Strategic Electronic Marketing: Managing E-Business, 2e ch01
E Marketing and Business
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Transcript of E Marketing and Business
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E-BUSINESS AND E-COMMERCE
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What is e-marketing?• E-marketing is:
• Applying…• Internet and other digital technology… • (web, e-mail, wireless, iTV, databases)
• to… • acquire and retain customers • (through a multi-channel buying process • and customer lifecycle)
• by…• Improving customer knowledge, targeting,• service delivery and satisfaction
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Drivers
• Cost/efficiency drivers– Increase speed of dispatch– Reduce sales cost– Reduce operating costs
• Competitiveness drivers– Customer demand – Range and quality of services offered– Avoid losing market share– Exploit new markets
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How it works - components
Figure 1.9 Infrastructure components of the Internet
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Distinguishing e-marketing and e-business• (a) Electronic business has some degree of overlap with
electronic marketing. From the discussion of the marketing concept above we can reject this since both e-marketing and e-marketing are broad topics.
• (b) Electronic business is broadly equivalent to electronic marketing. This is perhaps more realistic, and indeed some marketers would consider e-business and e-marketing to be synonymous.
• (c) Electronic marketing is a subset of electronic business. It can be argued that this is most realistic since e-marketing is essentially customer-oriented and it has less emphasis on supply chain and procurement activities in comparison with e-business.
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Learning Objectives
• Describe electronic commerce, its scope, benefits, limitations, and types.
• Describe the major applications of business-to-consumer commerce, including service industries, and major issues faced by e-tailers.
• Describe business-to-business applications.• Describe emerging EC applications such as intra-business
and B2E commerce.
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E-Commerce & E-Business
• Electronic commerce can take several forms depending on the degree of digitization (the transformation from physical to digital).
• The degree of digitization relates to:– the product (service) sold– the process– the delivery agent (or intermediary).
E-commerce describes the process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the Internet. E-business refers to a broader definition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and processing electronic transactions.
Turban et al., 2005
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E-Business – Transaction MediumMost e-commerce is done over the Internet. But EC can also be conducted on private networks, such as value-added networks (VANs, networks that add communication services to existing common carriers), on local area networks (LANs) or wide area networks (WANs)
Turban et al., 2005
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E-Business – Transaction Types
E-commerce transactions can be done between various parties.
• Business-to-business (B2B)
• Collaborative commerce (c-commerce)
• Business-to-consumers (B2C)
• Consumers-to-businesses (C2B)
• Consumer-to-consumer (C2C)
• Intra-business (intra-organizational) commerce
• Government-to-citizens (G2C)
• Mobile commerce (m-commerce)
Turban et al., 2005
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Reach
Access and connection :
the number of customers a business can connect with;
the number of products it can offer to those customers.
Unconstrained by physical limitations - Reach explodes !
Example : Navigation function (catalogue) separated from physical
function (inventory).
Evans and Wurster, 1999
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Implications of Reach
Unstable business boundaries;
Suppliers - bypass retailers and build relationship with end consumer;
Large suppliers - lose control of navigation and sources of
differentiation;
Must achieve the reach that the buyer values.
Evans and Wurster, 1999
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Richness
Two dimensions :
Depth and detail of information that the business can give the
customer;
Depth and detail of information that it collects about the customer
Evans and Wurster, 1999
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Richness
Rich Customer Information
Opportunity for rich customer information:
Example - browsing behaviour, purchase history & demographics
etc.;
Integrate information from a variety of sources;
Potential barriers:
Privacy constraints;
Consumer can search for and organise information.
Evans and Wurster, 1999
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Affiliation
Affiliation - whose interests the business represents;
Navigators - opportunity to affiliate with customers;
Consumer given greater variety and sophistication:
Rich information from wide-reaching sources at negligible costs;
‘Meta Navigators’ - use technologies that compare multiple electronic
retailers;
Supplier industries - greatest difficulty with controlling navigation.
Evans and Wurster, 1999
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How is e-business different?
Reduction in physical boundaries and distance;
Serve larger customer base more efficiently;
Target specific customer groups;
The Internet is an interactive marketing medium;
More detailed information on customer transactions; and
Improved transaction efficiency.
Kim et al., 2004
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Communications Types
C4
C5C1
C2
C4
O
Many-to-many communications viathe Internet medium
O - Organisation M - Communicating Message C - Customers
Internet Medium
C3
O
O O
Content
M M M Content
M
MMContent
Content
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Contrast with Conventional Marketing
“a many-to-many mediated communications model in which
consumers can interact with the medium, firms can provide
content to the medium and, in the most radical departure from
traditional marketing environments, consumers can provide
commercially oriented content to the medium.”
Hoffman & Novak, 1997
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What hasn’t changed
‘The myth of lower cost and price’;
Firms must have viable business models;
Implications for physical activities in the value chain;
Internet firms do not always offer lower prices;
Security and privacy concerns; and
The Internet only changes the customer interface (Porter,
2001).
Kim et al., 2004
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Why should organisations use the Internet?
Large companies in particular already computers, networks and
bandwidth;
Potential cost savings;
Network economic effects;
Many business transactions already conducted at a distance;
Opportunities for close alliances.
Coltman et al., 2001
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Business-To-Consumer – B2C
• Electronic retailing (e-tailing) is the direct sale of products through electronic storefronts or electronic malls, usually designed around an electronic catalog format and/or
auctions. – Electronic Storefronts. Hundreds of thousands of solo
storefronts can be found on the Internet, each with its own Internet name and EC portal, such as Home Depot, The Sharper Image, or Wal-Mart.
– Electronic mall, also known as a cybermall or e-mall, is a collection of individual shops under one Internet address.
Turban et al., 2005
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E-tailing Issues – B2C
• Resolving channel conflict• Resolving conflicts within click-and-mortar
organizations• Organizing order fulfillment and logistics• Determining viability and risk of online e-tailers• Identifying appropriate revenue models
The concept of retailing and e-tailing implies the sale of goods and/or services to individual customers. The following are the major issues faced by e-tailers that may be handled and supported by IT tools:
Turban et al., 2005
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Key Questions for E-tailers
Does the Internet enable a company to significantly enhance its
value proposition to customers?
Does the Internet suit the nature of the company’s products and
appeal?
Can the company brand attract customers to the web site?
What value-added services and techniques can be employed to
encourage customer ‘lock-in’?
What is the relationship between online and offline activities?
Where do we obtain the necessary online marketing and web site
capabilities?
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Service Industries – B2C
• Electronic banking• International and Multiple-Currency Banking• Online Securities Trading• Online Job Market• Travel Services• Real Estate
Delivery of services (buying an airline ticket or stocks) can be done 100 percent electronically, with considerable cost reduction potential. Therefore, online services is growing very rapidly.
Turban et al., 2005