COMM470 WS4 - Customer Satisfaction Via E-Commerce

1. COMM470 WS4 - Customer Satisfaction Via E-Commerce The Virtual Office Joseph Lewis Aguirre

2. COURSE OBJECTIVES- WS4 E-COMMERCE COMMUNICATION • Identify the similarities and differences between the virtual and the real-world customer. • Distinguish the difference between the world of e-commerce and the real world in terms of customer communications. • Determine which traditional customer communications can and cannot be successfully ported to the world of e-commerce. • Assess what new communications techniques are uniquely available in the world of e-commerce. • Demonstrate how the use of multimedia technologies creates effective e-commerce sites.

3. The Marketing Concept Customer Satisfaction Profits Company Effort

4. eBusiness Planning Framework Environment Competition Objective Technology Customers STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS, TRENDS (SWOTT) SEGMENTATION TARGETING POSITIONING PRODUCT PRICE PROMOTION PRICE

5. Strategy Decision Areas • Place • Objectives • Channels • Logistics • Promotion • Objectives • Blend • Sales People • Advertising • Sales Promotion • Publicity • Price • Objectives • Flexibility • Geographic Terms • Discounts • Sales Promotion • Publicity Product • Physical Goods • Service • Features • Quality • Accessories • Installation • Warranty • Product Lines • Packaging • Branding • Individualization • Interactivity

6. SEGMENTATION OBJECTIVES Meaningful • Customers must demonstrate needs, aspirations or behavioral patterns that are similar within a segment and different across segments • A distinction between a price-sensitive and a quality-seeking segment is meaningful, since the two segments demonstrate distinguishable sets of needs Actionable • A company must be able to reach customers within each segment through effective and targeted marketing programs • A customer segment consisting of customers with blue eyes is not actionable, since it is very hard to identify and reach only customers with blue eyes Substantial • Segments must be large and profitable enough to make the investment in serving them worthwhile • MyCFO.com is targeted toward high-net-worth individuals, helping them manage their portfolios; even though the number of those individuals is small, the dollar amount managed is sizeable, thus constituting a substantial segment Measurable • Key characteristics of the segments (e.g., size and spending patterns) must be easy to measure

7. PROMOTION PRICE PRODUCT PLACE II & The Product Mix Interactivity Branding Individual

8. “Blackbeard” “Nazi” Volkswagen Believers Infidels/Gentiles IBM Amazon.com Andersen Consulting Route 66 Tom Clancy Mark Twain Albert Einstein The Kennedy’s Al Capone Ted Turner CNN Nickelodeon Marlboro Sports Illustrated Swimsuit Edition The New York Times “Them” “The White House” Brands through history

9. Brands Mercedes The Beach Boys Kodak Disney Intel (Today) Virgin NOT Brands General Motors The Beatles Xerox Time-Warner Berkshire Hathaway Brands through history

10. Brand Types • Brand as Energy: • Amazon.com • Brand as Security • Stew Leonard’s • Brand as Quality/Choice Editor • Nordstrom • Anti-brand • Audi • Evolving: Brand as known and reliable sub-contractor • IT Opportunity

11. Why Brand • 67% - There is no risk associated with buying brands with which you are not familiar • Lack of substantive differentiation • 72% - A well-known brand is an important factor on making buying decisions • “Selection shorthand”

12. Brand Examples For Example:

13. What is a brand worth? Chicken Poop Haul it Away, Please!

14. What is a brand worth? Premium Natural Fertilizer $ 10.00 per drum

15. What is a brand worth? Agricultural Chemicals $25.00/c.wt.

16. DUPONT What is a brand worth? Better Living through Chemistry $50/bag

17. What is a brand worth?

18. Measuring Brand Value The Business and the Brand are Intertwined The Business Customers(number/type)Fees/Prices (revenue) The Brand Customers(number/type)Potential Markets Served (size/growth) Brand Share Potential Brand Contribution Defines & Drives Brand Value Business Value Today’s business is the DNA of the Brand and its potential to create value via strategic decisions, such as diversification

