E-COMMERCE

Chapter 1: The Revolution is just beginning

1. Introduction to e-commerce

Involve the use of Internet, Web (HTML, Deep Web Vs “surface” Web),
mobile apps ⇒ transact business

(digital commercial transactions between org & individuals)

!!! Web

Career in e-commerce - E-commerce Specialist

→ Roles:

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 Ex: On-demand services: Uber, Airbnb
a) History

1st 2 decades of e-commerce:

→ just the beginning

→ rapid growth & change

Technologies evolve

→ disruptive business change

→ new opportunities
b) Why study e-commerce

understand opportunities & risks

analyze e-commerce ideas, models, issues

c) E-commerce Vs E-business

E-commerce - def as above

E- business

→ digital enables transactions & processes within firm (in4 system,…)

→ does not include commercial transactions involving an exchange of value
across org boundaries

Shopee : the number 1 e-commerce platform in South East Asia

(4 times more users than Lazada)

⇒ However, with TikTok Shop, different buying experience is the challenge faced
by traditional e-commerce platforms

d) Major trends in E-commerce

Business trends - All forms of e-commerce ⇒ show strong strength

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 Technology trends - Mobile platform has made mobile e-commerce reality

Societal trends - increased online social interaction & sharing

2. Unique features of E-commerce Technology

Ubiquity

Global reach

Universal standards

In4 richness

Interactivity

In4 density

Personalization & Customization

Social technology

3. Types of E-commerce

Business-to Consumer (B2C)

B2B

C2C

Mobile e-commerce (M-commerce)

Social e-commerce

Local e-commerce

4. A brief history

Precursors

1995-2000: Invention

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 2001-2006: Consolidation

2007-present: Reinvention

!!! CASE STUDY: Y-Combinator’s Startup Boot Camp

What is Y-Combinator
a) Why do you think investors today are still interested in investing in startups?

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 b) What are the benefits of investing in a company that is a graduate of a Y
Combinator boot camp?

Graduates of Y Combinator boot camp are goal oriented & ambitious. They
are trained in such a way that they can tackle business problems smartly &
legally. Graduates have collected various in4, ideas, views regarding start-
ups from many entrepreneurs who are motivated to achieve their goals &
targets.

The capability of graduates flourishes even more in their 3 month camp

which makes them capable enough to compete in the market & take possible
risks.

⇒ have been trained & have had business plan

c) Is an incubator the best solution for start-ups to find funding? Why?

Incubators already has helped in self-development, growing, enhancing

knowledge, ideas & prepares entrepreneurs → persuade investors

⇒ Present innovative ideas → attract many investors for funding

5. Assessing E-commerce

Stunning tech success

Early years a mixed business success

→ few early dot-coms have survived

→ online sales growing rapidly

Many early visions not fulfilled

→ price dispersion
→ in4 asymmetry

→ new intermediaries

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 Other surprises

6. Understanding E-commerce: Organizing themes

Tech - development of digital computing & communication tech

Business - new tech → new ways of production & transaction

Society - intellectual property, individual privacy, public welfare policy

!!! CASE STUDY - FACEBOOK & the Age of Privacy

7. Academic Disciplines Concerned with tech

Technical - computer science, management science, in4 systems

Behavioral - in4 systems research, economics, mkt, management,

finance/accounting, sociology

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 Chapter 2: E-commerce Business Models & Concepts

1. E-commerce Business Models

- a set of planned activities → profit in marketplace - how business

Business model
create, deliver value & make money sustainably (Harvard)

Business plan - describe firm’s business model

E-commerce
- use/leverage unique qualities of Internet & Web
business model

2. Eight key elements of a Business Model

2.1 Value proposition - Why should customer buy from you?

Successful e-commerce value propositions:

→ personalize/customize
→ reduce product research, price discovery costs

→ facilitate transactions = managing product delivery

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 What is your niche?

→ what problem do you want to solve?

→ who do you serve?

Customer Avatar

Demographics - age, gender, marital status, location, income, edu,

employment

Psychographics - interests, habits, attitudes, emotions, preferences, values,

lifestyle

Customer Avatar worksheet

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 Ex:

What is your solution?

P = Problem - What is ur product trying to solve?

S= Statistic - Data → supports the need of product & credibility

S = Solution - Solution to your problem identified earlier in framework

P = Product - What would solution look like in form of a product?

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 Ex: Slide

Is the product viable for E-commerce?

Shipping

→ Can my product be shipped worldwide?

→ Is my product lightweight?
→ Is my product difficult to break?

Regulations

Passion

Ex: Small local shop, Toyota ⇒ slide

Value Statement

We help (target audience)

By solving their problem of (problem)

Through our (solution)

In order to get the result of (desired results)

2.2 Revenue Model - How will you earn money?

Major types of revenue models

- Advertising revenue model

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 - Subscription revenue model (freemium strategy)

- Transaction fee revenue model

- Sales revenue model

- Affiliate revenue model

2.3 Market Opportunity

What marketspace do you intend to serve & what is its size?

