1. ELC 310
DAY 2
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2. Agenda Questions? Finish discussion on Convergence
Begin discussion on Strategic eMarketing
Assignment 1 (due in one week)
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3. Past, Present, and Future
The first generation of e-business was like a gold rush.
From , over 500 Internet firms shut down in the U.S.
Almost 60% of dot-coms were profitable in the fourth quarter of 2003.
Today, the Internet is mainstream in industrialized nations.
20 nations comprise 90% of all Internet users.
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4. E-Business Recovery Is Sweet
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5. E-Marketing Today Power shift from sellers to buyers
Marketing fragmentation: mass market to one customer
Death of distance
Time compression
Knowledge/database management is key
Marketing and technology: an interdisciplinary focus
Intellectual capital is important resource
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6. Consumer Control
New technologies such as personal video recorders (PVRs) and TiVo will increase consumer control.
Convergence of television, radio, print, etc.
Customer-controlled entertainment, and shopping on demand.
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7. Improved Internet Strategy Integration
Organizations will integrate information technology seamlessly into marketing strategy.
Multichannel marketing: Web site, retail store, and catalog
Integration of inventory databases
Integration of customer service across channels
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8. Refined Metrics
Internet provides great deal of data, not all of which is very useful.
Tracking customer acquisition cost (CAC) and other key metrics is a critical marketing function still in its infancy.
Future metrics will provide better measures of performance, return on investment, etc.
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9. Wireless Networking Increases
Cell phones, PDAs and laptops connect to the Internet via wireless modem worldwide.
Starbucks
Hotels and airports
Queen Mary II luxury liner
Amtrak train stations
Customers will have information, entertainment and communication when, where and how they want it.
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10. WiFi at Train Station in France
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11. Appliance Convergence
The receiving appliance is separate from the media type.
Computers can receive digital radio and TV.
TV sets can receive the Web.
New types of “smart” receiving appliances will emerge.
Internet refrigerator is many digital appliances in one.
Global position systems (GPS) allow in-car communication and entertainment.
GM’s OnStar
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12. Semantic Web
The Semantic Web will utilize a standard definition protocol that will allow users to find information based on its type, such as:
The next available appointment for a doctor
Details about an upcoming concert
Menu at the local restaurant
Represents the next huge advance: providing worldwide access to data on demand without effort.
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13. Internet-Time Analogy
1949 Atomic
1929 Quartz Crystal
1600’s Mechanical
1583 AD Pendulum
3500 BC Sundial
Web is here in 2004
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14. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 2: Strategic E-Marketing
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15. Chapter 2 Objectives After reading Chapter 2 you will be able to:
Explain the importance of strategic planning, strategy, e-business strategy, and e-marketing strategy.
Identify the main e-business models at the activity, business process, and enterprise levels.
Discuss the use of metrics and the Balanced Scorecard to measure e-business and e-marketing performance.
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16. Amazon.com Utilizes several business models
Founded as online retailing business model.
Established co-branding partnerships with Office Depot, Circuit City, Target, and Expedia
Co-branding is more profitable than retailing
Amazon is now a hybrid company
Created the first affiliate program.
Customers can auction items.
Which of the models do you think will drive Amazon’s strategy in the future?
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17. Strategic Planning
A managerial process to develop and maintain a viable fit between the organization and its changing market opportunities
Process identifies firm’s goals for
Growth
Competitive position
Geographic scope
Other objectives, such as industry, products, etc.
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18. Strategy Strategy is the means to achieve a goal. E-business strategy
Strategy that deploys enterprise resources to reach performance objectives, competitive advantages.
E-marketing strategy
Strategy that capitalizes on information technology to reach objectives.
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19. E-business strategy flows from the firm’s environmental analysis.
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20. From Strategy to Electronic Strategy
Most strategic plans explain the rationale for the chosen objectives and strategies. There are four appropriate types of rationale:
Strategic justification shows how the strategy fits with the firm’s overall mission and business objectives,
Operational justification identifies and quantifies the specific process improvements that will result from the strategy,
Technical justification shows how the technology will fit and provide synergy with current information technology capabilities,
Financial justification examines cost/benefit analysis and uses standard measures (ROI, NPV).
