For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 1 Chapter 3: E-Business.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 2 LEARNING OBJECTIVES (1) List the audiences with whom an e-business would need to communicate. Compare and contrast a one-to-many and many- to-many communication model. Explain how the communication process works. Describe the role involvement plays in Web site design. Relate hypermedia’s role in gaining audience attention.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 3 LEARNING OBJECTIVES (2) Outline what should be done with a Web site to gain audience interest. Explain how an e-business can develop desire from its target market. List what is important in motivating an audience to take action. Explain how e-business communication can be used in industrial markets. Contrast the strengths and weaknesses of using the Internet as an advertising medium.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 4 Vignette: Amazing Amazon.com Thinking Strategically –Make a short list of what you know about Amazon.com. –Decide how much of that information comes from: Paid advertising, publicity, and from interacting with the Web site. –Evaluate the design of the Web site. –Determine what in the Web site design would encourage you to purchase.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 5 The Internet as a Communication Medium The Internet is used to communicate to constituencies or audiences both external and internal to the e-business. –External audiences include customers, stockholders, the general public, and other specifically targeted audiences. –Internal audiences can include both employees and suppliers.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 6 Hypermedia Hypermedia allow companies to deliver targeted messages to specific audiences. –Hypermedia environments are distributed network that allow for hyperlinks and nonlinear search and retrieval processes to collect information. Examples: World Wide Web, interactive television, interactive Web based cellular telephones, and other portable devices.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 7 Linear Communication Traditional media often follow a one-to- many communication model where a single promotion, such as a print ad or television commercial, is sent by one source and seen by many without the opportunity for immediate feedback. Linear communication follows a scripted flow.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 8 Non-Linear Communication Interactivity and hyperlinks allow for a type of two-way communication between the e- business and its audience. Non-linear communication allows for a free flow and exchange of information. – Most conversations individuals have with others are non-linear. Good sales presentations are free flows of communication.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 9 What Is Promotion? Promotion is a communication process consisting of advertising, publicity, sales promotion, and salesmanship.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 10 Figure 3.1: The Communication System COMMUNICATION SYSTEM MESSAGE Media MESSAGE Media SENDER FEEDBACK NOISE TARGETED SEGMENT EncodeDecode

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 11 Many-to-Many Model (1) The many-to-many model places the hypermedia in the center of the communication process. Hypermedia become a meeting place where anyone can communicate with anyone else. Both firms and customers can obtain and deliver content.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 12 Hypermedia Figure 3.2: Many-to-Many Model Content Custome r Fir m Custome r

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 13 Many-to-Many Model (2) The many-to-many model is also evident in the use of chat or threaded discussion lists at Web sites. –Chatting online involves a number of individuals who leave messages for others to see. This can be placed in a repository or chat rooms for viewing at later times or could be “live” in that individuals write to others in real time.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 14 Many-to-Many Model (3) Threaded discussion lists allow individuals to add to an initial message with successive messages. This allows a newsgroup user to add to a thread, or single conversation, by indicating their response to the prior message. Messages are available for other to read and are indented under topics headings: –Initial Post First response –Second response