Marketspace: area of actual/potential commercial value in which company

intends to operate

Realistic market opportunity: defined = rev potential in each market niche

company hopes to compete

Market Opportunity → divided into smaller niches

Ex:

Keyword research

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 - find how many people are searching

- find how many people are sharing online

- tools: Gg, Keywordtool, Semrush,…

Research ecommerce platforms - Shopee, Lazada

Social Listening & Engagement

- find what audience is taking about

- learn how audience speak

- establish trust with audience

- go to where audience is - FB Gr, LinkedIn, Ig,…

Talk to audience

- ask direct, open ended questions

- use surveys for one-to-many - Gg form, typeform

- follow up one-to-one

- tools: Gg, Keywordtool, Semrush,…

Magic questions

- Biggest challenges with …?

- Questions u have about …?

- What u like when it comes to …?

2.4 Competitive Environment

Who else occupies your intended marketspace?

others selling similar products in same marketplace

include both direct & indirect competitors

Influenced by:

→ number & size of active competitors

→ each competitor market share
→ competitors’ profitability

→ competitors’ pricing

Real project analysis

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 SWOT Analysis?

Best sellers?

Pricing?

Product categories/structure?

What special advantages → bring to marketplace?

Important concepts:

- asymmetries

- 1st mover advantage, complementary resources

- unfair competitive advantage

- leverage

- perfect markets

2.5 Competitive Advantage

What special advantages does your firm bring to the marketspace?
→ Is your product superior/cheaper to produce than competitors?

Important concepts:

2.6 Market Strategy

How do u plan to promote ur products/services to attract target

audience?

details how company intends to enter market & attract customers

best business concepts FAILED if NOT PROPERLY MARKETED to potential

customers

2.7 Organizational Development

What types of org structures within firm are necessary to carry out business
plan?

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 describes how firm will organize work

→ typically, divided into functional departments

→ as company grows, hire moves from generalists → specialists
2.8 Management Team
What kind of backgrounds should company’s leaders have?

A strong management team:

can make business model work

can give credibility to outside investors

has market-specific knowledge

has experience in implementing business plans

3. Raising capital

seed capital

elevator pitch

traditional sources (incubators, angel investors, commercial banks, venture

capital firms, strategic partners)

crowdfunding (JOBS Act)

4. Categorizing E-commerce Business Models

NO 1 CORRECT WAY TO CATEGORIZE

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 5. B2C Business Model

5.1 E-tailer

online ver of traditional retailer

Rev model = Sales

Variations:

→ virtual merchant
→ bricks-and-clicks
→ catalog merchant

→ manufacturer-direct

Low barriers to entry

Ex: ecommerce business, platforms

Dropshipping

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 5.2 Community Provider

Provide social network → people with similar interests → transact, share,

communicate

Ex: Fb, LinkedIn, Twitter,…

Rev model = (typically) hybrid, combining ads, subscriptions, sales,

transaction fees,…

5.3 Content Provider

Digital content = news, music, vid, text, artwork

Rev model = variety of models (ads + subscription + sales of digital goods)

⇒ Key to success = owning the content

Variations: syndication, aggregators

!!! CASE STUDY - Insight on Technology: Connected Cars and the Future of E-
commerce
5.4 Portal

Search + integrated package of content & services

Rev model = ads + referral fees + transaction fees + subscriptions for

premium

Variations

Horizontal/General Yahoo, AOL, MSN

Vertical/Specialized Sailnet

Search Gg, Bing

5.5 Transaction Broker

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 process online transactions for consumers

⇒ Primary value proposition = save time + money

Rev model = transaction fees

Industries using this model

Ex: financial services, travel, job placement services,…

5.6 Market creator

create digital environment → buyers & sellers → meet & transact

Ex: Priceline, eBay

Rev model = transaction fees + fees for merchants access

On-demand service companies (sharing economy) → allow people sell

services

Ex: Uber, Airbnb

5.7 Service provider

Online services: Gg - gg maps, gmail,…

Value proposition = valuable, convenient, time-saving, low-cost alternatives

to traditional service providers

Rev model = sales of services, subscription fees, ads, sales of mkt data

6. B2B Business Models

Ex: BulkBookStore.com, Knobs.co, BerlinPackaging.com

6.1 E-Distributor

version of retail & wholesale store (MRO & indirect goods)

Owned by 1 company - serve many customers

Rev model = sales of goods

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 Ex: Grainger
6.2 E-Procurement

create digital markets where participants transact indirect goods

→ B2B service providers, SaaS, PaaS providers

→ scale economies

Rev model = service fees, SCM, fulfillment services

Ex: Ariba

6.3 Exchanges

Independently owned vertical digital marketplace for direct inputs

Rev model = transaction + commission fee

create powerful competition between suppliers

tend to force suppliers into powerful price competition

number of exchanges has dropped dramatically

Ex: Go2Paper
6.4 Industry Consortia

Industry-owned vertical digital marketplace open to select suppliers

More successful than exchanges

→ sponsored = powerful industry players

→ strengthen traditional purchasing behavior

Rev model = transaction + commission fees

Ex: SupplyOn

6.5 Private Industrial Networks

digital network - coordinate among firms ⇒ engaged business together

typically internal system → evolve

→ key, trusted, long-term suppliers invited to network

Ex: Walmart’s network of suppliers

7. How e-commerce changes business

E-commerce changes industry structure by changing:

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 rivalry among existing competitors

barriers to entry

threat of new substitute products

strength of suppliers

bargaining power of buyers

Chapter 4: Building E-commerce Presence: Websites, Mobile sites, Apps

1. Imagine your E-commerce Presence

The vision includes:

mission statement

target audience

intended market space

strategic analysis

mkt matrix

development timeline

preliminary budget

The money includes:

Business model

Revenue model

Target audience:

demographics, lifestyle, consumption patterns,…

Characterize marketplace:

size, growth, demographics, structure

Where content comes from?

