E-COMMERCE AND MARKETING STRATEGY Fahri Karakaya D. Steven White Charlton College of Business University of Massachusetts Dartmouth.
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E-COMMERCE AND MARKETING STRATEGY Fahri Karakaya D. Steven White Charlton College of Business University of Massachusetts Dartmouth
Number of Internet Users 148.7 million users in North America 86.6 million users in Western Europe 57.6 million users in Asia Pacific, 10.8 million users in South/Central America, 9.5 million users in Eastern Europe, and 7.5 million users in Middle East/Africa. Source: Business Week (Sept. - 1999)
Web Users By Region (Millions at Year end 1999) US 38% Japan 9% AP 9% WE 36% Other 8% 327M Source: ICMM V6.1, IDC 2000
Web Users By Segment (at Year end 1999) Home 55% Med/Lrg Bus 18% Small Bus 13% Ed/Gov 15% Total:327M Source: ICMM V6.1, IDC 2000
Users & Devices On The Web (Millions at Year end) 756M devices 602M users Source: ICMM V6.1, IDC 2000
Digital Homes & Consumers 40% of US homes now online 26M homes with broadband by 2003 Source: CyberDialogue
Ecommerce on the Web Worldwide commerce will double between 1999 and 2000 (to $270B) Web spending by international buyers is growing dramatically. In fact, 2000 will be the last year the US accounts for the majority of web spending. By the end of 2000, two-thirds of worldwide PCs and network computers will be accessing the web. This year the web will see almost 100 million unique web buyers.
Ecommerce on the Web the number of publicly accessible Web pages is expected to grow from 800 million in 1999 to 8 billion by 2002. By 2002, e-commerce among U.S. businesses alone (b2b) will be $327 billion up from 1998 year's estimate of $17 billion.
B2B Marketplace Opportunity Estimates – –Forrester - $1.3 trillion by 2003 and 92% of all Internet commerce – –Goldman Sachs - $1.5 trillion by 2004 – –IDC - $1.1 trillion by 2003 Huge efficiency gains possible Cost of GoodsSold Gross Profit Overhead Net Profit
DEVELOPING EFFECTIVE MARKETING STRATEGIES Target Market Identification and Targeting: Target Market Identification and Targeting: traditional marketing research online surveys (registration forms) e-mails sent to companies (e-leads) Products and Services: Products and Services: not everything can be sold via the web customers are still wary about purchasing on the web customers gather info. on products then go to stores or call 800# (e.g. autos.)
Products and Services Successful business categories: Successful business categories: Book resellers & music retailers Airlines Financial services (e.g.,brokers and online banking) Publishers Package delivery businesses Computer and software firms. New Business offerings New Business offerings Search Engines Pricing and reservation services (e.g., expedia.com, priceline.com)
PLACE - Does it apply? Convenience- from your living room Disintermediation - reduction in the # of intermediaries in distribution Some argue that the fastest growing businesses on the WWW are intermediaries In some cases, the Internet is both a retail store and the delivery medium pressure on delivery services to increase their speed, accuracy and geographical reach
PROMOTION Web sites need promotion Web sites need to be findable Need to register with as many search engines or directories Registration services (register.com) $40-50 Banner Ads, static ads, pop up ads -search engines Traditional media Companies offer incentives such as sweepstakes or some small free gift for customers to register
PRICING "shopbots" or automated shopping agents, are here to search the Net, for deals on behalf of buyers. Discounting - bypassing distributors and earning higher margins. Impact on distributor relationship? Auction houses affect the pricing of products. Ebay.com, Yahoo’s auction link. Auction houses may provide good info. for companies when pricing
Discussion & Conclusion Many firms use the Internet without considering the fit between current marketing strategy, Need to have synergy between the traditional mkt. stg. and the Internet mkt. stg. alienating distribution channel members is a concern. Secure transaction software - outsourcing Customer service will be a major part of e-commerce business services There is a new industry called dot.coms