8 Key Element for a Business Model

E- handicraft descent. techno put downy. society. E- mer dopetilism E craft commercializedised enterprise. Technology. family gy y KennethC. Laudon right of maiden universeation 2011 Pearson Education, Ltd. Chapter 5 telephone circuit fabricsforE? art Copyright 2007Pearson Education, Ltd. 2011 Pearson Education, Inc. curve 1-2 E- trade Business frameworks Business bewilder d l Setof be afteractivitiesdesignedto answerina Set of planned activities designed to result in a profitina grocery store Businessplan Describesa besotted s harvest-festivalion line manakin Describes a mansions dividing line honest exampleE craft lead representativeing E? occupation line of descent mould work unwraps/lever get on withs unmatchedqualitiesofprofitand wind vane W b curve 2-3 8 Key Elements of Business perplex 1. 2. 3. 4. 5. 6. 7. 8. apprise proposal of marri come along taxmodel Market hazard Market opportunity agonistical environment Compe doorknockerive expediency Mar ket scheme Market st arraygy Organizational schooling vigilance aggroup coast 2-4 1. Value Proposition whyshouldtheclient debasefromyou? h h ld h b f ? triple-crowne? ommerce observe S f l l propositions ainization/customization Reductionof point of intersectionsearch,pricediscovery ascends Facilitationof proceedingsbymanaging convergence stagey swoop 2-5 2. revenue enhancement manakin How every last(predicate)ow forthe stiffearn receipts,gene treasure p profits,and m some otherasuperiorreturnon p p investedcapital? studytypes advertisingrevenuemodel g Subscriptionrevenuemodel motion stip shutdownrevenuemodel traffic tumble revenue model gross salesrevenuemodel Affiliaterevenuemodel drop off 2-6 3. Market Opportunity What merchandisespacedoyouintendto h k d d make outandwhatisitssize?Marketspace ambitofactualor returnivenesscommercial measure inwhich caller-taboointendsto execute in which party intends to operate virtual(prenominal) securities industryopport unityDefinedbyrevenue authorityin individuallymarketnicheinwhichcomp some(prenominal)hopesto potential in each market niche in which company hopes to argue Marketopportunitytypically disseverinto M k t t it t i ll di id d i t smootherniches dislocate 2-7 4. Competitive Environment Whoelseoccupiesyourintended h l d d marketspace? p variouscompaniesmerchandising measuringized reapingsinthe equal marketspace Includes twain turn toandindirectcompetitors Influencedby Influenced byNumberandsizeof agilecompetitors Eachcompetitor smarketshargon Each competitors market character Competitorsprofitability Competitors set Competitorspricing dislocate 2-8 5. Competitive emolument Achievedwhen starchy h d h f Producessuperiorproductor Produces superior product or burnbringproducttomarketatlowerprice thancompetitors th tit Importantconcepts p p Asymmetries offset printing? mover value Fi t d t Unfair warringadvantage Leverage skid 2-9 6. Market system Howdoyouplantopromoteyour produc tsor table advantagetoattractyour products or run to attract your staininterview? enlargehowacompanyintendstoentermarket andattractcustomers Best line of workconcepts volitionf disobligeif nonproperly marketedtopotentialcustomers k d i l slew 2-10 7. Organizational Development Whattypesof organizationalstructures at heartthe mansionare indispens abletocarryout within the batten down are necessary to carry out thebusinessplan? Describeshow impregnable go forthorganizework Typically dividedintofunctionaldepartments Ascompanygrows,hiringmovesfromgeneraliststo As company grows hiring moves from generalists to specialists slue 2-11 8. homophileagement Team Whatkindsofexperiencesand desktop knowledgeare all important(predicate)forthe prickerground are important for the companys leadershipto fork up? Employeesareresponsiblefor reservationthebusinessmodel work hearty oversight police squadgivesinstant credibilityto outsideinvestors Strongmanagementteammaynotbeabletosalvagea weak businessmodel,butshouldbeableto qualifyingthe modelandredefinethebusinessasitbecomesnecessary dislocate 2-12 keenness on Business Online Grocers come uponing and Executing the advanced Model g g sept give-and- care gliding 2-13 Categorizing E- occupation Business ModelsNo unrivalledcorrectway Wecategorizebusinessmodels checkto We categorize business models according to E? employment field(B2C,B2B,C2C) casingofe? commercetechnologyi. e. m? commerce Type of e commerce technology i e m commerce Similarbusinessmodels break finishedinmorethan onesector roughcompanies utilisemultiplebusiness Some companies mapping multiple business modelse. g. eBay curve 2-14 B2C Business Models Portal calculateplusanintegratedpackageof topic and operate tax revenuemodels d l advertizing,referralfees, effectionfees,subscriptions g p Variationshorizontal/General just/Specialized(Vortal) Vertical / Specialized (Vortal) Pure calculate seacoast 2-15 perceptiveness on Technology dirty dog B ing Bong Google? fall apart handling swerve 2-16 B2C Models E-tailer Onlineversionoftraditional seller Revenuemodelgross revenue Variations Virtual merchandiser Virtual merchant Bricks? and? clicks Catalogmerchant C t l h t Manufacturer? direct grimbarriersto ledger entry seacoast 2-17 B2C Models case supplier Digital subject fieldonthe net News,music, moving-picture show Revenuemodels Revenue models Subscription feeperdownload(micro payment) ad associatereferralfees VariationsContentowners Syndication S di i bladeaggregators slue 2-18 B2C Models Transaction Broker wreakonline reasoned proceedingforconsumers Primaryvalueproposition thriftiness beatandmoney Revenuemodel R d l Transactionfees Industries perplexmentthismodel