1. 1. E-Commerce Final Exam ReviewThis is to really help me
2. 2. Customer RelationshipManagement
3. 3. Customer Relationship Management In e-business context, is the use of technologyto establish, develop, maintain and optimizerelationships with customers byunderstanding customers needs and desires. Marketing could use CRM to answer thefollowing questions: Who are our customers? What do these customers really want from us? What advertising methods are most effective? Which channels are likely to be most successful ingaining repeat business?
4. 4. Up-Selling and Cross-Selling Sales will benefit from CRM by providingsales representatives with better informationthat they can use to up-sell or cross-sellproducts and services: Up-selling: is the process of encouragingcustomers to purchase higher-priced products orservices. Cross-selling: is encouraging customers topurchase complementary or additional products orservices from the firm.
5. 5. Process of CRM Data capture Data is captured andstored : Data warehouse: a centraldata repository utilized toorganize, store, analyze,and report upon data fordecision-making purposes. Data mart: a data repositorythat is dedicated to specificuser groups and is oftenintegrated into the datawarehouse. Data Analysis Also called CustomerIntelligence Customer intelligence is theuse of CRM applications toexplore data to identifyrelevant customerinformation. Strategic Decision Making Data analysis oftenidentifies areas requiringchange e.g. cost-reductioninitiatives or product orservice delivery Implementation This may involve changein the methods by whichinformation is delivered tocustomers, modification ofmarketing campaigns,revisions to the onlinestore, or numerous otherpossibilities.
6. 6. CRM Goals The overall goal of CRM should be to improvecustomer relationships by providing better service,improved sales efforts, and reduced marketing costs. Marketing goals Improved marketing planning, sales forecasting,competitor intelligence, trend analysis and performanceanalysis. Sales goals Sales Force Automation (SFA) is the process ofsimplifying sales in the field and the integration of salesactivity into the corporate information structure. Some of the leading CRM application providers haveevolved from SFA providers in the past. Service goals Customer Service Representatives have the capability tobecome effective sales contacts through CRMtechnology.
7. 7. Concerns of CRM Political and Cultural Concerns Success requires strong buy-in from management. Ownership of customer touch-points is always anissue. Changes with employees adjusting to their newresponsibilities, compensation management andother cultural changes need to be well attended to. Technological Concerns Need to use middleware and EAI tools for properintegration Integration of numerous touch points including useof computer telephony integration (CTI). CTI allows telephone systems to integrate with computersystems to aid in customer service and data capture
8. 8. Implementation of CRM Planning Process Redesign Integration Education Analysis Reporting Analyzing Predicting Change implementation
9. 9. Business IntelligenceBI is about providing the right data at the righttime to the right people so that they can take theright decisions Nic Smith with Microsoft BI Solutions Marketing
10. 10. What is BI? BI enables businesses to capture, analyze,interpret, and report on data thus creatingvaluable information for the enterprise. The concepts of BI have emerged from data-miningtechniques, decision support systems,data warehousing, knowledge management andother business tools that have been used foryears.
11. 11. Benefits of BI Some of the key benefits of business intelligenceinclude: continuous rather than periodic management-opportunityto manage based on a continuous flow ofinformation that is current and exact information can be correlated with other data at anytime, all the time. improved management of diverse businessfunctions- including marketing, HR, and finance/at thesame time. improved collaboration- enables different divisions toshare common data resources. can produce a collaborative work culture amongemployees. improved understanding of customers- reactions ofcustomers to prices, products, and promotions. can lead to action plans to meet or exceed their
12. 12. BI Functions Data Integration and Organization Internal data sources include ERP systems, CRM systems,e-procurement systems, legacy systems, and call centres. External data sources include supply-chain partners,industry information regarding competitors, or other externalinformation such as economic indicators BI applications integrate all data sources in a manneroptimized for reporting and analysis. Data warehouses exists outside of online transaction-processing(OLTP) system or ERP, and is dedicated tothe analytical aspects of the organization. OLTP is a program that facilitates and manages transaction-orientedapplications, typically for data entry and retrievaltransactions across a network. Data in a BI system is structured around metadata. Metadata is a structured definition of data; it is data about data The integration of data occurs through a number ofmethods, as the data warehouse consolidates data fromnumerous sources using the process of Extraction,Transformation and Loading (ETL). ETL is the process of gathering data from a system such as anERP system, which can be simplified and stored within the datawarehouse.
