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E-Commerce: Supporting External and Internal LinkagesPart 1 MIS 320 Kraig Pencil Summer 2014
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)
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
A. Introduction • Enables efficient value chain linkages and relationships • e.g., External linkage from customer to supplier: Order information Supplier CorporateCustomer Order information
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
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 !!!
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
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
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
Disintermediation If distribution channels get bypassed, then there can be “channel conflict”
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
E. WWW Advertising 1. WWW advertising: Interaction • Information/interaction matrix (see figure)
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
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
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
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.
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?)
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
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