1. Chapter 4 E-Business: Managing the Customer Experience

2. Chapter Objectives Describe the growth of Internet use worldwide.
Define e-business and e-marketing, and list the opportunities e-marketing presents.
Distinguish between a corporate Web site and a marketing Web site.
List the major forms of B2B e-marketing.
Explain business-to-consumer (B2C) e-marketing.
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3. Chapter Objectives 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 assessing Web site effectiveness.
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4. New E-terms E-business E-marketing E-commerce E-tailing E-zine E-mail
E-space
E-procurement

5. The Digital World
Almost three-quarters of the U.S. population access the Internet at home, school, work, or public access sites
What do people do online?
United States – Communication, information, and purchases
China – Downloading, streaming music, online gaming, videogaming, and social networking
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6. The Digital World
In spite of the past success and future potential of the Internet, issues and concerns relating to e-business remain
The benefits and potential of e-business outweigh the concerns and problems
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7. What is E-Commerce?
Electronic commerce (e-commerce): Targeting customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers by means of computer networks

8. E-Marketing
Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools
Application of electronic tools to contemporary marketing has the potential to:
Greatly reduce costs
Increase customer satisfaction
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9. E-Marketing
Online marketing - Activities that connect buyers and sellers electronically through interactive computer systems
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10. Copyright © 2012 by South Western, a division of Cengage Learning
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11. What is Interactive Marketing?
Buyer-seller communications in which the customer controls the amount and type of information received from a marketer through such channels as the Internet, and virtual reality kiosks.

12. What is the Internet?
Worldwide network of interconnected computers that lets anyone with access to a personal computer send and receive images and data anywhere

13. 70% of Internet Users - USA The Birth and Rise of Ecommerce
The Internet
World Internet Users
1990 – Fewer than 1 Million
1995 – 50 Million
2001 – 490 Million
2005 – 766 Million
70% of Internet Users - USA
2006 – 50% outside the USA
The Birth and Rise of Ecommerce

14. The Internet Over 143 million active users in the USA Intranets
Internal corporate network that allows employees within an organization to communicate with each other and gain access to organizational information
Extranets
Secure network accessible through a Website by external customers or organization for electronic commerce. It provides more customer-specific information than a public site.

15. The Internet (1 of 2)
Taken from the paper “International Internet Marketing (IIM)” by Philip, R. (2004).
In 1990, fewer than 1 million users were connected to the Internet. By 1995, the figure had risen to 50 million. In 2001, it grew to 490 million. In the US, where Internet usage is most advanced, 58 percent of the population had Internet access at home by July 2001 (Cantrell, 2001).
The internet has become more powerful with the growing use of broadband. Broadband permits the rapid transmission of much greater quantities of information, including moving pictures. In 2002, Korea’s 15 million households had broadband service (Moon, 2002). By 2004, more than 152 million people in the United States were online with over one-third having broadband connections (Fost, 2004).

16. The Internet (2 of 2)
In 2000 there were nearly 350 million internet users world-wide and by 2005 the number of users could be more than double to nearly 766 million (Wall street journal, 2000).
Also the number of internet users is growing in other countries; this should be of concern for firms wanting to enter foreign markets. For example, although 70% of today’s internet users are currently based in the United States (Harrison-Walker, 2002), more research done by Heckman & Schmidt (2000) and Struass and Frost (2001) predict that by 2005 more than 50% of internet users will be based outside the US, and that the percent of users in the European Union will exceed the percent of users in the United States.

17. Four Web Functions Communication Information
; Instant messaging; Chat rooms and bulletin boards; Online communities
Information
Search engines; Online publications; Newsgroups; Internet forums; Electronic bulletin boards; Web communities

18. Four Web Functions Entertainment E-Commerce
Games; Radio and TV programming, including music; Streaming video of live news reports, sports, and musical performances; Electronic books
E-Commerce
Online auctions
B2B: electronic exchanges; Extranets and private exchanges
B2C: Electronic storefronts and cybermalls; Web kiosks, Online ticketing; Matchmaking

