MGT 293-1: Marketing for E-Commerce

Transcription

1 Winter 2002 Scott Davis MGT 293-1: Marketing for E-Commerce OUTLINE OF CLASS ASSIGNMENTS (Subject to Change) The pages that follow contain a summary of the material we expect to cover in the class, the course assignments and the grading policy. The first section of this outline describes the requirements for the case assignments and the Internet marketing plan which will be due at the end of the quarter. Following this summary is a summary of the grading policy. The third section provides brief descriptions of each class session and the assignments for each class meeting. Readings The assigned text is Internet Marketing: Building Advantage in a Networked Economy by Rafi Mohammed, et. al. The reading assignments for each class session in the daily assignments that follow. We will expect you to have completed the assigned readings prior to the class session for which they are assigned. Case and Internet Assignments There will be both individual and group assignments that will require you to analyze a case or visit some sites on the Web. All members of the team will receive the same grade for group assignments. There will be written assignments in weeks 2, 4, 5, 7 and 8. You are encouraged to read the description of the classes in which cases are to be discussed at least a week in advance so that you will have adequate time to prepare them. Final Project Each team will be expected to prepare and present a marketing plan for one of the following: 1) a new Internet company, 2) an existing company that has yet to develop a website, or 3) a major revision in an existing company s Internet presence. If you choose a new Internet company, you your plan should be sure to identify your proposed business s unique value proposition and justify why you feel it would be successful given the needs of customers and the existing offerings of competitors. If you are proposing a new Internet presence or a substantial renovation of an existing Internet presence for an existing company, you will want to demonstrate how your proposed Internet offering will improve its execution against its existing strategy or how it will enable the company to pursue a new, more effective strategy. The work for this project should be original for this class. You may not base this project on assignments prepared for other courses without the instructor s permission. The marketing plan should consist of three parts: a written plan, an accompanying oral presentation, and a mockup of your proposed website. The proposed Internet business should fulfill a new marketing function and have a strong potential for profitability. Written Plan: The written plan should contain the following elements: An Executive Summary: A concise review of the main objectives and recommendations to be covered in the plan. (1 page maximum) A Table of Contents: This should make it easy to locate specific issues. Neither this nor the Executive Summary count toward your page limit.

2 A Preface: It should briefly summarize the main issues facing your organization that will be addressed by your marketing plan. (Suggested length not to exceed 1 or 2 paragraphs) A Brief Situation Analysis: It should highlight the key points that the organization should consider. Your analysis should include 1) the organization's objectives and abilities, 2) the composition and size of the customer base, 3) appropriate target markets for their products, 4) the likely activities of competitors, and 5) alternatives to the organization's products. This section should tie the key aspects of the situation analysis together with a "SWOT" analysis. This analysis summarizes the organization's Strengths and Weaknesses along with the Opportunities and Threats that it faces. (Suggested length: 3 pages plus exhibits) The Strategic Approach: You should state your organization s value proposition and the strategic approach that will be adopted. You should identify your target audience(s) and determine whether the organization will attempt to differentiate its product (goods or services) or should use price as its principal source of appeal to the customer. If your organization will be operating in an established market, you should identify the key competitors and how you will compete against them. If you are making recommendations for an established organization, you should make clear the role of your proposed Internet presence in helping fulfill its existing strategy or changing the desired strategic approach. (Suggested length: 1 page) Goals and Objectives: You should summarize them briefly. It should be possible to measure the organization's performance with respect to them and, to the extent possible, quantified. You should identify both short-term and long-term objectives. (Suggested length: 1 page) Sources of Customer, User and Organization Value: You should discuss how your Internet presence will provide value to your target audience(s). Consider which of the seven C s (as covered in the course) you will use and how you will use them. If you are proposing a commerce site, you should consider issues such as the market structure (e.g. retail, auction, etc.), fulfillment, the potential for channel conflict, and how you will deal with customer dissatisfaction (e.g. returns policies, guarantees, etc.). You should also discuss how you will build traffic, capture the value your web site is providing, and summarize the types of data (if any) you are planning to collect and how it will be used. (Suggested length: 6 pages plus exhibits) Web Site Implementation: You should describe the structure of your site and provide an exhibit containing a flow chart to illustrate it. The flow chart should include the home page, the Tier 1 pages, and a description of the most important Tier 2 pages. You should also prepare exhibits that depict your site s home page as well as at least one Tier 1 page. If your site is going to be introduced in phases, you should include a timeline that summarizes the key milestones or decision points. (Suggested length: 1 page plus exhibits) A Financial Justification: You should provide a brief summary of the expected financial implications of your Internet proposal in the text. If you are proposing a new company, you should review the expected cash flows and the projected path to profitability. If your proposal is for a new or revised Internet presence a justification as to why you would expect the site to recover its expenses. In the Appendix, you should include a sample budget and possibly a sales or revenue forecast. You should explain how you came up with your estimates. (Suggested length: 1 page plus exhibits) The plan should not exceed 25 pages in total length (text plus exhibits) with the main body of the plan not exceeding fifteen pages of double-spaced typewritten text. This policy implies that you may have up to 15 pages of exhibits to accompany 15 pages of written text. You may have more than ten pages of exhibits, but every page of exhibits in excess of ten should be accommodated

