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E-COMMERCE AND VIRTUAL MARKETING

CHAPTER 8. E-COMMERCE AND VIRTUAL MARKETING. 8-1 What Is E-Commerce? 8-2 The Growing Importance of E-Commerce 8-3 Virtual Marketing and Distribution 8-4 The Role of Promotion for E-Commerce. Newsline - Page 208 Think/Pair/Share. Consumers Say No to Pets.com Read it individually

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E-COMMERCE AND VIRTUAL MARKETING

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  1. CHAPTER8 E-COMMERCE ANDVIRTUAL MARKETING 8-1 What Is E-Commerce? 8-2 The Growing Importance of E-Commerce 8-3 Virtual Marketing and Distribution 8-4 TheRole of Promotion for E-Commerce Chapter 8

  2. Newsline - Page 208 Think/Pair/Share • Consumers Say No to Pets.com • Read it individually • Think critically #1 & #2 individually • Pair with two row members & discuss • Share with the entire class Chapter 8

  3. Focus Questions: • Do you agree that using the Internet is the same as socializing and shopping with your friends at the mall? • What problems might a business encounter if it tries to use the Internet only to sell products without realizing the other ways people use the Internet? Courtesy, CISCO SYSTEMS, INC. Chapter 8

  4. 8-1 WHAT IS E-COMMERCE? GOALS • Describe the 3 stages of development for e-commerce businesses. • Discuss the importance of the marketing concept to successful e-commerce. Chapter 8

  5. Marketing MattersPage 210 • Make a list of the advantages and disadvantages of using the Internet to buy products and services. Chapter 8

  6. The Expanding Worldof E-Commerce • E-Commerce: involves business activities completed electronically via the Internet. • Exchange of goods, services & information via the Internet Chapter 8

  7. The Expanding Worldof E-Commerce • Includes: • Purchasing/Selling products • Provide/Exchange Info • Customer Service/Support • Not all businesses can complete all their activities using the Internet but it can be used for many activities. Chapter 8

  8. From Bricks to Clicks • Click-Only Businesses: Companies that complete almost all of their business activities through the Internet. • 1st known as ~ Dot.com Businesses • Ex: CustomInk.com & EastBay.com Chapter 8

  9. From Bricks to Clicks • Brick-and-Mortar Businesses: Companies that complete most of their business activities by means other than the Internet. • Brick-and-Mortar – suggests that the companies relies on actual buildings, such as retail stores, offices, or factories to conduct its business. • Ex: Traditional Groceries Store Chapter 8

  10. From Bricks to Clicks • Brick-and-Click Businesses: Companies that combine traditional business operations with the use of the Internet. (Combo) • Ex: Kohls, JCP, Foot Locker, etc. Chapter 8

  11. Stages of Development • Businesses generally progress through 3 stages as they develop their e-commerce presence on the Internet. Chapter 8

  12. Stages of Development • Information Stage • Simple Web site • Form of one way communication • Limitation - Customers cannot use the site to interact w/ the business. • Ex: School Store Wikispace Chapter 8

  13. Stages of Development • Interaction Stage (1 of 2) • Provide Information and Interact • Click to Email option – request info, ask questions, contact specific people. • Provide databases – check product availability, product costs, shipping costs, delivery dates Chapter 8

  14. Stages of Development • Interaction Stage (2 of 2) • Limitation – offer order form for print and mail, but cannot place order directly over the Internet • EX: http://jacketsnthingsambler.com/ Chapter 8

  15. Stages of Development • Full Integration Stage • Complete business transaction • Place orders and pay for it online • Track their shipments until delivered • Obtain customer assistance at every step • Advantage – Do not have to be a click-only company to use full integration. Chapter 8

  16. Get the MessagePage 213 • Critically Thinking • What factors might have contributed to the closing of the digital divide? • How would this information impact marketers hoping to target minorities? • What approach might such marketers take now that they would not have taken in 2000? Chapter 8

  17. Success in E-Commerce • Brainstorm some Advantages & Disadvantages of e-commerce. • Still need to identify the target market and need consumer needs to be successful in business. Chapter 8

