E-marketing- How to make it a sucess?

One of the key ways to make any business a success is to know and classify your consumers.

Classifying Consumers

1) Psychographic/ Lifestyle profiles

- Usually uses external factors (in the models) to predict behaviour

- Combines demographic and psychological data

- Divides market into groups based on social class, lifestyle and/or personality characteristics

- It is usually empirically derived through broad and contrived e.g. clarita’s Prizm profiles.

- PRIZM defines every U.S household in terms of 66 demographically and behaviourally distinct types of “segments”, to help marketers discern those consumers likes and dislikes

PRIZM x Hitwise

- Hitwise is the leading online competitive intelligence service

- Each day, Hitwise monitors how more than 25 million Internet users interact with over 500,000 websites across 160 industry categories

2) Decision-stage based

Stages in the Online Purchasing Decision

- Five stages in the consumer decision process:

- Awareness of need

- Search for more information –concept of involvement

- Evaluation of alternatives

- Actual purchase decision

- Post purchase contact with firm—did I do the right thing (Contact of dissonance reduction)

Text book Model –Communication behaviour in each stage of decision process

3) Behavioural pattern based

A) Shoppers: Browsers vs. Buyer

- Buyers: 68% online users

- Browsers: 12% online users; purchase offline

What consumers shop for and Buy online

Big Ticket items:

- $500 plus

- Travel, computer hardware, consumer electronics

- Expanding

Small Ticket Items:

- On average, $100 or less

- Apparel, books, office supplies, software, etc.

- Physically small

- High margin items

- Broad selection of products available

B) Behavioural patterns based: Search based, contextual, technical

- Using search terms, search pages, search choices, tracking search related clicks thoughts

- Using the context of the event. What is purchased, what is browsed for on Wal-Mart or Amazon.com

- Using technical behavioural information: IP addresses, ISP connected from, type of connection: broadband, DSL, etc.

Intentional Acts: How shoppers Find Vendors Online

- 37% of shoppers use search engines

- 33% to directly to site

- 17% use comparison shopping sites

- 15% use product use of product rating sites

- 66% in the US and 103% of residents connect using broadband

- Online shoppers are highly intentional, looking for specific products, companies, services

Why more people don’t shop online

- 44% uneasy about online credit card use

- 42% have concerns about privacy data

- 37% dislike shipping charges

- 33% feel no need to purchase online

- 32% prefer to touch/feel product before purchase

4) Based on the technology’s stage of diffusion

Diffusion is the study of –

- the patterns and processes by which technology diffuses through the marketplace

- All technology follow a predictable pattern of proliferation

- The pattern of adoption when plotted overtime follows a S shape curve (sometimes referred to J shaped curve)

Aspects of the S shape that is important

- The shape of the curve is determined by the exchanges between different adopting segments as the product diffuses

- The S shape curve can be used to classify adopters into various categories

- There generally 5 categories of adopters: innovators, early adapters, early majority, late majority and laggards

Cool Payment Systems!

What do you use to pay when you go to a physical shop to buy say clothes, or groceries? Cash? Credit Card? Or for other times, maybe payments could be made through cheques, stored values like cards, gift certificates, prepaid cards (NETS), smart cards. But in our new age, the internet has allowed us to buy and also sell stuff online. So then how do we pay or receive payment. Lets take a look at some of the e-commerce payment systems.

Credit Cards

• Credit cards are dominant form of online payment, according for around 60% of online payments in 2008

Limitations of online Credit Card Payment Systems

• Poor security:
• Neither merchant no consumer can be fully authenticated
• Cost: For merchants, around 3.5% of purchase price plus transaction fee of 20-30 cents per transaction
• Social Equity: Many people do not have access to credit cards

Digital Wallets

-Seeks to emulate the functionality of traditional wallet

-Most important functions:

-Authenticate consumer through use of digital certificates or other encryption methods

-Store and transfer value

-Secure payment process from consumer to merchant

-Early efforts to popularize have failed (passport)

-Newest effort: Google Checkout

Online Stored Value Systems

- Permit consumers to make instant, online payment s to merchants and other individuals