3 by a corresponding page reduction in the main body of the text. Suggested page lengths have been provided above. These should be used as guidelines that suggest how your space can be most effectively utilized. You are free to allocate space in any way you feel is appropriate. Oral Presentation: Each group will be asked to present their marketing plan to the rest of the class during the final week of the course. The presentation should be made as if the audience included a potential venture capitalist or, in the case of a new or revised Internet presence for an existing company, the company s chief executive marketing and financial officers. Each presentation should be between 15 and 20 minutes in length to be followed by five minutes devoted to questions and answers. You may assume that the audience is familiar with the credentials of the individual team members. You should devote your time to the problems you see as critical, but you should be sure to cover the following: 1) the business value proposition, 2) the strategic approach, 3) the product or service offering (including sample web pages), 4) the revenue drivers and pricing policy, 5) a plan for generating traffic, and 6) a financial projection that explains how and when the business will achieve profitability. Website Prototype: The website mockup should include sample pages that will give a feel for the website you are planning and illustrate how your site will work. It should at a minimum include a home page with links to the Tier 1 pages. The pages need not have full functionality (e.g. forms do not have to be active, shopping carts don t need to be functional, etc.) but they should illustrate the site s organization, navigation and layout. In preparing your site you can use any software you choose. Recommended programs include: Macromedia Dreamweaver, Adobe GoLive, and Microsoft FrontPage. This class will not provide an extensive tutorial on the use of these programs or HTML, so you may wish to delegate the heavier web design task to a group member who knows some HTML or can use one of these programs. Dreamweaver 4 Hands-On Training by Garo Green Lynda Weinman is listed as a recommended text and is a good guide for teaching yourself how to design web pages using Dreamweaver (one of the more popular web design programs). You will need to use the Dreamweaver software if you wish to get my assistance in designing web pages. I know most of the basics of HTML programming but have very little experience with FrontPage and GoLive.

4 Grades There will be three components to your course grade: individual class participation, case assignments, and the final project. The contribution of each component to the final grade is given below: Class attendance and participation: 30% Written class assignments: 30% Final project: 50% The lowest 10 percent will be dropped. Grading Breakdown: Class participation will be based on an equal weighting of your attendance and your contributions to the class discussion as judged by the instructor. The written case/internet assignments will have the following point value: Content and connection (week 2): 5 Communication and community (week 3): 5 Priceline.com (week 5): 10 Matching Dell (week 6): 10 Internet Shopping (individual) (week 8): 10 Esurance.com (week 9): 5 Final project evaluations 5 Total 60 30% of final grade The components of the final project will have the following point values: Proposal 10 Written Presentation 50 Oral Presentation 20 Website mockup 20 Total % of final grade

5 Session 1. Wednesday, January 9 PROVIDING AND CAPTURING VALUE THOUGH THE INTERNET In this class session we will discuss some of the ways the Internet can allow a company to better fulfill its marketing functions. These might include advertising, providing product and service information, assisting in managing customer relationships and providing an individualized customer experience, as well as directly enabling transaction to take place. We will introduce the seven C s (Context, Content, Connection, Communication, Community, Customization, and Commerce) that summarize the potential sources of value to the audience on the Internet. We will also explore the concept of Context in more depth and introduce some of the key factors that should be considered in designing a site in order to effectively provide the best context for an audience s Internet experience. Mohammed, et. al., Internet Marketing, Chapter 6 Green and Weinman, Chapters 1-3 (recommended only for those who have limited web page design experience and who intend to use the Dreamweaver software to create web pages) In Class Assignment: 1. Form a study group of 3 to 5 members. Your group will work together to complete the group case assignments and the final project. Your group affiliations will be due at the beginning of the second class meeting.

