ECT 250: Survey of e-commerce technology

Marketing, sales, and promotion

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• An organization’s presence is the public image itconveys to its stakeholders.

• The stakeholders include customers, suppliers,employees, stockholders, neighbors, and thegeneral public.

• Physical world: Create a store, factory, warehouseor office building and/or engage in advertising.

• On the Web: Create a site, which may be the onlypoint of contact for stakeholders, and/or engagein advertising.

Building a presence

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• Attracting visitors to the site• Making the site sticky so that visitors stay• Convincing visitors to follow the site’s links to

obtain information• Creating an image consistent with the desired

image of the organization• Reinforcing positive images that the visitor may

already have about the organization

Web presence goals

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• Commercial organizations– Toyota– Metra

• Museums– Art Institute– Field Museum– Museum of Science and Industry

Examples

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• History, statement of objectives, mission statement• Information about products or services• Financial information• A way to communicate with the organization

+ Usability matters+ Communication should be two-way+ Failure will result in a loss of competitiveness

How can the design of the site be done effectively?

Elements of a Web site

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• Learning about products and services• Buying products and services• Obtaining information about warranties or service

for previously purchased products• Gaining general information about the organization• Obtaining information for the purposes of investing

or granting credit• Identifying the people who manage the organization• Obtaining contact information for an individual

Purposes for visiting a site

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• Varying visitor needs• Differing experience levels• Technological issues

– Data transmission speeds– Web browsers– Plug-in software

Difficulties in delivering content

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• Convey an integrated image• Provide easily accessible facts both about the

firm and any products or services it may offer• Allow visitors to experience the site in a variety

of ways and at different levels• Provide meaningful, responsive, reliable, two-

way communication• Sustain visitor attention without detracting from

the purpose and image of the site• Find ways to encourage return visits

Strategies

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• Design the site around how visitors will navigatethe site, not around the organization’s structure

• Allow quick access to the site’s information• Avoid using inflated marketing statements• Avoid using business jargon• Allow visitors with older browsers and slower

connections to access the site -- this may meanbuilding several versions of the site

• Be consistent in the use of design features andcolors

Usability

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• Make sure that navigation controls are clearlylabeled or otherwise recognizable

• Test text visibility on smaller monitors• Check that color combinations do not impair

viewing clarity for the colorblind

Positive examples: Webby Awards(See the Monterey Bay Aquarium)Negative examples: Mud Brick Awards

Usability

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• Personal contact/prospectingEmployees individually search for, qualify, andcontact potential customers.

• Mass media approachAdvertising and promotional material is createdand then distributed via:– Television or radio– Newspapers or magazines– Highway billboards– Mailings

Finding and reaching customers

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• One-to-many– Mass media– Seller sends out carefully produced messages

to a large audience.– Seller is active; buyer is passive.

• One-to-one– Personal contact– Salesperson interacts with customer directly.– Trust building is important.– Both seller and buyer participate actively.

Types of interactions

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• Many-to-one Many active potential customers seek out information from resources produced by the seller. Example: Book review sites, fan sites

• One-to-oneE-mail contact with a seller

• Many-to-manyNewsgroups and interactive Web sites

• Primary characteristic: The buyer is active andcontrols the length, depth, and scope of thesearch.

The Web

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• Mass media efforts are measured by estimates ofaudience size, circulation, or number of addresses.

• Money spent on mass media is in dollars per eachthousand people in the estimated audience.

• This pricing metric is called cost per thousand andis often abbreviated CPM.

Effectiveness of mass media

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As mass media lost its effectiveness (new and improved!), one approach was to divide a poolof potential customers into segments. This iscalled market segmentation.

Targeting very small market segments is calledmicromarketing. Micromarketing is expensiveusing traditional means, but more cost effectiveon the Web.

Micromarketing

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• A visit occurs when a visitor requests a page.Immediate downloads of new pages are oftencounted as part of the same visit.

• A trial visit is the first one; subsequent onesare called repeat visits.

• Each page loaded is a page view.• If the page contains an ad it is an ad view.• An impression refers to each banner ad load.• If a visitor clicks a banner, it is a click-through.• One CPM for banner ads is 1000 impressions.• Charges range from $1 to $100 CPM.