13. 13. BI Functions Contd Data Analysis Levels of data analysis may range from basic reportingupon pre-configured data cubes to ad-hoc queries ordata mining. Data cubes are multi-dimensional database structures that allow quickdrill-down and reformatting of data. BI allows users to have access to reports andinformation that previously resided only in theinformation systems group. Data analysis and reporting range from standardreports through to data mining. Standard reports Ad-hoc query. The ability for users to generate any type of query orreport they wish within the system. OLAP Analysis. Provides the ability for users to perform detailed,summary or trend analysis on data and allows for drill-down into thatdata. Data mining. The analysis of data for relationships that may not havepreviously been known.
14. 14. BI Functions Contd Data Integration and Organization Internal data sources include ERP systems, CRMsystems, eprocurement systems, legacy systems,and call centres. External data sources include supply-chainpartners, industry information regardingcompetitors, or other external information such aseconomic indicators BI applications integrate all data sources in amanner optimized for reporting and analysis.
15. 15. BI Performance Analysis Key Performance Indicators important standards that a company measures itsperformance against in relation to goals, competitors, and theindustry. Examples of KPIs include market share percentages, revenuegrowth, and quality deviations. Balanced Scorecard Multi-dimensional measurement tool aimed at capturing avariety of performance indicators including performancemetrics on customers, internal processes, learning andgrowth, and financial performance. Dissemination communicating on a timely basis Collaboration share info with entire supply chain
16. 16. Technologies of BI Core technologies. Technologies that provide the basic infrastructurefor business intelligence: such as the use ofrelational databases. A relational database is one that uses numerous tables and canrelate fields or tables within the database to one another, and caneasily be reorganized or extended. Enabling technologies. Technologies that provide the ability of the BIapplications to interact and perform tasks within thecore technologies, such as the data warehouse.E.g. OLAP, SQL, XML BI Solutions Technologies that provide the reporting and analysisof data at the client or user end of the process.
17. 17. Implementing BI Planning phase Critical SuccessFactors: Ease of use Scalability Flexibility Performance Data Quality Security Architectural Design Database design System architecture Execution Top managementcommitment throughoutthe project to ensureadequate resources arededicated and to gainemployee buy-in. Team approach to theentire project isnecessary to allowdepartmental input andevaluation of the projectplanning andimplementation. make sure the systemcovers the goals set outin the planning stage Planning must be verydetailed and wellthought out Levels of detail requiredneed to be considered
18. 18. Implementing BI Contd Maintenance and Change Management. Design and implementation of a BI system must berevised as new user requirements and newtechnologies come along. As technologies such as ERP systems, databases,and the internet continue to evolve, BI will need tokeep pace if it is to continue to provide value to thefirm. Flexible systems are needed to enable the BIimplementation to adapt as the organizationsneeds change. The companys BI systems will need to be modifiedto incorporate changes quickly and effectively.
19. 19. E-Marketing & E-Advertising
20. 20. What is E-Marketing? Emarketing: Utilization of the internet and electronic technologiesto assist in the creation, implementation andevaluation of marketing strategy Online research, internet advertising, onlineconsumer behaviour Closely related to CRM and BI Useful in online branding. A brand is a name, term, sign, symbol, design, or acombination of these attributes that is used to differentiate aproduct or service from its competitors. The objective of a brand is to: Strengthen brand name Increase net traffic Build customer loyalty Encourage repeat purchases
21. 21. Strategy Creation Development of an e-marketing strategy requires ananalysis of competition and other environmentalfactors. Research process should provide management withthe information necessary to define the segments intheir market. A market segment is a group of customers who sharecommon needs and/or characteristics the selling firm may beable to satisfy. Online Research The internet offers a real opportunity to carry outresearch to develop marketing strategies. An abundance of information is available dealing withdemographic trends, social and cultural climates,competition, industry statistics, technological innovation,economics, legal data, and political environments. Secondary data are data that have not been developedspecifically for the task at hand, but that may be usefulfor decision making.
