Chapter 4 Key Concepts

Marketing on the Web

7 Pages every website should have: (this link is on WebCT)
Contact us
Testimonials
Privacy Policy
FAQ (do you have PayPal, MC, etc.)
“Gimme” page (if people want to sign up for newsletters/special offers etc. where they have to leave their contact info to get something in return)
About us
Confirmation (an order confirmation)

Web Marketing
-Product-based strategies (Staples, NCIX)
-Customer-based strategies (BMO, Okanagan College)
-Trust and Media Selection (low level of trust [mass media mass market], one on one selling: high level of trust = repeat customer [personal contact])
-Market Segmentation (Dell or BMO categorize by what needs are) similar to customer-based strategies
-The Long Tail (companies ignore products that are not as profitable on the long tail, although the profit from products on the short tail is not nearly as much as that of the long tail. E commerce is better at offering the long tail because it has no inventory costs. Ie Netflix)

Consumer Behavior
-Segmentation
Browsers [people who have no intentions of buying, only looking]
Shoppers [people who have a specific need and shop around]
Buyers [people making purchases from the site]
each group needs different strategy
-Relationship Marketing
Awareness (making people aware; wanting to go to your site)
Exploration (get people to explore and look up info)
Familiarity (when they buy and know how the process works)
Commitment (people like to come back because they are committed)
Separation (when people become disillusioned or unhappy from negative experiences)

Consumer Strategies
-Acquisition (cost of getting someone to your site)
-Conversion (what it takes to convert someone from a browser to a buyer)
-Retention (trying to get people to be committed)

Advertising Strategies
-Banner Ads, Pop-up ads, active ads, interstitial ads, site sponsorships
-problems: measuring effectiveness of advertising
-CPM (cost per thousand banner impressions)
-CPC (cost per click)
-CPT (cost per transaction if the customer ends up purchasing thorough a media)

Email and CRM Strategies
-Permission marketing (when people ask to receive newletters, etc)
-Content and advising (sending other info in addition to products)
-Outsourcing processing (processing email for people, spam mail and filters)
-eCRM solutions (Customer Relationship Management) is more important in ecommerce

Branding Strategies
-Leveraging and Consolidation (adding of services ie Google News)
-Affiliate Marketing (commissioned salesperson using a known brand)
-Viral Marketing (word of mouth through technology)

Search Engine Strategies
-Search engines (Google, Yahoo, etc.)
-web directories (people gather information, not a crawler)
-SEO for keywords (Search Engine Optimization) using key search words to get your site to be the first site hit in search results
-Paid Inclusion (paying to have your site be the first hit on search results)
-Blogs, Social Media Sites, Forums
-Website domain names (.net or .com etc incase people misspell the website)

Chapter 3 Key Concepts

Revenue Models

Web Catalogue
-product listing with info and pricing
-sell directly to customers online
-need checkout and shipping process
-sales contracts, returns policies, etc.
-uses standard mark-up pricing model
-value-added services for additional cost
Wal Mart, Victoria’s Secret, etc.

Digital Content
-firms own rights to intellectual property (journal articles, industry reports, etc.)
-more academic and research focused
-controlled by academic institutions (Business Schools)
-subscription or purchase per use
CMA, EBSCO, ACM Digital Library, ProQuest, etc.

Advertising Supported
-solely supported by advertising
-accounting for hits on the ads
-no subscriptions
-number of impressions (# of times ad is displayed) (CPM)
-number of clicks on ads (CPC)
-high traffic websites
Search engines, Monster.ca, AOL, MSN, Autotrader, etc.

Mixed Mode
-membership requirements
-subscription fees
-advertising to generate revenue
-uses BOTH advertising and subscription
Hotmail.com, Mustang.com
-to move a customer from fee to paid; more features and less advertising

Fee-For-Transaction/Fee-For-Service
-paid per purchase
-own the product after purchase
-discounter
-pricing info and login
-transaction fees
-trying to remove the middle-man (disintermediation)
Customer Integrated Systems (CIS) where the customer does the work
Ticketselleronline.com

The product does not determine the revenue model, its how the product is delivered

Strategic Issues
Channel/Conflict Cannibalizationgic : online stores stealing sales from the physical stores
Alliances/Distribution Management: ie Amazon.com can sell products (set up a storefront online) for small companies, who are trusted and reliable. Great way for a vendor to test the market for a product
Mobile Commerce: advertising and access to digital information is going to have to hit the mobile market; blackberry, cell phones, text messaging

Web Presence

-website must be attractive

-stickiness (attracting people and getting them to stay and browse)