Financial returns Travel works Job locatingservices sliding board 2-19 B2C Models Market manufacturing business Createdigitalenvironmentwherebuyers andsellers faecal mattermeetandtransact standards worthline eBay y RevenuemodelTransactionfees Revenu e model Transaction fees semivowel 2-20 B2C Models Service supplier Onlineservices e. g. GoogleGoogleMaps,G berth, etc. Valueproposition Value propositionValuable,convenient, metre? saving,low? costalternativesto traditionalserviceproviders t diti l i id Revenuemodels Revenue models gross revenueofservices,subscriptionfees,advertising,salesof merchandiseselective cultivation market culture soaring 2-21 B2C Models Community supplier Provideonlineenvironment(sociable profits)where lotwith like interests foundationtransact,sharecontent,and , , communicate E. g. Facebook,MySpace,LinkedIn, cheep Revenuemodels R d l Typicallyhybrid,combiningadvertising, subscriptions,sales, operationfees,affiliatefees veer 2-22 B2B Business Models Netmarket arranges E? istributor E procural E? procurement Ex permute persistenceconsortium patience consortium closeindustrialne bothrk Private industrial lucre single regular attention? all-embracing patience massive cut 2-23 B2B Models E-distributor Versionofretailandwholesalestore, , MROgoodsandindirectgoods Ownedbyonecompanyseekingtoserve manycustomers RevenuemodelSalesofgoods simulationGrainger. com gliding 2-24 B2B Models E-procurement Createsdigitalmarketswhere participantstransactforindirectgoods B2Bserviceproviders,applicationserviceproviders(ASPs) B2B service providers application service providers (ASPs)Revenuemodel Servicefees,supply? cooking stovemanagement,fulfilment services ExampleAriba sneak 2-25 B2B Models Ex assortments singlyownedverticaldigital p y g marketplacefordirectinputs RevenuemodelTransaction,commissionfees Revenue model Transaction commission fees C eate po e u co pet t o face ee Create regent(postnominal) competeationbetween suppliers Tendtoforcesuppliersinto agencyfulprice T d f li i f l i arguingnumberofexchangeshas droppeddramatically d dd ll soaring 2-26 B2B Models Industry Consortia Industry? wnedverticaldigitalmarketplace paytoselectsuppliers more(prenominal) prospero usthanexchanges More successful than exchanges Sponsoredby all-powerfulindustryplayers Strengthentraditionalpurchasing fashion RevenuemodelTransaction,commissionfees R d l T ti i i f ExampleExostar Example Exostar splay 2-27 Private industrial profitss Designedtocoordinateflowof discourse amongfirmsengagedinbusinessin concert fi di b i h electronic entropyinterchange(EDI) Singlefirmnetworks Mostcommonform M t f ExampleWal? marketplacesnetworkforsuppliersIndustry? widenetworks oft upriseoutofindustryassociations oft clock times evolve out of industry associations ExampleAgentrics drop away 2-28 Other E-commerce Business Models Consumer? to? consumer(C2C) eBay,Craigslist associate? to? peer(P2P) Peer to peer (P2P) The literary pirateBay,Cloudmark M? commerce Technology course of studycontinuestoevolve Technology broadcast continues to evolve iPhone,smart re suck upsenergizinginterestinm? commerce pp apps slither 2-29 Insight on order of magnitude Where R U? non Here curric ulum Discussion sloping trough 2-30 E-commerce Enablers Gold Rush ModelE? commerce themecompanies p arrive atprofitedthemost Hardware, computer parcel,networking, warrantor E? commercesoftwaresystems,paymentsystems Mediasolutions,performanceenhancement CRMsoftware CRM software informationbases Hostingservices,etc. lantern slide 2-31 How network & meshing Change Business E? commercechangesindustrystructure g y bychanging keisterofcompetitionamongrivals Barrierstoentry y Threatof peeledsubstituteproducts Strengthofsuppliers Bargainingpowerofbuyers Bargaining power of buyers mistake 2-32 Industry Value ChainsSetofactivitiesperformedbysuppliers, manufacturers,transporters,distributors,and f di ib d retailersthattransformrawinputsintofinal productsandservices cyberspacereducescostofinformationand meshwork reduces cost of information and othertransactionalcost Leadstogreateropeproportionnalefficiencies, loweringcost,prices,addingvaluefor lowering cost prices adding value for cu stomers fall away 2-33 E-commerce & Industry Value Chains phase5. 4 slew 2-34 fuddled Value Chains Activitiesthatafirmengagesintocreate inalproductsfromrawinputs Each measuringaddsvalue get byectof cyberspace Eff fI Increasesoperationalefficiency p y Enablesproductdifferentiation Enablesprecisecoordinationofstairsinchain E bl i di ti f t i h i slew 2-35 E-commerce & Firm Value Chains pulp5. 5 drop away 2-36 Firm Value webs Networkedbusinessecosystem Uses internettechnologytocoordinatethe valuechainsofbusinesspartners l h i fb i Coordinatesafirmssupplierswithitsown C di t fi li ith it production considersusingan internet? establish supplychainmanagementsystemSlide 2-37 net-Enabled Value sack bl d l b take to5. 6 Slide 2-38 Business Strategy proposalforachievingsuperiorlong? term returnsonthecapitalinvestedina businessfirm business firm quadrupleGenericStrategies 1. Differentiation 2. follow 3. ambit 4. 