage their portfolios; even though the number of those individuals is small, the dollar amount managed is sizeable, thus constituting a substantial segment

Key characteristics of the segments (e.g., size and spending patterns) must be easy to measure

SEGMENTATION OBJECTIVESSEGMENTATION OBJECTIVES

a more balanced revenue mix

imaging & printing41%

access21%

enterprise19%services

19%

total: $47 billion

services18%

enterprise34%

total: $40 billion


access33%

enterprise26%

services19%

total: $87 billion

access48%

hphp compaqcompaq combinedcombined

*All data based on estimated trailing four quarters. Source: SEC filings, press releases, and company estimates.

Carli’s Strategy: HP Product Mix BCCarli’s Strategy: HP Product Mix BC

a more balanced revenue mix


access21%

enterprise19%services

19%

total: $47 billion

services18%

enterprise34%

total: $40 billion


access33%

enterprise26%

services19%

total: $87 billion

access48%

hphp compaqcompaq combinedcombined

*All data based on estimated trailing four quarters. Source: SEC filings, press releases, and company estimates.

Post Carli’s : HP Beyond Ink SalesPost Carli’s : HP Beyond Ink Sales

DIGITAL CAMERA SEGMENTATIONDIGITAL CAMERA SEGMENTATION

Business Education Leisure Leisure Hobby or Special Interest

Collection Business Corporate Education

39

40+

39

40+

39

40+

Purchase Occasion

Reader

Self-Consumption Gift InstitutionalBy

Request

College Education

Moderate Education

Limited Education

Reference and Research Materials

How-To Information

Hobby or Special Interest

Entertainment

For Display

In-Depth Topical Insights and Discussion

How-To Information

RequiredReading

Comp-endium by Topic

Advice and

Recom-mend-ations

E-BOOKS SEGMENTATIONE-BOOKS SEGMENTATION

Promotional

Behavior

User Demographics

Very High High Moderate Limited None

39

40+

39

40+

39

40+

High Income

Moderate Income

Limited Income

Active Deal-Makers with Means

Active Frugal Collectors

Price-Sensitive

Active Frugal

Collectors

Passive Collectors

Ease

Convenience

Limited Accessibility or Options

History of Responding to Promotions

POTENTIAL eBAY CUSTOMERSPOTENTIAL eBAY CUSTOMERS

1.

2.

3.

4.

5.

6.

7.

A certain level of functionality must exist in order for a site to work; basic standards and expectations must be met

Relates to the individual’s unique perception of the encounter with the firm

More than just the economic transaction - the entire customer encounter experience includes both process and output measures of the shopping experience

Includes a customer’s response to multiple variables, from the tactical layout of the store/site to high-level interpretations of the meaning of the brand

To the extent that it is relevant, assessment of the customer experience needs to incorporate all five senses

Cognitive responses are thoughtful and evaluative in nature; emotional responses tend to capture moods, attitudes and feelings of the customer

Previous, separate experiences can affect a consumer’s reaction to various stimuli during a shopping experience

The Objective Element

The Perception Element

The Encounter Element

The Reactions-to-Stimuli Element

The Sensory Element

The Cognitive and Emotional Element

The Relative Element

Elements of Customer ExperienceElements of Customer Experience

If a Firm Gets This Right … This Is What the Customer

Experiences

Stage One: Functionality Design and information architecture

Deep understanding of customer behavior

Platform independence

Efficient transactions

Site is easy to use

Quick downloads

Intuitive navigation

Site reliability

Stage Two: Intimacy Warehousing and mining

Tailoring of pages and offerings

Overlay human interaction

Integrated data

Consistent performance over time

Constant innovation and upgrading (incremental or significant)

Personalization

Increasing trust

Repeated experiences of exceptional value

A sense of “being in the know”

Consistent experiences

Significant benefits relative to other offerings

Stage Three: Evangelism Supports evangelists

Acknowledgment of evangelists Desire to make messages to

the market

Community benefits

Stages of Customer ExperienceStages of Customer Experience

Product• Physical

Goods• Service• Features• Quality• Accessories• Installation• Warranty• Product Lines• Packaging• Branding

Place• Objectives• Channels• Logistics

Promotion• Objectives• Blend• Sales People• Advertising• Sales

Promotion• Publicity

Price• Objectives• Flexibility• Geographic

Terms• Discounts• Sales

Promotion• Publicity

Strategy Decision AreasStrategy Decision Areas

Element

Money

Growth

Concentration

Literacy

Focus on

Relative Buying Power

Rate of Growth

Population Density

Communication concerns

Potential MarketsPotential Markets

Branding

PLACE PRODUCT

Individual

PROMOTION PRICE

Interactivity

II & The Product MixII & The Product Mix

Banner Ad(to promote awareness)

Banner Ad(to promote awareness)

Personalized Website

Permission e-mails

Individualized offerings

Personalized Website

Permission e-mails

Individualized offerings

Website Website

AwarenessAwareness CommitmentCommitmentExploration Exploration

User clicks on bannerto find out more

User can set up the webpageaccording to personal preferences,register for e-mails, give feedback,or make a purchase

The II Through StagesThe II Through Stages

One Seamless Experience

Cell 4Cell 4 Cell 2Cell 2

Cell 3Cell 3 Cell 1Cell 1

Lo

cati

on

of

Re

ven

ue

Str

ea

m

Bric

ks-a

nd-

Mor

tar

Onl

i ne

Marketing Resource Allocation

Offline Online

Impact of Internet MarketingImpact of Internet Marketing

– ““Blackbeard”Blackbeard”– ““Nazi”Nazi”– VolkswagenVolkswagen– BelieversBelievers– Infidels/GentilesInfidels/Gentiles– IBMIBM– Amazon.comAmazon.com– Andersen ConsultingAndersen Consulting– Route 66Route 66– Tom ClancyTom Clancy– Mark TwainMark Twain– Albert EinsteinAlbert Einstein

