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DIGITAL BUSINESS AND E-COMMERCE MANAGEMENT
DIGITAL BUSINESS
Which strategies and tactics are needed to develop and implement a digital business?
How do we work out where to put our investment?
What are the things that have to happen in an organisation to make a digital
business successful?
How should businesses select the best digital technology, media and insight sources AND E-COMMERCE
MANAGEMENT SEVENTH EDITION
to compete?

This new edition of Dave Chaffey’s bestselling book, joined this time by fellow authors Tanya Hemphill
and David Edmundson-Bird, is your guide to answering these tough questions. Written in an engaging and
informative style, Digital Business and E-Commerce Management will give you the knowledge and skills to
be able to handle the speed of change faced by organisations in the digital world.
In this seventh edition of the book, Chaffey, Hemphill and Edmundson-Bird bring together the most recent
academic and practitioner thinking. Covering all aspects of digital business including strategy, digital
communications and transformation, Digital Business and E-Commerce Management gives you the benefit of:
• A structured approach to review, plan and implement a digital business strategy for all types of
organisation
• The latest on digital marketing techniques in SEO, social media communications and content marketing
• All new case studies providing examples of organisations and their experiences of digital business
and e-commerce
• A brand new chapter introducing the concepts of digital business transformation and growth hacking
Whether you’re a student studying digital business and e-commerce, a marketer or a business manager,
Digital Business and E-Commerce Management is the essential text to help you understand and apply the
concepts of digital, strategy and implementation.
SEVENTH
Dr Dave Chaffey FCIM, FIDM is co-founder of the publisher Smart Insights. EDITION
Tanya Hemphill MSc (Dist.) Chartered Marketer MCIM MCIPR MIPM is Senior Lecturer at Manchester
EDMUNDSON-BIRD
CHAFFEY, HEMPHILL
Metropolitan University and MD of WeDisrupt.
David Edmundson-Bird MSc FRSA is Principal Lecturer in Digital Marketing at Manchester
Metropolitan University.

Front cover image © DrAfter123/DigitalVision Vectors/Getty Images Plus www.pearson-books.com DAVE CHAFFEY
TANYA HEMPHILL
DAVID EDMUNDSON-BIRD
CVR_CHAFFEY_07_93335.indd 1 13/05/2019 08:53
DIGITAL BUSINESS
AND E-COMMERCE
MANAGEMENT

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 1 10/05/2019 15:59


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DIGITAL BUSINESS
AND E-COMMERCE
MANAGEMENT SEVENTH EDITION

DAVE CHAFFEY,
TANYA HEMPHILL
DAVID EDMUNDSON-BIRD

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong
Tokyo • Seoul • Taipei • New Delhi • Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan

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First published 2002 (print)


Second edition published 2004 (print)
Third edition published 2007 (print)
Fourth edition published 2009 (print)
Fifth edition published 2011 (print)
Sixth edition published 2015 (print and electronic)
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ISBN: 978-1-292-19333-5 (print)


978-1-292-19335-9 (PDF)
978-1-292-19336-6 (ePub)
British Library Cataloguing-in-Publication Data
A catalogue record for the print edition is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Chaffey, Dave, 1963- author. | Edmundson-Bird, David, author.
| Hemphill, Tanya, author.
Title: Digital business and e-commerce management : strategy, implementation and
practice / Dave Chaffey, David Edmundson-Bird and Tanya Hemphill.
Other titles: E-business and e-commerce management
Description: Seventh edition. | Harlow, England ; New York : Pearson, [2019]
Identifiers: LCCN 2018048265| ISBN 9781292193335 (print) | ISBN 9781292193359 (pdf) |
ISBN 9781292193366 (epub)
Subjects: LCSH: Electronic commerce. | Business enterprises--Computer networks.
Classification: LCC HF5548.32 .C472 2019 | DDC 658.8/72--dc23
LC record available at https://urldefense.proofpoint.com/v2/url?u=https-3A__lccn.loc.gov_20
18048265&d=DwIFAg&c=0YLnzTkWOdJlub_y7qAx8Q&r=DHV3lB6NYyi5k52Oyd75rqJsjAnt
DLt1__vXNeqFI9Y&m=0nlHtyBYQs36TSi0YZg4vQ0e3aIvW_P-7krlLSmqLEI&s=BG19fgbHozu
ya0aTHRnmreWctZMpky2owjRZEtZJTj8&e=
10 9 8 7 6 5 4 3 2 1
23 22 21 20 19
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Printed and bound by L.E.G.O. S.p.A., Italy
NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 4 10/05/2019 15:59


Brief contents

Preface xiv
About the authors xxv
Acknowledgements xxvii
Publisher’s acknowledgements xxviii

Part 1 Introduction 1

1 Introduction to digital business 3


2 Opportunity analysis for digital business and e-commerce 36
3 Managing digital business infrastructure 72
4 Key issues in the digital environment 120

Part 2 Strategy and applications 177

5 Digital business strategy 179


6 Supply chain and demand 248
7 Digital marketing 303
8 Customer relationship management 365

Part 3 Implementation 449

9 Customer experience and service design 450


10 Managing digital business transformation and growth hacking 522

Glossary 609
Index 623

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F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 6 10/05/2019 15:59
Contents

Preface xiv Drivers of consumer technology adoption 28


About the authors xxv Barriers to consumer digital adoption 29
Acknowledgements xxvii Case study 1.2: Amazon – the world’s largest
Publisher’s acknowledgements xxviii digital business? 30
Summary 32
Exercises 33
References 34
Part 1 Web links 35

Introduction 1 2 Opportunity analysis for digital business and


e-commerce 36
1 Introduction to digital business 3 Learning outcomes 36
Learning outcomes 3 Management issues 36
Management issues 3 Links to other chapters 36
Links to other chapters 3 Introduction 37
Introduction 4 Business and revenue models for e-commerce 37
The impact of digital communications on traditional Digital marketplace analysis 38
businesses 6 Case study 2.1: How Boden grew from an eight-
Inbound marketing 6 product menswear catalogue to an international
Social media marketing 7 brand with over £300 million in sales 39
Trends update: Social media usage 7 Strategic agility 41
Case study 1.1: The Uber business model 8 Case study 2.2: Unilever demonstrates
Mobile commerce 10 strategic agility 41
Trends update: Mobile usage 10 A process for digital marketplace analysis 42
What is the difference between a digital business and an Case study 2.3: Macy’s – using omnichannel
e-commerce business? 11 growth strategies to improve customer
E-commerce defined 11 experience 44
Trends update: E-commerce growth rates 12 1 Customer segments 46
Digital business defined 13 2 Search intermediaries 46
Intranets and extranets 13 3 Intermediaries, influencers and media
Different types of sell-side e-commerce 14 sites 47
Digital marketing 16 4 Destination sites 47
Trends update: Social network usage 17 Location of trading in the marketplace 49
Options for organisations to reach a digital audience 17 Review of marketplace channel structures 49
Owned, earned and paid media options 17 Location of trading in the marketplace 52
The six key types of digital media channels 18 The importance of omnichannel marketplace
The social internet and user-generated content 20 models 52
Supply chain management 21 Commercial arrangement for transactions 54
Business or consumer models of e-commerce Different types of online intermediary and
transactions 22 influencers 54
Dot Gov defined 23 Summary of the types of intermediary 55
Digital business opportunities 24 The importance of search engines 56
Drivers of digital technology adoption 25 Business models for e-commerce 56
Cost/efficiency drivers 25 Revenue models 58
Competitiveness drivers 26 Online publisher and intermediary revenue
Barriers to the adoption of technology by digital business models 58
stakeholders 27 Calculating revenue for an online business 60
Evaluating an organisation’s digital business Focus on Digital start-up companies 63
capabilities 28 Assessing digital businesses 63

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 7 10/05/2019 15:59


viii Contents

Valuing tech start-ups 63 Intranet applications 102


1 Concept 64 Extranet applications 102
2 Innovation 64 Encouraging use of intranets and extranets 105
3 Execution 65 Streaming TV 106
4 Traffic 66 Voice over IP (VoIP) 106
5 Financing 66 Widgets 107
6 Profile 66 Technology standards 107
Case study 2.4: i-to-i – a global marketplace for a Examples of XML applications 107
start-up 66 Semantic web standards 108
Summary 68 Microformats 109
Exercises 69 Focus on Internal and external governance factors that
References 70 impact digital business 109
Web links 71 The Net neutrality principle 109
The Internet Corporation for Assigned Names
3 Managing digital business infrastructure 72 and Numbers (ICANN, www.icann.org) 111
Learning outcomes 72 The Internet Society (www.isoc.org) 111
Management issues 72 The Internet Engineering Task Force
Links to other chapters 72 (IETF, www.ietf.org) 111
Introduction 73 The World Wide Web Consortium
Supporting the growing range of digital business (www.w3.org) 112
technology platforms 77 Telecommunications Information Networking
Desktop, laptop and notebook platforms 77 Architecture Consortium (TINA-C,
Mobile phone and tablet platforms 78 www.tinac.com) 112
Trends update: Mobile usage 79 How can companies influence or take control of
Other hardware platforms 80 Internet standards? 112
Augmented reality 82 Open-source software 113
Digital business infrastructure components 83 Case study 3.1: Innovation at Google
A short introduction to digital technology 85 (2017 update) 114
Management issues in creating a new customer-facing Summary 115
digital service 86 Exercises 116
Domain name selection 86 References 117
Uniform resource locators (URLs) 86 Web links 119
Domain name registration 87
Managing hardware and systems software 4 Key issues in the digital environment 120
infrastructure 88 Learning outcomes 120
Layer II – systems software 88 Management issues 120
Managing digital business applications Links to other chapters 120
infrastructure 88 Introduction 121
Focus on The development of customer experiences Social factors 125
and digital services 91 Legal and ethical factors 125
Benefits of web services or SaaS 91 Economic factors 126
Application programming interfaces (APIs) 92 Political factors 127
Challenges of deploying SaaS 92 Technology factors 127
Cloud computing 94 Cultural factors 128
Examples of cloud computing web services 94 Factors affecting e-commerce buying behaviour 128
Virtualisation 96 Understanding users’ access requirements 131
Service-orientated architecture (SOA) 97 Consumers influenced by using the online
Selecting hosting providers 98 channel 131
Managing service quality when selecting Internet Motivation for use of online services 133
service and cloud hosting providers 98 Business demand for digital business services 136
ISP connection methods 98 E-commerce sales across the EU 139
Issues in management of ISP and hosting Privacy and trust in e-commerce 140
relationships 98 Privacy legislation 141
Speed of access 98 Why personal data is valuable for digital business 142
Availability 101 Worldwide regulations on privacy and electronic
Service level agreements 101 communications 145
Security 101 Viral email marketing 148
Managing internal digital communications through Other e-commerce legislation 148
internal networks and external networks 102 1 Marketing your e-commerce business 148