Web-specific measures

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The Web has:• Better effectiveness than mass media• More trust than mass media• Lower cost than personal contact• Less trust than personal contact It is believed that a move toward the sideof personal contact is more effective.• Increase the trust level• Increase the personalization

Comparisons

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Technology-enabled relationship management iswhen a firm obtains detailed information aboutcustomer preferences, needs, behavior and buyingpatterns and uses that information to:• set prices• negotiate terms• tailor promotions• add product features• customize its relationship with the customer.

Technology and marketing

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• A known and respected brand presents a powerfulstatement about quality, value, and other desiredqualities to potential customers.

• Branded elements are easier to promote.• The key elements of branding are:

– Differentiation– Relevance– Perceived value

• This makes branding for commodity products likesalt or plywood more difficult.

Branding

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A characteristic that sets the product apart fromsimilar products.

Examples:• Ivory soap: “It floats”• Dove soap: “1/4 moisturizing creme”• Palmolive dish soap: “Mild on your hands”• Dawn dish soap: “Takes grease out of your way”• Antibacterial soaps

Differentiation

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The degree to which the product offer utility to apotential customer. The customer must be able tosee themselves purchasing and using the product.

Examples:• Cadillac• Hyundai• Minivans

Relevance

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The product must have some identified value.

Products can be different than others and peoplecan see themselves using it, but it may not havevalues that they desire.

Example: Subway sandwich ads comparing fat values of their product to those found in BigMacs.

Perceived value

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Ted Leonhardt: “Brand is an emotional shortcutbetween a company and its customer”

Emotional appeals work well on television, radio,billboards, and print media since the viewer is apassive recipient of information.

On the Web it is easy to click away from emotionalappeals.

Emotional branding

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Rational branding offers to help Web users in someway in exchange for their viewing an ad. Functionalassistance replaces emotional appeals.

Examples:• Free e-mail services such as HotMail• Free Web hosting such as HyperMart• ShopSmart! program from Mastercard

Rational branding

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• Leverage success in one area into another area.Example: Yahoo!

• Affiliate marketing: Descriptions, reviews or otherinformation about a product on one site are linkedto pages on another site allowing you to purchasethat item.Example: Amazon.com

• Serving as a market intermediary between buyersand sellers.Example: Wedding Channel

Other branding strategies

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• Transferring existing brands to the Web or usingthe Web to maintain an existing brand is easierand less expensive than creating a new brand.Example: Catalog sales companies

• Attempting to create a brand on the Web mayinvolve spending on traditional mass mediasuch as television, print, and radio.Example: In 1998 Amazon.com spent $133million and BarnesandNoble.com spent $70million, much of it on traditional advertising.

Costs of branding

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• Selling goods and servicesBased on the mail order catalog business

• Selling information or other digital contentCan be used to expand markets and cut costs

• Advertising supportedUsed by American network television

• Advertising-subscription mixedSupported via both fees and advertising

• Fee-for-transactionThe use of information filtering for profit

Business models for the Web

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• Used for apparel, computers, electronics, and gifts.• The printed catalog is replaced or supplemented by

information on the Web site.• Customers may purchase via phone. (Why?)• Fabric swatches are usually available. (Why?)• Examples:

– Dell computers: Flexibility– Lands’ End: Overstocks– FTD Florists: Traditional advertising– Buy.com: Discounting

Selling goods and services

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The Web is an efficient means for selling information.• Legal research: Lexis Publishing• Digital copies of documents: ProQuest• Electronic versions of journals: ACM Digital Library• Adult entertainment• Reference materials: Encyclopedia Britannica

Selling digital content

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The success of Web advertising has been hamperedby two major problems:• There is no consensus on how to measure and

charge for site visitor views.Examples: Number of visitors, number of uniquevisitors, number of click-throughs.

• Very few Web sites have sufficient number of hitsto interest large advertisers.Targeted advertising requires that demographicsbe collected, a sensitive privacy issue.

One success: Employment advertising

Advertising supported

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• Subscribers are subject to less advertising and havegreater access to the resources of the site.

• Popular with online newspapers.• Examples

– The New York Times– The Wall Street Journal– Reuters– ESPN

Advertising-subscription mixed

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• Value-added services are sold in exchange for acommission.

• Travel agencies– Travelocity– Expedia

• Automobile sales– Autobytel: An example of disintermediation

• Stockbrokers• Insurance companies

Fee-for-transaction