1. Explain business-to- consumer (B2C) e- marketing. Identify online buyers and sellers. Describe some of the challenges associated with online marketing and e-business. Chapter Objectives E-Business: Managing the Customer Experience CHAPTER 4 1 2 3 5 8 9 Describe the growth of Internet use worldwide. Define e-business and e- marketing, and list the opportunities e-marketing presents. Distinguish between a corporate Web site and a marketing Web site. List the major forms of B2B marketing. Discuss how marketers use the communication function of the Web as part of their online marketing strategies. Outline the steps involved in developing successful e-business Web sites and identify methods for assessing Web site effectiveness. 7 6 4

2. CHAPTER 4 E-Business: Managing the Customer Experience THE DIGITAL WORLD Almost three-quarters of the U.S. population—access the Internet at home, school, work, or public access sites. What do people do online? In the United States, Net usage is mostly about communication. information, and purchases. In China, in contrast, users log on for entertainment and social interaction. Where is e-business going and how can marketers capitalize on the digital links with consumers? The benefits and potential of e-business outweigh the concerns and problems.

3. CHAPTER 4 E-Business: Managing the Customer Experience E-BUSINESS AND E-MARKETING E-business The wide range of business activities that take place via Internet applications, such as e-mail and virtual shopping carts. E-business can be divided into five broad categories: E-tailing or virtual storefronts on Web sites. Business-to-business transactions. Electronic data interchanges (EDI), the business-to-business. Exchange of data e-mail, instant messaging, blogs, podcasts, and other Web-enabled communication tools and their use as media for reaching prospective and existing customers. The gathering and use of demographic, product, and other information through Web contacts.

4. CHAPTER 4 E-Business: Managing the Customer Experience E-marketing Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools. Examples: Booking a flight to Atlanta on Expedia.com to attend a job fairExpedia.com Researching MP3 accessories on Shopzilla and then placing an order.Shopzilla Online marketing Activities that connect buyers and sellers electronically through interactive computer systems. E-MARKETING

5. CHAPTER 4 E-Business: Managing the Customer Experience OPPORTUNITIES OF E-MARKETING

6. CHAPTER 4 E-Business: Managing the Customer Experience WEB BUSINESS MODELS Corporate Web site Site designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties. Purpose is to build customer goodwill and assist channel members in their marketing efforts. Marketing Web site Site whose main purpose is to increase purchases by visitors. Includes information about company history, products, locations, employment opportunities, and financial information. Many try to engage visitors in interactions that move them closer to a desired marketing outcome.

7. CHAPTER 4 E-Business: Managing the Customer Experience B2B E-MARKETING Business-to-business (B2B) e-marketing Use of the Internet for business transactions between organizations. Accounts for 93 percent of all e-business activity. Increases efficiency of business transactions, which typically involve more steps than consumer transactions. PROPRIETARY B2B TRANSACTIONS Electronic data interchange—computer-to-computer exchanges of price quotations, purchase orders, invoices, and other sales information between buyers and sellers. Web services—Internet-based systems that allow parties to communicate electronically with one another regardless of the computer operating system they use.

8. CHAPTER 4 E-Business: Managing the Customer Experience Extranets—secure networks used for e-marketing and accessible through the firm’s Web site by external customers, suppliers, or other authorized users. Private exchanges—secure Web site at which a company and its suppliers share all types of data related to e-marketing, from product design through delivery of orders. More collaborative than a typical extranet, so is sometimes been called c-business. E-PROCUREMENT ON OPEN EXCHANGES Electronic exchanges—online marketplaces that bring buyers and sellers together in one electronic marketplace and cater to a specific industry’s needs. E-procurement—Web-based systems that enable all types of organizations to improve the efficiency of their bidding and purchasing processes.

9. CHAPTER 4 E-Business: Managing the Customer Experience B2C E-MARKETING Business-to-consumer (B2C) e-marketing Selling directly to consumers over the Internet. Also called e-tailing. Service providers such as banks are an important segment of e-tailing. ELECTRONIC STOREFRONTS Electronic storefront Company Web site that sells products to customers. Example: American EagleAmerican Eagle Visitors can click on items they want to buy, and place them in a file called an electronic shopping cart or shopping bag before purchasing them. Growth anticipated with the increase in availability of wireless access. BENEFITS OF B2C E-MARKETING Competitive pricing. Access and convenience. Personalized service.

