DONE W7-Chapter 9 - TR2201 Entrepreneurial Marketing KWOK...

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Unformatted text preview: TR2201 Entrepreneurial Marketing KWOK Ying Yao bizkyy@nus.edu.sg CHAPTER 9 E-Commerce and the Entrepreneur The Internet: Changing the Face of Business Successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business. Business basics still apply online. In the world of e-commerce, company size matters less than speed and flexibility. Ch. 9: E-Commerce and the Entrepreneur 9-3 The Internet: Changing the Face of Business Study: By 2011, the Internet will influence more that $1 billion in offline sales. Neilsen study: 86% of the world's online population has used the Internet to make a purchase. Items purchased most often online include computer hardware and software, tickets, books, music, movies, gift cards, toys and video games, and baby products. 9-4 Ch. 9: E-Commerce and the Entrepreneur The Dot.com Boom/Bubble - Amazon (since 1994) - founded in 1994, and went public in 1997 - labeled as Amazon.toast and Amazon.bomb by investment analysts in 1997 and cumulative losses exceeded $550 million in 1999 - in December 1999, Amazon reached its highest raw price in history at $113 a share - in September 2001 Amazon dropped to its lowest raw price in history ($5.67 a share) -In October 2007 Amazon traded over $100 a share for the third time, and the first time since 1999, the split adjusted price of Amazon dating back to 1997 is $1.31 a share - on March 23 2009 Amazon closed at $75.61 a share - eToys (1997-2001) raised $166M, $84 in 10/99 to 9cents 2/01. - Pet.com (1998-2000) backed by Amazon, raised $82.5M during IPO in 2/2000 collapsed 9 months later. Ch. 9: E-Commerce and the Entrepreneur 9-5 Forrester Research 2009 data shows actual online retail sales at US$155.2 in 2009 and projected to grow to $248.7 in 2014 FIGURE 9.1 Online Retail Sales in the U.S. (2006 estimates by Nielsen) Ch. 9: E-Commerce and the Entrepreneur 9-6 Benefits of Selling on the Web In addition to the text Opportunity to increase revenues and profits Ability to expand into global markets Ability to remain open 24 hours a day, seven days a week Capacity to use the Web's interactive nature to enhance customer service Power to educate and inform Ch. 9: E-Commerce and the Entrepreneur 9-7 Benefits of Selling on the Web (continued) In addition to the text Ability to lower the cost of doing business Ability to spot new business opportunities and capitalize on them Ability to grow faster Power to track sales results Conversion rate the percentage of customers to a Web site who actually make a purchase. Ch. 9: E-Commerce and the Entrepreneur 9-8 Ch. 9: E-Commerce and the Entrepreneur 9-9 Factors to Consider Before Launching into E-Commerce How a company exploits the Web's interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success. Web success requires a company to develop a plan for integrating the Web into its overall strategy. 9 - 10 Ch. 9: E-Commerce and the Entrepreneur Factors to Consider Before Launching into E-Commerce Developing deep, lasting relationships with customers takes on even greater importance. Creating a meaningful presence on the Web requires an ongoing investment of resources time, money, energy, and talent. Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change. 9 - 11 Ch. 9: E-Commerce and the Entrepreneur Assessing You Company's Online Potential 1. Does your product have broad appeal to customers everywhere? 2. Do you want to sell your product to customers outside of your immediate geographic area? 3. Can the product you sell be delivered conveniently and economically? 4. Can your company realize significant cost advantages by going online? 