Know yourself - SWOT Analysis

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 Develop e-commerce presence map

Develop timeline - Milestone

How much will this cost?

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 simple website: up to $5000

small startup: $25,000-50,000

large corporate website: $100,000+ - millions

2. Building an E-commerce site - A systematic approach

2.1 Most important management challenges

develop clear business objectives

choose the right technology → achieve objectives

2.2 Main factors to consider

management

hardware architecture

software

design

telecommunications

human resources

3. E-commerce Presence - The Systems Development Life Cycle (SDLC)

Methodology → understand business objectives & design appropriate

solution

5 major steps:

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 3.1 System Analysis/Planning

Objectives: list capabilities you want ur site to have

System functionalities: list in4 system capabilities needed → achieve

objective

In4 requirements: elements must be produced → achieve objectives

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 3.2 System Design - Hardware & Software platforms

System design specification:

→ describe main components of a system & their relationship to 1 another

2 components of system design:

→ Logical design - data flow diagrams, processing functions, databases

→ Physical design - actual physical software components, models

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 a) Web Server Software
Apache

leading web server software

work with UNIX, Linux operating systems

reliable, stable, part of open software community

Microsoft’s Internet In4 Server (IIS)

2nd major web server software

windows-based

integrated, easy to use

b) Website development tools

Shopify

BigCommerce

Magento

WooCommerce

Wix

Haravan

Selection criteria:

Low monthly
how much does shopping cart cost to run/monthly …
costs

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 High level of
can new feature be easily added?
extensibility

3rd party support are there companies actively develop plugins for carts?

High level of
free to change shopping cart & tailor to your needs?
control

Ease of use is the cart easy to use & maintain?

b.1 Wix

PROS CONS

- fully hosted - no tech knowledge required - limited ecommerce feature set

- simple drag & drop interface

- tons of theme

- attractive price

Wix Free Plan

No domain - URL: accountname.wixsite.com/yoursitename

Unwanted ads

Limited storage

Limited Bandwidth

b.2 WooCommerce

PROS CONS

- free to use - no tech support provided

- full control of website & source code - require a webhost

- integration with Wordpress

- easy access to 3rd party developer community

b.3 Shopify

PROS CONS

- charge for every transaction, additional features &

- no tech knowledge required
themes

- easy to use - monthly price plan

- large 3rd party app ecosystem - hard to customize

- scalable

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 PROS CONS

- customer support

b.4 BigCommerce

PROS CONS

- expensive premium templates

- great for enterprise-level merchants
(≥$170)

- % transaction fee no matter what plan u choose

- get unlimited number of staff accounts

- many free & premium design theme

b.5 Magento

PROS CONS

- free - open source - not recommended for beginners

- great for enterprise level - steeper learning curve

- limitless flexibility with store design - high price for premium member (≥20,000/year)

c) Web Hosting Provider

d) E-commerce merchant server software

⇒ Provides basic functionality for sales
Online catalog - list available products

Shopping cart

Credit card processing - in conjunction with shopping cart, verify card, put
through credit to company’s account at checkout

e) Other E-commerce site tools

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 Website design - basic, enable customers to find & buy

Search engine optimization → search engine placement

Ex: Yoast

matatags, tittles, content

identify market niches

offer expertise

links

buy ads

local e-commerce

f) Right-Sizing hardware platform - the demand size

Customer demand - most important factor → affect speed of site

Supplier demand - scalability - ability to increase size as demand increase

3.3 Building System

Outsourcing - hire vendors to provide services involved

Build own - require team with diverse skill set, software tools

Host own

Hosting company responsible for ensuring 24/7 access for monthly fee

firm buys/leases web server (with control), server is located

Co-location
at vendor’s facility

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 !!! Annoying features

require users to view ads before view web

pop-up & pop-under ads

too many clicks to get content

links error

confusing navigation, no search function

require to register before viewing

slow loading page

out of date content

inability to use browser’s back button

no contact in4

unnecessary splash/flash screen

automatic music, audio

unprofessional design elements

text size, color, format

typo error

no/unclear return policy

3.4 Testing System

unit testing

system testing

acceptance testing

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 A/B testing (split testing)

multivariate testing

3.5 Implementation, Maintenance, Optimization

Systems break down unpredictably

Maintenance is ongoing

Maintenance costs - similar to development costs

($40K e-commerce site may require $40K annually to upkeep)

Benchmarking

8 most important factors → successful e-commerce site design

4. Planning & Building a Mobile Presence

Identify objectives, system functionality & in4 required

Choice:

Mobile web less expensive

Native app can use device hardware, available offline

Features to consider when design mobile app

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 Platform constraints graphics, file sizes

Mobile 1st design desktop website design after mobile design

size’s layout is adjusted according to device screen

Responsive web design (RWD)
resolution

server delivers different templates → optimized for

Adaptive web design (AWD)
device

Cross-platform Mobile App Development tools

→ Objective C, Java
→ Low cost, open-source alternatives

Mobile Presence - Performance & Costs considerations

Mobile 1st
most efficient
design

Mobile website resize existing web for mobile access is least expensive

Mobile web app can utilize browser API

Native app most expensive, require more programming

Chapter 4: Part 2: Building your Website

1. Idea

💡 Website about? - Audience? - Website visitors do what?

