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Internet Marketing and Electronic Retailing (E-Tailing)

• Overview of e-tailing– Electronic retailing (e-tailing): Retailing conducted

online, over the Internet– E-tailers: Those who conduct retail business over

the Internet

Types of Electronic Markets• Electronic storefront: A single

or company Web site where products and services are sold

• Mechanisms necessary for conducting the sale:– electronic catalogs– search engine – e-auction facilities– payment gateway– shipment court – customer services

Types of Electronic Markets (cont.)

• e-mall (online mall): An online shopping center where many stores are located– some are merely directories– some provide shared services (e.g.,

choicemall.com). – some are actually large click-and-mortar

retailers– some are virtual retailers (e.g., buy.com)


• Types of stores and malls– General stores/malls– Specialized stores/malls– Regional versus global stores– Pure online organizations versus click-and-mortar

stores


• e-marketplace: An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia

• Private e-marketplaces: Online markets owned by a single company; can be either sell-side or buyside marketplaces

• Sell-side e-marketplace:A private e-market in which a company sells either standard or customized products to qualified companies


• Buy-side e-marketplace: A private e-market in which a company makes purchases from invited suppliers

• Public e-marketplaces: B2B markets, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges

• Consortia: E-marketplaces owned by a small group of large vendors, usually in a single industry

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Web Advertisement

– Ad views– Banner– Click (ad click)– Click ratio– Cookie– CPM

– Effective frequency– Hit– Impressions– Reach– Visit

Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction

Internet Advertising Terminology

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Web Advertisement (cont.)

• Why Internet Advertisement?– 3/4 of PC users gave up some television time– Well educated, high-income Internet users are a desired

target for advertisers– Ads can be updated any time with a minimal cost;

making them timely and very accurate– Ads reach very large number of potential buyers all over

the world– Online ads are much cheaper in comparison to television,

newspaper, or radio ads

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– Web ads effectively use text, audio, graphics, and animation

– Ads easily combine games, entertainment, and promotions

– Web TV and Internet radio are attracting more people

– Web ads can be interactive and targeted– The use of the Internet is growing very rapidly

Web Advertisement (cont.)

Why Internet Advertisement?

The Future of Online Banking• Three core strategies to pursue

1. Customers Agents—banks unable to achieve economies of scale– Offer customers the widest possible choices– Include products from multiple sources– Provide the customers with integrated information services

2. Product Manufacturers – banks able to achieve economies of scale– Strengthen a trend that can already be seen in a number of product

segments– In core processing services for small and medium-sized institutions

The Future of Online Banking (cont.)

• Three core strategies to pursue (cont.)3. Integrated Players—banks with a strong brand and

position from manufacturing to delivery• Many banks will adopt a hybrid strategy• Every player needs to make crucial decisions about

which areas are strategically too risky:– To outsource – Which capabilities need to be built up in-house

The Future of Online Banking (cont.)

• Personal finance online– Bill paying and e-checks– Tracking bank accounts etc.– Portfolio management– Investment tracking– Quotes and prices (past and current)– Budget organization– Record keeping– Tax computations– Retirement goals, planning and budgeting

E-Cards (cont.)

• Purchase cards– Instrument of choice for B2B purchasing– Special-purpose, non-revolving payment cards

issued to employees solely for purchasing and paying for nonstrategic materials and services

E-Cards (cont.)

– Purchase cards—operate like other credit cards• Cardholder of corporation places an order for goods or

services• Supplier processes transaction with authorization of card

issuer• Issuer verifies purchase authorization• All cardholders’ transactions processed centrally—one

payment for all purchases• Each cardholder reviews monthly statement• Card issuer analyzes transactions—standard and ad hoc

reports are made• Card issuer creates electronic file to upload to corporation’s

ledger system

E-Cards (cont.)

• Benefits of purchasing cards– Cost savings– Productivity gains– Bill consolidation– Payment reconciliation– Preferred pricing– Management reports

Essentials of a Business Strategy

• Strategy—search for revolutionary actions that will significantly change the current position of a company, shaping its future– Finding the position in marketplace that best fits

the firm’s skills– Company’s choice of new position that must be

driven by its ability to find new trade-offs and leverage a new system of complementary activities into sustainable advantage

Essentials of a Business Strategy (cont.)

• Levels of strategy– Corporate (or

organizational) strategy

– IT strategy– EC strategy– EC functional

strategies• These are interrelated

• Types of strategy– Strategic planning– Strategic response– Strategic

innovation

Figure 9-1EC Strategy Alignment


• Elements of a strategy– Forecasting– Resource allocation– Core competency– Strategy formulation– Environmental

analysis– Company analysis

• Strategy landscape– Strategy initiation– Strategy formulation– Strategy

implementation– Strategy assessment

• Four major steps• Basis for chapter

organization

Figure 9-2The Landscape of EC Strategy


• Information technology (IT) strategy—strongly correlated with EC strategy because:– IT provides much of the infrastructure for EC– EC applications must be integrated with IT

applications– EC applications may replace or improve existing IT

applications– EC organization may report to CIO– Employees in IS department work on EC applications

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Computer Crimes

• Computer crimes refers to computer fraud and/or computer abuse

• Computer fraud committed by:– Alteration of input– Alteration of computer data– Alteration/misuse of programs– Destruction/suppression/misappropriation of

output

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Computer Crimes (cont.)