– The Kennedy’sThe Kennedy’s

– Al CaponeAl Capone

– Ted TurnerTed Turner

– CNNCNN

– NickelodeonNickelodeon

– MarlboroMarlboro

– Sports Illustrated Sports Illustrated Swimsuit EditionSwimsuit Edition

– The New York TimesThe New York Times

– ““Them”Them”

– ““The White House”The White House”

Brands through historyBrands through history

– BrandsBrands• MercedesMercedes

• The Beach BoysThe Beach Boys

• KodakKodak

• DisneyDisney

• Intel (Today)Intel (Today)

• VirginVirgin

– NOT BrandsNOT Brands• General MotorsGeneral Motors

• The BeatlesThe Beatles

• XeroxXerox

• Time-WarnerTime-Warner

• Berkshire HathawayBerkshire Hathaway

Brands through historyBrands through history

– 67% - There is no risk associated with buying 67% - There is no risk associated with buying brands with which you are not familiarbrands with which you are not familiar

• Lack of substantive differentiationLack of substantive differentiation

– 72% - A well-known brand is an important 72% - A well-known brand is an important factor on making buying decisionsfactor on making buying decisions

• ““Selection shorthand”Selection shorthand”

Why BrandWhy Brand

– Brand as Energy:Brand as Energy:• Amazon.comAmazon.com

– Brand as SecurityBrand as Security• Stew Leonard’sStew Leonard’s

– Brand as Quality/Choice EditorBrand as Quality/Choice Editor• NordstromNordstrom

– Anti-brandAnti-brand• AudiAudi

– Evolving: Brand as known and reliable sub-Evolving: Brand as known and reliable sub-contractorcontractor

• IT OpportunityIT Opportunity

Brand TypesBrand Types

Brand matters because We all live in a Plan “B” Universe

– Limited Resources

• Time

– Unlimited Options

• Money

• Energy

– Limited Consequences

Brand DriversBrand Drivers

• Brand determines the Purchase Ownership Association (POA) Factor– Terms of Engagement for 3 possible types of

relationships• Purchase

• Ownership

• Association

– Your Brand carves out the space you ‘own’

Brand POA FactorBrand POA Factor

Purchase Ownership Association

Normal (As bad as expected)

Neutral

Neutral

Neutral

Enjoyable (Works as it SHOULD!)

I ntrigued

I ntrigued

I ntrigued

Special (better than expected)

Expectant

Expectant

Expectant

Rewarding

(measurably/tangibly advantaged)

Committed

Committed

Committed




BJ ’s Club

Warehouse


Home Depot


Nordstrom

Rewarding

(measurably/tangibly advantaged)

Any airline’s

Mileage Rewards




McDonald’s


Coca- Cola


Outback

Steakhouse

Rewarding

(measurably/ tangibly advantaged)

United

Premiere Flyer




Planet Hollywood


Levi’s


Hilfiger

Rewarding

(measurably/ tangibly advantaged)

United Red Carpet Club


• Every company has an ‘identity’ – whether it Every company has an ‘identity’ – whether it chooses to control that image, or notchooses to control that image, or not

• A Good Brand is an identify which isA Good Brand is an identify which is– Recognition “shorthand”Recognition “shorthand”– Consciously developedConsciously developed– PurposefulPurposeful– CultivatedCultivated

• A Bad BrandA Bad Brand– Is ‘what happens’ to youIs ‘what happens’ to you– The discrepancy between promise and deliveryThe discrepancy between promise and delivery

Brand TruismsBrand Truisms

• A Brand is the difference between inherent A Brand is the difference between inherent worth and perceived valueworth and perceived value

• A Brand is a Unique Selling Proposition A Brand is a Unique Selling Proposition which translates intowhich translates into– Marketing AdvantageMarketing Advantage– Profit MarginProfit Margin– Higher MultiplesHigher Multiples


• A Brand hasA Brand has– An “aura”An “aura”– IdentityIdentity– PersonalityPersonality– Customer-’stickiness’Customer-’stickiness’– Positive inertiaPositive inertia


For Example:For Example:

Brand ExamplesBrand Examples

Chicken Chicken PoopPoop

Haul it Away, Please!Haul it Away, Please!

What is a brand worth?What is a brand worth?

Premium Premium Natural Natural

FertilizerFertilizer

$ 10.00 per drum$ 10.00 per drum


Agricultural Agricultural ChemicalsChemicals

$25.00/c.wt.$25.00/c.wt.


Better Living through Better Living through ChemistryChemistry

$50/bag$50/bag

DUPONTDUPONT


TheThe Business Business

CustomersCustomers(number/type)(number/type)

Fees/PricesFees/Prices(revenue)(revenue)

Defines &

Drives

Business Value

The BrandThe Brand

CustomersCustomers(number/type)(number/type)

Potential Markets Potential Markets ServedServed

(size/growth)(size/growth)

Brand Share Brand Share PotentialPotential

Brand ContributionBrand ContributionBrand Value

The Business and the Brand are Intertwined

Today’s business is the DNA of the Brand and its potential to create value via strategic decisions, such as diversification

Measuring Brand ValueMeasuring Brand Value

Brand EquityBrand Equity

Brand Loyalty Brand Awareness Perceived Quality Brand Associations Other Assets

Reduced Marketing

CostsTrade

LeverageAttracting New

CustomersTime to

Respond to Competitive

Threats

Anchor to Which Other Associations Can be Attached

Familiarity - Liking

Signal of Substance /

Commitment

Brand to be Considered

Reason-to-Buy

Differentiation / Position

Price

Channel Member Interest

Extensions

Help Process / Retrieve Information

Differentiate / Position

Reason-to-Buy

Create Positive Attitudes / Feelings

Extensions

Competitive Advantage

Provides Value To Customer By Enhancing Provides Value To Customer By Enhancing Customer’s:Customer’s:

Interpretation / Processing of InfoInterpretation / Processing of InfoConfidence in the Purchase DecisionConfidence in the Purchase DecisionUse SatisfactionUse Satisfaction

Provides Value To Firm By Enhancing :Efficiency & Effectiveness of Marketing ProgramsPrice / MarginsBrand ExtensionsCompetitive Advantage

Brand Equity Brand Equity

BrandBrandAwarenessAwareness

UniqueUniqueSellingSelling

PropositionProposition

BrandBrandDNADNA

BrandBrandExperienceExperience

Brand Awareness is Only One element of Brand Equity

Measuring Brand ValueMeasuring Brand Value

Demand Curve Shift With Brand Equity

VolumeEffect

Q2

Q1

P2P1 Price

Brand Equity

Leverage

Quantity

Price or Margin Effect

Brand Equity is the Premium that Consumers Pay for Your Products and Services...

