HCD302 E-Marketing Lecture 4: Information Collection/Use & E-Biz Strategy
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1 HCD302 E-Marketing Lecture 4: Information Collection/Use & E-Biz Strategy Tralvex (Rex) Yeap University of Leeds 29 January 2003
2 Outline Quick Review on Lecture 3 Topic 7: Information Collection & Use Class Activity 1: -- Topic 8: E-Business Strategy Class Activity 2: -- What s in Store for Lecture 5
3 Quick Review of Lecture 3 Quick Review on Lecture 3 Topic 5: E-Business Value Strategy Class Activity 1: The Pricing of Online Media Topic 6: Diffusion of Innovation Class Activity 2: Technology Intelligence What s in Store for Lecture 5
4 T7: Information Collection & Use Hierarchy of Information 3 rd Generation (2003) Intelligence 2 nd Generation ( ) Knowledge Charts 1 st Generation (1990s) Information Data Data & Information
5 T7: Information Collection & Use Marketing Information System A Marketing Information System (MIS) is a formal information gathering system designed to collect data and provide meaningful information. There are three major categories of data that marketers collect. data related to marketing mix elements (the effect of product, price, promotion, and place decisions) the behavior of individual buyers and prospects data from environmental scanning.
6 T7: Information Collection & Use Marketing Information System (Source & Use) SOURCES OF DATA THE THE MARKET Marketing Research & Data Data Capture Capture THE THE DATA DATA BASE BASE USE OF INFORMATION KNOWLEDGE DISCOVERY Information for for Managerial Decisions COMPETITIVE INTELLIGENCE Environmental Environmental Scanning Scanning and and Data Data Collection Collection THIRD THIRD PARTY PARTY DATA DATA Secondary Data Data Data Warehouse Marketing Decision Support Support System System BUSINESS SYSTEM CONTROL KNOWLEDGE MANAGEMENT
7 T7: Information Collection & Use Data Mining Data mining allows new insights to be gained and can develop tighter relationships with customers. Data mining is the process of using software to drill into a database to obtain meaningful information.
8 T7: Information Collection & Use Database A database is a structured storage of data consisting of fields and records. A field is a column of data related to a single attribute or variable. A record is a collection of fields that represent a single case, such as the profile of an individual. Record Field 1 (Lname) Field 2 (Income) Field 4 (Gender) Field 5 (Purchase behavior) 1 Jones 50,000 Male Product X purchased 11/09/99 2 Amy 54,000 Female Product Z purchased 09/16/98 Field N (Psychographic) Tennis Scuba Diving
9 T7: Information Collection & Use Fortune 1000 Companies - Data Mining Applications Application Market segmentation Customer churn Fraud detection Direct marketing Interactive marketing Market-basket analysis Trend analysis Description Identifies the common characteristics of customers who are likely to react to similar marketing strategies. Predicts which customers are likely to switch to a competitor. Rates the likelihood that a transaction is fraudulent. Identifies the prospects most likely to respond to direct marketing efforts. Predicts what each individual visitor to a Web site would be most interested in seeing (and can then deliver that content). Groups products or services that are most likely to be purchased together. Delineates differences and trends among groups of customers for a given period of time.
10 T7: Information Collection & Use Competitive Intelligence Competitive intelligence (CI) is a continuous process involving the legal and ethical collection of information and monitoring of the competitive environment giving managers the ability to make strategic decisions. Competitive intelligence allows managers to make informed decisions about marketing, R&D, and long-term business strategies. The Society for Competitive Intelligence Professionals (
11 T7: Information Collection & Use Technology Intelligence Technology Intelligence is a systematic program for gathering, analyzing, forecasting, and managing external technology related information (including patent information).
12 T7: Information Collection & Use Knowledge Management Knowledge management: Is the process of collecting corporate knowledge and developing a system to disseminate that knowledge throughout an organization. Allows businesses to undertake day-to-day operations as well as become more innovative. Knowledge can reside: In databases, on paper, and in workers heads. This knowledge should be available to workers when they need it.
13 T7: Information Collection & Use Knowledge Management
14 T7: Information Collection & Use Knowledge Management Developing a knowledge management system can: Reducing the cost of information gathering, Improve customer support Identifying new market opportunities Reducing cycle times Retain knowledge of workers who leave the organization.
15 T8: E-Business Strategy Introduction A strategy consists of a pattern of decisions that set the goals and objectives that lead to long run competitive advantages for a firm. Undertake a SWOT analysis. Determining distinctive competencies. Determining the competitive arena. Develop a plan to reach the business goals Porter s Competitive Forces Model
16 T8: E-Business Strategy SWOT Analysis Undertake a SWOT analysis. Evaluate the Strengths, Weaknesses, Opportunities, and Threats facing a business. Determining distinctive competencies. Analyze a business s value chain to help identify internal strengths and weaknesses that can help determine how a business can compete.
