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E-Business: Achieving Success in the Digital Age

This chapter discusses the concepts of e-business and e-marketing, including the different types of business websites, B2B marketing, B2C e-marketing, and the challenges associated with online marketing and e-business.

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E-Business: Achieving Success in the Digital Age

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  1. E-Business in Contemporary Marketing CHAPTER4 Chapter Objectives Define e-business and discuss how marketers use the Internet to achieve business success. Distinguish between a corporate Web site and a marketing Web site. List the major forms of B2B marketing. Explain business-to-consumer (B2C) e-marketing. Identify online buyers and sellers. Describe some of the challenges associated with online marketing and e-business. Discuss how marketers use the communication function of the Web as part of their online marketing strategies. Outline the steps involved in developing successful e-business Web sites and identify methods for measuring Web site effectiveness. 4 1 7 5 2 6 8 3

  2. WHAT IS E-BUSINESS? • E-business Firm that targets customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers. • E-marketing Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools.

  3. CAPABILITIES AND BENEFITS OF E-MARKETING Global Reach Personalization Interactive Marketing Right-time Marketing Integrated Marketing

  4. TYPES OF BUSINESS WEB SITES • Corporate Web site Site designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties. • Purpose is to build customer goodwill and assist channel members in their marketing efforts. • Marketing Web site Site whose main purpose is to increase purchases by visitors. • Many try to engage visitors in interactions that move them closer to a desired marketing outcome.

  5. B2B E-MARKETING • Business-to-business (B2B) e-marketing Use of the Internet for business transactions between organizations. • Accounts for 90 percent of all e-business activity. • Accounts for 10 percent of all B2B transactions. • Increases efficiency of business transactions, which typically involve more steps than consumer transactions. • Electronic data interchange—computer-to-computer exchanges of price quotations, purchase orders, invoices, and other sales information between buyers and sellers. • Web services—Internet-based systems that allow parties to communicate electronically with one another regardless of the computer operating system they use.

  6. • Extranets—secure networks used for e-marketing and accessible through the firm’s Web site by external customers, suppliers, or other authorized users. • Private exchanges—secure Web site at which a company and its suppliers share all types of data related to e-marketing, from product design through delivery of orders. • Electronic exchanges—online marketplaces that bring buyers and sellers together in one electronic marketplace and cater to a specific industry’s needs. • E-procurement—Web-based systems that enable all types of organizations to improve the efficiency of their bidding and purchasing processes.

  7. ONLINE SHOPPING AND B2C E-MARKETING • Business-to-consumer (B2C) e-marketing Selling directly to consumers over the Internet. Also called e-tailing. • Service providers such as banks are an important segment of e-tailing. • Two types of B2C Web sites • Shopping sites • Information sites

  8. ELECTRONIC STOREFRONTS • Electronic storefront Company Web site that sells products to customers. • Growth anticipated with the increase in broadband connections. • Broadband shoppers typically spend 34 percent more online than narrowband shoppers. BENEFITS OF B2C E-MARKETING • Lower prices. • Convenience. • Personalization.

  9. ONLINE BUYERS AND SELLERS • Demographics of customers are changing as Internet penetration grows.

  10. E-BUSINESS AND E-MARKETING CHALLENGES ONLINE PAYMENT SYSTEMS • Companies have developed secure payment systems to protect customer information. • Encryption, Secure Sockets Layer, and electronic wallets. PRIVACY ISSUES •  Protection of personal information is customers’ top security concern. • Cookies and spyware allow companies to personalize Internet experience but also invade computer users’ privacy. • To reassure customers, many online merchants have signed on with online privacy organizations such as TRUSTe. • Companies install firewalls to protect private corporate data.

  11. INTERNET FRAUD • Internet Crime Complaint Center logged more than 231,000 complaints in a recent year. • Phishing High-tech scam that uses authentic-looking e-mail or pop-up messages to get unsuspecting victims to reveal personal information. • Payment fraud is also growing. WEB SITE DESIGN AND SERVICE • As many as 70 percent of Internet shopping carts are abandoned before any purchase is made. • Companies that have brick-and-mortar experience often have more experience satisfying customers than Internet-only retailers. CHANNEL CONFLICTS • Direct sales to customers can compete with business partners such as retailers and distributors, disputes called channel conflicts.

  12. USING THE WEB’S COMMUNICATION FUNCTION • Web has four main functions: e-business, entertainment, information, and communication. • Communication is Web’s most popular function. • Firms use e-mail to communicate with customers, suppliers, and other partners. • Spam Popular name for junk e-mail. ONLINE COMMUNITIES • Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests.

  13. BLOGS • Blog Short for Web log, an online journal written by a blogger. • Some incorporate wikis and podcasts. • Corporate blogs can help build brand trust. • Employee blogs can humanize a company, but negative comments can harm it. WEB-BASED PROMOTIONS • Banner and pop-up ads on Web sites, and online coupons. • Search marketing Paying search engines, such as Google, a fee to make sure that the company’s listing appears toward the top of the search results.

  14. • Planning and preparation—company’s goal for its Web site determines scope, content, and design. • Will the site be maintained in-house or by a contractor? • What will the site be named? • Content and connections—important factor for whether visitors return to a site. • Relevant to viewers, easy to access and understand, updated regularly, and compelling and entertaining. • Most small businesses are better off outsourcing to meet their hosting and maintenance needs. • Costs and maintenance—development, placing the site on a Web server, and maintaining, updating, and promoting the site.

  15. MEASURING WEB SITE EFFECTIVENESS Click-through rate Percentage of people presented with a banner ad who click on it. Conversion rate Percentage of visitors to a Web site who make a purchase.

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