final lecture
DESCRIPTION
FINAL LECTURE. Wrap up B2BX Review Relationship/service/fulfillment Course Review Future of the Internet. B2BX SUMMARY. Why Most Fail: Not Consider Relationship/Trust Long Term Contracts Dominate Problem is eProcurement/Partners -- PVN 3rd Party Fail Unless Wider CBP - PowerPoint PPT PresentationTRANSCRIPT
FINAL LECTURE
• Wrap up B2BX
• Review Relationship/service/fulfillment
• Course Review
• Future of the Internet
B2BX SUMMARY
• Why Most Fail:– Not Consider Relationship/Trust– Long Term Contracts Dominate– Problem is eProcurement/Partners -- PVN– 3rd Party Fail Unless Wider CBP– Manufacturer Power -- Consortia or In House– Not Able to Run with the Big Dogs -- Telcos, Manufacturers,
Oracle/IBM• Lesson
– Talk to Customers– Refine Understanding of Need and Relationships– CBP Not Only Technology
Relationship
• Life Time Value
• Trust -- confidence -- relationship
• CRM -- multichannel communication
• Segment -- focus to build depth
• Permissive Marketing -- promotion and price for loyalty
• Channel -- Service Function
• Evaluation -- Loyalty measures
SERVICE/FULFILLMENT
• Critical element in satisfaction/relationship
• Internet Can Help
– Tracking -- FedEX
– Dell -- same file as 800 and service
– Xerox/Sun -- self service
– eService -- priority, track, resolve, evaluate
• Channel Partner Software
• Link TQM to Internet
• Continuing Innovation -- product design
Understanding Customers
Consumer Behavior
B2C vs B2B
Relationship Building
Fulfillment
Service
Distribution
Channel
Logistics
Customer Acquisition
Advertising / PR / Selling
Pricing & Promotion
Strategy Formulation
Trust vs. Push
Product Design
Segmentation
Positioning
CONSUMER BEHAVIOR
• Concept/Theory
– Information Processing
– Behavioral Theory
• Tool
– Flow Chart
– Steps, Information, Decision Rules, Actions, Post Purchase
– Decision Unit, Multiple Participants
• Action
– Design site for Conversion and Retention
• Case
– Mother Nature: Acquisition and Retention
– Dell: Conversion
– Marketsoft: Sell to Pain
INITIATION
AWARE/LEARN
DECIDE
BUY
POST PURCHASE
•What starts process?
•Role of past experience?
•Friends make input?
•Sources of information; Friends / media / web/ store?
•Active search? How much time?
•Where shop – store / catalog / internet?
•What learn? Products / technology / user experience / trends?
•Compare products?
•Role of price / quality – evaluation criteria
•Need to touch and feel?
•Impact of brand and trust?
•How do buyers gain confidence?
•Security / privacy assurance needed?
•Need push to action – close sale
•Word of month to friend/community
•Relationship contract
Questions to Ask•Source of input.
•ADS/catalogs/email?
•Life time service?
•Delivers promised value
•Special offers
•Guarantees / refund policies?
TRUST
• Concept/Theory
– Psychology
– Trust Cues and Perception
• Tool -Virtual Advisor– Trust Cues
• Actions
– Decide on Push -- Trust Dimension
– Design in Trust -- Currency of the Internet
– Real or Virtual Advisors
– Alternative Methodologies
• Case
– InSite: Advisor
– Dell: Recommend / Learning
PushCommodity
Price most important
Deal prone segment
Need short term results
Full TrustHave best product
Have good design feedback
Buyers getting info anyway (infomediaries)
Trust key element
Expensive/complex products
Culture to sell our products only
Strong channel attitudes
Evolutionary stop
Have both price and relationship segments
How much trust should you have in your eBusiness strategy?