19. Brand Equity Brand Equity Brand Loyalty Brand Awareness Perceived Quality Brand Associations Other Assets • Reduced Marketing • Costs • Trade Leverage • Attracting New Customers • Time to Respond to Competitive Threats • Anchor to Which Other Associations Can be Attached • Familiarity - Liking • Signal of Substance / Commitment • Brand to be Considered • Reason-to-Buy • Differentiation / Position • Price • Channel Member Interest • Extensions • Help Process / Retrieve Information • Differentiate / Position • Reason-to-Buy • Create Positive Attitudes / Feelings • Extensions • Competitive Advantage Provides Value To Customer By Enhancing Customer’s: • Interpretation / Processing of Info • Confidence in the Purchase Decision • Use Satisfaction Provides Value To Firm By Enhancing : • Efficiency & Effectiveness of Marketing Programs • Price / Margins • Brand Extensions • Competitive Advantage

20. Measuring Brand Value Brand Awareness Unique Selling Proposition Brand DNA Brand Experience Brand Awareness is Only One element of Brand Equity

21. Measuring Brand Value- Brand Equity Brand Equity is the Premium that Consumers Pay for Your Products and Services... Demand Curve Shift With Brand Equity Quantity Q2 Volume Effect Brand Equity Leverage Q1 P1 P2 Price Price or Margin Effect …And, the Premium that Investors Pay for Your Company.

22. Measuring Brand Value- Brand Equity Vs PE How Brand Equity Impacts PE Financial-Centric Companies Company PE MktCap 1. Bergen Brunswig 14 $2.1B 2. Ingersol Rand 19.7 10.9B 3. Dow Chemical 21.5 27.6B 4. Conectiv 11.12 $2.0B Brand-Centric Companies Company PE MktCap 1. P&G 35.2 $133B 2. Gillette 39.2 50B 3. Coca Cola 47.9 146B 4. Disney 40.7 $61.4B Hot Market-Centric Companies Company PE MktCap 1. AOL 253 $109.4B 2. Yahoo 311 $39.6B 3. Excite 491 $7.3B 4. Amazon -119 $20.2B The Reason Brand-Centric Companies have (traditionally) higher PE’s stems from premiums in pricing and growth potential

23. Advertising How Much Advertising is Enough? Brand-Centric Companies Company U.S. Revenue U.S. Ad Spending Ad $ as % of Sales 1. P&G $18,460M $2,743M 14.9 2. Gillette 3,682M 578M 15.7 3. Coca Cola 6,443M 710M 11.0

24. Comparables Conectiv .6% SBC 1.3% BellSouth 1.5% AT&T 1.5% Bell A. 1.9% MCI 3.9% Sprint 3.5% Brand $$ Kodak 5.7% Cendant 5.4% Sherwin-W. 6.3% Starwood 23.4% Advertising Spending

25. Standards Disney 7.0% Amex 3.1% GE .46% Advertising Spending

26. Building a Brand Vs Brand Equity • Brand Awareness • People KNOW who you are • Brand Equity • People pay Premium • To do business with you • To own you

27. Brand Equity Dimensions • Awareness • DNA • Experience

28. Building Strong Brands • Vision • CEO as ‘Keeper of the Marque’ • Consistency • Commitment • Patience

29. Building Strong Brands • Bases for Vision • Promotability • Operational Excellence • Product Excellence • USP • Powerful Potential

30. Building Strong Brands • If it doesn’t ‘line up’ – it doesn’t add up • What you SAY to the world • What you DO in the world • What you DO inside

31. Brand Checklist • Do WE know who we are? • Do we know who we want to do business with? • Do we know what the target market’s preferred terms of engagement are? • Do we understand the competitive marketplace? • Have we Mapped-The-Gap in the competitive marketplace?

