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Electronic Commerce Electronic Commerce BADM 561 BADM 561 Dr. Cara Peters Dr. Cara Peters

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Page 1: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Electronic Commerce Electronic Commerce

BADM 561BADM 561

Dr. Cara PetersDr. Cara Peters

Page 2: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Stages in MarketingStages in Marketing

1. Mass Production1. Mass Production

2. Personal Selling 2. Personal Selling

3. Branding 3. Branding

4. Customer Relationship 4. Customer Relationship

ManagementManagement

Page 3: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Marketing TrendsMarketing Trends

Production Selling Branding CRM

Product Single product Few, Mass Few, Mass Many, Custom

Market size Large as possible

Regional National, Global

Global

Competitive Tools

Manufacturing Channels Advertising Technology

Page 4: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Does the Internet change Does the Internet change marketing? marketing?

Increased personalization of messagesIncreased personalization of messages

Mass customization of products & Mass customization of products & pricesprices

Using multiple channels of distributionUsing multiple channels of distribution

E-commerce: E-commerce: a production process that converts a production process that converts digital inputs into value-added outputs through a set digital inputs into value-added outputs through a set of intermediariesof intermediaries

Page 5: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Modes of E-commerceModes of E-commerce

CommunicationsCommunications: delivery of : delivery of informationinformation

Business processBusiness process: automation of : automation of business transactionsbusiness transactions

ServiceService: maintenance of relationships: maintenance of relationships

TransactionsTransactions: exchange : exchange products/servicesproducts/services

Page 6: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Types of E-commerceTypes of E-commerce

Intra-organizational e-commerceIntra-organizational e-commerce• Called an intranetCalled an intranet• workgroup communications, electronic workgroup communications, electronic

publishing, sales force productivitypublishing, sales force productivity

Inter-organizational e-commerceInter-organizational e-commerce• inventory, channel management, payment inventory, channel management, payment

managementmanagement• Existence of an extranetExistence of an extranet

Page 7: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The InternetThe Internet

The world’s largest matrix of The world’s largest matrix of interconnected computer interconnected computer networks.networks.

Page 8: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of ComputingBeginning of Computing

Abacus (Babylonia, 2500 BC)Abacus (Babylonia, 2500 BC)

Babbage: first computing engineBabbage: first computing engine– Circa 1800, computed Bernoulli numbersCirca 1800, computed Bernoulli numbers

Bryon: first computer programmerBryon: first computer programmer– Circa 1800Circa 1800

Page 9: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of ComputingBeginning of Computing

Hollerith: punch card system Hollerith: punch card system – Analyzed 1880 census data Analyzed 1880 census data – Became IBM in 1924Became IBM in 1924

ENIAC: World’s first large scale ENIAC: World’s first large scale digital computerdigital computer

– Electronic Numerical Integrator Analyzer Electronic Numerical Integrator Analyzer & Computer& Computer

– University of Pennsylvania, 1945University of Pennsylvania, 1945– Prepared bombing tables for WWIIPrepared bombing tables for WWII

Page 10: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of the InternetBeginning of the Internet

Non-commercialNon-commercial• Military driven, Cold war fearsMilitary driven, Cold war fears• Department of Defense Department of Defense

– ARPA (Advanced Research Projects ARPA (Advanced Research Projects Agency, 1958)Agency, 1958)

– Created ARPANetCreated ARPANet– national nuclear-proof communication network national nuclear-proof communication network

– Wide area, packet-switching, resource- Wide area, packet-switching, resource- sharing communication networksharing communication network

Page 11: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of the InternetBeginning of the Internet

Four University computer nodes were Four University computer nodes were linked for host-to-host data exchangelinked for host-to-host data exchange• UCLA, Stanford, UCSB, & Utah (1969)UCLA, Stanford, UCSB, & Utah (1969)• 15 nodes connected 23 universities, 15 nodes connected 23 universities,

NASA, & other facilities (1971)NASA, & other facilities (1971) National Science Foundation: working National Science Foundation: working

on a high-speed network backboneon a high-speed network backbone• NSFNet, major component of Internet NSFNet, major component of Internet