- Based on value stored in a consumer’s bank, checking, or credit car account

-Paypal most successful systems

-Smart cards: Require physical reader : Mondex

Wireless Payment Systems

-Use of mobile handsets as payment devices well established in Europe, Japan, South Korea, Malaysia (Maxis Fast Tap)

-Japanese mobile payment systems

-Emoney (stored value)

- Mobile debit cards

-mobile credit cards

It is not as well established yet in the U.S but with growth in WI-Fi and 3G cellular phone systems, this is beginning to change; Mobile PayPal

8 Key Elements of a business model and types of E commerce Business models

Before you start any business you should take in consideration to a few pointers to kick start your business properly and make it a successful one.

8 Key elements of a business model that you need to pay attention to

1) Value Proposition

Define how a company’s product or service fufils the need of customers.

-Examples of successful value propositions

· -Personalization/ Customization

· -Reduction of product search, price discovery costs

· -Facilitation of transactions by managing product delivery

2) Revenue Model

Define how the firm will earn revenue generates profits and produce a superior return on invested capital

-Major types:

• Advertising revenue models: CNN.com
• Subscription revenue models: MATCH.com
• Transaction fee revenue model: EBay, E-Trade, Hotwire
• Sales revenue model: Amazon, LLbean, Gap.com
• Affiliate revenue model: E-pinions, Banner Exchange, Edmunds à sends traffic to another website

3) Market Opportunity

Refers to a company’s intended market space and the overall potential financial opportunities available to the firm in that market space

4) Competitive Environment

Refers to the other competition selling similar products and operating in the same market space

-Influenced by

• How many competitors are active
• How large operations are
• The market share for each competitor
• How profitable these firms are
• How they price their product

5) Competitive Advantage

Achieved when a firm can produce a superior product and/or bring a product to market, at a lower price than most, or all, of their competitors.

-Types of competitive advantage:

• First mover advantage
• Unfair competitive advantage

6) Market Strategy

Plan that details how a company intends to enter a new market and attract strategy

7) Organizational Development

Describes how the company will organize the work that needs to be accomplished

8) Management Team

Employees of the company responsible for making the business model work

-Strong management team gives instant credibility to outside investors

There are many types of e-commerce business models lets take a look at all of them and what are the difference.

Business to Consumer Models

Portal

• Offers powerful search tools plus an integrated packages of content and services
• typically utilize a combined subscription/ advertising revenues/ transaction fee model

E-tailer

• Online version of traditional retailer
• Types include:

-Virtual merchants: Amazon

-Bricks and Clicks: Borders, Wal-Mart

-Catalogue merchants: LL Bean

- Manufacturer- direct: Dell.com, Sony Style

Content Provider

• Information and entertainment companies that provide digital content over the web
• Typically utilizes a subscription, pay for download or advertising revenue model
• Syndication a variation of standard content provider model

Transaction Broker

· Processes online transactions for consumers

· Primary value proposition- saving time and money

· Pay Pal

· Typical revenue model – transaction fee

Market Creator

· Uses internet technology to create markets that bring buyers and sellers together

· E.g. priceline.com & ebay.com

Service Provider

• Offers service online
• Value proposition: valuable, convenient, time-saving, low cost alternatives to traditional service providers
• Visa Now
• Revenue Model: Subscription fees or one-time payment

Community Provider

• Sites that create a digital online environment where people with similar interest can transact, communicate and receive interest-related information
• Angie’s List
• Typically rely on hybrid revenue model

Business to Business Models

E-distributor

• Supplies products and services directly to individual businesses
• Owned by one company seeking to serve many customers

E-procurement

• Creates and sells access to digital electronic markets
• B2B services providers is one type
• Application service providers: a subset of B2B service providers

Exchanges

• Electronic digital marketplace where suppliers and commercial purchases can conduct transactions
• Usually owned by independent firms whose business is making a market

Industry Consortia

• Industry-owned vertical market place that serve specific industries
• Horizontal market place, in contrast, sell specific products and services to a whole range of industries

