Transcript Chapter 8: High Technology Marketing and the Internet

Marketing of High-Technology
Products and Innovations
Chapter 11:
E-Business, E-Commerce and the
Internet
Chapter Overview
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Lessons from the Dot Com Boom and
Bust
Effective Website Design and
Management
Consumer Behavior and the Internet
E-business and Organizational
(Business) Behavior
Realizing the Internet’s Full Potential
© Mohr, Sengupta, Slater 2005
Definitions
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E-business:
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the application of Internet technologies to
streamline business processes
E-commerce:
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the subset of E-business activities that
enables and supports customers to do
online transactions
© Mohr, Sengupta, Slater 2005
History of the Internet
1969
Arpanet
1974
TCP
1980s
Ethernet Protocol
1982
1990
TCP/IP
HTML
1992
Open access to the Internet
1993
Mosaic
1994
Netscape Navigator
 A decentralized network of computers commissioned by the U.S. Department of Defense to maintain
communications in the event of catastrophe.
 Limitations on the amount of data traffic it could carry.
 Scientists and engineers, and universities used the network to communicate about research projects.
 Evolved into the global Internet.
 Vince Cerf developed Transmission Control Protocol (TCP), which could transmit large amounts of traffic over
long distances.
 Developed by XEROX PARC.
 Allowed stand-alone PCs to be used for local area networking.
 TCP evolved into the current Internet protocol.
 Tim Berners-Lee, a computer programmer at CERN, Switzerland, started work on distributing and accessing
documents across servers on a network using Hyper Text Markup Language (HTML) and a primitive browser.
 Congress approved commercial use of the Internet, which for the first 20 years was only for scientists, engineers
and administrators.
 Mark Andreeson and his colleagues at the University of Illinois released Mosaic, a user-friendly browser that
built on the work of Tim Berners Lee.
 Netscape released the first commercial browser.
© Mohr, Sengupta, Slater 2005
Lessons from the Dot Com
Bust - Startups
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Dot Com founders lacked business
experience
Websites lacked value proposition for
users
Lack of vision and strategy
Overspent on customer acquisition
Intense competition
© Mohr, Sengupta, Slater 2005
Lessons from the Dot Com
Bust - Venture Capitalists
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Inadequate due diligence on startups
Imitated competitors
Unfamiliar with consumer marketing
Understaffed, spread too thin
Micro-managed startups
© Mohr, Sengupta, Slater 2005
Lessons from the Dot Com
Bust - Competition
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Reactive, venture-funded startups
Low entry barriers, overcapacity
Lack of differentiation among Websites
Formidable competition from traditional
businesses, bricks-and-clicks
© Mohr, Sengupta, Slater 2005
Lessons from the Dot Com
Bust - Overall
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Every E-business needs a solid
foundation of business strategy
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Business model or business plan
Capitalize on unique characteristics of
online environment
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Lower communication cost
© Mohr, Sengupta, Slater 2005
Framework for Online
Business Strategy
STRATEGY
B2C
1. Target:
B2B
BOTH
2. Channels to Serve:
On-line (pure-play)
Combination on- and off-line (Brick-and-click)
3. Value Proposition (and source of revenue stream)
EXECUTION
1. Infrastructure:
Technology
People
Physical assets
2. Financial projections (path to profitability)
3. Start-up financing
© Mohr, Sengupta, Slater 2005
Online Business Models
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Portals
Market makers
Seller storefronts
E-tailers
E-procurement
© Mohr, Sengupta, Slater 2005
Effective Web Site Design*
Context
Customization
Community
Connection
Communication
*All elements have reinforcement (consistency) and fit (meets needs of the target).
© Mohr, Sengupta, Slater 2005
Content
Commerce
Website Management
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Build Site Traffic
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Network effects
Scale economies
Retention rates
Manage Online Customer Relationships
© Mohr, Sengupta, Slater 2005
Consumer Behavior and the
Internet
Inhibitors
Not compatible with consumer behavior
Access to technology
Spam
Viruses, hackers, and fraud
Concerns about privacy
Facilitators
Empowerment (via access to information and transaction cost efficiencies)
Bricks-and-Clicks channel
Capability to join online communities
Peer-to-peer commuting
Broadband technologies
Wireless technologies
© Mohr, Sengupta, Slater 2005
E-Business Organizational
Behavior
Changing distribution channels
Gathering of market research
Purchasing: B2B electronic
marketplaces
Efficient human resource
management
Streamlined supply chain
management
Accelerated research and development
Effective partner relationship
management
Business Uses
of the Web
Enhanced knowledge management
Delivery of Web services
Efficient training and education
Customization of products
Improved customer service
operations
© Mohr, Sengupta, Slater 2005
Realizing the Internet’s
Full Potential
New Devices for Access
Diffusion of Broadband
Semantic Web
Overcoming Other Barriers:
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Quality/reliability
Privacy
Sociocultural/legal questions
Internet taxes
© Mohr, Sengupta, Slater 2005