E-Business in Contemporary Marketing Bagus Nurcahyo, Dr. Programme of Study of Marketing Management Undergraduate Programme of Business & Entrepreneurship Gunadarma University

Objectives E-Business in Contemporary Marketing Define e-business and discuss how marketers use the Internet to achieve business success. Distinguish between a corporate Web site and a marketing Web site. List the major forms of B2B marketing. Explain business-to- consumer (B2C) e- marketing. Identify online buyers and sellers. Describe some of the challenges associated with online marketing and e-business. Discuss how marketers use the communication function of the Web as part of their online marketing strategies. Outline the steps involved in developing successful e-business Web sites and identify methods for measuring Web site effectiveness. 6 5

E-Business in Contemporary Marketing WHAT IS E-BUSINESS? E-business Firm that targets customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers. Online retails sales in the U.S. totaled nearly $86 billion in a recent year. E-marketing Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools. Examples: Researching computer printers on CNet.com and then placing an order at Newegg.com.CNet.comNewegg.com Legally downloading music and videos from Apple Computer’s iTunes Web site. iTunes

E-Business in Contemporary Marketing CAPABILITIES AND BENEFITS OF E-MARKETING

E-Business in Contemporary Marketing TYPES OF BUSINESS WEB SITES Corporate Web site Site designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties. Purpose is to build customer goodwill and assist channel members in their marketing efforts. Marketing Web site Site whose main purpose is to increase purchases by visitors. Many try to engage visitors in interactions that move them closer to a desired marketing outcome.

E-Business in Contemporary Marketing B2B E-MARKETING Business-to-business (B2B) e-marketing Use of the Internet for business transactions between organizations. Accounts for 90 percent of all e-business activity. Accounts for 10 percent of all B2B transactions. Increases efficiency of business transactions, which typically involve more steps than consumer transactions. Electronic data interchange—computer-to-computer exchanges of price quotations, purchase orders, invoices, and other sales information between buyers and sellers. Web services—Internet-based systems that allow parties to communicate electronically with one another regardless of the computer operating system they use.

E-Business in Contemporary Marketing Extranets—secure networks used for e-marketing and accessible through the firm’s Web site by external customers, suppliers, or other authorized users. Private exchanges—secure Web site at which a company and its suppliers share all types of data related to e-marketing, from product design through delivery of orders. Electronic exchanges—online marketplaces that bring buyers and sellers together in one electronic marketplace and cater to a specific industry’s needs. E-procurement—Web-based systems that enable all types of organizations to improve the efficiency of their bidding and purchasing processes.

E-Business in Contemporary Marketing ONLINE SHOPPING AND B2C E-MARKETING Business-to-consumer (B2C) e-marketing Selling directly to consumers over the Internet. Also called e-tailing. Service providers such as banks are an important segment of e-tailing. Two types of B2C Web sites Shopping sites such as Gap.com where customers can get product information and make purchases online.Gap.com Information sites such as Toyota.com where customers can get product information but cannot make purchases online.Toyota.com

E-Business in Contemporary Marketing ELECTRONIC STOREFRONTS Electronic storefront Company Web site that sells products to customers. Example: Walmart’s electronic storefront.Walmart’s electronic storefront Example: Land’s End’s electronic storefront.Land’s End’s electronic storefront Growth anticipated with the increase in broadband connections. Broadband shoppers typically spend 34 percent more online than narrowband shoppers. BENEFITS OF B2C E-MARKETING Lower prices. Convenience. Personalization.

E-Business in Contemporary Marketing ONLINE BUYERS AND SELLERS Demographics of customers are changing as Internet penetration grows.

E-Business in Contemporary Marketing

E-BUSINESS AND E-MARKETING CHALLENGES ONLINE PAYMENT SYSTEMS Companies have developed secure payment systems to protect customer information. Encryption, Secure Sockets Layer, and electronic wallets. PRIVACY ISSUES Protection of personal information is customers’ top security concern. Cookies and spyware allow companies to personalize Internet experience but also invade computer users’ privacy. To reassure customers, many online merchants have signed on with online privacy organizations such as TRUSTe.TRUSTe Companies install firewalls to protect private corporate data.

E-Business in Contemporary Marketing INTERNET FRAUD Internet Crime Complaint Center logged more than 231,000 complaints in a recent year.Internet Crime Complaint Center Phishing High-tech scam that uses authentic-looking or pop-up messages to get unsuspecting victims to reveal personal information. Payment fraud is also growing. WEB SITE DESIGN AND SERVICE As many as 70 percent of Internet shopping carts are abandoned before any purchase is made. Companies that have brick-and-mortar experience often have more experience satisfying customers than Internet-only retailers. CHANNEL CONFLICTS Direct sales to customers can compete with business partners such as retailers and distributors, disputes called channel conflicts.

E-Business in Contemporary Marketing USING THE WEB’S COMMUNICATION FUNCTION Web has four main functions: e-business, entertainment, information, and communication. Communication is Web’s most popular function. Firms use to communicate with customers, suppliers, and other partners. Spam Popular name for junk . ONLINE COMMUNITIES Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests.

E-Business in Contemporary Marketing BLOGS Blog Short for Web log, an online journal written by a blogger. Some incorporate wikis and podcasts. Corporate blogs can help build brand trust. Example: Apple’s iLoungeiLounge Employee blogs can humanize a company, but negative comments can harm it. WEB-BASED PROMOTIONS Banner and pop-up ads on Web sites, and online coupons. Search marketing Paying search engines, such as Google, a fee to make sure that the company’s listing appears toward the top of the search results.

E-Business in Contemporary Marketing MANAGING A WEB SITE DEVELOPING SUCCESSFUL WEB SITES

E-Business in Contemporary Marketing Planning and preparation—company’s goal for its Web site determines scope, content, and design. Will the site be maintained in-house or by a contractor? What will the site be named? Content and connections—important factor for whether visitors return to a site. Relevant to viewers, easy to access and understand, updated regularly, and compelling and entertaining. Most small businesses are better off outsourcing to meet their hosting and maintenance needs. Costs and maintenance—development, placing the site on a Web server, and maintaining, updating, and promoting the site.

E-Business in Contemporary Marketing MEASURING WEB SITE EFFECTIVENESS Click-through rate Percentage of people presented with a banner ad who click on it. Conversion rate Percentage of visitors to a Web site who make a purchase. Research study Percentage of visitor based on survey Profitability Percentage of profit that made from e-business Web site traffic count Percentage of people who visit the site

E-Business in Contemporary Marketing For Further Information Bagus Nurcahyo,Dr. Programme of Study of Marketing Management, Undergraduate Programme of Business & Entrepreneurship, Gunadarma University, Margonda Raya St. No. 100, Pondok Cina, Depok, Phone: ext 456 Mobile: Official site: Web Blog: