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Chapter 16. Launching a Successful Online Business. Learning Objectives. Understand the fundamental requirements for initiating an online business. Describe the funding options available to startup businesses. Evaluate the options for hosting Web sites. Learning Objectives (cont.).

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chapter 16

Chapter 16

Launching a Successful

Online Business

learning objectives
Learning Objectives
  • Understand the fundamental requirements for initiating an online business.
  • Describe the funding options available to startup businesses.
  • Evaluate the options for hosting Web sites.
learning objectives cont
Learning Objectives (cont.)
  • Understand the processes and business decisions associated with managing Web site development.
  • Understand the importance of providing content that meets the needs and expectations of the intended audience.
learning objectives cont4
Learning Objectives (cont.)
  • Evaluate Web sites on design criteria such as appearance, navigation, consistency, and performance.
  • Know the techniques of search engine optimization to obtain high placement in search engines.
learning objectives cont5
Learning Objectives (cont.)
  • Understand the benefits of customer relationship management through customer self-service, listening to customers, and increasing trust.
obo sets its goals for success
OBO Sets Its Goals for Success
  • The Problem
    • OBO sells protective gear for field hockey goalkeepers
    • OBO’s unique three-dimensional thermo-bonding manufacturing process produces equipment that is shaped to reflect the way the body moves
obo sets its goals for success cont
OBO Sets Its Goals for Success (cont.)
  • By manufacturing a quality product and listening to the customer, OBO has become the market leader
  • OBO is based in a small provincial town in New Zealand that is a very long way from its principal markets
obo sets its goals for success cont8
OBO Sets Its Goals for Success (cont.)
  • OBO sells a niche product that is best sold thorough agents or stores to ensure a proper fit
  • How does OBO use its Web site to market an experiential product to a global market from New Zealand?
obo sets its goals for success cont9
OBO Sets Its Goals for Success (cont.)
  • The Solution
    • The goals of the Web site are:
      • community building
      • product sales
      • research and development
obo sets its goals for success cont10
OBO Sets Its Goals for Success (cont.)
  • Community building happens through:
    • online discussion forums
    • sponsored players
    • an image gallery
  • The principal marketing and sales goal of the Web site is to:
    • convince the visitor of the value of the product
    • direct the customer to a store or agent to make the purchase
obo sets its goals for success cont11
OBO Sets Its Goals for Success (cont.)
  • The Web site is a support mechanism for the brand and the sale of equipment through the agents
  • Research and development goal is met through:
    • online surveys
    • solicitation of players’ opinions of the products
    • focus groups
obo sets its goals for success cont12
OBO Sets Its Goals for Success (cont.)
  • The Results
    • The OBO Web site is most successful at community building
    • The site also builds community by promoting a goalie-friendly approach to OBO’s customers
    • Online product sales are modest because the Web site supports, not competes, with OBO’s agent network
obo sets its goals for success cont13
OBO Sets Its Goals for Success (cont.)
  • Online sales are expected to grow because OBO has introduced a new line of clothes designed to be sold exclusively through the Web site
  • The focus groups deliver high-value feedback at almost no cost
  • The discussion forums contribute to both community building and feedback about OBO’s product
obo sets its goals for success cont14
OBO Sets Its Goals for Success (cont.)
  • What we can learn…
    • A small company with a great product is using its Web site to reach its target markets in distant countries
    • OBO is using the site to support business goals, as well as to meet the needs and expectations of its target audience
obo sets its goals for success cont15
OBO Sets Its Goals for Success (cont.)
  • The Web site is simple and well designed, includes:
    • “attractors” that encourage customer interaction and keep customers coming back
    • content that promotes cross selling
    • effectively promotes sustainable customer relationships
doing business online getting started
Doing Business Online:Getting Started
  • Business formation process:
    • Identify a consumer or business need in the marketplace
    • Investigate the opportunity
    • Determine the business owner’s ability to meet the need
doing business online getting started cont
Doing Business Online:Getting Started (cont.)
  • Requirements that reflect the online nature of a business:
    • Need to understand Internet culture

Customers are active in how they absorb and use information, and the Internet is a personal, helping, and sharing place for most users

    • Consider the nature of appropriate products and services
doing business online getting started cont18
Doing Business Online:Getting Started (cont.)
  • E-business planning

Business plan: A written document that identifies a company’s goals and outlines how the company intends to achieve the goals

doing business online getting started cont19
Doing Business Online:Getting Started (cont.)
  • Biggest difference in e-business planning is for the ontrepreneur to recognize that the Internet is unlike any other sales channel; companies can:
    • interact with consumers with both reach and richness
    • introduce new and innovative business models
    • distribute information at the speed of light at almost zero cost
doing business online getting started cont20
Doing Business Online:Getting Started (cont.)
  • An existing brick-and-mortar business looking to move online also needs a:

Business case: A document that is used to justify the investment of internal, organizational resources in a specific application or project

doing business online getting started cont21
Doing Business Online:Getting Started (cont.)
  • Business case template includes:
    • Goals
    • Cost savings
    • New revenue
    • Extra benefits
    • Cost of the solution
    • Net benefits
    • Recommendation
doing business online getting started cont22
Doing Business Online:Getting Started (cont.)
  • Funding the online business
    • Venture capital (VC): Money invested in a business by an individual or a group of individuals (venture capitalists) in exchange for equity in the business
doing business online getting started cont23
Doing Business Online:Getting Started (cont.)
  • Angel investor: A wealthy individual who contributes personal funds and expertise at the earliest stage of business development
doing business online getting started cont24
Doing Business Online:Getting Started (cont.)
  • Incubator: A company, university, or not-for-profit organization that supports businesses in their initial stages of development
doing business online building the web site
Doing Business Online:Building the Web Site
  • Classifications of Web sites
    • Informational Web site: A Web site that does little more than provide information about the business and its products and services
    • Interactive Web site: A Web site that provides opportunities for the customers and the business to communicate and share information
doing business online building the web site cont
Doing Business Online:Building the Web Site (cont.)
  • Attractors: Web site features that attract and interact with visitors in the target stakeholder group
  • Transactional Web site: A Web site that sells products and services
doing business online building the web site cont27
Doing Business Online:Building the Web Site (cont.)
  • Building the Web site
    • Select a Web host
    • Register a domain name
    • Create and manage content
    • Design the Web site
    • Construct the Web site and test
    • Market and promote the Web site
web site hosting
Web Site Hosting
  • Web hosting options:
    • Storebuilder service: A hosting service that provides disk space and services to help small and micro businesses build a Web site quickly and cheaply
    • ISP hosting service: A hosting service that provides an independent, standalone Web site for small- and medium-sized businesses
web site hosting cont
Web Site Hosting (cont.)
  • Web hosting service: A dedicated Web site hosting company that offers a wide range of hosting services and functionality to businesses of all sizes
  • Mirror site: An exact duplicate of the original Web site, but it is physically located on a Web server on another continent
web site hosting cont30
Web Site Hosting (cont.)
  • Co-location: A Web server owned and maintained by the business is placed in a Web hosting service that manages the server’s connection to the Internet
  • Self-hosting: When a business acquires the hardware, software, staff, and dedicated telecommunications services necessary to set up and manage its own Web site
web site hosting cont31
Web Site Hosting (cont.)
  • Contracting the Web host
    • The search for an ISP host:
      • contacting local ISPs for information
      • asking others in the business community for recommendations
      • consulting with local telecommunications and computer user groups
web site hosting cont32
Web Site Hosting (cont.)
  • When a short list of potential ISPs has been compiled, a RFQ can be used to ensure that complete and consistent bids for provision of service are submitted
web site hosting cont33