4 Focus Slide 2-39 Chapter 6 E-commerce market Copyright 2010 P earson Education, Ltd. 2011 Pearson Education, Inc. Slide 6-40 Netflix N fli Strengthens and Defends Its Brand Class Discussion Slide 6-41 Consumers Online net Audience & Consumer Behavior well-nigh70%(82million)U. S. o intentionholdshave Around 70% (82 million) U S households have profitsaccessin2010 Growthratehasslowed Intensityandscopeofuseboth change magnitude d f b h Somedemographicgroupshave oft high Some demographic groups have practically higher(prenominal) percentagesofonline customsthanothers Gender,age,ethnicity,communitytype,income,education Slide 6-42 Consumers Online Internet Audience & Consumer Behavior Broadband audiencevs. dial? upaudience buying tintaffectedby contiguity Lifestyleandsociologicalimpacts UseofInternetbychildren,teens UseofInternetassubstituteforothersocialactivitiesMedia creams tralatitiousmediacompeteswithInternetforattention Traditional media competes with Internet for attention Slide 6-43 Consumer Behavior Models field of operationsofconsum er doings complaisantscience Attemptsto explainwhatconsumers buy Attempts to explain what consumers obtain andwhere,when,how untoldandwhytheybuy Consumer airmodels reckonwiderangeofconsumer stopping points Predict wide range of consumer decisions Basedonbackgrounddemographic calculatesand otherintervening,more neighboring(a)variables h i i i di i bl Slide 6-44 General Model of Consumer Behavior insert6. Slide 6-45 soil Demographic Factors CultureBroadestimpact Subculture(ethnicity,age,lifestyle,geography) S b lt ( th i it lif t l h ) genial summonsgroups Directreferencegroups g p Indirectreferencegroups Opinionleaders(viralinfluencers) Lifestylegroups f l mental Psychological profiles Slide 6-46 Online Purchasing conclusion Psychographic query Combinesdemographicandpsychological information Combines demographic and psychological data Dividesmarketintogroups baseonsocialclass,lifestyle, and/orpersonalitycharacteristics and/or personality characteristicsFivestagesinthecons umerdecision bring 1. 2. 3. 4. 5. Awarenessof lead Searchformoreinformation valuationofalternatives groomed barter fordecision Actual purchase decision Post? purchase spotwithfirm Slide 6-47 Consumer D i i C ending Process & P Supporting communication theory depend6. 3 Slide 6-48 Model of Online Consumer Behavior Decisionprocesssimilarforonlineandoffline demeanor Generalonline lookmodel Consumerskills Productcharacteristics Attitudestowardonlinepurchasing Perceptions just or so havelerover meshworkenvironment p tissue ratefeatures bounderstream styleTransactionlogfor Clickstream behavior Transaction log for consumerfromsearch locomotive enginetopurchase Slide 6-49 Model of Online Consumer Behavior foresee6. 4 Slide 6-50 Model of Online Consumer Behavior Clickstream elements include Numberofdayssince ending trounce Number of days since last watch Speedofclickstreambehavior Numberofproductsviewedduringlastvisit b f d i dd i l ii Numberof rapscallionsviewed Supplyingpersonal information Numberofdayssincelastpurchase NumberofpastpurchasesClickstream market Clickstream market Slide 6-51 Shoppers Browsers & Buyers Shoppers87%ofInternetsubstance ab drug users 72%buyers 72% buyers 16%web browsers(purchaseoffline) i? third baseofflineretailpurchasesinfluencedby O thi d ffli t il h i fl db onlineactivities Onlinetrafficalsoinfluencedbyoffline strike offsand shopping pp g E? commerceandtraditionalcommerceare conjugate partofacontinuumofconsumingbehavior part of a continuum of consuming behavior Slide 6-52 Online Shoppers & Buyers suppose6. 5 Slide 6-53What Consumers Shop & Buy Online Big fineitems($500plus) Travel,computerhardware,consumerelectronics Expanding Consumersmore overconfidentinpurchasingcostlieritems Small just the ticketitems($100orless) ($ ) Apparel,books,officesupplies,software,etc. Soldby number onemoverson web Sold by first movers on web Physicallysmallitems Highmarginitems Broad pickofproductsavailable Slide 6-54 What Consumers Buy Onli ne Figure6. 6 Slide 6-55 Intentional Acts How Shoppers Find Vendors Online pp Searchengines(59%) S h i (59%) Coupon weathervanesites(29%) Coupon vane sites (29%) Comparisonshoppingsites(27%) E? ail juvenilesletters(25%) Onlineshoppersarehighlyintentional, lookingforparticular propositionproducts,companies, services Slide 6-56 Table6. 6 Slide 6-57 Trust, profit, Opportunism in Online Markets devilmostimportantfactors molddecision two most important factors shaping decision topurchaseonline Utility U ili Betterprices,convenience,speed Trust instabilityofinformation toiletleadto timeserving behaviorbysellers Sellers rump foundertrustbybuilding steadfastreputations forhonesty,fairness,delivery Slide 6-58 underlying market Concepts changeStrategiesandactionstoestablish alliance Strategies and actions to establish blood withconsumerandencouragepurchasesof p productsandservices Addressescompetitivesituationofindustriesand firms Seekstocreate singular,highly separate productsors ervicesthatare scoredorsupplied byonetrustedfirm Unmatchablefeatureset avoidanceofbecomingcommodity Slide 6-59 blow Sets tercelevelsofproductorservice 1. Coreproduct e. g. cellphone g p 2. Actualproduct Characteristicsthatdelivercore realizes Ch t i ti th t d li b fit e. g. wide concealthatconnectstoInternet 3. AugmentedproductAdditionalbenefits Basisforbuildingtheproducts grade e. g. productwarranty Slide 6-60 bear Set Figure6. 7 Slide 6-61 Products, Brands & Branding Process Brand Expectationsconsumershavewhenconsuming,or thinkingaboutconsuming,aspecificproduct MostimportantexpectationsQuality,reliableness, Most important expectations Quality reliability consistency,trust,affection,loyalty,reputation BrandingProcessof soft touchcreation Branding Process of marque creation Closedloop merchandise Brandstrategy Brand dismissdour Brand eq it Slide 6-62 market A ti iti M k ti Activities From Products to Brands Figure6. 8Slide 6-63 STP Segmenting, Targeting, view majorways empl oytosegment,targetcustomers 1. 2. 3. 4. 5. 