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 8 10/05/2019 15:59


Contents ix

2 Forming an electronic contract (contract law Resource-advantage mapping 205


and distance-selling law) 149 Strategic objectives 206
3 Making and accepting payment 151 Defining vision and mission 206
4 Authenticating contracts concluded over the VMOST 207
Internet 151 How can digital business create business value? 210
5 Email risks 151 Case study 5.1: Arriva Bus redesigns its
6 Protecting intellectual property (IP) 151 m-ticket app and boosts revenue by over 17% 210
7 Advertising on the Internet 152 Objective setting 212
8 Data protection 152 The online revenue contribution 213
Environmental and green issues related to Conversion modelling for sell-side
Internet usage 152 e-commerce 213
Taxation 153 Case study 5.2: Setting the Internet revenue
Tax jurisdiction 153 contribution at Sandvik Steel 215
Freedom-restrictive legislation 154 The balanced scorecard approach to
Economic and competitive factors 155 objective setting 217
Case study 4.1: The implications of micro- Strategy definition 218
localisation vs globalisation based on consumer Selection of digital business strategy options 218
attitudes 157 Decision 1: Digital business channel priorities 220
The implications of e-commerce for international The diversification of digital platforms 221
B2B trading 159 Decision 2: Market and product development
Government and digital transformation 161 strategies 221
Internet governance 164 Decision 3: Positioning and differentiation
E-government 164 strategies 224
Technological innovation and technology Decision 4: Business, service and revenue
assessment 164 models 228
Approaches to identifying emerging technology 167 Decision 5: Marketplace restructuring 229
Summary 169 Decision 6: Supply chain management
Exercises 170 capabilities 229
References 171 Case study 5.3: Zappos innovates in the digital
Web links 173 marketplace 229
Decision 7: Internal knowledge management
capabilities 231
Part 2
Decision 8: Organisational resourcing and
Strategy and applications 177 capabilities 231
Strategy implementation 234
Failed digital business strategies 234
5 Digital business strategy 179
Digital business strategy implementation success
Learning outcomes 179
factors for SMEs 235
Management issues 179
Case study 5.4: Boo hoo – learning from the
Links to other chapters 179
largest European dot.com failure 235
Introduction 180
Focus on Aligning and impacting digital business
Development of the social business 183
strategies 238
What is digital business strategy? 187
Elements of information systems (IS) strategy 239
The imperative for digital business strategy 188
Investment appraisal 241
Digital channel strategies 188
Decisions about which business applications
Platform strategy 190
to invest in 241
Strategy process models for digital business 192
The productivity paradox 242
Strategic analysis 196
Summary 243
Resource and process analysis 196
Exercises 244
Stage models of digital business development 197
References 244
Application portfolio analysis 198
Web links 247
Organisational and IS SWOT analysis 200
Human and financial resources 201
Competitive environment analysis 202
6 Supply chain and demand 248
Learning outcomes 248
Demand analysis 202
Management issues 248
Assessing competitive threats 202
Links to other chapters 248
Competitive threats 203
Introduction 249
Sell-side threats 204
Case study 6.1: Fast-fashion retailer Zara uses its
Buy-side threats 205
supply chain to achieve competitive advantage 249
Competitor analysis 205

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 9 10/05/2019 15:59


x Contents

Problems of supply chain management 252 7 Digital marketing 303


What is supply chain management and Learning outcomes 303
e-procurement? 253 Management issues 303
A simple model of a supply chain 255 Links to other chapters 303
Case study 6.2: Shell Chemicals redefines its Introduction 304
customers’ supply chains 258 Chapter structure 305
What is logistics? 261 What is digital marketing? 307
Push and pull supply chain models 262 Marketing defined 307
Focus on The value chain 263 Inbound marketing 309
Restructuring the internal value chain 265 Content marketing 309
The value stream 265 Digital marketing planning 312
Value chain analysis 266 Is a separate digital marketing plan required? 312
Value networks 267 Situation analysis 314
Options for restructuring the supply chain 269 Customer demand analysis 314
Using digital business to restructure the Qualitative customer research 318
supply chain 271 Competitor analysis 320
Technology options and standards for supply Intermediary or influencer analysis 321
chain management 272 Internal marketing audit 322
Case study 6.3: Argos uses e-supply chain Objective setting 322
management to improve customer convenience 273 Case study 7.1: The evolution of easyJet’s online
IS-supported upstream supply chain revenue contribution 325
management 274 Strategy 328
RFID and the Internet of Things 274 Market and product positioning 330
IS-supported downstream supply chain Target market strategies 331
management 274 Content strategy 335
Outbound logistics management 275 Focus on Characteristics of digital media
IS infrastructure for supply chain management 275 communications 336
Supply chain management implementation 276 1 Interactivity 336
Data standardisation and exchange 277 2 Intelligence 337
The supply chain management strategy process 277 3 Individualisation 337
Goal-setting and performance management for 4 Integration 338
eSCM 278 5 Industry restructuring 340
Managing partnerships 279 6 Independence of location 341
Managing global distribution 280 Tactics 341
Case study 6.4: RFID – keeping track starts Product 343
its move to a faster track 282 Case study 7.2: Dell gets closer to its
What is e-procurement? 283 customers online 346
Understanding the procurement process 283 Price 348
Types of procurement 284 Place 352
Participants in different types of e-procurement 285 Promotion 353
Drivers of e-procurement 286 People, process and physical evidence 355
Examples of the benefits of e-procurement 288 Focus on Digital branding 355
Case study 6.5: Honeywell improves efficiency Brand identity 356
through SCM and e-procurement 288 The importance of brand online 358
Focus on Estimating e-procurement costs 289 Actions 358
The impact of cost savings on profitability 289 Control 360
Barriers and risks of e-procurement adoption 289 Summary 360
Implementing e-procurement 291 Exercises 361
Integrating company systems with supplier References 362
systems 293 Web links 364
Focus on B2B marketplaces 295
Types of marketplace 295 8 Customer relationship management 365
The future of e-procurement 296 Learning outcomes 365
Summary 297 Management issues 365
Exercises 298 Links to other chapters 365
References 299 Introduction 366
Web links 301 Marketing applications of CRM 367

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Contents xi

Case study 8.1: How Warby Parker disrupted the Assurance 427
eyewear industry 368 Empathy 428
What is eCRM? 371 Customer extension 429
From eCRM to social CRM 372 Advanced online segmentation and targeting
Benefits of eCRM 372 techniques 430
Customer engagement strategy 374 Sense, Respond, Adjust – delivering relevant
Permission marketing 374 e-communications through monitoring
Customer profiling 375 customer behaviour 432
Conversion marketing 376 Recency, Frequency, Monetary value (RFM)
The online buying process 379 analysis 432
Differences in buyer behaviour in target markets 380 Technology solutions for CRM 435
Differences between B2C and B2B buyer Types of CRM applications 437
behaviour 380 Integration with back-office systems 437
Influences on purchase 380 The choice of single-vendor solutions or a more
The net promoter score 382 fragmented choice 438
Customer acquisition management 383 Data quality 439
Focus on Marketing communications for customer Case study 8.2: Tesco.com increases product
acquisition, including search engine marketing, range and uses triggered communications to
digital PR, online partnerships, interactive advertising, support CRM 439
email marketing and social media marketing 383 Summary 442
The characteristics of interactive marketing Exercises 442
communications 383 References 443
1 From push to pull 383 Web links 447
2 From monologue to dialogue 384
3 From one-to-many to one-to-some and
one-to-one 384
4 From one-to-many to many-to-many
Part 3
communications 384
Implementation 449
5 From ‘lean-back’ to ‘lean-forward’ 384
6 The medium changes the nature of standard
9 Customer experience and service design 450
marketing communications tools such as
Learning outcomes 450
advertising 384
Management issues 450
7 Increase in communications intermediaries 385
Links to other chapters 450
8 Integration remains important 385
Introduction 451
Assessing marketing communications
Analysis for digital technology projects 451
effectiveness 385
Process modelling 454
Digital marketing communications 387
Process mapping 455
1 Search engine marketing (SEM) 388
Task analysis and task decomposition 455
2 Digital PR 397
Process dependencies 457
Focus on Social media and social CRM strategy 398
Workflow management 457
3 Online partnerships 409
Flow process charts 457
4 Digital advertising 410
Effort duration analysis 459
5 Email marketing 413
Network diagrams 459
6 Social media marketing 416
Event-driven process chain (EPC) model 461
Customer retention management 418
Validating a new process model 462
Personalisation and mass customisation 420
Data modelling 464
Creating personalisation 421
1 Identify entities 464
Extranets 422
2 Identify attributes for entities 464
Opt-in email 423
3 Identify relationships between entities 464
Techniques for managing customer activity
Big Data and data warehouses 464
and value 423
Design for digital technology projects 468
Lifetime-value modelling 424
Architectural design of digital business systems 469
Focus on Excelling in e-commerce service quality 426
Focus on User-centred site design and customer
Improving online service quality 426
experience management 471
Tangibles 427
Customer experience management framework 477
Reliability 427
Customer experience design 478
Responsiveness 427
Implementation 478

F01 DIGITAL BUSINESS AND E-COMMERC 93335 Contents.indd 11 10/05/2019 15:59


xii Contents

Usability 480 History of change and change management 530


Evaluating designs 480 The change in strategic position of digital versus
Use-case analysis 481 technology 531
Persona and scenario analysis 481 The need for digital transformation 531
Stages in use-case analysis 484 Understanding the reasons for digital transformation 532
Designing the information architecture 487 The opportunities provided by digital 532
Card sorting 488 Where does digital transformation occur? 532
Blueprints 488 Customer experience and service design 532
Wireframes 490 Customer insight 533
Customer orientation 491 Adding value 534
Elements of site design 493 Interfaces with customers 535
Site design and structure 493 Business process 536
Page design 496 The business model 537
Content design 497 New business where digital is at the heart of the
Mobile design 498 opportunity 538
Mobile site design option A. Responsive Adapting the existing business to a digital
design 498 opportunity 539
Mobile site design option B. Adaptive design 498 The framework of digital transformation 540
Mobile site design option C. HTML5 499 The process of review 540
Mobile site design option D. Separate mobile What the digital opportunity is 540
domain (screen scrape) 501 How sure the organisation is of the
Web accessibility 502 opportunity 541
Case study 9.1: Providing a better online user What level of digital the leadership of the
experience in a B2B market 504 organisation possesses 541
Focus on Security design for digital business 506 How mature as a digital business the
Secure e-commerce transactions 512 organisation sees itself 541
Principles of secure systems 513 The process of strategy 542
Approaches to developing secure systems 513 A focus on the objective for the future rather
Digital certificates 513 than solving an existing problem 542
Digital signatures 514 The process of resourcing and planning 543
The public-key infrastructure (PKI) and certificate The design of the transformation 543
authorities (CAs) 514 A programme for change 543
Virtual private networks 515 The process of deployment 543
Current approaches to e-commerce security 515 The process of living with, and evaluating, digital
Secure Sockets Layer protocol (SSL) 515 transformation 544
Certificate authorities (CAs) 515 What is growth hacking? 545
Reassuring the customer 516 Defining goals and KPIs 548
Summary 516 How to use a single metric to run a start-up 550
Exercises 517 Creating a growth hacking mindset 551
References 518 Ideal skill set of a growth hacking team 551
Web links 520 Use of Scrum, an agile methodology, in digital
marketing 552
10 Managing digital business transformation Scrum meetings 554
and growth hacking 522 Sprint planning 556
Learning outcomes 522 Daily Scrum 556
Management issues 522 Sprint review and retrospective 557
Links to other chapters 522 Developing agile marketing campaigns 557
Introduction 523 The growth hacking process 558
Case study 10.1: Transforming an entire industry 1 Product/market fit (create an MVP – Minimum
and supply chain: Spotify and Spotify Connect 523 Viable Product) 558
Definitions of digital transformation 524 Trigger 558
Definitions of digital business transformation 524 Action 559
Why is digital business transformation not just Rewards 560
about IT? 525 Investment 560
The applications portfolio – a precursor to 2 User data analysis 561
digital business transformation 525 Main areas of user testing 561
The emergence of digital transformation as a 3 Conversion rate optimisation 562
discipline 530 Key CRO elements 562

