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  1. E-Commerce: Supporting External and Internal LinkagesPart 1 MIS 320 Kraig Pencil Summer 2014

  2. Game Plan • Introduction • Supporting Internal Linkages • Intranets • Supporting External Linkages • B2C: Business to Consumer • C2C: Consumer to Consumer • B2B: Business to Business (Part 2 Notes)

  3. A. Introduction • E-Commerce • A very hot business topic! • Definition • Buying and selling of products, services, and information which is enhanced via computer networks • May also include • Internal business communications • Customer service • Info sharing with business partners

  4. A. Introduction • Enables efficient value chain linkages and relationships • e.g., External linkage from customer to supplier: Order information Supplier CorporateCustomer Order information

  5. B. History • E-commerce applications have existed since the early 1970s • e.g., electronic funds transfer, electronic data interchange EDI • But … There were significant limitations in the “old days” • Network reliability • Compatibility • Lack of technical standards • Limited computing power

  6. B. History (cont.) 3. Things changed in the 1990’s • Commercialization of the Internet • “Price/performance” of IT improved (remember Moore’s Law?) • Introduction of WWW  E-commerce exploded !!!

  7. C. Intranets • Defn: • Private network for one organization that uses Internet software and protocols • “Private Internet” • Typically involves WWW-based applications • Key goal: • Support internal value chain linkages • Example • WWU Web4U

  8. Intranet: WWU

  9. C. Intranets (cont.) 4. One key advantage: Save $$$ and time!! • Without intranet: • Large organizations •  Spend $50-$100/yr/person to distribute paper-based internal documents • Time lag to share information • e.g., product inventory status to salespeople in the field • With intranet: • Intranet approach is much cheaper • Rapid information sharing • ROI on intranet projects can exceed 1000% • Payback can be 6-12 weeks

  10. D. Business-to-Consumer Applications (B2C) • B2C applications • Support external linkages with consumers • Foster trading between a business and a consumer (“on-line retail”) • Examples? • E-commerce jargon • E-tailer • “Pure EC” • “Clicks and mortar” • M-commerce • E.g., cell phone, PDA • Disintermediation • Channel conflict Order Sales Info

  11. Disintermediation If distribution channels get bypassed, then there can be “channel conflict”

  12. D. Business-to-Consumer Applications (B2C) -- cont 3. B2C: What is a good fit? • Digital products • Can be described/delivered electronically • Examples?? • Commodity items • Items with known/uniform features, rather than “high touch” items • Would dentures be a good item to sell over the WWW? • In some cases … Effective to allow customer to “shop online and buy in a store” • e.g., Automobiles, REI merchandise

  13. E. WWW Advertising 1. WWW advertising: Interaction • Information/interaction matrix (see figure)

  14. Advertising:Information/Interaction Matrix High Catalogs, Infomercials Personal sales visit Information Content Where can WWW sites fit on this matrix??? Low Traditional ads (e.g., newspaper) Phone sales Personal Interaction Low High

  15. Advertising:Information/Interaction Matrix Many Web pages Dynamic product database Many links Static – same for everyone Personal login or cookies Product and personal history databases Key-word searches Analyzes individual history/preferences Infinitely personalized pages Shopping cart / Online purchases / Wish lists Amazon.com High Information Content Key-word searches Product listings / catalog Online purchase DonPencil.com Few Web pages Static product lists / catalog Static – same for everyone www.christiansonsnursery.com Low Personal Interaction Low High

  16. E. WWW Advertising 2. WWW advertising: Interaction (cont.) • Lower interaction sites (e.g., local plant nursery www.christiansonsnursery.comhttp://www.donpencil.com/ ) • Higher interaction sites (e.g., www.amazon.com) • Customized suggestions, e-mail messages 3. Personalization • Track individual consumer behavior • Use information technology to customize the interactions • E.g., Provide information of relevance to customer; Target the ads, promotions, recommendations

  17. Personalization Examples: Amazon.Com

  18. E. WWW Advertising 4. Learning from a WWW site: WWW Analytics • It is possible to capture web browsing activity at site • Lots of marketing information!!! • Info can be used to analyze behavior of visitors • e.g., data mining • Can be useful for personalization, market research • Google Analytics (www.google.com/analytics ) • Sample report for www.fourthcornerquilts.com • e.g., visits, page views, referring sites, visits by location, length of visit, conversion rates (% that go to check out/make order), etc.

  19. What do Google Analytics Look Like for a Class Website?

  20. E. WWW Advertising 5. Viral marketing • “Word of mouth” advertising on the WWW • Create something that people may pass along to others • Generate awareness at minimal cost • Examples • E-mail ads • Hotmail (Attracted 150,000 subscribers in first week … with a limited advertising budget) • Videos • Blendtec -- “Will it blend” (Made Blendtec famous) • Ford Sportka -- Bird: (A bit edgy …) • Ford Sportka – Cat (Too edgy?)

  21. Viral Marketing: Hotmail

  22. Viral Marketing: Videos

  23. F. Consumer-to-Consumer Applications (C2C) • C2C applications • Foster trading between consumers (and/or non-business entities) • Examples • e.g., Purchase goods: www.ebay.com , www.sfgiants.com (“Double Play Ticket Window”), seattle.mariners.mlb.com (“Ticket Market”) • e.g., Share/trade information: www.experts-exchange.com

  24. C2C Example: Season Ticket Holders Can Sell Spare Baseball Tickets

  25. C2C Example: IT-related Information from Experts

  26. References: Figures • Figures used on Matrix slide: • http://www.eslkidstuff.com/images/newspaper.gif • http://www.lionking.org/sequels/TLK2/Catalog.jpg • http://nordictrack.speedera.net/www.nordictrack.com/nt/v5/images/NTL1494dtl-main.jpg • http://www.brusselaar.blogger.com.br/telemarketing.jpg • http://www.uvater.de/Salesperson.gif