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MAR 6936-902

E-Commerce Marketing

Fall 2002—Tampa--MBAFraming Market OpportunityRich GonzalezSeptember 12, 2002 (Week 3)

Draft

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For Site/Model Evaluation # 1 Thiboult # 3 Heather # 4 Elio # 5 Mike C. Today:

Please peruse Nielsen & Tahir book:Homepage Usability

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URLs http://www.boingo.com/ ebay.com www.paypal.com www.carpoint.com wsj.com

www.winsupersite.com/showcase/tabletpc_preview.asp

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Agenda September 12, 2002

WSJ Online Demo Customer Orientation Porter Market Opportunity Business Models—Preview ebay.com Demo Due For September 19 PC Tablet???

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For Today: September 12 Chapter 4

Purchase the WSJ Online 60 Day Demo

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WSJ Online Demo

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For September 19

Blown to Bitsp.1 - 97

Weekly Analysis Paper # 1

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Weekly Analysis Paper # 1 Subject: Blown To Bits Length: 1.5 Pages -------125 points Due on September 19 ------Hard Date Subjects: (use bolded headings)

1. Information Asymmetries2. Deconstruction3. Disintermediation

4. You Pick One (i.e., 5 forces, killer app, standards, etc.

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Moore’s Law

# of transistors

Speed

Time1965—Double every 12 months

1975---Double every 24 months-----Sometimes 18 months

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Metcalfe’s Law

def: values the utility of a network as the square of its users

Morse CodeTelephone systemEthernet protocolsInternet protocols

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Metcalfe’s LawNet Utility

Nodes

Critical Mass

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802.11b Update Wi-Fi

COBA

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Wi-Fi Hot Spots—Offices, Cafes, Parks

4 Million Using Now, Worldwide Estimate: 45 Million Business Laptops--

2004 Estimate: 4.2 Million Households Have

Wireless-- 2004

Max Speed = 11,000 K

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Bandwith:Consumer Context Dialup ISDN Cable DSL T1 802.11b 3G

56 K 128 K 150 to 300 K 100 to 500 K 1400 K 300 to 500 K 144 K

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Wi-Fi Boingo Wireless

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Porter’s Competitive Business Model

Intraindustry Rivalry

New Entrants

BP of Sellers

Substitutes

BP of Buyers

Which is affected?

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Marketing Concept What is it?

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Customer Orientation A philosophy incorporating the

marketing concept that emphasizes first identifying unmet needs, then satisfying them.

Marketing Mantra:

Know your customer(s).

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Customer Oriented?

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Customer Orientation Metrics:

Customer AcquisitionMarket ShareCustomer SatisfactionCustomer Profitability

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Customer Satisfaction Definition?

Performance - Expectations =Customer Customer SatSat

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Quote and Revision “There is only one boss: the customer.

And he can fire everybody in the company...by spending his money somewhere else.” Sam Walton

“Only one person controls the mouse: the customer. And he can fire everybody in the company...by clicking and going to some other site to spend his money.” R. Gonzalez

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Customer Decision Process Origination (Recognize Problem) Information Gathering Evaluation Purchase Decision Postpurchase Results

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1 to 1 Marketing

Personalization

Customization

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3 Fundamental Business Shifts

1. Most transactions—B2C, B2B, C2C and C2C will become self-service digital transactions.

2. Customer service will become the primary value-added function in every business. Personal consultancy not routine services.

3. The pace of transactions and customer needs for customer service will force firms to adopt digital processes---for survival.

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Business Model Value Proposition What you give and what you get Value and Revenues

“How will the business win?”

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Business Model 1. Value Proposition or Target Cluster 2. A Marketspace Offering 3. Unique and Defensible Resource

System 4. Financial Model

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RAF vs. FRA Ready, Aim, Fire!

Fire, Ready, Aim

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eBay What is it? Why is it important? Who are the customers? What are the effects?

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The C2C Example

Pierre Omidyar Pez Dispensers New Marketspace

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ebay.com Mission: “Help anyone trade practically

anything on earth.”

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ebay.com How do they do this?

1. Technology 2. Customer Orientation 3. Information Usage 4. Value 5. Community 6. Fun

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Demo of ebay.com

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The B2C Example

An Intermediary A New Idea—Innovative IRACS

A Bank?

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Basic Components Criteria:

Business ModelTechnologyMissionTarget MarketCustomer Benefits

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PayPal.com How do they do this?

1. 2. 3. 4. 5.

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Demo of PayPal.com

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Table 1–1: Four Categories of E-Commerce

B2B B2B C2B C2B

B2C B2C C2C C2C

Business Consumers

Business originating from . . . B

usi

nes

s C

on

sum

ers

An

d s

elli

ng

to

. .

.

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Framework for MO: Microsoft CarPoint Example

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 a 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, the Microsoft 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 used 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

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Exhibit 1–6: A Flow Diagram of the Strategic Responsibilities

Set VisionSet Vision

Establish GoalsEstablish Goals

Formulate Strategy

Formulate Strategy

Drive Implementation

Drive Implementation

Be Accountablefor Performance

Be Accountablefor Performance

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Online Retailing Fact 65% of (virtual) shopping carts are

abandoned before checkout

Why?

You have to find out why potential customers are a) Leaving your “store”b) Not trying your “store”

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End Here