Marketplace Analysis For E-Commerce

Slide 2.
Chapter 2
Marketplace Analysis for
E-Commerce
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 2.2
Learning Outcomes
• Complete an online marketplace analysis to

assess competitor, customer and intermediary
and competitor use of the Internet as part of
strategy development
• Identify the main business and marketplace

models for electronic communications and trading
• Evaluate the effectiveness of business and

revenue models for online businesses.
Slide 2.3
Management Issues
• What are the implications of changes in

marketplace structures for how we trade with
customers and other partners?
• Which business models and revenue models

should we consider in order to exploit the
Internet?
• What will be the importance of online

intermediaries and marketplace hubs to our
business and what actions should we take to
partner these intermediaries?
Slide 2.4
Introduction
 Disruptive technologies
 B2B
○ Destination sites
 B2C
○ Online intermediaries
 Online marketplace
Slide 2.5
Introduction
 Organizations that monitor, understand, and respond
appropriately to changes in their online marketplace have
the greatest opportunities to use digital technologies to
compete effectively
 E-business strategy development
 Situation analysis
○ Understanding the online elements of organization’s environment
 Environmental scanning
Slide 2.6
Figure 2.1 The environment in which e-business services are provided
Slide 2.7
Activity – The E-Commerce Environment
• For each of the environment influences shown in

Figure 2.1, give examples of why it is important
to monitor and respond in an e-business
context. For example, the personalization
mentioned in the text is part of why it is
important to respond to technological innovation.
Slide 2.8
Environment Constraints and

Opportunities
• Customers – which services are they offering via
their web site that your organization could
support them in?
• Competitors – need to be benchmarked in order

to review the online services they are offering –
do they have a competitive advantage?
• Intermediaries – are new or existing

intermediaries offering products or services from
your competitors while you are not represented?
Slide 2.9
Environment Constraints and Opportunities

(Continued)
• Suppliers – are suppliers offering different
methods of procurement to competitors that give
them a competitive advantage?
• Macro-environment
• Society – what is the ethical and moral

consensus on holding personal information?
• Country specific, international legal – what are

the local and global legal constraints, for
example, on holding personal information, or
taxation rules on sale of goods?
Slide 2.10
Environment Constraints and Opportunities

(Continued)
• Country specific, international economic – what
are the economic constraints of operating within
a country or global constraints?
• Technology – what new technologies are

emerging by which to deliver online services
such as interactive digital TV and mobile
phone-based access?
Slide 2.11
Figure 2.2 Professor Donald Sull of London Business School talks about strategic
agility
Source: www.ft.com
Slide 2.12
Strategic agility
 The capacity to respond to environmental
opportunities and threats
 Gain competitive advantages within a marketplace
 In e-business context, strategic agility requires
several characteristics and requirements for
organization to be successful in its strategy
development:
1. Efficient collection, dissemination, and evaluation of
different information sources from the micro and macro-
environment.
2. Effective process for generating and reviewing the
relevance of new strategies based on creating new value
for customers
Slide 2.13
Strategic agility
3. Efficient research into potential customer
value against the business value generated
4. Efficient implementation of prototypes of
new functionality to deliver customer value
5. Efficient measurement and review of results
from prototypes to revise further to improve
proposition or to end trial.
Slide 2.14
Figure 2.3 An online marketplace map
Slide 2.15
Google Trends for websites – useful for benchmarking the growth of

Figure 2.4
online intermediaries and destination sites
Source: http://trends.google.com/websites
Slide 2.16
B2B and B2C interactions between an organization, its suppliers and its
Figure 2.5
customers
Slide 2.17
B2B and B2C Characteristics
Characteristic B2C B2B

Proportion of adopters with Low to medium High to very high
access
Complexity of buying Relatively simple – More complex – buying

decisions individual and influencers process involves users,
specifiers, buyers, etc.
Channel Relatively simple – direct or More complex, direct or via

from retailer wholesaler, agent or
distributor
Purchasing characteristics Low value, high volume or Similar volume/value. May

high value, low volume. be high involvement.
May be high involvement Repeat orders (rebuys)
more common
Product characteristic Often standardized items Standardized items or

bespoke for sale
Slide 2.18
Disintermediation of a consumer distribution channel showing (a) the

Figure 2.6
original situation, (b) disintermediation omitting the wholesaler, and
(c) disintermediation omitting both wholesaler and retailer
Slide 2.19
Figure 2.7 From original situation (a) to disintermediation (b) and reintermediation (c)
Slide 2.20
Counter-Mediation
• Creation of a new intermediary