…And, the Premium that Investors Pay for Your Company.

Measuring Brand Value- Brand Equity

Measuring Brand Value- Brand Equity

How Brand Equity Impacts PE

Financial-Centric CompaniesFinancial-Centric Companies CompanyCompany PEPE MktCapMktCap1. Bergen Brunswig1. Bergen Brunswig 1414 $2.1B $2.1B2. Ingersol Rand2. Ingersol Rand 19.719.7 10.9B 10.9B3. Dow Chemical3. Dow Chemical 21.521.5 27.6B 27.6B4. Conectiv4. Conectiv 11.1211.12 $2.0B $2.0B

Brand-Centric CompaniesBrand-Centric Companies CompanyCompany PEPE MktCapMktCap1. P&G1. P&G 35.235.2 $133B$133B2. Gillette2. Gillette 39.239.2 50B 50B3. Coca Cola3. Coca Cola 47.947.9 146B 146B4. Disney4. Disney 40.740.7 $61.4B$61.4B

Hot Market-Centric CompaniesHot Market-Centric Companies CompanyCompany PEPE MktCapMktCap1. AOL1. AOL 253253 $109.4B$109.4B2. Yahoo2. Yahoo 311311 $39.6B $39.6B3. Excite3. Excite 491491 $7.3B $7.3B4. Amazon4. Amazon -119-119 $20.2B $20.2B

The Reason Brand-Centric Companies have (traditionally) higher PE’s stems from premiums in pricing and growth potential

Measuring Brand Value- Brand Equity Vs PE

Measuring Brand Value- Brand Equity Vs PE

Brand-Centric CompaniesBrand-Centric Companies CompanyCompany U.S. RevenueU.S. Revenue U.S. Ad SpendingU.S. Ad Spending Ad $ as % of SalesAd $ as % of Sales

1. P&G1. P&G $18,460M$18,460M $2,743M$2,743M 14.9 14.92. Gillette2. Gillette 3,682M 3,682M 578M 578M 15.7 15.73. Coca Cola3. Coca Cola 6,443M 6,443M 710M 710M 11.0 11.0

How Much Advertising is Enough?

AdvertisingAdvertising

ComparablesComparables

ConectivConectiv .6%.6%

SBCSBC 1.3%1.3%

BellSouthBellSouth 1.5%1.5%

AT&TAT&T 1.5%1.5%

Bell A.Bell A. 1.9%1.9%

MCIMCI 3.9%3.9%

SprintSprint 3.5%3.5%

Brand $$Brand $$

KodakKodak 5.7%5.7%

CendantCendant 5.4%5.4%

Sherwin-W.Sherwin-W. 6.3%6.3%

StarwoodStarwood 23.4%23.4%

Advertising SpendingAdvertising Spending

StandardsStandards

DisneyDisney 7.0%7.0%

AmexAmex 3.1%3.1%

GEGE .46%.46%

Advertising SpendingAdvertising Spending

– Brand AwarenessBrand Awareness• People KNOW who you arePeople KNOW who you are

– Brand EquityBrand Equity• People pay PremiumPeople pay Premium

– To do business with youTo do business with you– To own youTo own you

Building a Brand Vs Brand EquityBuilding a Brand Vs Brand Equity

–Awareness Awareness

–DNADNA

–ExperienceExperience

Brand Equity DimensionsBrand Equity Dimensions

– VisionVision

– CEO as ‘Keeper of the Marque’CEO as ‘Keeper of the Marque’

– ConsistencyConsistency

– CommitmentCommitment

– PatiencePatience

Building Strong BrandsBuilding Strong Brands

• Bases for VisionBases for Vision– PromotabilityPromotability– Operational ExcellenceOperational Excellence– Product ExcellenceProduct Excellence– USPUSP– Powerful PotentialPowerful Potential


• If it doesn’t ‘line up’ – it doesn’t add upIf it doesn’t ‘line up’ – it doesn’t add up– What you SAY to the worldWhat you SAY to the world– What you DO in the worldWhat you DO in the world– What you DO insideWhat you DO inside


STATE

Rejection

Non Recognitions

Recognition

Preference

Insistence

STRATEGY

Change Position

Increase Awareness

Continue Education

Maintain Availability

Develop High Brand Equity

Branding StrategyBranding Strategy

• “E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff – online or off – unless you are top-of-mind.” – Annette Hamilton, Executive Producer, ZDNet

• “Brand is the price of entry [to the Internet], not the winning strategy.” – Dylan Tweney, infoNet

• “By the time your potential customers log on, they already know what they’re looking for, and they often know from whom they want to buy it. … They’re just not listening to branding messages anymore.” – Michael Fischler, Principal, The Pubs Group

Online BrandingOnline Branding

Selected Internet BrandsSelected Internet Brands

Branding

Online Branding and Selling Online

Intermediary/ Vertical Portal

e-Commerce

Business-to-

Consumer Ragu

American Airlines

Yahoo! CDNow

Business-to-

Business Boeing Cisco Systems Avnet NexPrise

Established as Traditional Brand

Established as Online Brand

Source: PricewaterhouseCoopers Moneytree Report 2000.