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 15 Figure 3.3: Linear Communication Thumbnails Thumbnail: a quick sketch of a communication concept allowing the creation of a large number of ideas in a short time period.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 17 Hypermedia Communication Goals A Web site can provide a little or a great depth of information for a site visitor. A single site can be designed for goal- directed buyers as well as for those who are net surfing and are looking only to experience the site. –The Web site can be designed to allow links to other individuals who share the same interests.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 18 High Involvement (1) Individuals with high involvement for a product or product category are: –likely to see a topic as interesting or important –attend to information more –are more likely to comprehend complex messages –may be willing to spend more time with a Web site. Involvement levels of individuals can be high when they are goal directed, such as attempting to gather information to make a purchase.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 19 High Involvement (2) Individuals can also have high enduring involvement with products or product categories, and engage in net surfing to obtain high levels of interactivity with sites. –Enduring involvement exists when an individual has a high level interest in a topic over and extended time period.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 20 From Public Relations to Supporting Relationships Brochure sites are designed as an advertising or public relations tool. –May contain the same information as a business’ print material. –These sites are designed to make visitors aware of and informed about a business's image or products. –This can be seen as a simple extension of traditional media campaigns. –Brochure sites should be designed to enhance the overall promotional campaign.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 21 The Public Face of a Business For non-brick and mortar pure-play Internet businesses, the Web page may be the only chance a customer has to interact with the business. The Web page must project and protect the image of the company. Protecting a company's image is a concern on the Internet.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 22 Web Sites and Company Image Some companies that have registered domain names to prevent attack include:  Charles Schwab: !#%*schwab.com and schwab!#%*.com.  BellAtlantic: Bigyellow!#%*.com  Chase Manhattan Bank: Chase!#%*.com  Cox Communications Inc.: Cox!#%*.com  Vail Resorts: vailresorts!#%*.com  Volvo Cars of North America: volvo!#%*.com  Playboy Enterprises: Playboy!#%*.com !#%* represents a deleted offending word

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 23 Relationship Sites Relationship sites target individuals who may have higher levels of information involvement. –Sites can designed for individuals with high levels of enduring involvement. –They often contain games, chat groups, or other interactive components to maintain relationships with customers.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 24 Online Transactions Sites Customers can be taken from a stage with little information to the process of engaging in online transactions. –Experienced salespeople can be key in developing a relationship site. –Salespeople identify the needs of their prospects and then tailor, or encode, the communication to meet the prospect's needs and answer any questions the prospect may have.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 25 Case 3.1: In The Web Driving Seat Thinking Strategically –Visit the BMW Web site (www.bmwusa.com).www.bmwusa.com –Determine if the site is only designed for current BMW owners or if they are targeting potential owners as well. –Decide if this site appeals to individuals with high or low levels of automotive involvement. –Visit another Web site for a single automobile or manufacturer. –Determine if those sites are designed to appeal to high or low automotive involvement levels.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 27 Media and Effects PROMOTIONAL STRATEGY MATRIX ATTENTION INTEREST DESIRE ACTION PUBLIC RELATIONS ADVERTISING PERSONAL SALES SALES PROMOTION WEB PAGE A promotional mix includes the use of public relations and publicity, advertising, personal selling, sales promotions, and hypermedia such as Web sites.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 28 Gaining Attention (1) Traditional media gain attention by designing messages with enough impact to gain and hold the audience or the message can be repeated numerous times. A Web site differs from traditional media in that the receiver must actually use the Internet to link to Web page content. An individual will not be exposed to the message unless they participate in some active measure to view a Web site.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 29 Steps to gain the audience's attention: –Include a site's URL or address in other media. The Web address should be included in advertising copy and layouts, business cards, banner ads located in other Web sites, direct email and other directed media. The use of URLs in print ads have increased from around 10 percent of ads in 1995 to over 90 percent by 1998 Gaining Attention (2)

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 30 Search engines should also be used so the business and its Web address will appear when the Web user searches for topics related to that business. Search engines are a cost-effective means of making people aware of a site, but they do not guarantee that a viewer will choose or remember the site. Search Engines (1)

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 31 Search Engines (2) Three types: –Search directories require that Web site be submitted for cataloging. –Search engines use Web spiders or web bots to collect information from sites. Web spiders are bots, or software robots, that “crawl” through the Internet looking at Web sites. –Metacrawlers use the databases of multiple major search engines. These are good for power searches, but combining multiple results can lead to repetitive hits.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 32 Hypermedia Hyperlinks (1) Gaining attention through Web sites: –Banner ads Banner ads have not been highly effective in achieving click-through, or having an individual click on a linked banner to link to other sites. –Sponsorship (or co-branded ads) Integrate a company's brand to the editorial content of the Web site. For example, a firm may sponsor a news site or community bulletin board

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 33 –Interstitials Automatically load and display content as Web site content is brought up. This includes the use of daughter windows that pop and freely float to display ad content. Hypermedia Hyperlinks (2)

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 34 Online Advertising Sponsorships Interstitial (daughter window) Banners and Buttons