(1986)(1986)

Page 12: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of the InternetBeginning of the Internet

Initially banned commercial useInitially banned commercial use

Led to development of an “Internet Led to development of an “Internet Culture”Culture”

Tomlin invented email (1971)Tomlin invented email (1971)• ARAPNet contractorARAPNet contractor• Became largest Internet serviceBecame largest Internet service• Driving growth among the massesDriving growth among the masses

Page 13: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of the InternetBeginning of the Internet

Transmission Control Transmission Control Protocol/Internet Protocol standard Protocol/Internet Protocol standard became common operating standard became common operating standard (1983)(1983)

Non-commercial restrictions removed Non-commercial restrictions removed (1986)(1986)• NSFNet backbone open to all usersNSFNet backbone open to all users• By 1987, number of Internet hosts By 1987, number of Internet hosts

10,000+10,000+

Page 14: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Beginning of the InternetBeginning of the Internet

Berners-Lee created a program that Berners-Lee created a program that created hypertext links (1991)created hypertext links (1991)• Browser interface & beginning of the Browser interface & beginning of the

World Wide WebWorld Wide Web

The web took off in the 1990sThe web took off in the 1990s• graphical user interfacegraphical user interface• mix media (picture, sound, video, etc.)mix media (picture, sound, video, etc.)• ripe for commercializationripe for commercialization

Page 15: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Early Internet useEarly Internet use

Early web sites lacked features which Early web sites lacked features which are common todayare common today

Had to program in HTML code, Had to program in HTML code, compared to today’s WYSIWIG compared to today’s WYSIWIG formatformat

Consumer fascination & Consumer fascination & commercialization spurred growth of commercialization spurred growth of webweb

Page 16: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Advantages of Internet: Advantages of Internet: SharingSharing

OpennessOpenness Low connection costs lead to Low connection costs lead to

sharingsharing Common standardsCommon standards

• Internet Protocol (IP)/Transmission Internet Protocol (IP)/Transmission Control Protocol (TCP)Control Protocol (TCP)

• Communication sending standards for Communication sending standards for the Internetthe Internet

Page 17: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Advantages cont: UbiquityAdvantages cont: Ubiquity

Interactive & DynamicInteractive & Dynamic Networks are ever-present Networks are ever-present

• anywhere, anytime, any equipmentanywhere, anytime, any equipment Value of a network increases with the Value of a network increases with the

square of the number of participantssquare of the number of participants• Metcalfe’s lawMetcalfe’s law• Suggests value of a network rises when Suggests value of a network rises when

more people participatemore people participate

Page 18: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Ubiquity continuedUbiquity continued

So, value depends on growthSo, value depends on growth Reach point of inflection or Reach point of inflection or critical critical

massmass Too much growth can be a negativeToo much growth can be a negative

• presence of unwanted individualspresence of unwanted individuals– too many who clog the systemtoo many who clog the system– spammersspammers– crimecrime

Page 19: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Advantages cont: Advantages cont: RedundancyRedundancy

ReliabilityReliability• decentralized, distributed networks with decentralized, distributed networks with

multiple connectionsmultiple connections EfficiencyEfficiency

• messages broken into packets with messages broken into packets with multiple users on one phone connectionmultiple users on one phone connection

ScalabilityScalability• open standards, capability to grow the open standards, capability to grow the

network rapidlynetwork rapidly

Page 20: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Technology Behind the Technology Behind the InternetInternet

Digital underpinnings: its Digital underpinnings: its properties & information are properties & information are strings of zeros/onesstrings of zeros/ones• Bytes of informationBytes of information

Three factors give power to bytesThree factors give power to bytes• Moore’s lawMoore’s law• Digital environmentsDigital environments• ConvergenceConvergence

Page 21: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Moore’s lawMoore’s law

Describes falling cost of technologyDescribes falling cost of technology Moore (Intel, 1965) noticed that Moore (Intel, 1965) noticed that

engineers kept packing circuits engineers kept packing circuits more closely togethermore closely together• miniaturization was about 30% smaller miniaturization was about 30% smaller

every 18monthsevery 18months• in fact, surface area needed for same in fact, surface area needed for same

number of components was about half number of components was about half

Page 22: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Moore’s lawMoore’s law