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 1.1 Purpose of website
-communication -capturing -conversion

1.2 Map of customer journey

How potential client interact with website? → buy → fill contact form → join
email list → subsribe podcast → follow on social media

Where u want them to go?

What u want them to do from each page?

2. Content

Pages include: posts, sidebar, videos, pics, audios

Business message

Ex:

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 Key webpage: homepage, about us, product categories, product pages,
blog, check-out page, operational pages (return policy, shipping in4, FAQ,
Contact us)

2.1 Homepage

Clear description

Focused content - avoid overloaded images, text,…

Credibility

Testimonial

!!! Use the GRUNT TEST

product? - how will it better customer’s life? - how to buy?

⇒ Easy that even a caveman understand

2.2 Contact Page

Video - hello from us

Intro of company

Pictures of team

2.3 Category pages & Product pages

Keyword research

Write 1000 words - sprinkle keywords (3-5x)

Key elements of Product Pages

3. Design

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 3.1 Logo

symbol represents business

good logo - distinctive, appropriate, practical, simple, transmit message

text alone can be good logo/minimum clip art

stick to brand’s fonts & colors

3.2 Tagline

short & sweet motto

3.3 Visual Aesthetics

a) Color palette

5-6 colors - 1 accent color, 2 dominant (use most), 2 neutral (text &
background)\

Color psychology

power, passion, love, elegfance, formal,

RED BLACK
dramatic sophisticate

friendly, adventure, health, growth,

ORANGE GREEN
encourage harmony

lux, magic, ambition,

BLUE strength, trust, peace PURPLE
mystery

feminine, calm, nurture, light, goodness, pure,

PINK WHITE
gratitude clean

cheerful, optimist,
YELLOW
creative, energy

b) Font combination

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 choose 2 main fonts that balance & contrast

Ex: Serif & Sans Serif

c) Design elements

overall concept, graphics, icons, patterns, illustration

d) Voice

brand’s tone, vocab, syntax

⇒ USE A BRAND BOARD → clear on visual elements → create consistent

look

4. Organization

(Site org, SIte hierarchy, Navigation/Menu)

Website Golden Rules

→ Rule 1: Simple → Rule 2: Keep every page 3 clicks from homepage

Website Infrastructure:

4.1 Building Website

Hosting Service Providers: Blue Host, GoDaddy

E-commerce Maerchant Server Software: Shopify, WooCommerce,

BigCommerce, Wix

Other tools: Yoast, Zipify

4.2 Select a Domain

Select a name

Select a domain: .com, .vn, .net….

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 Register your name with a domain register: GoDaddy, NameCheap, Wix,
Inet, PA Vietnam,…

5. Synthesize mkt hub

Website is a HUB - centralized, unified location → connects all mkt

strategies: search, social, email, analytics

Set up website performance tracking = install GG Analytics & GG Search

Console

Integrate SEO keywords while building website

Link up social media account

Ensure easy browse for customers

Add email mkt integrations

Chapter 6: E-commerce Marketing & Advertising Concepts

1. Online Consumers’ Behaviour

Growth rate has slowed

Intesity & scope of use both increasing

Some demographics groups have higher % of online usage (income, edu,

age, ethnic dimension)

Community effects

→ role of social emulation in consumption decisions

→ Connectedness - top 10-15% are more independent

- middle 50% share more purchase patterns of friends
→ recommender systems - co-purchase networks
1.1 Consumer Behavior Models

Profiles of online consumers: shop primarily for concenience

a) General model

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 b) Online consumer model

c) AISAS model

Consumers buy online: Big ticket items (≥$1000), Small ticket items (≤$100),
Bulky goods, furniture,…

1.2 How shoppers find online vendors?

higly intentional, goal-oriented

search engines

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 marketplaces (Amazon, eBay)

specific retail site

1.3 Trust, Utility, Opportunism in Online Market

2 most important factors shaping online purchase decision

Utility: better prices, convenience, speed

Trust: credibility, easy to use, perceived risk, sellers’ reputations

2. Online Purchase Decision

Five stages in consumer decision process

awareness of need

search for more in4

evaluate alternatives

actual purchase decision

post-purchase contact with firm

similar for online & offline behavior

Customer Journey - online & offline touchpoints customers take during

buying process

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 3. Multi-Channel Marketing

Integration online + offline mkt

Reinforce branding messages across media

Most effective multi-channel campaigns - use consistent imagery across

media

4 features of Internet mkt: → more personalized, more participatory, more

peer-to-peer, more communual

Goals

Reach Attract new customers

Act Nurture leads

Convert Convert leads → customers

Engage Create communities of advocates & promoters

The RACE Framework

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 Paid, owned & earned media

6 digital media channels with relationship to paid, owned, earned

media

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 4. Traditional Online Marketing & Advertising tools