19. Four Web Functions

20. Online Consumer Marketing
Lower Prices
Bots (short for robots): programs that check hundreds of sites, gather and assemble information, and bring it back to the sender
Convenience
Worldwide access, Day or night, Customized products and information
Personalization
Improves the quality of the shopping experience
Improves customer satisfaction

21. Benefits of Online Consumer Marketing
Relationship Building
Crucial to success
Online’s personalization helps
Easier for small businesses with small budgets
Customer service is the key
Increased Efficiency
Greater profit margins
Educating customers online frees salespeople from answering routine questions

22. A More Level Playing Field
Cost Reductions
Reduced start-up costs
Reduced operating costs
Frees funds for new marketing efforts
A More Level Playing Field
Even small firms with small budgets can compete in the global marketplace
Helps eliminate discrimination and allow minority businesses to succeed on their own merits
AutoNetwork.com

23. Creating an Effective Web Presence
Measuring
Effectiveness
Managing a Web Site
Creating an Effective Web Site

24. Building an Effective Web Site
Establish a Mission for the company’s site
Identify the purpose of the site
Satisfy customer needs and wants through a clear site design
Managing a Web Site
Update the site frequently
Flag new merchandise and services
Ensure that site appears to be current
Update software as needed
Track costs and revenues

25. 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.

26. WEB BUSINESS MODELS
• 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.
• Other purposes include disseminating financial information; giving prospective employees the opportunity to apply online for jobs; and providing a communication channel for customers and other interested parties.
.• Marketing Web site Site whose main purpose is to increase purchases by visitors.
• Includes information about company history, products, locations, employment opportunities, and financial information.

