Charles Schwab  Innovative The first discount brokerage (1975) The first 24/7 interface in 1975 Mid 1980’s: Multichannel access In 1984 created the mutual fund supermarket concept: The Schwab Mutual Fund MarketPlace®.The Schwab Mutual Fund MarketPlace®. The first online trading (1985)– The Equalizer Software (by modem) The first voice-response telephone brokerage (1989) – Telebroker Full-featured online trading service on MS Windows (1993) – StreetSmart – unsustainable cost In 1996, Schwab Internet brokerage service – $39.95 and then $29.95 (compare to others) In 2000, acquired CyberTrader. Became the new engine. In 2000, purchased U.S. Trust – a full service investment firm  1. What is Charles Schwab’s SWOT?  2. Target segment, p. 1, p.10  3. Focal benefits, p. 5  4. Rationale p 11  5. Competitors, Exhibit 1  6. Branding, p. 4  7. Online volume and performance– Fig. 4  8. Commissions– Fig. 1  9. Future – Shift to a new business model model? 1982 model? 1993 model? Cybertrader (2000)? 2000 business model? U.S. Trust (2000), Epoch? 2002 business model? Schwab Equity Rating System?

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Relationships  Relationship – A bond between a firm and customers Strong, weak, nonexistent-- Tiers Intellectual, emotional, both-- Branding Web: Low degree of interpersonal interaction makes it difficult to create bonds. How to overcome? Trust Personalization Communication Communities Trust – The belief that a party’s word or promise is reliable and the party will fulfill its obligations. Customers need to believe that a firm will fulfill the order, deliver high quality, and not misuse information.

How to establish trust on the web? Independent intermediaries (paypal) and infomediaries Access to other customers’ experiences, live interaction, or both. Offer more information and allow easy search and comparison, as only the web can offer Share your inventory levels Intelligent agents and live representatives for assistance work risk to your advantage – high perceived risk means increased loyalty Personalization / individualization Communication Communities

Customization requires Data Collection  Secondary Data Past marketing research surveys Other surveys Census information Publications Focus group reports NEWSGROUPS  Primary data collection Surveys Interviews Database Marketing

Customer Relationship Management Technologies to maintain long-term customer relationships, including:   databases on individual service needs  personalization of automated responses  wizards that allow individuals to ask questions  auto-response .

Broadvision  BroadVision is the world's leading supplier of enterprise self-service (ESS) applications and technology that enable organizations to create immediate business value by moving interactions, transactions and services from a resource-centric paradigm to a personalized self-service model that enhances growth, reduces costs and improves productivity.

Broadvision Customers  More than 1,200 leading companies and government entities around the globe use BroadVision- powered applications to enable their enterprise self-service initiatives. They are leveraging the web to their wireless devices to unify and extend their enterprise's applications, information and business processes to better serve their employees, partners and customers in a personalized and collaborative way.  BroadVision's customer base represents a broad spectrum of organizations, including British Telecom, The Boeing Company, E*Trade, Ericsson, FleetBoston Financial, GE Supply, Home Depot, Rockwell Automation, Sears, State of California, Toyota and Vodafone.

Broadvision

Broadvision Questions  What’s the idea behind one-to-one web sites?  What are the advantages of personalization systems?  What are the risks in personalization?  How can a company maintain trust and privacy with personalization?  How to convince customers they have something to gain by disclosing info?  What impact will personalization have on selling prices on the web?  What is meant by collaborative filtering? Who are the competitors that are using collaborative filtering to develop applications?  What is rules-based system?  Which method is better and under what conditions?  How is Broadvision’s financial performance? Who are their customers? Who are their partners?  Do you think this company will survive? Why or why not?  What are their unique strengths/weaknesses relative to their competition.

New Market research  Faster and cheaper data collection  Continuous dialog with customers  Tracking of clicks  Can track effectiveness of marketing efforts

Clickstream data  The dataset contains one individual’s clickstream for an entire month.  Use the data to guess the following about this person:  Gender  Age  Race  Marital Status  Geographic location in U.S.  City size (urban/suburban/rural)  Household size  Household composition (male and female married, female head of household, male head of household, etc.)  Household income  Rents or owns  Education level of householder  Age and presence of children  Car or truck ownership  Dog or cat ownership

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