• Example:
– B&Q www.diy.com
– Opodo www.opodo.com
– Boots www.wellbeing.com www.handbag.com
– Ford, Daimler (www.covisint.com)
• Partnering with existing intermediary – Mortgage
broker Charcol and Freeserve.
Slide 2.21
Multi-channel marketplace models

 Customer journey: a description of
modern multi-channel buyer behavior as
consumers use different media to select
suppliers, make purchases and gain
customer support.
 A channel chain shows alternative

customer journeys for customers with
different channel preferences
Slide 2.22
Example channel chain map for consumers selecting an estate agent to

Figure 2.8
sell their property
Slide 2.23
Interactive Activity – Portals
Q1. Define portal
Q2. Is a search engine the same as a

portal? Yes, No
Q3. Is a search engine the same as a
directory? Yes, No
Q4. List search engines/portals you use

and explain why.
Slide 2.24
Meta services
Search engines
Portal
Directories
‘A gateway to
information resources News aggregators
and services’
MR aggregators
Comparers
Exchanges
Slide 2.25
Figure 2.10 Number of searches through the Google Keyword Tool

Source: Google https://adwords.google.com/select/KeywordTool
Slide 2.26
Online intermediary types

 Infomediary: a business whose main
source of revenue derives from
capturing consumer information and
developing detailed profiles of individual
customers for use by third parties.
 Metamediary: intermediaries providing
information to assist with selection and
discussion about different products and
services
Slide 2.27
Figure 2.9 Metacritic

Source: CBS Interactive; www.metacritic.com
Slide 2.28
Business Model
Timmers (1999) defines a ‘business model’ as:
An architecture for product, service and information

flows, including a description of the various
business actors and their roles; and a description of
the potential benefits for the various business
actors; and a description of the sources of revenue.
Slide 2.29
Online business model

 A summary of how a company will
generate a profit identifying its core
product or service value proposition,
target customers in different markets,
position in the competitive online
marketplace or value chain and its
projections for revenue and costs
Slide 2.30
Figure 2.11 Alternative perspectives on business models
Slide 2.31
Revenue Models – Publisher Example
• Subscription access to content

• Pay per view content access
• CPM display advertising
• CPC advertising on site
• Sponsorship of sections, content or widgets
• Affiliate revenue (CPA or CPC)
• Subscriber data for e-mail marketing
• Access to customers for research purposes.
Slide 2.32
Figure 2.12 Example spreadsheet for calculating a site revenue model

Note: Available for download at www.smartinsights.com/conversion-model-spreadsheets/
Slide 2.33
Figure 2.12 Example spreadsheet for calculating a site revenue model (Continued)
Note: Available for download at www.smartinsights.com/conversion-model-spreadsheets/
Slide 2.34
Figure 2.13 E-consultancy

Source: www.econsultancy.com
Slide 2.35
Figure 2.14 Firebox

Source: www.firebox.com
Slide 2.36
Figure 2.15 Zopa

Source: www.zopa.com.

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Slide 2.

• Complete an online marketplace analysis to

• Identify the main business and marketplace

• Evaluate the effectiveness of business and

• What are the implications of changes in

• Which business models and revenue models

• What will be the importance of online

 E-business strategy development

Figure 2.1 The environment in which e-business services are provided

Activity – The E-Commerce Environment

• For each of the environment influences shown in

Environment Constraints and

• Competitors – need to be benchmarked in order

• Intermediaries – are new or existing

Environment Constraints and Opportunities

• Society – what is the ethical and moral

• Country specific, international legal – what are

Environment Constraints and Opportunities

• Technology – what new technologies are

Figure 2.3 An online marketplace map

Google Trends for websites – useful for benchmarking the growth of

B2B and B2C Characteristics

Characteristic B2C B2B

Complexity of buying Relatively simple – More complex – buying

Channel Relatively simple – direct or More complex, direct or via

Purchasing characteristics Low value, high volume or Similar volume/value. May

Product characteristic Often standardized items Standardized items or

Disintermediation of a consumer distribution channel showing (a) the

• Creation of a new intermediary

Multi-channel marketplace models

 A channel chain shows alternative

Example channel chain map for consumers selecting an estate agent to

Interactive Activity – Portals

Q1. Define portal

Q2. Is a search engine the same as a

Q4. List search engines/portals you use

Figure 2.10 Number of searches through the Google Keyword Tool

Online intermediary types

Figure 2.9 Metacritic

Timmers (1999) defines a ‘business model’ as:

An architecture for product, service and information

Online business model

Figure 2.11 Alternative perspectives on business models

Revenue Models – Publisher Example

• Subscription access to content

Figure 2.12 Example spreadsheet for calculating a site revenue model

Figure 2.13 E-consultancy

Figure 2.14 Firebox

Figure 2.15 Zopa

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