10. CHAPTER 4 E-Business: Managing the Customer Experience ONLINE BUYERS AND SELLERS

11. CHAPTER 4 E-Business: Managing the Customer Experience

12. E-BUSINESS AND E-MARKETING CHALLENGES SAFETY OF ONLINE PAYMENT Companies have developed secure payment systems to protect customer information. Encryption, Secure Sockets Layer, and electronic wallets. PRIVACY ISSUES Protection of personal information is customers’ top security concern. Electronic signatures allow consumers enter legal contracts online. Cookies and spyware allow companies to personalize Internet experience but also invade computer users’ privacy. To reassure customers, many online merchants have signed on with online privacy organizations such as TRUSTe.TRUSTe Companies install firewalls to protect private corporate data.

13. CHAPTER 4 E-Business: Managing the Customer Experience FRAUDS AND SCAMS Internet Crime Complaint Center logged more than 206,000 complaints in a recent year.Internet Crime Complaint Center Phishing High-tech scam that uses authentic-looking e-mail or pop-up messages to get unsuspecting victims to reveal personal information. Vishing The voice equivalent of phishing. Payment fraud is also growing. SITE DESIGN AND CUSTOMER SERVICE Competition and customer expectations drive more sites to include innovative design elements. Web sites allow customers to track orders from placement to delivery. Reverse logistics allows consumers to return merchandise. Companies that combine their store and catalog operations with e-business show more success.

14. CHAPTER 4 E-Business: Managing the Customer Experience CHANNEL CONFLICTS AND COPYRIGHT DISPUTES Channel conflicts Conflicts between producers, wholesalers and retailers. Conflicts also arise in the area of copyright, usually when a site hosts content to which someone else holds the rights.

15. CHAPTER 4 E-Business: Managing the Customer Experience MARKETING AND WEB COMMUNICATION Four main functions of the Internet: e-business, entertainment, information, and communication. Communication is Web’s most popular function. Firms use e-mail to communicate with customers, suppliers, and other partners. Spam Popular name for junk e-mail. ONLINE COMMUNITIES AND SOCIAL NETWORKS Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests. Electronic bulletin boards are specialized online services that center on a specific topic or area of interest. Social networking sites have grown dramatically.

16. CHAPTER 4 E-Business: Managing the Customer Experience BLOGS AND PODCASTS Blog Short for Web log, an online journal written by a blogger. Some incorporate wikis and podcasts. Corporate blogs can help build brand trust. Example: Wal-Mart’s Check OutCheck Out Employee blogs can humanize a company, but negative comments can harm it. WEB-BASED PROMOTIONS Banner and pop-up ads on Web sites, and online coupons. Preroll video ads and widgets are becoming popular. Search marketing Paying search engines, such as Google, a fee to make sure that the company’s listing appears toward the top of the search results.

17. CHAPTER 4 E-Business: Managing the Customer Experience BUILDING AN EFFECTIVE WEB PRESENCE SUCCESSFUL SITE DEVELOPMENT

18. CHAPTER 4 E-Business: Managing the Customer Experience ESTABLISHING GOALS Company’s goal for its Web site determines scope, content, and design. Will the site be maintained in-house or by a contractor? What will the site be named? IMPLEMENTATION AND INTEREST Content and connections—important factor for whether visitors return to a site. Relevant to viewers, easy to access and understand, updated regularly, and compelling and entertaining. Most small businesses are better off outsourcing to meet their hosting and maintenance needs. PRICING AND MAINTENANCE Costs and maintenance—development, placing the site on a Web server, and maintaining, updating, and promoting the site.

19. CHAPTER 4 E-Business: Managing the Customer Experience ASSESSING SITE EFFECTIVENESS Web-to-store shoppers A group that favors the Internet primarily as a research tool and time-saving device for retail purchases made in stores are a significant consumer niche. Click-through rate Percentage of people presented with a banner ad who click on it. Conversion rate Percentage of visitors to a Web site who make a purchase.