Each new generation of chip Each new generation of chip technology, which has been technology, which has been released about every 18 months, released about every 18 months, can pack the same number of can pack the same number of elements into half the spaceelements into half the space

• smaller, cheaper yet more powersmaller, cheaper yet more power

Critics: law cannot continue Critics: law cannot continue • separation becomes too smallseparation becomes too small

Page 23: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Digital environmentsDigital environments

Digital technology can create life-Digital technology can create life-like environmentslike environments

Encyclopedic: store information: store information Procedural: follow programmed : follow programmed

rulesrules Participatory: user choice, : user choice,

command, or preferencecommand, or preference Spatial: virtual space: virtual space

Page 24: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The Power of Digital The Power of Digital EnvironmentsEnvironments

Digitization can change industriesDigitization can change industries• Adult entertainment Adult entertainment

– These sites generate $2 Billion in salesThese sites generate $2 Billion in sales– Most profitable consumer sector on webMost profitable consumer sector on web– Over 11 million sites come up when Over 11 million sites come up when

search “Porn”search “Porn”– Yet few providers convey most of the contentYet few providers convey most of the content

– ““Sex” is consistently the top term on Sex” is consistently the top term on search enginessearch engines

Page 25: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The Power of Digital The Power of Digital EnvironmentsEnvironments

Adult entertainment Adult entertainment • Preview to payPreview to pay

– $25-40 per month for pictures & video$25-40 per month for pictures & video– High marginsHigh margins

• Upgrading sites for competitionUpgrading sites for competition– Reliable streaming videoReliable streaming video

• Increased customer serviceIncreased customer service– Credit cards, personal funds transfer, Credit cards, personal funds transfer,

telephone subscriptionstelephone subscriptions

Page 26: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The Power of Digital The Power of Digital EnvironmentsEnvironments

Adult entertainment Adult entertainment • PlayboyPlayboy• Danny’s hard driveDanny’s hard drive• Club Jenna dot comClub Jenna dot com

• What will virtual reality bring about?What will virtual reality bring about?

Page 27: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

ConvergenceConvergence

Merging of industries, Merging of industries, technologies, and content which technologies, and content which used to be separateused to be separate

Computing, communications, & Computing, communications, & media content coming togethermedia content coming together

– AOL/Time Warner Merger (Spring 2000)AOL/Time Warner Merger (Spring 2000)– Cell phonesCell phones

Page 28: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The Internet Does Have The Internet Does Have ProblemsProblems

Breakdowns/Outages or Delays/Lags Breakdowns/Outages or Delays/Lags Bandwidth: amount of data transmitted Bandwidth: amount of data transmitted

through communication channelthrough communication channel• broadband, direct connection to National broadband, direct connection to National

Internet Backbone, large bandwidth Internet Backbone, large bandwidth – Cable, DSLCable, DSL

• dial-up, indirect path through ISP, narrow-dial-up, indirect path through ISP, narrow-bandwidth bandwidth

Page 29: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

DiffusionDiffusion

How Innovations Spread How Innovations Spread

Throughout SocietyThroughout Society

Page 30: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Technology Diffusion Technology Diffusion Rates (US)*Rates (US)*

FaxFax RadioRadio TelevisionTelevision Personal Personal

ComputerComputer InternetInternet

*To reach 50 million people*To reach 50 million people

75 years75 years 38 years38 years 13 years13 years 16 years16 years 5 years5 years

Page 31: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

DiffusionDiffusion

A process by which an innovation A process by which an innovation is communicated through certain is communicated through certain channels over time among channels over time among members of a social systemmembers of a social system• social change social change • spreadspread

– diseases, products, ideasdiseases, products, ideas– Similar patternSimilar pattern

Page 32: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Four Main Elements of Four Main Elements of DiffusionDiffusion

InnovationInnovation

CommunicationCommunication

TimeTime

Social systemSocial system

Page 33: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Diffusion NetworksDiffusion Networks