-provide rich links and content

-help and support

-trusting relationship with customers

-meeting expectations

Chapter 2 Key Concepts

Origins of the Internet: (The physical network)
-1960s: Created by the US Department of Defence in order to keep their information secure and safe
-1972: email was created
-1974: Dr.Serf created TCP/IP (the language used to send data back & forth)
-1979: Usenet (groups or forums)
-1980s: NSF (National Science Foundation) Funded by US gov't to give the public access to all parts of the government
-1995: Internet was privatized and number of hosts increased dramatically

History of the Web: (How we use the Internet to pulish and view information)
-1945: Memex - Vannevar Busch. Designed a machine that would store data
-1960: Ted Nelson - Hypertext
-1987: Ted Nelson - Xanadu
-1989: Tim Berners-Lee: The Father of the World Wide Web. Created a hypertext system
-1993: Mosaic; the first web browser. Leading to FireFox, Internet Explorer, etc.
-2004: Web 2.0 (the production of content on the internet)

Web 1.0: storing info on the web, can access and read. passive consumption of content
Web 2.0: producing content (i.e. Facebook) on the web


Web Languages:
1. SGML:Standard Generalized Markup Language
-HTML: Hypertext Markup Language
-DHTML:
-XML: eXtensible Markup Language
-XHTML: eXtensible Hypertext Markup Language
2. CSS: design, stylesheets
3. Scripting and Programming: Javascript(client side/server side) PHP (databases etc.) Perl, VBScript, Python
4. Tutorials

Web Software:
Web servers: i.e. Apache, IIS, HFS, Server 2 Go, etc.
-[any computer connected to the internet can be a web server]
Web clients: i.e. Opera, Flock, Mozilla, Internet Explorer, etc.

Future of the Internet:
Internet 2 (huge increase in Bandwidth) [only universities are connected at this time]
Semantic Web (click on anything to get background info on it - not just hyperlinks)

Network Technologies:
Hardware: Routers (connects two different networks and has built-in intelligence), Hubs (gives extra connection points for computers or devices), Switches (a larger Hub), Gateways, Access Point, & Modems (POTS, Cable, DSL).
Protocols:
-Internet (TCP/IP[127.0.0.1 is the local IP address "localhost". 192.168.1.x is the address of the internal network]/TelNet/VOIP). Domain names (ie: .com, .de, or .ca) www.whatismyip.com
-Ports allow people to get through your firewall :80
-Mail (SMTP/POP3/IMAP/WebMail [gmail/hotmail/etc.])
-Newsgroups (NNTP)
-Files (FTP/SFTP), Web (HTTP/HTTPS)[S=secure website].
"Rules and guidelines for transfering info over the Internet"

Network Connectivity:

-Public

-Private

-Brandwidth: telephone(POTS), broadband(Cable/DSL), leased-line (TI/T3), wireless
-Wireless: bluetooth, wi-fi

Chapter 1 Summary

Revenue Model vs. a Business Model

Business Model: bottom-line driven
Revenue Model: a channel for generating revenue

Terms:
Globalization (of markets)
Localization (cultural nuances)
Translation (word by word)
EDI (Electronic Data Interchange)
EFT (Electronic Funds Transfer)

-60% of internet content is in english.

E Commerce is: the exchange of info across electronic networks at any stage of the supply chain, whether it is B2B, B2C, or btw public and private sectors. (E Commerce is: commerce, but commerce accelerated and enhanced by IT)

E-Business is: the transformation of key business processes through the use of INternet technologies. Includes front and back-office applications. Redefines old business models. (IBM)

E Commerce is broadly equivalent to E business

-B2B 97%, B2C 3%

E Commerce Categories/Models:

1. B2B: Supply-chain, Value-chain management (ie Dell)
2. B2C: Commerce over the net (Amazon & Dell)
3. C2B: Demand Aggregation (consumer groups)
4. C2C: Community Groups (eBay auctions)
5. B2G: Business to Government

Disintermediation: getting rid of the middle-man (driving the cost out of the supply chain)

1. First Wave: EFT's, EDI's and VAN. Mostly in the US, therefore predominantly English. Piracy, hacking. Customers not technologically "ready".
2. Second Wave: multi-lingual, multi-cultural, integration, broadband connection.

Product/Process Suitability:

• Commodity Item (hard to differentiate from competitors)
• Shipping Profile (how easily it can be packaged/shipped)
• High value-to-wieght value (ratio of shipping cost to selling price)
• Digital products

Pros of Ecommerce

• Increase sales through enhanced customer service
• decrase cost of handling inquiries and transactions
• reach new potential customers
• increase purchasing opportunities for buyers

Cons of Ecommerce

• difficult to calculate ROI
• perishable items difficult to sell
• cultural and lgeal obstacles

Global Issues in Ecommerce: trust, language, cultural, infrastructure

January 7th, 2008:

First blogg entry for BuAd 335-E commerce. This is gonna be greeaat fun.