Framing Market Opportunity


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Framing Market Opportunity

  1. 1. MAR 6936-902 E-Commerce Marketing Fall 2002— Tampa--MBA Framing Market Opportunity Rich Gonzalez September 12, 2002 (Week 3) Draft
  2. 2. For Site/Model Evaluation <ul><li># 1 Thiboult </li></ul><ul><li># 3 Heather </li></ul><ul><li># 4 Elio </li></ul><ul><li># 5 Mike C. </li></ul><ul><li>Today: Please peruse Nielsen & Tahir book: Homepage Usability </li></ul>
  3. 3. URLs <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>
  4. 4. Agenda September 12, 2002 <ul><li>WSJ Online Demo </li></ul><ul><li>Customer Orientation </li></ul><ul><li>Porter </li></ul><ul><li>Market Opportunity </li></ul><ul><li>Business Models—Preview </li></ul><ul><li> Demo </li></ul><ul><li>Due For September 19 </li></ul><ul><li>PC Tablet??? </li></ul>
  5. 5. For Today: September 12 <ul><li>Chapter 4 </li></ul><ul><li>Purchase the WSJ Online 60 Day Demo </li></ul>
  6. 6. WSJ Online Demo
  7. 7. For September 19 <ul><li>Blown to Bits p.1 - 97 </li></ul><ul><li>Weekly Analysis Paper # 1 </li></ul>
  8. 8. Weekly Analysis Paper # 1 <ul><li>Subject: Blown To Bits </li></ul><ul><li>Length: 1.5 Pages -------125 points </li></ul><ul><li>Due on September 19 ------Hard Date </li></ul><ul><li>Subjects: (use bolded headings) 1. Information Asymmetries 2. Deconstruction 3. Disintermediation </li></ul><ul><li>4. You Pick One (i.e., 5 forces, killer app, standards, etc. </li></ul>
  9. 9. Moore’s Law # of transistors 1965—Double every 12 months 1975---Double every 24 months-----Sometimes 18 months Speed Time
  10. 10. Metcalfe’s Law <ul><li>def: values the utility of a network as the square of its users </li></ul><ul><li>Morse Code </li></ul><ul><li>Telephone system </li></ul><ul><li>Ethernet protocols </li></ul><ul><li>Internet protocols </li></ul>
  11. 11. Metcalfe’s Law Net Utility Nodes Critical Mass
  12. 12. 802.11b Update <ul><li>Wi-Fi </li></ul>COBA
  13. 13. Wi-Fi <ul><li>Hot Spots—Offices, Cafes, Parks </li></ul><ul><li>4 Million Using Now, Worldwide </li></ul><ul><li>Estimate: 45 Million Business Laptops-- 2004 </li></ul><ul><li>Estimate: 4.2 Million Households Have Wireless-- 2004 </li></ul><ul><li>Max Speed = 11,000 K </li></ul>
  14. 14. Bandwith: Consumer Context <ul><li>Dialup </li></ul><ul><li>ISDN </li></ul><ul><li>Cable </li></ul><ul><li>DSL </li></ul><ul><li>T1 </li></ul><ul><li>802.11b </li></ul><ul><li>3G </li></ul><ul><li>56 K </li></ul><ul><li>128 K </li></ul><ul><li>150 to 300 K </li></ul><ul><li>100 to 500 K </li></ul><ul><li>1400 K </li></ul><ul><li>300 to 500 K </li></ul><ul><li>144 K </li></ul>
  15. 15. Wi-Fi <ul><li>Boingo Wireless </li></ul>
  16. 16. Porter’s Competitive Business Model Intraindustry Rivalry New Entrants BP of Sellers Substitutes BP of Buyers Which is affected?
