1. ELC 310 Day 26

2. Agenda • Questions? • Exam # 4 on Friday, December 8 • 10 Short essays • Plus one extra credit essay • Entire class period • Albert Chapters 1-14 • Case study Analysis • 3 A’s, 2 B +’s and 1 B • Did use student grading even though some of the input was flawed • Eliminated bad inputs • Student prepared Case Studies • 16% of Overall Grade • Written due December 14, email in WebCT • Presentation due December 14 at 1-3 PM, email in WebCT prior to 1 PM • Lecture/Discuss Evaluation Methodology and Research in E-Commerce

3. Today Albert Chap 13 & 14 December 8 Quiz 4 December 14, 1 – 3 PM Written Case study & presentations Due Please send me your PowerPoint's prior to any presentation so I may load them up on the web server Schedule for last days of class

4. Case Study Recap

5. Chapter 13Customerization--a future online opportunity

6. What is “Customer”ization? • Customerization defines the exchange process of marketing in the context of complete customer-control. • Natural fit with the electronic environment • Entices customers to remain loyal

7. Overview of the Model • Customerization is a buyer or customer-centric marketing model. • Develops a relationship between: • One-to-one marketing • Mass customization • Internal operations must have the capability to customize • “Build to order process”

8. Flexible Requires database integration, operations, and production for success Relies on a number marketing approaches: traditional mass marketing targeted direct marketing Characteristics

9. Develop/Deepen Customer Relationship Transitioning Experienced-Based Decision Customizing the Interaction Co-develop Products and Services Premium Pricing Acceptance Interactive Information Exchange Distribution Channel Choice Personal Brands 8 Enhanced Marketing Outcomes

10. I. Developing/Deepening Customer Relationship • Capitalizes on relationship building • E-business component demonstrated : • CRM • Value Bubble Steps involved: • Attract, Engage, Retain, Learn, Relate

11. II. Transitioning Experienced-Based Decisions • “Design and Discover Process” • allows user to see the outcome • provides the experience that is necessary to make purchase decision • E-business component demonstrated : • CRM and SCM • Value Bubble Steps involved: • Engage, Retain

12. III. Customizing the Interaction • Relies on accurate databases that integrate all customer information a firm possesses. • Segmentation and Microsegmentation • E-business component demonstrated: • CRM and BI • Value Bubble Steps involved: • Learn and Relate

13. IV. Co-Develop Products and Services • Collaborate with customers to develop a new product or service • part of market research and NPD • E-business component demonstrated: • BI, CRM • Value Bubble Steps involved: • Engage

14. V. Premium Pricing Acceptance • Increases value beyond competition • creates customer satisfaction and loyalty • E-business component demonstrated : • E-Commerce or the transaction • Value Bubble Steps involved: • Learn and Relate

15. VI. Interactive Information Exchange • Leverages information about the products and services it provides • E-business component demonstrated: • CRM • Value Bubble Steps involved: • Engage and Retain

16. VIII. Personal Brands • Transfers the brand from the company to the customer • allows for total customer empowerment • E-business component demonstrated: • CRM • Value Bubble Steps involved: • Engage and Retain

17. Original Article • Evolution • mass customization • personalization • 1:1 marketing • Customerization • buyer-centric • mass customization with customized marketing

18. 1:1 and Personalized • “Know thy customer” • Controlled by the firm • Customerization • more than customized products/services • internal processes • supply chain partnerships • what if significant costs are involved?

19. Customerization • Why? • Changing customer • ability/competency to co-produce • technological and operational capabilities • Customer-centric • active participant • drive process • building/solidifying relationships

20. Customer better meet needs worth premium price higher satisfaction Firm reductions in inventory enhance loyalty avoid commoditization better channel mgmt. Potential Benefits Online environment: reconfigurable, and easier identification of preferences

21. Company Examples • Dell (build to order) • inventory = $273 million/sales of $18.2 billion (1.5%) • Compaq (build to stock) • inventory = $2 billion/ sales of $38.5 billion (5.2%) 1999 figures

22. Marketing Implications • Relationship Marketing • passive to active participants • “What can you do with us?” • adoption of MP3 by music industry • Focusing on Unarticulated Needs • guides customer through design & discovery • product use experiences (search vs. experience) • Andersen Windows • Tailoring the offer • only relevant options (db, software, ask)

23. Marketing Implications • New Products • interactive process (no longer laboratory only) • Acumin • company no longer manufacturer but service provider • Customized vitamin packs • TI specs for new calculator • high school teachers’ web reviews • pre-sold • copycat product from competitor reaction

24. Marketing Implications • Price is Negotiable: Global Bazaar • more fluid • tailored to specific users based on elasticity • customer acceptance issues • dynamic pricing evolves • prices don’t go down • value-added services • price becomes less important • Interactive Edu-tainment • mix what you know with what you offer • DuPont • customer selects information

25. Marketing Implications • Distribution off-the-shelf • direct channel • channel conflict • customer has choice • reverse portals • aggregate and coordinate final distribution

26. Marketing Implications • Competitive Advantage: Power of Finesse • instead of brute strength • high customer value wins • levels playing field • street likes finesse and flexibility • “big will not eat the small…the fast will eat the slow” • E-volve-or-Die.Com

27. Marketing Strategies/Implications • Customerization--additional strategy • determine optimal portfolio • mass marketing • direct marketing to target segments • interactive customized marketing • E-businesses have advantage • Amazon vs. General Motors • Technology is easy • strategic and organizational decisions more complex and expensive.

28. Researching E-Business Chapter 14

29. E-business Market Research • Business Intelligence • Web Site Focus • Results impact • E-Commerce • Customer relationship management • Supply chain management • Enterprise resource planning

30. Traditional Marketing Research Process • 5 steps • Define the issue or challenge • Develop the research plan • Collect information • Analyze the information • Actions

31. Defining the issue or challenge • Indicators • Declining market share • Sales reduction • Profits • Order reduction • Increased complaints • Competitive actions • Develop research objectives

32. Developing the Research Plan • 5 Steps (for step two) • Deciding on the research design • Determining the types of information needed and sources • Evaluating different data Collections options • Developing the data collection device • Deciding who and how many will participate

33. Research Design • Exploratory research • Devine patterns • Look for connections • Independent variables (cause) • Dependant variables (effect) • Multivariate analysis • Experimental research • Experimental group • Control group • Data sources • Primary • Secondary • Skewed Populations

34. Collecting the Information • Face-to-Face • Telephone • On-line • Representative samples?

35. Analyzing the Data • Begin with research objectives • Address the issue, opportunity or challenge • Analysis leads to • Recommendations • Actions • Must be supported by quantifiable evidence

36. 3 Strategies for an Initial Web Launch • Setup Strategies • Maintenance strategies • Evaluation Strategies

37. Setup Strategies • Attract customers applicable to offerings • 3 components • Web Site Quality • Frequency of updates • Speed • 56K—10 secs • Value bubble • Attract, Engage & Retain

38. Maintenance Strategies • Create Site Loyalty and Facilitate Sales • GIST • Gather • Infer • Segment • Track • Measure Sales • Value bubble • Learn & Relate

39. Evaluation Strategies • Site-Centric (automated) • Daily, weekly and monthly reports (hits) • Length of time spent (stickiness) • Frequency of visits for each page and/or sections • Customer-Centric (still new) • Clickstreams • Core Services aspects • Recovery aspects