E-commerce

Name : Dr. Nasim Z. Hosein E-Mail : nhosein@northern.edu Phone number : 605-626-7724

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Agenda
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Marketing Commerce History of Internet Computer, Networks Intro to E-commerce History of E-commerce WWW What is E-commerce Forces shaping E-commerce E-commerce today Categories of E-commerce What is a web based business E-commerce marketing strategies Setting up for E-marketing (online) Benefits of E-commerce Strategy Formulation Business Model

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Definition of Marketing

Philip Kotler
– Social and Managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others.

This definition rests on the following core concepts: needs, wants, demands, products, value, cost and satisfaction, exchange and transactions, relationships and networks, markets, marketers and prospects.
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Definition (cont)
Needs – exist in biology they are not created by marketers – i.e. shelter, food, clothing, safety, belonging, esteem  Wants – Need food want hamburger, fries, coke.  Desire – Wants for specific products backed by an ability and willingness to buy them

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Definition of Commerce
The exchange of goods and services for money  Consists of: Buyers - these are people with money who want to purchase a good or service. Sellers - these are the people who offer goods and services to buyers. Producers - these are the people who create the products and services that sellers offer to buyers.

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Elements of Commerce
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You need a Product or service to sell You need a Place from which to sell the products You need to figure out a way to get people to come to your place. You need a way to accept orders. You also need a way to accept money. You need a way to deliver the product or service, often known as fulfillment. Sometimes customers do not like what they buy, so you need a way to accept returns. You need a customer service and technical support department to assist customers with products.

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7 .  .History of The Internet Started as a US government project in 1969. as long as information can pass through other nodes.  Effective in 1971 with computers on both coasts of the US.―Hub and spokes‖ can be useless if the hub is destroyed. .Network can continue to be functional even if some nodes are destroyed.  The purpose was to create a net that can function even if one center is destroyed in a military attack.

 Only large companies could afford the expense and investment in equipment.  8 .  The server was a mainframe. or connected to a mainframe computer.In the 1980´s Personal computers or terminals were connected to a server.  The mainframe was connected to another mainframe of the company in another location via dedicated lines.

Today Connections across countries and continents made through dedicated fast lines.  Well established in N.A.. Europe and certain Asian countries  9 . which is connected to the Internet through a Regional network.  A company may have one local network (LAN) in NY.

less expensive and smaller .used to handle large amount of data or complex processes .work stations with computing capabilities .usually a server Micro-computer: .single-users systems linked to form a network 10 .term for very large computers .medium sized.Computer classifications    Mainframes: .main advantage is reliability Midrange: .

What is a network Series of points or nodes interconnected by communication paths  Node is a connection point for transmitting data  Network can interconnect with other networks to form global networks  11 .

Benefits of a network Facilitates resource sharing  Provides reliability  Cost effective  Provide a powerful medium across geographical divide  12 .

can include several MAN’s  Internet: a network of networks that covers the entire globe  14 . can bridge several LAN’s  Wide area network (WAN): a broader area covered. share a single server  Metropolitan area network (MAN): a wider network.Geographical Distance Local area network (LAN): small area.

org: for non-profit. therefore every computer on the Internet has an IP address  IP address is numerical.net: for Internet Service Providers .gov: reserved for government . separated by dots  Works with DNS: .int: reserved for international organizations  16 .mil: reserved for military .com: for commercial purposes . non-commercial groups .Internet addressing system Internet uses TCP/IP.

Assimilation of Technology  Technology first adopted to increase efficiency – doing the same tasks faster e. spreadsheets transformed finance and accounting (as well as science and other fields) 17  .g.g. word processing instead of typing Technology next adopted to increase effectiveness – doing tasks not only faster but better e.

Internet  The evolution of new businesses  The adoption of Brick and Mortar companies to the new economy  Market failures and economic explanations for the new economy  18 . Networks.Introduction to E-commerce E-Commerce. Web.

Large corporations .Electronic funds transfer (EFT)  Limited to: .A few other daring businesses 19 .History of E-commerce  EC applications first developed in the early 1970s .Financial institutions .

and services among parties that are connected to through the Internet. .  Enables new ways of creating. content.E-Commerce Mechanisms  Transformation of economic activity into digital media .Exchange information. delivering and capturing value to customers.Availability . agreements.Convenience 22 .

 Multimedia documents: . and that can be accessed by other computers on the Internet.Text .Drawings .Links to other documents .A collection of documents that reside on computers.World Wide Web (WWW)  World Wide Web (Web): .Can begin execution of a program 23 .Sounds .Video  Hypertext: .Images .

