MAR 6936-902

E-Commerce Marketing

Fall 2002—Tampa

Rich GonzalezAugust 29, 2002

Agenda August 29, 2002 Expectations of course Survey of course themes/concepts LISTERV Drucker Marketing Concept Porter Introduction & Framework for E-C Blown to Bits Due for September 5

URLs coba.usf.edu lists.acomp.usf.edu www.wurlitzer-jukebox.com www.britannica.com/

LISTSERV

xhttp://lists.acomp.usf.edu

No Password Sign on by Friday Send Intro on Saturday or later

For September 5 Chapter 1 Chapter 2--- SKIM only Chapter 3 Mini-Investigation of Product Purchase WSJ Interactive

Syllabus Let’s review and answer questions

Expectations/Grading Writing Assignments vs. Midterm

The Big Concepts Information

Amplification

Asynchonicity

Textbooks REQUIRED TEXT E-Commerce Marketing introduction to e-commerce, Rayport &

Jaworski, McGraw Hill/Irwin (2002). ISBN-0072510242

 REQUIRED TEXT II Blown to Bits: How the New Economics of Information

Transforms Strategy, Harvard Business School Press, Evans & Wurster (2000). ISBN 087584877x

Price Shopping On Books? ebay.com www.half.com bibliofind.com ebs.allbookstores.com www.bigwords.com

Weekly Analysis Papers Current Topic Will Be Selected 1.5 page Discussion Paper

6 WAP Scoring on 125 Points, Then

Averaged Better than a Midterm Exam

WSJ Interactive A Good Resource $4.95 for 60 Day Trial 10 Points

Do not start up service yet.

Survey & Writing Writing exercise—5 minutes E-commerce is....

Just your thoughts, what comes to mind.

E-commerce is important...Just your thoughts, put yourself in the role of the businessperson and customer

Legibility!!

Why Is E-Commerce Important?

Let’s Look at Some Predictions

"I think there is a world market for, maybe, five computers."

Thomas J. Watson,1943

Prediction 1

“There is no reason for any individual to have a computer in their home.”

Ken Olson, 1977

Prediction 2

Prediction 3

Business is going to change more in the next 10 years than it has in the past 50.

William H. Gates III, 2000

Prediction 4

“Everyone will have access to most of the world’s information.”

William H. Gates III, 2000

E-Commerce R&J Digital technology has transformed

the economy. Value Creation shifts from physical

to information E-C is about exchange of information E-C is technology enabled E-C is technology mediated

E-Commerce R&J ...technology-mediated exchanges

between parties as well as the electronically based intra-organizational activities that facilitate such change

Exemplar Sites paypal.com cdbaby.com www.flyertalk.com orbitz.com etrade.com B2B sites

Mini-Basic Marketing Review

Drucker What is the purpose of a business?

Two primary responsibilities of a business

Elements of the Marketing Mix within an Environmental Framework

TargetMarket

Produ

ct

Distribution

Prom

otio

nPrice

Marketing Concept A managerial philosophy that on

organization should satisfy customer’s needs through a coordinated set of activities that also allows the org to achieve its goals

Marketing Concept Target Market  Customer Needs & Wants  Coordinated activities  Profitability

Why Is E-Commerce Important?

Important Facts 2002Q2 Internet Access:

165 million U.S.553 million Worldwide

Broadband Penetration: 2001—13 million U.S. Households 2002—17 million U.S. Households 2007---37 million U.S. Households 2002--- 4% European Households

2002– 35 M AOL Worldwide Subscribers

Important Facts Online Retail Sales in U.S.

2002Q2 = $10 B Jul 2002 = $ 7 B

Jul 2002 = 7.8 M Users Online, Brazil

22% Research Online, Shop Offline, Europe

Information Technology

FasterFeedback

FasterFeedback

Real TimeData DetailsReal Time

Data Details

Efficientand

Effective

Efficientand

Effective

RelationshipOrientation

RelationshipOrientation

Porter’s Competitive Business Model

Intraindustry Rivalry

New Entrants

BP of Sellers

Substitutes

BP of Buyers

3 Fundamental Business Shifts1. Most transactions—B2C, B2B and G2C will

become self-service digital transactions.2. Customer service will become the primary

value-added function in every business. Personal consultancy not routine services.