PRODUCT DESIGN
• Concept/Theory
– Build Process
• Tool
– Models / Market Research
– Information Acceleration
– Listen In
• Actions
– Prevent Failure
– Do Research and Budget
– Hire Modeling Capability
• Case
– Market Soft: eLeads and eOffers – suite
– Prime Response: Depth - Breadth
SEGMENTATION
• Concept/Theory– Taxonomy– Segment for Competitive Advantage
• Tool– Clustering– Demographic, Psychographic, Product– Data Mining
• Action– Decide Basis of Segmentation– Use Data and Analytic Services– Personalize
• Case– Mother Nature: Lifestyle – Data Mining– Dell: Sophisticated Buyers– MarketSoft: Marketing Manager– Prime Response: Vertical Markets– Terra Lycos
POSITIONING
• Concept/Theory– Psychology– Perception Simplicity
• Tool– Perceptual Map– Needs Seen by Customers– Preference Vectors
• Action Do Maps– Find Competitive Value Added– Do Vectors and Benefit Segmentation– Be First in But Position in Best Spot
• Case– InSite: Advisor– Market Soft: Suite– Prime Response: Campaign Management versus New Competition– Terra Lycos
ADVERTISING
• Concept– Psychology– Communication
• Tool– Copy Evaluation Framework
• Action– Advertising Goals– Multichannel -- Sales/PR/Telemarketing
• Case– SemiSales– Mother Nature -- Acquisition
– Dell -- Catalog (separate URL)
AD EVALUATION FORM
ATTENTION 1 2 3 4 5 6 7
BRAND ASSOCIATION 1 2 3 4 5 6 7
BRAND RECALL 1 2 3 4 5 6 7
PERCEPTION
INFORMATION 1 2 3 4 5 6 7
CBP/CSP 1 2 3 4 5 6 7
POSITIONING 1 2 3 4 5 6 7
EMOTION 1 2 3 4 5 6 7
ACTION – VISIT SITE / BUY 1 2 3 4 5 6 7
CREATIVITY 1 2 3 4 5 6 7
TARGET GROUP 1 2 3 4 5 6 7
OTHER 1 2 3 4 5 6 7
Extre
mely
Bad
Extre
mely
Goo
d
PRICE AND CHANNELS• Concept
– Economic Theory– Logistics
• Tool– Avoid Price War by Differentiation and Segmentation– Channel Function Map
• Action– Consider Incentive Site– Manufacturer Direct as Complement– B2BX lessons
• Case– Terra/Lycos
– SemiSales/ANX/Logistics.com
– Mother Nature and Kozmo price to profit
PALM.COM
BIG CHAINS (PD, I, IV, S)
PALM
(S)
DISTRIBUTOR (I, PD, IV)
WHOLESALE (I, PD, IV)
SMALL ELECTRONICS (I, IV, S)
MACS MERCHANDISE (I, IV, S)
CUSTOMER
eCOM SITES
(I,S)
RELATIONSHIP• Concept
– Psychology– Customer Satisfaction
• Tool– Trust Based Marketing– CRM
• Action– DO IT -- obvious– Trust/Franchise/Long Run– Service/Fulfill -- TQM
• Case– Mother Nature -- Life Time Value– Dell -- Premier Pages/Repeat -- E2E– InSite -- Advisor builds relationship– Prime Response -- Communicate– B2BX -- all about Relationships
FAILED ASSUMPTIONS
• People will Flock to the Internet to Buy• Self Service Sites are Enough for Conversion• The Internet Technology will Create a New Economy• B2BX Have to Work Because Can Match Information• Must Be First -- Claim High Ground• Worry About Business Model Later• Frictionless Prices -- Price Competition and Comparators• Established Companies are Not Innovative• VC Capital Will Keep Coming • Need Young New Thinking Tech Management• Buzz and PR are the Key to Success• Must Set Up Internet as Separate Company• Internet will Replace Existing Channels
LESSONS FROM FAILURES
• Must have Strong CBP to Attract and Communicate It • Design Site to Support and Complete Decision Process• Internet will Improve Exisiting Economy• B2BX is relationships -- Talk to Customer• Be Right and First• Start with Business Model and CBP• Differentiate and Segment for Success• When the Dinosaurs Dance the Grass gets Crushed• VC Fads Come and Go -- Bubbles Burst• Must Know Fundamentals of Management• Focus and Fulfill Promises to Customers and Investors• Structural Integration is Key to Success• Multichannel Marketing will dominate
FUTURE• Bright
– Solid growth B2C, B2B, Infrastructure– Drivers -- life cycle adoption, global, technology, trust
• Existing Players– Manufactures– Click and Mortar– Survivors Figure out ROI
• Multichannel– Communication -- customer experience– Distribution
• Innovation Opportunities– Start ups (VC will be back)– Existing Players– Fundamental Management Skill
BUILDING A NEW INTERNET STRATEGY
NEED RECOGNITION
•Introspection
•Customer Focus
•Customer Response
•Decision Process
TECHNOLOGY DEVELOPMENT
•Transfer in
•Internet Capability
COME BENEFIT PROPOSITION
•Trust vs. Push
•Segment
•Product Design
BUILDING A NEW INTERNET STRATEGY (cont’d)
BUILD RELATIONSHIP
•Trust
•Service
•Fulfillment
INNOVATE
PROFIT ABILITY – BUSINESS MODEL
•Venture Capital (internal / external)
•Customer Acquisition / Retention
•Advertising / PR / Selling
•Logistics / Channel
•Pricing