Enhance applications such as real-time audio or video Netscape and Internet Explorer  The Microsoft legal trouble due to the Explorer.  24 .Execute other programs .Follow links .Web Browsers  Computer programs that can: .Display Web documents .

Web Servers Computers that run server software. The server sends (serves) the document to the requesting computer.The request is typically for a document.  . and the then transfers the information to another program or a server.  Sometimes the server allows a user to fill in information on a document.  A server waits for request to arrive from a user.  25 .

WWW and Internet The World Wide Web (WWW) is not the Internet  Access to the Internet doesn’t mean you have e-commerce  WWW works in HTTP  Web pages works in HTML  Web browser provide access to information on the WWW  27 .

online marketing.Internet . buying. EDI  Uses electronic technology such as: .Protocols  28 . selling and marketing products and services over electronic systems  E-business for commercial transactions  Involves supply chain management. e-marketing.What is E-commerce Distributing.Extranet/Intranet .

Forces Shaping the Digital Age 29 .

– Internet : connects users around the world. – Increasing numbers of users each month. 30 .  Internet Explosion – Explosive worldwide growth forms the heart of the New Economy. – Companies must adopt Internet technology or risk being left behind. and outside partners. – Extranets : connect a company with its suppliers. distributors.Forces Shaping the Digital Age  Digitalization & Connectivity – Intranets : connect people within a company.

Collaborate with other companies 31 .Requires security and privacy .Private network that users outside the company can access .A collection of computers that speak a common language – protocol   Intranet: .Main purpose to share company information and computing resources among employees Extranet: .Definitions  Internet: .Private version of the Internet .

some ―click-only‖ companies have failed. – As a result. 32 . – ―Brick-and-mortar‖ firms became ―click-andmortar‖ companies.Forces Shaping the Digital Age  New Types of Intermediaries: – Direct selling via the Internet bypassed existing intermediaries (disintermediation).

– With customerization. the customer designs the market offering and the company makes it. 33 . the company custom designs the market offering for the customer.Forces Shaping the Digital Age  Customization and Customerization: – With customization.

synthesizing and distribution of information Formulate strategies that make management of the enterprise and technology convergent Compete in real time rather than in ―cycle time‖ Operate in a world characterized by low barriers to entry.E-commerce as the Networked Economy       Create value largely through gathering. near-zero variable costs of operation and shifting competition Organize resources around the demand side rather than supply side Manage better relationships with customers through technology 34 .

It’s cheap and relatively easy to use it as a medium for connecting customers. 35 .E-commerce Today     The Internet is the perfect vehicle for ecommerce because of its open standards and structure. suppliers. and employees of a firm. No other mechanism has been created that allow organizations to reach out to anyone and everyone like the Internet. No other methodology or technology has proven to work as well as the Internet for distributing information and bringing people together.

It’s more than just posting a nice looking Web site with lots of cute animations and expecting customers and suppliers to figure it out Web-based solutions must be easier to use and more convenient than traditional methods if a company hopes to attract and keep customers.E-commerce Today     The Internet allows big businesses to act like small ones and small businesses to act big. The challenge to businesses is to make transactions not just cheaper and easier for themselves but also easier and more convenient for customers and suppliers. 36 .

Four Categories of E-Commerce Business originating from.. Business Consumers Business And selling to.... B2B C2B Consumers B2C C2C 37 .

payment management &service and support. Dell and General Electric Business to Consumer (B2C) refers to exchanges between business and consumers. sales activities. Yahoo and Charles Schwab & Co 38  .Distinct Categories of E-Commerce  Business to Business (B2B) refers to the full spectrum of ecommerce that can occur between two organizations. activities tracked are consumer search. channel management. supplier management. frequently asked questions and service and support. Examples: FreeMarkets. This includes purchasing and procurement. Examples: Amazon. inventory management.

planetfeedback.Distinct Categories of E-Commerce (cont’d)  Peer to Peer (C2C) exchanges involve transactions between and among consumers. as in the case of the auction website Ebay.com. Example: www. Monster Consumer to Business (C2B) involves when consumers band together to present themselves as a buyer in group. These can include third party involvement.com  39 . Craiglist. Examples: Owners.

offers and initiate purchases from Amazon And Selling to… Business Amazon orders from publishers Consumers Consumers buy thousands of Harry Potter books from Amazon Consumers resell copies on eBay 40 .Convergence of e-Commerce Categories Business originating from… Business Publishers order paper supplies from paper companies Consumers Consumers search out sellers.

promotions and marketing .data capture .transacting with stakeholders Business objectives interact with web based applications 41 .What is a web-based business    Business that uses the WWW to fulfill it’s business process Four basic business processes: .information dissemination .