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Contents xiii

A/B and multivariate testing 564 Principles of performance management and


Clickstream analysis and visitor segmentation 567 improvement 590
Budgeting 569 Stage 1: Creating a performance management
Case study 10.2: Learning from Amazon’s system 590
culture of metrics 571 Stage 2: Defining the performance metrics
4 Viral growth 575 framework 592
Inherent virality: Skype 576 Focus on Measuring social media marketing 596
Artificial virality: Giffgaff 577 Stage 3: Tools and techniques for collecting
Word-of-mouth virality: Zappos 577 metrics and summarising results 598
Measuring virality 577 Collecting site outcome data 599
5 Retention and scalable growth 577 Selecting a web analytics tool 600
Creating the right environment for growth hacking 579 User testing prioritisation 603
Bridging the digital and physical world 580 Summary 603
Best traditional marketing methods for growth Exercises 604
hacking 580 References 605
Case study 10.3: How Leon used PR to Web links 607
growth hack 582
Growth hacking framework 583 Glossary 609
Twenty traction channels to test 585 Index 623
Data analysis 586
Measuring implementation success 589
Focus on Web analytics: Measuring and improving
performance of digital business services 589

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Preface

In 1969, the United States was able to land two men on the Moon, only seven years after
John F. Kennedy’s famous ‘We choose to go to the Moon’ speech in Houston in 1962 as
part of NASA’s Apollo space programme. NASA used advanced computing (for the time)
to get their payload into orbit and then send the crew to the Moon and land there. Known
as the Apollo Guidance Computer (AGC), the system remained unmatched in power for
more than a decade, until the advent of the personal computing era.
Only 50 years later, a device many times more powerful than the AGC is carried around
by several billion people. Smartphones contain more computing power and offer a dizzying
array of functions compared to NASA’s computers. Even modern washing machines now
contain more computing power.
The smartphone is a gateway for many digital business opportunities, and most users of
smartphones are blissfully unaware of the intricacies of the infrastructure that supports
their telephony, their access to the Internet or the functionality of their apps. The develop-
ment of everything that underpins digital business is not straightforward and fraught with
difficulties of selecting the correct strategic direction and surviving in an increasingly harsh
competitive environment. Not all who follow the route survive. But whether it’s the start-up
businesses or an existing business, what they have in common is that those who prosper
learn to optimise to take the right strategic decisions about digital technology, digital mar-
keting and supply chain management.
This book is intended to equip current and future managers with some of the knowledge
and practical skills to help them navigate their organisation towards digital business.
A key aim of this book is to identify and review the key management decisions required
by organisations moving to digital business and consider the process by which these deci-
sions can be taken. Key questions include: What approach to digital business strategy do
we follow? How much do we need to invest in digital business? Which processes should be
our digital business priorities? Should we adopt new business and revenue models? What are
the main changes that need to be made to transform an organisation that uses technology
to a true digital business?
Given the broad scope of digital business, this book takes an integrative approach draw-
ing on new and existing approaches and models from many disciplines, including informa-
tion systems, strategy, marketing, supply chain management, operations and human
resources management.

What is digital business management?

Digital business As we will see in Chapter 1, digital business is aimed at enhancing the competitiveness of
How businesses apply an organisation by deploying innovative digital technologies throughout an organisation
digital technology and
media to improve the and beyond, through links to partners and customers and promotion through digital media.
competitiveness of their It does not simply involve using technology to automate existing processes, but is about
organisation through
optimising internal
digital transformation by applying technology to help change these processes to add value
processes with digital to the business and its customers. To be successful in managing digital business, a breadth
and traditional channels of knowledge is needed of different business processes and activities from across the value
to market and supply.
chain, such as marketing and sales, through new product development, manufacturing and

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Preface xv

Supply chain inbound and outbound logistics. Organisations also need to manage the change required
management (SCM)
by new processes and technology through what have traditionally been support activities
The coordination of all
supply activities of an such as human resources management.
organisation, from its
suppliers and partners to From this definition, it is apparent that digital business involves looking at how elec-
its customers.
tronic communications can be used to enhance all aspects of an organisation’s supply chain
Value chain
management. It also involves optimising an organisation’s value chain, a related concept
A model for analysis of
how supply chain that describes the different value-adding activities that connect a company’s supply side
activities can add value with its demand side. The digital business era also involves management of a network of
to products and services
delivered to the interrelated value chains or value networks.
customer.

What is e-commerce management?

Value networks To set the scope of this text, in its title we reference both ‘digital business’ and ‘e-commerce’.
The links between an Both these terms are applied in a variety of ways; to some they mean the same, to others they
organisation and its
strategic and non- are quite different. As explained in Chapter 1, what is most important is that they are
strategic partners that applied consistently within organisations so that employees and external stakeholders are
form its external value
chain. clear about how the organisation can exploit digital communications. The distinction made
in this text is to use electronic commerce (e-commerce) to refer to all types of electronic
Electronic
commerce transactions between organisations and stakeholders, whether they are financial transac-
(e-commerce) tions or exchanges of information or other services. These e-commerce transactions are
All electronically either buy-side e-commerce or sell-side e-commerce and the management issues involved
mediated information
exchanges between an with each aspect are considered separately in Part 2 of the book. ‘Digital business’ is applied
organisation and its as a broader term encompassing e-commerce but also including all digital interaction within
external stakeholders.
an organisation.
Buy-side
e-commerce Management of e-commerce involves prioritising buy-side and sell-side activities and
Transactions between an
organisation and its putting in place the plans and resources to deliver the identified benefits. These plans need
suppliers and other to focus on management of the many risks to success, some of which you may have expe-
partners.
rienced when using e-commerce sites, from technical problems such as transactions that
Sell-side fail, sites that are difficult to use or are too slow, through to problems with customer service
e-commerce or fulfilment, which also indicate failure of management. Today, the social media or peer-
E-commerce
transactions between an to-peer interactions that occur between customers on company websites, blogs, apps and
organisation and its social networks have changed the dynamics of online commerce. Likewise, the frenzied
customers.
consumer adoption of mobile technology platforms via mobile apps offers new platforms
to interact with customers that must be evaluated and prioritised. Deciding which of the
many emerging technologies and marketing approaches to prioritise and which to ignore
is a challenge for all organisations!

How is this text structured?

Social media The overall structure of the text, shown in Figure P.1, follows a logical sequence: introduc-
A category of media
focusing on participation
ing the foundations of digital business concepts in Part 1; reviewing alternative strategic
and peer-to-peer approaches and applications of digital business in Part 2; and how strategy can be imple-
communication between mented in Part 3. Within this overall structure, differences in how electronic communica-
individuals, with sites
providing the capability tions are used to support different business processes are considered separately. This is
to develop user- achieved by distinguishing between how electronic communications are used, from buy-side
generated content (UGC)
and to exchange e-commerce aspects of supply chain management in Chapters 6 and 7, to the marketing
messages and perspective of sell-side e-commerce in Chapters 8 and 9. Figure P.1 shows the emphasis of
comments between
different users.
perspective for the particular chapters.

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xvi Preface

Mobile technology Part 1: Introduction (Chapters 1–4)


platforms
Devices and services
used by consumers to Part 1 introduces digital business and e-commerce. It seeks to clarify basic terms and con-
interact with other cepts by looking at different interpretations of terms and applications through case
consumers and
companies, including studies.
smartphones, tablets
and wearable ● Chapter 1: Introduction to digital business. Describes the impact of digital communica-
technology. tions on traditional businesses and shows the difference between a digital business and
Mobile apps an e-commerce business.
A software application ● Chapter 2: Opportunity analysis for digital business and e-commerce. Introduction to
that is designed for use
on a mobile phone or new business models and marketplace structures enabled by digital communications.
tablet, typically ● Chapter 3: Managing digital business infrastructure. Background on the technology that
downloaded from an app
store. iPhone apps are
needs to be managed to achieve digital business.
best known, but all ● Chapter 4: Key issues in the digital environment. Describes the macro-environment of
smartphones support the an organisation, which presents opportunities and constraints on strategy and
use of apps, which can
provide users with implementation.
information,
entertainment or
location-based services
such as mapping.
Part 2: Strategy and applications (Chapters 5–8)
In Part 2 of the text, approaches to developing digital business strategy and applications are
reviewed for the organisation as a whole (Chapter 5), and with an emphasis on buy-side
e-commerce (Chapters 6 and 7) and sell-side e-commerce (Chapters 8 and 9).
● Chapter 5: Digital business strategy. Approaches to developing digital business strategy.
How to do strategic analysis and define strategic objectives. The link with business
strategy. How to implement a digital business strategy.
● Chapter 6: Supply chain and demand. A supply-chain perspective on strategy, with exam-
ples of how technology can be applied to increase supply-chain and value-chain efficiency.
How to manage demand. Dealing with e-procurement.
● Chapter 7: Digital marketing. Understanding digital marketing. Planning for digital
marketing.
● Chapter 8: Customer relationship management. Reviewing marketing techniques that
apply ‘digital’ for acquiring and retaining customers.

Part 3: Implementation (Chapters 9–10)


Management of digital business implementation is described in Part 3 of the text, in which
we examine practical management issues involved with creating and maintaining digital
business solutions.
● Chapter 9: Customer experience and service design. Analysis for digital projects. Business
processes. Designing a digital business. Looking at customer experience.
● Chapter 10: Managing digital transformation and growth hacking. An overview of the
key elements of digital transformation. Principles of growth hacking and measuring the
performance of digital.

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Preface xvii

Part 1 INTRODUCTION
Chapter 1 Chapter 2 Chapter 3 Chapter 4
Introduction to Opportunity Managing Key issues in the
digital business analysis for digital digital business digital
business and infrastructure environment
e-commerce

Part 2 STRATEGY AND APPLICATIONS


Chapter 8
Chapter 5 Chapter 6 Chapter 7
Customer
Digital business Supply chain Digital
relationship
strategy and demand marketing
management

Part 3 IMPLEMENTATION
Chapter 9 Chapter 10
Customer Managing digital
experience and transformation and
service design growth hacking

Key
Sell-side e-commerce emphasis

Digital business emphasis

Figure P.1

Who should use this text?

Students
This text has been created as the main student text for undergraduate and postgraduate
students taking specialist courses or modules that cover digital business, e-commerce infor-
mation systems or digital marketing. The book is relevant to students who are:
● undergraduates on business programmes that include modules on the use of the Internet
and e-commerce; this includes specialist degrees such as digital business, e-commerce,
digital marketing and marketing, or general business degrees such as business studies,
business administration and business management;
● undergraduate project students who select this topic for final-year projects or disserta-
tions – this book is an excellent resource for these students;
● undergraduates completing work placement involved with different aspects of digital
business, such as managing digital resources or company digital communications;
● postgraduate students on specialist master’s degrees in e-commerce, digital business or
digital marketing and generic MBA, Certificate in Management or Diploma in Manage-
ment Studies that involve modules or electives for e-commerce and digital marketing.

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xviii Preface

What does the text offer to lecturers teaching these courses?


