ECOMMERCE CHAPTER 2 ZeenathMariyam (BIT)
Electronic communications disruptive technologies Communications approaches which change the way in which information about products is exchanged, which impact the basis for competition in a marketplace.
Electronic communications Electronic communications are disruptive technologies that have caused majorchanges in industry structure, marketplace structure and business model Allows to bypass distributors and trade directly with customers via a destination web site has the opportunity to reach customers through new B2B marketplaces.
Electronic communications Similarly, for B2C organizations such as an e-retail destination site there is the opportunity to market its products through online intermediaries search engines, price comparison sites, social networks, brokers, directories newspaper and magazine publishers
Characteristics of disruptive Internet technologies • Reach • potential number of customers a business can interact with. • Using online store, catalogue or web site • Internet enables reach to be increased nationally and internationally at low cost through making content available via search engines
Characteristics of disruptive Internet technologies • Richness • detailed up-to-date information about products, prices and availability to be made available • Affiliation • detailed information about products, prices and availability to be made available
Situation analysis Collection and review of information about an organization’s external environment and internal processes and resources in order to inform its strategies.
Environmental scanning and analysis The process of continuously monitoring the environment and events and responding accordingly.
e-commerce environment Is the environment that influences the way in which they conduct business. Strategy development should be strongly influenced by considering the environment the business operates in
Strategic agility The capability to innovate and so gain competitive advantage within a marketplace by….. • monitoring changes within an organization’s marketplace • efficiently evaluate alternative strategies • select, review and implement appropriate candidate strategies.
Online marketplace analysis Is the key part of … • developing a long-term e-business plan • creating a shorter-term digital marketing campaign
online marketplace map • Customer segments. • identify and summarize different target segments for an online business • understand their online media consumption, buyer behavior and the type of content and experiences they will be looking for from intermediaries and your web site.
online marketplace map • Search intermediaries. • the main search engines in each country. Typically they are Google, Yahoo!,Microsoft Live Search and Ask • the Google trends tool is a free tool for assessing site popularity and the searches used to find sites and how they vary seasonally, which is useful for student assignments.
online marketplace map Search traffic - number of people entering you site while browsing the internet. How to get the search traffic? search engine marketing affiliate marketing search engine marketing affiliate marketing
online marketplace map 3. Intermediaries and media sites. • Mainstream news media sites / portals. • FT.com or Times • Google news • Niche or vertical media sites • E-consultancy, • ClickZ.com in B2B. • Price comparison sites/aggregators • Moneysupermarket, • Kelkoo, • Shopping.com • uSwitch.
online marketplace map 3. Intermediaries and media sites. • Super affiliates.- Affiliates gain revenue from a merchant they refer traffic to using a commission-based arrangement based on the proportion of sale or a fixed amount. • Niche affiliates or bloggers - These are often individuals ex - UK,Martin Lewis of Moneysavingexpert.com
online marketplace map 3. Destination sites These are the sites that the marketer is trying to generate visitors to, whether these are transactional sites like • retailers • financial services • travel companies • manufacturers • brands.
Research tools for assessing your e-marketplace Alexa - www.alexa.com http://trends.google.com/websites www.hitwise.com www.netratings.com www.forrester.com www.comscore.com www.iab.net www.jupiterresearch.com www.abce.org.uk
Marketplace channel structures describe the way a manufacturer or selling organization delivers products and services to its customers
Disintermediation ( ‘cutting out the middleman’) Is The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers.
Re-intermediation The creation of new intermediaries between customers and suppliers providing services such as supplier search and product evaluation. • results from Internet-based communications.
Counter-mediation Type of Re-intermediation where this is a Creation of a new intermediary by an established company.
Electronic marketplace A virtual marketplace such as the Internet in which no direct contact occurs between buyers and sellers.
Types of E-marketplace sites Seller-controlled sites are those that are the main site of the supplier company and are e-commerce-enabled. B. Seller-oriented sites are controlled by third parties, but represent the seller rather than providing a full range of options.
Types of E-marketplace sites Neutral sites are independent evaluator intermediaries that enable price and product comparison and will result in the purchase being fulfilled on the target site. Buyer-oriented sites are controlled by third parties on behalf of the buyer.
Types of E-marketplace sites Buyer-controlled sites usually involve either procurement posting on buyer-company sites or those of intermediaries that have been set up in such a way that it is the buyer who initiates the market making.
Different types of online intermediary Infomediary A business whose main source of revenue derives from capturing consumer information and developing detailed profiles of individual customers for use by third parties.
Different types of online intermediary Metamediaries Intermediaries providing information to assist with selection and discussion about different products and services. brings buyers and sellers together www.metacritic.com -provides reviews of music and movies from traditional publication
Different types of online intermediary Portal A web site that acts as a gateway to information and services available on the Internet by providing search engine directories and other services such as personalized news or free e-mail. Ex- www.orange.com. www.msn.com
Main new intermediaries Directories (such as Yahoo!, Excite). Search engines (AltaVista, Infoseek). Malls (BarclaySquare, Buckingham Gate). Virtual resellers (own-inventory and sell-direct, e.g. Amazon, CDNow, CDWow , Play.com).
Main new intermediaries • Financial intermediaries (offering digital cash and cheque payment services, such as Digicash, PayPal). • Forums, fan clubs and user groups (referred to collectively as ‘virtual communities’). • HabboHotel • Second Life • Evaluators (sites which perform review or comparison of services)
Search Engine • Allows you to search Resources online (documents, images, audio, video) • key type of intermediary for organizations marketing their services online • Used for marketplace analysis • assess demand for products • brand preferences in different countries using tools such as the Google Keyword Tool which shows the volume of searches by consumers related to clothes in the UK in a one-month period.
Search engines, spiders and robots Automatic tools known as ‘spiders’ or ‘robots’ index registered sites. Users search this by typing keywords and are presented with a list of pages. Directories or catalogues Structured listings of registered sites in different categories.
Online business model A summary of how a company will generate a profit identifying its core product or service value proposition, target customers in different markets, position in the competitive online marketplace or value chain and its projections for revenue and costs.
8 key elements of the business model • Value proposition. • Offered Products and services • The value of the Products and services • Market or audience • non-profit? For-profit? B2B ? B2C? • Target customers • Revenue models and cost base. • revenue models that will generate different income streams • main costs of the business • Forecast expenses
8 key elements of the business model • Competitive environment. • direct and indirect competitors • business models which they use • Value chain and marketplace positioning • the value chain between customers and suppliers and in comparison with direct and indirect competitors