Ecommerce Midterm Flashcards by Brillian Qi-Bell

Use of Internet to transact business
Includes Web, mobile browsers and apps

changing money

E-Commerce

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Digital enabling of transactions and processes within a firm, involving information systems under firm’s control
Does not include commercial transactions involving an exchange of value across organizational boundaries

help with the transaction but not the actual business, where the money changes hands

E-Buisiness

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any disparity in relevant market information among parties in a transaction

Information assymmetry

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8 unique features of e-commerce tech

Ubiquity
Global reach
Universal standards
Richness
Interactivity
Information density
Personalization/Customization
Social technologies

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It is everywhere, smartphones-

Ubiquity

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Can reach more places, more countries from one laptop

Global reach

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Not everyone has to speak the same language

Universal standards

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quality is much better, we know more before making decisions

(Information) Richness

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can talk to you specifically, engaging with you often,

Interactivity

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how much there is, there is more info available

Information density

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Can be tailored to them with cookies, greet them by name

Personalization/Customization

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Social media

Social technologies

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Major types of e-commerce

B2C/B2B/C2C
Mobile e-commerce
Social e-commerce
Local e-commerce

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displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between producers and consumers

Disintermediation

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All participants receive value from the fact that everyone else uses the same tool or product (ex: telephone, windows), all of which increase in value as more people adopt them

Network effect

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Internet vs WWW

Internet- Highway, environment in which entities exist

WWW- Vehicles on highway, part of internet

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Major Trends in E-commerce

Business trends include:
All forms of e-commerce show very strong growth

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

Societal trends include:
Increased online social interaction and sharing

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Look alike audience, Facebook, things you like

Social e-commerce

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Uber, yelp, look for things in YOUR area

Local e-commerce

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Examples:
Business-to-Consumer (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Mobile e-commerce (M-commerce)

B2C- Target
B2B- Maker to Seller
C2C- Ebay
M-commere- works on ur phone

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Invention of E-Commerce

Ideal:

Friction free commerce- anyone could do anything, instant
if your product was out there first you could win

Additional concepts include disintermediation, monopoly profits, switching costs, network effects, disrupting traditional channels.

1995–2000: Invention
Sale of simple retail goods
Limited bandwidth and media
Euphoric visions of
Friction-free commerce
First-mover advantages
Dot-com crash of 2000

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Consolidation of E-Commerce

People who survived who returned on profitability
Venture capitalist left

2001–2006: Consolidation
Emphasis on business-driven approach
Traditional large firms expand presence
Start-up financing shrinks
More complex products and services sold
Growth of search engine advertising
Business web presences expand

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Reinvention of E-Commerce

Rapid growth of everything after Iphone

2007–Present: Reinvention
Rapid growth of:
Web 2.0, including online social networks
Mobile platform
Local commerce
On-demand service economy
Entertainment content develops as source of revenues
Transformation of marketing

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Why Many early visions not fulfilled

Price dispersion
Information asymmetry
New intermediaries
Big brands can compete more aggressively

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person who follows the first person who makes mistakes, usually succeeds

Fast Follower

Fast-follower advantages Start-up costs Impact of mobile platform Emergence of on-demand e-commerce

Other surprises of E-Commerce

Technology: Development and mastery of digital computing and communications technology Business: New technologies present businesses with new ways of organizing production and transacting business Society: Intellectual property, individual privacy, public welfare policy