22. 22. Strategy Creation Contd Methods of collecting primary data: Surveys Experiments Focus Groups Data collection methods provide data for usein: User behaviour analysis click-stream analysis Cookies user profiles Internet usage Shopping Patterns Email usage Advertising planning. Strategy creation shouldconclude with a comprehensive e-marketingplan.
23. 23. Implementation Website Design Brochureware phase. An early stage of the internets development, wherecommercial enterprises primarily put existing marketingbrochures in digital format Interactive phase. A stage of the internets development when websites beganto allow two-way communication through e-mail and webforms Personalization phase. A stage in the internets development when websites beganto develop one-to-one marketing techniques through theuse of cookies and other tracking tools. Personalizationincreases site stickiness. Obtainan good domain name:The internet offers the opportunity for businesses to
24. 24. Online Advertising The evolution of website design and onlinetechnologies has led to improvements in thecapabilities for online advertising. Banner ads are graphical images, which mayinclude interactive applications, that appearon websites to attract users to click-through toother websites or sections of the presentwebsite. Buttons are similar to banners and could beused to submit data on web-pages or as ameans of clicking through to anotherwebpage.
25. 25. Online Advertising Contd The cost of banner advertising varies; depending onthe location of the advertisement, the hostcompany, and any barter deals that are in place. Costs of advertising are often measured in cost perthousand (CPM) impressions. Charges are set for each thousand users who visitthe site or see an advertisement. Interstitials are web-based windows that pop up asa user enters an internet site, aiming to catch theusers attention. Also known as daughter windows, commonlypromote a specific product of a site or aim to gathersurvey data. Superstitials: Internet advertisement spots thatload into a users browser while the internetconnection is idle and then launch as a daughterwindow showing a short, TV-like advertisement.
26. 26. Online Advertising Contd Email is an important vehicle for corporateadvertising and marketing campaigns, but itshould be used very carefully. Interactive tools: Interactive ads provide advertisers with numerouscapabilities such as branding, interactive selling,and other advertising techniques in numerousformats. Spam is the name given to unsolicited email sentin an attempt to gain commercial advantage. Therising problem with spam was created by therelative ease of gathering large numbers of emailaddresses over the internet through newsgroups,chat sites, and other websites.
27. 27. Online Advertising Contd Affiliate Programs These are agreements between website operators wherebydelivery of customers or prospective customers to anothercompanys site results in compensation becoming due. Partnerships Can be created to increase traffic or to target specific productsand services to a market segment. Promotions Sales Promotion tools Points programs PC Financial Coupons Rogers, Staples Free samples/trials Globeinvestor.com Online focus groups by invitation Contests/sweepstakes - Orbitz Public Relations This is the activity of creating goodwill or positive company image.
28. 28. Digitized Word of Mouth & Pricing Mechanisms for recording feedback about ecommercesites, products and market participants, and sharing suchfeedback with others: The internet offers important new possibilities for digitizedword of mouth advertising and promotion, and for buildingtrust in ecommerce sites through formal online feedbackmechanisms. Marketers have started to pay bloggers to promote certainproducts in their blogs, thereby creating word of mouth forthose products. Pricing The internet offers a new medium within businesses mustestablish pricing policies that capture potential sales andmaximize profits. A solid pricing strategy can lead to substantially improvedprofitability and market share.
29. 29. Metrics
30. 30. What Are Metrics? What areBenefits? Metrics are used to measure e-businessperformance range from the number ofwebsite hits, to the proportion of customervisits leading to sales, and ultimatelyprofitability. Benefits of Metrics: Improving understanding of business model Helping to communicate corporate strategy Motivating performance Analyzing actual performance Increasing accountability
31. 31. Metrics & Business Objectives Maximize Traffic Maximize Sales Increase Market Share Minimize Transaction Costs Maximize Return on Investment Balance Multiple Competing/ConflictingObjectives
32. 32. Limitations of Metrics Metrics can quickly become irrelevant ormisleading when strategies change rapidly. Measurement can be costly, consuming moneyand the time of key personnel. Online measurements are vulnerable totampering by insiders or outsiders, hence datasources require strict security. Acceptance due to differences between softmetrics and hard data. Some metrics requiresubjectivity.