4.1 Lead generation marketing

services & tools → collect, manage, convert leads

Lead Magnet: a way to generate highly qualified leads → guides customers

through enlightenment phase, engage customer with brand without placing
orders

Lead magnet types: PDF, E-book, Webinar, giveaways, minigames, zalo

group,…

Create Magnet

1.Introduce problem 3.Deliver value

2.Offer solution 4.Call to Action (CTA)
4.2 Search Engine Mkt & Ads

Search engine mkt (SEM) use search engines for branding

Search engine ads use search engines to support direct sales

- Paid inclusion - Pay-per-click (PPC) search ads:

Types of search engine ads
keyword ads/network keyword ads (context ads)

Search engine optimization SEO

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 GG search engine
algorithms

Social search use social contacts → fewer & more relevant results

Search engine issues:

-paid inclusion & placement practice

-link farms, content farms
-click fraud

!!! Keywords

make it posible for people find site = search engine

SERP - search engine result page

SEO Content checklist

4.3 Display Ad Marketing

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 Banner ads - Content mkt

Rich media ads - Ads networks ***

Video ads - more effective than other formats

Sponsorship - Native ads

Ad exchanges, programmatic ads, real time bidding (RTB)

Display ads issues: as fraud, viewability, ad blocking

***

4.4 Email mkt

Direct email mkt - Benefits:

→ inexpensive, 3-4% clicks, measure & track responses, personalize & target

3 main challenges: spam, anti-spam software, poorly targeted purchased

email list

Email sequences:

→ Abandoned cart campaign - activated when customer doesn’t complete

checkout
→ Re-engagement campaign - activated when customer hasn’t purchased for
time
→ Pre-purchase campaign - activated when customer signs up for email list
4.5 Affiliate mkt

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 paid fee for other websites for sending customers to their site

4.6 Viral mkt

designed to inspire customer to pass message to others

5. Social, Mobile & Local mkt & ads

5.1 Social mkt & ads - use online social network

5.2 Mobile mkt & ads - use mobile platforms (apps)
5.3 Local mkt

geotargeting, display ads hyperlocal publications, coupons

5.4 Social mkt - 4 stages

!!! Other Online mkt strategies

Customer retention strategies

→ 1-to-1 mkt (personalization)

→ behavioral targeting (interest-based ads)
→ retargeting

Customization & customer co-production

Customer service: FAQs, real time chat, automated response

6. Pricing Strategies

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 Traditional pricing based on fixed costs, variable costs, demand curve,
marginal costs, marginal revenue

Piggyback strategy - Free &

freemium

Price discrimination - Versioning

Dynamic pricing (auction, yield mana, surge pricing, flash mkt) - Bundling

Long tail mkt - Iinternet allows sales of obscure products with little demand

⇒ Substantial revenue because:

-near zero inventory costs
-liltle marketing costs
-search & recommendation engines

7. Intenet Mkt Technologies

7.1 Internet’s impacts on mkt

Scope of mkt communications broadened

Richness of mkt communications increased

Information intensity of marketplace expanded

Always-on-mobile environment expands mkt opportunities

7.2 Web transaction logs

build into server software

record user activity at website

provide much mkt data , combined with registration forms, shopping cart
database

answaer questions such as: ‘What are major patterns of interest &
purchase?’, ‘After homepage, where do users go 1st?’

7.3 Cookies & Tracking files

Types of tracking files: cookies, flasd cookies, web beacons (bugs), tracking
headers (supercookies)

Other tracking methods: Deterministic cross-device tracking, Probabilistic

cross-device tracking

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 7.4 Databases

enable profiling

store records & attibutes

database management system (DBMS)

SQL (Structures Query Language) - Industry-standard database query &

manipulation language used in relational database

Relational database

7.5 Data Warehouses & Data Mining

Data Warehouse - collects firm’s transactional & customer data in 1 location

for offline analysis by mkters & site managers

Data Mining - analytical techniques → find patterns in data, model behavior

of customers, develop customer profiles

Query-driven data mining

Model-driven data mining

Rule-based data mining

7.6 Hadoop & Challenge of Big Data

Big data: petabyte, exabyte range, web traffic, email, social media, content >
< traditional DBMS unable to process increasing volume of data

Hadoop: open-source software framwork, process any type of data, even

unstructured, distributed processing

7.7 Mkt Automation & Customer rela mana (CRM) Systems

Mkt automation systems - track steps in lead generation

CRM systems - manage rela with customers once purchase is made, create
customer profile

Customer data used to - develop & sell addtional products, identify profitable
customers, optimize service delivery,…

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 7.8 Online mkt metrics: Lexicon

Audience size/market share metrics - impression, click-through rate (CTR),

page views, viewability rate , stickiness, loyalty, reach, recency

Conversion to customer metrics - acquisition rate, conversion rate, browse-

to-buy ratio, cart conversion rate, abandonment rate

Video ad metrics - view time, completion rate

Email campaign metrics - open rate, delivery rate, click-through rate,

bounce-back rate

7.9 How well does online ads work?

Use ROI → measure ad campaign

Difficult of cross-platform atttribution

Highest click-through rates - search engine ads, permission email

campaigns

Most powerful mkt campaigns use multiple channels, including online,

catalog, TV, radio, newspaper, stores

7.10 Costs of online ads

Pricing models: Barter, cost per thousand (CPM), cost per click (CPC), cost
per action (CPA), hybid, sponsorship