Understanding E-commerce: Organizing Themes

• Eight key components of e-commerce business models (e.g. value prop, revenue model, etc.)

``` o Value proposition o Revenue model o Market opportunity o Competitive environment o Competitive advantage o Market strategy o Organizational development o Management team ```

“Why should the customer buy from you?” Successful e-commerce ______: Personalization/customization Reduction of product search, price discovery costs Facilitation of transactions by managing product delivery

Value proposition

“How will you earn money?”

o Revenue model

“What marketspace do you intend to serve and what is its size?” Area of actual or potential commercial value in which company intends to operate typically divided into smaller niches

o Market opportunity

“Who else occupies your intended marketspace?” Other companies selling similar products in the same marketspace Includes both direct and indirect competitors

Competitive environment

“What special advantages does your firm bring to the marketspace?” Is your product superior to or cheaper to produce than your competitors’?

o Competitive advantage

“How do you plan to promote your products or services to attract your target audience?” Details how a company intends to enter market and attract customers Best business concepts will fail if not properly marketed to potential customers

o Market strategy

“What types of organizational structures within the firm are necessary to carry out the business plan?” Describes how firm will organize work Typically, divided into functional departments As company grows, hiring moves from generalists to specialists

o Organizational development

“What kind of backgrounds should the company’s leaders have?”

o Management team

• B2C business models (be able to match the model with an example provided)

``` o Portal o E-tailer o Content provider o Transaction broker o Market creator o Service provider o Community provider ```

Search plus an integrated package of content and services (REV?) Variations: Horizontal/general (example: Yahoo, A O L, M S N) Vertical/specialized (vortal) (example: Sailnet) Search (example: Google, Bing)

o Portal Revenue models: Advertising, referral fees, transaction fees, subscriptions for premium services

online version of traditional retailer (REV?) ``` Variations: Virtual merchant Bricks-and-clicks Catalog merchant Manufacturer-direct ``` Low barriers to entry

o E-tailer | Sales rev model

Digital content on the Web: News, music, video, text, artwork (REV?) Variations: Syndication Aggregators

o Content provider Revenue models: Use variety of models, including advertising, subscription; sales of digital goods Key to success is typically owning the content

Process online transactions for consumers Primary value proposition-saving time and money Industries using this model: Financial services Travel services Job placement services

o Transaction broker Revenue model: Transaction fees

Create digital environment where buyers and sellers can meet and transact Examples: Priceline, eBay On-demand service companies (sharing economy): platforms that allow people to sell services Examples: Uber, Airbnb

o Market creator Revenue model: Transaction fees, fees to merchants for access

Online services Example: Google-Google Maps, Gmail, and so on Value proposition Valuable, convenient, time-saving, low-cost alternatives to traditional service providers

o Service provider Revenue models: Sales of services, subscription fees, advertising, sales of marketing data

Provide online environment (social network) where people with similar interests can transact, share content, and communicate Examples: Facebook, LinkedIn, Twitter, Pinterest (REV?)

o Community provider Revenue models: Typically hybrid, combining advertising, subscriptions, sales, transaction fees, and so on

• B2B business models (be able to match the model with an example provided; note that some of these items are similar and these will NOT be used as answer choices in the same exam question)

``` Net marketplaces E-distributor E-procurement Exchange Industry consortium Private industrial network ```

Supplier of things businesses need, online store Version of retail and wholesale store, M R O goods, and indirect goods Owned by one company seeking to serve many customers (REV?)

o E-distributor (Grainger, McMaster-Carr) Revenue model: Sales of goods

Creates digital markets where participants transact for indirect goods B2B service providers, S a a S and P a a S providers Scale economies (REV?) Builds access to digital markets; software that selling companies can use to create e-catalogs and buying companies can use to build internal mini-markets. Generally value-chain software Example: Ariba

o E-procurement Revenue model: Service fees, supply-chain management, fulfillment services

Open market place Not as popular as we thought (REV?) Independently owned vertical digital marketplace for direct inputs Create powerful competition between suppliers Tend to force suppliers into powerful price competition; number of exchanges has dropped dramatically Example: Go2Paper Not as popular as anticipated. Giant digital marketplace owned by private companies (usually entrepreneurial) who bring lots of suppliers for a single industry together so that buyers can have a more streamlines buying process. Encourages price competition, making it unattractive for some vendors.

o Exchange | Revenue model: Transaction, commission fees

Industry-owned vertical digital marketplace open to select suppliers More successful than exchanges Sponsored by powerful industry players Strengthen traditional purchasing behavior (REV?) Example: SupplyOn similar to an exchanges, but owned by group of major industry players. More successful than private exchanges

o Industry consortium Revenue model: Transaction, commission fees

Digital network used to coordinate among firms engaged in business together Typically evolve out of large company’s internal enterprise system Key, trusted, long-term suppliers invited to network Example: Walmart’s network for suppliers Be able to recognize this model: Created by super-large companies to make their buying process more efficient. Open only to trusted long-time suppliers, companies like Walmart create these private networks to coordinate communication, ordering overall inventory management. Company pays for network but saves in creating a much more efficient procurement network

Private Industrial Network

Business strategy (definition and five key types)