Key Drivers of E-commerce Technological – degree of advancement of telecommunications infrastructure  Political – role of government. funding and support  Social – IT skills. creating legislation. education and training of users  Economic – general wealth and commercial health of the nation  46 .

in terms of product and service Competition.Key Drivers of E-business      Organizational culture.stay ahead of or keep up with competitors 47 .attitudes to R&D.willing and able to implement and use new technology Requirements of customers/suppliers. willingness to innovate and use technology Commercial benefits.impact on financial performance of the firm Skilled/committed workforce.

Appeal of E-commerce     Lower transaction costs . 48 . the web can significantly lower both order-taking costs up front and customer service costs Larger purchases per transaction .if an e-commerce site is implemented well.Amazon offers a feature that no normal store offers Integration into the business cycle People can shop in different ways. The ability to build an order over several days – The ability to configure products and see actual prices – The ability to easily build complicated custom orders – The ability to compare prices between multiple vendors easily – The ability to search large catalogs easily   Larger catalogs Improved customer interactions .company.

access costs. reliance on technology. reliability. lack of privacy for personal data. social division.Limitations of E-commerce To organizations: lack of security. JIT manufacturing  49 . new technology  To consumers: equipment costs. pressure to innovate. standards. old vs. wasted resources. changing technology. knowledge. relationship replacement  To society: less human interaction. competition.

and reliability The telecommunications bandwidth is insufficient Software development tools are still evolving There are difficulties in integrating the Internet and EC software with some existing (especially legacy) applications and databases.Technical limitations       There is a lack of universally accepted standards for quality. security. Special Web servers in addition to the network servers are needed (added cost). Internet accessibility is still expensive and/or inconvenient 50 .

Web based technology Websites  E-mail  Search engines  Interactive communications  51 .

Old Economy Firms  Brick and Mortar companies need to adopt to the new economy .Buy the technology from a consultant. 52 .Integrate with suppliers and or customers.Invest in an Internet competitor.Work with other firms to create an exchange. . . . . .Create a new subsidiary.Create a new Internet company.

Reduced profits and cash flows. .Inability to raise new financing. 53 .Inability to meet new economy competitors´prices. .Old Economy Firms  Failure of old economy companies to adopt may result in: . .Loss of control in an acquisition by a new economy firm.Loss of market share. .

Business Opportunity The Internet revolutionized ways of doing business  Entrepreneurs found ways to exploit market failures and earn economic rents  New businesses were created that were not feasible earlier  The new economy poses threats to old economy firms that do not wish to adapt  The transformation is still in process. The evolution continues  54 .

Benefits and Challenges of E-commerce Benefits  Persistent  New Challenges  Cannibalization  Channel connection with customers value for customers to new customers conflict confusion  Access  Customer  Investor  Scalability confusion 55 .

e-auction 56 .Front end systems    Direct user interface with business processes Accessible via WWW Front-end systems: .e-marketplace .e-marketing .e-services .e-CRM .

Marketing Strategy in the Digital Age Requires a new model for marketing strategy and practice Some suggest that all buying and selling will eventually be done electronically Companies need to retain old skills and practices but add new competencies 57 .

– Web sites for selling and customer relations – Intranets for within-company communication – Extranets connecting with major suppliers and distributors 58 .E-Business in the Digital Age  Involves the use of electronic platforms to conduct company business.

 Includes:  – e-marketing – e-purchasing (e-procurement) 59 .E-Commerce in the Digital Age More specific than e-business. primarily the Internet.  Involves buying and selling processes supported by electronic means.

E-commerce vs. E-business E-commerce is about doing business electronically  E-commerce conducting financial transactions electronically  E-business is conducting business on the Internet  E-business is the transformation of business processes through the Internet  60 .

E-Marketing in the Digital Age The marketing side of e-commerce.  Includes efforts to communicate about. services. and sell products and services over the Internet.  E-purchasing is the buying side of ecommerce.  – It consists of companies purchasing goods. promote. and information from online suppliers. 61 .

Types of e-Marketers 62 .