  18. Advantages of E-commerce (1 of 2) • Immediate access to prospective customers all over the world. • Introduce new products or update product info instantaneously. • Communication is no longer confined to computers. Extended to notebooks, cell phones, PDAs. Chapter 8

  19. Advantages of E-commerce (2 of 2) • Marketing Research Tool. • Customer access 24/7. • Products delivered to computersE-Tickets replace paper tickets. • Small businesses can compete more easily with large companies Chapter 8

  20. Disadvantages of E-commerce (1 of 3) • Easy to start w/o understanding • Products not described well • Products not delivered on time • Damaged during shipments • Errors in order processing • Customer service hard to obtain • Returns/Defects difficult to return Chapter 8

  21. Disadvantages of E-commerce (2 of 3) • Businesses learned: • Difficult to predict demands • Customers expect 24/7 service • Warranty/Repairs must be offered to online customers • Methods to accept returns • Secure websites to accept credit cards Chapter 8

  22. One of the Greatest Disadvantages of E-commerce (3 of 3) • Changing nature of competition & Customers purchasing behaviors • Brick-n-mortar businesses compete geographically • E-commerce compete with all businesses offering same products Chapter 8

  23. Marketing ConceptApplied to E-commerce • Still need to: • Understand target market • Know their needs and wants • How to meet/satisfy those needs and wants with a marketing mix. Chapter 8

  24. Marketing ConceptApplied to E-commerce • Offer products that customers want (Product) • Distribute them effectively (Place) • Make purchases affordable (Price) • Make ordering and payments easy (Finance) • Provide info in description/pictures (Promo) • Answer questions (Service) • Provide expected services (Product) • Solve problems at every stage of sale (Service) Chapter 8

  25. 8-2 GROWING IMPORTANCEOF E-COMMERCE GOALS • Identify evidence of the growth of the Internet. • Describe the various business uses of the Internet for e-commerce. Chapter 8

  26. Growth of the Internet • No one recognized the potential of the Internet when it was first developed in 1950 as the military and research tool. • Over 120 Million business, organization and individual registered web sites were active worldwide in 2007. • Millions more added each year. Chapter 8

  27. Growth of the Internet • B2C: Business-to-Consumer • B2B: Business-to-Business • Many people/businesses around the world do not yet purchase online or small amount • Some not even connected yet. • Likely to increase by million/billions in the future • Lots of room for growth Chapter 8

  28. Business Uses of the InternetCommunicating (1 of 4) • Internet is a very efficient and effective communications tool for both individuals and businesses. • Chat Room • Bulletins board • Personal Messengers • Webcams • Online Whiteboards • Social Media (Facebook, MySpace, Twitter) Chapter 8

  29. Business Uses of the InternetCommunicating (2 of 4) • Quick and Inexpensive • Newsletters • Reports • Other important information for employees and investors Chapter 8

  30. Business Uses of the InternetCommunicating (3 of 4) • Provide detailed information • Post hours of operations • Provide contact information • Provide directions and maps to locations • If you do not post your info online you are missing many prospective customers. Chapter 8

  31. Business Uses of the InternetCommunicating (4 of 4) • Common for business communication • Place orders • Provide product info • Share data • Send emails • Exchange documents • Offer trainings • Update online records Chapter 8

  32. Business Uses of the InternetGathering Information (1 of 3) • Much information is FREE • Provided by government agencies, colleges, libraries, & even private businesses • Other information can be purchased • Research companies, professional & trade associations & businesses publish info Chapter 8

  33. Business Uses of the InternetGathering Information (2 of 3) • Improved capacity to gather consumer info • Customers encouraged to complete product registrations & warranty cards on their purchase • Allows company to collect info about consumer including an email address • Valuable information for future communication and promotional activities Chapter 8

  34. Business Uses of the InternetGathering Information (3 of 3) • Websites now include: • Requests for further information • Requests to be added to mailing lists • These options provide businesses with a list of prospective customers seeking more info. Chapter 8