``` o Differentiation  Commoditization (opposite of differentiation o Cost competition o Scope strategy o Focus/market niche strategy o Customer intimacy ```

Plan for achieving superior long-term returns on capital invested: that is, profit

Business Strategy

making ur product stand out

Differentiation

No difference in products, only difference is price

Commoditization (opposite of differentiation

Firm has an advantage so they can charge less

Cost competition

Compete globally

Scope strategy

connect with small niche of ppl

Focus/market niche strategy

create strong ties with customer

Customer intimacy

Number and size of active competitors Each competitor’s market share Competitors’ profitability Competitors’ pricing

Competitive Environment Influences

``` Asymmetries First-mover advantage, complementary resources Unfair competitive advantage Leverage Perfect markets ```

Competitive Advantage Important Concepts

Can make the business model work Can give credibility to outside investors Has market-specific knowledge Has experience in implementing business plans

Strong management team

Raising Capital

``` Seed capital Elevator pitch Traditional sources - Incubators, angel investors - Commercial banks, venture capital firms - Strategic partners Crowdfunding - J O B S Act ```

easier to get into for new businesses, time varies

Incubators-

high standards, highly competitive, for more established businesses

Exrelerators-

allows equity crowdfunding (selling stocks)

Jobs ACT-

When you donate, you get something back

Reward crowdfunding

Fails visibly | If you win, they support your business

Crowdfunding

SaaS-

Software as a Service

SaaS-

Software as a Service

``` Rivalry among existing competitors Barriers to entry Threat of new substitute products Strength of suppliers Bargaining power of buyers Industry structural analysis ```

E-commerce changes industry structure by changing:

Set of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services All of the steps that move the og stuff in the product/service into the stuff you sell Every step should add value

Industry Value Chains

Activities that a firm engages in to create final products from raw inputs

Firm Value Chains

Networked business ecosystem Strategic partnerships as part of value chain, amazon

Firm Value Webs

Disruptors introduce new products of lower quality Disruptors improve products New products become superior to existing products Incumbent companies lose market share

Disruptive changes stages

Industry Value Chains

Disruptors introduce new products of lower quality Disruptors improve products New products become superior to existing products Incumbent companies lose market share

Disruptive changes stages

 initial purpose was to link large mainframe computers on different college campuses  Key building blocks were created (even if not fully implemented at the time) !!!!Packet switching • Email invented !!!!!Client/server computing invented !!!!!!TCP/IP invented

Innovation of Internet (1961-1974)

 Department of Defense and National Science Foundation (NSF) fund further development and deployment.  1986 NSF given task to create civilian Internet for $200 million  First personal computers are introduced !!!!!! Domain Name System (DNS) introduced so we don’t need to remember IP addresses  Start of e-commerce

o Institutionalization (1975-1995)

The fully civilian, commercial internet is born becomes widely adopted

Commercialization (1995-present)

is a set of standards/rules that unify formatting, compression, error checking, speed and confirmation of sent/received messages

TCP | transmission control protocol

initial purpose was to link large mainframe computers on different college campuses

Innovation of Internet (1961-1974) Invented

Slices digital messages into packets Sends packets along different communication paths as they become available Reassembles packets once they arrive at destination Uses routers Less expensive, wasteful than circuit-switching

Packet switching

o Institutionalization (1975-1995) Used by department of defense and university

The fully civilian, commercial internet is born becomes widely adopted

Commercialization (1995-present) Used by everyone and businesses

is a set of standards/rules that unify formatting, compression, error checking, speed and confirmation of sent/received messages Establishes connections among sending and receiving Web computers Handles assembly of packets at point of transmission, and reassembly at receiving end intermediatery between 2 computers, structure that they’ve adopted, we can speak the same language