Private industrial networks

• Digital networks designed to co-ordinate the flow of communications among firms engaged in business together
• Lobbying: influence the government as a group à Public policy access

Business models in emerging E-Commerce Areas

• Consumer to consumer: Provides a way for consumers to sell to each other, with the help of online market maker (EBay)

• Peer to peer (P2P): Link users, enabling them to share files and common resources without a common server (Kazaa, Cloudmark)

• M-Commerce: E-commerce business models that use wireless technologies (EBay Mobile)—To date, m-commerce is a disappointment in the united states however, technology platform continues to evolve

Evolving trend: Web 3.0

So one day you're feeling hungry and you decide to eat out because you are craving for that north Indian cuisine. And after you want to maybe get some drinks but you are tired of the same old bar that you've been to every week. So you switch on your computer and open your web browser to go to Google to search for these information on which Indian restaurants and bars that are good to go. What you will be doing in the next 15 to 20 minutes would be checking out the reviews and maybe the bars around the Indian restaurant. So before heading out after making a decision, you would have visited about quite a number of websites already.

Well, in introducing the Web 3.0, some internet experts say that this next generation of the web would make tasks like finding a good restaurant or bar to go to a lot easier and faster. Instead of multiple searches, you might type a complex sentence or two in your Web 3.0 browser, and the Web will do the rest. In this example, you could type: “I want to have dinner at an Indian restaurant and head to a bar after, what are my options?” The Web 3.0 browser would then analyze your response and search the internet for all possible answers and then organize the results for you.


Many of these experts believe that the Web 3.0 would be like a personal assistant as it learns from your search patterns and what you are interested in, over time. So the more you use the web, the browser would learn more about you and your habits, and so the questions you ask on the search engine could be less specific. Eventually you are able to ask questions such as “Where should I go for dinner?” and your browser would then refer to its records of what you like and dislike, taking into account your current location and then suggest a list of restaurants. Is it like a personal assistant, or better?

Socia Media and its downside.

As we all know Social media is media designed to be disseminated through social interaction, created using highly accessible and scalable publishing techniques. People use these publishing techniques to share opinions, insights, experiences and perspective with on another. Publishing techniques such as social networking websites like Facebook or Twitter, video sharing websites like Youtube or photo sharing through sites like photobucket or Flickr are used.

Social media uses Internet and web-based technologies to transform broadcast media monologues (one to many) into social media dialogues (many to many). It supports the democratization of knowledge and information, transforming people from content consumers into content producers. It is also define as "a group of Internet-based applications that build on the ideological and technological foundations of Web2.0, and that allowed the creation and exchange of user-generated content.

Social media can be said to have three components;

1. Concept (art, information, or meme).
2. Media (physical, electronic, or verbal).
3. Social interface (intimate direct, community engagement, social viral, electronic broadcast or syndication, or other physical media such as print).

Common forms of social media;

• Concepts, slogans, and statements with a high memory retention quotient, that excite others to repeat.
• Grass-Roots direct action information dissemination such as public speaking, installations, performance, and demonstrations.
• Electronic media with 'sharing', syndication, or search algorithm technologies (includes internet and mobile devices).
• Print media, designed to be re-distributed.

Social media comes with great advantages like for example MSN messenger, blogs, Twitter and Facebook, where it aids you in connecting with people; friends whom you haven't seen high school and constant updates from your close friends. However, everything has its pros and cons.

One of the downside of Social Media is Internet Fraud

The term "Internet fraud" generally refers to any type of fraud scheme that uses one or more online services to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme. Internet fraud can take place on computer programs such as chat rooms, e-mail, message boards, or Web sites. Take a look at the pictures that has been sent to me.

Do you think they would really give me a free ipod after i follow their instructions? Or do they just want my particulars? I really do not know, but i would rather not take the chance because it really looks too good to be true. Now, with these social networks rising, it makes it more accessible for frauds to gain access to your private information therefore us as users, we have to set a limit to how much we want to let out to the public and be very cautious and alert to information and requests presented to us.