Electronic Marketing

Electronic Marketing Chapter 16Special Opportunities for E-Business Situations 2004 Joel Reedy and Shauna Schullo

The Brave, New World of the Web • For competitive pressures, business management is looking inward to evaluate its own strengths and weaknesses, defining the corporate competencies and shoring up or outsourcing its deficiencies • Internet-based B2B trade will reach nearly $2.4 trillion in 2004 • B2B commerce will experience astounding growth over the next 5 years rising to $6.3 trillion in 2005 • Businesses must adopt bold new models for buying and selling as online B2B commerce swells from 3% to 42% of total B2B domestic trade within 5 years 2004 Joel Reedy and Shauna Schullo

The Brave, New World of the Web • Additional findings continued… • Business users accounted for 54% of all Internet users in 1999. Cyberatlas estimates more than 500 million active users accessed the Internet • More than 75 million businesses world wide are listed on the Dunn & Bradstreet world wide database. Of those, 54.4 million are active companies. In 2000, 80% had Web sites, 43% had online catalogs, 32% use B2B e-commerce, and 52% want new Web sales channels • Volumetrics – the use of the Internet in the business world has had a 17% increase compared to home user statistics 2004 Joel Reedy and Shauna Schullo

The Brave, New World of the Web • Web usage – according to a Thomas Register and Visa USA online survey of two thousand American and Canadian businesses, 40% used the Web at least once a month • Small Business – according to a survey of 501 small businesses with less than 100 employees, 66% said they have integrated the Internet as a tool to help them run their business 2004 Joel Reedy and Shauna Schullo

The Logic of Web Usage by Business-to-Business Organizations • The way commercial enterprises conduct business has changed drastically through the nineties, and few managers, marketing included, could have foretold how technology would entangle itself in the Web of business • Businesses are finding methods to adjust their business practices in the Information Economy 2004 Joel Reedy and Shauna Schullo

The Logic of Web Usage by Business-to-Business Organizations • Marketers recognize the greatest benefit of the Web to the business sector is its efficiency: • Products can be rushed to the market • Production costs can be reduced by computer-aided design and computer-aided manufacturing • The marketing process can be made more efficient with electronic resources 2004 Joel Reedy and Shauna Schullo

The Logic of Web Usage by Business-to-Business Organizations • Efficiency continued… • Targeting prospects can be enhanced with Web sites, listservs, or Usenet discussion groups, which are directed specifically to electronic commerce support, entrepreneurial, or venture capital funds • Advertising messages can seek out viewers chosen by these viewers’ site selections and search engine choices; electronic publicity releases covering business topics find their way to news wires 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • The first order of e-business for many companies was toward automated procurement because much of the material handling involved numbers easily recognized by computer interfaces • Open Buying on the Internet (OBI) became the standard way for exchanging and trading information 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Values delivered by e-business as described by PricewaterhouseCoopers • Achieve market leadership • Reach new markets • Create new products and services • Build customer loyalty • Optimize business processes • Enhance human capital • Harness technology • Manage risk and compliance 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Information is the key commodity in business-to-business transactions • E-business strategies are selling products and services • E-business is conducive for presentation through the catalog medium • The Web serves the catalog medium well • Listings, color photographs, diagrams, prices, and details subject to quickly change are popular product specifications • Web site selling keeps product information updated 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Management and advisory services are other forms of worthwhile information gaining awareness and sales momentum on the Web • Consultative selling, situations where the outside representative becomes a trusted member of the client’s management team and the salesperson’s input is highly valued, is a most profitable activity • IBM has created a “virtual seminar for e-business” 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • The electronic marketing resources for e-business • Commercial auctions to sell surpluses carried with “live price boards” for common knowledge, either buyer or seller • Virtual consulting using videoconferencing or virtual reality Web sites • Speech recognition for routing telephone sales inquiries and security authentication 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Marketing resources continued… • Automated kiosks for guard-less entry of lodging facilities after hours, retail order-taking by push key, or printed or graphical information dispensing such as maps or brochures • Automated procurement and reordering • Robot shopping for availability of item and best price • Delivery tracking 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Marketing resources continued… • Customer and prospect profiling for company preferences and buying patterns • Inventory control and balancing • Custom communications networks • Suppliers extranets for partnering and collaboration • EDI for fast and efficient passing of large amounts of data • Company marketing presence via Web advertising and customer communications and Web-enabled product and service ordering • Customer service e-mail and call routing systems for customer communications 2004 Joel Reedy and Shauna Schullo

The Opportunities for Electronic Marketing Resources in Business-to-Business Transactions • Marketing resources continued… • Virtual seminars and CD-ROM training of personnel • Partnering with specialized companies to strengthen all technology and service areas of an e-commerce organization • On many Web sites the user will find search engines that are time-savers in locating information contained within the site 2004 Joel Reedy and Shauna Schullo

Internal Considerations for Business Operations • Business should always be searching for the best methods for doing business • Competitive forces are pushing many companies to assess the Internet as a competitive tool 2004 Joel Reedy and Shauna Schullo

Disadvantages of Online Business-to-Business Commerce • While the strength of e-business is streamlined efficiency, companies employing e-business lose contact with their distribution channels and sales personnel • The biggest disadvantage is the threat of alienating distributors and therefore loss of physical distribution points 2004 Joel Reedy and Shauna Schullo

Disadvantages of Online Business-to-Business Commerce • Different companies are trying different strategies to address the distributor or salesperson displeasure • Compaq had introduced its own Web commerce site, selling computers at rock-bottom prices directly to small businesses and individuals • IBM has tried using their Internet sites mainly to direct prospects to online ordering sites operated by long-established dealers 2004 Joel Reedy and Shauna Schullo

Disadvantages of Online Business-to-Business Commerce • Strategies continued… • Radius, Inc., began online sales of its software for handling digital photos • Many other industries have long been partnering with distributors or third-party resellers, and e-business marketing strategies should be set with the prospect of gaining or losing key personnel or distribution outlets at any time 2004 Joel Reedy and Shauna Schullo

Disadvantages of Online Business-to-Business Commerce • Some companies abhor the prospect of limiting its sales over the Internet • 3M lists hundreds of its products on its Web site, but generally does not provide a way to order these products directly from the company 2004 Joel Reedy and Shauna Schullo

E-Business Sales Forecasts by Industry • The e-commerce specialist, Forrester Research, expects business-to-business e-commerce revenues to jump from $109 billion in 1999 to $1.3 trillion by 2003 • In making marketing decisions and plans, the marketer should probably adopt a conservative strategy, projecting the industry’s sales volume and her company’s market share and volume no further than two years hence • Study the industry projections to see which are reasonable for the environmental conditions of today and hopefully of tomorrow 2004 Joel Reedy and Shauna Schullo

Electronic Marketing