The text is intended to be a comprehensive guide to all aspects of deploying digital business
and e-commerce within an organisation. The text builds on existing theories and concepts
and questions the validity of these models in the light of the differences between the ‘digital’
and other media. It references the growing body of literature specific to digital business,
e-commerce and digital marketing. As such, it can be used across several modules. Lecturers
will find that the text has a good range of case studies, activities and exercises to support
their teaching. These activities assist in using the text for student-centred learning as part
of directed study. Web links given in the text and at the end of each chapter highlight key
information sources for particular topics.

Practitioners
There is also much of relevance in this text for the industry professional, including:
● senior managers and directors seeking to apply the right digital business and e-commerce
approaches to benefit their organisation;
● digital managers who are developing and implementing digital business and e-commerce
strategies;
● marketing managers responsible for defining a digital marketing strategy and implement-
ing and maintaining organisational digital communications channels;
● supply chain, logistics and procurement managers wanting to see examples of best prac-
tice in using e-commerce for supply chain management;
● technical project managers who may understand the technical details of building digital
resources, but have a limited knowledge of business or marketing fundamentals.

Student learning features

A range of features has been incorporated into this text to help the reader get the most out
of it. The features have been designed to assist understanding, reinforce learning and help
readers find information easily. They are described in the order you will encounter them.

At the start of each chapter

● Chapter at a glance: a list of main topics, ‘focus on’ topics and case studies.
● Learning outcomes: a list describing what readers can learn through reading the chapter
and completing the activities.
● Management issues: a summary of main issues or decisions faced by managers related
to the chapter topic area.
● Web support: additional material on the companion website.
● Links to other chapters: a summary of related topics in other chapters.
● Introductions: succinct summaries of the relevance of the topic to marketing students
and practitioners, together with content and structure.

Within each chapter

● Activities: short activities in the main text that develop concepts and understanding,
often by relating to student experience or through reference to websites. Model answers
to activities are provided at the end of the chapter where applicable.

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Preface xix

● Case studies: real-world examples of issues facing companies that implement digital
business. Questions at the end of the case study highlight the main learning points from
that case study.
● Real-world digital business experiences: interviews with e-commerce managers at a range
of UK, European and US-based organisations concerning the strategies they have adopted
and their approaches to strategy implementation.
● Digital trends updates (in Chapters 1 and 3): references to relevant statistical sources to
update information on the latest consumer and business adoption of digital
technology.
● Box features: these explore a concept in more detail or give an example of a principle
discussed in the text.
● ‘Focus on’ sections: more detailed coverage of specific topics of interest.
● Questions for debate: suggestions for discussion of significant issues for managers
involved with the transformation required for digital business.
● Definitions: when significant terms are first introduced in the main text, succinct defini-
tions can be found in the margin for easy reference.
● Web links: where appropriate, web addresses are given for further information, particu-
larly those that update information.
● Chapter summaries: intended as revision aids and to summarise the main learning points
from the chapter.

At the end of each chapter

● Self-assessment exercises: short questions that will test understanding of terms and
concepts described in the chapter.
● Discussion questions: questions requiring longer essay-style answers discussing themes
from the chapter, which can be used for essays or as debate questions in seminars.
● Essay questions: conventional essay questions.
● Examination questions: typical short-answer questions found in exams, which can also
be used for revision.
● References: list of books, articles or papers referred to within the chapter.
● Web links: these are significant sites that provide further information on the concepts
and topics of the chapter. All website references within the chapter, for example com-
pany sites, are not repeated here. The website address prefix ‘http://’ is omitted from
www links for clarity.

At the end of the book

● Glossary: a list of definitions of all key terms and phrases used within the main text.
● Index: all key words and abbreviations referred to in the main text.

Learning techniques

The text is intended to support a range of learning styles. It can be used for an active or
student-centred learning approach whereby students attempt the activities through reflect-
ing on questions posed, answering questions and then comparing their answer to a sug-
gested answer at the end of the chapter. Alternatively, students can proceed straight to
suggested answers in a more traditional learning approach, which still encourages reflection
about the topic.

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xx Preface

Module guide

Table B presents one mapping of how the text could be used in different weekly lectures
and seminars through the core eleven weeks of a module where the focus is on management
issues of digital business and e-commerce.
A full set of PowerPoint slides and accompanying notes to assist lecturers in preparing
lectures is available for download at www.pearsoned.co.uk/chaffey.

Enhancements for the seventh edition

The effective chapter structure of previous editions has been retained, but many other
changes have been incorporated based on lecturer and student feedback. We now refer to
‘digital business’ throughout, rather than the dated term ‘e-business’ which we had included
from the first edition in 2002. The rationale is that the term e-business is less used now in
industry; instead, companies increasingly reference management of digital technologies,
channel strategies, digital marketing and digital transformation.
You will see from the listing of updates below that the most significant additions to the
content reflect the growth in importance of mobile marketing and commerce and inbound
marketing, including content marketing and social media marketing.
Each chapter has been rationalised to focus on the key concepts and processes recom-
mended to evaluate capability and develop digital business strategies. The main updates for
the seventh edition on a chapter-by-chapter basis are:
● Chapter 1. The chapter starts by introducing the major trends now determining selection
of digital services, which are a major theme in the text, but the focus is increasingly
around the nature of ‘digital’ as opposed to simply technology or ‘e’ components. There
are new cases on businesses where digital is at the heart of the proposition, particularly
Uber and Amazon.
● Chapter 2. Increased emphasis on new business models for digital start-up businesses, of
particular interest to students. Mini case studies on Boden and Macys have been added
to give recent examples of how businesses are evolving with changes in consumer behav-
iour because of mobile.
● There is also a new case on the Dollar Shave Club.

● Updated review of online ecosystem to explain the increasing role of omnichannel in

the customer journey.


● A focus on tech start-ups introduced. A useful guide for students to consider emerging

business models driven by technology and understand new terms, such as unicorn
businesses.
● Chapter 3. Updates to cases and enhancements to the language to reflects changes in the
technology and changes to professionals’ views of the technology, with an emphasis on
the understanding of the capability of technology rather than knowing exactly how it
works. There are many new cases and a big update to reflect changes in Google.

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Preface xxi

● Chapter 4. A lot of updates have been made in this new edition because of changes in
consumer attitudes and behaviour. This includes discussions on showrooming, influ-
encer marketing and multiscreening. It also includes sections on M-shopping segmenta-
tion and attitudes to behavioural ad targeting. Other updates include recent political
changes and how they link to micro-localisation vs globalisation.
● This update also includes changes to data protection and privacy laws, in relation to the
2018 EU General Data Protection Regulation (GDPR). Other changes include informa-
tion on the UK government’s digital strategy and discussion around how companies are
utilising tech incubators and accelerators for innovation.
● Chapter 5. This chapter has been updated with new sections on disruptive innovation
and platform strategy. A new case study on how Zappos has innovated a marketplace
and the company’s unique culture has been added. There are also two new mini case
studies from Onedox about peer-to-peer lending and Arriva Bus and their M-ticket app.
● Chapter 6. This chapter has merged Chapters 6 and 7 from the last edition and has been
renamed ‘Supply chain and demand’. It covers supply chain management (SCM) and
e-procurement.
● Most of the updates include how technology is making the supply chain and e-pro-

curement more efficient and effective. A new case study on Zara explains how the
fashion retailer uses the supply chain to gain competitive advantage. Mini case studies
from Boots and Honeywell have also been added.
● Chapter 7. This has now become the chapter on digital marketing. It as has been updated
with an interview from the co-founder and marketing director of Country Attire, an
independent online retailer. There are also two new mini case studies, one about how
Firebox used crowdfunding to tap into a ready-made distribution network and the other
about Hotel Chocolat’s brand identity.
● Chapter 8. This chapter covers customer relationship management. It includes discus-
sions on changes to customer service expectations and the growing use of new technolo-
gies such as Live Chat. A new case study has been added, which explains how Warby
Parker has disrupted the eyewear market. There are also new mini cases from Hubspot
and First Choice.
● A discussion on eCRM versus social CRM has also been added.

● Chapter 9. This is a revised chapter, which was Chapter 11 in the last edition. It has been
renamed ‘Customer experience and service design’ and has a focus on customer experience
(CX). Updates include an interview with the Head of Digital at Domino’s Pizza UK and an
introduction to the six pillars of customer experience, as well as a CX management frame-
work. A new B2B mini case study has been added from Miele. The cyber security section
has been updated and massive security breaches at TalkTalk and Uber are discussed.
● Chapter 10. This is a completely new chapter, in line with changes in the marketplace,
which includes a section on digital transformation and growth hacking. The section on
digital transformation looks at the way organisations as a whole now have to think of
themselves when they engage in change that is centered around a digital opportunity. The
section on growth hacking is a relatively new concept that is particularly relevant to digital
start-ups, but can be applied to existing businesses too. Case studies and mini case studies
from Spotify, Hotmail, Instagram, Leon and others have been added.

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xxii Preface

Table A In-depth case studies in Digital Business and E-Commerce Management, 7th edition

Chapter Case study

1 Introduction to digital business and 1.1 The Uber business model


e-commerce 1.2 Amazon – the world’s largest digital business?

2 Opportunity analysis for digital business 2.1 How Boden grew from an eight-product menswear catalogue to an
and e-commerce international brand with over £300 million in sales
2.2 Unilever demonstrates strategic agility
2.3 Macy’s – using omnichannel growth strategies to improve
customer experience
2.4 i-to-i – a global marketplace for a start-up company

3 Managing digital business infrastructure 3.1 Innovation at Google (2017 update)

4 Key issues in the digital environment 4.1 The implications of micro-localisation vs globalisation based on
consumer attitudes

5 Digital business strategy 5.1 Arriva Bus redesigns its m-ticket app and boosts revenue by
over 17%
5.2 Setting the Internet revenue contribution at Sandvik Steel
5.3 Zappos innovates in the digital marketplace
5.4 Boo hoo – learning from the largest European dot.com failure

6 Supply chain and demand 6.1 Fast-fashion retailer Zara uses its supply chain to achieve
competitive advantage
6.2 Shell Chemicals redefines its customers’ supply chains
6.3 Argos uses e-supply chain management to improve customer
convenience
6.4 RFID – keeping track starts its move to a faster track
6.5 Honeywell improves efficiency through SCM and e-procurement

7 Digital marketing 7.1 The evolution of easyJet’s online revenue contribution


7.2 Dell gets closer to its customers online

8 Customer relationship management 8.1 How Warby Parker disrupted the eyewear industry
8.2 Tesco.com increases product range and uses triggered
communications to support CRM

9 Customer experience and service design 9.1 Providing an effective online experience for local markets

10 Managing digital business transformation 10.1 Transforming an entire industry and supply chain: Spotify and
and growth hacking Spotify Connect
10.2 Learning from Amazon’s culture of metrics

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Preface xxiii

Table B Module guide

Week Lecture topic Se minar or tutorial topics Notes

1 LI Introduction to digital business and Activity 1.1 Introduction Chapter 1 and


e-commerce Case study 1.2 Amazon Chapter 3
(technical
Debate 1.2 Limited SME adoption
introduction)
of digital business

2 L2 Opportunity analysis for digital Activity 2.1 Introduction Chapter 2


business and e-commerce Case study 2.1 Boden
(micro-environment)
Debate 2.1 Countermediation
Debate 2.2 Innovative business
models

3 L3 Managing digital business Activity 3.1 Introduction Chapters 3 and 4


infrastructure key environmental Case study 4.1 Globalisation
issues (macro-environment)
Activity 4.4 Government
e-communications