  17. 17. Marketing Concept <ul><li>What is it? </li></ul>
  18. 18. Customer Orientation <ul><li>A philosophy incorporating the marketing concept that emphasizes first identifying unmet needs, then satisfying them. </li></ul><ul><li>Marketing Mantra: Know your customer(s) . </li></ul>
  19. 19. Customer Oriented? <ul><li>Access denied: -ERR mail storage services unavailable, wait a few minutes and try again. </li></ul>
  20. 20. Customer Orientation <ul><li>Metrics: Customer Acquisition Market Share Customer Satisfaction Customer Profitability </li></ul>
  21. 21. Customer Satisfaction <ul><li>Definition? </li></ul>Expectations Performance - = Customer Sat
  22. 22. Quote and Revision <ul><li>“ There is only one boss: the customer. And he can fire everybody in the spending his money somewhere else.” Sam Walton </li></ul><ul><li>“ Only one person controls the mouse: the customer. And he can fire everybody in the clicking and going to some other site to spend his money.” R. Gonzalez </li></ul>
  23. 23. Customer Decision Process <ul><li>Origination (Recognize Problem) </li></ul><ul><li>Information Gathering </li></ul><ul><li>Evaluation </li></ul><ul><li>Purchase Decision </li></ul><ul><li>Postpurchase Results </li></ul>
  24. 24. 1 to 1 Marketing <ul><li>Personalization </li></ul><ul><li>Customization </li></ul>
  25. 25. 3 Fundamental Business Shifts <ul><li>1. Most transactions—B2C, B2B, C2C and C2C will become self-service digital transactions. </li></ul><ul><li>2. Customer service will become the primary value-added function in every business. Personal consultancy not routine services. </li></ul><ul><li>3. The pace of transactions and customer needs for customer service will force firms to adopt digital processes ---for survival. </li></ul>
  26. 26. Business Model <ul><li>Value Proposition </li></ul><ul><li>What you give and what you get </li></ul><ul><li>Value and Revenues </li></ul><ul><li>“How will the business win?” </li></ul>
  27. 27. Business Model <ul><li>1. Value Proposition or Target Cluster </li></ul><ul><li>2. A Marketspace Offering </li></ul><ul><li>3. Unique and Defensible Resource System </li></ul><ul><li>4. Financial Model </li></ul>
  28. 28. RAF vs. FRA <ul><li>Ready, Aim, Fire! </li></ul><ul><li>Fire, Ready, Aim </li></ul>
  29. 29. eBay <ul><li>What is it? </li></ul><ul><li>Why is it important? </li></ul><ul><li>Who are the customers? </li></ul><ul><li>What are the effects? </li></ul>
  30. 30. The C2C Example <ul><li>Pierre Omidyar </li></ul><ul><li>Pez Dispensers </li></ul><ul><li>New Marketspace </li></ul>
  31. 31. Mission: <ul><li>“Help anyone trade practically anything on earth.” </li></ul>
  32. 32. <ul><li>How do they do this? </li></ul><ul><li>1. Technology </li></ul><ul><li>2. Customer Orientation </li></ul><ul><li>3. Information Usage </li></ul><ul><li>4. Value </li></ul><ul><li>5. Community </li></ul><ul><li>6. Fun </li></ul>
  33. 33. Demo of
  34. 34. The B2C Example <ul><li>An Intermediary </li></ul><ul><li>A New Idea—Innovative </li></ul><ul><li>IRACS </li></ul><ul><li>A Bank? </li></ul>
  35. 35. Basic Components <ul><li>Criteria: Business Model Technology Mission Target Market Customer Benefits </li></ul>
  36. 36. <ul><li>How do they do this? </li></ul><ul><li>1. </li></ul><ul><li>2. </li></ul><ul><li>3. </li></ul><ul><li>4. </li></ul><ul><li>5. </li></ul>
  37. 37. Demo of
  38. 38. Table 1–1: Four Categories of E-Commerce <ul><li>B2B </li></ul><ul><li>C2B </li></ul><ul><li>B2C </li></ul><ul><li>C2C </li></ul><ul><li>Business </li></ul><ul><li>Consumers </li></ul><ul><li>Business originating from . . . </li></ul><ul><li>Business </li></ul><ul><li>Consumers </li></ul><ul><li>And selling to . . . </li></ul>
  39. 39. Framework for MO: Microsoft CarPoint Example Leverage the Internet to Improve the Consumer Car-Buying Process Car Buyers Are Dissatisfied With Current Retail Car Buying Process Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way Microsoft’s Software and Free Placement on All Its Websites How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors? Make Go / No-Go Assessment <ul><li>MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry </li></ul><ul><li>The retail car-buying process was frustrating and inefficient: </li></ul><ul><ul><li>Little information available to the consumer </li></ul></ul><ul><ul><li>Bargaining with salesperson viewed as a hassle </li></ul></ul><ul><ul><li>Long process overall </li></ul></ul><ul><li>MSN CarPoint selected two primary target segments for its service: </li></ul><ul><ul><li>“ The intimidated by the process” </li></ul></ul><ul><ul><li>“ The information seekers” </li></ul></ul><ul><li>MSN CarPoint could leverage Microsoft’s expertise in software development, the Microsoft brand name and its multitude of online properties </li></ul><ul><li>Competition was getting fierce with more and more online car services entering the market </li></ul><ul><li>But the financial opportunity was large: 66% of new car buyers used online services in 2000 </li></ul><ul><li>In 1996 the first version of CarPoint was shipped </li></ul><ul><li>By 1998, CarPoint was driving $5 million in car sales a day </li></ul>
  40. 40. Exhibit 1 –6 : A Flow Diagram of the Strategic Responsibilities Set Vision Establish Goals Formulate Strategy Drive Implementation Be Accountable for Performance
  41. 41. Online Retailing Fact <ul><li>65% of (virtual) shopping carts are abandoned before checkout </li></ul><ul><li>Why? </li></ul><ul><li>You have to find out why potential customers are a) Leaving your “store” b) Not trying your “store” </li></ul>
  42. 42. End Here