Transcript Chapter 16
Electronic Marketing Chapter 16 Special Opportunities for E-Business Situations Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Brave, New World of the Web • For competitive pressures, business management is looking inward to evaluate its own strengths and weaknesses, defining the corporate competencies and shoring up or outsourcing its deficiencies – Internet-based B2B trade will reach nearly $2.4 trillion in 2004 – B2B commerce will experience astounding growth over the next 5 years rising to $6.3 trillion in 2005 – Businesses must adopt bold new models for buying and selling as online B2B commerce swells from 3% to 42% of total B2B domestic trade within 5 years Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Brave, New World of the Web • Additional findings continued… – Business users accounted for 54% of all Internet users in 1999. Cyberatlas estimates more than 500 million active users accessed the Internet – More than 75 million businesses world wide are listed on the Dunn & Bradstreet world wide database. Of those, 54.4 million are active companies. In 2000, 80% had Web sites, 43% had online catalogs, 32% use B2B e-commerce, and 52% want new Web sales channels – Volumetrics – the use of the Internet in the business world has had a 17% increase compared to home user statistics Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Brave, New World of the Web – Web usage – according to a Thomas Register and Visa USA online survey of two thousand American and Canadian businesses, 40% used the Web at least once a month – Small Business – according to a survey of 501 small businesses with less than 100 employees, 66% said they have integrated the Internet as a tool to help them run their business Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Logic of Web Usage by Business-to-Business Organizations • The way commercial enterprises conduct business has changed drastically through the nineties, and few managers, marketing included, could have foretold how technology would entangle itself in the Web of business • Businesses are finding methods to adjust their business practices in the Information Economy Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Logic of Web Usage by Business-to-Business Organizations • Marketers recognize the greatest benefit of the Web to the business sector is its efficiency: – Products can be rushed to the market – Production costs can be reduced by computer-aided design and computer-aided manufacturing – The marketing process can be made more efficient with electronic resources Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Logic of Web Usage by Business-to-Business Organizations • Efficiency continued… – Targeting prospects can be enhanced with Web sites, listservs, or Usenet discussion groups, which are directed specifically to electronic commerce support, entrepreneurial, or venture capital funds – Advertising messages can seek out viewers chosen by these viewers’ site selections and search engine choices; electronic publicity releases covering business topics find their way to news wires Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • The first order of e-business for many companies was toward automated procurement because much of the material handling involved numbers easily recognized by computer interfaces • Open Buying on the Internet (OBI) became the standard way for exchanging and trading information Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Values delivered by e-business as described by PricewaterhouseCoopers – Achieve market leadership – Reach new markets – Create new products and services – Build customer loyalty – Optimize business processes – Enhance human capital – Harness technology – Manage risk and compliance Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Information is the key commodity in business-to-business transactions • E-business strategies are selling products and services – E-business is conducive for presentation through the catalog medium – The Web serves the catalog medium well – Listings, color photographs, diagrams, prices, and details subject to quickly change are popular product specifications – Web site selling keeps product information updated Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Management and advisory services are other forms of worthwhile information gaining awareness and sales momentum on the Web – Consultative selling, situations where the outside representative becomes a trusted member of the client’s management team and the salesperson’s input is highly valued, is a most profitable activity – IBM has created a “virtual seminar for e-business” Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • The electronic marketing resources for e-business – Commercial auctions to sell surpluses carried with “live price boards” for common knowledge, either buyer or seller – Virtual consulting using videoconferencing or virtual reality Web sites – Speech recognition for routing telephone sales inquiries and security authentication Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Marketing resources continued… – Automated kiosks for guard-less entry of lodging facilities after hours, retail order-taking by push key, or printed or graphical information dispensing such as maps or brochures – Automated procurement and reordering – Robot shopping for availability of item and best price – Delivery tracking Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Marketing resources continued… – Customer and prospect profiling for company preferences and buying patterns • Inventory control and balancing • Custom communications networks • Suppliers extranets for partnering and collaboration • EDI for fast and efficient passing of large amounts of data • Company marketing presence via Web advertising and customer communications and Web-enabled product and service ordering • Customer service e-mail and call routing systems for customer communications Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo The Opportunities for Electronic Marketing Resources in Businessto-Business Transactions • Marketing resources continued… – Virtual seminars and CD-ROM training of personnel – Partnering with specialized companies to strengthen all technology and service areas of an e-commerce organization – On many Web sites the user will find search engines that are time-savers in locating information contained within the site Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo Internal Considerations for Business Operations • Business should always be searching for the best methods for doing business • Competitive forces are pushing many companies to assess the Internet as a competitive tool Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo Disadvantages of Online Businessto-Business Commerce • While the strength of e-business is streamlined efficiency, companies employing e-business lose contact with their distribution channels and sales personnel • The biggest disadvantage is the threat of alienating distributors and therefore loss of physical distribution points Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo Disadvantages of Online Businessto-Business Commerce • Different companies are trying different strategies to address the distributor or salesperson displeasure – Compaq had introduced its own Web commerce site, selling computers at rock-bottom prices directly to small businesses and individuals – IBM has tried using their Internet sites mainly to direct prospects to online ordering sites operated by longestablished dealers Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo Disadvantages of Online Businessto-Business Commerce • Strategies continued… – Radius, Inc., began online sales of its software for handling digital photos – Many other industries have long been partnering with distributors or third-party resellers, and e-business marketing strategies should be set with the prospect of gaining or losing key personnel or distribution outlets at any time Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo Disadvantages of Online Businessto-Business Commerce • Some companies abhor the prospect of limiting its sales over the Internet – 3M lists hundreds of its products on its Web site, but generally does not provide a way to order these products directly from the company Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo E-Business Sales Forecasts by Industry • The e-commerce specialist, Forrester Research, expects business-to-business e-commerce revenues to jump from $109 billion in 1999 to $1.3 trillion by 2003 • In making marketing decisions and plans, the marketer should probably adopt a conservative strategy, projecting the industry’s sales volume and her company’s market share and volume no further than two years hence • Study the industry projections to see which are reasonable for the environmental conditions of today and hopefully of tomorrow Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/8/2016 2004 Joel Reedy and Shauna Schullo