Measuring issues - correlating online mkt → online/offline sales

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 Online mkt is more expensive on CPM basis, but more effective in producing
sales

Effective cost-per-thousand (eCPM)

7.11 Mkt Analytics

Software analyze data at each stage of customer conversion process -

awareness, engagement, interation, purchaseactivity, loyalty & post-
purchase

Help managers

→ optimize ROI on web & mkt efforts

→ build detailed customer profiles
→ measure impact of mkt campaigns

Chapter 7: Social, Mobile & Local Marketing

1. Introduction to Social, Mobile & Local Marketing

New mkt concepts: conversations & engagement

Impact of smartphones & tablets

Social-mobile-local nexus: strong ties bw consumer use of social network,

mobile devices & local shopping

2. Social Marketing

Traditional Online Mkt Social Mkt

- deliver business message to the most

- encourage consumers to be fans & engage
consumers

- strengthen brand = increase share of online

conversation

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 Dark social - sharing outside major social network (email, IM, texts,…)

The social mkt process

2.1 Social MKT Strategy

a) Goal setting

launch new product

increase brand awareness

increase income - more followers, traffic, email subcribers, sales

b) What social platform is right for your business?

where ur people hang out online

where ur competitors are active

be selective with social media platforms

keep social media goals in mind → guide selection

c) Social Media Content Plan

Content Buckets

Description

Frequency

2.2 Facebook

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 a) Fb Mkt

Basic Fb features - news feed, timeline (profile), search, livestream

Social density of audience is magnified

→ Fb is largest repository of deeply personal in4

→ Fb geared to maximize connections between users

Fb Mkt Tools

reaction buttons right-hand column sidebar ads video Ads

news feed page post ads Fb Live mobile Ads

brand pages Fb Watch Fb Messenger

FB Exchange (FBX)

b) Typical Fb Mkt campaign

establish fb brand page

use comment & fb tools → develop fan comments

develop community of users

encourage brand involvement = video, rich media, contests

use display ads for other fb pages & social search

display like button liberally

c) Measuring Fb Mkt results

Basic metrics

- fan acquisition (impressions) - community

- engagement (conversion rate) - brand strength/sales

- amplification (reach)

Fb analytics tools

-fb page insights

-social media management systems (HootSuite)
-analytics providers (GG analytics, Webtrends)
d) Fb Ads

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 Create business manager - a central space to manage ur business separate
from personal FB profile

Fb Pixel - analytics tool ⇒ measure effectiveness of ads

Ads Campaign/Ad Set/Ads

(Product Page retargeting, Collection & homepage retargeting, Shopping cart

retargeting, Loyalty Campaign)
e) Measuring Fb Ads results

Reach - total number of times ad has been seen

Frequency - number of times a person see ur ad

Cost per purchase - how much it costs to get customers to buy

2.3 Twitter
a) Twitter Mkt

real-time interation with consumers

Basic features - tweet, retweet, follower, message (DM), hashtag, mention,

reply, links, moments tab, timeline

Mkt tools

- promoted tweets - amplify - mobile ads

- promoted trends - promoted video

- promoted account - twitter cards

Typical Twitter mkt Campaign

- follow relevant content & conversion

- Promoted tweets & Twitter promote mode

- for larger budget, use Promoted Trends

- for retail business local sales, build Twitter Cards

b) Measuring Twitter mkt results

Fan acquisition, engagement, amplification, community, brand strength

Analytics tools: - Twitter’s real-time dashboard

- Twitter;s timeline activity & followers dashboard

- 3rd party tools (TweetDeck, Twitalyzer, Back Tweets)

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 2.4 Pinterest

One of the fastest-growing image-sharing sites

Users talk about brands using pics

Features - pins, repins to boards, share, fllow, contributors, links to URLS,

price displays

Pinterest mkt tools

- rich pins, promoted pins, cinematic pins - pin as display ads

- buyable pins/ship the look pins - theme-based boards

- promoted video - brand pages

- add pin it & follow buttons - URL link to stores

- integration with other social sites - network with users, followers,…

Typical Pinterest mkt campaign

- create Pinterest brand page & multiple themes ⇒ quality photos, URL links,
keywords

- utilize pinterest Rich pin/Product pin, Pin it Button

- Integrate with Fb & Twitter

- follow & interact with other pinners & boards

- measuring Pinterest mkt results

2.5 Other Social network

Ig - brand profile, ad campaign (display video), buy buttons, marquee ads

Snapchat - stories, live, discover, snap ads, sponsored geofilters, sponsored

lenses

LinkedIn - company profiles, showcase pages, career page, display ads

(feeds), self-service ads, ads partner solutions, sponsored inMail,
LinkedInPulse

2.6 Downside of Social mkt

Loss control - where ads appear, what people say

In contrast TV ads maintain near complete control

3. Mobile marketing

the use of mobile devices (phones, tablets) → display banner, rich media,…

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 Challenges - motivate consumers to click

- raise fees for each click

App mkt - most effective are in-app ads

- placed in most popular apps

- targeted to immediate activities & interests
!!! Multi-Screen Environment ⇒ Need consistent branding, responsive design
Increasee complexity & costs
3.1 Mobile mkt Features