TCP | transmission control protocol

(Internet of things)

IoT

32-bit number Four sets of numbers marked off by periods: 201.61.186.227 Class C address: Network identified by first three sets, computer identified by last set

IPv4 Internet Address

128-bit addresses, able to handle up to 1 quadrillion addresses (I P v4 can handle only 4 billion) know that this was created to respond to shortage of available IPv4 addresses.)

• IPv6 Internet Address

know that it stands for a numeric IP address !!!I P address!!! expressed in natural language

Domain name

know that it also uses a domain name as part of the URL Address used by Web browser to identify location of content on the Web

URL (uniform resource locator)

that client computers (e.g. desktops) are connected/networked with servers (dedicated to functions that the client computers need) Powerful personal computers (clients) connected in network with one or more servers Servers perform common functions for the clients

• Client/Server Computing (DEF)

Firms and individuals obtain computing power and software over Internet Three types of services

• Cloud computing

owned and maintained by CPS like Amazon, HP, and made available to multiple customers who pay only for the resources they use. Good at cost saving, you don't own the infrastructure, good for smaller companies

Public cloud

operated solely for the benefit of a single tenant, may be managed by a 3rd party higher security, retain control over it

Private cloud

own infrastructure for their most essential core activities and adopt public cloud computing for less essential or during peak hours Large firms

Hybrid cloud

Telephone-based wireless Internet access Currently based on 3G and 4G technologies _____ will provide higher bandwidth with speeds reaching 10 G b p s or more

• 5G

High-speed, fixed broadband wireless L A N (W L A N) Wireless access point (“hot spots”) Limited range but inexpensive

• WiFi (basic definition; don’t need to memorize diagram)

Modest speed, low power, short range, connection of digital devices

Bluetooth

(Internet of things) Objects connected via sensors/R F I D to the Internet “Smart things” Interoperability issues and standards Security and privacy concerns Smart accessories are adding up What’s gonna happen with that data? Who has it?

IoT

3 types of Cloud computing services

Infrastructure as a service (I a a S) Software as a service (S a a S) Platform as a service (P a a S)

Drawbacks and benefits of cloud computing

Drawbacks: Security risks Shifts responsibility for storage and control to providers Radically reduces costs of: Building and operating websites Infrastructure, I T support Hardware, software

Regional hubs where Tier 1 I S P s physically connect with one another and with regional Tier 2 I S P s. Tier 2 I S P s provide Tier 3 I S P s with Internet access. Originally called Network Access Points (N A P s) or Metropolitan Area Exchanges (M A E s).

Internet Exchange Points (I X P s)

Local area networks operating within single organization, such as N Y U or Microsoft Corporation Lease Internet access directly from regional and national carriers

Campus/Corporate Area Networks

Two basic types of wireless Internet access:

Telephone-based (mobile phones, smartphones) | Computer network-based (wireless local area network-based)

area has wifi

WiMax

area has wifi

WiMax

area has wifi

WiMax

Text formatted with embedded links | Links connect documents to one another, and to other objects such as sound, video, or animation files

Hypertext

Fixed set of pre-defined markup “tags” used to format text | Controls look and feel of web pages

Hypertext Markup Language (H T M L)

Designed to describe data and information | Tags used are defined by user

eXtensible Markup Language (X M L)

Enables a computer to deliver web pages to clients on a network that request this service by sending an H T T P request Basic capabilities: Security services, F T P, search engine, data capture

Web server software

May refer to either web server software or physical server | Specialized servers: Database servers, ad servers, and so on

Web server

Any computing device attached to the Internet that is capable of making H T T P requests and displaying H T M L pages

Web client

Any computing device attached to the Internet that is capable of making H T T P requests and displaying H T M L pages

Web client

• Considerations to address before building your site/app

