1 Chapter Five Understanding eCommerce product design strategy

Learning objectives  Benefits of internet based marketing  E-commerce considerations  When a product can be marketed over internet  Design criteria for selecting web enabled supply channels 2

Introduction  channels used for marketing is quite important  Channels are different conduits to reach end users  correct fitment of products and channels  lower selling costs  availability of products at the right time  fewer customer problems  technology is changing the shape of the channel  enhancing capability of existing channels  creating new ones  fitment of products, technology and channel is becoming critical 3

Introduction..contd..  Product marketing strategy - enabled by technology  nature and mix of channels  packaging and designing of their offerings  enabling internet with correct design can take advantage of the web enabled  products that easily fit are digital music, news, financial services, and computer software  creates easy brand awareness among consumers 4

Benefits of Web Enabled Channels  Dell pioneered the concept of redesigning the product  Technology enhances existing selling channels and creates new ones  “digitize” product catalogues and available to all  to re-architect product specifications  customer configured information can be pushed to potential customers  Internet stores (virtual) and online marketplaces that sell products directly online  products are displayed on electronic shelves  customers can customize and try out different combinations 5

Benefits of Web Enabled Channels..contd..  Can help rapid-fire bidding during online auctions  Not only products but channels need to be web ready  Professional services such as executive search, tax consulting  Enabling product configuration and assembly that is fast and transparent to the customer  Designing products and services that can be sold through any channel or mix of channels 6

E-commerce considerations  capability of the channel  distribution requirements need to be understood  Features in an interactive mode  How the products can be stacked in logistics (if ordered through online)  personalized products, personalised services, and fast delivery  package, distribute, and configure products  Compare prices and products  adjusting product pricing on the fly 7

E-commerce considerations..contd..  wider selection of products and services  self-service electronic channels  online marketing assistance  Benchmark customer offerings  lower transaction costs, more self-service  building services into structured pricing  accessorize mature products with desirable services  automatic replenishment ordering, free returns and free delivery  Technical capabilities of the channels 8

E-commerce considerations..contd..  packaging, price, placement, and promotion need to be applied  Be able to digitally represent the products  Be able to distribute products through electronic order fulfilment  publishing and the music industry modify their offerings for digital distribution  pricing by considering time, medium, and context  Web’s unique ability to sell contents in small quantities  Shelf life of perishable products 9

E-commerce considerations..contd..  several material changes to the product are necessary for web enabling  search engine keywords and interactive links to make information available to potential buyers  Graphics bring life to contents and make them look better online  Mechanism for impartial, open-source reviews and referrals from actual customers  re-segmenting and repackaging product based on feedback – making products easier to sell buy online 10

E-commerce considerations..contd..  customers should be able to select, configure, and buy products over internet  3G/4G technologies will increase the capability of ecommerce  customers can feel the product online  take decisions without going to retail stores  gain competitive advantage  Standardization and availability of catalogues over internet  Local language  Search and artificial intelligence  Mass customization - products to be readily configured and assembled as per customer specifications 11

E-commerce considerations..contd..  design products that can be more easily configured  facilities to request the ingredients, textures, packaging, and chose delivery schedule  Factor in large amounts of customer information into the design of the product, including health, diet, portion size, allergies, and demographics  Dynamic pricing  fast and accurate market pricing  calculate product profitability  as per the configuration demanded by the customer  flexible pricing 12

E-commerce considerations..contd..  market-based pricing structures  data mining/segmentation software will provide data analysis tools  bundle products with other features and provide a package  optimally align the value to the customer  Customers are more demanding and innovate new ‘values’ for customers  hybrid distribution channel needs to be defined  Online billing for rapid decision and delivery and returns  mail response management  Service and support integrated with e-commerce  13

Summary The chapter talks about different parameters that need to be considered before getting ready for ecommerce  designing product features,  hybrid channels for distributions,  differential pricing for products meant for different channels and  mass customization  product channel readiness 14