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Website Marketing and Design Poitiers, September 23-27 Session 1 - Introduction to the Internet, Web and eCommerce 1 Introduction to Course • Tom Leuchtner - Instructor • Course Topics: – Web/Internet Marketing – Practical Aspects of Commerce on the Web – Web Design • All information can be found on web: http://www.leuchtner.com/course2002 • Program for week • Questions? Part 1 - Introduction to Ecommerce I Perry & W Robson 2 Web Marketing • • • • The Original WWW Web and Marketing Stages of Web Publishing Break Part 1 - Introduction to Ecommerce I Perry & W Robson 3 The Original WWW • It’s 1922 • Radio suddenly transitions from a technology used primarily by the military and the shipping industry to a consumer and business phenomenon • At the end of 1921, there are 5 radio stations • A year later, there are 575 • Starting radio stations is the height of entrepreneurship • Listening to radio is a runaway consumer fad • “Combing the ether” is the hit of the day Part 1 - Introduction to Ecommerce I Perry & W Robson 4 The Original WWW • Radio’s impact on 1920s society – It changes the way people think about distance and time – Simultaneity no longer requires proximity – Global events are experienced as they happen – Performances in different cities can be heard in the neighbor’s living room – Fast-breaking world stories and even the local weather are available at the flip of a switch and the turn of the dial Part 1 - Introduction to Ecommerce I Perry & W Robson 5 The Original WWW • Radio changed business, especially marketing – It accelerated the economy’s transition to a mass market – It facilitated the creation of national brands – Firms could launch national marketing campaigns simultaneously – New product store introductions could be synchronized with ad campaigns to build consumer interest – Product positioning became more flexible • Businesses learned to use this new, powerful method of reaching customers Part 1 - Introduction to Ecommerce I Perry & W Robson 6 The Original WWW • As an industry, radio struggled with generating a self-sustaining revenue base – In 1926, radio stations were failing at a rate of 15% per month – Consumers still rushed to buy radios – Ultimately, national networks of stations emerged – A combination of national and local advertising made radio profitable • Internet marketing shows many of these same uncertainties Part 1 - Introduction to Ecommerce I 7 Perry & W Robson The Real World Wide Web • The Internet changes the way companies connect to their customers • It expands the opportunities for branding, innovation, pricing, and selling • It leads to new ways of thinking about time and distance • It opens up new distribution channels and markets Part 1 - Introduction to Ecommerce I Perry & W Robson 8 Virtuous Web Cycle • Is a business system with positive feedback • Each element in the business system feeds off another element in the system and feeds into yet another element in the system • If the cycle is strong enough, it can actually be a self-fulfilling expectation Huh? Part 1 - Introduction to Ecommerce I Perry & W Robson 9 Virtuous Cycle for Net Growth Let’s look at how it works Consumer and Business Internet Access Web Sites and Web Content Popular Fascination • It starts with user fascination • Providers see the developing opportunity and rush to create new brands & services, which creates more hype • The buzz feeds back into consumers’ interest and desire to experiment with Part 1 - Introduction to Ecommerce I 10 the new technology Perry & W Robson A Dot Com World • The virtuous Web cycle leads to rapid growth of – Consumer access – Internet usage – Content online Part 1 - Introduction to Ecommerce I Perry & W Robson 11 Consumer Access Figure 1.4 • The past five years have seen rapid growth in Growth of World Wide Web Domains – Network size – Users on networks – Network activity 50 46% growth in 1998 30 20 10 99 1/ 98 1/ 97 1/ 96 1/ 95 1/ 94 1/ 93 1/ 92 0 1/ Millions • Between January 1994 and January 1999, Internet hosts grew from 2.2 million to over 43 million • A 46% growth rate in 1998 40 Online Access Growth in12 Net Hosts Part 1 - Introduction to Ecommerce I Perry & W Robson Consumer Access • The Internet user base has grown rapidly as well • Worldwide, the number of users was estimated to be > 160 million in March, 1999 • Over 90% of the users on the Net have joined in the last 5 years • More growth is possible, as < 4% of the world’s adult population is online • 50% of users think the Net is a “necessity” Figure 1.5 HOW MANY ONLINE? The art of estimating the number of people online throughout the world is inexact. An “educated guess” as of May 1999 is 165 million. Source: NUA Worldwide Online Population 13 – Continuing Fascination Part 1 - Introduction to Ecommerce I Perry & W Robson Consumer Access • Spring 1998, the size of the Web was estimated at 300 million pages • Growth rates in content exceed growth rates in Web access and the number of users • From June 1997 to March 1998, Web content grew at 120% • More importantly, the types and creativity of Web site content have blossomed Figure 1.6 Size in millions of distinct static pages 0 Pages found in all 4 engines 50 100 150 200 250 300 1 2 2 Infoseek 16 25 35 Excite 28 30 33 1997 1998 1999 42 80 HotBot 100 35 Alta Vista Pages found in at least one of the four engines 100 110 90 160 195 125 Size of static web 200 Rapid Growth in Web 14 Content Part 1 - Introduction to Ecommerce I Perry & W Robson 275 Stages (or Generations) of Websites • Stage I: Publishing sites • Stage II: Databases and Forms • Stage III: Personalization Part 1 - Introduction to Ecommerce I Perry & W Robson 15 Stage I: Publishing Site Info Links Pictures/Information http://www.france98.com/french/index.html Part 1 - Introduction to Ecommerce I Perry & W Robson 16 Stage I What makes this a Stage Website ? I Organises, Broadcasts and Disseminates Information Part 1 - Introduction to Ecommerce I Perry & W Robson 17 Stage II: Databases and Forms To find out the travel distances between the host cities: Select your starting point Select your destination Bordeaux Paris Toulouse Marseilles Toulouse Marseille – 404km Part 1 - Introduction to Ecommerce I Perry & W Robson 18 Stage II What Makes this a Stage Website? II Ability to retrieve information to respond to user requests Part 1 - Introduction to Ecommerce I Perry & W Robson 19 Stage III: Personalization If you area team WC98 member and are using a computer other than the one you originally joined WC98, enter your nickname and password now. Part 1 - Introduction to Ecommerce I Perry & W Robson 20 Stage III What Makes this a Stage Website? III More than ask-respond Anticipates Suggests Part 1 - Introduction to Ecommerce I Perry & W Robson 21 Website Marketing and Design Poitiers, September 23-27 Session 2 – The Web and Marketing, Intro to eCommerce 1 Web Marketing • Marketing Principles on the Web • Online Consumer Behavior • eCommerce Part 1 - Introduction to Ecommerce I Perry & W Robson 23 The Dell Triangle: Figure 4.1 Part 1 - Introduction to Ecommerce I Perry & W Robson 24 Online Marketing – personalization – community building – real-time marketing Communication Drives Usage Customer Contacts • Direct interaction creates customer value and sets the stage for relationship building • This creates opportunities for Figure 4.2 Interactivity Customers use sites more as companies add more Part 1 - Introduction to Ecommerce I 25 Perry & W Robson interactive content Online Behavior & Interactivity • Interactivity depends on – Direct communication – Individual choice – Friendly technology • Let’s take a look at each of these Part 1 - Introduction to Ecommerce I Perry & W Robson 26 Direct Communication From Broadcast to Dialogue Figure 4.3 One-to-Many Broadcast (same message to all) Direct Targeting (one direction, different messages) One-to-One Interactive (unique messages to individuals) • Dialogue is possible when there’s direct communication between marketer and customer – Intermediaries can filter or block feedback Part 1 - Introduction to Ecommerce I Perry & W Robson 27 Comparing Communication Methods • Hoffman & Novak (1996): Compared traditional and online communication methods • They looked at – Communication model: one-to-many one-to one – Media symmetry: is the information flow symmetric? – Media content: use of text, images, audio, video – Diversity of information: the number of information sources available through the medium (billboards vs. cable TV or the Web) – Communication timing: synchronous vs. asynchronous – Personal interactivity: person-to-person vs. machine-mediated interaction Part 1 - Introduction to Ecommerce I 28 Perry & W Robson Comparing Communication Methods • The Web is a flexible technology • It’s evolving into a personal and dynamic communication medium Part 1 - Introduction to Ecommerce I Perry & W Robson 29 Figure 4.4 Individual Choice Selection + Suggestion = Value • The modern economy presents a staggering amount of variety – Typical supermarkets contain 25,000 different items – Variety expands even further without the physical constraints of inventory and shelf space • Choice is confusing without a way to compare, evaluate & select among the huge number of possibilities – New technologies combine selection and suggestion Part 