Transcript ECT 250: Survey of e-commerce technology

ECT 250: Survey of e-commerce technology
Marketing, sales, and promotion
Building a presence
• An organization’s presence is the public image it
conveys to its stakeholders.
• The stakeholders include customers, suppliers,
employees, stockholders, neighbors, and the
general public.
• Physical world: Create a store, factory, warehouse
or office building and/or engage in advertising.
• On the Web: Create a site, which may be the only
point of contact for stakeholders, and/or engage
in advertising.
2
Web presence goals
• Attracting visitors to the site
• Making the site sticky so that visitors stay
• Convincing visitors to follow the site’s links to
obtain information
• Creating an image consistent with the desired
image of the organization
• Reinforcing positive images that the visitor may
already have about the organization
3
Examples
• Commercial organizations
– Toyota
– Metra
• Museums
– Art Institute
– Field Museum
– Museum of Science and Industry
4
Elements of a Web site
• History, statement of objectives, mission statement
• Information about products or services
• Financial information
• A way to communicate with the organization
+ Usability matters
+ Communication should be two-way
+ Failure will result in a loss of competitiveness
How can the design of the site be done effectively?
5
Purposes for visiting a site
• Learning about products and services
• Buying products and services
• Obtaining information about warranties or service
for previously purchased products
• Gaining general information about the organization
• Obtaining information for the purposes of investing
or granting credit
• Identifying the people who manage the organization
• Obtaining contact information for an individual
6
Difficulties in delivering content
• Varying visitor needs
• Differing experience levels
• Technological issues
– Data transmission speeds
– Web browsers
– Plug-in software
7
Strategies
• Convey an integrated image
• Provide easily accessible facts both about the
firm and any products or services it may offer
• Allow visitors to experience the site in a variety
of ways and at different levels
• Provide meaningful, responsive, reliable, twoway communication
• Sustain visitor attention without detracting from
the purpose and image of the site
• Find ways to encourage return visits
8
Usability
• Design the site around how visitors will navigate
the site, not around the organization’s structure
• Allow quick access to the site’s information
• Avoid using inflated marketing statements
• Avoid using business jargon
• Allow visitors with older browsers and slower
connections to access the site -- this may mean
building several versions of the site
• Be consistent in the use of design features and
colors
9
Usability
• Make sure that navigation controls are clearly
labeled or otherwise recognizable
• Test text visibility on smaller monitors
• Check that color combinations do not impair
viewing clarity for the colorblind
Positive examples: Webby Awards
(See the Monterey Bay Aquarium)
Negative examples: Mud Brick Awards
10
Finding and reaching customers
• Personal contact/prospecting
Employees individually search for, qualify, and
contact potential customers.
• Mass media approach
Advertising and promotional material is created
and then distributed via:
– Television or radio
– Newspapers or magazines
– Highway billboards
– Mailings
11
Types of interactions
• One-to-many
– Mass media
– Seller sends out carefully produced messages
to a large audience.
– Seller is active; buyer is passive.
• One-to-one
– Personal contact
– Salesperson interacts with customer directly.
– Trust building is important.
– Both seller and buyer participate actively.
12
The Web
• Many-to-one
Many active potential customers seek out
information from resources produced by the
seller. Example: Book review sites, fan sites
• One-to-one
E-mail contact with a seller
• Many-to-many
Newsgroups and interactive Web sites
• Primary characteristic: The buyer is active and
controls the length, depth, and scope of the
search.
13
Effectiveness of mass media
• Mass media efforts are measured by estimates of
audience size, circulation, or number of addresses.
• Money spent on mass media is in dollars per each
thousand people in the estimated audience.
• This pricing metric is called cost per thousand and
is often abbreviated CPM.
14
Micromarketing
As mass media lost its effectiveness (new and
improved!), one approach was to divide a pool
of potential customers into segments. This is
called market segmentation.
Targeting very small market segments is called
micromarketing. Micromarketing is expensive
using traditional means, but more cost effective
on the Web.
15
Web-specific measures
• A visit occurs when a visitor requests a page.
Immediate downloads of new pages are often
counted as part of the same visit.
• A trial visit is the first one; subsequent ones
are called repeat visits.
• Each page loaded is a page view.
• If the page contains an ad it is an ad view.
• An impression refers to each banner ad load.
• If a visitor clicks a banner, it is a click-through.
• One CPM for banner ads is 1000 impressions.
• Charges range from $1 to $100 CPM.