Opinion leadership• Degree to which an individual is able Degree to which an individual is able

informally to influence other individual’s informally to influence other individual’s attitudes/behavior with relative attitudes/behavior with relative frequencyfrequency

Adopters Adopters model and and imitate their their peers’ behaviorspeers’ behaviors• follow other consumers & innovations follow other consumers & innovations

spreadspread

Page 34: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Diffusion networksDiffusion networks

Consumers are linked by Consumers are linked by relationships and communicationrelationships and communication• both strong and weak both strong and weak ties

Eventually get a Eventually get a critical mass of of adoptersadopters• Point at which enough individuals have Point at which enough individuals have

adopted an innovation so further rate of adopted an innovation so further rate of adoption is self-sustainingadoption is self-sustaining

Page 35: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Diffusion networks Diffusion networks continuedcontinued

S-shaped curveS-shaped curve• X axis: time/Y axis: rate of adoptionX axis: time/Y axis: rate of adoption• Critical mass occurs at point of Critical mass occurs at point of

inflection in curveinflection in curve Marketers can Marketers can build a critical mass a critical mass

• target groupstarget groups• shape perceptions of innovationshape perceptions of innovation• provide incentivesprovide incentives

Page 36: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

What affects rate of What affects rate of adoptionadoption

Relative advantage• degree to which an innovation is perceived degree to which an innovation is perceived

as better than what it supercedesas better than what it supercedes

Compatibility • degree to which an innovation is perceived degree to which an innovation is perceived

as consistent with existing values, past as consistent with existing values, past experiences, and needs of potential experiences, and needs of potential adoptersadopters

Page 37: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

What affects rate of What affects rate of adoption?adoption?

Complexity• degree to which an innovation is degree to which an innovation is

perceived as relatively difficult to perceived as relatively difficult to understand and useunderstand and use

Trialability• degree to which an innovation may degree to which an innovation may

be experimented with on a limited be experimented with on a limited basisbasis

Page 38: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

What affects rate of What affects rate of adoption?adoption?

Observability• degree to which the results of an degree to which the results of an

innovation are visible to othersinnovation are visible to others

Examples

Page 39: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Adopter CategoriesAdopter Categories

Consumers can be categorized by Consumers can be categorized by their innovativenesstheir innovativeness

Adopter category growth is related Adopter category growth is related to the spread of the innovationto the spread of the innovation

Five common categoriesFive common categories• innovators, early adopters, early innovators, early adopters, early

majority, late majority, & laggardsmajority, late majority, & laggards

Page 40: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

InnovatorsInnovators

First groupFirst group 2.5% of adopters2.5% of adopters VenturesomeVenturesome Obsessed with innovationsObsessed with innovations Gate keepersGate keepers

Page 41: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Early AdoptersEarly Adopters

The second groupThe second group 13.5% of adopters13.5% of adopters Social and LocalitesSocial and Localites Integrated into social systemsIntegrated into social systems Often opinion leadersOften opinion leaders

Page 42: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Early MajorityEarly Majority

The third groupThe third group 34% percent of adopters34% percent of adopters DeliberateDeliberate Interact frequently with peersInteract frequently with peers Important link in diffusion processImportant link in diffusion process

• provide connections in networkprovide connections in network

Page 43: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Late MajorityLate Majority

The Fourth groupThe Fourth group 34% of adopters34% of adopters SkepticalSkeptical Adoption may be economic Adoption may be economic

necessity and /or result of peer necessity and /or result of peer pressurepressure

Adopt after most othersAdopt after most others

Page 44: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

LaggardsLaggards

Last 16% of adoptersLast 16% of adopters TraditionalTraditional Almost no opinion leadersAlmost no opinion leaders Near isolates in social systemNear isolates in social system Suspicious of innovations & changeSuspicious of innovations & change Some people never adoptSome people never adopt

Page 45: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Other TechnologiesOther Technologies

Interactive kiosks, iTV, Interactive kiosks, iTV,

& m-commerce& m-commerce

Page 46: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Interactive kiosksInteractive kiosks