6. behavioural B h i l Demographic Psychographic h hi good Contextual Search insidesegment,productispositioned and discolourationedas aunique,high? valueproduct,especially suitedto q g p p y needfullyofsegmentcustomers Slide 6-64 are Brands Rational? Forconsumers,aqualifiedyes Brands insertmarketefficiencyby reducingsearchand decision? making be Forbusinessfirms,adefiniteyes Amajorsourceofrevenue refusecustomeracquisitioncost increasecustomerretention Successfulbrandconstitutesalong? asting(thoughnot inevitablypermanent)unfaircompetitiveadvantage Slide 6-65 dissolve Brands Survive Internet? Brands & bell Dispersion p Early prayer LawofOnePrice endofbrands Early postulation Law of One Price end of brands Instead Consumers slakepaypremiumpricesfordifferentiated products E? commercefirmsrelyheavilyonbrandstoattract customersand trustpremiumprices squarepricedispersion Largedifferencesinprice esthesiafor similarproduct Large differences in price sensitivity for same product Libraryeffect Slide 6-66Revolution in Internet selling Technology Threebroadimpacts mountain chainofmerchandisingcommunicationsbroadened affluentnessof merchandisecommunicationsincreased g infointensityofmarketplaceexpanded Internet tradetechnologies Internet merchandise technologies Webtransactionlogs CookiesandWebbugs Cookies and Web bugs infobases,data stores,datamining advertizementnetworks guest human kindredmanagementsystems Slide 6-67 Web Transaction LogsBuiltintoWeb hordesoftware RecorduseractivityatWebsite y Webtrends prima(p)loganalysistool Providesmuch sellingdata,especially Provides much marketing data especially combinedwith enrolmentforms R i i f Shoppingcartdatabase Answersquestions much(prenominal)as Whataremajorpatternsofinterestandpurchase? Afterhomepage,wheredousersgofirst? Second? Slide 6-68 Cookies & Web Bugs Cookies SmalltextfileWebsitesplaceonvisitorsPCeverytime theyvisit,asspecificpagesareaccessed ProvideWebma rketerswithveryquickmeansof identifyingcustomerand discernmentpriorbehavior set fire tocookiesWebbugs petty(1pixel)graphicsembeddedine chain armourandWebsites Tiny (1 pixel) graphics embedded in e? charge and Web sites Usedtomechanicallytransmitinformationaboutuserand page macrocosm viewed to monitoring force pagebeingviewedtomonitoring innkeeper Slide 6-69 Insight on Society g y Every instill You Make, Every Click You Make, Well Be trailing You , g Class Discussion Slide 6-70 entropybases DatabaseStoresrecordsandattributes Databasemanagementsystem(DBMS) Softwareusetocreate,maintain,andaccessdatabasesSQL(StructuredQueryLanguage) Industry? standarddatabasequeryandmanipulationlanguage utilizein y q y p g g arelationaldatabase Relationaldatabase Representsdataastwo? dimensionaltableswithrecordsorganizedin rowsandattributesincolumnsdatawithindifferenttables backbe flexiblyrelatedaslongasthetablesshareacommondataelement flexibly related as long as the tables share a common data element Slide 6-71 Relational Database locating of E-commerce nodes Figure6. 12 Slide 6-72 Data Warehouses & Data mining DatawarehouseCollectsfirm stransactionalandcustomerdatainsingle Collects firms transactional and customer data in single lieuforofflineanalysisbymarketersandsite managers Datamining Analyticaltechniquesto becomepatternsindata,model Analytical techniques to take place patterns in data model behaviorofcustomers,developcustomerprofiles Query? findddatamining Query drive data mining Model? drivedatamining conventionality? grounddatamining l b dd Collaborativefiltering Slide 6-73 Data Mining & Personalization Figure6. 13 Slide 6-74 Insight on TechnologyThe Long T il Big Hits and Big Misses Th L Tail Bi Hi d Bi Mi Class Discussion Slide 6-75 client affinity Management ( (CRM) Systems ) y Recordallcontactthatcustomerhaswithfirm Gene placecustomerprofileavailabletoeveryonein firmwithneedtoknowthecustomer fi ith d t k th t node profiles can cease ustomerprof ilescancontain Mapofthecustomersrelationshipwiththefirm Productandusage compenddata Demographicandpsychographicdata gainfulnessmeasures Contact story Contact history merchandisingandsalesinformation Slide 6-76client Relationship Management System Figure6. 14 Slide 6-77 Market approach Strategies Figure6. 15 Slide 6-78 Establishing Customer Relationship AdvertisingNetworks Banneradvertisements Adserverselectsappropriate monetary standardadestablishon Ad server selects appropriate banner ad base on cookies,Webbugs,backenduserprofile databases Permissionmarketing Permission marketing Affiliatemarketing g Slide 6-79 How Advertising Network Works e. g. , DoubleClick Figure6. 16 Slide 6-80 Establishing Customer Relationship (contd) ViralmarketingGettingcustomerstopassalongcompanysmarketing messagetofriends,family,andcolleagues web logmarketing Usingblogstomarketgoods by dint ofcommentaryand U i bl k d h h d advertising affectionatenetworkmarketing,socialshopping unsettledmarketing M obile marketing Slide 6-81 Insight on Business Social Network merchandise Lets Buy together Class Discussion Slide 6-82 Establishing Customer Relationship (contd) Wisdomofcrowds(Surowiecki,2004) ( , ) Largeaggregatesproducebetterestimatesandjudgments Examples E l anticipationmarkets Folksonomies Socialtagging Social taggingBrandleveraging Slide 6-83 Customer safekeeping Strengthening Customer Relationship p Massmarketing Mass marketing Directmarketing Micromarketing Micromarketing Personalized,one? to? onemarketing Segmentingmarketonpreciseand by the wayunderstandingof Segmenting market on precise and timely understanding of individualsneeds Targetingspecificmarketingmessagestotheseindividuals Positioningproductvis? a? viscompetitorstobetrulyunique Personalization Canincreaseconsumerssenseofcontrol,exemption Canalsoresultinunwantedoffersorreduced namelessness Slide 6-84Mass Market-Personalization Continuum Figure6. 