16
Comparisons
The Web has:
• Better effectiveness than mass media
• More trust than mass media
• Lower cost than personal contact
• Less trust than personal contact
It is believed that a move toward the side
of personal contact is more effective.
• Increase the trust level
• Increase the personalization
17
Technology and marketing
Technology-enabled relationship management is
when a firm obtains detailed information about
customer preferences, needs, behavior and buying
patterns and uses that information to:
• set prices
• negotiate terms
• tailor promotions
• add product features
• customize its relationship with the customer.
18
Branding
• A known and respected brand presents a powerful
statement about quality, value, and other desired
qualities to potential customers.
• Branded elements are easier to promote.
• The key elements of branding are:
– Differentiation
– Relevance
– Perceived value
• This makes branding for commodity products like
salt or plywood more difficult.
19
Differentiation
A characteristic that sets the product apart from
similar products.
Examples:
• Ivory soap: “It floats”
• Dove soap: “1/4 moisturizing creme”
• Palmolive dish soap: “Mild on your hands”
• Dawn dish soap: “Takes grease out of your way”
• Antibacterial soaps
20
Relevance
The degree to which the product offer utility to a
potential customer. The customer must be able to
see themselves purchasing and using the product.
Examples:
• Cadillac
• Hyundai
• Minivans
21
Perceived value
The product must have some identified value.
Products can be different than others and people
can see themselves using it, but it may not have
values that they desire.
Example: Subway sandwich ads comparing fat
values of their product to those found in BigMacs.
22
Emotional branding
Ted Leonhardt: “Brand is an emotional shortcut
between a company and its customer”
Emotional appeals work well on television, radio,
billboards, and print media since the viewer is a
passive recipient of information.
On the Web it is easy to click away from emotional
appeals.
23
Rational branding
Rational branding offers to help Web users in some
way in exchange for their viewing an ad. Functional
assistance replaces emotional appeals.
Examples:
• Free e-mail services such as HotMail
• Free Web hosting such as HyperMart
• ShopSmart! program from Mastercard
24
Other branding strategies
• Leverage success in one area into another area.
Example: Yahoo!
• Affiliate marketing: Descriptions, reviews or other
information about a product on one site are linked
to pages on another site allowing you to purchase
that item.
Example: Amazon.com
• Serving as a market intermediary between buyers
and sellers.
Example: Wedding Channel
25
Costs of branding
• Transferring existing brands to the Web or using
the Web to maintain an existing brand is easier
and less expensive than creating a new brand.
Example: Catalog sales companies
• Attempting to create a brand on the Web may
involve spending on traditional mass media
such as television, print, and radio.
Example: In 1998 Amazon.com spent $133
million and BarnesandNoble.com spent $70
million, much of it on traditional advertising.
26
Business models for the Web
• Selling goods and services
Based on the mail order catalog business
• Selling information or other digital content
Can be used to expand markets and cut costs
• Advertising supported
Used by American network television
• Advertising-subscription mixed
Supported via both fees and advertising
• Fee-for-transaction
The use of information filtering for profit
27
Selling goods and services
• Used for apparel, computers, electronics, and gifts.
• The printed catalog is replaced or supplemented by
information on the Web site.
• Customers may purchase via phone. (Why?)
• Fabric swatches are usually available. (Why?)
• Examples:
– Dell computers: Flexibility
– Lands’ End: Overstocks
– FTD Florists: Traditional advertising
– Buy.com: Discounting
28
Selling digital content
The Web is an efficient means for selling information.
• Legal research: Lexis Publishing
• Digital copies of documents: ProQuest
• Electronic versions of journals: ACM Digital Library
• Adult entertainment
• Reference materials: Encyclopedia Britannica
29
Advertising supported
The success of Web advertising has been hampered
by two major problems:
• There is no consensus on how to measure and
charge for site visitor views.
Examples: Number of visitors, number of unique
visitors, number of click-throughs.
• Very few Web sites have sufficient number of hits
to interest large advertisers.
Targeted advertising requires that demographics
be collected, a sensitive privacy issue.
One success: Employment advertising
30
Advertising-subscription mixed
• Subscribers are subject to less advertising and have
greater access to the resources of the site.
• Popular with online newspapers.
• Examples
– The New York Times
– The Wall Street Journal
– Reuters
– ESPN
31
Fee-for-transaction
• Value-added services are sold in exchange for a
commission.
• Travel agencies
– Travelocity
– Expedia
• Automobile sales
– Autobytel: An example of disintermediation
• Stockbrokers
• Insurance companies
32