27. Web Business Models
Corporate Web site - Designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties
Build customer goodwill
Assist channel members in their marketing efforts
Marketing Web site - Aim is to increase purchases by visitors
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28. B2B E-Marketing
Use of the Internet for business transactions between organizations
Generates sales revenue
Provides detailed product description when required
Increases efficiency of business transactions
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29. B2B E-Marketing Tools used: EDI Web services Extranets
Private exchanges
Electronic exchanges
E-procurement
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30. Proprietary B2B Transactions
Electronic data interchange
Exchange of sales information between buyers and sellers
Requires compatible hardware and software systems
Cuts paper flow, speeds the order cycle, and reduces errors
Allows companies to set production schedules to better match demand
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31. Proprietary B2B Transactions
Web services
Internet-based systems that allow parties to communicate electronically with one another regardless of the computer operating system they use
Rely on open source XML standards
Extranets
Secure networks used for e-marketing and accessible through the firm’s Web site by external customers, suppliers, or other authorized users
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32. Proprietary B2B Transactions
Intranets
Secure internal networks that help companies share information among employees
Private exchanges
A secure Web site at which a company and its suppliers share all types of data related to e-marketing
Sometimes called c-business
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33. E-procurement on Open Exchanges
E-Procurement - Use of the Internet by to solicit bids and purchase goods and services from suppliers
Offers benefits to the public sector
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34. B2C E-Marketing Selling directly to consumers over the Internet
Also called e-tailing
Driven by convenience and improved security for transmitting financial information
Service providers such as banks are important participants in e-tailing
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35. Electronic Storefronts
Company Web site that sells products to customers
Items for purchase are placed in an electronic shopping cart
Electronic shopping cart - File that holds items the online shopper has chosen to buy
Increased capability of smartphones influence the growth of online shopping
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36. Benefits of B2C E-Marketing
Competitive pricing
An ideal method for savvy shoppers to compare prices from dozens of sellers
Easy price comparisons through bots such as pricegrabber.com.
Access and convenience
Allows customers to place orders from anywhere at anytime; product tracking
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37. Benefits of B2C E-Marketing
Personalized service
Software analyzes past user purchases to customize experience
Goal is to create loyal customers who make repeat purchases
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38. Source: Data from Nielsen Online, “Nielsen Provides Topline U. S
Source: Data from Nielsen Online, “Nielsen Provides Topline U.S. Web Data for February 2010,” Data from
Nielsen Online, as cited in “Nielsen Online Reports Topline U.S. Data,” Market Wire, accessed on March 25, 2010.
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39. Challenges in E-Business and E-Marketing
Safety of online payment
Companies have developed secure payment systems to protect customer information
Encryption - Encoding data for security purposes
Secure Sockets Layer - Technology that encrypts information and provides authentication
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40. Privacy Issues
Customers’ top security concern is protection of their personal information
Through electronic signatures, parties can enter into legal contracts online
Cookies and spyware allow companies to personalize customers’ Internet experience but also invade users’ privacy
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41. Privacy Issues
To reassure customers, many online merchants have signed on with online privacy organizations such as TRUSTe
Companies install firewalls to protect private corporate data
Firewall - An electronic barrier between a company’s internal network and the Internet that limits access into and out of the network
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42. Frauds and Scams
Complaints about Internet fraud are received by the Internet Crime Complaint Center (IC3)
Phishing - High-tech scam that uses authentic-looking or pop-up messages to get unsuspecting victims to reveal personal information
Vishing - Scam that collects personal information through voice response systems; stands for voice phishing
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43. Frauds and Scams Payment fraud
Cardholder fraudulently claims ordered merchandise was never delivered and asks credit issuer for a chargeback
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44. Site Design and Customer Service
Not all Web sites are well designed and easy to use
Merchandise delivery and returns pose challenges
Companies that have brick-and-mortar stores often have more experience satisfying customers than Internet-only retailers
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45. Channel Conflicts and Copyright Disputes
Channel conflicts - Conflicts among manufacturers, wholesalers, and retailers
Conflicts in the area of copyright law
When a site hosts content to which someone else holds the rights
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46. Marketing and Web Communication
The Internet has four main functions:
E-business
Entertainment
Information
Communication – most popular function
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47. Online Communities and Social Networks
Firms use Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests
Social networking sites have grown dramatically
Example: MySpace, Facebook, and LinkedIn
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48. Blogs and Podcasts
Blog - Short for Web log— an online journal for an individual or organization
Some blogs incorporate wikis, a Web page that anyone can edit
Podcast - Online audio or video file that can be downloaded to other digital devices
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49. Blogs and Podcasts Corporate blogs can help build brand trust
Employee blogs present ethical issues
Companies have strict policies about the content of employee blogs
Employees can be disciplined over improper blogging
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50. Promotions on the Web
Banner ad - Strip message placed in high-visibility areas of frequently visited Web sites
Pop-up ad - Separate window that pops up with an advertising message
Preroll video ad - Marketing messages that play before an online video
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51. Promotions on the Web
Widget - Tiny interactive applications that Internet users can copy and add to their own pages to play music, video, or slide shows
Search marketing - Paying search engines a fee to make sure that the company’s listing appears toward the top of the search results
Companies use online coupons to promote their products
Example: Procter & Gamble
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52. Building an Effective Web Presence
An e-business Web site can:
Broaden customer bases
Provide immediate access to current catalogs
Accept and process orders
Offer personalized customer service
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54. Establishing Goals What is the company’s goal for its Web site?
Objectives for the Web site determines the scope of the project
Create and maintain a site in-house or to contract with outside designers?
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55. Implementation and Interest
Content – Determines whether visitors return to a site
Available resources should be:
Relevant to viewers
Easy to access and understand
Updated regularly
Written or displayed in a compelling, entertaining way
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56. Pricing and Maintenance
Variety of costs:
Development
Placing the site on a Web server
Maintaining and updating the site
Promoting the site
Important for a Web site to stay current
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57. Assessing Site Effectiveness
Web-to-store shoppers - Consumers who use the Internet as a tool to aid them at brick-and-mortar retailers
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
Engagement - Amount of time users spend on sites
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58. Copyright © 2012 by South Western, a division of Cengage Learning
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59. Watch E-Business at Evo
Video
Watch E-Business at Evo
Aside from offering good prices, how does evogear.com offer value to the consumer?
Evo has opened a large brick-and-mortar store/community art space in Seattle, Washington. Go to culture.evogear.com/ category/seattle/ to learn more about what the store offers. Do you think this store will distract or enhance the Web site? Consider potential channel conflicts, pricing strategy, convenience, and consumer behavior in your answer.
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