4 L5 Digital business strategy: (a) Activity 5.1 Digital business Chapter 5


Situation analysis and objectives Case study 5.1 strategies
setting Zappos
Debate 5.1
Digital business
responsibility

5 L5 Digital business strategy: (b) Activity 5.2 Digital channels Chapter 5


Strategy and tactics Case study 5.2 Boo.com
Debate 5.2 Board-level
representation

6 L6 Digital business applications: (a) Activity 6.1 Introduction Chapter 6


Supply chain management Case study 6.1 Zara
Case study 6.3 Argos
Debate 6.1 Value chain

7 L7 Digital business applications: (b) Activity 6.4 Introduction Chapter 6


E-procurement Case study 6.5 Honeywell
Debate 7.3 Cost savings

8 L8 Digital business applications: (c) Activity 7.3 Competitor Chapter 7


Digital marketing Case study 7.1 benchmarking

Debate 7.1 easyJet


Digital marketing
planning

9 L9 Digital business applications: (d) Activity 8.1 Introduction Chapter 8


E-CRM Case study 8.1 Warby Parker
Debate 8.1 Permission marketing

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xxiv Preface

Table B Continued

Week Lecture topic Se minar or tutorial topics Notes

10 L10 Customer Experience (CX) Activity 9.1 Introduction Chapter 9


Mini Case study 9.1 Miele
Debate 9.2 Website design

11 L11 Digital transformation Activity 10.1 Introduction Chapter 10


Case study 10.1 Spotify
Case study 10.2 Amazon

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About the authors

Dave Chaffey BSc, PhD, FCIM, HIDM


Dave manages his own digital business, Smart Insights (www.smartinsights.com), an online
publisher and analytics company providing advice and alerts on best practice and industry
developments for digital marketers and e-commerce managers. The advice is also created to
help readers of Dave’s books. The most relevant information is highlighted at www.smart-
insights.com/book-support.
Dave also works as an independent Internet marketing trainer and consultant for Market-
ing Insights Limited. He has consulted on digital marketing and e-commerce strategy for
companies of a range of sizes from larger organisations like 3M, Barclaycard, HSBC, Mer-
cedes-Benz and Nokia to smaller organisations like Arco, Confused.com, Euroffice, Horn-
bill and i-to-i.
Dave’s passion is educating students and marketers about the latest and best practices in
digital marketing, so empowering businesses to improve their online performance through
getting the most value from their web analytics and market insight. In other words, making
the most of online opportunities and avoiding waste.
He is proud to have been recognised by the Department of Trade and Industry as one of
the leading individuals who have provided input to, and influence on, the development and
growth of e-commerce and the Internet in the UK over the past 10 years. Dave has also been
recognised by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ world-
wide who have helped shape the future of marketing. He is also proud to be an Honorary
Fellow of the IDM.
Dave is a visiting lecturer on e-commerce courses at different universities, including Bir-
mingham, Cranfield, Derby, Manchester Metropolitan and Warwick. He is a tutor on the
IDM Diploma in Digital Marketing, for which he is also senior examiner.
In total, Dave is author of five best-selling business books, including Internet Marketing:
Strategy, Implementation and Practice, eMarketing eXcellence (with PR Smith) and Total
Email Marketing. Many of these books have been published in new editions since 2000 and
translations include Chinese, Dutch, German, Italian and Serbian.
When offline he enjoys fell-running, indie guitar music and travelling with his family.
Tanya Hemphill BA (Hons), MSc (Dist.), Chartered Marketer, MCIM, MCIPR
Tanya runs her own digital marketing training and consultancy firm WeDisrupt (www
.wedisrupt.co.uk). She has worked with a wide range of different-sized organisations to help
them with digital marketing strategy and digital transformation, including: the Chartered
Institute of Marketing, Harvey Nash, Ingredion, KPMG, the NHS, Alder Hey Hospice,
Monsanto and AkzoNobel.
Passionate about technology, Tanya is one of the UK’s leading experts in growth hacking
for tech start-ups and is often asked to be a keynote speaker on the subject. She is an Associ-
ate Lecturer at Manchester Metropolitan University and has developed and taught MBA
units and undergraduate courses such as Retail Life.
She has also worked closely with the Chartered Institute of Marketing to speak at their
conferences, run commercial training workshops and has been a Level Verifier for a number
of their professional qualifications. Her personal blog can be found at www.digitaltanya
.co.uk and she often Tweets from @DigitallTanya.

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xxvi About the authors

Outside of work, Tanya enjoys travelling with her family, dancing (Salsa and Ceroc) and
watching action thrillers.
David Edmundson-Bird BA (Hons), MSc, FRSA
David is Principal Lecturer in Digital Marketing & Enterprise at Manchester Metropolitan
University and has worked there since 2004. He has worked in a variety of organisations,
including Leeds Metropolitan (now Beckett) University, The University of Salford and Shef-
field Hallam University. He helped set up Manchester’s second web design agency, Sozo, in
1995 and was Chief Learning Architect at Academee from 1999 until 2002.
David set up Manchester Met’s first MSc in Digital Marketing in 2007 in collaboration
with Econsultancy and their full-time MSc Digital Marketing Communications in 2016. He
teaches full time on undergraduate, postgraduate and MBA programmes, specialising in
digital strategy, search engine marketing and content strategy. David has also worked on
many commercial programmes for clients including JD Sport and McCann Erickson. He
speaks widely about digital education and about digital transformation in the marketing
business at conferences and in the media.
Outside of work, David spends time with his family as much as possible, is an avid chef
and enjoys discovering and using new ingredients from all over the world. He is a huge fan
of Scandi-noir literature and can be seen tweeting a mixture of industry-relevant and per-
sonal tweets as @groovegenerator

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lOMoARcPSD|28540587

1 Introduction to
digital business

Chapter at a glance Learning outcomes

Main topics
After completing this chapter the reader should be able to:
➔ The impact of digital ● Define the meaning and scope of digital business and the
communications on traditional
businesses 6 difference between digital business and e-commerce
➔ What is the difference between a
● Summarise the main reasons for becoming a digital business
digital business and an and barriers that may restrict it
e-commerce business? 11 ● Outline the ongoing business challenges of managing digital
➔ Digital business opportunities 24 business in an organisation, particularly tech start-ups
➔ Barriers to the adoption of
technology by digital business
stakeholders 27
➔ Barriers to consumer digital
Management issues
adoption 29
The issues for managers raised in this chapter include:
Case studies
● How do we explain the scope and implications of digital business
1.1 The Uber business model 8 to staff?
1.2 Amazon – the world’s largest ● What is the full range of benefits of introducing digital business
digital business? 30 and what are the risks?
● How do we evaluate our current digital capabilities?

Web support Links to other chapters

The following additional case studies


are available at The main related chapters are:
Copyright © 2018. Pearson Education Limited. All rights reserved.

www.pearsoned.co.uk/chaffey
● Chapter 2 examines the principal e-commerce business and
➔ SME adoption of sell-side
marketplace models in more detail
e-commerce
● Chapter 3 introduces the technical infrastructure of software and
➔ Death of the dot.com dream
hardware that companies must incorporate to achieve
➔ Encouraging SME adoption of
e-commerce
sell-side e-commerce
● Chapter 5 describes approaches to digital business strategy
The site also contains a range of study
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4 Part 1 Introduction

Introduction

The Internet Organisations have now been adapting to technology opportunities based on the Internet,
The ‘Internet’ refers to the World Wide Web and mobile communications innovations to transform their businesses
physical network that links
computers across the
for more than 25 years, since the creation of the first website (http://info.cern.ch) by Sir
globe. It consists of the Tim Berners-Lee in 1991. Deploying these disruptive digital technologies has offered many
infrastructure of network opportunities for innovative businesses to transform their services and organisations.
servers and wired and
wireless communication Table 1.1 highlights some of the best-known examples, and in Activity 1.1 you can explore
links between them that some of the reasons for the success of these companies.
are used to hold and
transport data between In Digital Business we will explore approaches managers can use to assess the relevance
the client devices and of different digital technologies and then devise and implement strategies to exploit these
web servers.
opportunities. We will also study how to manage more practical risks such as delivering a
World Wide Web satisfactory customer service experience, maintaining customer privacy and managing secu-
(WWW)
The most common
rity. In this chapter we start by introducing the scope of digital business. Then we review
technique for publishing the main opportunities and risks of digital business, together with the drivers and barriers
information on the to adoption.
Internet. It is accessed
through desktop or For the author, digital business is an exciting area to be involved with, since many new
mobile web browsers opportunities and challenges arise yearly, monthly and even daily. Innovation is a given,
that display interactive
web pages of embedded
with the continuous introduction of new technologies, new business models and new
graphics and HTML/XML- communications approaches. For example, Google innovates relentlessly. Its service has
encoded text. developed a long way since 1998 (Figure 1.1), with billions of pages now indexed and other
Mobile services such as web mail, pay-per-click adverts, analytics, shopping services, social
communications networks and artificial intelligence all part of its offering. Complete Activity 1.1 or view
Digital business
processes and Table 1.1 to see other examples of the rate at which new innovations occur.
communications
conducted using mobile
devices such as laptops,
tablets, mobile phones
(including fixed access
platforms) and ubiquitous
devices with different
forms of wireless
connection, including
services on wifi, 3G, 4G,
5G and satellite.

Disruptive digital
technologies
Copyright © 2018. Pearson Education Limited. All rights reserved.

Technologies that offer


opportunities for business
for new products and
services for buyers,
suppliers, partners and
customers and can
transform business
processes. Danneels
(2004) defined disruptive
technologies as ‘a
technology that changes
the bases of competition
by changing the
performance metrics
along which firms
compete. Customer
needs drive customers to
seek certain benefits in
the products they use
and form the basis for
customer choices Google circa 1998
between competing Source: Wayback machine archive: http://web.archive.org/web/19981111183552/google.
products.’ (There isn’t a Figure 1.1 stanford.edu. Google and the Google logo are registered trademarks of Google Inc., used
better definition and this with permission.
remains the most widely
cited definition.)

Chaffey, Dave, et al. Digital Business and E-Commerce Management, Pearson Education Limited, 2018. ProQuest Ebook Central,
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only to point to some of the symptoms which, individually
considered, are found in other disorders, and may therefore be
misinterpreted. The chief of these is vertigo, which, as already
stated, being associated with nausea, and even vomiting, is not
infrequently confounded with stomachic vertigo, while the opposite
error is also, though less frequently, fallen into. The chief differential
points are—that stomachic vertigo is relieved by vomiting, and
anæmic vertigo is not; that the former is rather episodical, the latter
more continuous; that in the free intervals of the former, while there
may be some dulness, there is not the lethargy found with anæmia;
that the headache with the former is either over the eyes or occipital,
and most intense after the passage of a vertiginous seizure, while
anæmic headache is verticalar or general, and not subject to marked
momentary changes. It is unnecessary to indicate here the positive
evidences of gastric disorder which are always discoverable in
persons suffering from stomachic vertigo; but it is also to be borne in
mind that such disorder is frequently associated with the conditions
underlying general and cerebral anæmia, particularly in the
prodromal period of some pulmonary troubles.