service quality measures

guaranteed uptime

number of clients

current traffic rates

software support


site traffic analysis

technical support services


Web Site Hosting (cont.)
web site hosting cont34
Web Site Hosting (cont.)
  • Registering a domain name
    • Domain name: A name-based address that identifies an Internet-connected server
    • Domain name registrar: A business that assists prospective Web site owners with finding and registering a domain name of their choice
web site hosting cont35
Web Site Hosting (cont.)
  • Selecting a good domain name:
    • Make it memorable
    • Make it easy to spell
    • Avoid numbers and special characters
    • Keep it short and sensible
web site hosting cont36
Web Site Hosting (cont.)
  • Be flexible
  • Think about the future
  • Give products their own name
  • Investigate the competition
  • Avoid trademarked names
content creation and management
Content Creation and Management
  • Content:The text, images, sound, and video that make up a Web page
  • Commodity content:Information that is widely available and generally free to access on the Web
content creation and management cont
Content Creation and Management (cont.)
  • Premium content:Content not available elsewhere on the Web
  • Cross selling:Offering similar or related products and services to increase sales
  • Up selling:Offering an upgraded version of the product in order to boost sales and profit
content creation and management cont39
Content Creation and Management (cont.)
  • Up-selling activities usually include offering products with a different design, color, fabric, or size
    • Promotion

secondary content that can increase sales or improve customer service

    • Comment

further explanation about the product can be offered after introducing the product

content creation and management cont40
Content Creation and Management (cont.)
  • Creating content
    • collecting all the content that is currently available
    • value of additional content is assessed for inclusion in the Web site
    • consider how each bit of content will serve the site’s goals and whether customers will want it or expect it
    • created by customers through reviews etc.
content creation and management cont41
Content Creation and Management (cont.)
  • Buying content
    • Content can be purchased or licensed
    • Content that is acquired from outside sources should be supplemental content, not primary content
    • If primary content is purchased and no value is added, visitors will go to the originating site and not return
content creation and management cont42
Content Creation and Management (cont.)
  • Personalizing content

Personalized content: Web content that is prepared to match the needs and expectations of the individual visitor

  • Delivering content by e-newsletter

E-newsletter: A collection of short, informative articles sent at regular intervals by e-mail to individuals who have an interest in the newsletter’s topic

content creation and management cont43
Content Creation and Management (cont.)
  • Writing effective content
    • Write scannable text
    • Break long sections into smaller ones with clearly noted headings
    • Grab the reader’s attention at the beginning of every page and section
    • Write in a tone and with language that reflects the purpose of the material
content creation and management cont44
Content Creation and Management (cont.)
  • Consistency in site content can be achieved using a style guide
  • Make the material available in a .pdf file when necessary
  • Create compelling links that encourage a reader to click
  • External links can offer good content for visitors
  • Avoid material that is not highly valued by customers
content creation and management cont45
Content Creation and Management (cont.)
  • Content management

Content management: The process of adding, revising, and removing content from a Web site to keep content fresh, accurate, compelling, and credible

content creation and management cont46
Content Creation and Management (cont.)
  • Content testing—frequent checks of material for:
    • Accuracy
    • Clarity
    • Typos
      • poor punctuation
      • misspelled words
      • inconsistencies
content creation and management cont47
Content Creation and Management (cont.)
  • Content removal

Expired pages should be deleted or moved to an off-line location that can serve as an archive

  • Content management software

Allows nontechnical staff to create, edit, and delete content on the company’s Web site

content creation and management cont48
Content Creation and Management (cont.)
  • Purchasing a content management software
    • Do a thorough needs analysis
    • Document requirements and discuss with at least two companies that have purchased a CMS
    • Start small with CMS that has a trial version or low entry cost
    • Assess the system after 30 days
    • Repeat the assessment process regularly
web site design
Web Site Design
  • The goal of any Web site is to deliver quality content to its intended audience and to do so with an elegant design
web site design cont
Web Site Design (cont.)
  • Information architecture

Information architecture: How the site and its Web pages are organized, labeled, and navigated to support browsing and searching throughout the Web site

web site design cont51
Web site design criteria:





Quality assurance




Web Site Design (cont.)
web site design cont52
Web Site Design (cont.)
  • Site structure is:
    • hierarchical
    • circular
    • linear
  • Getting the homepage right is critical
  • All pages within the site should link back to the homepage
web site design cont53
Web Site Design (cont.)
  • Deep linking: Entry into a Web site via the site’s interior pages, not the homepage, typically through search engines or external links
web site design cont56
Web Site Design (cont.)
  • Organizing and labeling the site support browsing and searching:
    • Obey the three-click rule
    • Place the most important content at the top of the page
    • Keep pages short
web site design cont57
Web Site Design (cont.)
  • Keep page layouts simple
  • Follow commonsense publishing rules
  • Make the primary content easy to find
  • Show the products in many ways
web site design cont58
Web Site Design (cont.)
  • Site navigation

