1. E-COMMERCE
BUS2513
(Diploma in International Business)
Chapter 1: Core Marketing Concepts
2. Introduction to E-Commerce
• What is E-Commerce?
The process of buying, selling, or exchanging products, services and
information via computer networks.
King D. , Turban E.
The art and science of selling products and/or services over the
Internet.
sbinfocanada.about.com
The sharing of business information, maintaining business
relationships, and the conducting business transactions by means of
telecommunication networks.
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3. 4 different types of information technology are
converging to create the discipline of e-commerce:
• Electronic messages, email and fax
• Sharing a corporate digital library
• Electronic document interchange utilizing
Electronic Data Interchange (EDI) and
electronic funds transfer
• Electronic publishing to promote marketing,
advertising, sales, and customer support
4. Differences between E-Commerce and
traditional commerce
E-Commerce Traditional Commerce
• Using internet or other • Face-to-face, telephone
network communication lines, or mail systems
technology
• Manual processing of
• Automated processing of traditional business
business transactions transactions
• Individual involved in all stages
of transactions • Individual involved in all
stages of business
• Pulls together all activities of
business transactions,
transactions
marketing and advertising as • Separated activities of
well as service and customer business transactions.
support
5. Why E-Commerce?
In the short term:
The top line: Access to a Global Market
- the ability to reach new customers and
create more intimate relationships with all
customers
The bottom line: Dramatic Reduction in
distribution costs
- drastic cost reductions for distribution
and customer service
6. In the long term:
The internet may well change the structure of
the competitive landscape.
Internet communications will transform
- the relationship between business and
their customers.
- the conversion from physical to digital
will displace the source of business value.
7. Marketing Channel
• Mechanism through which goods/services are
moved from the manufacturer/service
provider to the user/ consumer.
• Also known as distribution or intermediaries.
8. Types of intermediaries
• Wholesaler : buy from producers in a large
quantity and resell to retailer.
• Agent : secure an order for producer and will
take commission for success transaction
• Retailer : directly sell goods to customer. They
might have strong personal relationship with
the customer
• Internet : e-commerce technology
9. Marketing Defined
• Kotler’s social definition:
“Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and freely
exchanging products and services of
value with others.”
10. Marketing Defined
• The AMA managerial definition:
“Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.”
11. The Marketing Process A Five-Step
Process
1. Understand the marketplace and customer needs
and wants
2. Design a customer-driven marketing strategy
3. Construct a marketing program that delivers
superior value
4. Build profitable relationships and create customer
delight
5. Capture value from customers to create profits and
customer quality
12. Marketing Concepts
• Target markets and market • Exchange and transactions,
segmentation & Relationship and
• Marketplace, market-space, networks
metamarkets • Marketing channels
• Marketers & prospects • Supply chain
• Needs, wants, demands • Competition
• Product offering and brand • Marketing environment
• Value and satisfaction • Marketing program
13. Customer Key Concepts
• Customer loyalty
Customer loyalty is all about attracting the right customer, getting
them to buy, buy often, buy in higher quantities and bring you
even more customers.
• Share of customer
The percentage of customers that buy a company's product of all
customers purchasing in that product category.
14. • Customer equity
Value: a fair return or equivalent in goods, services, or money for
something exchanged.
Brand: An identifying symbol, words, or mark that distinguishes a
product or company from its competitors.
Customer retention: Keep a company’s customer and to retain
their revenue contribution. Aim is to prevent customers from
defecting to alternative brands / going to the competition.
17. Challenges and Issues in E-Commerce
• Digital Age
Growth of internet
Advances in telecommunications, information provided,
transportation, etc.
• Globalization
Geographical & culture distances have shrunk
Greater in market coverage
Higher competition from foreign competitors
• Ethics & Social Responsibility
Technical Issues
Security and privacy
IT skills shortage
18. Benefits of E-Commerce
• Business Benefits
Reduced costs
Reduces inventories and warehouse
Increased access to real-time inventory information, speed-up
ordering & purchasing processing time
Easier enter into new markets in an efficient way
Easily create new markets & get new customers
Automated business processing
19. • Marketing Benefits
Improved market analysis, product analysis, and customer
analysis.