33. 33. What to Measure? Traffic Metrics General measurements of sites activity Hits: A request of an element (page, graphics element etc.)from the Web Server Page Views: A full page request by a single user, includingall pages elements Ad Views, Ad Impressions or Banner Impressions: # oftimes a page with a banner ad is viewed. Visit/User Session: A stream of page requests from asingle user constitutes a visit. Unique Visitors: Non-repeating visitors in a specifictimeframe
34. 34. What to Measure Contd Marketing Metrics Referrer Analysis Traffic Breakdown by Source (who is visiting?) Log file contains information about last visited URL Top referrer URLs indicate where traffic is coming from Useful to measure effectiveness of advertisingcampaigns In case of search engines, URL can contain searchkeywords as parameters Location Analysis Breakdown by geographical origin Customer Profile Analysis. Visitors/ shoppers breakdown by profile attribute Explicit: Information surrendered by user when subscribing, making apurchase, completing a survey form:Name, Address, Marital Status Implicit: Information inferred from the users actions and/or purchasehistory: Favorite Color, Age group, Preferred Topics.
35. 35. What to Measure Contd Financial Metrics Revenues Sales revenue from products and services, advertisingrevenue, affiliate commission and database marketing Expenses Fixed costs like infrastructure and operating costs Operating costs like site maintenance,advertising/promotion, marketing and operations Marketing costs Returns on Investment
36. 36. What to Measure Contd Other Performance Metrics Internal and external (partners) e-businessmetrics Multi-dimensional scorecards Internal Scorecard External Scorecard. Identifies criteria in atleast four categories: Ease of Use: demonstrations of functionality; simplicity;design and navigation. Customer Confidence: availability, depth, and breadth ofcustomer service options. Online Resources: ability to look up account information foreach product. Relationship Services: online help, tutorials, glossary, andFAQs.
37. 37. Sources of Information Click-Stream Analysis A method by which a users path through a website can be tracked andanalyzed Cookies Small text files stored by a website on individual computers that allow thesite to track the movements of a visitor. Electronic Wallets A file that securely stores a users information, such as name, address,credit card number, and ship-to-address, for frequent use in executingecommerce transactions. Web Server log Files Files stored on a web server containing details of every action that hasoccurred. Log file analysis is the process of analyzing information regarding themovements of users throughout a site based upon data captured in serverlog files. Web Bugs (clear GIFs) Image files embedded into a webpage that can track user movementswithout the user knowing.
38. 38. Privacy, Legal & Taxation Issues
39. 39. What are some of the issues? Legal and tax issues of Canada and othercountries were not designed to handleecommerce issues. Napster brought ecommerce (intellectualproperty) issues to the fore. Technology improvements have given birth tointernet privacy concerns Other issues include jurisdictional, e-contract ,enforcement, liability and unfair competition
40. 40. Internet Privacy Medical Information Personal information can easily gathered on the internet Increasing privacy concerns have led to the development oflegislation within Canada and abroad The Personal Information Protection and Electronic DocumentsAct (PIPEDA) is a Canadian legislation that has provided privacyprotection for personal information since coming into full effecton January 1, 2004. Major component of PIPEDA are: Legal basis for electronic service delivery Recognizes secure electronic signatures Clarifies status of electronic records Recognizes the status of electronic statutes and regulations Amends related legislation, e.g. evidence act Protect any personal information that is collected PIPEDA is designed to protect personal information.
41. 41. Internet Privacy Contd Personal information: is defined within the act asinformation that could identify an individual and couldpotentially be used to discriminate against that personor invade his or her privacy, such as: name, age, weight, height medical records income, purchases, and spending habits race, ethnic origin, and colour blood type, DNA code, fingerprints marital status and religion education home address and phone number Ensure that individuals privacy is respected and notused inappropriately. Misuse can lead to inappropriate business practices,identity theft, and discrimination, and is therefore ofcritical importance.