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 35 Interest The home page or the first page that a visitor sees at a site. –If a visitor has specifically tried to find the web site, or they have high involvement with the company or product, they may wait for the page to load and spend time watching and interacting with the site. –If the visitor is only browsing, they may zap the site and move on if it takes too long to download or is not interesting.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 36 Case 3.: Ride the Wild Mouse Thinking Strategically –Consider what types of design elements would be of interest to Six Flags’ customers. –Visit the Six Flags’ Web site (www.sixflags.com).www.sixflags.com –Determine the types of plug-ins that are required to use the site. –Decide how important having high bandwidth is for users of this site. –Evaluate the design elements. –Determine what this site has that will get its target audience to visit more than once.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 37 Web Site Goals Brochure or public relations sites –The compelling reasons for the visitor to remember and return to the site should be communicated. Action oriented sites –The communication should be focused around the unique selling proposition of the firm or the competitive advantage of the product over competitive products

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 39 Desire The cost of obtaining a new Web customer can average $34. –Once this customer is found an e-business has an incentive to keep that customer’s interest and desire to come back to a site. –This can be accomplished by effect message design and communication strategies. –Knowledge held by the sales force can be tapped to outline the site’s information flow.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 40 Targeted E-Mail Targeted e-mail allows firms to directly contact individuals. –Targeted e-mail works best with individuals who have already given their permission to receive messages. Permission marketing is where the customer ops-in, or signs in at a Web site and agrees to receive email based direct marketing.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 41 Push and Personalization Hypermedia based promotion allows for personalized messages and sending messages to the individual using push technology. –Webcasting allows the user to have information delivered to their "doorway" or browser without requesting or searching for information. Individuals can customize the homepages.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 43 Action E-business Action Goals: –Have individuals visit a Web site –Provide information for databases –Obtain information for future purchases –Make online purchases.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 45 Case 3.: Which Media Helped the Witch? (1) Thinking Strategically –Decide who the target market was for The Blair Witch Project. –Determine what this target market would be most interested in seeing at a Web site. –Visit the Web site (www.blairwitch.com).www.blairwitch.com –Evaluate the content developed for the site. –Determine what is the most compelling for individuals interested in this movie.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 46 Case 3.: Which Media Helped the Witch? (2) Thinking Strategically –Consider what would need to be changed to keep individuals returning to the site. –Visit other movie Web sites. –Determine their target markets and how they develop relationships with their audiences.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 47 Industrial Markets Industrial markets have traditionally relied more on personal sales for communication while consumer markets have been centered on advertising. Table 3.5: Consumer vs. Industrial Markets CONSUMER INDUSTRIAL ADVERTISING PERSONAL SALES WEB PAGE

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 48 Communicating Through Extranets and Internets Extranets and Intranets use the common IP interface and have the same communication considerations as Internet based Web communication. Intranets use browsers, servers, and Internet protocols, but are not open to unauthorized users. –Bandwidth inside organizations is often higher than home users allowing for the potential for applications such as voice, video, and conferencing online.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 49 Sales Force Automation Sales force automation (SFA) uses the information power of interactive media to enhance selling efforts. –The basis for sales force automation is centered on using Web based technology to aid in the sales process. SFA empowers the sales person by allowing them to link to vital information from the companies Web site. –Provide inventory data, price information, and aiding in sales presentations.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 50 Advertising (1) The Web allows for: –Direct communication and interaction with customers. –Tracking a customer's media use. –The development of customized ads and placement. –Facilitates actions such as purchasing.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 51 Advertising (2) The Internet is the fasting growing media. –Taking only 5 years to reach 50 million users compared to radio’s 38 years, television’s 13 years, and cable’s 10 years. –Web surfers have shifted media habits away from television watching. Problems with the Web media include: –Narrow target markets, privacy concerns, limited bandwidth, no effective measures of success, and hard to prove returns on investments.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 52 Agencies Advertising agencies act as intermediaries by providing the talent to help set promotional objectives, create the content, place the promotion in the media, and provide feedback on the results of the campaign to the client. Agencies: –DoubleClick (www.doubleclick.com)www.doubleclick.com –USWeb (www.usweb.com)www.usweb.com –Razorfish (www.razorfish.com)www.razorfish.com