``` o Vision of website o Business and Revenue model o Target audience o Understand the Marketplace o Where does the content come from o SWOT Analysis o E-Commerce Presence Map; o Timeline/Milestones o Costs ```

What's the Idea? ``` Mission statement Target audience Intended market space Strategic analysis Marketing matrix Development timeline Preliminary budget ```

o Vision of website

Where's the Money? ``` ? [Is it Sustainable?] Business model(s) Revenue model(s) ```

Business & Revenue Model

[Do trends support this?] demographics, lifestyle, consumption patterns, etc.

o Who & where is the Target audience?

What is the Ballpark? Characterize the ____ Size, growth, demographics, structure

o Understand the Marketplace

Where is the ____ coming from?

o Where does the content come from; understand static/dynamic/user generated

``` Know yourself Strengths Weaknesses Opportunities Threats ```

o SWOT Analysis

Develop a _______ what platforms will you tackle when? Where are you present on? What media sites?

o E-Commerce Presence Map

Where would you like to be X from now?

o Timeline/Milestones

How much will it ____? Simple website: up to $5000 Small startup: $25,000 to $50,000 Large corporate website: $100,000+ to millions

o Costs

Systems Development Life Cycle

* Systems analysis/planning * Systems design * Building the system * Testing * Implementation/Service delivery

Business objectives: List of capabilities you want your site to have System functionalities: List of information system capabilities needed to achieve business objectives Information requirements: Information elements that system must produce in order to achieve business objectives

Systems analysis/planning

System design specification: Description of main components of a system and their relationship to one another Two components of system design: Logical design Data flow diagrams, processing functions, databases Physical design Specifies actual physical, software components, models, and so on

Systems design

Outsourcing Building your own Host your own

Building the system

``` Unit testing System testing Acceptance testing A/B testing (split testing) Multivariate testing ```

• Testing e.g. multivariate, A/B or split testing, acceptance testing (often under-funded)

Most important management challenges to building e-commerce site

Developing a clear understanding of business objectives | Knowing how to choose the right technology to achieve those objectives

``` Management Hardware architecture Software Design Telecommunications Human resources ```

Main factors to consider building e-commerce site

Methodology for understanding business objectives of a system and designing an appropriate solution

The Systems Development Life Cycle

Systems break down unpredictably Maintenance is ongoing Maintenance costs: Similar to development costs A $40K e-commerce site may require $40K annually to upkeep Benchmarking

• Implementation/Service delivery (recognize ongoing costs to maintain)

Website scaled down to in content and navigation to quickly purchase Responsive Web design Less expensive Resizing existing website for mobile access is least expensive

• Mobile website

Built to run on the mobile web browser on phone or tablet Less expensive Can utilize browser A P I

• Mobile web-app

Application built to use the device's internal hardware, can connect to internet Can use device hardware, available offline Most expensive; requires more programming

• Native app

Create mobile 1st and then add elements for desktops Most efficient Desktop website design after mobile design

• Mobile first design

Server delivers different templates or versions of site optimized for device

Adaptive web design

Test the site on a test internet server, key personnel

Acceptance Testing

Showing 2 versions of site to ppl and seeing which they prefer better

A/B Testing (Split testing)

Test all possibilities to see which design does things best

Multivariate Testing

Test all possibilities to see which design does things best

Multivariate Testing

A $40K e-commerce site may require ____ annually to upkeep

$40K

Arrangement of software, machinery, and tasks in an information system needed to achieve a specific functionality

System architecture

Web server and database server

Two-tier

Web application servers | Backend, legacy databases

Multi-tier

Basic tools included in all web servers Verify that links on pages are still valid Identify orphan files

Site Management Tools

Contents stored in database and fetched when needed

Dynamic page generation:

Provide specific business functionality required for a website

Web application servers:

Provides basic functionality for sales Online catalog List of products available on website Shopping cart Allows shoppers to set aside, review, edit selections, and then make purchase Credit card processing Typically works in conjunction with shopping cart Verifies card and puts through credit to company’s account at checkout

E-commerce Merchant Server Software

Integrated environment that includes most of functionality needed

Merchant Server Software Packages

Underlying computing equipment needed for e-commerce functionality

Hardware platform:

Ability to treat people based on personal qualities and prior history with site

Personalization

Ability to change the product to better fit the needs of the customer

Customization

Set of public statements declaring how site will treat customers’ personal information that is gathered by site

Set of design objectives that ensure users with disabilities can effectively access site

Accessibility rules

C S S site adjusts layout of site according to device screen resolutions

Responsive web design (R W D)

C S S site adjusts layout of site according to device screen resolutions

Responsive web design (R W D)

need reassurance, to trust brand, referenced by friends, similar purchase patterns as friends 10-15% want to be hipster and get something not everyone has

“Connectedness”

Five stages in consumer decision process