Mobile mkt = 70% all online mkt

Dominant players: Google & Fb

Features

- multimedia
- personal communicator & organizer - web browser
capable

- screen size & resolution - apps - touch/haptic tech

- ultraportable &
- GPS location
personnal

3.2 Mobile mkt Tools

Mobile mkt formats - search ads, display ads, video, text/video messaging,
email, classifieds, generation

Mobile interface versions

3.3 Mobile mkt Campaigns

Mobile website

fb & Twitter brand pages

mobile versions of display ads campaigns

ad networks

interative content aimed at mobile user

tools for measuring responses

4. Local & Location-Based Marketing

Location-based mkt - target message to user based on location

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 - mkt of location-based services

Location-based services

→ provide service to users based on location (personal navigation, point-of-

interest, reviews, friend-finders, family trackers)
→ consumers have high likelihood of responding to local ads

Local & Location-based mobile mkt ⇒ grow since 2005

Location-based mkt Platforms - Gg (Android OS, GG maps, GG places,
AdMob, AdWords)

- Fb, Oath, Twitter

4.1 Location-based mkt Techniques

2 TYPES OF TECHNIQUES

Geo-aware techniques ⇒ ads & rcm actions within reach

identify user’s location

identify perimeter around a location ⇒ ads & rcm within

Proximity mkt
perimeter

Identify locations with:

a) GPS signals

determine position = satellite

AND phones are most popular satellite receivers

b) Cell-tower locations/BTS (Base Transceiver Station)

transceiver station (2/3/4G) → mobile devices identified = thousands BTS

station

c) Wi-Fi locations

free internet access → determined user based on the wifi they visit

4.2 Why is Local Mobile attractive to Mkters?

mobile users > active than desktop users

easy to segment audience based on location

4.3 Location-Based mkt Tools

Geo-social-based services mkt

Location-based services mkt

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 Mobile-local social network mkt

Proximity mkt - in-store messaging

Location-based app messaging

Local SEO - Gg my business

Search ads based on location (PPC)

Location-based SMS

4.4 Location-Based mkt Campaigns

Considerations

- Action-based, time-restrained offers & opportunities

- Target demographic & location-aware mobile user demographics

- Strategic analysis of marketspaces

Measuring mkt results

→ same measures as mobile & web mkt

→ metrics for unique characteristics - inquire, reserve, click-to-call, friend,
purchase

Measuring location-based mkt results

Chapter 12: B2B E-commerce - Supply Chain Mangement & Collaborative

Commerce

1. B2B E-commerce

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 1.1 Trends

Flexibility - emphasize on rapid response & optimal supply chain

Resurgence in in Net marketplace bring together hundreds of suppliers &

thousands of buying firms

Supply chain visibility - real time

Social/Mobile commerce & customer intimacy

Cloud computing

Big data & business analytics

Internet of Things

Accountable & sustainable supply chain

1.2 Definition

- all types of computer-enabled inter-firm trade - Before internet,

B2B commerce
B2B transactions called trade/procurement

B2B e-commerce - the portion of B2B commerce enabled by Internet

Supply chain - org, people, processes, tech, in4 -> produce product efficiently

1.3 Evolution of B2B Commerce

automateed order-entry systems - seller side solution

Electronic data interchange (EDI)*** - buyer-side solution, hub & spoke

system, serve vertical markets → continue to be workhorse of B2B e-
commerce

B2B e-commerce websites

net marketplaces

private industrial networks - continue to play dominant role in B2B

Non-EDI - most rapidly growing type of e-commerce

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 *** EDI - Communications protocol for exchanging documents among computers
- Each industry has own standards

Evolution of EDI as a B2B Medium

!!! NOTE

Not all industries similarly affected by B2B e-commerce

Not all industries benefit equally

Factors influencing move to e-commerce:

→ utilization of EDI
→ large investment in IT & Internet infrastructure
→ market concentrated on purchasing/selling

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 1.4 Potential Challenges & Benefits of E-commerce

Benfits

- lower admin costs

- lower search cost for buyer

- reduce invetory costs

lower transaction costs

- increase flexibility = just-in-time parts delivery

- improve quality = cooperation with buyers

- decrease product cycle time

- increase opportunities for collaboration

- greater price transparency

- increase visibility

Challenge - increase globalization & consolidation

2. Procurement Process

2.1 Procurement Process

way firms purchase materials needed

Steps in procurement process

→ decide who to buy & what to pay

→ complete transaction

The Procurement Process

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 2.2 Types of Procurement

Firms purchase 2 types of goods

Direct goods integrally involved in production process

Indirect goods not directly involved in production process (MRO goods)

Firm use 2 methods to purchase

Contract
long-term written agreement, agreed-upon terms & quality
purchasing

purchase based on immediate needs in larger market, involving

Spot purchasing
many suppliers

Procurement - highly in4 intensive & labor intensive ⇒ require mana in4
among corporate system

Purchasing managers - key players in procurement process

- key decision-makers for adoption of B2B e-commerce solutions

2.3 Multi-Tier Supply Chain

Complex series of transactions bw firms & thousands of suppliers & goods

Challenges

- supply chain visibility - order management

- demand forecasting - logistics management

- production scheduling

2.4 Role of existing legacy computer systems

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 Legacy computer system = older mainframe, minicomputer systems used to
mange key business processes within firm