17 T8: E-Business Strategy Value Chain A value chain is a way of envisioning the collection of activities that a business undertakes to design, produce, market, deliver, and support products or services. The Competitive Arena is the competitive environment in which a business competes. Distinctive Competencies are unique areas of advantage where a firm can differentiate itself from competitors.
18 T8: E-Business Strategy E-Business Value Chain E-business value chains view information technology as part of a business overall value chain adding to the competitive advantages of a business Inbound Logistics Extranets: Lowers costs increase speed Production ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets:Lower costs, better communication. Innovativeness:Speed, flexibility, new product ideas Marketing/Sales E-commerce: Lower costs, new market entry. Databases:Meet market needs better, make better decisions. Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships
19 T8: E-Business Strategy E-Business Value Chain Inbound Logistics Extranets: Lowers costs increase speed Production ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets:Lower costs, better communication. Innovativeness:Speed, flexibility, new product ideas Marketing/Sales E-commerce: Lower costs, new market entry. Databases:Meet market needs better, make better decisions. Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships Inbound Logistics Extranets: Lowers costs increase speed Production ERP ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new new product ideas
20 T8: E-Business Strategy E-Business Value Chain (cont) Inbound Logistics Extranets: Lowers costs increase speed Production ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new Marketing/Sales E-commerce: Lower costs, new market entry. Databases:Meet market needs better, make better Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships Marketing/Sales E-commerce: Lower costs, new new market entry. Databases: Meet market needs better, make better decisions. Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships
21 T8: E-Business Strategy E-Business Value Chain: Coca Cola Inbound Logistics Extranets: Lowers costs increase speed Production ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets:Lower costs, better communication. Innovativeness:Speed, flexibility, new product ideas Marketing/Sales E-commerce: Lower costs, new market entry. Databases:Meet market needs better, make better decisions. Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships Inbound Logistics Extranets: Links Links Coke Coke with with bottling bottling partners partners and and suppliers. suppliers. Production ERP ERP Software: Software: Links Links Coke Coke with with its its bottling bottling partners. partners. Provides Provides interconnected management system. system. Management Leadership: Management willing willing to to change change and and sell sell ideas. ideas. Intranets: Intranets: Worldwide Worldwide systems systems improves improves communication. Innovativeness: New New approach approach in in the the soft-drink soft-drink industry. industry.
22 T8: E-Business Strategy E-Business Value Chain: Coca Cola (cont) Inbound Logistics Extranets: Lowers costs increase speed Production ERP Software: Lowers costs Customized Production: Differential Advantage Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new Marketing/Sales E-commerce: Lower costs, new market entry. Databases:Meet market needs better, make better Customer Support Internet: Lower costs, speeds service. Competitive Advantage Through Stronger Customer Relationships Marketing/Sales E-commerce: Cellular Cellular linked linked vending vending machines. machines. Databases: Used Used with with decision decision support support systems. systems. Can Can determine determine the the effectiveness of of marketing marketing efforts. efforts. Customer Support Internet: Internet: Provide Provide more more timely timely delivery delivery to to trade trade customers. Competitive Advantage Through Stronger Customer Relationships
23 T8: E-Business Strategy Michael Porter s five competitive forces model
24 T8: E-Business Strategy Porter s Model for Wal-mart (walmart.com)
25 T8: E-Business Strategy Porter s Value Chain Model for a Manufacturing Firm
26 T8: E-Business Strategy The Airline Industry Value Chain superimposed on Porter s Value Chain
27 T8: E-Business Strategy Strategies for Existing Businesses High Resource Low Resource Table 8.5: E-Business Strategy Matrix Characterized by: High brand name recognition. Large portals and general e-commerce sites Keys to success: Heavy brand name advertising. Examples: Yahoo, Amazon.com, Disney, Wal- Mart, Schwab.com. Characterized by: Low brand name recognition. Keys to success: First mover advantages. Enhance customer relationships. Examples: CDNow, E-Toys, SMEs with Web site support. Low Differentiation Characterized by: High brand name recognition with niche markets. Keys to success: Develop vertical portals. Serve niche community. Examples: ivillage, VerticalNet, ESPN.com. Characterized by: Low brand name recognition outside of niche market. Keys to success: First mover advantages. Serve niche markets. Enhance customer relationships. Examples: Asay Publishing, High Differentiation
28 Class Activity 1: Reading How Information Gives You Competitive Advantage, Michael Porter
29 Additional Handouts for Lecture 4 1. How Information Gives You Competitive Advantage, Michael Porter
30 What s in Store for Lecture 5 Topic 9: E-Business Management Topic 10: Political, Legal and Ethical Environments Assignment 3 Discussion Additional Class Activities / Discussion
31 End of Lecture 4 Good Night.
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