There are a number of organic affections of the brain which are in


their early periods associated with symptoms which are in a
superficial way like those of cerebral anæmia. As a rule, focal or
other pathognomonic signs are present which render the exclusion
of a purely nutritive disorder easy; but with some tumors, as is
generally admitted, these signs may be absent. It is not difficult to
understand why a tumor not destructive to important brain-centres,
nor growing sufficiently rapid to produce brain-pressure, yet rapidly
enough to compress the blood-channels, may produce symptoms
like those of simple cerebral anæmia. It is claimed that with such a
tumor the symptoms are aggravated on the patient's lying down,
while in simple anæmia they are ameliorated.34 The latter proposition
holds good as a general rule; as to the former, I have some doubts.
Not even the ophthalmoscope, although of unquestionable value in
ascertaining the nature of so many organic conditions of the brain
and its appendages, can be absolutely relied on in this field. Until
quite recently, optic neuritis, if associated with cerebral symptoms,
was regarded as satisfactory proof that the latter depended on
organic disease; but within the year it has been shown by Juler35 that
it may occur in simple cerebral anæmia, and both the latter and the
associated condition of the optic nerve be recovered from.
34 The increased flow of blood to the brain in anæmia is not always momentarily
remedial: if, for example, the patient stoop down, he flushes more easily than a
normal person, and suffers more than the latter. The same is observed with regard to
stimulants.

35 British Medical Journal, Jan. 30, 1886. In the case reported suppression of the
catamenia is spoken of, as well as the fact that treatment was directed to the
menstrual disturbance. It is not evident from the brief report at my disposal whether
the suspension of the menstrual flow was symptomatic of general anæmia or of a
local disturbance. Optic neuritis has been recorded as having been present in a large
number of cases with no other assignable cause than a uterine disorder. As
previously stated, Hirschberg and Litten found choked disc under like circumstances.

The claim of Hammond and Vance that ordinary anæmia of the brain
may be recognized through the ophthalmoscope is almost
unanimously disputed by experienced ophthalmoscopists, nor is it
unreservedly endorsed by any authority of weight among
neurologists. That there may be color-differences to indicate anæmia
is, however, not impossible; and the fact that a concentric limitation
of the visual field sometimes occurs should not be forgotten. It is
distinguished from that found with organic diseases by its variability
through the day and in different positions of the body.

TREATMENT.—Chronic as well as acute cerebral anæmia, dependent


on general anæmia, usually requires no other medicinal treatment
than that rendered necessary by the general anæmic state of which
it is a part. This has been discussed at length in the third volume of
this work: it remains to speak of certain special precautions and
procedures rendered necessary by the nervous symptoms
predominating in such cases. As the insufficiently nourished brain is
not capable of exertion, mental as well as physical rest is naturally
indicated. And this not only for the reason that it is necessary to
avoid functional exhaustion, but also because the anæmic brain
when overstrained furnishes a favorable soil for the development of
morbid fears, imperative impulses, and imperative conceptions. This
fact does not seem to have been noticed by most writers. The mind
of the anæmic person is as peculiarly sensitive to psychical
influences as the anæmic visual and auditory centres are to light and
sound; and in a considerable proportion of cases of this kind the
origin of the morbid idea has been traced to the period of
convalescence from exhausting diseases. The prominent position
which masturbation occupies among the causes of cerebral anæmia
perhaps explains its frequent etiological relationship to imperative
conceptions and impulsive insanity.

Although the radical and rational treatment of cerebral anæmia is


covered by the treatment of the general anæmia, there are certain
special symptoms which call for palliative measures. Most of these,
such as the vertigo, the optic and aural phenomena, improve, as
stated, on assuming the horizontal position. The headache if very
intense will yield to one of three drugs: nitrite of amyl, cannabis
indica, or morphine. I am not able to furnish other than approximative
indications for the use of remedies differing so widely in their
physiological action. Where the cerebral anæmia and facial pallor
are disproportionately great in relation to the general anæmia, and
we have reason to suppose the existence of irritative spasm of the
cerebral blood-vessels—a condition with which the cephalalgia is
often of great severity—nitrite of amyl acts as wonderfully as it does
in the analogous condition of syncope.36 Where palpitations are
complained of, and exist to such a degree as to produce or
aggravate existing insomnia, small doses of morphine will act very
well, due precautions being taken to reduce the disturbance of the
visceral functions to a minimum, and to prevent the formation of a
drug habit by keeping the patient in ignorance of the nature of the
remedy. When trance-like conditions and melancholic depression are
in the foreground, cannabis indica with or without morphia will have
the best temporary effect: it is often directly remedial to the
cephalalgia. Chloral and the bromides are positively contraindicated,
and untold harm is done by their routine administration in nervous
headache and insomnia, irrespective of their origin. Nor are
hypnotics, aside from those previously mentioned, to be
recommended; the disadvantages of their administration are not
counterbalanced by the advantages.37 Frequently, in constitutional
syphilis, insomnia resembling and probably identical with the
insomnia of cerebral anæmia will call for special treatment. In such
cases the iodides, if then being administered, should be suspended,
and if the luetic manifestations urgently require active measures,
they should be restricted to the use of mercury in small and frequent
dosage, while the vegetable alteratives may be administered if the
state of the stomach permit.
36 There are disturbances in the early phases of cerebral syphilis, whose exact
pathological character is not yet ascertained, which so closely resemble the condition
here described that without a knowledge of the syphilitic history, and misled by the
frequently coexisting general anæmia, it is regarded as simple cerebral anæmia.
Under such circumstances, as also with the cerebral anæmia of old age, amyl nitrite
should not be employed.

37 Urethran and paraldehyde have failed in my hands with anæmic persons.

Among the measures applicable to the treatment of general anæmia


there are three which require special consideration when the
cerebral symptoms are in the foreground: these are alcoholic
stimulants, the cold pack, and massage. It is a remarkable and
characteristic feature of cerebral anæmia that alcoholic stimulants,
although indicated, are not well borne38—at least not in such
quantities as healthy persons can and do take without any
appreciable effect. I therefore order them—usually in the shape of
Hungarian extract wines,39 South Side madeira, or California
angelica—to be given at first in such small quantities as cannot
affect the cerebral circulation unpleasantly, and then gradually have
the quantity increased as tolerated. In fact, both with regard to the
solid nourishment and the stimulating or nourishing fluids and
restorative drugs the division-of-labor principle is well worth
following. The cerebral anæmic is not in a position to take much
exercise, his somatic functions are more or less stagnant, and bulky
meals are therefore not well borne. Small quantities of food,
pleasingly varied in character and frequently administered, will
accomplish the purpose of the physician much better.
38 Hammond, who classes many disorders under the head of cerebral anæmia which
the majority of neurologists regard as of a different character, has offered a very
happy explanation. He says, “Now, it must be recollected that the brains of anæmic
persons are in very much the same condition as the eyes of those who have for a
long time been shut out from their natural stimulus, light. When the full blaze of day is
allowed to fall upon them retinal pain is produced, the pupils are contracted, and the
lids close involuntarily. The light must be admitted in a diffused form, and gradually, till
the eye becomes accustomed to the excitation. So it is with the use of alcohol in
some cases of cerebral anæmia. The quantity must be small at first and administered
in a highly diluted form, though it may be frequently repeated.”

39 Such as Meneszer Aszu; there is no genuine tokay wine imported to this country,
as far as I am able to learn.

The cold pack, strongly recommended by some in general anæmia,


is not, in my opinion, beneficial in cases where the nervous
phenomena are in the foreground, particularly in elderly persons.
Gentle massage, on the other hand, has the happiest effects in this
very class of cases.

Of late years my attention has been repeatedly directed to cerebral


anæmia of peculiar localization due to malarial poisoning. It has
been noted by others that temporary aphasia and other evidences of
spasm of the cortical arteries may occur as equivalents or sequelæ
of a malarial attack. I have seen an analogous case in which
hemianopsia and hemianæsthesia occurred under like
circumstances, and were recovered from. Whether more permanent
lesions, in the way of pigmentary embolism or progressing vascular
disease, causing thrombotic or other forms of softening, may
develop after such focal symptoms is a matter of conjecture, but I
have observed two fatal cases in which the premonitory symptoms
resembled those of one which recovered, and in which these were
preceded by signs of a more general cerebral anæmia, and in one
case had been mistaken for the uncomplicated form of that disorder.
Where a type is observable in the exacerbation of the vertigo,
headache, tinnitus, and lethargy of cerebral anæmia, particularly if
numbness, tingling, or other signs of cortical malnutrition are noted in
focal distribution, a careful search for evidences of malarial
poisoning should be made; and if such be discovered the most
energetic antimalarial treatment instituted. It is in such cases that
arsenic is of special benefit.

The treatment of syncope properly belongs to this article. Where the


signs of returning animation do not immediately follow the
assumption of the recumbent position, the nitrite of amyl, ammonia,
or small quantities of ether should be exhibited for inhalation. The
action of the former is peculiarly rapid and gratifying, though the
patient on recovery may suffer from fulness and pain in the head as
after-effects of its administration. The customary giving of stimulants
by the mouth is to be deprecated. Even when the patient is
sufficiently conscious to be able to swallow, he is usually nauseated,
and, as he is extremely susceptible to strong odors or tastes in his
then condition, this nausea is aggravated by them. By far the greater
number of fainting persons recover spontaneously or have their
recovery accelerated by such simple measures as cold affusion,
which, by causing a reflex inspiration, excites the circulatory forces
to a more normal action. Rarely will the electric brush be necessary,
but in all cases where surgical operations of such a nature as to
render the development of a grave form of cerebral anæmia a
possibility are to be performed, a powerful battery and clysters of hot
vinegar, as well as the apparatus for transfusion, should be provided,
so as to be within reach at a moment's notice.

Inflammation of the Brain.

Before the introduction of accurate methods of examining the


diseased brain the term inflammatory softening was used in a much
wider sense than it is to-day. Most of the disorders ascribed to
inflammatory irritation by writers of the period of Andral and Rush are
to-day recognized as regressive, and in great part passive, results of
necrotic destruction through embolic or thrombic closure of afferent
blood-channels. Two forms of inflammation are universally
recognized. One manifests itself in slow vascular and connective-
tissue changes and in an indurating inflammation. There are two
varieties of it: the first of these, which is associated with furibund
vaso-motor explosions and regressive metamorphosis of the
functional brain-elements, is known from its typical association with
grave motor and mental enfeeblement as paretic dementia or
dementia paralytica. The second, which is focal in the distribution of
the affected brain-areas, is known as sclerosis. The former is treated
of in a separate article; the latter is considered in connection with the
spinal affections which either resemble it in histological character or
complicate its course. The second form of cerebral inflammation is
marked by the formation of the ordinary fluid products of acute
inflammation in other organs of the body; this is the suppurative
form, usually spoken of as abscess of the brain.

In addition to these two generally recognized inflammatory affections


there are a number of rare diseases which are regarded by excellent
authority as also of that character. The vaguely-used term acute
encephalitis has been recently reapplied with distinct limitations to an
acute affection of children by Strümpell. This disease is usually of
acute onset, infants under the sixth year of age being suddenly, and
in the midst of apparently previous good health sometimes, attacked
by fever, vomiting, and convulsions.40 Occasionally coma follows,
which may last for several days, perhaps interrupted from time to
time by recurring convulsions or delirium. The convalescence from
this condition is rapid, and in some cases is complete; in others
paralysis remains behind in the hemiplegic form. The paralysis is
usually greater in the arm than in the leg; in extreme cases it
involves the corresponding side of the face, and, as the paralyzed
parts are arrested or perverted in growth, considerable deformity,
even extending to asymmetry of the skull, may ensue. The deformity
is aggravated by contractures. Usually there is some atrophy of the
muscles, but in one case I found actual hypertrophy41 of some
groups, probably in association with the hemiathetoid movements.
40 As in my case of infantile encephalitis followed by athetoid symptoms (Journal of
Nervous and Mental Diseases).