Enterprise systems

1, Corporate-wide
2, Support/Control all aspects of production, including procurement, finance, HR
2.5 Trends in SCM

SCM - activities used to coordinate procurement process

Major trends: Continual efforts → improve process, including:

a) Just-in-Time & Lean Production

Just-in-Time - manage inventory cost & keep inventory at minimum

Lean Production - eliminate waste throughout customer value chain, not just
inventory

b) SC Simplification

Reduce size of supply chain - work with gr of strategic suppliers ⇒ reduce

product & admin costs & improve quality

Essential for JIT model

May involve - joint product development & design

- integration of computer systems

- tight coupling (ensure precise delivery at specific times)

c) Adaptive SC

Reduce centralization → reduce risks by relying on single supplier who may

face local instability (Ex: European financial crisis, Japanese earthquake)

Create regional - product-based SC

1, allow production → temporary safe harbors in case of local manufacturing

disruptions
2, focus on optimal cost, distributed manufacturing & flexible SC

d) Accountable SC

Labor condition in low-wage countries are acceptable to consumers

- slave/forced - work >48h/week

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 - child labor - harrassment, abuse, sexual exploitation

- exposure to toxic substances - adequate conpensation

Make global SC more accountable & transparent

(Fair Labor Association, National Consumers League, Human Rights 1st,…)

e) Sustainable SC

Consider social & ecological interests (Ex: water usage, air pollution,…)

Use most efficient environment for production, distribution & log

2.6 B2B Mobile

increasingly inportant - used in all phases

- users expect B2B e-coomerce site accessiblie from

mobile devices

Bring your own device (BYOD) policies

Supply chain software & network providers⇒ support mobile platform

B2B in Cloud - expense of B2B system from firm ⇒ network provider

⇒ Network effects - costs spread out over all members

3. SCM Systems

Continuously link activities of buying, making & moving products from

suppliers to purchasing firms (Ex: SAP & Oracle Mobile apps,…)

Integrate demand side of business equation by including order entry system

With SCM + continuous replenishment ⇒ eliminate inventory & begin

production when order is received

Hewlett Packard’s SCM system - Elapsed time from order entry → shipping
= 48h

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 !!! Blockchain & SCM

Transaction database - operate on distributed P2P network that connects

participants in a single database

-secure
-reliable
-resilient
-inexpensive

Expected to transform SCM, eventually replacing EDI

4. Collaborative Commerce

Use digital tech → collaborate design, produce & manage products

Move focus from transactions → relationships among SC participants

Unlike EDI, more interactive teleconference among members of SC

Use Internet tech for rich communications environment - share designs,

documents, messages, meetings, videoconference

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 5. Social Network & B2B

Provide personnal connections ⇒ help decision making in SC

Ex: Dell’s Youtube channel, Cisco’s FB page for business clients,…)
5.1 B2B Mkt

more interpersonal than traditional retail mkt

B2B contract selling - long standing rela bw suppliers & buyers

Spot purchase markets for MRO - similar to B2C mkt tactics (mobile ads,
predictive analytics, sales enablement systems)

5.2 Net Marketplace

Classified = pricing mechanism, nature of market served, ownership

By business functionality

-what business buy (direct/indirect goods)

-how business buy (spot/long-term purchase)
-4 main types: E-distributors, E-procurement, Exchanges, Industry
condortia

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 a) E-distributors

most common type of Net marketp

electronic catalogs representing products of thousands of direct

manufacturers

independently owned intermediaries

fixed price discounts for large customers

Ex: W.W. Grainger, Amazon Business

b) E-precurement Net Marketplaces

independently owned intermediaries

connect hundreds of suppliers of indirect goods

firms pay fees to join

revenues from transaction fees, licencing consultation services & software,

network fees

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 Offer value chain mana (VCM) services

many-to-many market

Ex: Ariba

c) Exchanges

independently owned online marketplaces

connect suppliers & buyers in dynamic, real-time environment

single industry

charge commission fees on transaction

tend to be buyer-biased, suppliers disadvataged by competition

many failed due to low liquidity

d) Industry condortia

industry-owned vertical markets

purchase of direct inputs from set of invited participants

aim to unify SC within entire industry = common platform

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 revenue from transaction & subscription fees

6. Private Industrial Networks

most prevalent form of B2B e-commerce

web-enabled networks for coordination of trans-org business process

(collaborative commerce)

-direct descendant of EDI, closely tied to ERP systems

-manufacture & support industries
-single, large manufacturing firm sponsors network

range in scope - single → entire industry

Ex: P&G

Objective:

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 → efficient purchasing & selling industry-wide
→ increase SC visibility
→ closer buyer-supplier rela
→ global scale operations

focus on continuous business process condition

focus on single sponsoring company that owns the network

!!! Private Industrial network & Collaborative Commerce

Forms of collaboration

1, Collaborative resource planning, forecasting & replanishment (CPFR)

2, Demand chain visibility
3, Market coordination & product design
→ ensure products fulfill claims of mkt
→ feedback enables closed loop mkt

Implementation Barriers

1, Concerns about sharing proprietary, sensitive data

2, Integration of private insutrial networks into existig ERP systems & EDI
network difficult, expensive
3, Require change in mindset & behavior of employees & suppliers ⇒ all
partners lose some independence

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