Successful Online Branding ExamplesSuccessful Online Branding Examples

• “Brands stand as comfort anchors in the sea of confusion, fear, and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move.” – Chuck Pettis, Technobranding

• “It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for online search engine Yahoo to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between offline and online brands.” – Mark Lindstrom, Executive Director, ZIVO

• “A company’s website is the brand. It’s the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. It’s the company in a nutshell, all there in a way that just is not possible in the analog world.” – Sean Carton, Carton Donofrio Interactive

Online BrandingOnline Branding

Product, Price, Community, Communication and Distribution Programs

Wraparounds

Core Product/ Core Product/ ServiceService

Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis

. . . provides positive consumer responses . . .A good brand . . .

Customer Benefits

Confidence

Loyalty

Satisfaction

Customer Benefits

Confidence

Loyalty

Satisfaction

Firm Benefits

Reduced marketing costs

Increased margins

Opportunity for brand extensions

Firm Benefits

Reduced marketing costs

Increased margins

Opportunity for brand extensions

. . . and benefits both target customers and firm

Brand Awareness

Depth

Breadth

Brand Awareness

Depth

Breadth

Brand Associations

Strength– Relevant– Consistent

Valence

Uniqueness– Memorable– Distinctive

Brand Associations

Strength– Relevant– Consistent

Valence

Uniqueness– Memorable– Distinctive

Brand Equity Conceptual ModelBrand Equity Conceptual Model

A Strong Brand Essential Strength of Brand

Is Not That Important

A strong brand name provides a clear presence in the market

Strong brands attract customers

Strong brands carry positive associations with consumers

Clear brands are associated with higher conversion rates

All current online “winners” have strong brands

Alliances — not strong brands — are the key to winning in the marketplace

Readily available third-party evaluators will increasingly influence online consumption

Speed to market is more important than branding

The trend toward customization is leading to an environment where the meaning of a “mega-brand” is no longer relevant

Current online winners may have strong brands, but so do a number of “big losers”

Value of Online BrandsValue of Online Brands

Clearly Define the Target AudienceClearly Define the Target AudienceStep 1

Step 3

Step 2

Step 4

Step 5

Step 6

Step 7

Understand the Target CustomerUnderstand the Target Customer

Understand the CompetitionUnderstand the Competition

Design Compelling Brand IntentDesign Compelling Brand Intent

Identify Key Leverage Points in Customer Experience

Identify Key Leverage Points in Customer Experience

Execute the Branding StrategyExecute the Branding Strategy

Establish Feedback SystemsEstablish Feedback Systems

Branding ProcessBranding Process

Branding Element

Offline Online

1. Clearly Define the Brand Audience

Limited to manageable number of segments to prevent inconsistent messaging

Could include larger number of segments based on values or interests rather than demographics

2. Understand the Customer

Requires thorough understanding of environment, desired purchase and usage experience

Requires thorough understanding of desired purchase and usage experience in both the offline and online environment

3. Understand the Competition

Requires monitoring of competitor advertisements and activities

Competitor advertisements and some activities can be directly observed online

4. Design Compelling Brand Intent

Brand intent (desired positioning) designed to address the needs and beliefs of target segments

Greater opportunity for customization of key messages

5. Identify Key Leverage Points in Customer Experience

Buying process is typically a simplified representation of customer segment behavior with static leverage points

Buying process tends to be more dynamic and flexible

6. Execute the Branding Strategy

Strong, positive brands are built up over time

Image reinforced through variety of offline media

Marketing strategy includes plan for sequenced growth and adjustment of brand based on changing

customer needs

Building brand awareness requires significant investment

Building brand loyalty takes time offline, especially because early customer receptivity to brands is difficult to assess (and usually involves market research)

Online interactions bring in added concerns of security and privacy

Limited familiarity with online brands makes fostering trust more difficult

With the ability to customize, one customer’s brand image may be different from another customer’s brand image

Customization for multiple segments and opportunity for early recognition of the changing customer requires a corresponding tailoring of brand intent

Building brand awareness requires significant investment, especially for those competitors who are not first in their category online

Brands have the potential to generate loyalty more quickly, especially if customers are targeted effectively

7. Establish Feedback Systems

Collecting and analyzing customer feedback is more time-consuming

Sophisticated tools exist for tracking online; allow for anonymous, interactive, quick feedback

Branding Type ComparisonBranding Type Comparison

• How do companies determine level of Ad or PR SpendingHow do companies determine level of Ad or PR Spending

– Industry StandardsIndustry Standards– Goal StandardsGoal Standards

• Higher if you are growing or protecting brandHigher if you are growing or protecting brand

• Lower if you are in maintenance modeLower if you are in maintenance mode

– Situational StandardsSituational Standards• Go away in appropriate situationGo away in appropriate situation

– eg - airlines in plane crasheg - airlines in plane crash

• Be VERY visible in appropriate situationBe VERY visible in appropriate situation– Smart utility in outage scenariosSmart utility in outage scenarios

IssuesIssues

• How do companies determine level of Ad/PR How do companies determine level of Ad/PR SpendingSpending– There are no ‘ideal’ There are no ‘ideal’ GPR levels of exposurelevels of exposure

• Message-dependentMessage-dependent• Competitive environment-dependentCompetitive environment-dependent• Goal-dependentGoal-dependent• eg - introducing new products/brands/copy requires eg - introducing new products/brands/copy requires

higher GRP’s than does maintenance. Even higher GRP’s than does maintenance. Even maintenance GRP’s go UP in competitive maintenance GRP’s go UP in competitive environmentenvironment

IssuesIssues

http://www.clearchanneloutdoor.com/resource/vocab.asp

• Should we trade off Brand Advertising for ‘feet Should we trade off Brand Advertising for ‘feet on the street?’on the street?’

