20. HSN
TV OFFLINE
CATALOG ONLINE
20%
43%
22%
16%
Friday, November 20, 2009
21. Market opportunity analysis!
Create More Efficient
Markets, e.g., eBay
!
Enable Ease of Access,
Liberate e.g., Gap
!
Trapped
Create More Efficient
Value! Systems, e.g., FedEx
!
Look at Value Disrupt Current Pricing
System to Power, e.g., Priceline
!
Discover New
Business
Opportunities! Customize Offerings, e.g. MyYahoo
!
Introduce Extend Reach and Access, e.g., keen.com!
New-to-
the- Build Community, e.g., MyFamily.com!
World
Value !
Enable Collaboration, e.g., ProjectPoint
!
Introduce New Functionality/Expertise,
e.g., C-Mode
!
Friday, November 20, 2009
23. Identify customer needs
The “Customer Decision Process” framework: analyze and discover customer needs
Gift Interested in Author/ Need for Activity/Class
Problem Recognition
!
Subject Matter
Prepurchase
Read Reviews Search for Availability Review Contents
Information Gathering
Evaluation Price Quality Availability Fits Needs
Purchase
Purchase Decision
! Purchase Online Purchase Offline
Satisfaction Arrived on Time Good Quality of Contents Easy Buying Experience
Postpurchase
!
Repeat Purchases High Percentage of
Loyalty
Consumers’ Book
!
Purchases
Friday, November 20, 2009
25. What do they have in common
Friday, November 20, 2009
26. Strategic analysis
When it comes to competitors, remember the
Information Economy.
Who is competing with you on CUSTOMER
ATTENTION.
It might not be the obvious candidate.
Friday, November 20, 2009
28. Assess competitive advantages
Direct competitors
–! Firms offering products or services that are “close
substitute”
–! Rivals in the same industry
Indirect competitors
–! Substitute Producers
•! Firms that, though they reside in different industries, offer
products and services that perform the same function
–! Adjacent Competitors
•! Firms that have the potential to provide products or services
that are substitutes
Friday, November 20, 2009
33. Background
• Founded in 1998 by now CEO
Mark Vadon
• Based in Seattle
• Went public in May 2004
• Largest online retailer of
diamonds and other jewelry
• 159 employees
Friday, November 20, 2009
34. Firm Statistics
• Profits have risen 24% since 2005
• Current market value of $1 B
• Online market share 50%
• Stock valued at around $56 a share
Friday, November 20, 2009
35. Technology
• Offers unique programs through website
– Ex. “Build Your Own Ring”
• Point of sale system
– Knowing their customer
• Personal website
– My Blue Nile
Friday, November 20, 2009
36. Competitive Advantage
• Exclusive contracts & distribution rights with
diamond suppliers
• Low acquisition costs
– Creates barriers to entry for competitors
• Purchases diamonds after customers pay
– Allows for a negative working-capital cycle
Friday, November 20, 2009
37. Competitive Advantage
• Doesn’t keep inventory
• Price transparency
– Compare prices, can
choose cheaper diamonds
• Large selection
– Over 60,000 diamonds to
choose from
Friday, November 20, 2009
38. Rival Firms
• Traditional brick and mortar jewelers
– Zale
– Tiffany’s
– Ice.com
• eBay and Amazon
• Department / Super stores
– Macy’s
– Wal-Mart
Friday, November 20, 2009
39. Opportunities/Threats
• Rising costs
– online marketing, diamond prices
• Diamonds as a commodity
• Complexity of predicting future sale growth
• Trying to expand in European market
• Customers want to feel diamonds
Friday, November 20, 2009
40. 7. Market Strategy
Search
SEO/SEM Viral Social
Email Comparison Affiliates
Marketing Media
Friday, November 20, 2009
49. Products
• Products can be digital (e.g. software)
• Technology aids with developing new
products, whether digital or not
Friday, November 20, 2009
50. Price
• Easier access to comparative websites allows
consumers to find lowest price
• Organisations need to differentiate
themselves, but should not rely on price
Friday, November 20, 2009
51. Placement
• Digital products can be digitally distributed
(e.g. download MP3)
• Stores can be online (e.g. Amazon)
Friday, November 20, 2009
52. Promotion
• The Internet provides a wealth of
promotional tools
• Advertising, personal sales, promotions, public
relations and more can be conducted online
• Importantly: customers as promoters
Friday, November 20, 2009
63. Peer-to-Peer
• Most trusted is “someone like me”
• Social networks encourage interactions
• Word of mouth can be more easily
tracked
• Equip engaged users with tools to
promote
Friday, November 20, 2009
64. What are their needs?
What problems do they
have that you can solve?
Friday, November 20, 2009
65. Make the customer the
centre
of your marketing
Friday, November 20, 2009
66. Price
What is a cynic?
A man who
knows the price
of everything and
the value of
nothing.
Friday, November 20, 2009
67. Product
• Does your product fulfill customer needs?
Friday, November 20, 2009
68. Product
• Does your product fulfill customer needs?
Friday, November 20, 2009
69. Making money is a
hobby that will
complement any
other hobbies you
have
Friday, November 20, 2009
71. Promotion
• The Internet was created to share
information, not to market products
• How can you harness customer needs
online?
Friday, November 20, 2009
72. Deve
loping
a mar
keting
plan
Friday, November 20, 2009
73. 1. Know yourself and
your market
• Internal audit and market
review
• Who are we?
• Who are our customers
and what are their needs?
• What is the social
context?
Friday, November 20, 2009