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Slide 2.1
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Chapter 2
Marketplace Analysis for
E-Commerce
Slide 2.2
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.1 The environment in which e-business services are provided
Slide 2.5
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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 2.6
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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 2.7
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• 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?
Environment Constraints and Opportunities (Continued)
Slide 2.8
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• 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?
Environment Constraints and Opportunities (Continued)
Slide 2.9
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 2.10
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.3 An online marketplace map
Slide 2.11
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Anlaysis of the online marketplace or “marketspace” is a key part developing a long term e-business plan.
Analysis helps to define the main types of online presence that are part of a “click ecosystem”.
Online Marketplace AnalysisOnline Marketplace Analysis
Slide 2.12
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Identify and summarise different segments from an online business in order to then understand their online media consumption, buyer behaviour and type of content and experiences that they will be looking for from intermediaries and your website.
Customer SegmentsCustomer Segments
Slide 2.13
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• Main search engines in each country
• Google Yahoo Microsoft Live Ask
• China = Baidu/Russia = Yandex
• Google Trends Tool – assessing site popularity
• Companies need to know which sites are effective
Search Intermediaries
Slide 2.14
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• Companies need to assess potential online media and distribution partners – aggregators and affiliates.
• Mainstream news media sites eg. FT.com…Google news• Niche or vertical media sites or portals• Price comparison sites – also known as aggregators eg.
Moneysupermarket• Superaffiliates – gain revenue from a merchant they refer traffic to
using a commission based arrangement based on proportion of sales.
• Niche Affiliates or Bloggers – These may be individual but they are important..industry experts etc
Intermediaries & Media Sites
Slide 2.15
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• Aggregators = An alternative term for price comparison sites. Product, price and service information, comparing competitors within a sector such as financial services, retail or travel.
• Their revenue model commonly include affiliate revenues (CPA), pay per click advertising (CPC) and display advertising (CPM)
• Affiliate = A company promoting a merchant typically through a commission based arrangement
Some Definitions!
Slide 2.16
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• CPA = Cost per Acquisition, cost to the advertiser, or the revenue received by the publisher, for each outcome such as a lead or a sale generated after a click to a third party site.
• Pay per click advertising (PPC) = Company pays for text to be displayed on the search engine results pages as a sponsored link, when a key phrase is entered by the search user.
• CPC = Cost per click, cost to the advertiser, or the revenue received by the publisher, of each click of a link to a third party site.
• CPM – cost to the advertiser or revenue received by the publisher when the as is served 1000 times.
Some Definitions!
Slide 2.17
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• Sites a marketer is trying to generate visitors to
Destination Sites
Slide 2.18
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.4 Google Trends for websites – useful for benchmarking the growth of online intermediaries and destination sitesSource: http://trends.google.com/websites
Slide 2.19
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• The a manufacturer or selling organisation delivers products to its customers.
• Traditional marketplaces have a physical location, an internet based market has no physical presence – it is a virtual market place
• The relationship between a company and its channel partners can be dramatically altered by the opportunities afforded online.
Review Marketplace Channel Structures
Slide 2.20
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.5 B2B and B2C interactions between an organization, its suppliers and its customers
Slide 2.21
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
B2B and B2C Characteristics
Characteristic B2C B2B
Proportion of adopters with access
Low to medium High to very high
Complexity of buying decisions
Relatively simple – individual and influencers
More complex – buying process involves users, specifiers, buyers, etc.
Channel Relatively simple – direct or from retailer
More complex, direct or via wholesaler, agent or distributor
Purchasing characteristics Low value, high volume or high value, low volume. May be high involvement
Similar volume/value. May be high involvement. Repeat orders (rebuys) more common
Product characteristic Often standardized items Standardized items or bespoke for sale
Slide 2.22
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.6 Disintermediation of a consumer distribution channel showing (a) the original situation, (b) disintermediation omitting the wholesaler, and (c) disintermediation omitting both wholesaler and retailer
Slide 2.23
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.7 From original situation (a) to disintermediation (b) and reintermediation (c)
Slide 2.24
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Counter-Mediation
• Creation of a new intermediary by an established company
• Example:– B&Q www.diy.com
Reintermediation
The creation of new intermediaries between customers and suppliers
Slide 2.25
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.8 Example channel chain map for consumers selecting an estate agent to sell their property
Slide 2.26
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Search engines
Directories
News aggregators
MR aggregators
Comparers
Exchanges
Meta services
‘A gateway to information resources and services’
Portal
Slide 2.27
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.9 MetacriticSource: CBS Interactive; www.metacritic.com
Slide 2.28
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.10 Number of searches through the Google Keyword ToolSource: Google https://adwords.google.com/select/KeywordTool
Slide 2.29
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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 2.30
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
• Different techniques for generating income
Revenue Models
Slide 2.31
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.11 Alternative perspectives on business models
Slide 2.32
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
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 2.33
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.12 Example spreadsheet for calculating a site revenue modelNote: Available for download at www.smartinsights.com/conversion-model-spreadsheets/
Slide 2.34
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.12 Example spreadsheet for calculating a site revenue model (Continued)Note: Available for download at www.smartinsights.com/conversion-model-spreadsheets/
Slide 2.35
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.13 E-consultancySource: www.econsultancy.com
Slide 2.36
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.14 FireboxSource: www.firebox.com
Slide 2.37
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Figure 2.15 ZopaSource: www.zopa.com.