– Good Branding builds sales AND equityGood Branding builds sales AND equity

– ‘‘Feet on the street’ and product Feet on the street’ and product marketing builds sales and CAN marketing builds sales and CAN diminish Brand Value over timediminish Brand Value over time• Automobile rebate exampleAutomobile rebate example

• Competitive computer advertising exampleCompetitive computer advertising example

IssuesIssues

• A Good Brand initiative will yield tangible A Good Brand initiative will yield tangible resultsresults– You can’t react/adjust unless you know it’s You can’t react/adjust unless you know it’s

working/not workingworking/not working– You can’t know if it’s working/not working You can’t know if it’s working/not working

unless you measure itunless you measure it

Issues: Success MetricsIssues: Success Metrics

• Need Regular evaluation:Need Regular evaluation:– Need to measure Brand Need to measure Brand EquityEquity rather than simply rather than simply

Brand AwarenessBrand Awareness– Need a regular review of Advertising/Equity/Sales Need a regular review of Advertising/Equity/Sales

Impact chartsImpact charts

• Consider Exit Strategy as the objectiveConsider Exit Strategy as the objective– If you exit, you winIf you exit, you win– If you don’t exit, you still winIf you don’t exit, you still win– Measure Equity at PPE (Presumed Point of Exit) which Measure Equity at PPE (Presumed Point of Exit) which

defines the growth or attrition in the presumed value of defines the growth or attrition in the presumed value of the company at a potential sale pointthe company at a potential sale point


• Need Regular evaluation:Need Regular evaluation:– % of target population who ‘gets’ our brand % of target population who ‘gets’ our brand

conceptconcept– # of new customers# of new customers– Change in customer‘churn’Change in customer‘churn’– Profitability increases Profitability increases – Open-ness to buy new prospectsOpen-ness to buy new prospects


Do WE know who we are?Do WE know who we are? Do we know who we want to do business with?Do we know who we want to do business with? Do we know what the target market’s preferred Do we know what the target market’s preferred

terms of engagement are?terms of engagement are? Do we understand the competitive marketplace?Do we understand the competitive marketplace? Have we Mapped-The-Gap in the competitive Have we Mapped-The-Gap in the competitive

marketplace?marketplace?

Brand ChecklistBrand Checklist

Are we willing to commit long-term resources for Are we willing to commit long-term resources for long-term gain?long-term gain?

Do we have the ‘guts’ to live by the promises we Do we have the ‘guts’ to live by the promises we make in public?make in public?

Do we understand the issues well enough to be Do we understand the issues well enough to be brief? (Define the Vision)brief? (Define the Vision)

Do we understand who needs to do what to Do we understand who needs to do what to Create the VisionCreate the Vision Maintain the Vision (e.g. –can it wear ears?)Maintain the Vision (e.g. –can it wear ears?) Expand the Vision (We can’t know everything at the start)Expand the Vision (We can’t know everything at the start)

Brand ChecklistBrand Checklist

– Branding is fundamentally different from the other marketing activities — product, pricing, communication, community and distribution — in three ways:• Brands are reflections or outcomes of the firm’s marketing activities

• Unlike the other activities, branding is an integral part of every marketing activity and strategy

• Strong brands can be used to enhance the effectiveness of all other marketing activities

- The presence of a strong brand enhances positive marketing activities such that awareness, exploration and commitment are more effectively established.

Branding SummaryBranding Summary

AwarenessAwareness Exploration /Expansion

Exploration /Expansion CommitmentCommitment DissolutionDissolution

Keys to Customer RelationshipKeys to Customer Relationship

Deadly Sins of Customer ExperienceDeadly Sins of Customer Experience

Customer Experience Over TimeCustomer Experience Over Time

Brand Awareness Is the Key to Success

Customer Experience Is the Key to Success

Building brand awareness leads to traffic Investors need to see site traffic and the

likelihood of future profitability

Offering a great customer experience when nobody knows about the site is a waste of resources as long as a baseline functional standard is being met

Focusing on customer experience is the single most profitable thing a business can do

Customers that have a positive experience with the site are more likely to keep coming back and to tell their peers about it

Positive customer experience leads to purchases at commerce sites, exploration at content sites and participation at community sites

Branding Vs Customer ExperienceBranding Vs Customer Experience

1.

2.

3.

4.

5.

6.

Create a Rich Description of the Target Customer

Develop Use-Case Scenarios for Each Target Segment

Effectively Integrate the Online and Offline Experience

Articulate Clear Stages of Desired Experience

Effectively Assess Relative Levels of Hierarchy

Highly Leverage the Evangelists

Goals for Creating Customer Experience

Goals for Creating Customer Experience

1.

2.

3.

4.

5.

6.

7.

Site’s layout and design

Text, pictures, sound and video that webpages contain

The ways sites enable user-to-user communication

Site’s ability to self-tailor to different users or to allow users to personalize the site

The ways sites enable site-to-user communication or two-way communication

Degree site is linked to other sites

Site’s capabilities to enable commercial transactions

Context

Content

Community

Customization

Communication

Connection

Commerce

Customer InterfaceCustomer Interface

Offering MixOffering Mix

Appeal MixAppeal Mix

Content TypeContent Type

Multimedia MixMultimedia Mix

ContentContent

Community can create attractive content

Community can create attractive content

Community can make certain activities possible or

easier, thus satisfying needs not attainable

individually

Community can make certain activities possible or

easier, thus satisfying needs not attainable

individually

CommunityCommunity

PersonalizationPersonalization

Tailoring by SiteTailoring by Site

CustomizationCustomization

Personalization Tailoring by Site

Login Registration Cookies Personalized E-Mail Accounts Content and Layout Configuration Storage Agents

Tailoring based on past user behavior

Tailoring based on behavior of other users with similar preferences

Is– Land’s EndIs– Land’s End

Is– Mercury MarinerIs– Mercury Mariner

http://www.mercuryvehicles.com/marinerhybrid/preorder.asp

http://www.mercuryvehicles.com/marinerhybrid/preorder.asp

Is – Luxury Retailer on the WebIs – Luxury Retailer on the Webhttp://www.pearlparadise.com/

http://www.pearlparadise.com/

Interactivity, Viral MarketingInteractivity, Viral Marketing

Burger King’s: http://www.subservientchicken.com/GAP’s: http://www.watchmechange.com/