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 53 Timing Traditional promotional campaigns use a mix of media to reach all of the AIDA goals. –Using a combination of broadcast and print over differing time periods. The Web allows advertisers to develop sites where the target audience can visit whenever they want and as often as they like. –It is important that Web sites be refreshed to encourage the users to return.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 54 Measuring Effectiveness Internet advertising has the potential for allowing the advertiser to capture information such as who sees which ad and for how long. –Web servers are able to track every time an individual moves from one linked page to another. –Dead pages, or pages no one visits, can be updated or deleted. –This data can be collected from both the sending server and the user's PC. –Data from cookies may even provide an indication of the profile of the user.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 55 Table 3.3: Measurement of Hypermedia Advertising (1) Hit Counts: Early measure that looks at server data for number of times a page is requested, but not necessarily seen or displayed at the user’s browser. –C ould include multiple hits counted for every click of the mouse or page refresh. –Records activity regardless of the viewer’s location such as from workplaces, homes, schools, or from other countries. –Provides no information on users.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 56 Table 3.3: Measurement of Hypermedia Advertising (2) Page Views: Tracks the number of individual pages sent to Web viewers. –Gives no indication of how many users receive or view pages and no profile data on the user. Click-Throughs: Tracks the number of times an online ad is clicked on. –Gives no information about the customers. –Customers who click through may dump a page before it loads.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 57 Unique Visitors: Allows tracking by the IP address of viewer. –Multiple users may use the same IP address to access a site. Reach: Measure of sampled group’s visits (if 25% of sample has visited site has obtained 25% reach). –Requires the use of surveys or panels may be narrow in scope. –This can pair information on the individual’s background with individual behavior. Table 3.3: Measurement of Hypermedia Advertising (3)

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 58 New Measures: These could include linking individuals by demographic data, loyalty, site behavior, and other measures. –These new measures may allow constant measures of who visits a site and how long they stay at a site. Table 3.3: Measurement of Hypermedia Advertising (4)

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 59 Ad Blocking Consumers can filter, or block ads from Web sites. –This shifts power from businesses to the consumers. Filters look at the HTML code and checks files and file types against a filter list to block ads, interstitials, or animated banners. –There is a stronger interest in this type of technology inside of companies where blocking of ads can improve speed and network performance. Some companies have retaliated by blocking users who use ad blocking software

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 60 Table 3.4: Web Site Ratings Indicators In the first quarter of 1999: –43% of campaigns used cost per thousand, 6% used performance based measures, and 51% used a combination of measures.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 62 ALE 3.2: Determining Advertising Rates Find pricing information on advertising rates from media kit at Web sites. –DoubleClick’s Business Rate Card: www.doubleclick.com/advertisers/business/rate_card.htm www.doubleclick.com/advertisers/business/rate_card.htm –Evaluate how DoubleClick assigns its charges. –Visit another site and find its advertising rates. –How do these compare to DoubleClick’s. –Compare the target markets of the two Web sites. –Determine which Web site is the better value.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 63 ALE 3.3: Charting A Thumbnail Create a thumbnail of a TV ad by charting out the flow of the major scenes. Find a Web site for that product or a similar product. Contrast the differences in information flow. Consider which approach works best in moving the audience through the AIDA process. Determine how each medium could support the other in reaching communication goals.

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 64 Active Learning Exercise #3.1: Soft Drink Design Design a Web site for a new soft drink: –Who is the target market? –What is the main selling point? –How will the market will decode the message? –What other media will tie in with this site as part of a campaign? –How will the message encoded? –How will the site be designed? How does this Web design compare to existing sites? How do these companies develop relationships with their target audiences?

For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 1 Chapter 3: E-Business.

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For use with Strategic Electronic Marketing: Managing E-Business Copyright 2000 South-Western College Publishing Chapter 3 Slide: 1 Chapter 3: E-Business.

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