• Computer abuse committed by:– Misuse of company computer

service/resources by performing unauthorized private work or playing games by employees

– Compromise of system integrity by:• Altering company data• Introducing viruses• Hacking into the system

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• Characteristics of computer crime– Chronic underreporting of abuse– Security not introduced until abuse has occurred– Organizational size unrelated to severity of

punishment– Abuses by high-level employees less likely to be

prosecuted– Programmers most difficult to identify– Publicity discourages abuse– Security efforts reduce abuse

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• Effective measures in deterring computer crime– Make computer security visible– Define and communicate company’s policy

regularly– Make staff aware of penalties– Report cases to police– Publicize successful prosecution– Deploy security technologies extensively

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The Future of Electronic Commerce

• Opportunities for buyingIncrease rapidly

• Internet usageIncrease exponentiallyAccess via cell phones!

• M-commerceNo need for a computer brings more people to

the web

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The Future of Electronic Commerce (cont.)

• Purchasing incentivesIncrease buyers’ advantages

• Increased security and trustSignificant improvement is expected

• Efficient information handingAccessible from anywhere

• Innovative organizationsRestructured and reengineered

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• Virtual CommunitiesSpreading rapidly

• Payment systemsAbility to use e-cash cards and make

micropayments is getting close to reality• Business-to-business

Continues to grow rapidly

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• B2B exchangesProvide infrastructure

• AuctionsIncreasing rapidly

• Going globalMost appealing benefit of EC

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• E-government--comprehensive– Government-to-consumers (G2C)– Government-to-government (G2G)– Government-to-business (G2B)– Government-to-employees (G2E)

• Intrabusiness EC– Improving internal supply chain

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• Technology trends– Clients• Thin client and embedded client

– Servers • Windows NT

– Networks • XDSL and wireless communication

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• Technology Trends– EC software and services• Availability of all types of EC software• Companies support auctions and multiple types of

certifications

– EC knowledge• The quantity and quality of EC knowledge is increasing

rapidly

– Networked economy

Benefits of EC (cont.)

• Benefits to Organizations (cont.)– Allows reduced inventories and overhead by

facilitating pull-type supply chain management– The pull-type processing allows for

customization of products and services which provides competitive advantage to its implementers


• Benefits to Organizations (cont.)– Reduces the time between the outlay of

capital and the receipt of products and services

– Supports business processes reengineering (BPR) efforts

– Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)


• Benefits to consumers– Enables consumers to shop or do other

transactions 24 hours a day, all year round from almost any location

– Provides consumers with more choices– Provides consumers with less expensive

products and services by allowing them to shop in many places and conduct quick comparisons


• Benefits to consumers (cont.)– Allows quick delivery of products and services (in

some cases) especially with digitized products– Consumers can receive relevant and detailed

information in seconds, rather than in days or weeks

– Makes it possible to participate in virtual auctions


• Benefits to consumers (cont.)– Allows consumers to interact with other

consumers n electronic communities and exchange ideas as well as compare experiences

– Facilitates competition, which results in substantial discounts


• Benefits to society– Enables more individuals to work at home, and to

do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution

– Allows some merchandise to be sold at lower prices benefiting less affluent people


• Benefits to society (cont.)– Enables people in Third World countries and rural

areas to enjoy products and services which otherwise are not available to them

– Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality

• The process• Advertisers want to reach as many consumers as efficiently as possible.

This requires an understanding of how customers' minds work.[4][dead link]

• Behavioral targeting is the most common targeting method used online. Behavioral targeting works by anonymously monitoring and tracking the content read and sites visited by a user or IP when that user surfs on the Internet. This is done by serving tracking codes. Sites visited, content viewed, and length of visit are databased to predict an online behavioral pattern.[5] A further refinement to behavioral targeting is Predictive Behavioral Targeting, where machine learning algorithms overlay behavioral patterns with sampled data, to create data-rich predicted profiles for every user.

• Alternatives to behavioral advertising include audience targeting, contextual targeting, and psychographic[6] targeting.

http://en.wikipedia.org/wiki/Advertisers

http://en.wikipedia.org/wiki/Targeted_advertising

http://en.wikipedia.org/wiki/Wikipedia:Link_rot

http://en.wikipedia.org/wiki/Behavioral_targeting

http://en.wikipedia.org/wiki/Internet


http://en.wikipedia.org/wiki/Predictive_Behavioral_Targeting

http://en.wikipedia.org/wiki/Psychographic


• The phrase “online consumer behavior” describes the process of online shopping from a consumer’s perspective. It is often described as the study of trends, including the influence of online advertising, consumer willingness to click on links, the prevalence of comparison shopping, among others. The decision-making process of an online consumer is often very different from that of a consumer in a physical store. Companies are increasingly studying online consumer behavior in order to adapt their sales and marketing strategies to appeal to the Internet purchaser.

• Online sales have increased all over the world, with more and more shoppers looking to the Internet before they head out to malls or other stores. In order to remain competitive, many companies are electing to devote at least some of their marketing capital to the online space. Companies decide many of the finer points of online sales, including advertising strategies, page layout, and ease of website searching by analyzing online consumer behavior.

• The field of online consumer behavior can be broad. Most of the time, theories in this field are posited by economists or market analysts who specialize in consumer analysis. Companies hire some consumer analysts on a contract basis to provide tailored advice. Others work for independent market analyst firms, for think tanks, or in academia.

http://www.wisegeek.com/what-is-consumer-behavior.htm

http://www.wisegeek.com/what-does-a-market-analyst-do.htm

Imp

Business

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