Mitsubishi: Thrill Ride Challenge http://www.mitsubishicars.com/06eclipse/

Ford Supercar Challenge: http://www.fordvehicles.com/supercarchallenge/err/index.asp

Sims: http://thesims.ea.com/index_flash.php, http://simcity.ea.com/about/simcity4/flash.php

BroadcastBroadcast

InteractiveInteractive

CommunicationCommunication

Broadcast Interactive

Mass Mailings FAQs E-Mail Newsletters Content Update Notifications Broadcast Events

E-Commerce Dialogue Customer Service User Input

Homesite BackgroundHomesite Background

Outsourced ContentOutsourced Content

Pathway of ConnectionPathway of Connection

Percent of Homesite ContentPercent of Homesite Content

Links to SitesLinks to Sites

ConnectionConnection

Shopping CartShopping Cart

SecuritySecurity

One-Click ShoppingOne-Click Shopping

Credit Card ApprovalCredit Card Approval

RegistrationRegistration

Configuration Technology

Configuration Technology

Order TrackingOrder Tracking

Delivery OptionsDelivery Options

Orders Through Affilates

Orders Through Affilates

CommerceCommerce

EBAYEBAY

Automobile

Expensive Watch

Scotch Whiskey

Wine for Dinner Party

Face Soap

Eyeglasses

Paper Towels

Disposable Razor

Liquid BleachInsect Repellent

Salad Oil

Insecticide

Toilet Tissue

35-mm Camera

Stereo Component

Credit Card

Headache Remedy

Hair Coloring

Deodorant Soap

Soft DrinkPotato Chips

Washer/Dryer

High

Low

Relationship InvolvementRelationship Involvement

Short Long

Customer Lifetime

Low

Hig

h

Pro

fita

bil

ity

Customer Tenure and ProfitabilityCustomer Tenure and Profitability

A Time and Place for IIA Time and Place for II

High Individualization,

Low Interactivity

Example: bank statement

High Individualization,

High Interactivity

Example: Design Robot

Low Individualization,

Low Interactivity

Example: news service

Low Individualization,

High Interactivity

Example: library

Level of Interactivity

Level of Indiv.

Price

Product

Promotion

Distribution

Brand

Marketing Levers

AwarenessAwareness Exploration/Expansion

Exploration/Expansion CommitmentCommitment DissolutionDissolution

A Framework for Building CR on the Web

A Framework for Building CR on the Web

Target Market

Product

Product Idea

PhysicalGood/service

FeaturesQuality

AccessoriesInstallationInstructionsProduct Line

IndividualFamily

ManufacturerDealer

Brand

ProtectionPromotion

Both

Package

NoneFull

Limited

Warranty

Price Place Promotion

Product DefinitionProduct Definition

Augmented Product

Basic Product Daily Newsletter

Advice

In-Depth Information

Engine

Tires

Radio

Extended Warranty

Trade In

Financing

MealPreparation

Fitness Books

Exercise Plan

Traditional: Sports Utility Vehicle

New Economy: e-diets.com

Transportation Dieting Information Core Benefit

Val

ue P

ropo

sitio

n

Product Value AdProduct Value Ad

Diff

Product Type Primary Purpose Internet Properties Examples

Digitized Good Provides core benefit in digitized form online

Is not used up in consumption; easily reproducible; transferable

Downloadable software, music, newspapers

Service Performs core servic e benefit online

Standardizes service; allows producer and consumer to be separated in space and time; adds vividness to intangibles

Schwab.com, eDiets.com, Yahoo Sports Fantasy Baseball Plus

Retail or Distribution Service

Sells, brokers, or distributes p roduct delivered offline

Helps dispose of perishable inventory; aggregates demand

Amazon.com, priceline, FreeMarkets

Product Augmentation

Adds extra services or benefits to a service or product

Differentiates at low incremental cost

FedEx, Fidelity

Internet Product TypesInternet Product Types

Hi-Lo PricingHi-Lo Pricing Everyday Low Pricing

Everyday Low Pricing

No Pricing No Pricing FlexibilityFlexibility

No Pricing No Pricing FlexibilityFlexibility

Price at market Price at market

Corporate MandateCorporate MandateCorporate MandateCorporate Mandate

Target return pricing Target profit return

Target return pricing Target profit return

High Initial DemandHigh Initial DemandHigh Initial DemandHigh Initial Demand

Fairness pricing Bundling Frenzy pricing Price discrimination

over time

Fairness pricing Bundling Frenzy pricing Price discrimination

over time

Correlated DemandCorrelated DemandCorrelated DemandCorrelated Demand

Bundling Volume discount

pricing Two-part pricing

Bundling Volume discount

pricing Two-part pricing

Dynamic PricingDynamic PricingDynamic PricingDynamic Pricing

English auction Reverse English

auction Dutch auction

(regular and eBay type)

First price sealed-bid auction (regular and Priceline type)

Reverse first price sealed-bid auction

Group buying Electronic exchange

English auction Reverse English

auction Dutch auction

(regular and eBay type)

First price sealed-bid auction (regular and Priceline type)

Reverse first price sealed-bid auction

Group buying Electronic exchange

Price as Price as Marketing StrategyMarketing Strategy

Price as Price as Marketing StrategyMarketing Strategy

Prestige Sign of quality Promotional

Prestige Sign of quality Promotional

Select Retail Pricing Strategy

Select Retail Pricing Strategy

Select Pricing StrategySelect Pricing Strategy

Pricing Strategy FrameworkPricing Strategy Framework

The Internet Will Lead to Price Commoditization

The Internet Will Not Commoditize Prices

The Internet makes vast amounts of information available to consumers. As a result, markets will become more efficient, and differences in products and pricing will decrease

Consumers on the Internet are not restricted by geography when making their purchases, so they are free to choose among a wider range of providers and may switch more frequently

On the Internet, providers have difficulty differentiating their

products; they find it hard to compete on anything but price

Even if all else is equal, brand will still command a premium

Providers are able to differentiate their offerings by bundling products and services; consumers will place a premium on attractive

"bundles"

The Internet makes it possible for consumers to create their own products and bundles

The Internet offers consumers a new convenient purchasing experience that they are willing to

pay for

Product Pricing and the InternetProduct Pricing and the Internet

Pricing SinsPricing Sins

– Firms have a wide variety of potential pricing strategies and price points to consider when deciding how to best implement profit-maximizing strategies.