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21. Business Models
A business model is a method for long term survival and a value proposition for partners, customers and revenue
E-business models include the use of information technology to achieve long term goals.
Firm selects one or more models as strategies to accomplish enterprise goals.
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22. E-Business Model = Business Model + Information Technology
E-Business Models
The direct connection with information technology makes a business model an e-business model:
E-Business Model = Business Model
+ Information Technology
E-business model: method by which the organization sustains itself in the long term using information technology, which includes its value proposition for partners and customers as well as its revenue streams.
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23. Level of Commitment to E-Business
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24. Activity-level models
Online purchasing
Order processing
Content publisher (brochureware)
Business intelligence
Online advertising
Online sales promotion
Pricing strategies
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25. Business Process-Level Models
Customer relationship management (CRM)
Knowledge management
Supply chain management
Community building
Affiliate programs
Database marketing
Enterprise resource planning (ERP)
Mass customization
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26. Enterprise-Level Models
E-commerce
Direct selling
Content sponsorship
Portal
Online broker
Exchange
Auction
Metamediary
Purchasing agent
Virtual mall
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27. Pure Play Model A Pure Play is a business that began on the Internet.
Top level of the E-Business pyramid.
Examples: E*Trade, eBay, Yahoo!
Most dot-com crash failures were pure plays.
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28. Performance Metrics
Performance metrics are specific measures designed to evaluate the effectiveness and efficiency of operations.
The Balanced Scorecard provides a framework for understanding e-marketing metrics.
Four perspectives: customer, internal, innovation and learning (growth), and financial
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29. The Balanced Scorecard
BEFORE to measure success, firms used:
Financial performance,
Market share,
The bottom line (profits).
BUT these approaches are narrowly focused and place more weight on short-term results rather than addressing the firm's long-term sustainability.
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31. The Balanced Scorecard
Customer perspective
Time
Quality
Performance and service
Cost
Internal perspective
Cycle time
Manufacturing quality
Employee skills and productivity
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32. The Balanced Scorecard
Innovation and learning (growth) perspective
Number of new products
Penetration of new markets
Improvement of processes such as CRM
Financial perspective
Income and expense metrics
ROI
Sales
Market share growth
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33. Applying the Balanced Scorecard to E-Business and E-Marketing
Metrics for the Customer Perspective (Exhibit 2.6)
Customer perceptions of product value
Customer buying patterns
Metrics for the Internal Perspective (Exhibit 2.7)
Customer service
Information technology
Supply chain
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34. Applying the Balanced Scorecard to E-Business and E-Marketing
Metrics for the Innovation and Learning Perspective (Exhibit 2.8)
CRM
Sales conversions
Metrics for the Financial Perspective (Exhibit 2.10)
Profits
ROI
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35. Assignment 1
Prepare a two to three page paper (not less than 500 and not more than 1000 words) that covers the listed requirements.
Carefully articulate your career objectives (20%)
Perform a SWOT analysis of your current situation as it relates to your desired career objectives (30%)
Develop a strategic plan (less than a page!) the takes you from your current situation to your desired career objectives (30%)
Develop a set of performance metrics that you will use to determine if your strategic plan is working. (20%)
This assignment is due Tuesday, September 20 at 2PM.
Resources
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36. SWOT Analysis Strengths, Weaknesses, Opportunities, and Threats
It examines:
The company’s internal strengths and weaknesses with respect to the environment,
The competition and looks at external opportunities and threats.
Opportunities may help to define a target market or identify new product opportunities, while threats are areas of exposure.
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37. Example The Amazon story Strength
A smart and talented team that stayed focused and learned what it didn’t know.
Weakness
No experience in:
Selling books
Processing credit card transactions
Boxing books for shipment
Opportunity
To sell online.
Threat
A full-scale push by one of the large bookstore chains to claim the online market.
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