42. 42. Intellectual Property Intellectual property. This is a creation of the mind such as aninvention, artistic work, symbol, name, image, or design used incommerce. Made up primarily of: Metatags Trademarks belong to specific companies, not free to beused. Trademark: A distinguishable feature such as a word, symbol,picture, logo, or design that can be used to identify the products orservices of a specific individual or organization. Copyrights- a category of intellectual property that includesliterary and artistic works such as books, poems, films, andmusical works. The major means by which copyright can be violated includeplagiarism, piracy, bootlegging, and counterfeiting. Results inthe inappropriate use of anothers work for commercial or otherpurposes. Digital Music Sharing Creation of a technology that could easily allow millions of individuals toshare and distribute copyrighted music files over the internet. Collectives an organization that administers the common rights of several copyrightowners The collective acts for its members to grant permission to use themembers works, and sets the conditions for that use. Example: a ring tone is sufficient to warrant protection under copyright.
43. 43. Intellectual Property Contd Media Neutrality Deep Linking: The creation of a link on one website to aspecific part or page (not the homepage) of another website. Website framing: The use of HTML and browser technology tosplit a page into segments, which is useful for facilitating ease ofuse and building impressive websites. Patents: documents issued by the government that grant aninventor or patent owner the right to make and use an invention for20 years after the patent is filed. The issue of patents has recently become a concern forecommerce and e-business because processes are coveredas inventions that may be protected by patents. One of the most recognized examples of a business methodpatent is Amazon.coms 1-Click process of its online purchasingsystem, which allows users to easily make purchases byspeeding up the checkout process. Other companies may be sued if they set up the same type ofonline check-out system.
44. 44. E-Contracts Legally binding contracts require 3 parts offer acceptance consideration ($ exchanged) These three parts are challenging to confirm when parts ofthe process are done digitally e-contracts More and more e-retailers require users to read the termsof a contract and click on I agree before they can go tonext step Assents of Users Shrink-wrap agreements refer to the practice ofindicating on the outside of shrink-wrapped softwarepackaging that the use of the software product is subjectto license terms. Click-wrap agreements are the online equivalent of thestandard agreements included within the shrink-wrap ofsoftware bought in physical locations.
45. 45. Taxation Taxation in the global economy can be verycomplex. Where a business is located for tax purposes-knownas permanent establishment inCanada or physical presence in the UnitedStates. The permanent establishment of an online companycan be very difficult to determine, since it could be: the location of the vendors head office the location of the websites ISP the physical location of the server or some other location such as the branch closest tothe customer. Results in extreme difficulties in determiningthe appropriateness of collecting incometaxes, and proper sales taxes.
46. 46. E-Commerce & Small Business
47. 47. Small Business Intro The potential to reach new markets, reduce costsof operations and compete against largercompetitors brought the potential of ecommerceto the forefront in the 1990s and early 2000s. Much of the job growth in Canada can beattributed to small businesses Larger organizations and many high growth firmshave shifted their focus from the B2C market tothe B2B market, and left a massive opportunityfor the right individuals wishing to launchebusinesses in the B2C arena.
48. 48. Opportunities Marketing Depending on business can be critical Customer support Technology makes our business available 24/7 One of the main tools that will reduce routine questions over thephone is a frequently asked questions (FAQ) page on the web. Market intelligence As market expands need additional details Procurement Small businesses save money on procurement of virtually everythingthey purchase, turning those savings into lower prices and increasedmarket share. Operations Simplify processes electronically Sales transactions Expanding the market Public relations Reach your audience at reasonable cost
49. 49. Opportunities Contd Employee Retention and Morale Online training programs boost knowledge/ moreproductive. Use of e-business technologies help employees feelchallenged in a small company. Potential Benefits access to new markets improved customer responsiveness increased flexibility improved profits increased innovation better managed resources
50. 50. Challenges Technological Most small e-businesseswill lack internal ITexpertise Need to ensure adequatesupport available eitherinternally or externally Valuable for internalexpertise to be gainedthrough training wherepossible Financial Large web strategies andother IT initiatives can bevery costly Need to determine trueneeds not just the wants Develop systems that canbe scaled up and expanded Organizational Small businesses will alsoface change managementissues Owner/manager needs to bepromoter ofe-business Provide adequate trainingand support Operational Volume of data can be smalland yield limited results fromanalysis - need to determinecase by case Ability to integrate can belimited if back office notintegrated Support for growth must beavailable