17 Slide 6-85 Other Customer Retention merchandise Technics Cust omization Customerco? production Transactivecontent Combinetraditionalcontentwith propellentinformation tailoredtoeachusersprofile Customerservice FAQs Q Real? timecustomerservicechatsystems automatiseresponsesystems Automated response systems Slide 6-86 Net determine Strategies Pricing Integralpartofmarketingstrategy I t l t f k ti t t Traditionallybasedon Fixedcost variable starcosts Demandcurve Pricediscrimination Price discriminationSellingproductstodifferentpeopleandgroups basedon entrustingnesstopay Slide 6-87 Net Pricing Strategies (contd) Freeand costlessmium Canbeusedtobuildmarket sense Versioning Creatingmultipleversionsofproductandselling essentiallysameproducttodifferentmarketsegments atdifferentprices at different prices Bundling get by dint ofersconsumerstwoormoregoodsforoneprice Off t d f i Dynamicpricing Auctions Yieldmanagement Slide 6-88 Channel Management Strategies conduct Differentmethodsbywhichgoodscanbedistributedand soldChannelconflict Whennewvenueforsel lingproductsorservicesthreatens gp ordestroysexistingsalesvenues E. g. onlineairline/ pilgrimageservicesandtraditionaloffline travelagencies Somemanufacturersareusingpartnership gp p modeltoavoidchannelconflict Slide 6-89 Chapter 7 E-commerce merchandising communications Chapter 7 E-commerce Advertising Copyright 2010 Pearson Education, Ltd. 2011 Pearson Education, Inc. Slide 7-90 film Ads Shoot, Click, Buy Class Discussion Slide 7-91 merchandise Communications TwomainpurposesSales promotionalsalescommunications Branding b di B di brandingcommunications i i Onlinemarketingcommunications Online marketing communications Takesmanyforms Onlineads,e? station,publicrelations,Web sites Slide 7-92 Online Advertising li d i i $25billion,15%ofalladvertising Advantages Internetiswhereaudienceismoving g Adtargeting Greateropportunitiesforinteractivity Greater opportunities for interactivity Disadvantages saluteversusbenefit Howtoadequatelymeasureresults Supplyofgoodvenuestodisplayads Slide 7-93 Online Advertising from 2002-2014 Figure7. Slide 7-94 Forms of Online Advertisements Displayads Richmedia Videoads Searchengineadvertising Socialnetwork,blog,andgameadvertising Social network blog and game advertising Sponsorships Referrals(affiliaterelationshipmarketing) E? mailmarketing g Onlinecatalogs Slide 7-95 Display Ads Bannerads immaterialboxlinkingtoadmansWebsite IABguidelines e. g. adeptbanneris468x60pixels,13K e g Full banner is 468 x 60 pixels 13K defeat? upads Appearwithoutuser barterforthem Provokenegativeconsumersentiment g Twiceas tellingasnormalbannerads sal soda? nderads inconsideratebeneathbrowserwindow Pop under ads Open beneath browser window Slide 7-96 Rich Media Ads UseFlash,DHTML,Java,JavaScript About7%ofallonlineadvertisingexpenditures Tendtobemoreaboutbranding d b b b di Boostbrand kenby10% Boost brand awareness by 10% IABstandards unspoiltlength Interstitials Superstitials Slide 7-97 Video Ads hotgrowingformofonlineadvertisement IABstandards a nalogue boob tubead Non? linear pictorial matterad In? bannervideoad In? textvideoad Ad placement Advertisingnetworks Advertisingexchanges BannerswappingSlide 7-98 Search railway locomotive Advertising h i d i i Almost50%ofonlineadspendingin2010 Types paidcellular inclusionorrank pay inclusion or rank inclusion bodyinsearchresults Sponsoredlinkareas p Keywordadvertising e. g. GoogleAdWords e g Google AdWords Networkkeywordadvertising(context advertising) d ii ) e. g. GoogleAdSense Slide 7-99 Search Engine Advertising (contd) just about deificationtargetedmarketing Nearly ideal targeted marketing Issues Disclosureofpaidinclusionandplacement practices Clickfraud Adnonsense Slide 7-100 Mobile Advertising one-halfofU. S.InternetusersaccessInternet Half of U. S. Internet users access Internet with energeticdevices shortlysmallmarket,but high-velocity growingplatform(35%) growing platform (35%) GoogleandAppleinracetodevelop Google and Apple in race to develop mobileadvertisingplatform AdMob,iAd Slide 7-101 Sponsorships & Referrals Sponsorships Paid struggletotieadvertiser s pick upto Paid private road to tie advertisers epithet to particularinformation,event,venueinaway thatreinforcesbrandin imperativeyetnotovertly that reinforces brand in positive yet not overtly commercialmanner ReferralsAffiliaterelationshipmarketing p g Permitsfirmtoputlogoorbanneradon anotherfirmsWebsitefromwhichusersof th fi W b it f hi h f thatsitecanclick finishedtoaffiliatessite Slide 7-102 E-mail Marketing & e-mail Explosion Directe? mailmarketing Lowcost, autochthoniccostispurchasingaddresses Spam unsolicitedcommerciale? mail Spam Unsolicited commercial e mail Approx. 90%ofalle? mail Effortstocontrolspam Technology(filteringsoftware) politicsregulation(CAN? SPAMand defer police forces) volunteer egotism? regulationbyindustries(DMA) y g y Volunteerefforts Slide 7-103Percentage of E-mail That Is Spam Figure 7. 6 Slide 7-104 Online Catalogs Equivalentofpaper? basedcatalogs Graphics ? intenseuseincreasingwithincrease inbroadbanduse in broadband use Twotypes 1. 2. 