MAR 4933001

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MAR 4933-001

• E-Commerce Marketing
• Summer 2003
• E-Commerce and Customers
• Rich Gonzalez
• University of South Florida
• June 5, 2003

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URLs

• salesforce.com
• pets.com (no longer)
• http//www.starbucks-express.com/
• https//www.starbucks-express.com/info/allLocation
  s.aspx

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Agenda June 5, 2003

• Digital Ordering
• Web Site Selection Begins
• The E-Biz Surprise (Finish)
• Renting Software Online
• Value Chain
• Chapter 6 (Finish)
• Value Propositions
• Due For June 10

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For Site/Model Evaluation

• Today and next 2 weeks Please peruse Nielsen
  Tahir bookHomepage Usability
• Should Pick TodayRuth, Rose, Paul, Melissa,
  Craig, Nick, Sharla

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Ontain Ordering System

• 10 Minutes In Line Is Way Too Long
• Starbucks, Boston Market, etc.

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Why Wait For Your Morning Latté?

• Starbucks Express
• 60 Stores TestDenver Boulder, CO
• Register Online
• Charge 20Prepaid Balance
• Create Profile
• Order 1 tall half-decaf, extra hot, vanilla
  latte, blueberry scone.
• Order 2 small double shot cappuccino.

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Why Wait For Your Morning Latté? contd

• Cell phone callwith menu item select (up to 5
  menu items)
• Website orders, too
• 25 Charge
• Why Denver? Like Technology, Innovation
• Online OrderingBoost Sales?
• Next McDonalds, Subway

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Starbucks Express

• https//www.starbucks-express.com/info/allLocation
  s.aspx
• Demo

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(No Transcript)
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For Last Time June 3

• The E-Biz Surprise, BusinessWeek, May 12,
  2003Well Finish Today

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For Today June 5

• Renting Software Online, June 3, 2003, Don
  Clark, wsj.com
• Post a Comment To Listserve About This

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For June 5

• Wi-Fi Means Business, Heather Green, et al.,
  BusinessWeek, April 28, 2003
• Songs In the Key of Steve, David Leonard,
  Fortune, May 12, 2003
• Find One (1) Article at WSJ.com About Either
  Wi-Fi Or Apples iTunes Music StorePost Cite on
  Listserv Class Participation Item

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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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The E-Biz Surprise

• BusinessWeek, May 12, 2003

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Major Impacts of E-Commerce

• E-Business is Part of E-Commerce
• B2B Most of E-Commerce
• B2C 100 B
• Connecting P2P and B2P and B2B
• Reducing Business Costs
• Improving Productivity
• Accelerating Innovation

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Major Impacts of E-Commerce

• Advertising Is Up (From 2001)

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E-Commerce Profits

• 1997-2000 No Profits
• 2000-2002 Very Tiny Profits
• Late 2002 Increasing Profits
• How Many

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e-failures
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E-Failures

• pets.com
• webvan.com
• Lycos, Alta Vista, Netscape
• 6,000 StartupsHow Many Left?

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Metcalfes Law
Net Utility
Nodes
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Big Changes

• Travel
• Information, Information, Information
• Online SystemsSelf Service
• Expedia Is the Big Winner
• 13 of Traditional Firms End In 2002
• Critical Mass

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Big Changes

• Computers
• Information, Information, Information
• Online SystemsSelf Service
• Dell Is the Big Winner
• Competitors Cannot Be Profitable
• Critical Mass

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Figure 6.6 Dells Business Model
Suppliers linked through Extranet deliver
just-in-time. Lowers inventory costs.
Product delivered through independent shippers
such as UPS. Contract low shipping rates, no
fixed costs in assets.
Customer gathers information and purchases
through Web page. Lowers communication costs.
Dell manufactures customized PC and sell at low
price.
Web page provides information and
ordering. Lowers ordering costs.
Payments are made online through Web page credit
card or invoice. Lowers bad debt expense and
credit risks.
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Elements of the Marketing Mix within an
Environmental Framework
Competitive
Distribution
Product
Political-Legal
Target Market
Social-Cultural
Price
Promotion
Technological
Economic
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Marketing Experience
Pre-Purchase
Post-Purchase
Purchase
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Figure 6.4 E-Commerce Value Chain

• E-Commerce Value Chain can give insight into the
  problems encountered by newly formed online-only
  e-commerce companies.

Promotion Need to develop customer base,
experience in targeting audience.
Distribution Channels Need locations, shipping
facilitators, payment systems, and return
policies and procedures.
Knowledge Management Need database on customer
and links to inventory and other business
processes.
Management Needs experience in field, knowledge
of process and industry, strong relationships
with employees, suppliers, and other
constituencies.
Supply Chain Develop and deploy inventory
systems, warehousing, extranets, etc.
Product and Pricing Strategies Develop
positioning strategy, image with market, etc.
Delivered Value to Customer
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Renting Software Onlinewsj.com June 3, 2003

• Utility Computing or Computing On Demand
• Software Hardware ?
• Running Applications Users IT SSS (Staff,
  Support Security)
• salesforce.com A New Idea?
• Business Model
• Subscription Revenue Model

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Renting Software Onlinewsj.com June 3, 2003

• BIG TREND Use Here, Process There
• BIG TREND Web Services
• BIG CONSTRAINT What If Offline?
• Sforce Growth Projected90 K Users To 1,000 K
  Users
• Give Me the Bits!

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Renting Software OnlineYour Comments

• this is how things will be done in the future.
• very good concept that I am sure is not too far
  off ... you can get TV on demand why not computer
  programs?
• online through a Web browser... would be very
  convenient 
• recieve the revenue all at once but they only
  recognize a portion at time.
• in due time people will not even think twice
  about renting software online.

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Renting Software OnlineYour Comments

• Can they keep the exclusivity long enough to get
  through the kinks and reach critical mass
• This is not unlike some of the freetrials one
  can download, try it out, and then purchase the
  full version

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• We Stopped Right Here

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Marketing Concept

• Target Market
•  Customer Needs Wants
•  Coordinated activities
•  Profitability

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3 Fundamental Business Shifts
03

• 1. Most transactionsB2C, B2B, C2C and G2C are
  becoming self-service digital transactions.
• 2. Customer service is becoming the primary
  value-added function in every business.
  Personalization and customization are ways to do
  this.
• 3. Customer service requirements force firms to
  adopt digital processes---to meet and/or beat
  competition.

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Economics of Things

• Seller Ceases To Own
• Replicate By Manufacture
• Deteriorate

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Economics of Information

• Sell, Yet Still Owned?
• Replicated at cost of ?
• Limit?
• Never Wears Out

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Customer Orientation

• A philosophy incorporating the marketing concept
  that emphasizes first identifying unmet needs,
  then satisfying them.
• Marketing MantraKnow your customer(s).

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End Here