``` Awareness of need Search for more information Evaluation of alternatives Actual purchase decision Post-purchase contact with firm ``` Awareness Comparison search, search for competition Compare competition Buy it Cognitive dissonance: Was this worth it?: Make sure they loved it

User characteristics Product characteristics Website features: latency, usability, security Attitudes toward online purchasing Perceptions about control over Web environment Clickstream behavior

General online behavior model

Highly intentional, goal-oriented Search engines Marketplaces (Amazon, e Bay) Specific retail site

How shoppers find online vendors

Two most important factors shaping decision to purchase online:

Utility: Better prices, convenience, speed Trust: Perception of credibility, ease of use, perceived risk Sellers develop trust by building strong reputations for honesty, fairness, delivery

More personalized More participatory More peer-to-peer More communal

Features of Internet marketing (versus traditional)

More personalized More participatory More peer-to-peer More communal

Features of Internet marketing (versus traditional)

Massive, but growth is slowing. Digital divide is not as big as once feared, but still work to be done. Biggest gaps are income (15% gap) and level of education (65% less than high school/97% college degree+/93% some college) Rural/older/low levels of education/low household income/African Americans/Latinos all less likely to have home broadband connection. May access in other places with public wifi. Peer groups influence

Consumers Online: The Internet Audience and Consumer Behavior

looks at how people behave on your site. What do they actually click on and in what order? What did they mouse over? How long between clicks? How many clicks to purchase? More than X clicks = abandon? Analysis can yield predictive results that help you make product recommendations and created more targeted offers. what do they click on in what order, time mouse stayed there What parts of site are effective

Clickstream behavior & Analysis

If you are a clicks-and-bricks firm,

make sure that they reinforce each other for additive effect.

How Consumers Shop

Most come through search engines 8% don’t shop online bc of trust & Hassle

Need multiple layers of marketing

Multi-Channel Marketing Plan

How do you measure and compare metrics from different platforms? How do you link each to sales revenues?

How do you allocate resources & Prioritize

``` Establish brand identity and customer expectations Differentiating product Anchor the brand online Central point for all marketing messages Inform and educate customer Shape customer experience ```

Website functions to:

Need multiple layers of marketing All the different ways your customer is exposed to your brand

Multi-Channel Marketing Plan

Website functions to:

Advantages to online marketing

18-34 audience is online Ad targeting to individuals Price discrimination Personalization

``` Search engine marketing and advertising (best) Display ad marketing E-mail marketing Affiliate marketing Viral marketing Lead generation marketing ```

Traditional Online Marketing and Advertising Tools

Use of search engines for branding

Search engine marketing (S E M)

Use of search engines to support direct sales

Search engine advertising

Paid inclusion Pay-per-click (P P C) search ads Keyword advertising Network keyword advertising (context advertising)

Types of search engine advertising

competition will hire people to click your ad to rack up a huge click bill

Click fraud

Utilizes social contacts and social graph to provide fewer and more relevant results