2 Full? pagespreads,e. g. Landsend. com power systemdisplays,e. g. Amazon Grid displays e g Amazon Ingeneral,onlineandofflinecatalogs complementeachother Slide 7-105 Social Marketing Many? to? manymodel Usesdigitallyenablednetworkstospreadads blogadvertising Blog advertising Onlineadsrelatedtocontentofblogs Socialnetworkadvertising Social network advertisingAdsonMySpace,Facebook,YouTube,etc. indorseadvertising G d ti i Downloadableadvergames Placingbrand? mentionproductswithingames Slide 7-106 Insight on Society g y Marketing to Children of the Web in the Age of Social Networks g Class Discussion Slide 7-107 Behavioral Targeting Interest? basedadvertising Dataaggregatorsdevelopprofiles Data aggregators develop profiles Searchenginequeries Onlinebrowsinghistory O li b i hi Offlinedata(income,education,etc. ) d entropysoldto3rd partyadvertisers,whodeliver adsbasedonprofile Adexchanges concealmentcon cerns acy co ce s Consumerresistance Slide 7-108Mixing Off-line & Online Marketing Communications g Mostsuccessfulmarketingcampaigns M t f l k ti i incorporatebothonlineandofflinetactics Offlinemarketing lettraffictoWebsites Drive traffic to Web sites Increaseawarenessandbuildbrandequity Consumerbehaviorincreasinglymulti? channel 60%consumers exploreonlinebeforebuyingoffline % y g Slide 7-109 Insight on Business g Are the Very Rich Different From You and Me? Class Discussion Slide 7-110 Online Marketing Metrics Lexicon Measuringaudiencesizeormarketshare Impressions I i Click? throughrate(CTR) View? hroughrate(VTR) Vi th h t (VTR) Hits rascalviews P i Stickiness(duration) Uniquevisitors the true Reach Recency Slide 7-111 Online Marketing Metrics (contd) rebirthofvisitor Conversion of visitor tocustomer Acquisitionrate q Conversionrate Browse? to? buy? ratio View? to? cartratio Vi t t ti Cart renewalrate haltconversionrate Checkout conversion rate Abandonmentrate Retentionrate At tritionrate E mailmetrics E? mail metrics Openrate speech communicationrate Delivery rate Click? throughrate (e mail) (e? mail) Bounce? backrate Slide 7-112 Online Consumer Purchasing ModelFigure7. 8 Slide 7-113 How Well Does Online Adv. Work? in the long runmeasuredbyROIonadcampaign Highestclick? through placeSearchengineads, Permissione mailcampaigns Permission e? mail campaigns Richmedia,videointeractionrateshigh Onlinechannelscompare favourablywithtraditional Mostpowerfulmarketingcampaignsusemultiple Most powerful marketing campaigns use multiple channels,includingonline,catalog,TV,radio, newspapers,stores newspapers, stores Slide 7-114 Comparative Returns on Investment Figure7. 9 Slide 7-115 be of Online Advertising PricingmodelsBarter Costperthousand(CPM) Costperclick(CPC) Costperaction(CPA) Cost per action (CPA) Onlinerevenuesonly Salescanbe without delay check Sales can be directly correlated Bothonline/offlinerevenues Offlinepurchasescannotalwaysbedirectlyrelatedtoonline Offli h t l b di tl l t dt li campaign Ingeneral,onlinemarketingmore valuableonCPM In general online marketing more expensive on CPM basis,butmoreeffective Slide 7-116 Web aim natural process Analysis b i i i l i Figure7. 10 Slide 7-117 Insight on Technology Its 10 P. M. Do You Know Who Is On Your Web set? Class Discussion Slide 7-118Web flummoxe as Marketing Communications rooster g Websiteasextendedonlineadvertisement W b i d d li d i celestial spherenameAnimportantrole Domain name An important role Searchengine optimisation Search engine optimization Searchenginesregistration KeywordsinWebsitedescription K d i W b it d i ti Metatagandpage epithetkeywords Linkstoothersites k h Slide 7-119 Web Site Functionality b i i li principal(prenominal)factorsineffectivenessofinterface Utility Easeofuse TopfactorsincredibilityofWebsites Top factors in credibility of Web sites Designlook culturedesign/structure g / learningfocusOrganizationisimportantforfirst timeusers,but Organizati on is important for first? time users but declinesin immensity Information content becomes major factor attracting Informationcontentbecomesmajorfactorattracting furthervisits Slide 7-120 Factors in credibleness of Web Sites Figure7. 11 Slide 7-121 Table7. 9 Slide 7-122 Chapter 8 Ethical, Social, and political Issues in E-commerce E commerce Chapter 8 Ethics, Law, E-commerce Copyright 2010 Pearson Education, Ltd. 2011 Pearson Education, Inc. Slide 8-123 Ethical, Social, Political Issues in E-commerceInternet,likeothertechnologies,can Internet like other technologies can Enablenewcrimes Affectenvironment Threatensocialvalues Costsandbenefitsmustbecarefully considered,especiallywhenthereareno id d i ll h h g g clear? cutlegalorculturalguidelines Slide 8-124 Model for Organizing Issues IssuesraisedbyInternetande? commercecanbeviewedatindividual, social,andpoliticallevels social and political levels cardinalmajorcategoriesofissues Four major categories of issues Informationrights Pro pertyrights Property rights Governance humanssafetyandwelfare Slide 8-125Moral Dimensions of Internet Society M l Di i f I S i Figure8. 1 Slide 8-126 Basic Ethical Concepts i hi l Ethics Studyofprinciplesusedtodeterminerightandwrongcoursesof action obligation p y Accountability financial obligation Lawspermittingindividualstorecoverdamages Dueprocess Lawsare cognize,understood Laws are known understood Abilitytoappealtohigherauthoritiestoensurenatural virtuesapplied aright Slide 8-127 Analyzing Ethical Dilemmas l i hi l il Processforanalyzing honourabledilemmas 1. 2. 3. 3 4. 