5. Can you draw customers to your company's Web site with a reasonable investment? Ch. 9: E-Commerce and the Entrepreneur 9 - 12 10 Myths of E-Commerce Myth 1: Online customers are easy to please. Myth 2: If I launch a site, customers will flock to it. Myth 3: Making money on the Web is easy. Myth 4: Privacy is not an important issue. Myth 5: The most important part of an e-commerce effort is technology. Myth 6: I don't need a strategy to sell online. Myth 7: Customer service is not important. Myth 8: Flashy Web sites are better than simple ones. Myth 9: It's what's up front that counts. Myth 10: Its too late to get on the Web. Ch. 9: E-Commerce and the Entrepreneur 9 - 13 FIGURE 9.3 Reasons for Abandoning Online Shopping Carts 9 - 14 Ch. 9: E-Commerce and the Entrepreneur Strategies for E-Success Focus on a market niche. Develop a community. Attract visitors by giving away "freebies." Make creative use of e-mail, but avoid becoming a "spammer." Make sure your Web site says "credibility." Ch. 9: E-Commerce and the Entrepreneur 9 - 15 Strategies for E-Success (continued) Make the most of the Web's global reach. Use Web 2.0 tools to attract and retain customers. Promote your site online and offline. Develop an effective search engine optimization (SEO) strategy. Ch. 9: E-Commerce and the Entrepreneur 9 - 16 Search Engine Strategies Arise as a result of "spiders," powerful programs search engines use to crawl around the Web. Paid (sponsored) Listings Short text ads with links to the sponsoring company's Web site. Paid Inclusion When a company pays a search engine for the right to submit either selected pages or its entire Web site content for listing. Ch. 9: E-Commerce and the Entrepreneur Natural (organic) Listings 9 - 17 Designing a Killer Web Site Understand your target customer. Give customers what they want. Select an intuitive domain name that is consistent with the image you want to create for your company and register it. Short Memorable Indicative of a company's business Easy to spell Make your Web site easy to navigate. 9 - 18 Ch. 9: E-Commerce and the Entrepreneur Designing a Killer Web Site (continued) Add wish list capability. Use online videos. Create a gift idea center. Build loyalty by giving online customers a reason to return to your Web site. Establish hyperlinks with other businesses, preferably those selling complementary products. Ch. 9: E-Commerce and the Entrepreneur 9 - 19 Designing a Killer Web Site (continued) Include an e-mail option and a telephone number on your site. Give shoppers the ability to track their orders online. Offer Web shoppers a special all their own. Follow a simple design. Create a fast, simple checkout process. Ch. 9: E-Commerce and the Entrepreneur 9 - 20 Designing a Killer Web Site (continued) Assure customers that online transactions are secure. Establish reasonable shipping and handling charges and post them up front. Confirm transactions. Keep your site updated. Test your site often. Consider hiring a professional to design your site 9 - 21 Ch. 9: E-Commerce and the Entrepreneur Tracking Web Results Web Analytics tools that measure a Web site's ability to attract customers, generate sales, and keep customers coming back. Only about 40% of e-businesses use Web analytics strategically to refashion their Web sites. Commerce metrics Visitor segmentation measurements Content reports Process measurements Ch. 9: E-Commerce and the Entrepreneur 9 - 22 Measuring Online Performance Recency The length of time between customers' visits to a Web site. Click-through Rate (CTR) The proportion of people who see a company's ad online and actually click on it. Ch. 9: E-Commerce and the Entrepreneur 9 - 23 FIGURE 9.3 E-Mail Open and Click-Through Rates by the Day of the Week 9 - 24 Ch. 9: E-Commerce and the Entrepreneur Measuring Online Performance (continued) Cost per Acquisition (CPA) The amount it costs to generate a purchase (or a customer registration). Conversion (browse-to-buy) ratio The proportion of visitors to a site who actually make a purchase. Ch. 9: E-Commerce and the Entrepreneur 9 - 25 Ensuring Web Privacy Take an inventory of the customer data collected. Develop a company policy for the information you collect. Post your company's privacy policy prominently on your Web site and follow it. Ch. 9: E-Commerce and the Entrepreneur 9 - 26 Ensuring Web Security Virus detection software detection software Intrusion Firewall Ch. 9: E-Commerce and the Entrepreneur 9 - 27 Conclusion Know what you need to know before launching into e-commerce Assess the basic strategies to follow Know what works on Web sites Track results and listen to customers Ch. 9: E-Commerce and the Entrepreneur 9 - 28 ...
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This note was uploaded on 01/18/2012 for the course TR 3001 taught by Professor Kok during the Spring '08 term at National University of Singapore.

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