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ECommerce and Online Marketing Strategies

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Title: ECommerce and Online Marketing Strategies


1
2nd Annual Micronesian Tourism Executives
Conference Visitor Satisfaction Creating
Expectations Meeting Them
  • E-Commerce and Online Marketing Strategies
  • for the Tourism and Hospitality Industry
  • Max Palisson, Ph.D.ITE - Talaya Internet
    ServicesEmail maxpat_at_ite.net

2
Outline
  • Introduction What is E-Commerce ?
  • E-Business or B2B
  • Recent Internet traffic and usage statistics
  • Trends in the Travel and Hospitality Industry
  • Web Marketing Strategies
  • Web vs. traditional media
  • Establishing an online presence
  • Knowing Your Audience
  • Keys to a Successful Presence
  • Start an E-commerce site
  • Lets Go Online
  • Conclusion

3
What is E-Commerce ?
  • E-commerce, or electronic commerce can be defined
    as the way to conduct financial transactions
    electronically.
  • With the explosive growth of the Internet,
    E-commerce now often refers to purchases made
    from websites with online stores
  • Global e-commerce transactions expected to reach
    9 billion in 2000 and 30 billion in 2005

4
E-Business or B2B
  • Describes how companies are changing the way they
    buy and sell products from each other, by doing
    online transactions and sharing information over
    the Internet.
  • The value of transactions conducted on-line
    between companies will reach 1.5 trillion by
    2004 (source Goldman Sachs Investment Research)
  • Recommended lecture B2B Exchanges The Killer
    Application in the Business-to-Business Internet
    Revolution by William W. Woods, Arthur Sculley

5
Internet Traffic UsageRecent Statistics
  • World
  • about 200 million Internet users
  • Japan
  • 21 million Internet users (Mar. 2000) 10 of
    the worlds users !
  • Users spend an average of 2 hours 30 minutes
    online over 5 sessions every week.
  • They visit 6 unique sites each and view 49 pages
    per session.
  • Most visited sites in February 2000 Yahoo!
    websites, NEC, MSN, Sony Online, Geocities, Dream
    Train Internet, Nifty Corporation, Lycos Network,
    Hi-Ho Internet Service and Goo.
  • Guam
  • 25,000-30,000 Internet/e-mail accounts with local
    ISPs on Guam and Saipan
  • an estimated 6,000-8,000 additional accounts with
    UoG, GovGuam and private companies

6
Online Trends for the Travel and Hospitality
Industry
  • Business travel bookings online have doubled in
    the past 6 months
  • 28 of business travelers make airline
    reservations over the Internet, vs. 33 who
    book on the telephone(source Greenfield Online
    3-28-2000)
  • Travel Sites Could Be Easier To Use To be
    successful, online travel sites must be easy to
    navigate and keep graphics compressed with small
    size(source WebCriteria.com, 3-21-2000).
  • 52.2 Million Online Travelers Use Internet For
    Planning
  • 16.5 Million Online Travelers Use Internet To
    Book Reservations
  • Compared to all travelers, online travelers are
    more likely to be younger, have an annual
    household income above 75,000, be
    college-educated, and work in a
    professional/managerial occupation(source TIA,
    Feb. 2000, http//www.tia.org/press/020800int.stm)

7
Marketing Strategies Web vs. traditional media
  • Most Marketing strategies still apply to the Web
    as a new media
  • Advantages of the Web as a new media
  • Media available 24x7 from virtually anywhere in
    the world
  • Easy and immediate distribution of information to
    masses
  • Expand your market reach to a global -worldwide-
    audience
  • Potential to present multimedia information, and
    to interact with visitors
  • Enhance customer services (offers information of
    services, feedback forms)
  • Can be used to gather information about customers
    via online contests

8
Marketing Strategies Before Establishing your
Online Presence
  • Identify your goal(s) before starting
  • - Advertisement or simply information
  • - Online sales
  • - Online reservations
  • - Customer feedback
  • Identify your targeted market audience
  • - Current and prospective customers
  • - Specific groups/categories visitors from
    Japan, Korea, companies, new markets (ex India)
  • - Business partners (B2B)

9
Marketing Strategies Know Your Audience
  • Occasional visitors may browse your pages and
    never return
  • Regular visitors may return repeatedly to obtain
    some service
  • Frequent visitors, such as your sales people, may
    use your pages for personal use, or to refer
    customers to the latest, always available
    information on your products and services.
  • How to adjust contents to your visitors ?
  • gt Implement a reward strategy to let you know
    about them

10
Marketing StrategiesKeys to a Successful
Presence
  • Interactivity, search functions, feedback forms
  • Start small and grow
  • Dedicate adequate resources designing a website
    is not a one-time task !
  • Provide links to other sites that relate to yours
    (tour operator sites, TIA)
  • Respect your visitors time with fast loading
    pages and graphics
  • Update your site regularly
  • Sponsor contests and online-only promotions
    (online sales, discount coupons, interactive
    contests)

11
Marketing StrategiesKeys to a Successful
Presence (2)
  • And dont forget to
  • Promote your website address !
  • - Put it on all of your stationery and public
    documents
  • - Mention it in all commercials and traditional
    advertisements
  • - Register your site with Internet search
    engines and directories
  • (50 of visitors usually come from a search
    engine)

12
What you should do
  • Register your own domain name
  • Use distinctive email addresses.
  • Provide adequate staff training on both the
    Internet in general and the specific resources
    with which you provide them access.
  • Capitalize on your investment. Once you have
    invested your time and money into creating an
    Internet presence, be sure to capitalize on it.

