© copyright 2006, thomson south-western, a division of the thomson corporation internet marketing...

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Internet Marketing & e-CommerceWard HansonKirthi Kalyanam

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Phone: (800) 423-0563

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Part Two: Chapter 11Innovation and the Net

“Nothing endures but change.”

Heraclitus (540-480 BC)

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Competition and the Need for Speed

• Traditional business rivalries have been bitter, enduring battles

• Coke vs. Pepsi

on the front lines

of the Cold War

SOURCE: ©Bettman/CORBIS: Vice President Richard Nixon and Soviet Premier Khrushchev share a Pepsi, 1959

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Competition and the Need for Speed

• In high-tech markets, rivalries burn bright but fast – IBM vs. Apple in personal computers – Digital vs. Data General in minicomputers

• Most prominently: the Browser Wars– Microsoft vs. Netscape in late 1990s– Now, Microsoft vs. upstart(暴發戶的 )Firefox

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Competition and the Need for Speed

• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity

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Competition and the Need for Speed

• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Competition and the Need for Speed

• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Competition and the Need for Speed

• On “Internet Time” marketers face strain of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

☆ Competition and the Need for Speed

• On “Internet Time” marketers face strain 拉緊 of creating new products at the moment of new opportunity– Time-to-market influences profitability– Swiftness signals innovativeness– Early arrivals draw partners and alliances– Market leaders can set industry or product

standards and gain dominance

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Competition and the Need for Speed

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Standards Marketing

• Open Standards: Formed by process of official debate and consensus(一致 )

– Widespread adoption and innovation, but also greater competition

• Example: WiFi

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Standards Marketing

• Open Standards: Formed by process of official debate and consensus– Widespread adoption and innovation, but

also greater competition• Example: WiFi

• De Facto (事實上的 )Standards: Based on market acceptance, but proprietary (專屬的 )

– Harder to establish, but more profitable• Example: Xbox and Playstation

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Standards Marketing

Growth in certified Wi-Fi product types, according to the Wi-Fi Alliance

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Product Development Online

• Understanding the Idea Funnel 漏斗– Dual goals of identifying unmet needs and

weeding 雜草 out costly ideas early in process

– Few ideas make it through the funnel, but process still can be costly

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Product Development Online

The Idea Funnel for event-driven new products

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Product Development Online

• Understanding the Idea Funnel– Dual goals of identifying unmet needs and

weeding out costly ideas early in process– Few ideas make it through the funnel, but

process still can be costly

• Improving the Idea Funnel– Online market research screens concepts– Virtual setting facilitates consumer-

assisted design

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Product Development Online

• Not all products fit easily into preexisting product categories

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Product Development Online

• Not all products fit easily into preexisting product categories

• Simulation and digital environments offer realistic market research settings

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Product Development Online

• Not all products fit easily into preexisting product categories

• Simulation and digital environments offer realistic market research settings

• Information Acceleration (IA)– Places consumer in virtual buying

environments– Can replace expensive prototypes, spot

importance of valuable new features

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Modular Product Development

• Products divided into subsystems for more focused development

– Visible design rules: describe how different modules fit together

– Hidden design parameters: offer flexibility– One example: Wikipedia

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Modular Product Development

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Product Development Online

• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input

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Product Development Online

• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input– Prerelease of products for swift

prototyping and testing

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Product Development Online

• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input– Prerelease of products for swift

prototyping and testing• Alpha release – trusted lead users, such as

company employees

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Product Development Online

• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input– Prerelease of products for swift

prototyping and testing• Alpha release – trusted lead users, such as

company employees• Beta release – wider public sampling at lower

price or for free

© Copyright 2006, Thomson South-Western, a division of the Thomson Corporation

Product Development Online

• Early feedback and rapid release – Key role of email for fast, meaningful

consumer input– Prerelease of products for swift

prototyping and testing• Alpha release – trusted lead users, such as

company employees• Beta release – wider public sampling at lower

price or for free

– Speed to market drives profitability