– Firms face multiple pricing decisions including basic, dynamic, and advanced pricing strategies.

– There are a variety of pricing levers for firms to employ in their pricing strategies. Each stage of the customer relationship has a set of appropriate pricing levers that should be used.

Pricing SummaryPricing Summary

On

line

Off

line

OutdoorAdvertising (Billboards)

Yellow Pages

Radio

Television

Brochures

Newspapers

Sponsorships

Magazines

Newsletters

Point-of-Purchase Displays

Customer Service

Direct Mailings

Telemarketing

Sales force/Face-

to-Face

Banner Ads

Rich Media

Search Engines

Interstitials

Classifieds & Listings

Wireless Devices

Websites

E-MailMarketing

Personal Websites

Mass Personal

Public Relations

Dynamic Ads

Interactive

Television

Online/Offline PromotionOnline/Offline Promotion

Medium Advantages Disadvantages

Websites/Personalized websites

Communicate rich, detailed information that users can navigate at will; can track users and customize site accordingly.

Narrow reach

Banner ads Link directly to buying opportunity; easy to me asure effectiveness; wide reach; potential for effective targeting

Low attention and click -through rates; short life; limited “pass -along” audience; very high clutter; fleeting exposure

Interstitials Catch users’ attention; link to buying opportunity Can annoy users; limited “pass -along” audience

Rich media Attention -getting; link to buying opportunity Can annoy users without broadband access

Dynamic ad placement Serves up customized ads to users in real time Difficult to execute well; can annoy users, o ther advertisers

Search engines Good credibility; high believability; guarantee of position available; significant audience at major sites

High competition; information overload; limited “pass-along”

Classifieds and listings

Relatively inexpensive, poten tial for wide exposure; qualified audience

Clutter

Opt-in e-mail High demographic selectivity; high credibility; significant flexibility; proven high click -through rates; absolutely inexpensive; some pass -along

Requires substantial user base before effect ive; high clutter

Mass e-mail High reach; inexpensive; flexible Low attention and significant resentment (spam image)

Customer service Interested parties asking for help, thus high targeting value; generates loyal customers

Very expensive to provide comp rehensive telephone, e -mail, and online support

Types of Online MediaTypes of Online Media

Aggregate number of user clicks on a banner adAd ClicksAd Clicks

Number of times a banner ad is downloaded to a user’s browser and presumably looked at

Ad Views (Impressions)

Ad Views (Impressions)

Percentage of ad views that are clicked upon; also “Ad Click Rate”Click-ThroughClick-Through

Formula used to calculate what an advertiser will pay to an Internet publisher based on number of click-throughs a banner generates

CPC(Cost-per-Click)

CPC(Cost-per-Click)

Cost per thousand impressions of a banner ad; a publisher that charges $10,000 per banner and guarantees 500,000 impressions has a CPM of $20 ($10,000 divided by 500)CPMCPM

Measurement recorded in server log files that represent each file downloaded to a browser; since page design can include multiple files, hits are not a good guide for measuring traffic at a website

HitHit

Number of individuals who visit a website in a specified period of time; requires the use of registration or cookies to verify and identify unique usersUnique UsersUnique Users

A series of requests made by an individual at one site; if no information is requested for a certain period of time, a “time-out” occurs and the next request made counts as a new visit — a 30 minute time-out is now standard

VisitsVisits

Selected Internet Ad TermsSelected Internet Ad Terms

CommunicationCriteria

MediaCriteria

Chose Media Mix

Tie Back toOverall

Plan

AllocateSpending

Behavioral objectives

Available spending

Customer segments

Ability to further behavioral objectives

CPM

Ability to reach target segments

Direct mail, Internet, broadcast, print, point-of-sale, etc.

Tie media plan back to communications plan (e.g., make sure the media plan will drive the trial or awareness required)

Allocation of spending across media mix elements and time periods based on relative priority

Promotion ProcessPromotion Process

Level of Community Nascent Formative Mature

People Characteristics

Small number of core members, small number of participants

Small number of core members, higher number of participants

Users begin to build equity

Increased number of core members, high number of participants

Users become operationally entangled

Process Characteristics

Somewhat less defined and focused processes of communication

Lack of segmentation of users/little segmentation of discussion topics

Small number of core members, higher number of participants

Users begin to build equity

Efficient processes of communication established

Clear segmentation of topics and users

Culture Characteristics

Momentum is kickstarted and driven by core group of founders

High on energy, low on focus

Community’s brand is evolving

Gains more momentum

Refinement of missions/ goals (as defined by members)

Community is building a solidified brand

Achieves critical mass

Mission close to fully defined according to members

Membership alignment in shaping of the community

Leadership positions wi thin the community are established

Community establishes brand

Technological Characteristics

Fewer technological options for communications

More options for communication technology explored

Preferre d technology used for communication is established

Community LevelsCommunity Levels

Nascent Formative Mature

General Strategy and Operational Objectives

Aim for growth (in membership)

Attract users by creating administrator -user value, promote administrator -generated content

Seek feedback to determine where the community is going

Find and build upon one or a few well -used methods of communication

Foment relationships and vibrant discussion within only a small number of community groups

Aim for change (in functionality and mission)

Leverage increasing size to create user-to-user val ue and promote user -generated content

Seek feedback to further refine community goals and mission according to members

Explore different processes of communication (asynchronous vs. real time, or both)

Refine community facilitation processes; establish rol es for which members are chosen and can volunteer for (e.g., watchpeople, guides)

Leverage CRM to tailor site and functionality to the member

Allow for further segmentation of discussion topics

Aim for sustainability (in solidifying branding and presence)

