Building Direct Customer
Relationships
 Example:
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2.
The New Economy
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Amazon
 Start with customers
 If it has 173 million customers, then
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THE MAJOR DRIVERS OF
THE NEW ECONOMY
OUTLINE
 Digitalization
Challenges
faced by
Click-only
companies
E-Marketing
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Major forces
driving the new
economy
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E-Commerce
domains
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Major forces
driving the
new
economy
& Connectivity
 The Internet Explosion
 Disintermediation
 Customization and Cutomerization
 Industry Convergence
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BUYER BENEFITS OF E-COMMERCE
SELLER BENEFITS OF E-COMMERCE
 Relationship
 Convenience
 Greater
 Access
product access/selection
to comparative information
 Interactive
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and private
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 Easy
building
 Reduced transaction costs
 Increased speed and efficiency
 Flexibility
 Global access, global reach
and immediate
E-Commerce
domains
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E-Commerce
domains
Figure 3-2
E-MARKETING DOMAINS
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THE IMPACT OF B2C WEB SITES
 Lower
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E-Commerce
domains
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Shan-Yu Chou
E-Commerce
domains
consumer search costs;
can contact consumers
directly;
 More intensive price competition
among firms?
 Any online loyalty from customers?
 Disintermediation?
 Manufacturers
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C2C E-COMMERCE
THE IMPACTS OF B2B SITES
 More
consumers exchange goods or
information, e.g., eBay.
 Auction sites facilitate the exchange
process;
 Blogs: offering inexpensive ways to
reach fragmented audiences
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E-Commerce
domains
C2B E-COMMERCE
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E-Commerce
domains
 Helping
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information and lower transaction
costs;
 Prices are transparent;
 Buying alliances;
 Differentiation or price competition?
 More efficient markets.
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PURE CLICK COMPANIES
 Allow
 Search
 Some
sites facilitate the feedback
process between customers and
companies.
E-Commerce
domains
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Engines and Portals, e.g., Yahoo,
Google
 Commerce Sites, e.g., Amazon, Expedia
 Transaction Sites: eBay, Etrade
 Content Sites, e.g., New York Times,
ESPN
 Online Social Networks, e.g., Facebook,
YouTube, Twitter
Challenges faced
by Click-only
companies
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Shan-Yu Chou
consumers to search out sellers,
learn about offers, initiate purchase, or
dictate purchase terms;
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E-MARKETING
BRICK AND CLICK COMPANIES
Challenges faced
by Click-only
companies
up web sites
 Placing online ads and promotions
 Creating or participating web
community
 Using e-mail
 Mobile Marketing
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E-Marketing
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 E-commerce
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conflict was initially a concern;
often created new
customers, rather than cannibalizing
existing one;
 Many firms now enjoy greater success
than their click-only competition. Why?
 Setting
 Channel
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Online forms of ads
and promotions
SEVEN C’S OF WEB SITE DESIGN
Display
 Content
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 Context
 Community
 Communication
 Connection
 Commerce
ads
Search-related ads
Content sponsorships
Viral marketing
Affiliate programs
 Customization
E-Marketing
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Creating or Participating in
Social Networks
Networks allow members to
congregate online and exchange
views on issues of common
interests, e.g., Facebook
Offering targeting opportunities to
advertisers.
Smaller might be better？
E-Marketing
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Social
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