6 Session 2. Wednesday, January 16 PROVIDING CONTENT AND CONNECTION ON THE WEB In this session, we consider the individual customer and internet interactivity. We consider the array of communication methods. Thomas Eisenman and Alistair Brown, Online Content Providers, HBS Thomas Eisenman and Sanjay Pothen, Online Portals, HBS Green and Weinman, Chapters 4-7 (recommended only for those who have limited web page design experience and who intend to use the Dreamweaver software to create web pages) Individual Assignment: 1. Visit the news sites and For each site: 1) review the coverage of latest breaking national and local headlines and 2) search the site for a source of entertainment for an evening in the news sites local areas (Sacramento, the Bay Area, and New York City respectively), and 3) if available, sign up for at least one newsletter from each site (you will be able to unsubscribe later). 2. Visit the portals and From each site attempt to gain the same information through the portals as you were asked to obtain for item Rate the above five sites using a five point scale on the following dimensions: Ease of use and navigation Ease of access to relevant content Quality of content you were able to access Ability to get updated information easily Entertainment of use Likelihood of revisiting the site (for the news sites, it may be conditional on your being in the relevant locality e.g. likely if I m in New York) Prepare a tabular summary of your ratings. 4. Sign up for an newsletter from two other sites of your choosing (one of which should be a retail site). If you already receive newsletters from two other sites (including one retail site), you do not need to sign up for additional newsletters. You should prepare item 3 to be turned in. Note: You will need to provide a valid address to access and personalize some of these pages. If you don t wish to use a current account, you may wish to establish an account for this course through Yahoo! or Hotmail.

7 Session 3. Wednesday, January 23 COMMUNICATING AND BUILDING COMMUNITIES WITH THE INTERNET In this session, we will address the next two ways of delivering value to the customer through the internet: Communication and the creation of Communities. Communication may take place from the individual to the company, from the company to the individual, from the company to a group of individuals, or possibly from a group of individuals to a company. We will focus on the role of different types of communication in improving customer service, driving traffic, and customer targeting. Communities allow communication among a group of individuals. We will look at different tools that the internet provides to facilitate interactions among individuals and review guideline for effectively operating a community web presence. Mohammed, et. al., Internet Marketing, Chapter 11 Individual Assignment: 1. Create your own custom home page. This page should have links to your favorite sites and the sites you use the most often. You should have links to at least six external sites using absolute URL s. You should also have a link to a bio page that communicates some information about you. This should be a relative link (a link to a page within your own site). 2. Rate the newsletters you have received (from the previous week s assignment) using a ten point scale on the following dimensions: Relevance of information Range of content choices or ability to customize content Ease of obtaining further information (or otherwise acting on the information provided) Absence of irrelevant promotions Frequency of newsletters Ability to avoid additional spam 3. Visit the following sites: MSN Money community: ( The Sims game site: ( WebMD: ( ebay: ( For each site identify ways to participate in the community and incentives that are provided to increase community involvement. Prepare a bulleted list of approaches for each site. For each approach give illustrations of topics or options but do not list every one. You should prepare items 2 and 3 to be turned in. Item 1 should be uploaded to a class site if we have the capability. If that option is not available it may be submitted electronically (send your entire web page folder in a zipped file) or by diskette (label clearly). Group Project Assignment: Proposal Prepare a written proposal for your marketing plan project. The proposal should include: 1. A brief statement of your proposed Internet business activity. The activity may be a new division of an established firm or a new firm. 2. A summary of the value proposition and business model. 3. A description of the industry and its key competitors. This proposal should not exceed two pages in length.