Leverage size to increase user-administrator value (e.g., advertising)

Establish reliable feedback loops to ensure the recognition of member needs

Determine most appropriate methods of community communication

Further develop community leaders/caretakers of the community to create sustainability

Incorporate offline events/ marketing to further solidify community relationships, activities and community presence

Leverage processes of offline community (e.g., rituals and tradition)

Marketing Objectives

Increase member base

Get the word out

Use good content to attract members

Refine community vision (as defined by members)

Generate equity for members within community

Establish solid mission and brand

Establish community presence

Expand possibilities for equity generation

Community Building OptionsCommunity Building Options

Community Example - EBAYCommunity Example - EBAY

29334

3153 2904 2778905

0

5,000

10,000

15,000

20,000

25,000

30,000

eBay uBid.com YahooAuctions

Andale Sites Qool.com

Mo

nth

ly U

niq

ue

Vis

ito

rs(i

n t

ho

usa

nd

s)Community Effect Example - EBAYCommunity Effect Example - EBAY

Place Objectives

Channel Type Service Level

Direct Indirect

Market Exposure

Middlemen Management

DistributionType

Place StrategyPlace Strategy

Transportation CostTransportation Cost

Lost SalesLost Sales

Inventory CostsInventory Costs

Total CostsTotal Costs

Customer Service Level (%)Customer Service Level (%)

Cos

ts (

$)C

osts

($)

Physical DistributionPhysical Distribution

C

C

C

1

2

3

4

5

6

7

8

9

(a) Number of contactsM x C = 3 x 3 = 9

1

2

3

4

5

6

(b) Number of contactsM + C = 3 + 3 = 6

M = Manufacturer C = Customer D = Distributor

D

M

M

M

C

C

C

M

M

M

Channel Efficiency and IntermediariesChannel Efficiency and Intermediaries

Market Information Monitoring sales trends, inventory levels, competitive behavior

Promotional Effort Banner ads, sales promotions, traditional advertising support, personal selling

Transactional Activities

Bargaining on price and terms, order processing, credit, inventory and assortments

Storage and Transportation

Warehousing, transportation to buyer, sorting and packaging into desired forms

Facilitation Activities Credit card processing, invoicing, shipping confirmations

Installation and Service

Technical support, customer service lines, warranty work, repair, spare parts, etc.

Distributor Value AddDistributor Value Add

– The Internet is a distribution channel. It facilitates the exchange of goods and services between buyers and sellers.

– The Internet has become a driving force for disintermediation.

– The distribution levers include activities that affect buyer-seller relationships through the type of intermediary, number of intermediaries, intermediary functions and responsibilities, number of channels and degree of channel integration.

– The distribution levers can be applied to affect buyer-seller relationships in each of the customer relationship stages.

Distribution SummaryDistribution Summary

MarketerMarketer PublicPublicPublicPublic

ConsumerConsumerConsumerConsumer

CustomerCustomerCustomerCustomerMarketing Research

Market Problems

Target Market

Market Opportunities

IdentificationIdentification

DefinitionDefinition

ActionAction

Market ResearchMarket Research

Quickly gain crucial market intelligenceQuickly gain crucial market intelligence

Act upon first-mover advantagesAct upon first-mover advantages

Stay afloat in a fast-paced environmentStay afloat in a fast-paced environment

Reduce market research costsReduce market research costs

Many more…Many more…

Benefits of Internet Market ResearchBenefits of Internet Market Research

Market Research UsesMarket Research Uses

Who are mycustomers?

Who are mycustomers? Conjoint

Analysis

How to segment

the market?

How to segment

the market?

What isthe price

elasticity?

What isthe price

elasticity?

What are the growth

trends?

What are the growth

trends?

Who are my competitors?

Who are my competitors?

What dothey like?

What dothey like?

Whendo they

purchase?

Whendo they

purchase?

MarketingResearchMarketingResearch

Opinion Research

Competitive Analysis

Buying-Habit Studies

Environmental Studies

Customer Identification

Discrete Choice Modeling

HighLowEthical Issues (privacy)

LowHigh to MediumAnonymity guarantee

UnlimitedLimitedGeographical Coverage

LowHighInterviewer Bias

UnlimitedLimitedDelivery/Illustration

High to Uncontrollable**ControllableSample-selection Bias

InaccurateAccurateSampling

LowHighResearcher Control

HighMediumData Quality*

Labor-NonintensiveLabor-IntensiveEffort

QuickSlowTurnaround Time

LowHighCost

Online MethodOffline MethodDecision Factor

* Quality of data is defined here as ease and timeliness of data collection and entry.

** As the Internet becomes ubiquitous, this issue is becoming less important.

Market Research Types Market Research Types

Values

GOALS

STRUCTURE

CLIMATE

ENVIRONMENT

MarketplaceOther Teams

CultureCompetition

Pressures

Clarity Commitment

Reward System

Reporting Relationships

Feedback System

Behavior Norm

Decision Making

Competition

Enthusiasm

Stress

Trust

Involvement

Flexibility

Collaboration Mission Philosophy

Accountability

ORGANIZATIONAL EFFECTIVENESSORGANIZATIONAL EFFECTIVENESS


Design ExperienceDesign Experience Design ExperienceDesign Experience

http://www.interaction-ivrea.it/en/index.asp

http://www.monsterskate.com/

http://www.visualthesaurus.com/

http://www.hermanmiller.com/

http://www.generalmills.com/corporate/index.aspx

www.reflect.com

Design ExperienceDesign Experience

















http://www.reflect.com/

Online MarketingOnline Marketing

www.godaddy.com

http://smallbusiness.yahoo.com/merchant/

http://www.google.com/ads/

http://www.cj.com/

http://www.content.overture.com/d/

http://www.godaddy.com/









http://www.cj.com/

http://www.cj.com/

http://www.cj.com/

http://www.content.overture.com/d/

ebus 400 ecommerce joseph lewis aguirre. ebusiness strategy define ebusiness. describe the strategy...

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