1 - Introduction to Ecommerce I 30 – Enable consumers to more effective choices Perrymake & W Robson Impact on Consumer Choice Selection Suggestion Shopping on demand Greater value consciousness Power shift to consumers Personalization Customization "Friction-Free Capitalism" Automation of consumption "Captive Consumers" Part 1 - Introduction to Ecommerce I Perry & W Robson 31 Friendly Technology Technology is technology only if it was invented after you were born • Televisions, radios, telephones, and VCRs have market penetrations > 85% • The Web must become even easier & friendlier to reach the 98% household penetration of TV • As Web access devices becomes more appliance-like, increasing numbers of consumers will be online • Internet marketers must understand consumer behavior online Part 1 - Introduction to Ecommerce I 32 Perry & W Robson Web Stage and User Challenges • The easiest type of online consumer activity is when loyal and experienced users perform simple tasks • More complicated tasks require marketers to develop better user interfaces • More risky transactions require marketers to establish trust and pay attention to customer needs Part 1 - Introduction to Ecommerce I Perry & W Robson Figure 4.6 33 Online Consumer Behavior The Media Equation Media = Real Life Byron Reeves & Cliff Nass • Users relate to virtual information in many of the basic social ways they interact with people in their everyday lives • Users treat machines and software like people Part 1 - Introduction to Ecommerce I Perry & W Robson 34 Online Consumer Behavior Why Are There Social Responses to Information Technology? • The human brain isn’t well adapted to 20th century media • New media is engaging old brains Part 1 - Introduction to Ecommerce I Perry & W Robson 35 Online Consumer Behavior Simple Technological Features Can Elicit Strong Social Responses • Manners are critical in online & computer messages • Good Manners = positive responses • Behavior that is considered rude in real life is considered rude onscreen Part 1 - Introduction to Ecommerce I Perry & W Robson 36 Online Consumer Behavior Social Cues • E-mail lacks the social cues that a phone conversation or a face-to-face meeting provide • Misunderstandings develop more easily because people it’s harder to judge confusion – People don’t get the signals that make them stop and explain themselves in face-to-face discussion • People tend to use stronger language and express themselves more frankly • And they tend to circulate their thoughts to a Part 1 - Introduction to Ecommerce I 37 much wider audience Perry & W Robson Online Consumer Behavior Cognitive Difficulty • One of the challenges of providing online information is making it accessible to users • Providing effective search functionality is key • Site developers must understand how their users are likely to search and browse Part 1 - Introduction to Ecommerce I Perry & W Robson 38 Who’s Online? • High income • Above average education • Heaviest users: 30-49 years old – students & kids also online – seniors & older middle-aged less likely • Gap between male & female is closing • US dominates – wealthiest European & Asian countries coming online quickly Part 1 - Introduction to Ecommerce I Perry & W Robson 39 As Time Passes • More people online • More people connecting at higher speeds • More people using the Web to shop and transact business – >40% of those with 4+ years experience on the Web regularly shop and conduct Web commerce – as opposed to only 12% of people who have been online for <1 year Part 1 - Introduction to Ecommerce I Perry & W Robson 40 eCommerce • Introduction to eCommerce • eCommerce Overview • eCommerce Terminology Part 1 - Introduction to Ecommerce I Perry & W Robson 41 How Companies Organize Net Activities •Visible to the public •Managed by marketing •Visible to suppliers and Bto-B customers •Supply chain management •Managed by marketing and logistics •Internal to a company •Available only to employees •Often managed by HR Part 1 - Introduction to Ecommerce I Perry & W Robson 42 eCommerce (EC) Definition • Ecommerce is any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact • It is one of those rare cases where changing needs and new technologies come together to revolutionise the way in which business is conducted European Commission (1997) http://www.ispo.cec/be/Ecommerce/whatis.htm Part 1 - Introduction to Ecommerce I Perry & W Robson 43 Ecommerce Terminology E-Business Business Partners EProcurement E-Commerce Enterprise Extranet Business-to-Business Intranet Internet Customers Business-to-Consumer Consumer-to-Consumer workers Associations E-Government Citizens • ECommerce – Using