Strategically placed in high-traffic Strategically placed in high-traffic areas of stores areas of stores

Information rich, “ultimate Information rich, “ultimate salesperson”salesperson”

Low overhead, can provide Low overhead, can provide incremental salesincremental sales

Acceptance of machines by Acceptance of machines by consumers is vitalconsumers is vital

Page 47: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

KiosksKiosks

Early tests of kiosks Early tests of kiosks not successfulsuccessful• slow, broken, not updated, few graphicsslow, broken, not updated, few graphics• misapplied contentmisapplied content• lack of consumer interestlack of consumer interest• sales did not cover cost of machinesales did not cover cost of machine

As problems have been addressed, As problems have been addressed, consumer acceptance has increasedconsumer acceptance has increased• 151,000 used in 2001 151,000 used in 2001

Page 48: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Kiosks Kiosks

Applicable to various industriesApplicable to various industries• 66% of Kiosks are in retail locations66% of Kiosks are in retail locations

– ATMs prepared consumers for kiosksATMs prepared consumers for kiosks– Wedding or Baby RegistryWedding or Baby Registry– Record storesRecord stores

• Service providers, Governments, & Service providers, Governments, & SchoolsSchools– Court houses and librariesCourt houses and libraries

Page 49: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Interactive Television Interactive Television

Television with interactive content & Television with interactive content & enhancementsenhancements• convergence of computer, telephone, & TVconvergence of computer, telephone, & TV

Provides richer entertainment, Provides richer entertainment, interaction & more information interaction & more information

– pertaining to shows, props and people involved pertaining to shows, props and people involved

– programming can include richer graphics, links to programming can include richer graphics, links to Web sites, communication with others, & e-Web sites, communication with others, & e-commercecommerce

Page 50: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

iTViTV

Three forms: Three forms: set-top box-set-top box- 2-screen TV 2-screen TV Mobile phone Mobile phone

• and to a lesser and to a lesser extent PDAextent PDA

Page 51: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

iTViTV

Consumers get greater choice of Consumers get greater choice of content, when they want to see it, content, when they want to see it, & how to act on it & how to act on it • video & information on demandvideo & information on demand• interactive programminginteractive programming• diverse communication & purchasing optionsdiverse communication & purchasing options

Control shifting to viewerControl shifting to viewer• more personalized, relevant contentmore personalized, relevant content

Page 52: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Possible iTV featuresPossible iTV features

Programming credits Programming credits available anytime available anytime

Trivia questions in real time Trivia questions in real time during showduring show

Customized/localized Customized/localized information (news/ weather)information (news/ weather)

Constant update across Constant update across showsshows

Home shopping (movies/CDs)Home shopping (movies/CDs)

Interactive Entertainment Interactive Entertainment GuidesGuides

Surveys during a programSurveys during a program

Interactive Game ShowsInteractive Game Shows Interactive Sports (pick Interactive Sports (pick

angle)angle)

• gambling gambling

Videoconferencing, distance Videoconferencing, distance learninglearning

Photo display services. Photo display services.

Communications (chat/email) Communications (chat/email)

Information acquisition (retail Information acquisition (retail locations; details on a news locations; details on a news story; order a sample)story; order a sample)

Page 53: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

iTViTV

Early tests did not materializeEarly tests did not materialize• consumers would not fully use nor consumers would not fully use nor

pay for the servicepay for the service– Initial target market: participants in Initial target market: participants in

interactive services interactive services – Use of PC & TV are differentUse of PC & TV are different

PC/task oriented versus TV/socially PC/task oriented versus TV/socially orientedoriented

Page 54: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

The Future of iTVThe Future of iTV

Consumers want additional facts Consumers want additional facts pertaining to programming, pertaining to programming, alternative commentaries, & Web alternative commentaries, & Web support support • enhancements to programmingenhancements to programming

27+ million US homes have iTV today27+ million US homes have iTV today• To grow: must find those applications in To grow: must find those applications in

which benefits > costswhich benefits > costs• Marketing research & product placement Marketing research & product placement

Page 55: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Interactive telephoneInteractive telephone