13
What you should NOT do
  • Send junk or unsolicited email.
  • Disclose customer information.
  • Forget that the Internet is a global medium with
    a multi-cultural audience (different language,
    culture and response).
  • Approach Internet marketing without appropriate
    resources or adequate planning.
  • Approach Internet marketing with a
    make-money-fast mentality.

NO
14
Start an E-commerce siteMajor Steps
  • If you want to offer credit card transactions,
    apply for a merchant bank account and consider a
    real-time credit card authorization system such
    as CyberCash (http//www.cybercash.com/) (Note
    that Japanese people are wary of credit card
    fraud and loss of privacy and prefer to make cash
    payments).
  • Decide on E-commerce package vs. custom
    programming (in-house or outsourced)
  • Choose a web hosting company, based on features
    (Frontpage support, database integration, SSL
    secure transactions), platform (UNIX, NT), costs,
    reputation of security and reliability.
  • Pick your own domain name and register it
  • Get a site certificate for secure transactions
    (SSL)

15
E-Commerce Applicationsfor the Travel and
Hospitality Industry
  • Plane ticket booking
  • Travel package booking with/without travel
    insurance
  • Hotel room reservation / e-mail inquiries
  • Restaurant review with online feedback
  • Shopping with shipping / delivery or pickup
  • Marketing Research through online
    surveys/feedback with coupons, discounts or other
    incentives

16
IHRAs THINK- TANK VISIONSTHE FUTURE OF
HOSPITALITY TECHNOLOGYLausanne, Switzerland,
from 14-15 February 2000 - http//www.ih-ra.com/ne
wsroom/press/
  • The hospitality industry must overcome its
    general reluctance to invest in new ideas and
    technologies and look for applications that will
    drive the bottom line.
  • E-commerce
  • In order to generate increased revenues - while,
    at the same time, reducing costs - the Think Tank
    concluded that there were two key plans of
    action
  • Attracting new business and ensuring incremental
    business from existing clients, ie increasing
    their lifetime value.
  • Greater focus on customer relationship management
    and loyalty building.
  • At the same time, E-commerce also means business
    transacted with suppliers and, as an example,
    supply-chain economies of scale through bulk
    purchasing.

17
Search Engine RegistrationExample Yahoo search
for guam hotel
18
Directory Listing Online PromotionsExample
LodgingDiscounts.com
19
Listing with Tour AgenciesExample Japan Travel
Bureau
20
Reduce costs and develop partnershipsExample
http//www.hotel-online.com
  • Reduce your hiring and job advertising costs
    while reaching a larger market
  • Find business opportunities and discounts
  • Develop partnerships

21
Get Electronic Shelfspace on the Global
Distribution Network - Example GDS
  • A 'GDS' is a Global Distribution System, aka a
    Central Reservation System (CRS).
  • There are 4 main systems
  • Amadeus owners include Lufthansa, Air France,
    Iberia
  • SABRE owned by American Airlines
  • Galileo owners include United Airlines, BA,
    KLM, USAir, Swissair
  • WORLDSPAN owners include TWA, NorthWest and
    Delta airlines
  • These systems dominate the world of airline
    bookings. When these systems expanded to accept
    hotel and car rental bookings worldwide, they
    became global.Now, travel agents can book air
    tickets, hotel rooms and rental cars all at the
    same time from the one terminal.
  • This requires to regularly load the inventory
    (eg. hotel description, rates) into these
    systems.
  • For more info. http//www.hotel-online.com/Neo/Tr
    ends/Andersen/1998_GDNShelfSpace.html

22
The Travel and Hospitality Industry the
WebInternational Tourism Exchange 3-20-2000
  • Leading travel industry executives attending the
    International
  • Tourism Exchange were debating ways to turn a
    profit from the Internet.
  • While thoughtful use of the Internet can help
    travel companies to save on marketing expenses
    and travel agent commissions, industry executives
    are concerned at the low numbers of Internet
    surfers that actually book online.
  • An executive from one German travel company said
    that only 0.2 percent of visitors to their site
    book online, while another said that only 3
    percent of European hotels are now booked online.
  • Those in the online travel business admit that
    the Internet is currently only suitable for
    simple and straightforward bookings.
  • Those wishing to plan a complicated journey
    invariably turn to a travel agent for assistance.

23
In conclusion
  • E-Commerce and Online Marketing can
  • - Increase your visibility and accessibility in
    the worldwide market
  • - Increase your sales leads
  • - Reduce your administrative costs through B2B
  • - Add a new dimension to your marketing
    promotions
  • - Help you get closer to your customers (customer
    service), and understand them better (market
    research)
  • - Help you survive in a very competitive market

24
The End
  • Thank you for your attention
  • Any questions ?
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