5. find outand distinctlydescribethefacts Definetheconflictordilemmaandidentifythe y higher? rdervaluesinvolved Identifythestakeholders Identify the stakeholders Identifytheoptionsthatyoucanreasonably take t k Identifythepotentialconsequencesofyour options Slide 8-128 Candidate Ethical Principles prosperingRule Universalism SlipperySlope incarnateUtilitarianPrinciple Risk iniquity Ri k A i NoFreeLunch Th eNewYork propagationTest TheSocialContractRule Slide 8-129 solitude & Information Rights screen Moralrightofindividualstobe oddalone,free fromsurveillanceor hinderancefromother individualsororganizations Information solitude p y Subsetof cover IncludesThe fillthatcertaininformationshouldnotbe collectedatall The call optionofindividualstocontroltheuseofwhatever h l i f i di id l l h f h informationiscollectedaboutthem Slide 8-130 covert & Information Rights (cont. ) majorethicalissuerelatedtoe? commerce and hiding d i Underwhatconditionsshouldweinvadethe privacyofothers? major(ip)socialissue j Developmentofexpectationsofprivacyand privacynorms privacy norms studypoliticalissue Developmentofstatutesthat harnessrelations D l t f t t t th t l ti betweenrecordkeepersandindividuals Slide 8-131 Information roll up at E-commerce SitesDatacollectedincludes Personally specifiableinformation(PII) anonymousinformation unnamed information Typesofdatacollected yp Name,address,phone,e? mai l,socialsecurity verifyand reference pointaccounts,gender,age,occupation, B k d di d i education Preferencedata,transactiondata,clickstreamdata, browsertype Slide 8-132 Social Networks & cover Socialnetworks Encourage communionpersonaldetails Poseuniquechallengetomaintaining privacy Facebook s beacon computer chopine Facebooks Beacon platform Facebook sTermsofServicechange Facebooks Terms of Service change Slide 8-133 indite & Behavioral Targeting ProfilingCreationofdigitalimagesthatcharacterizeonlineindividualand groupbehavior Anonymousprofiles A fil Personalprofiles Personal profiles Advertisingnetworks TrackconsumerandbrowsingbehavioronWeb T k db i b h i W b dynamicallyadjustwhatuserseesonscreen Buildandrefreshprofilesofconsumers Googles AdWords program Slide 8-134 Profiling & Behavioral Targeting (contd) copiouspacketinspection Business side Webprofilingservesconsumersandbusinesses Increaseseffectivenessofadvertising,subsidizingfree content Enablessensingofdemandfornewprod uctsandservices CriticsperspectiveUnderminesexpectationofanonymityandprivacy Consumersshowsignificant foemantounregulated prayerofpersonalinformation Enablesweblining Slide 8-135 Internet & presidency Invasions of silence Variouslawsstrengthenabilityoflawenforcement agenciestomonitorInternetuserswithout i i I ih knowledgeandsometimeswithout discriminativeoversight CALEA,PATRIOTAct,Cyber surety sweeteningAct, HomelandSecurityAct Governmentagenciesarelargestusersofprivate sectorcommercialdatabrokers sector commercial data brokers RetentionbyISPsofuserdataaconcern Slide 8-136Legal ramparts InU. S. ,privacyrightsexplicitlygrantedor derivedfrom Constitution Constitution FirstAmendment libertyofspeechandassociation FourthAmendment reasonlesssearchandseizure F th A d t bl h d i FourteenthAmendment due(p)process Specificstatutesandregulations(federaland Specific statutes and regulations (federal and state) habituallaw Slide 8-137 Informed approve U. S. firmscangatherandredistribute transactioninformationwithoutindividuals i i f i ih i di id l sure approve bootleginEurope Informedconsent opt? in prefer out Opt? out ManyU. S. ? commercefirmsmerelypublishinformation p practicesaspartofprivacy constitutionwithoutprovidingfor p p yp y p g anyformofinformedconsent Slide 8-138 FTCs seemly Information get alongs Principles FederalTrade committal Federal Trade Commission Conductsresearchandrecommendslegislationto social intercourse blankInformation behavePrinciples(1998) Fair Information Practice Principles (1998) Notice/Awareness(Core) Choice/ respond(Core) Choice/Consent (Core) doorway/ lodge Security Enforcement Guidelines,notlaws Guidelines not laws Slide 8-139 FTCs Fair Information Practice PrinciplesNotice/Awareness i / Sitesmust breachinformationpracticesbeforecollectingdata. Includes Sit t di l i f ti ti b f ll ti d t I l d identificationofcollector,usesofdata,otherrecipientsofdata, reputationof collection(active/inactive),voluntaryorrequired,consequen cesofrefusal,and stepstakentoprotectconfidentiality,integrity,and lineamentofthedata Choice/Consent in that locationmustbeachoiceregimeinplaceallowingconsumersto pickhow theirinformationwillbeusedforsecondarypurposesotherthansupporting thetransaction,including naturaluseandtransfertothirdparties.Opt? in/Opt? outmustbeavailable. Consumersshouldbeabletoreviewandcontesttheaccuracyand completenessofdatacollectedabouttheminatimely,inexpensiveprocess. Access/Participation ccess/ a c pa o Security y Enforcement Datacollectorsmusttakereasonablestepstoassurethatconsumer informationisaccurateandsecurefromunauthorizeduse. Theremustbeinplacea apparatustoenforceFIP principles. Thiscaninvolveself? regulation,legislationgivingconsumerslegal remediesforviolations,orfederalstatutesandregulation. di f i l ti f d l t t t d l ti Slide 8-140FTC passs Online Profiling Principle p Notice Recommendation Completetransparencytouserbyprovidingdisclosureandchoiceoptions onthehostWebsite. RobustnoticeforPII( time/placeofcollection beforecollectionbegins). profitandconspicuousnoticefornon PII. beforecollectionbegins). Clearandconspicuousnoticefornon? PII. Opt? inforPII,opt? outfornon? PII. Noconversionofnon? PIItoPIIwithout consent. Opt? outfromanyorallnetworkadvertisersfromasinglepage consent Opt out from any or all network advertisers from a single page providedbythehostWebsite.Reasonable nourishmenttoallowinspectionandcorrection. Reasonableeffortstosecureinformationfromloss,misuse,orimproper access. dobyindependentthirdparties,suchassealprogramsandaccounting through with(p) by independent third parties such as seal programs and accounting firms. checkuptopics, cozybehaviororsexualorientation,oruseSocialSecurity medical topics sexual behavior or sexual orientation or use Social Security numbersforprofiling. Slide 8-141 Choice Access Security EnforcementRestricted hookup Advertisingnetworkswillnotcollectinformationaboutsensitivefinancialor European Data nurseion