Click-Only Companies E-tailers Enabler Sites Content Sites Types of Sites Transaction Sites Search Engines and Portals Internet Service Providers 63 .

com Failures Poor research or planning.  Devoted too much effort to acquiring new customers instead of building loyalty.Reasons for dot.  Spent too heavily on brand identities.  64 .  Relied on spin and hype instead of marketing strategies.

Reasons: – – – – – Trusted brand names and more resources Large customer bases More knowledge and experience Good relationships with suppliers Can offer customers more options 65 . Many are now doing better than click-only companies.Click-and-Mortar Companies    Most established companies resisted adding Web sites because of the potential for channel conflict and cannibalization.

Setting Up for E-Marketing Online Marketing 66 .

generate excitement Marketing websites – Engage consumers and attempt to influence purchase Website design – 7 C’s of effective website design 67 .Setting up for E-Marketing Options Creating Corporate websites websites Placing online ads and promotions Creating or using Web communities Using E-mail – Build goodwill and relationships.

Conducting E-Commerce Seven C’s of Website Design Context Content Communication Connection Commerce Community Customization 68 .

sound and video that web pages contain Commerce Site’s capabilities to enable commercial transactions Community The ways sites enable user-touser communication Connection Degree site is linked to other sites Customization Site’s ability to self-tailor to different users or to allow users to personalize the site Communication The ways sites enable site-touser communication or two-way communication 69 .The 7C’s of Website design Context Site’s layout and design Content Text. pictures.

Fit and Reinforcement of Cs Business Model Individually Supporting Fit Context Content Community Customization Communication Connection Commerce Consistent Reinforcement 70 .

Setting up for E-Marketing Options Online Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail forms of ads and promotions – Banner ads/tickers – Skyscrapers – Interstitials – Content sponsorships – Microsites – Viral marketing Future of online ads 71 .

Web Advertising  Banner ads: allows for more targeted advertising  Pop-up ads: pop-under ads are displayed in a separate browser window beneath your main browser window and remain there until you close them This is a pop-up ad Click here to close me  Skyscrapers: An advertisement on a Web site that is vertically oriented on the page and larger than the typical banner ad 72 .

Web Advertising  Interstitials: are usually full-page ads displayed while a user is in transit from one page to another. triggered by code included in the link 73 .

74 . medial side) of the running shoe. Often. Post or footbridge: This is the firm material in the midsole which increases stability along the inner side (arch side. the upper is padded to prevent rubbing and irritation against the achilles tendon. The heel counter: This is a firm and inflexible cup which is built into the upper of running shoes and surrounds the heel. It may be made of leather or a synthetic material that is lighter and breathable (to reduce heat from inside the running shoe).Web Advertising Content Sponsorship: are sites that pay for placement in search results on keywords that are relevant to their business The upper: This is the part of the shoe that wraps around and over the top of the foot. at the back of the running shoe. The tongue of the upper should be padded to cushion the top of the foot against the pressure from the laces. It is usually very firm so that it can control motion of the rearfoot.

Web Advertising  Microsites: limited areas on the Web managed and paid for by external companies http://www.autotrader.com/ 75 .

greatly expanding the audience reached by its “Reveal the Goddess in You” truck tour and beach-site promotions. 76 .Viral Marketing Gillette used viral marketing to introduce the 3-bladed Venus razor for women.

Setting up for E-Marketing Options Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail Web communities allow members with special interests to exchange views – Social communities – Work-related communities Marketers find welldefined demographics and shared interests useful when marketing 77 .

Setting up for E-Marketing Options Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail E-mail marketing – Key tool for B2B and B2C marketing – Clutter is a problem – Enriched forms of e-mail attempt to break through clutter – Spam is a problem 78 .

connects people. digitization of products/services  To society: flexible working practices. cost savings. reduced inventories. customization. more choices.Benefits of E-commerce To consumers: 24/7 access. competition  To organizations: International marketplace (global reach). delivery of public services  79 . improved delivery. price comparisons.

Benefits to Consumers Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate 80 .

Benefits to Organizations Powerful tool for building customer relationships Can reduce costs Can increase speed and efficiency Offers greater flexibility in offers and programs Is a truly global medium 81 .

Benefits to Society More individuals can work from home Benefits less affluent people Third world countries gain access Facilitates delivery of public services 82 .

Discussion Questions  What features do you look for on a Web site that you feel make the site appealing?  What are your major concerns about making online purchases?  What types of things can an online retailer do to create a more secure buying environment? 83 .

Online Ads and Promotion  Forms of online advertising & promotion: – – – – – – Banner ads & tickers (move across the screen) Skyscrapers (tall. skinny ads at the side of a page) Rectangles (boxes that are larger than a banner) Interstitials (pop up between changes on Web site) Content sponsorships (sponsoring special content) Microsites (limited areas paid for by an external company) – Viral marketing (Internet version of word-of-mouth) 84 .

Technological 85 . and political actions that affect business activities  Business pressures are divided into the following categories:  .Business Pressures The term business environment refers to the social. technological. economic. legal.Societal .Market (economic) .

Major Business Pressures & the Role of EC 86 .

Many companies continuously conduct programs to improve:    Productivity Quality Customer service  Business process reengineering (BPR) .Provide organizations with strategic advantages.Organizational Responses  Strategic systems .Such an effort is referred to as business process reengineering (BPR) 87 . enabling them to:    Increase their market share Better negotiate with their suppliers Prevent competitors from entering into their territory  Continuous improvement efforts .Strong business pressures may require a radical change .

Organizational Responses  Business alliances . can be beneficial . even competitors.Alliances with other companies.Require the collaboration of the different companies and competitors 88 .Enable their members to compete globally .Optimize trading efficiency .Virtual corporation—electronically supported temporary joint venture   Special organization for a specific Time-limited mission  Electronic markets .

Organizational Responses  Reduction in cycle time and time to market .Extranet-based applications expedite steps in the process of product or service development.Extremely important for increasing productivity and competitiveness .Cycle time reduction—shortening the time it takes for a business to complete a productive activity from its beginning to end . and implementation 89 . testing.

Strategy Formulation Porter’s three generic strategies for business: .differentiation  Differentiation in the new e-commerce sector is the key to success  90 .low cost leadership .focus .

Classic Framework for Strategy Management Mission Goals External Analysis Internal (Company) Analysis Strategy Formulation •Corporate •Business-unit •Functional •Operating Implementation Control and Monitoring 91 .

E-commerce and Organizations Organizations that undertake e-commerce do so from two possible starting points: .differentiation in the marketplace .traditional established organizations  Factors for success: .flexibility and agility in the electronic marketspace  92 .first-mover advantage .new online organizations .

Seven dimensions of E-commerce Strategy Four positional factors Three bonding factors • Technology: goal must be • Leadership: vision of CEO for eunderstood within its’ market and commerce industry • Infrastructure: technology •Market: must determine its’ target support for new model of market and whether it is still business open to new entrants • Organizational Learning: does •Service: must know its’ the organization support internal customer’s expectations learning • Brand: must understand if it has the ability to create a strong brand 93 .

staffing: developing a strong pool of skills .style: add value to customers .strategy: focus upon alignment and planning .shared values: must build value to the organization 94 .structure: focus upon becoming an e-organization .systems: technology integration .Technology Leadership   Involves more than hardware and software Seven major areas: .skills: developing the necessary knowledge .

high-quality service channel with a global reach  Call centre strategy must be defined  E-mail interface channel must be defined  95 .Service Leadership Established strategies of customer still apply  Internet service strength derived from providing additional information to the customer  Internet provides a low-cost.

Brand Leadership Branding strength comes from being a first mover  Brand reinforcement is a continuous task  Brand positioning can be defined using the Internet service value chain  Brand followers need to reposition as quickly and effectively as possible  Four brand  96 .

marketing and service Identify and use knowledge in the organization Strategy must add value for customers and must change as the requirements of the customers change 97 . branding.Developing a Winning E-strategy      Ensure that the project is backed by senior management Develop a strategy before a Web presence Develop a strategy by focusing on technology.

The Three Approaches to Strategy  Position approach: ―Where should we be vs. our competition?‖ Resources approach: ―what resources should we possess?‖ Simple rules approach: ―What processes should we follow?‖   98 .

ambiguous markets • Unpredictable • Managers will be too tentative in executing on promising opportunities • Growth Strategic Question • What should we be? Source of Advantagewith tightly integrated Works Best In • Unique.Three Approaches to Strategy Position Strategic Logic Strategic Steps • Establish position Resources • Leverage resources Simple Rules • Pursue opportunities • Identify an attractive market • Locate a defensible position • Fortify and defend • Where should we be? • Establish a vision • Build resources •Leverage across markets • Jump into the confusion •Keep moving •Seize opportunities •Finish strong • How should we proceed? • Key processes and unique simple rules • Rapidly changing. wellstructured markets • Sustained • It will be too difficult to alter position as conditions change • Profitability • Moderately changing. valuable position • Unique. well structured markets • Sustained • Company will be too slow to build new resources as conditions change • Long-term dominance Duration of Advantage Risk Performance Goal 99 . inimitable resources activity system • Slowly changing. valuable.