Social search

Search engine issues

Paid inclusion and placement practices Link farms, content farms Click fraud

``` Banner ads Rich media ads Interstitial ads Video ads Far more effective than other display formats Sponsorships Native advertising Content marketing Advertising networks Ad exchanges, programmatic advertising, and real-time bidding (R T B) ```

Display Ad Marketing

Ad fraud Viewability Ad blocking

Display advertising issues

Messages sent directly to interested users

E-mail Marketing

Inexpensive Average around 3% to 4% click-throughs Measuring and tracking responses Personalization and targeting

Email Marketing Benefits

Spam Anti-spam software Poorly targeted purchased e-mail lists

Email marketing Challenges

Efforts to control spam have largely

failed

Commission fee paid to other websites for sending customers to their website

Affiliate marketing

Marketing designed to inspire customers to pass message to others

Viral marketing

Services and tools for collecting, managing, and converting leads

Lead generation marketing

Use of online social networks and communities

Social marketing and advertising

Use of mobile platform | Influence of mobile apps

Mobile marketing and advertising

Geotargeting Display ads in hyperlocal publications Coupons

Local marketing

It's better to have a ________ audience than a _______ audience

Smaller; larger

All the different ways your customer is exposed to your brand Integration of online and offline marketing Reinforce branding messages across media

Multi-Channel Marketing

One-to-one marketing (personalization) Behavioral targeting (interest-based advertising) Retargeting

Customer retention strategies

F A Qs Real-time customer service chat systems Automated response systems

Customer service

integral part of marketing strategy

Pricing:

Traditional pricing based on

fixed costs, variable costs, demand curve

Base level is free, advanced is more

Free:

no ads if you pay for it

Freemium:

lower vs higher features

Versioning:

Auctions Yield management Surge pricing Flash marketing

Dynamic pricing

Internet allows for sales of obscure products with little demand

Long Tail Marketing

Near zero inventory costs Little marketing costs Search and recommendation engines

Long tail marketing Substantial revenue because

The incremental cost of producing the next product

Marginal costs

Revenue incrementally firm receives for each item sold

Marginal Revenue

Scope of marketing communications broadened Richness of marketing communications increased Information intensity of marketplace expanded Always-on mobile environment expands marketing opportunities

Internet’s main impacts on marketing:

Built into web server software Record user activity at website Provides much marketing data, especially combined with: Registration forms Shopping cart database Answers questions such as: What are major patterns of interest and purchase? After home page, where do users go first? Second?

Web Transaction Logs

cookies that can't be deleted like normal cookies

Supercookies

``` Cookies Flash cookies Web beacons (“bugs”) Tracking headers (supercookies) Other tracking methods Deterministic cross-device tracking Probabilistic cross-device tracking ```

Types of tracking files

Enable profiling Store records and attributes Database management system (D B M S): Relational Databases

Databases

Industry-standard database query and manipulation language used in a relational database

S Q L (Structured Query Language):

Collects firm’s transactional and customer data in single location for offline analysis by marketers and site managers

Data warehouse:

Analytical techniques to find patterns in data, model behavior of customers, develop customer profiles

Data mining:

Query-driven data mining Model-driven data mining Rule-based data mining

Types of data mining

Manage relationship with customers once purchase is made | Create customer profiles

C R M systems

Develop and sell additional products Identify profitable customers Optimize service delivery, and so on

Customer data used to:

Use ____ to measure ad campaign

ROI (return on investment)

Pricing models of online advertising

Barter, cost per thousand (C P M), cost per click (C P C), cost per action (C P A), hybrid, sponsorship

Correlating online marketing to online or offline sales In general, online marketing is more expensive on C P M basis, but more efficient in producing sales Effective cost-per-thousand (e C P M)

Measuring issues of online advertising

Software that analyzes data at each stage of the customer conversion process Helps managers Optimize R O I on website and marketing efforts Build detailed customer profiles Measure impact of marketing campaigns

Marketing Analytics

Ecommerce Midterm Flashcards

(224 cards)