41 This was followed by atrophy. There are never any qualitative electrical changes.

The sequelæ of acute infantile encephalitis present us with the most


interesting forms of post-paralytic disturbances of muscular
equilibrium. Hemichorea and hemiathetosis, as well as peculiar
associated movements and hemicontracture, are found in their
highest development with this class of cases. Occasionally
epileptiform symptoms are noted,42 and in others true epilepsy is
developed. It is under such circumstances that imbecility is apt to be
a companion symptom or result; and this imbecility is prominently
noted in the moral sphere.
42 Which in one case of my own disappeared spontaneously.

The grave set of symptoms briefly detailed here are attributed by


Strümpell43 to an acute encephalitis, analogous, in his opinion, to the
acute poliomyelitis of children. Its frequent occurrence after measles
and scarlatina, as well as the fact that Ross44 in a carefully-studied
case arrived at the opinion that the disease was an embolo-necrotic
result of endocarditis, would lead to the conclusion that it is a focal
affection, probably due to the transportation of infectious elements to
the brain through the blood-vessels. Its occurrence in children in the
midst of apparent health45 is consistent with the fact that rheumatism
and an attendant slight endocarditis frequently pass unrecognized in
infancy. It is supposed that a diffuse form of inflammatory non-
suppurative softening exists by some of the Germans, but the proof
advanced in favor of this view is not conclusive.
43 As a surmise, for up to his writing no reliable autopsies had been made.

44 Brain, October, 1883.

45 McNutt (American Journal of Medical Sciences, January, 1885) cites Strümpell as


attributing the theory of an inflammatory affection, which is analogous to poliomyelitis
in its suddenness and nature, to Benedict, and refers to p. 349 of Strümpell's textbook
under the erroneous date of 1864. This work was published in 1883-84, and the
theory is advanced by Strümpell as his own. It is only a synonym, hemiplegia spastica
infantile, that is attributed to Benedict.

A number of rare forms of interstitial encephalitis have been


described. In one, elaborately studied by Danillo, an inflammatory
hypertrophy of the cortex, involving the parenchyma as well as the
connective and vascular structures, was found in a limited area of
the motor province of the right hemisphere. There had been crossed
epileptiform convulsions during life.46
46 Bulletin de la Société de Biologie, 1883, p. 238.

There is some question among pathologists as to the recognition of


Virchow's encephalitis of the new-born. Certainly a part of Virchow's
material was derived from the imperfect study of a condition of
infantile brain-development which, as Jastrowitz showed, is
physiological, and on which Flechsig based his important researches
of tract-development. More recent studies, however, demonstrate
that there is a form of miliary encephalitis in new-born children due to
septic causes, such as, for example, suppuration of the umbilical
cord. The demonstration by Zenker of the occurrence of metastatic
parasitic emboli in cases of aphthous stomatitis, and by Letzerich of
a diphtheritic micrococcus invasion in the brain of his own child,
show that the subject of early infantile encephalitis merits renewed
consideration.47
47 The attempt of Jacusiel to revive Virchow's encephalitis of the new-born (Berliner
klinische Wochenschrift, 1883, No. 7) under the title of interstitial encephalitis does
not seem to have met with encouragement, for, besides Jastrowitz, Henoch and
Hirschberg opposed this view in the discussion.

Strictly speaking, the reactive changes which occur in the brain-


substance bordering on tumors, hemorrhagic and softened foci,
belong to the domain of encephalitis; but as they are considered in
conjunction with the graver lesions to which they are secondary both
in occurrence and importance, it is not necessary to more than refer
to them here.
Abscess of the Brain.

As indicated in the last article, there formerly existed much confusion


in the minds of pathologists regarding the terms softening and
abscess of the brain. As long as softening was regarded as an
inflammation, so long was abscess of the brain regarded as a
suppurative form of softening. Aside from the fact that there is some
resemblance in mechanical consistency between a spot of ordinary
softening and one of inflammatory softening, there is no essential
similarity of the two conditions. True softening is to-day regarded as
the result of a death of brain-tissue produced by interference with the
blood-supply; it is therefore a passive process. Inflammatory
softening, of which abscess is a form, is due to an irritant, usually of
an infectious nature. It is to the results of such irritation that the term
suppurative encephalitis should be limited.

MORBID ANATOMY.—In all well-established inflammatory brain troubles


the active part is taken by the blood-vessels and connective tissue;
the ganglionic elements undergo secondary, usually regressive or
necrotic, changes. The brain, considered as a parenchymatous
organ, is not disposed to react readily in the way of suppurative
inflammation unless some septic elements are added to the
inflammatory irritant. Foreign bodies, such as knitting-needles,
bullets, and slate-pencils, have been found encapsulated in this
organ or projecting into it from the surrounding bony shell without
encapsulation and without any evidences of inflammatory change.
As a rule, a foreign body which enters the brain under aseptic
conditions will, if the subject survive sufficiently long, be found to
have made its way to the deepest part of the brain, in obedience to
the law of gravity, and through an area of so-called inflammatory red
softening which appears to precede it and facilitate the movement
downward. This form of softening derives its color from the colored
elements of the blood, which either escape from the vessels in
consequence of the direct action of the traumatic agent; secondly, in
consequence of vascular rupture from the reduced resistance of the
perivascular tissue in consequence of inflammatory œdema and
infiltration; or, thirdly, in obedience to the general laws governing
simple inflammation.

A cerebral abscess may present itself to the pathological anatomist


in one of three phases—the formative, the crude, and the
encapsulated. In the first it is not dissimilar to a focus of yellow
softening, being, like the latter, a diffuse softened area varying from
almost microscopical dimensions to the size of a walnut, and of a
distinctly yellow tinge. Microscopic examination, however, shows a
profound difference. In pure yellow softening there are no pus-cells;
in the suppurative encephalitic foci they are very numerous, and
congregated around the vessels and in the parenchyma in groups.
The crude abscess is the form usually found in cases rapidly running
to a fatal termination. Here there is an irregular cavity in the brain,
usually the white central substance of the cerebrum or cerebellum,
formed by its eroded and pulpy tissue; it is filled with yellow,
greenish, and more rarely brownish pus. In the most furibund cases
broken-down brain-detritus may be found in the shape of whitish or
reddish flocculi, but in slowly-formed abscesses the contents are free
from such admixture, and thus the third phase is produced, known
as the encapsulated abscess. The cavity of the abscess becomes
more regular, usually spheroid or ovoid; the pus is less fluid, more
tenacious, and slightly transparent; and the walls are formed by a
pseudo-membrane48 which is contributed by the sclerosing brain-
substance, which merges gradually into the outlying normal tissue. I
have seen one acute cerebral abscess from ear disease which might
be appropriately designated as hemorrhagic; the contents were
almost chocolate-colored; on closer inspection it was found that they
were true pus, mingled with a large number of red blood-discs and
some small flocculi of softened brain-substance. This hemorrhagic
admixture was not due to the erosion of any large vessel, for the
abscess had ruptured into the lateral ventricle at that part where it
was most purely purulent. In a case of tubercular meningitis,
Mollenhauer in my laboratory found an abscess in the white axis of
the precentral gyrus, with a distinct purulent infiltration following the
line of one of the long cortical vessels. The abscess was not
encapsulated, the surrounding white substance exhibited an injected
halo, and the consistency of the contents was that of mucoid
material.
48 There is considerable dispute as to the real nature of the tissue encapsulating
cerebral abscesses. It is known, through the careful observations of R. Meyer, Goll,
Lebert, Schott, and Huguenin, that the capsule may form in from seven to ten weeks
in the majority of cases, about eight weeks being the presumable time, and that at
first the so-called capsule of Lallemand does not deserve the name, being a mucoid
lining of the wall. At about the fiftieth day, according to Huguenin, this lining becomes
a delicate membrane composed of young cells and a layer of spindle-shaped
connective elements.

In cases where the symptoms accompanying the abscess during life


had been very severe it is not rare to find intense vascular injection
of the parts near the abscess, and it is not unlikely that the reddish or
chocolate color of the contents of some acutely developed
abscesses is due to blood admixture derived from the rupture of
vessels in this congested vicinity. Sometimes the entire segment of
the brain in which the abscess is situated, or the whole brain, is
congested or œdematous. In a few cases meningitis with lymphoid
and purulent exudation has been found to accompany abscesses
that had not ruptured. It is impossible to say whether in this case
there was any relation between the focal and the meningeal
inflammation, as both may have been due to a common primary
cause.49 In such cases, usually secondary to ear disease,
thrombosis of the lateral sinus may be found on the same side.
Where rupture of an abscess occurs, if the patient have survived this
accident long enough—for it is usually fatal in a few minutes or hours
—meningitis will be found in its most malignant form. A rupture into
the lateral and other ventricles has been noted in a few cases.50
49 Otitis media purulenta in the two cases of this kind I examined.

50 In one, observed together with E. G. Messemer, intense injection of the endymal


lining, with capillary extravasations, demonstrated the irritant properties of the
discharged contents.
Some rare forms of abscess have been related in the various
journals and archives which have less interest as objects of clinical
study than as curiosities of medical literature. Thus, Chiari51 found
the cavity of a cerebral abscess filled with air, a communication with
the nose having become established by its rupture and discharge.
51 Zeitschrift für Heilkunde, 1884, v. p. 383. In this remarkable rase the abscess,
situated in the frontal lobe, had perforated in two directions—one outward into the
ethmoidal cells, the other inward into the ventricles, so that the ventricles had also
become filled with air. This event precipitated a fatal apoplectiform seizure.

The contents of a cerebral abscess usually develop a peculiarly fetid


odor. It has been claimed that this odor is particularly marked in
cases where the abscess was due to some necrotic process in the
neighborhood of the brain-cavity. The only special odor developed by
cerebral abscesses, as a rule, is identical with that of putrid brain-
substance, and it must therefore depend upon the presence of brain-
detritus in the contents of the abscess or upon the rapid post-mortem
decomposition of the neighboring brain-substance.

In two cases of miliary abscess which, as far as an imperfect


examination showed, depended on an invasion of micro-organisms,
an odor was noticed by me which was of so specific a character that
on cutting open the second brain it instantly suggested that of the
first case, examined six years previous, although up to that moment I
had not yet determined the nature of the lesion.52
52 Owing to the lack of proper methods of demonstrating micro-organisms, the first
case whose clinical history was known was imperfectly studied; of the second case,
accidentally found in a brain obtained for anatomical purposes, the examination is not
yet completed.

That form of abscess which, from its situation in or immediately


beneath the surface, has latterly aroused so much interest from its
important relations to localizations is usually metastatic, and directly
connected with disease of the overlying structures, notably the
cranial walls. In this case the membranes are nearly always
involved. The dura shows a necrotic perforation resembling that
found with internal perforation of a mastoid or tympanic abscess.
The pia is thickened and covered with a tough fibro-purulent
exudation; occasionally the dura and leptomeninges are fused into a
continuous mass of the consistency of leather through the
agglutinating exudation. The abscess is usually found open, and it is
not yet determined whether it begins as a surface erosion, and,
bursting through the cortex, spreads rapidly on reaching the white
substance, or not. The white substance is much more vulnerable to
the assault of suppurative inflammation than the gray, and not
infrequently the superficial part of the cortex may appear in its
normal contiguity with the pia, but undermined by the cavity of the
abscess, which has destroyed the subcortical tissue. Possibly the
infecting agent, as in some cases of ear disease, makes its way to
the brain-tissue through the vascular connections, which, however
sparse at the convexity of the brain, still exist.

