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Electronic commerce

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Electronic commerce

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Electronic commerce

  1. 1. Chapter 9 Interactive Marketing and Electronic Commerce
  2. 2. Electronic Commerce <ul><li>… any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services. </li></ul>
  3. 3. Marketing Opportunities in Marketspace <ul><li>Products best suited for e-commerce: </li></ul><ul><li>product information important, but not pre-purchase trial </li></ul><ul><li>audio or video demonstration </li></ul><ul><li>digitally deliverable items </li></ul><ul><li>unique items </li></ul><ul><li>routine purchases, convenience important </li></ul><ul><li>highly standardized products, price information important </li></ul>
  4. 4. E-Commerce Models: Sales Revenue Model <ul><li>involves marketing products and services through the Internet </li></ul><ul><li>companies seek to earn a margin on actual sales or a fee charged for rendering a service </li></ul><ul><li>few companies that market consumer products actually make an operating profit using this model exclusively </li></ul><ul><li>Examples – CDNow.com and Cisco Systems </li></ul>
  5. 5. E-Commerce Models: Advertising Support Model <ul><li>emphasizes the selling of advertising on a company’s Web site </li></ul><ul><li>often prices are listed at or below their cost </li></ul><ul><li>often used to complement the selling model, but sometimes used alone to generate revenue </li></ul><ul><li>Examples – Buy.com and Yahoo.com </li></ul>
  6. 6. E-Commerce Models: Cost Elimination Model <ul><li>used when delivery of the product, service, or information through the Internet significantly lowers costs </li></ul><ul><li>Examples – banks and airlines </li></ul>
  7. 7. E-Commerce Models: Subscription Support Model <ul><li>generates revenue from users in the form of monthly or annual subscriptions based on the value of the content or service provided </li></ul><ul><li>Examples – aol.com and wsj.com </li></ul>
  8. 8. E-Commerce Models: Information Trading Model <ul><li>company gathers information about consumer interests or purchase intentions, and sells the information to a retailer or manufacturer for a fee </li></ul><ul><li>Example – Popular Demand, Inc. </li></ul>
  9. 9. E-Commerce Models: Infomediary Model <ul><li>sells information about a market and creates a platform on which buyer and sellers can do business in marketspace </li></ul><ul><li>Three Types : </li></ul><ul><ul><li>aggregators – e.g., chemdex.com </li></ul></ul><ul><ul><li>auctioneers – e.g., eBay.com </li></ul></ul><ul><ul><li>exchanges – e.g., nte.net </li></ul></ul>
  10. 10. Customer Value Proposition in Marketspace Value Proposition Choice Convenience Coordination Customization Cost Customer Service
  11. 11. Types of Marketing Web Sites <ul><li>Transactional sites </li></ul><ul><li>e.g., L.L.Bean and gap.com </li></ul><ul><li>Promotional sites </li></ul><ul><li>e.g., saturn.com and cathay-usa.com </li></ul>
  12. 12. Transactional Websites <ul><li>are essentially electronic storefronts </li></ul><ul><li>focus on turning online browsers into online buyers </li></ul>
  13. 13. Promotional Websites <ul><li>promote a company’s products </li></ul><ul><li>provide information on how product can be used and where it can be purchased </li></ul><ul><li>often engage the visitor in an interactive experience </li></ul><ul><li>can be effective in generating interest in and trial of a company’s products </li></ul>
  14. 14. Marketing Websites and IMC <ul><li>Web sites complement direct selling and supplement advertising </li></ul><ul><li>play a cost-effective role in the communication mix </li></ul><ul><li>cost-effective in providing feedback on product performance </li></ul>
  15. 15. Managing Product-Market Convergence <ul><li>increasing number of companies maintaining presence in both marketplace and marketspace. This necessitates: </li></ul><ul><ul><li>coordinating marketing efforts </li></ul></ul><ul><ul><li>managing trade relations </li></ul></ul>

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