3. The pace of transactions and customer needs for customer service will force firms to adopt digital processes---for survival.

Environmental Backdrop of Course Content Technology and Economic Forces Digitization Explosive Innovation---Networks Knowledge/Education Productivity Quality of Life Westernization/Globalization

Break About 7:11 PM

Example of Digitization Effect Atoms vs. Bits Bits vs. Atoms

February 2002

Wurlitzer—A Digital Product?

Jukebox—A growing business? 250,000 in U.S. : Sales =15,000/yr MP3 source files from MP3.com DSL Connection ~500,000 songs $150/month or $5,000 All royalties paid Surf net, send e-mail, send songs

Encyclopaedia Britannica 1768, Scotland 15 Editions 1920 Sears Purchases EB Is Most:

ComprehensiveAuthoritativePrestigious

Encyclopaedia Britannica cont’d

EB = 40 Million Words Superior Sales Force—Aggressive &

Successful 1990 Sales = $650 Million Set Price = $1400 to $2200 EB = Dominant Market Share . 1990-95 Sales went down by 80% EB= Sold in 1996 Why?

Encyclopaedia Britannica cont’d

CD-ROM Encarta, Grolier, Compton marketed

a CD product Price: $50-75 Quality of CD vs. Britannica?

So What Happened?

Encyclopaedia Britannica cont’d

IRACS Ignore

RidiculeAttackCopySteal

Encyclopaedia Britannica cont’d

Strategic Competitive Advantage

Quality & Volume

Sales Force

$1,500+ PriceLarge Margins

Thoroughness

Strategic Competitive Disadvantage

Too Big For CD

Commissions

$75--$50--$0

Too Slow To React

Encyclopaedia Britannica cont’d

Encyclopaedia Britannica 2003 Ultimate Reference Suite

Contains:32 Volume EB, 75,000 articles, 3 encyclopedias, 2 dictionaries, World Atlas...

Price = $69.95 Online Premium Services ($30)

http://www.britannica.com/

Elements of the Marketing Mix within an Environmental Framework

TargetMarket

Produ

ct

Distribution

Prom

otio

nPrice

It’s Not Just About Marketing Impact of technology and change

wide Business Society Culture Nations Classes

Table 1–1: Four Categories of E-Commerce

B2B B2B C2B C2B

B2C B2C C2C C2C

Business Consumers

Business originating from . . . B

usi

nes

s C

on

sum

ers

An

d s

elli

ng

to

. .

.

Exhibit 1–6: A Flow Diagram of the Strategic Responsibilities

Set VisionSet Vision

Establish GoalsEstablish Goals

Formulate Strategy

Formulate Strategy

Drive Implementation

Drive Implementation

Be Accountablefor Performance

Be Accountablefor Performance

The ChallengesUnderstanding Customer Evolution

“Tablestakes” or “cost of doing business” Market research to understand how customer needs are

evolving

Charting Changing Technology Choosing the “right” technologies — matching

consumer tastes to technology choices

Balancing Irrational Exuberance and Irrational Doom Estimating the impact of technology Weathering the storm — reassuring stakeholders

Moore’s Law

# of transistors

Speed

Time1965—Double every 12 months

1975---Double every 24 months-----Sometimes 18 months

Metcalfe’s Law

def: values the utility of a network as the square of its users

Morse CodeTelephone systemEthernet protocolsInternet protocols

Metcalfe’s LawNet Utility

Nodes

Critical Mass

The Big Concepts Information

Amplification

Asynchonicity

A Step Toward E-Commerce?

Nokia 9290 For September 5

Find out 3 or four things about it. We’ll discuss at the beginning of

class

Student Introduction Your career area, a snippet of that

Your track, semesters in MBA

Stop Here