In 1980s, marketers programmed In 1980s, marketers programmed phones to do a number of marketing phones to do a number of marketing functionsfunctions

– build databases, sell products, enhance build databases, sell products, enhance image, facilitate customer service, collect image, facilitate customer service, collect data data

Now with the growth of cell phones, Now with the growth of cell phones, the telephone has become part of the telephone has become part of m-commerce

Page 56: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

M-commerceM-commerce

Mobile or Wireless CommerceMobile or Wireless Commerce• cell phones cell phones • 110 million cell phone service subscribers 110 million cell phone service subscribers

– In 2000, 5 million consumers used m-In 2000, 5 million consumers used m-commercecommerce

– By 2006, 85 million will use m-commerceBy 2006, 85 million will use m-commerce

Growth due to needs outside the homeGrowth due to needs outside the home– Europe and JapanEurope and Japan

Page 57: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

M-commerceM-commerce

Large profit potential, yet face challengesLarge profit potential, yet face challenges• narrow band-widthnarrow band-width• slow connections & roaming areasslow connections & roaming areas• signal blocks & security breachessignal blocks & security breaches• physical (carpal tunnel/eye strain/cancer) physical (carpal tunnel/eye strain/cancer)

Growth predicted among 10-24 year oldsGrowth predicted among 10-24 year olds• 50% will use m-commerce by 200650% will use m-commerce by 2006

Page 58: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web Site ConstructionWeb Site Construction

Design & ContentDesign & Content

Page 59: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Key TermsKey Terms

• HTTP: hyper-text transfer protocolHTTP: hyper-text transfer protocol– Standard for transferring files on webStandard for transferring files on web

• HTML: hyper-text mark-up languageHTML: hyper-text mark-up language–WYSIWYGWYSIWYG

• Applets: application programs Applets: application programs embedded in web pages (JAVA)embedded in web pages (JAVA)

Page 60: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Key TermsKey Terms

• URL: uniform resource locatorURL: uniform resource locator– Web address that browser readsWeb address that browser reads

• Portals: gateways to the webPortals: gateways to the web– AOL, Netscape, AlfyAOL, Netscape, Alfy

• Upfront: what site visitor seesUpfront: what site visitor sees

• Backend: Technology that Backend: Technology that supports contentsupports content

Page 61: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Development Development ConsiderationsConsiderations

• GoalsGoals• TargetsTargets• ContentContent• SizeSize• TimingTiming• BudgetBudget• BackendBackend

Page 62: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

DesignDesign

Various software can do thisVarious software can do this• FrontPage, Dreamweaver, Netscape FrontPage, Dreamweaver, Netscape

(free)(free) Free Web Hosting SitesFree Web Hosting Sites

http://www.qsites.com/, http://www.50megs.com/, http://www.angelfire.com/, http://www.bcity.com/, http://www.cybercities.com/, http://www.freeservers.com/, http://www.geocities.com/ , http://www.gurlpages.com/, http://www.tripod.com/, http://www.webprovider.com/

Look at site across different browsers Look at site across different browsers

Page 63: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web Site ContentWeb Site Content

Study with designers & consumersStudy with designers & consumers• optimal complexity leveloptimal complexity level

– one logo on each page, few graphicsone logo on each page, few graphics

• design for lowest common technological design for lowest common technological denominatordenominator

• should be a quick download (<7 second should be a quick download (<7 second rule)rule)

• key features on which to be competitive?key features on which to be competitive?– Search, shopping cart, returns, quality photos, Search, shopping cart, returns, quality photos,

contact information, FAQs, feedback optionscontact information, FAQs, feedback options

Page 64: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web Site ContentWeb Site Content

Other considerationsOther considerations• Fresh content Fresh content • Most sites are text basedMost sites are text based

– information should be chunkedinformation should be chunked– teasers link to full text teasers link to full text (NEW!)(NEW!)

