2001 International Conference Istanbul - Turkey1 New x (Economy +Business Rules + Business Models ) Şule Özmen Marmara University, Istanbul, TURKEY Department of Business Administration URL:

2001 International Conference Istanbul - Turkey2 AGENDA Are they really new? What has changed and what has not changed in new economy? Generic objectives – Marketing, production and finance Comparison of old and new economy with respect to: Business value of generic objectives What extent the objectives are considered Strategy formulation and implementation Business tasks performed – planning, execution and control Sule Ozmen

2001 International Conference Istanbul - Turkey3 The New Economy –Digital Economy Information economy * First stage (based on computers) Data processing, spreadsheets, word processing Second stage ( based on networks) Connectivitiy, networks and teradata * Stan Davis & Cristopher Meyer; (1998); Blur: The Speed of Change in the Connected Economy; Perseus Books, New York Sule Ozmen

2001 International Conference Istanbul - Turkey4 Business Rules in New Economy Time –Speed Time between business processes gets shorter real time responses Space - Distance Connectivity decreased the importance of locations Value – Intangibles Economic value shifted from tangibles to intangibles value is added by information (CRM,SCM) Consumers are empowered Sule Ozmen

2001 International Conference Istanbul - Turkey5 Became number one Digital Economy Customers Empowered customers Sule Ozmen

2001 International Conference Istanbul - Turkey6 Who is your customer in digital economy? Who doesn’t buy every product or service you offer like in “old good days” Equipped with information Less brand loyal, runs away to your rival by a click But when?If not satisfied ! Sule Ozmen

2001 International Conference Istanbul - Turkey7 Market Adoption Sequence: Traditional and Internet Life Cycles Sule Ozmen Source: Patel, McCarthy; 2000; Digital Transformation; Mc Graw Hill

2001 International Conference Istanbul - Turkey8 MARKETING PROCESS New and Traditional Buyer Identifying the needs, wants, desires Seller Search promote Order and paymentDelivery Product / service design Sule Ozmen

2001 International Conference Istanbul - Turkey9 E-conomy, e-business e-commerce, e- competition New Sense Process Respond HOW ????? By e-commerce, by e-business, by new business models CRM, SCM, ERP, Data Warehousing Traditional Make Sell Sule Ozmen

2001 International Conference Istanbul - Turkey10 What has not changed What has changed Goal of making money ROI Efficiency Effectiveness The way of doing business Strategy formulation procedures Performing the business tasks Planning Executing Monitoring The way of doing business through the extensive use of computer and internet technologies Sule Ozmen

2001 International Conference Istanbul - Turkey11 Generic Objectives Business Tasks Marketing Production Finance Planning Execution Controling Business value of objectives To what extent considered Strategy formulation and implementation

2001 International Conference Istanbul - Turkey12 Old Economy New Economy Marketing Objective Business value of objective Converting light buyers to heavy buyers getting them buy more frequently High Getting competitors’s buyers High Acquiring new buyer. (selling to non buyers) High Retaining existing buyer - Making the buyer loyal High Keeping the profitable customer High

2001 International Conference Istanbul - Turkey13 Old Economy New Economy Marketing Objective To what extent considered Converting light buyers to heavy buyers getting them buy more frequently Considered much Getting competitors’s buyers Considered moderately Considered much Competitor’s buyer is “one click away” from you. Acquiring new buyer. (selling to non buyers) Considered much Less considerable than retaining existing customer Retaining existing buyer - Making the buyer loyal Not considered much Offers are limited Considered much Your competitor is “one click away” from your customer Keeping the profitable customer Not considered much Profitability measurements were not common Considered much Leaving unprofitable customer to competitor.

2001 International Conference Istanbul - Turkey14 Old Economy New Economy Marketing Objective Strategy Formulation and Implementation Planning executing and controlling Converting light buyers to heavy buyers getting them buy more frequently Not easy Knowing-Understanding– Identifying the customer is time consuming and costly Easier Less costly Cross selling, upselling strategies. CRM, 1 to 1 marketing Getting competitors’s buyers Not easy Customers are more loyal Easier Less costly Customers are less loyal Acquiring new buyer. (selling to non buyers) Not easy Not easy Costly More challenging but arising need is more probable Retaining existing buyer - Making the buyer loyal Easier Customers are more loyal. Not much effort is required More challenging but alternative loyalty programs are applicable. Keeping the profitable customer Difficult to identify the profitable customer. Both the tools and the information for measuring profitability are not developed Easier Profitable customers are followed very closely. Both the tools and the information are available.

2001 International Conference Istanbul - Turkey15 Technology is enabler now Collect teradata amounts of data to know, understand and identify your customers and their needs. Current and potential needs. Offer the products or service faster through alternative distribution channels Receive orders and accept payment through internet Follow your customer after delivery Don’t lose contact with your customer once interacted you Communicate with your customer on the basis of the knowledge obtained from the data warehouse Sule Ozmen

2001 International Conference Istanbul - Turkey16 It is now possible to Know who your customers are and who your best customers are Stimulate what they buy or know what they won’t buy Know the time when and how they buy Learn customers’ preferences and shape the offer accordingly Formulate strategies to make your customers loyal customers and to keep your customers for many years Define characteristics that make up a great/profitable customer Model channels best to address a customer’s need Predict what they may or will buy in the future

2001 International Conference Istanbul - Turkey17 Key success factors Vision, leadership, Commitment of Senior management Strategy and management People at work It is both cheaper and profitable to absolete yourself than it is to let your competitor do it for you Peter Drucker Sule Ozmen

2001 International Conference Istanbul - Turkey18 ?

2001 International Conference Istanbul - Turkey19 New x (Economy +Business Rules + Business Models ) Şule Özmen Marmara University, Istanbul, TURKEY Department of Business Administration URL: