1. FINAL LECTURE Wrap up B2BX Review Relationship/service/fulfillment Course Review Future of the Internet

2. B2BX SUMMARY Why Most Fail: –Not Consider Relationship/Trust –Long Term Contracts Dominate –Problem is eProcurement/Partners -- PVN –3rd Party Fail Unless Wider CBP –Manufacturer Power -- Consortia or In House –Not Able to Run with the Big Dogs -- Telcos, Manufacturers, Oracle/IBM Lesson –Talk to Customers –Refine Understanding of Need and Relationships –CBP Not Only Technology

3. Relationship Life Time Value Trust -- confidence -- relationship CRM -- multichannel communication Segment -- focus to build depth Permissive Marketing -- promotion and price for loyalty Channel -- Service Function Evaluation -- Loyalty measures

4. SERVICE/FULFILLMENT Critical element in satisfaction/relationship Internet Can Help –Tracking -- FedEX –Dell -- same file as 800 and service –Xerox/Sun -- self service –eService -- priority, track, resolve, evaluate Channel Partner Software Link TQM to Internet Continuing Innovation -- product design

5. Understanding Customers Consumer Behavior B2C vs B2B Relationship Building Fulfillment Service Distribution Channel Logistics Customer Acquisition Advertising / PR / Selling Pricing & Promotion Strategy Formulation Trust vs. Push Product Design Segmentation Positioning

6. CONSUMER BEHAVIOR Concept/Theory –Information Processing –Behavioral Theory Tool –Flow Chart –Steps, Information, Decision Rules, Actions, Post Purchase –Decision Unit, Multiple Participants Action –Design site for Conversion and Retention Case –Mother Nature: Acquisition and Retention –Dell: Conversion –Marketsoft: Sell to Pain

7. INITIATION AWARE/LEARN DECIDE BUY POST PURCHASE What starts process? Role of past experience? Friends make input? Sources of information; Friends / media / web/ store? Active search? How much time? Where shop – store / catalog / internet? What learn? Products / technology / user experience / trends? Compare products? Role of price / quality – evaluation criteria Need to touch and feel? Impact of brand and trust? How do buyers gain confidence? Security / privacy assurance needed? Need push to action – close sale Word of month to friend/community Relationship contract Questions to Ask Source of input. ADS/catalogs/email? Life time service? Delivers promised value Special offers Guarantees / refund policies?

8. TRUST Concept/Theory –Psychology –Trust Cues and Perception Tool - Virtual Advisor –Trust Cues Actions –Decide on Push -- Trust Dimension –Design in Trust -- Currency of the Internet –Real or Virtual Advisors –Alternative Methodologies Case –InSite: Advisor –Dell: Recommend / Learning

9. Push Commodity Price most important Deal prone segment Need short term results Full Trust Have best product Have good design feedback Buyers getting info anyway (infomediaries) Trust key element Expensive/complex products Culture to sell our products only Strong channel attitudes Evolutionary stop Have both price and relationship segments How much trust should you have in your eBusiness strategy?

10. PRODUCT DESIGN Concept/Theory –Build Process Tool –Models / Market Research –Information Acceleration –Listen In Actions –Prevent Failure –Do Research and Budget –Hire Modeling Capability Case –Market Soft: eLeads and eOffers – suite –Prime Response: Depth - Breadth

11. SEGMENTATION Concept/Theory –Taxonomy –Segment for Competitive Advantage Tool –Clustering –Demographic, Psychographic, Product –Data Mining Action –Decide Basis of Segmentation –Use Data and Analytic Services –Personalize Case –Mother Nature: Lifestyle – Data Mining –Dell: Sophisticated Buyers –MarketSoft: Marketing Manager –Prime Response: Vertical Markets –Terra Lycos

12. POSITIONING Concept/Theory –Psychology –Perception Simplicity Tool –Perceptual Map –Needs Seen by Customers –Preference Vectors Action Do Maps –Find Competitive Value Added –Do Vectors and Benefit Segmentation –Be First in But Position in Best Spot Case –InSite: Advisor –Market Soft:Suite –Prime Response: Campaign Management versus New Competition –Terra Lycos

13. ADVERTISING Concept –Psychology –Communication Tool –Copy Evaluation Framework Action –Advertising Goals –Multichannel -- Sales/PR/Telemarketing Case –SemiSales –Mother Nature -- Acquisition –Dell -- Catalog (separate URL)

14. Extremely Bad Extremely Good

15. PRICE AND CHANNELS Concept –Economic Theory –Logistics Tool –Avoid Price War by Differentiation and Segmentation –Channel Function Map Action –Consider Incentive Site –Manufacturer Direct as Complement –B2BX lessons Case –Terra/Lycos –SemiSales/ANX/Logistics.com –Mother Nature and Kozmo price to profit

16. PALM.COM BIG CHAINS (PD, I, IV, S) PALM (S) DISTRIBUTOR (I, PD, IV) WHOLESALE (I, PD, IV) SMALL ELECTRONICS (I, IV, S) MACS MERCHANDISE (I, IV, S) CUSTOMER eCOM SITES (I,S)

17. RELATIONSHIP Concept –Psychology –Customer Satisfaction Tool –Trust Based Marketing –CRM Action –DO IT -- obvious –Trust/Franchise/Long Run –Service/Fulfill -- TQM Case –Mother Nature -- Life Time Value –Dell -- Premier Pages/Repeat -- E2E –InSite -- Advisor builds relationship –Prime Response -- Communicate –B2BX -- all about Relationships

18. FAILED ASSUMPTIONS People will Flock to the Internet to Buy Self Service Sites are Enough for Conversion The Internet Technology will Create a New Economy B2BX Have to Work Because Can Match Information Must Be First -- Claim High Ground Worry About Business Model Later Frictionless Prices -- Price Competition and Comparators Established Companies are Not Innovative VC Capital Will Keep Coming Need Young New Thinking Tech Management Buzz and PR are the Key to Success Must Set Up Internet as Separate Company Internet will Replace Existing Channels

19. LESSONS FROM FAILURES Must have Strong CBP to Attract and Communicate It Design Site to Support and Complete Decision Process Internet will Improve Exisiting Economy B2BX is relationships -- Talk to Customer Be Right and First Start with Business Model and CBP Differentiate and Segment for Success When the Dinosaurs Dance the Grass gets Crushed VC Fads Come and Go -- Bubbles Burst Must Know Fundamentals of Management Focus and Fulfill Promises to Customers and Investors Structural Integration is Key to Success Multichannel Marketing will dominate

20. FUTURE Bright –Solid growth B2C, B2B, Infrastructure –Drivers -- life cycle adoption, global, technology, trust Existing Players –Manufactures –Click and Mortar –Survivors Figure out ROI Multichannel –Communication -- customer experience –Distribution Innovation Opportunities –Start ups (VC will be back) –Existing Players –Fundamental Management Skill

21. BUILDING A NEW INTERNET STRATEGY NEED RECOGNITION Introspection Customer Focus Customer Response Decision Process TECHNOLOGY DEVELOPMENT Transfer in Internet Capability COME BENEFIT PROPOSITION Trust vs. Push Segment Product Design

22. BUILDING A NEW INTERNET STRATEGY (cont’d) BUILD RELATIONSHIP Trust Service Fulfillment INNOVATE PROFIT ABILITY – BUSINESS MODEL Venture Capital (internal / external) Customer Acquisition / Retention Advertising / PR / Selling Logistics / Channel Pricing