Site navigation: Aids that help visitors find the information they need quickly and easily

    • The simplest navigation aid is a navigation barat thetop and bottom of each page
    • Frame: An HTML element that divides the browser window into two or more separate windows
web site design cont60
Web Site Design (cont.)
  • Other suggestions for designing successful Web site navigation:
    • Use small lists and menus
    • Do not rely entirely on graphical images for navigation
    • Make the homepage easy to find
    • Integrate navigation into content
    • Avoid frames
    • Follow accessibility guidelines
web site design cont62
Web Site Design (cont.)
  • Consistency
    • Look and feel:The elements that visually distinguish a site from any other, including layout, typeface, colors, graphics, and navigation aids
web site design cont63
Web Site Design (cont.)
  • Elements of page content also should be consistent:
    • company logo
    • contact information
    • short, descriptive title
  • Design a Web site for all of these browsers, but to use designated World Wide Web Consortium standards
web site design cont64
Web Site Design (cont.)
  • Performance
    • Speed ranks at or near the top of every list of essential design considerations
    • The most widely recognized cause of long download times is a large graphic or a large number of small graphics on a single page
web site design cont65
Web Site Design (cont.)
  • 12-second rule: Every page on the Web site should appear within 12 seconds
  • 4-second rule: something should appear in the visitor’s browser in 4 seconds or less
web site design cont66
Web Site Design (cont.)
  • Colors and graphics rules:
    • Match the expectations of the target audience
    • Use standard colors
    • Follow color standards
    • Use complementary colors
    • Specify the background color
web site design cont67
Web Site Design (cont.)
  • Use bandwidth-intensive features selectively
  • Design for visually or hearing-impaired visitors
  • Use the ALT tag
  • Avoid distracting features
web site design cont68
Web Site Design (cont.)
  • Quality assurance
    • make sure the Web site design is properly tested before it is launched
    • ensure that it continues to perform up to expectations after launch


web site design cont69
Web Site Design (cont.)
  • design the site for easy maintenance
  • responsible owners frequently test all features of the site personally
  • quality Web sites are tested regularly
  • Web site performance is also an ongoing concern
web site construction
Web Site Construction
  • Who builds the Web site?
    • Internal staff, an outside contractor, or a combination of these two
    • Internal Web site development: The process of building and/or maintaining the Web site with company staff
web site construction cont
Web Site Construction (cont.)
  • Companies build their own site because:
    • Use of existing in-house expertise
    • Desire to build in-house expertise
    • Protection of proprietary technologies
    • Tighter control and responsiveness
web site construction cont72
Web Site Construction (cont.)
  • External Web site development:When the business hires another firm to build and/or maintain the Web site
    • Speed to market
    • Not a core competency
    • Access to special expertise
web site construction cont73
Web Site Construction (cont.)
  • Partnering Web site development:When a mixture of internal and external development is used to build and/or maintain a Web site

The principal downside to partnering is the additional overhead of contract and relationship management

web site construction cont74
Web Site Construction (cont.)
  • Web site construction: The initial content creation, design, programming, and installation phases of a Web site’s development
  • Web site maintenance: The on-going process of keeping the Web site open for business, managing content, fixing problems, and making incremental additions to the site
web site construction cont75
Web Site Construction (cont.)
  • Managing Web site construction:
    • Start with a plan
    • Set goals early and stick to them
    • Use a fixed-price contract
    • Justify graphics and features
web site construction cont76
Web Site Construction (cont.)
  • Accepting credit cards