32. Brand Checklist • Are we willing to commit long-term resources for long-term gain? • Do we have the ‘guts’ to live by the promises we make in public? • Do we understand the issues well enough to be brief? (Define the Vision) • Do we understand who needs to do what to • Create the Vision • Maintain the Vision (e.g. –can it wear ears?) • Expand the Vision (We can’t know everything at the start)

33. Branding Summary • Branding is fundamentally different from the other marketing activities — product, pricing, communication, community and distribution — in three ways: • Brands are reflections or outcomes of the firm’s marketing activities • Unlike the other activities, branding is an integral part of every marketing activity and strategy • Strong brands can be used to enhance the effectiveness of all other marketing activities - The presence of a strong brand enhances positive marketing activities such that awareness, exploration and commitment are more effectively established.

34. Branding Strategy

35. Customer Satisfaction Via E-Commerce E-Commerce as a function of Costumers & e-merchants: 1) Standards a) Order response time b) Product availability (either for download or for instant shipping) c) 24-hour, online self-help capabilities

36. Customer Satisfaction Via E-Commerce 2) Technologies a) Computer peripherals for online payments (e.g., smart cards and readers) b) Methods for online micro-payments for micro-purchases (e.g., individual pieces of music or magazine articles) c) Customer security (e.g., biometric identification devices) d) Mass customization (e.g., devices to scan body measurements for ordering "customized" clothing from online catalogs)

37. Customer Satisfaction Via E-Commerce Customer Service Expectations 1) Customer service: guarantees, alternative methods of contact (e.g., 800-numbers, online chat capability) 2) Customer satisfaction: security, privacy

38. Interactivity, Viral Marketing Burger King’s: http://www.subservientchicken.com/ GAP’s: http://www.watchmechange.com/ Levi Jean Finder http://www.us.levi.com/fal05a/levi/jeanfinder/l_jf_app.jsp?bmUID=1138045809789 Mitsubishi: Thrill Ride Challenge http://www.mitsubishicars.com/06eclipse/ Ford Supercar Challenge: http://www.fordvehicles.com/supercarchallenge/err/index.asp Sims: http://thesims.ea.com/index_flash.php, http://simcity.ea.com/about/simcity4/flash.php http://www.jamster.com/s/jiw/html/affiliate/om/us/buy_this_real_tone/index.htm?tduid=58ebbda74fa9786e730de3c098bb54d9 www.jamster.com

39. Interactivity, Individualization

40. Online/Offline Promotion OutdoorAdvertising (Billboards) Sales force/Face-to-Face Radio Public Relations Yellow Pages Telemarketing Television Offline Brochures Direct Mailings Newsletters Magazines Newspapers Point-of-Purchase Displays Customer Service Sponsorships Wireless Devices Banner Ads Websites Personal Websites Online E-MailMarketing Rich Media Interstitials Dynamic Ads Classifieds & Listings Search Engines Interactive Television Personal Mass

41. Design Experience Joseph Lewis Aguirre

42. Design Experience http://www.interaction-ivrea.it/en/index.asp http://www.monsterskate.com/ http://www.visualthesaurus.com/ http://www.hermanmiller.com/ http://www.generalmills.com/corporate/index.aspx www.reflect.com

43. Online Marketing www.godaddy.com http://smallbusiness.yahoo.com/merchant/ http://www.google.com/ads/ http://www.cj.com/ http://www.content.overture.com/d/

44. The Marketing Concept and the Law Marketing Concept Ethics, Law, Regulations Company Effort

45. Multinational Customer Joseph Lewis Aguirre

46. Global Information Flow

47. Internet Accounts and Hosts http://www.riverdeep.net/current/2002/01/011402t_divide.jhtml ,

48. Business Management for The Multinational Customer • Globalization of technology is bringing diverse cultures together into a common business value chain raising with consequent issues: • The effects of cultural and language differences on consensus and collaboration. • Standardization of business processes. • Real-time status for business transactions. • Maturity of the technological environment.

49. COURSE OBJECTIVES- WS5 CUSTOMER SATISFACTION VIA E-COMMERCE • Examine the customer satisfaction expectations of e-customers. • Assess the communications techniques that e-merchants can use to satisfy customer expectations. • Translate new communications technologies into a vehicle for enhanced customer satisfaction.