CLINICAL HISTORY.—The symptoms of a cerebral abscess depend on


its location, size, and rapidity of formation. There are certain parts of
the brain, particularly near the apex of the temporal lobe and in the
centre of the cerebellar hemisphere, where a moderately large
abscess may produce no special symptoms leading us to suspect its
presence. There are other localities where the suppurative focus53
indicates its presence, and nearly its precise location and extent, by
the irritative focal symptoms which mark its development and by the
elimination of important functions which follows its maturation. It is
also in accordance with the general law governing the influence of
new formations on the cerebral functions that an acutely produced
abscess will mark its presence by more pronounced symptoms than
one of slow, insidious development. Indeed, there are found
abscesses in the brain, even of fair dimensions, that are called latent
because their existence could not have been suspected from any
indication during life, while many others of equal size are latent at
some time in their history.
53 Practically, our knowledge of localization of functions in the human brain begins
with the observation by Hitzig of a traumatic abscess in a wounded French prisoner at
Nancy named Joseph Masseau. The year of the publication of this interesting case
constitutes an epoch in advancing biological knowledge, which will be remembered
when even the mighty historical events in which Hitzig's patient played the part of an
insignificant unit shall have become obsolete. This, the first case in the human subject
where a reliable observation was made was an unusually pure one; the abscess
involved the facial-hypoglossal cortical field (Archiv für Psychiatrie, iii. p. 231).

An acute cerebral abscess is ushered in by severe, deep, and dull


headache, which is rarely piercing, but often of a pulsating character.
The pain is sometimes localized, but the subjective localization does
not correspond to the actual site of the morbid focus.54 It is often
accompanied by vertigo or by a tendency to dig the head into the
pillow or to grind it against the wall. With this there is more or less
delirium, usually of the same character as that which accompanies
acute simple meningitis. As the delirium increases the slight rise in
temperature which often occurs in the beginning undergoes an
increase; finally coma develops, and the patient dies either in this
state or in violent convulsions. The case may run its course in this
way in a few days, but usually one to three weeks intervene between
the initial symptoms and death.
54 Although Ross seems to be of a contrary opinion, it is the exception for the pain to
correspond in location to the abscess.

Between the rapid and violent course of acute cerebral abscess


detailed, and the insidious course of those which as latent
abscesses may exist for many years without producing any
noticeable symptoms whatever, there is every connecting link as to
suddenness and slowness of onset, severity and mildness of
symptoms, and rapidity and slowness of development and progress.
It is the encapsulated abscesses which are properly spoken of as
chronic, and which may even constitute an exception to the almost
uniform fatality of the suppurative affections of the brain. Thus, the
symptoms marking their development may correspond to those of an
acute abscess, but coma does not supervene, temporary recovery
ensues, and the patient leaves the hospital or returns to his vocation.
But all this time he appears cachectic, and there will be found, on
accurate observation, pathological variations of the temperature and
pulse. The appetite is poor; the bowels are usually constipated; there
are frequent chilly sensations and horripilations, and a general
malaise. This condition slowly passes away in the few cases which
recover; in others relapses occur, usually of progressing severity,
and terminate life. The period during which the symptoms of the
abscess are latent may be regarded as corresponding to the latent
period which sometimes intervenes between an injury and the
development of the symptoms of acute abscess, and which,
according to Lebert, may comprise several weeks or months. In
other words, the morbid process may be regarded all this time as
progressing under the mask of a remission. It is this latent period
which it is of the highest importance for the diagnostician to
recognize. There is usually headache, which is continuous and does
not change in character, though it may be aggravated in paroxysms.
Usually the temperature rises with these paroxysms, and if they
continue increasing in severity they may culminate in epileptic
convulsions.

Many of the symptoms of cerebral abscess—prominently those


attending the rapidly-developed forms and the exacerbations of the
chronic form—are due to cerebral compression. It is the pulse and
pupils, above all, that are influenced by this factor.

In an affection having so many different modes of origin as cerebral


abscess, and occupying such a wide range of possible relations to
the cerebral mechanism, it is natural that there should exist many
different clinical types. So far as the question of the diagnosis of
localized cerebral abscesses is concerned, I would refer to the article
dealing with cerebral localization, in order to avoid repetition. With
regard to the etiological types, they will be discussed with the
respective causal factors.

ETIOLOGY.—Abscess of the brain is so frequently found to be due to


metastatic or other infectious causes that it is to be regarded as
highly improbable that it is ever of idiopathic occurrence. The most
frequent associated conditions are—suppurative inflammation in
neighboring structures, such as the tympanic cavity, the mastoid
cells, the nasal cavity, or inflammation or injury of any part of the
cranium and scalp. The connection of these structures with the brain
through lymphatic and vascular channels is so intimate that the
transmission of a pyogenic inflammatory process from the former to
the latter is not difficult to understand. But disease of far distant
organs, such as gangrene of the lung, and general affections, such
as typhoid fever, occasionally figure among the causes of cerebral
abscess, particularly of the miliary variety.

Among the commonest causes of cerebral abscesses are those


which the surgeon encounters. The injury may be apparently slight
and limited to the soft parts, or the bone may be merely grazed.
Gunshot wounds are particularly apt to be followed by a cerebral
abscess; and it has been noted that those which granulate feebly,
whose base is formed by a grayish, dirty, and fetid material, are most
apt to lead to this ominous complication. The symptoms do not
usually develop immediately, and after the surgeon is led to indulge
in the hope that danger is past, proper reaction sets in, healthy
granulations develop—nay, the wound may close and be undergoing
cicatrization—then the patient complains of feeling faint or drowsy,
and with or without this premonition he has convulsive movements of
one side, sometimes involving both extremities and the
corresponding side of the face. Consciousness is usually preserved,
but the spells recur, and the patient is noted to be absent-minded
during and after the convulsive seizure. On some later day he is
noticed to become pale, as in the initial stage of a true epileptic
seizure; total abolition of consciousness follows, and the clonic
spasms, affecting the same limbs and muscles involved in the first
seizures, now recur with redoubled violence. After such an attack
more or less paresis is observed in the muscles previously
convulsed. A number of such seizures may occur, or a fatal issue
terminate any one of them. Not infrequently the field of the involved
muscles increases with each fit. Thus the thumb or a few fingers
may be the first to show clonic spasm; in the next fits, the entire arm;
in succeeding ones, the leg and face may follow suit. In such a case
the periphery first to be convulsed is the first to become paralyzed,
thus showing that where the disease began as an irritative lesion the
cortex is now destroyed, and that around the destructive focus as a
centre the zone of irritation is spreading excentrically, first to irritate
and then to destroy seriatim the functions of the various cortical
fields in their order. According to the teachings laid down in the
article on Localization, the order of invasion and extension, as well
as the nature, of the focal symptoms will vary. Finally, the attacks
become more severe and of longer duration; the patient does not
recover in the intervals, but complains of nausea, pain, confusion,
and head-pressure. He is noted to be dull, his temperature is slightly
raised (100° F.), and the speech may be affected. Several attacks
may occur in a day, each leaving the patient more and more crippled
as to motility and mind. He is delirious and drowsy at intervals; his
temperature may rise after an attack from one to four degrees,
usually remaining near 103°–104° F. in the evening; and, coma
developing, death occurs, the convulsion or paralytic phenomena
continuing at intervals during the moribund period, and the
temperature and pulse sometimes running up rapidly toward the last.
On examining the parts, it is found that the bone is necrotic at the
point of injury, usually only in its outer table, but sometimes in its
entire thickness. In exceptional cases the normal continuity of the
entire table is not interrupted to all appearances, and a small eroded
spot on the inner table is found bathed in pus, or a detached necrotic
fragment may be found in the latter. Corresponding to the purulent
focus on the inner table the dura mater is detached, discolored, and
perforated in one or more places with irregular rents or holes which
have a greenish or blackish border. An abscess is found in that part
of the brain which corresponds to this opening. There is no question
that it was caused by direct infection from the necrotic spot.

Cases have been noted,55 apparently of idiopathic origin, in which a


sudden paralysis of a few fingers was the first symptom produced by
the development of a cerebral abscess. In a few days such a
paralysis extends to the other fingers and to the forearm.
Occasionally no convulsive phenomena are noted, or choreic
movements indicate, in their place, that the cortical field is irritated.
Such cases usually run a rapidly fatal course.
55 Arthur E. W. Fox, Brain, July, 1885.

The most frequent cause of cerebral abscess in civil practice is


suppurative inflammation of the middle ear. It may be safely asserted
that the person suffering from this affection is at no time free from the
danger of a cerebral abscess, a purulent meningitis, or a phlebitic
thrombosis of the sinuses. Cases are on record where the aural
trouble had become chronic, and even quiescent, for a period of
thirty years, and at that late date led to abscess with a fatal
termination. Of 6 cases of this character in my experience, 4 of
which were verified by anatomical examination, not one but had
occurred at least four years after the commencement of the ear
trouble, and 1 happened in a man aged fifty-four who had contracted
the latter affection in childhood. In 2 there was in addition diffuse
purulent meningitis, limited on the convexity to the side where the
abscess was situated.56 In 4 the abscess was in the temporal lobe, 1
of them having in addition an abscess in the cerebellar hemisphere
of the same side; in a fifth the abscess was in the deep white
substance of the cerebral hemisphere, opening into the lateral
ventricle, and in the sixth it was in one cerebellar hemisphere alone.
56 One of these was seen during life by J. R. Pooley; the other was a paretic dement
at the New York City Pauper Asylum.

The course of this class of abscesses is usually obscure: focal


symptoms are not commonly present, and the constitutional and
local symptoms usually appear as a gradual outgrowth from the
aural troubles. Thus there is at first usually little fever, vertigo, and
chilliness, but considerable tinnitus, and sometimes pain in the ear.
Occasionally local signs of a septic metastasis of the otitis, such as
œdema over the mastoid or painful tumefaction of the cervical
glands, are visible. The pain previously referred to the region of the
ear now becomes general; commonly—even where the abscess is in
the temporal lobe—it becomes progressively aggravated in the
frontal and sometimes in the nuchal region, and under an increase of
the febrile phenomena death may exceptionally occur without further
complication. Even large abscesses in one half of the cerebellum
occur without producing Ménière's symptom—a fact which leads to
the suspicion that the purulent deposit must have been of slow and
gradual development. In one case distinct symptoms indicating an
affection of the subcortical auditory tract were observed. As a rule,
this class of abscesses are accompanied toward the close by active
general symptoms—convulsions, coma, narrowing and impaired
light-reaction of the pupils. Delirium, when a prominent symptom
from the beginning, indicates the probable association of meningitis
with the abscess.57 Occasionally severe pain, rigor, high
temperature, and paralysis may be absent even with rapidly-
developed abscess from otitis.58
57 The same is probably true of oculo-motor paralysis, which Ross (loc. cit., vol. ii. p.
735) refers to uncomplicated abscess.

58 This was the case with an abscess containing five ounces of pus recorded by C. S.
Kilham at the Sheffield Medical Society (British Medical Journal, February 13, 1886).
As illustrating what was stated about the non-correspondence of the pain and the
location of the abscess, it may be stated that notwithstanding this large abscess was
in the temporal lobe, what pain was present was in the forehead.

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