Information Technology to support external business processes (eg marketing/selling products &/or services) • EBusiness – Supporting both and external business processes Partinternal 1 - Introduction to Ecommerce I 44 Perry & W Robson It includes at least the following • The exchange of goods & services across an interactive digital network • A computer-mediated & virtual market with new relationships among businesses and consumers • A digital means of exchange (digital money, ecash, secure credit card transactions) • The increasing importance of digital information as a commodity Part 1 - Introduction to Ecommerce I Perry & W Robson 45 eBusiness model • Covers the support of the processes & relations between business partners, coworkers and customers by electronic media Business Partners Extranet Enterprise Internet Customers Intranet Part 1 - Introduction to Ecommerce I Perry & W Robson 46 eCommerce • Is that part of the eBusiness which is aligned to the negotiation and settlement of obligatory business transactions. Information Agreement Knowledge Informing Settlement Intention Goal Definition Negotiating Execution Example: Part 1 -http://www.amazon.com/ Introduction to Ecommerce I Perry & W Robson 47 Further e-terms • E-Procurement – the electronic support of the procurement processes (purchase) of an enterprise • E-Marketing – the electronic support of the sales & marketing (and services) processes of an enterprise Part 1 - Introduction to Ecommerce I Perry & W Robson 48 A Revolution? • Traditional commerce: – Physical product: a tangible, material object – Physical process: interactions between buyers, sellers, producers – Physical agent: People in a storefront • eCommerce: – Digital product: a digital object – Digital process: interactions between buyers, sellers, producers online – Digital agent: web storefront Part 1 - Introduction to Ecommerce I Perry & W Robson 49 An Ecommerce (EC) manifesto: • Organisations must change to take advantage of EC opportunities • Organisations must take EC into account when developing strategy • EC is the strategic perspective that all firms must adopt, now & in future • An organisation that does not explicitly consider EC as a strategic imperative is making a critical error Part 1 - Introduction to Ecommerce I Perry & W Robson 50 EC evolution in waves First Wave Traditional EDI place orders shipment notification invoicing examine inventory availability pre-established business partners Second Wave Electronic Commerce Elements in 1st wave plus electronic shopping banking and financial institutions transacting with virtual strangers increased information sharing Part 1 - Introduction to Ecommerce I Perry & W Robson Third Wave - A New Electronic Society Elements in 2nd wave plus cashless transactions high transaction integrity widespread use of intelligent agents continuous testing agents 51 EC Could Be Seen As: Economic Aspects Ecommerce as Business Model E-Business- Ecommerce Concept Relevance Ecommerce-StrategyVirtual Transaction Communities Processes Network EC-Platforms Marketing EC-Applications Intranet Pagination Extranet Visualizing Architecture Screens Dialogs Technical Aspects: Information and TeleCommunications User Guides Media Aspects: Multimedia-Design and User Interaction Style and Tone Programming Part 1 - Introduction to Ecommerce I Perry & W Robson 52 Levels of eCommerce Company promotion National Electronic distribution Pre/post sales support Electronic presence International Electronic distribution National payment Sales/ Simple transactions ‘Standard’, simple, Many instances International payment Shared business processes ‘Custom’, complex, Few instances http://www.ispo.cec.be/ecommerce/introduc.htm Part 1 - Introduction to Ecommerce I Perry & W Robson 53 So, EC world is Interdisciplinary • Consumer behaviour & psychology • Accounting & auditing • Production/Logistic • Information systems • Business ethics • • • • • • Management Business law Marketing Finance Economic Computer sciences Part 1 - Introduction to Ecommerce I Perry & W Robson 54 Producing typical career profiles • Generalist – eBusiness-responsible person (integration of the divisions) – Project manager eCommerce – Sales manager eCommerce Products – Director/conductor of a special product group (e.g. Smartcards) • Specialist – Web designer / Web master – Web editor – Internet Service Provider Part 1 - Introduction to Ecommerce I Perry & W Robson 55 Examples • www.ebay.com – person to person EC • www.amazon.com - retail • www.yahoo.com - ecommerce portal Part 1 - Introduction to Ecommerce I Perry & W Robson 56 Website Marketing and Design Poitiers, September 23-27 End of Sessions 1-2: LUNCH! 1