P3 Business Analysis

2 Section E: Information Technology E1. Principles of E-business E2. E-business application – upstream supply chain management E3. E-business application – downstream supply chain management E4. E-business application: customer relationship management Designed to give you the knowledge and application of:

3 E2,E3&E4: E-business application  Main elements of both the push and pull models of the supply chain.  Relationship of the supply chain to the value chain and the value network.  How external relationships with suppliers and distributors can be structured to deliver a restructured supply chain.  Discuss the methods, benefits and risks of e-procurement.  Define the scope and media of e-marketing.  Effect of the media of e-marketing on the traditional marketing mix of product, promotion, price, place, people, processes and physical evidence.  Importance of on-line branding in e-marketing and compare it with traditional branding.  Define the meaning and scope of customer relationship management.  Different methods of acquiring customers through exploiting electronic media.  Different buyer behaviour amongst on-line customers. Learning Outcomes

4 Supply chain management Supply chain: network of facilities and distribution options that deal with:  Procurement of materials  Transformation of materials into finished products  Distribution of finished products to customers Supply chain management  Influencing the behaviour of the supply chain in order to produce desired results  Combines the traditional activities of logistics (procurement, distribution and inventory management) with product development, marketing and finance  Emergence of E-commerce resulted in new B2B supply chains that are more customer focussed than product-focussed  Supply chains can be up-stream or down-stream

5 Supply chain models  Works on response to customers’ request  Driven by e-commerce  Aim is to maximise service levels and focus on innovation  Work flexibly to attain high customer satisfaction levels  Anticipate demand to “push” products down the supply to end customer  End customer incurs most costs  Aim is to minimise cost and focus on efficiency  Enables maximum utilisation of resources at least cost Product-driven push model Consumer-driven pull model

6 Supply chain restructuring  Fundamental alterations in supply chain activities  Affects all functions and activities of the entity  Benefits of using the internet in supply chain: Reduced costs Reduced errors Improved customer satisfaction  Broader concept than merely changing supply chain function Supply chain Continued …

7 Supply chain relationships  Collaborative relationships: sharing of demand and supply information in order to reduce excess inventory  Co-operative relationships: enhance competitive positions of both manufacturer and supplier  Power-based relationships: exist when large organisations use their market powers for getting preferential treatment from their trading partners  Arm’s length relationships: often involve conflict negotiating techniques with price being the key negotiating point Continued …

8 E-procurement  Technology that facilitates buying over the internet by: Streamlining the procurement process Using on-line catalogues and  entity can consolidate orders for similar items with one supplier to gain discounts  higher budgetary control  enables strategic purchasing by buyers  improves manufacturing cycles  simplified purchasing process Benefits of e-procurement

9 E-marketing E-marketing: e-commerce that aims to achieve marketing objectives through the use of internet technologies and other technological approaches.  Reach: opens new avenues for smaller businesses  Scope: can offer wider range of products and services in a variety of ways  Immediacy: conduct business dealings with the click of a mouse  Interactivity: facilitates communication between businesses and its customers  Lowered cost  Better conversion rate Why e-market instead of using traditional marketing methods? Internet Print media Direct mailKeyword advertising E-marketing media

10 7 Ps of marketing mix 7 Ps of marketing mix Place Price Promotion Physical evidence Process People Product

11 Branding and online branding  Name, term, sign, symbol, design or combination of these  Indended to identify and differentiate a product / service  From products / services offered by competitors What is a brand? E-brand Representing the company’s brand on internet webspace Online branding Represents the organisation’s definitions in the market in which it operates A brand signifies a company's product position in the market place:  What the product stands for  What level of quality it has  What personality it has

12 Customer Relationship Management (CRM) CRM methodologies, strategies and software capabilities to help an organisation organise and manage its customer relationships. E-CRM: managing customers online  Cost reduction  Customer-focussed  Increase in efficiency  Creation of competitive advantage  Market segmentation  Complex systems  Excessive dependence on technology  Excessive costs Benefits Limitations

13 Methods of acquiring customers through electronic media Web banners / banner advertising Embedding an advertisement onto a webpage Search engine optimisation Methods to improve ranking of company website on search engines Sending information / reminders through internet to target audience Continued …

14 Newsletters Regularly distributed publication generally about one main topic of interest to subscribers Link campaign Ask strategic partners to put up links to the business’ website on their own websites Cool tool Video clip, standalone software that appears on the computer screen and is used for a specific purpose Viral marketing Create exponential increases in brand awareness by creating a buzz about the product / service Continued …

15 Buyer behaviour among online customers Buyer behaviour: decision process and acts of people involved in buying and using the products such as:  why customers buy  what influences them to buy  changing variables in society Programmed behaviour / Routine response Limited decision making Extensive decision making Impulse buying Types of buyer behaviour

16 Recap  Main elements of both the push and pull models of the supply chain.  Relationship of the supply chain to the value chain and the value network.  How external relationships with suppliers and distributors can be structured to deliver a restructured supply chain.  Discuss the methods, benefits and risks of e-procurement.  Define the scope and media of e-marketing.  Effect of the media of e-marketing on the traditional marketing mix of product, promotion, price, place, people, processes and physical evidence.  Importance of on-line branding in e-marketing and compare it with traditional branding.  Define the meaning and scope of customer relationship management.  Different methods of acquiring customers through exploiting electronic media.  Different buyer behaviour amongst on-line customers.