Chapter 5 E-Business: Managing the Customer Experience Chapter 5 E-Business: Managing the Customer Experience © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 Chapter 5 E-Business: Managing the Customer Experience Objectives 1. Describe the growth of Internet use worldwide. 2. Define e-business and e-marketing, and list the opportunities e-marketing presents. 3. Distinguish between a corporate website and a marketing website. 4. List the major forms of B2B e-marketing. 5. Explain business-to-consumer (B2C) e-marketing. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 Chapter 5 E-Business: Managing the Customer Experience Objectives 6. Identify online buyers and sellers. 7. Describe some of the challenges associated with online marketing and e-business. 8. Discuss how marketers use the communication function of the Web as part of their online marketing strategies. 9. Outline the steps involved in developing successful e-business websites and identify methods for assessing website effectiveness. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Chapter 5 E-Business: Managing the Customer Experience The Digital World • More than three-quarters of the U.S. population access the Internet • What do people do online? – United States – Communication, information, and purchases – China – Downloading, streaming music, online gaming, videogaming, and social networking • The benefits and potential of e-business outweigh the concerns and problems © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Chapter 5 E-Business: Managing the Customer Experience E-Business • Wide range of business activities that take place via Internet applications • It can be divided into five broad categories: – E-tailing – Business-to-business transactions – Electronic data interchanges (EDI) – Email, instant messaging, blogs, podcasts, vlogs (video blogs), and other Web-enabled communication tools – The gathering and use of demographic, product, and other information through Web contacts © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Chapter 5 E-Business: Managing the Customer Experience E-Marketing • Strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools • Has the potential to: – Greatly reduce costs – Increase customer satisfaction • Online marketing - Activities that connect buyers and sellers electronically through interactive computer systems © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Chapter 5 E-Business: Managing the Customer Experience Table 5.1 - E-Marketing Capabilities © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 Chapter 5 E-Business: Managing the Customer Experience Web Business Models • Corporate website - Designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties – Build customer goodwill – Assist channel members in their marketing efforts • Marketing website - Main purpose is to increase purchases by visitors © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Chapter 5 E-Business: Managing the Customer Experience B2B E-Marketing • Use of the Internet for business transactions between organizations • Tools used: – EDI – Web services – Extranets – Private exchanges – Electronic exchanges – E-procurement © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 Chapter 5 E-Business: Managing the Customer Experience E-procurement on Open Exchanges • E-Procurement - Use of the Internet to solicit bids and purchase goods and services from suppliers – Offers benefits to the public sector © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Chapter 5 E-Business: Managing the Customer Experience B2C E-Marketing • Selling directly to consumers over the Internet – Also called e-tailing – Driven by convenience and improved security for transmitting financial information – Service providers are important participants in etailing © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Chapter 5 E-Business: Managing the Customer Experience Electronic Storefronts • Company website that sells products to customers • Items for purchase are placed in an electronic shopping cart – Electronic shopping cart - File that holds items the online shopper has chosen to buy © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Chapter 5 E-Business: Managing the Customer Experience Benefits of B2C E-Marketing • Competitive pricing • Access and convenience • Personalized service © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Chapter 5 E-Business: Managing the Customer Experience Online Buyers and Sellers • More than half of all users make at least one purchase online each month • Half of all shoppers spend three quarters of total shopping time doing product research • Many online shoppers are loyal and buy mostly from a single site • Consumers’ online shopping experiences have been steadily improving in quality and convenience © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Chapter 5 E-Business: Managing the Customer Experience Challenges in E-Business and EMarketing • • • • • Safety of online payment Privacy issues Frauds and scams Site design and customer service Channel conflicts and copyright disputes © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Chapter 5 E-Business: Managing the Customer Experience Marketing and Web Communication • The Internet has four main functions: – E-business – Entertainment – Information – Communication – Most popular function © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Chapter 5 E-Business: Managing the Customer Experience Marketing and Web Communication • Online communities and social networks Internet forums, newsgroups, electronic bulletin boards, and social networks that appeal to people with common interests • Blogs and podcasts – Blog - An online journal for an individual or organization – Wikis - A webpage that anyone can edit – Podcast - Online audio or video file that can be downloaded to other digital devices © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 Chapter 5 E-Business: Managing the Customer Experience Marketing and Web Communication • Promotions on the web – Banner ad - Strip message placed in high-visibility areas of frequently visited websites – Pop-up ad - Separate window that pops up with an advertising message – Preroll video ad - Marketing messages that play before an online video – Widget - Tiny interactive applications that Internet users can copy and add to their own pages to play music, video, or slide shows – Search marketing - Paying search engines a fee to make sure that the company’s listing appears toward the top of the search results © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Chapter 5 E-Business: Managing the Customer Experience Building an Effective Web Presence An e-business website can: • Broaden customer bases • Provide immediate access to current catalogs • Accept and process orders • Offer personalized customer service This requires: • Developing the site successfully • Establishing goals • Implementing and determining whether visitors return to site • Pricing and maintenance © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 Chapter 5 E-Business: Managing the Customer Experience Assessing Site Effectiveness • Web-to-store shoppers - Consumers who use the Internet as a tool to aid them at brick-andmortar retailers • 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 • Engagement - Amount of time users spend on sites © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 Chapter 5 E-Business: Managing the Customer Experience Strategic Implications of Marketing in the 21st Century • Bright future for marketers who continue to take advantage of the tremendous potential of ebusiness and e-marketing • Cutting edge technology of today will be eclipsed within the next decade by newer technologies • A marketing evolution for organizations has occurred – It embraces Internet technologies as essential parts of their marketing strategies © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21