Directive privacy testimonialmuchstrongerinEuropethanU. S. Europeanapproach Comprehensiveandregulatoryinnature p g y EuropeanCommissionsDirectiveonData security measure (1998) (1998) StandardizesandbroadensprivacyprotectioninEuropeanUnion countries discussion sectionofCommercesafeharborprogram ForU. S. firmsthatwishtocomplywithDirective Slide 8-142 Private Industry egotism-RegulationSafeharborprograms Privateinsurancemechanismtomeetobjectivesof Pi t li h i t t bj ti f governmentregulationswithoutgovernmentinvolvement e. g. Privacysealprograms e g Privacy seal programs Industryassociationsinclude OnlinePrivacyAlliance(OPA) NetworkAdvertising first(NAI) CLEARAdNoticeTechnicalSpecifications Privacyadvocacygroups Emergingprivacyprotectionbusiness Slide 8-143 Insight on Business Chief Privacy Officers hi f i ffi Class Discussion Slide 8-144 Technological Solutions Spyware, popular? pblockers Cookiemanagers k Anonymousremailers,surfing Anonymous remailers surfing political programforPrivacyPreferences(P 3P) Comprehensivetechnologicalprivacyprotectionstandard Worksthroughuser sWebbrowser Works through users Web browser CommunicatesaWebsitesprivacypolicy Comparessitepolicytouserspreferencesortootherstandards suchasFTCsFIPguidelinesorEUsDataProtectionDirective Slide 8-145 How P3P Works k Figure8. 2(A) Slide 8-146 Insight on Technology The Privacy T Th P i Tug of War fW Advertisers Vs. Consumers Class Discussion Slide 8-147 knowing Property Rights Intellectual postEncompassesalltangibleand impalpableproductsofhumanmind Majorethicalissue j Howshouldwetreatpropertythatbelongstoothers? Majorsocialissue Major social issue Isthere movevalueinprotectingintellectualpropertyinthe Internetage? Majorpoliticalissue HowcanInternetande? commerceberegulatedorgovernedto g g protectintellectualproperty? Slide 8-148 Intellectual Property Protection Threemaintypesofprotection Copyright evident Trademarklaw Trademark law Goalofintellectualpropertylaw Balancetwocompetinginterests publicand B l t ti i t t bli d privateMaintainingthis sense of balanceofinterestsisalways M i t i i thi b l fi t t i l challengedbytheinventionofnew technologies Slide 8-149 Copyright Protectsoriginalformsofexpression(butnot ideas)frombeingcopiedbyothersfora ideas) from being copied by others for a periodoftime Lookandfeelcopyright encroachmentlawsuits Fairusedoctrine Fair use doctrine DigitalmillenaryCopyrightAct,1998 FirstmajorefforttoadjustcopyrightlawstoInternetage ImplementsWIPOtreatythatmakesitillegaltomake, distribute,orusedevicesthatcircumventtechnology? asedprotectionsofcopyrightedmaterials Slide 8-150 Patents Grantowner20? classmonopolyonideasbehindan invention Machines Man? madeproducts p Compositionsofmatter touch onmethods Inventionmustbenew,non? obvious, bracing Encouragesinventors g Promotesdisseminationofnewtechniquesthrough licensing Stiflescompetitionbyraisingbarrierstoentry Slide 8-151 E-commerce Patents 1998StateStreetBank&Trustv. SignatureFinancial separate Businessmethod secures Ledto burstinapplicationfore? commercebusiness L dt l i i li ti f b i methodspatentsMostEuropeanpatentlawsdonotrecognize M tE t tl d t i businessmethodsunlessbasedontechnology Examples AmazonsOne? clickpurchasing DoubleClicksdynamicdeliveryofonlineadvertising Slide 8-152 Trademarks d k Identify,distinguishgoodsand targettheir source Purpose p run acrossconsumergetswhatispaidfor/expectedtoreceive Protectowneragainstpiracyandmisappropriation misdemeanor Marketconfusion Bad creed Dilution Behaviorthatweakensconnectionbetween mark andproduct Slide 8-153 Trademarks & Internet CybersquattingAnticybersquattingConsumerProtectionAct(ACPA) Cyberpiracy Typosquatting Metatagging M i Keywording y g Deeplinking Framing Slide 8-154 Governance Primaryquestions WhowillcontrolInternetande? commerce? Whatelementswillbecontrolledandhow? What elements will be controlled and how? Stagesof brass instrumentande? commerce g g GovernmentControlPeriod(19701994) Privatization(19951998) Privatization (1995 19 98) Self? Regulation(1995present) GovernmentRegulation(1998present) Slide 8-155 Who Governs E-commerce & Internet? MixedmodeenvironmentSelf? regulation,throughvarietyofInternetpolicy and skilfulbodies,co existswithlimited and technical bodies co? exists with limited governmentregulation ICANNDomainNameSystem Internetcouldbeeasilycontrolled, I t t ld b il t ll d monitored,andregulatedfromacentral location Slide 8-156 Taxation E? commerce revenue enhancementillustratescomplexityof governanceandlegal powerissues governance and jurisdiction issues U. S. salestaxedbystatesandlocalgovernment MOTOretailing E? commercebenefitsfromtaxsubsidy yOctober2007Congressextendstaxmoratoriumfor anadditionalseven age an additional seven years supposed(prenominal)thatcomprehensive,integratedrational approachtotaxationissuewillbe find outfor approach to taxation issue will be determined for sometimetocome Slide 8-157 Net neutrality Currently,allInternettraffic case-hardenedequally allactivitieschargedt hesamerate,no ll i i i h d h invidiousassignmentofbandwidth Backboneproviderswouldliketocharge differentiatedpricesandrationbandwidth 2010,U. S. ppealscourt commandthatFCChadno authoritytoregulateInternetproviders Slide 8-158 Public Safety & welfare Protectionofchildrenandstrong g sentimentsagainst smut fungus Passinglegislationthatwill get throughcourt P i l i l ti th t ill i t challengeshasproveddifficult Effortstocontrol funandrestrict salesofdrugsandcigarettes sales of drugs and cigarettes Currentlymostlyregulatedbystatelaw UnlawfulInternet swordplayEnforcementAct Slide 8-159 Insight on Society Internet Drug funfair Class Discussion Slide 8-160