Business Model 100 .

Business Models A method of doing business by which a company can generate revenue to sustain itself  Spells out where the company is positioned in the value chain  Business models are a component of a business plan or a business case  101 .

its major emphasis is the justification for a specific investment 102 .A written document that is used by managers to garner funding for specific applications or projects.A written document that identifies the business goals and outlines the plan of how to achieve them  Business case: .Business Plans & Business Cases  Business plan: .

The Content of a Business Plan      Mission statement and company description The management team The market and the customers The industry and competition The specifics of the products and/or services      Marketing and sales plan Operations plan Financial projections and plans Risk analysis Technology analysis 103 .

Sales .Transaction fees .Other models 104 .Advertisement fees .Subscription fees .Structure of Business Models All business models must specify their revenue model (the description of how the company or an E-commerce project will earn revenue)  Value proposition is the description of the benefits a company can derive from using EC  Revenue sources are  .Affiliate fees .

logistical stream  105 .Business Models in E-commerce Method of doing business  Well-planned model gives a competitive advantage  Impacts on sustainability and growth  Three areas: .value stream .revenue stream .

Transaction costs        Cost of providing some good or service through the market Effects of e-commerce and the internet that impacts the business model Searching for an obtaining information Participating in a market Policing and enforcing transactions Bargaining and decision costs Actual cost of buying or selling the product 106 .

creation/participation of virtual communities .creation/participation in an e-marketplace .additional value offers .Value Stream Create long-term sustainability  Benefit for business stakeholders  Can be achieved in four ways: .exploitation of offers  107 .

Creation/participation in an e-marketplace      Reduce transaction costs directly/indirectly Economics of e-market similar to traditional market Can be setup by supplier/buyer or run independently Buyer value: .reduced costs .improved service .differentiation .reduced costs .convenience Supplier value: .reduced lead time 108 .

Creation/participation of virtual communities Bringing together members of a community  Larger communities mean larger sources  Improves customer service  109 .

Additional value offers Value is added by improving product mix  Through association or partnership  Can be achieved with minimum costs  Can be integrated into the host sites  110 .

Exploitation of offers E-commerce/Internet economy founded on information  Value can be added by using this information  Target customers demographically  Can bridge the uncertainty gap  Can post RFP’s  111 .

Revenue Stream

Short-term realization of value proposition Direct: - cost reduction - free offerings of service/products - pricing strategies Indirect: - internet advertising - selling customer information - joining affiliate programs
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Logistical stream
Examines organization restructure to deliver value added and revenue streams  Issues such as: - organizational culture - pre/post restructuring - implementing information - communication and training - reward systems for motivation

113

Kinds of business models
Brokerage: market makers bring together buyer and sellers  Advertising: web advertising providing advertising messages  Infomediary: collecting and disseminating information

115

imitation .complementary assets  Financial measures  Competitor benchmarking  Market analysis  116 .Assessing a business model Can be assessed by looking at the marketing strategy  Can also be assessed by technology .

Traditional vs. New Business Models Traditional Production Mass Manufactures push Middleman Closed Slow Difficult Local Mass Physical New Business Personalized Customer Pull Direct Open Fast Easier Global Niche Virtual Distribution Communications Finance Markets Assets 117 .

Consumer Decision Process Problem .Recognition Information Search Evaluation of Alternatives PRE-PURCHASE PURCHASE Purchase Decision Satisfaction POST-PURCHASE Loyalty Disposal 118 .

potentially triggered by a holiday. anniversary or everyday events  Pre-Purchase Information Search Search for ideas and offerings.Consumer Decision Process — Flower Example Flowers Problem . availability. such as price. appeal. including: – Available on-line and off-line stores – Gift ideas and recommendations – Advice on selection style and match Evaluation of alternatives along a number of dimensions.Recognition  Need recognition. etc. Evaluation of Alternatives   Purchase Purchase Decision  Purchase decision Message selection (medium and content)  Satisfaction Post-sales support – Order tracking – Customer service Education on flowers and decoration Post sales perks PostPurchase  Loyalty  Disposal 119 .

may be quantitative or qualitative     Response times Site availability Download times Timeliness     Security and privacy On-time order fulfillment Return policy Navigability 120 . measure it! Measures of performance.Metrics Metrics: If it moves.

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