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Chapter 5
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
E-BUSINESS:MANAGING THECUSTOMER EXPERIENCE
2© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Objectives
1. Describe the growth of Internet use worldwide.
2. Define e-business and e-marketing, and list the opportunities e-marketing presents.
3. Distinguish between a corporate website and a marketing website.
4. List the major forms of B2B e-marketing.
5. Explain business-to-consumer (B2C) e-marketing.
3© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Objectives
6. Identify online buyers and sellers.
7. Describe some of the challenges associated with online marketing and e-business.
8. Discuss how marketers use the communication function of the Web as part of their online marketing strategies.
9. Outline the steps involved in developing successful e-business websites and identify methods for assessing website effectiveness.
4© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
The Digital World
▮ More than three-quarters of the U.S. population access the Internet at home, school, work, or public access sites
▮ What do people do online?• United States – Communication, information,
and purchases• China – Downloading, streaming music, online
gaming, videogaming, and social networking
5© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
The Digital World
▮ In spite of the past success and future potential of the Internet, issues and concerns relating to e-business remain
▮ The benefits and potential of e-business outweigh the concerns and problems
6© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
E-Business
▮ Wide range of business activities that take place via Internet applications
▮ It can be divided into five broad categories:
• E-tailing
• Business-to-business transactions
• Electronic data interchanges (EDI)
7© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
E-Business
• Email, instant messaging, blogs, podcasts, vlogs (video blogs), and other Web-enabled communication tools
• The gathering and use of demographic, product, and other information through Web contacts
8© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
E-Marketing
▮ Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools
▮ Application of electronic tools to contemporary marketing has the potential to:• Greatly reduce costs • Increase customer satisfaction
9© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
E-Marketing
▮ Online marketing - Activities that connect buyers and sellers electronically through interactive computer systems
10© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Table 5.1 - Marketing Capabilities
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Chapter 5 E-Business: Managing the Customer Experience
Web Business Models
▮ Corporate website - Designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties• Build customer goodwill• Assist channel members in their marketing
efforts
▮ Marketing website - Main purpose is to increase purchases by visitors
12© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
B2B E-Marketing
▮ Use of the Internet for business transactions between organizations• Generates sales revenue• Provides detailed product description when
required• Increases efficiency of business-to-business
transactions
13© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
B2B E-Marketing
▮ Tools used:• EDI• Web services• Extranets• Private exchanges• Electronic exchanges• E-procurement
14© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Proprietary B2B Transactions
▮ Electronic data interchange• Exchange of sales information between buyers
and sellers• Requires compatible hardware and software
systems• Cuts paper flow, speeds the order cycle, and
reduces errors• Allows companies to set production schedules
to better match demand
15© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Proprietary B2B Transactions
▮ Web services - Internet-based systems• Allow parties to communicate electronically
with one another regardless of the computer operating system they use
• Rely on open source XML standards
▮ Extranets - Secure networks • Used for e-marketing and accessible through
the firm’s website by external customers, suppliers, or other authorized users
16© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Proprietary B2B Transactions
▮ Intranets• Secure internal networks that help companies
share information among employees
▮ Private exchanges• A secure website at which a company and its
suppliers share all types of data related to e-marketing
• Sometimes called c-business
17© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
E-procurement on Open Exchanges▮ E-Procurement - Use of the Internet to
solicit bids and purchase goods and services from suppliers• Offers benefits to the public sector
18© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
B2C E-Marketing
▮ Selling directly to consumers over the Internet
▮ Also called e-tailing
▮ Driven by convenience and improved security for transmitting financial information
▮ Service providers are important participants in e-tailing
19© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Electronic Storefronts
▮ Company website that sells products to customers
▮ Items for purchase are placed in an electronic shopping cart• Electronic shopping cart - File that holds
items the online shopper has chosen to buy
▮ Increased capability of smartphones influence the growth of online shopping
20© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Benefits of B2C E-Marketing
▮ Competitive pricing• An ideal method for savvy shoppers to compare
prices from dozens of sellers• Easy price comparisons with the aid of bots • For example: pricegrabber.com
▮ Access and convenience - Allows customers to • Place orders from anywhere at anytime• Track products
21© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Benefits of B2C E-Marketing
▮ Personalized service• Software analyzes past user purchases to
customize experience• Goal is to create loyal customers who make
repeat purchases
22© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Online Buyers and Sellers
▮ More than half of all users make at least one purchase online each month
▮ Half of all shoppers spend three quarters of total shopping time doing product research
▮ Many online shoppers are loyal and buy mostly from a single site
▮ Consumers’ online shopping experiences have been steadily improving in quality and convenience
23© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Figure 5.2 - Characteristics of U.S. Internet Users – need new figure
24© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing▮ Safety of online payment• Companies have developed secure payment
systems to protect customer information• Encryption - Encoding data for security
purposes• Secure Sockets Layer - Technology that
encrypts information and provides authentication
25© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing▮ Privacy issues • Customers’ top security concern is protection of
their personal information• Through electronic signatures, parties can enter
into legal contracts online• Electronic signatures - Electronic identification that
allows legal contracts such as home mortgages and insurance policies to be executed online
• Cookies and spyware allow online companies can track their customers’ shopping and viewing habits
26© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing• To reassure customers, many online merchants
have signed on with online privacy organizations such as TRUSTe
• Companies install firewalls to protect private corporate data• Firewall - An electronic barrier between a
company’s internal network and the Internet that limits access into and out of the network
27© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing▮ Frauds and scams• Complaints about Internet fraud are received by
the Internet Crime Complaint Center (IC3)• Phishing - High-tech scam that uses authentic-
looking e-mail or pop-up messages to get unsuspecting victims to reveal personal information
28© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing• Vishing - Scam that collects personal
information through voice response systems; stands for voice phishing
• Payment fraud
29© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing▮ Site design and customer service• Not all websites are well designed and easy to
use• Merchandise delivery and returns pose
challenges• Companies that have traditional stores have
more success satisfying customers than Internet-only retailers
30© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Challenges in E-Business and E-Marketing▮ Channel conflicts and copyright disputes• Channel conflicts - Conflicts among
manufacturers, wholesalers, and retailers• Conflicts in the area of copyright law• When a site hosts content to which someone else
holds the rights
31© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Marketing and Web Communication▮ The Internet has four main functions: • E-business• Entertainment• Information• Communication – Most popular function
32© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Online Communities and Social Networks
▮ Firms use Internet forums, newsgroups, electronic bulletin boards, and social networks that appeal to people who share common interests
▮ Electronic bulletin board - Internet forum that allows users to post and read messages on a specific topic
33© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Online Communities and Social Networks
▮ Social networking sites have grown dramatically• Example: Facebook, Twitter
34© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Blogs and Podcasts
▮ Blog - An online journal for an individual or organization
▮ Some blogs incorporate wikis, a Web page that anyone can edit
▮ Podcast - Online audio or video file that can be downloaded to other digital devices
35© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Blogs and Podcasts
▮ Many companies encourage, employees to start their own blogs
▮ Employee blogs present ethical issues• Companies have strict policies about the
content of employee blogs• Employees can be disciplined over improper
blogging
36© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Promotions on the Web
▮ Banner ad - Strip message placed in high-visibility areas of frequently visited websites
▮ Pop-up ad - Separate window that pops up with an advertising message
37© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Promotions on the Web
▮ Preroll video ad - Marketing messages that play before an online video
▮ Widget - Tiny interactive applications that Internet users can copy and add to their own pages to play music, video, or slide shows
38© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Promotions on the Web
▮ Search marketing - Paying search engines a fee to make sure that the company’s listing appears toward the top of the search results
▮ Companies use online coupons to promote their products• Example: Aeropostale
39© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Building an Effective Web Presence▮ An e-business website can:• Broaden customer bases• Provide immediate access to current catalogs• Accept and process orders• Offer personalized customer service
40© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Successful Site Development
▮ Internet merchants need to attract customers who conduct business on the spot
▮ Entrepreneurs define business goals by creating a community of enthusiasts to:• Build up sales in advance • Pay due attention to tried-and-true marketing
tools that can complement Internet efforts
41© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Establishing Goals
▮ What is the company’s goal for its website?▮ Objectives for the website determine the
scope of the project▮ Key decisions include: • Whether to create and maintain a site in-house • Whether to contract with outside designers
42© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Implementation and Interest
▮ Content - Determines whether visitors return to a site
▮ Available resources should be:• Relevant to viewers• Easy to access and understand• Updated regularly• Written or displayed in a compelling,
entertaining way
43© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Pricing and Maintenance
▮ Variety of costs:• Development• Placing the site on a Web server• Maintaining and updating the site• Promoting the site
▮ Important for a website to stay current
44© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Assessing Site Effectiveness
▮ Web-to-store shoppers - Consumers who use the Internet as a tool to aid them at brick-and-mortar retailers
▮ Click-through rate - Percentage of people presented with a banner ad who click on it
▮ Conversion rate - Percentage of visitors to a Web site who make a purchase
▮ Engagement - Amount of time users spend on sites
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Chapter 5 E-Business: Managing the Customer Experience
Figure 5.4 - Measures of Website Effectiveness
46© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Strategic Implications of Marketing in the 21st Century▮ Bright future for marketers who continue to
take advantage of the tremendous potential of e-business and e-marketing
▮ Cutting edge technology of today will be eclipsed within the next decade by newer technologies
▮ A marketing evolution for organizations has occurred• It embraces Internet technologies as essential parts
of their marketing strategies
47© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 E-Business: Managing the Customer Experience
Scripps Networks Interactive & Food Network Video
Hubway Video
http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/part1.html
http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/ch05.html