1. Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH Phone: (800)

2. Part Two: Chapter 11 Innovation and the Net
“Nothing endures but change.”
Heraclitus ( BC)

3. Competition and the Need for Speed
Traditional business rivalries have been bitter, enduring battles
Coke vs. Pepsi
on the front lines
of the Cold War
SOURCE: ©Bettman/CORBIS: Vice President Richard Nixon and Soviet Premier Khrushchev share a Pepsi, 1959

4. Competition and the Need for Speed
In high-tech markets, rivalries burn bright but fast
IBM vs. Apple in personal computers
Digital vs. Data General in minicomputers
Most prominently: the Browser Wars
Microsoft vs. Netscape in late 1990s
Now, Microsoft vs. upstart Firefox

5. Competition and the Need for Speed
On “Internet Time” marketers face strain of creating new products at the moment of new opportunity

6. Competition and the Need for Speed
On “Internet Time” marketers face strain of creating new products at the moment of new opportunity
Time-to-market influences profitability

7. Competition and the Need for Speed
On “Internet Time” marketers face strain of creating new products at the moment of new opportunity
Time-to-market influences profitability
Swiftness signals innovativeness

8. Competition and the Need for Speed
On “Internet Time” marketers face strain of creating new products at the moment of new opportunity
Time-to-market influences profitability
Swiftness signals innovativeness
Early arrivals draw partners and alliances

9. Competition and the Need for Speed
On “Internet Time” marketers face strain of creating new products at the moment of new opportunity
Time-to-market influences profitability
Swiftness signals innovativeness
Early arrivals draw partners and alliances
Market leaders can set industry or product standards and gain dominance

10. Competition and the Need for Speed

11. Standards Marketing
Open Standards: Formed by process of official debate and consensus
Widespread adoption and innovation, but also greater competition
Example: WiFi

12. Standards Marketing
Open Standards: Formed by process of official debate and consensus
Widespread adoption and innovation, but also greater competition
Example: WiFi
De Facto Standards: Based on market acceptance, but proprietary
Harder to establish, but more profitable
Example: Xbox and Playstation

13. Standards Marketing
Growth in certified Wi-Fi product types, according to the Wi-Fi Alliance

14. Product Development Online
Understanding the Idea Funnel
Dual goals of identifying unmet needs and weeding out costly ideas early in process
Few ideas make it through the funnel, but process still can be costly

15. Product Development Online
The Idea Funnel for event-driven new products

16. Product Development Online
Understanding the Idea Funnel
Dual goals of identifying unmet needs and weeding out costly ideas early in process
Few ideas make it through the funnel, but process still can be costly
Improving the Idea Funnel
Online market research screens concepts
Virtual setting facilitates consumer-assisted design

17. Product Development Online
Not all products fit easily into preexisting product categories

18. Product Development Online
Not all products fit easily into preexisting product categories
Simulation and digital environments offer realistic market research settings

19. Product Development Online
Not all products fit easily into preexisting product categories
Simulation and digital environments offer realistic market research settings
Information Acceleration (IA)
Places consumer in virtual buying environments
Can replace expensive prototypes, spot importance of valuable new features

20. Modular Product Development
Products divided into subsystems for more focused development
Visible design rules: describe how different modules fit together
Hidden design parameters: offer flexibility
One example: Wikipedia

21. Modular Product Development

22. Product Development Online
Early feedback and rapid release
Key role of for fast, meaningful consumer input

23. Product Development Online
Early feedback and rapid release
Key role of for fast, meaningful consumer input
Prerelease of products for swift prototyping and testing

24. Product Development Online
Early feedback and rapid release
Key role of for fast, meaningful consumer input
Prerelease of products for swift prototyping and testing
Alpha release – trusted lead users, such as company employees

25. Product Development Online
Early feedback and rapid release
Key role of for fast, meaningful consumer input
Prerelease of products for swift prototyping and testing
Alpha release – trusted lead users, such as company employees
Beta release – wider public sampling at lower price or for free

26. Product Development Online
Early feedback and rapid release
Key role of for fast, meaningful consumer input
Prerelease of products for swift prototyping and testing
Alpha release – trusted lead users, such as company employees
Beta release – wider public sampling at lower price or for free
Speed to market drives profitability