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© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Internet Marketing & e-CommerceWard HansonKirthi Kalyanam
Requests for permission to copy any part of the material should be addressed to:
PERMISSIONS DEPARTMENTTHOMSON BUSINESS and ECONOMICS
5109 Natorp BoulevardMason, OH 45040
Phone: (800) 423-0563
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Part Two: Chapter 11Innovation and the Net
“Nothing endures but change.”
Heraclitus (540-480 BC)
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• Traditional business rivalries have been bitter, enduring battles
• Coke vs. Pepsi
on the front lines
of the Cold War
SOURCE: ©Bettman/CORBIS: Vice President Richard Nixon and Soviet Premier Khrushchev share a Pepsi, 1959
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• In high-tech markets, rivalries burn bright but fast – IBM vs. Apple in personal computers – Digital vs. Data General in minicomputers
• Most prominently: the Browser Wars– Microsoft vs. Netscape in late 1990s– Now, Microsoft vs. upstart(暴發戶的 )Firefox
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
☆ Competition and the Need for Speed
• On “Internet Time” marketers face strain 拉緊 of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances– Market leaders can set industry or product
standards and gain dominance
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Competition and the Need for Speed
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Standards Marketing
• Open Standards: Formed by process of official debate and consensus(一致 )
– Widespread adoption and innovation, but also greater competition
• Example: WiFi
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Standards Marketing
• Open Standards: Formed by process of official debate and consensus– Widespread adoption and innovation, but
also greater competition• Example: WiFi
• De Facto (事實上的 )Standards: Based on market acceptance, but proprietary (專屬的 )
– Harder to establish, but more profitable• Example: Xbox and Playstation
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Standards Marketing
Growth in certified Wi-Fi product types, according to the Wi-Fi Alliance
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Understanding the Idea Funnel 漏斗– Dual goals of identifying unmet needs and
weeding 雜草 out costly ideas early in process
– Few ideas make it through the funnel, but process still can be costly
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
The Idea Funnel for event-driven new products
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Understanding the Idea Funnel– Dual goals of identifying unmet needs and
weeding out costly ideas early in process– Few ideas make it through the funnel, but
process still can be costly
• Improving the Idea Funnel– Online market research screens concepts– Virtual setting facilitates consumer-
assisted design
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Not all products fit easily into preexisting product categories
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Not all products fit easily into preexisting product categories
• Simulation and digital environments offer realistic market research settings
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Not all products fit easily into preexisting product categories
• Simulation and digital environments offer realistic market research settings
• Information Acceleration (IA)– Places consumer in virtual buying
environments– Can replace expensive prototypes, spot
importance of valuable new features
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Modular Product Development
• Products divided into subsystems for more focused development
– Visible design rules: describe how different modules fit together
– Hidden design parameters: offer flexibility– One example: Wikipedia
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Modular Product Development
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Early feedback and rapid release – Key role of email for fast, meaningful
consumer input
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Early feedback and rapid release – Key role of email for fast, meaningful
consumer input– Prerelease of products for swift
prototyping and testing
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Early feedback and rapid release – Key role of email for fast, meaningful
consumer input– Prerelease of products for swift
prototyping and testing• Alpha release – trusted lead users, such as
company employees
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Early feedback and rapid release – Key role of email for fast, meaningful
consumer input– Prerelease of products for swift
prototyping and testing• Alpha release – trusted lead users, such as
company employees• Beta release – wider public sampling at lower
price or for free
© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation
Product Development Online
• Early feedback and rapid release – Key role of email for fast, meaningful
consumer input– Prerelease of products for swift
prototyping and testing• Alpha release – trusted lead users, such as
company employees• Beta release – wider public sampling at lower
price or for free
– Speed to market drives profitability