• Simplicity is importantSimplicity is important– generally no animation, blinking images, generally no animation, blinking images,

loud colors, & blaring soundsloud colors, & blaring sounds

Page 65: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web Site ContentWeb Site Content

Content should be based on goals of Content should be based on goals of site & why people are theresite & why people are there

3-click rule: users should be able to 3-click rule: users should be able to get to the reason they are there get to the reason they are there within 3-clickswithin 3-clicks

– not always realisticnot always realistic

• Some firms take content from other Some firms take content from other media & move it onlinemedia & move it online

• Copyright issuesCopyright issues

Page 66: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web Site ContentWeb Site Content

Front page should let consumer Front page should let consumer know what the firm is aboutknow what the firm is about

Should contain:Should contain:– logo, contact information, navigation bar, logo, contact information, navigation bar,

& appealing image representing enterprise & appealing image representing enterprise and its goalsand its goals

• no scrolling on front pageno scrolling on front page• most important content on top 1/3 of most important content on top 1/3 of

screenscreen

Page 67: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

DesignDesign

Combination of aesthetics & Combination of aesthetics & usabilityusability• detail, functionality, & creativitydetail, functionality, & creativity

A few advertising considerations:A few advertising considerations:• non-linearity of designnon-linearity of design• most users do not read, may skimmost users do not read, may skim• consistencyconsistency

– adopt page model & use it throughout the siteadopt page model & use it throughout the site– consider flow of pageconsider flow of page

Page 68: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Layout IssuesLayout Issues

Layout & Design Tips onlineLayout & Design Tips online• http://webmonkey.wired.com/webmonkey/http://webmonkey.wired.com/webmonkey/

Considerations:Considerations:• Top HeadingTop Heading• Typeface (Arial, Chicago, Courier, Times or Geneva)Typeface (Arial, Chicago, Courier, Times or Geneva)

– do not use ALL CAPSdo not use ALL CAPS

• Left justify text (with exception of navigation bar)Left justify text (with exception of navigation bar)• Small segments of text, chunk information, link into Small segments of text, chunk information, link into

multiple pagesmultiple pages• Use several small tablesUse several small tables

Page 69: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

More Layout More Layout ConsiderationsConsiderations

ColorsColors• can be powerful communication toolcan be powerful communication tool• In 2001, study found most web sites were blueIn 2001, study found most web sites were blue• darker background, lighter typedarker background, lighter type• some color combinations hard to read & may vary some color combinations hard to read & may vary

across screensacross screens LinksLinks

• no page should dead end, all should link back to no page should dead end, all should link back to homehome

• should have operational front & back button on should have operational front & back button on every pageevery page

Page 70: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

GraphicsGraphics

Simplicity is bestSimplicity is best• many features overdone, including many features overdone, including

page fade-ins & flashpage fade-ins & flash• consider small, appropriate graphics or consider small, appropriate graphics or

randomize graphics to display an array randomize graphics to display an array of images & avoid clutterof images & avoid clutter

• under construction signs are negativeunder construction signs are negative• streaming audio/video notoriously slowstreaming audio/video notoriously slow

Page 71: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Privacy and Security Privacy and Security importantimportant

66% of web users leave a site when 66% of web users leave a site when asked for personal informationasked for personal information

21% give false information to gain 21% give false information to gain accessaccess

Sites that have prominent privacy & Sites that have prominent privacy & security statements are more stickysecurity statements are more sticky

Page 72: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Development CostsDevelopment Costs

Small-scale, B2C sitesSmall-scale, B2C sites• $20-$300 per page$20-$300 per page

Full-scale, B2B sitesFull-scale, B2B sites• $65,000 for small site$65,000 for small site• $250,000 for large site$250,000 for large site

Monthly maintenance fees of Monthly maintenance fees of complex sitescomplex sites• $2,500 for small sites$2,500 for small sites• $14,000 for large sites$14,000 for large sites

Page 73: Electronic Commerce BADM 561 Dr. Cara Peters. Stages in Marketing 1. Mass Production 2. Personal Selling 3. Branding 4. Customer Relationship Management

Web StoryboardingWeb Storyboarding

Design of text, content, and links Design of text, content, and links to be contained in a siteto be contained in a site• Note cardsNote cards• PowerPointPowerPoint• Specialized softwareSpecialized software

Carolina-Gifts.comCarolina-Gifts.com