Card-not-present (CNP) transaction: When there is no signature and no verification of the credit card signature by the merchant

web site construction cont77
Web Site Construction (cont.)
  • To accept credit cards online a company must:
    • Open a merchant account
    • Purchase credit card processing software
    • Integrate the credit card processing software into the transaction system
web site promotion
Web Site Promotion
  • Internal Web site promotion
    • Include content that establishes the site as a useful site for customers to remember so that they return and make a purchase
    • Signature file: A simple text message an e-mail program automatically adds to outgoing messages
web site promotion cont
Web Site Promotion (cont.)
  • Search engine optimization (SEO): The application of strategies intended to position a Web site at the top of Web search engines
  • The key to SEO is understanding the algorithms the search engines use to determine the ranking of the results returned to the searcher
web site promotion cont80
Web Site Promotion (cont.)
  • Strategies for keyword creation and placement:
    • Create keywords the target audience is most likely to use
    • Use specific phrases, not general keywords
    • Optimize the title
web site promotion cont81
Web Site Promotion (cont.)
  • Use meta tags
    • Meta tag: An HTML element that describes the contents of a Web page
  • Use keywords early and often in page content
  • Include keywords in ALT tags
  • Avoid spider-hostile features
  • Do not spam search engines
web site promotion cont82
Web Site Promotion (cont.)
  • Strategies for maximizing link popularity:
    • Create content that promotes linking
    • Seek reciprocal links
    • Determine what sites already link to the target site
web site promotion cont83
Web Site Promotion (cont.)
  • Visit competitors
  • Seek highly placed links
  • Seek links from well-known sites
  • Do not use free-for-all (FFA) or link farms
customer relationship management
Customer Relationship Management
  • Customer relationship management (CRM):A customer service approach that focuses on building long-term and sustainable customer relationships that add value for the customer and the company
customer relationship management cont
Customer Relationship Management (cont.)
  • Using content to create customer relationships
    • Provide membership
    • Personalize the user experience
    • Support users
    • Communicate via the community
    • Reward visitors
    • Market effectively
    • Set up smart affiliate relationships
customer relationship management cont86
Customer Relationship Management (cont.)
  • Customer self-service with FAQ pages:

FAQ page: A Web site page that lists questions that are frequently asked by customers and the answers to those questions


customer relationship management cont87
Customer Relationship Management (cont.)
  • Characteristics of an effective FAQ page:
    • The FAQ page is easy to find
    • The FAQ page loads fast
    • The questions are easy to find
customer relationship management cont88
Customer Relationship Management (cont.)
  • The answers are written from a customer’s perspective
  • The answers do not repeat information offered elsewhere
  • Offer an opportunity to ask a question not on the FAQ
  • The FAQ page is never done
customer relationship management cont89
Customer Relationship Management (cont.)
  • Listening to customers
    • Mine e-mail for information
    • Survey customers quickly and frequently
    • Create an e-mail list

E-mail discussion list: A group of people who share a common interest and who communicate with each other via e-mail messages managed by e-mail list software

customer relationship management cont90
Customer Relationship Management (cont.)
  • Create a discussion forum

Electronic discussion forum: A portion of the Web site where visitors can post questions, comments, and answers

  • Create a chat group

Chat group: A portion of the Web site where visitors can communicate synchronously

customer relationship management cont91
Customer Relationship Management (cont.)
  • Increasing trust

Trust: A psychological state-of-mind when two or more parties are willing to pursue further interactions to achieve a planned goal

customer relationship management cont92
Customer Relationship Management (cont.)
  • Ways to increase trust:
    • Tell the customer about the company
    • Include testimonials from loyal, satisfied customers
    • Provide numerous opportunities for feedback
    • Answer customer e-mail promptly
    • Provide information to the customer about an order
managerial issues
Managerial Issues
  • What does it take to create a successful online business?
  • Is creating a Web site a technical task or a management task?
  • How do we attract visitors to the Web site?
  • How do we turn visitors into buyers?
  • Fundamental requirements for initiating an online business.
  • Funding options for a start-up online business.
  • Web site hosting options for an online business.
  • Web site construction options for an online business.
summary cont
Summary (cont.)
  • Provide content that attracts and keeps Web site visitors.
  • Design a visitor-friendly site.
  • High placement in search engines is key.
  • Customer relationship management can contribute to success.