  35. Business Uses of the InternetImproving Operations (1 of 2) • Internet has improved marketing activities and doing business. • Salesperson can check availability of products • Production manager can access transportation records and see shipment details • Engineers in different locations can collaborate on product designs instantaneously. Chapter 8

  36. Business Uses of the InternetImproving Operations (2 of 2) • Businesses can compete nationally and internationally without cost of salespeople • Businesses locate other businesses to assist them w/ long distance transactions. • Distribution • Customer Service • Billing & Payment Collection Chapter 8

  37. 8-3 VIRTUAL MARKETINGAND DISTRIBUTION GOALS • Differentiate virtual marketing from traditional marketing. • Describe distribution methods used in e-commerce. • Identify distribution problems experienced by e-businesses and how they can be resolved. Chapter 8

  38. Marketing Via the Internet • E-Commerce usually requires a combination of traditional marketing and: • Virtual Marketing: the completion of marketing activities primarily through the use of computer and Internet technologies Chapter 8

  39. Virtual MarketingExamples • Marketing research using online surveys and other electronic data-collection methods • Distribution of electronic versions of products & services such as e-tickets & e-books • Processes for making electronic payments and managing finances such as secure credit card transactions and online banking/bill payments • Communication & promotion strategies such as Internet advertising, email, live chats, blogs Chapter 8

  40. Virtual Marketing • E-commerce businesses also need to be able to use traditional marketing forms • Effective order processing • Product storage • Transportation systems Chapter 8

  41. Virtual Marketing Issues • Some customers may not be comfortable with electronic payments • Companies need to have alternative payments • Some customers may not search online • Requires traditional advertising/promotions • Need more attention to marketing planning • Need knowledge of new technologies Chapter 8

  42. Distribution for E-Commerce • Distribution is the marketing function that can determine success or failure for a company in e-commerce. • Major distribution changes in e-commerce: • access to products • ordering processing • distribution methods Chapter 8

  43. Distribution for E-Commerce • Finding and Buying Products Online • Increased competition • Online shopping carts designed: • Complete orders • Make immediate payments • Securely submit orders • Confirmations occur almost instantaneously Chapter 8

  44. Distribution for E-Commerce • Internet has streamlined Order Processing • Past – process for filling orders required a lot of paperwork to be sent to every dept involved • Internet provides all the info at your fingertips • Order info sent via computer to depts. involved • Check order status via Internet (more on next slide) Chapter 8

  45. Distribution for E-Commerce • Internet has streamlined Order Processing • Customers can check order status via Internet • Reduces errors - accuracy checked more easily • Save $ - on order processing & distribution costs • Savings Chart to follow… Chapter 8

  46. Cost Savings Average Cost Savings for Businesses when Customers Use the Internet to Make Purchases Chapter 8

  47. Distribution for E-Commerce • Internet can make Product Distribution easier & less expensive • Software companies do not have to produce CD – instead we download the software • Government does not have to print & mail tax forms & instruction books – online forms instead • Newspapers/Magazines have online editions • Photographers post photos online instead of CD Chapter 8

  48. Distribution Problems & SolutionsTransaction Security (1 of 3) • Transaction Security • Over half of all Internet consumers make at least one online purchase every 3 months. • Nearly 2/3 of all purchases started are ended before the customer submits the final order. • Business loses the sale and may have lost the consumer completely due to problems with the purchasing procedures. Chapter 8

  49. Distribution Problems & SolutionsTransaction Security (2 of 3) • One of the greatest concerns of customers is the security of the info they provide when placing an order online: • Personal info: Name, Address, Phone #, Credit Card # • Personal info can be stolen or misused while it is being transmitted or stored on computer • Business may misuse the info after the order has been processed Chapter 8

  50. Distribution Problems & SolutionsTransaction Security (3 of 3) • E-commerce companies go through great lengths to provide security for customers • Advanced Security Technologies • Offer the choice of fax or phone orders • Bank account transfers (no credit card #) • C.C. companies offer insurance so they aren’t responsible for misuse of their info • Privacy policies concerning use of private info Chapter 8

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