Low-cost advertising
Easy to create and maintain customer on client database
• Customer Benefits
Wide scale information dissemination
Wide selection of good products and goods at the low price
Rapid inter-personal communications and information accesses
Wider access to assistance and to advice from experts and
peers
Save shopping time and money
Fast service and delivery
20. Internet Marketing
• E-commerce (EC) : the process of buying, selling or
exchanging products, services or information via
computer network.
• E-business :
A broader definition of EC
Includes not just the buying and selling of goods and
services.
Servicing customers.
Collaborating with business partners.
Conducting electronic transaction within an
organisation.
21. • Online Marketing : company efforts to market
products and services, and build customer
relationship over the internet.
• Internet : a vast public web of computer
networks that connects users all around the
world to each other and to an amazingly large
‘information repository’.
22. EC Organisations
• Brick-And-Mortar : old-economy
organisations that perform most of their
business off-line, selling physical products by
means of physical agent
• Virtual/Pure-Play/Click Only : organisations
that conduct their business activities solely
online
• Click-And-Mortar : organisations that conduct
some e-commerce activities, but do their
primary business in the physical world
23. Internet Advertising Terminology
• Hit: a request for data from a Web page or file
• Visit: a series of requests during one
navigation of a web site; a pause of a certain
length of time ends a visit
• Unique Visit: a count of a number of visitors
to a site, regardless of how many pages are
viewed per visit
• Stickiness: characteristic that influences the
average length of time a visitor stays in a site.
24. Advertising Strategies & Promotions
Online
• Affiliate Marketing: a marketing arrangement by
which an organisation refer consumers to the
selling company’s Web site
• Viral Marketing: word-of-mouth marketing by
which customers promote a product or service by
telling others about it
• Webcasting: a free Internet news service that
broadcasts personalized news and information,
including seminars, in category selected by the
user
25. Web Advertising
• Interactive Marketing: Online marketing,
enabled by the Internet, in which advertisers
can interact directly with customers and
consumer can interact with
advertisers/vendors
26. Major Business Models for
Advertising Online
• Using the Web as a channel to advertise a
firm’s own products and services.
• Making a firm’s site a public portal site and
using captive audiences to advertise products
offered by other firms.
27. Internet Advertising Methods
• Banner: on a Web page, graphic advertising
display linked to the advertiser’s Web page.
• Keyword Banners: banner ads that appear
when a predetermined word is queried from a
search engine.
• Random Banners: banner ads that appear at
random, not as the result of the user’s action.
28. Benefits of Banner Ads
• By clicking on them, users are transferred to
an advertiser’s site, and frequently direct to
the shopping page of that site.
• The ability to customize them for individual
surfer or a market segment of surfers.
• Viewing of banner is fairly high because “force
advertising” is use.
• Banners may include attention-grabbing
multimedia.
29. Limitations of Banner Ads
• Costly.
• A limited amount of information can be places
on the banner.
• Viewers have become somewhat immune to
banners and simply do not notice them as
they once did.
30. Types of Banner Ads
• Banner Swapping: an agreement between
two companies to display the other’s banner
ad on its Web site.
• Banner Exchanges: markets in which
companies can trade or exchange placement
of banner ads on each other’s Web sites.
• Pop-Up Ad: an ad that appears in a separate
window before, during, or after Internet
surfing or when reading e-mail.
31. • Pop-Under Ad: an ad that appears underneath
the current browser window, so when the
user close the active window, he or she can
sees the ads.
• Interstitial: an initial Web page or a portion of
its that is used to capture the user’s attention
for a short time while other content is loading.
32. Why Internet Advertising?
Reasons Explanations
Cost Cheaper and can update at anytime
Richness of Format Use of text, audio, graphics,
animations
Personalization Interactive, targeted to specific
groups/individual and focusing on
medium segment
Location-Basis Internet ads can be send to customer
whenever they are in specific location
and time
Digital Branding Online shoppers are willing to pay
premiums for brands they trust.
Timeliness Ads can be fresh and up-to-the minute