8 Session 4. Wednesday, January 30 INTERNET CASE: POWERSHCOOL Guest Speaker: John Stone, Chief Operating Officer, PowerSchool PowerSchool is a subsidiary of Apple that provides a completely web-based student information system that enables districts and schools to record, access, report and manage their student data and performance records in real-time. Parents, students, teachers and administrators use the system to share information about grades, attendance records, and homework assignments. Individual Case Assignment: Familiarize yourself with the educational support industry by visiting the website of Powerschool.com and some of its competitors (see below). URL s for websites: PowerSchool: ( NCS 4 School: k12planet.com: ( Prepare to discuss the following questions in class: 1. What are PowerSchool s strengths and weaknesses relative to its competitors? 2. What tactics would you recommend as they try to grow their business? 3. What features, if any, could PowerSchool add that could add value to current and potential customers? CUSTOMIZING THE INTERNET EXPERIENCE In this part of the session, we will look at ways customization can add value to customers and increase the potential for capturing value from customers. Key value drivers come from the ability to provide targeted information and promotions to different customers/users, enhance customer service capabilities, and making the site easier for different individuals to use. We will also examine the potential pros and cons of different approaches to customization. Individual Internet Exercise: 1. Revisit Yahoo.com and customize it. Cookies will need to be allowed for you to customize the site. 2. Visit Amazon.com and register at the site, if you haven t already done so. Browse through the site a few times, put some items in your shopping cart (buy some things if you like) and observe if and how the home page and tier 1 pages have changed. 3. Revisit ebay.com and register at the site, if you haven t already done so. Find some items you might be interested in bidding on and choose the Watch this Item option. (Do not bid on an item unless you are willing to pay for it if you win). Visit you re My ebay page. We will view some of your customized pages in class.

9 Session 5. Wednesday, February 6 COMMERCE ON THE INTERNET In this session we will look at how the internet can help enable and facilitate transactions of products and services. The internet may allow new market structures that would be costly, if not impossible, to implement otherwise. It may also help a customer more effectively search for desired items and item-specific information within and across vendors. We will discuss the logistical implications of distributing products and services through the web as well as the potential role of the internet in enhancing the sales of bricks and mortar retailers. Mohammed, et. al., Internet Marketing, Chapter 12 Ranjay Gulati and Jason Garino, Get the Right Mix of Bricks and Clicks, Harvard Business Review, May-June HBS CASE: PRICELINE.COM: NAME YOUR OWN PRICE Priceline.com is a new concept shifting the setting of price from sellers to buyers. The company aspires to use its patented process of advertising units of demand at named prices to suppliers in many categories. Priceline s initial use was in the airline industry in which customers seeking low cost airfares could make an offer on a ticket satisfying certain conditions and airlines seeking to fill excess capacity could decide whether or not to accept the offer. Written Group Case Assignment: 1. Read the HBS case Priceline.com. 2. Visit the Priceline.com website to get a better feeling about how its service works. 3. Evaluate the effectiveness of the Priceline pricing procedure in each of its core businesses: airline tickets, hotel rooms, home financing, new cars, rental cars and long distance. 4. Should Priceline have attempted to expand its grocery service offering? Why? 5. Visit at least two competing travel sites such as Expedia.com ore LowestFare.com. With your group discuss the following: Would the members of your group be more inclined to use the Priceline service or a competing service? Under what circumstances would Priceline s services be most attractive? Who is the most likely target market for Priceline s travel services? 6. Group Written Assignment: Prepare a one-page recommendation for Priceline to increase profitability over the upcoming year (2000). Do not do any outside research to try to determine what they did aside from visiting the site.

10 Session 6. Wednesday, February 13 STRATEGIC POSITIONING AND BRANDING WITH THE INTERNET Designing an effective web presence requires sound strategic planning. In this session we will examine how strategic planning approaches can be applied to businesses having a presence on the internet. The focus will be on how the benefits provided by the internet (the seven C s) can be integrated with a consideration of non-internet benefits in developing an effective strategic plan for a business and its internet presence. Mohammed, et. al., Internet Marketing, Chapter 3 HBS CASE: MATCHING DELL Written Group Case Assignment: 1. Read the Matching Dell case. 2. Visit the web sites for the key players listed below and note the offerings to PC customers Prepare a table that evaluates the relative performance of the competitors in key dimensions using numerical ratings. In the table rows should represent attributes (features or benefits) and columns should represent the competing firms. Consider both the relevant elements of the seven C s and other factors influencing success in the business. Prepare a transparency of this matrix for presentation in class. 4. Prepare a one to two paragraph recommendation for each Compaq and Gateway regarding the role of the internet in their PC businesses going forward. Highlight the things they are currently doing well and suggest changes that they should consider to improve their performance going forward. Be sure to consider their target markets and strategic strengths and weaknesses. 5. Be prepared to discuss and justify your recommendations in class.

11 Session 7. Wednesday, February 20 PRODUCT AND SERVICE DESIGN AND THE INTERNET The nature of the internet can influence the design and launch of products or services on the internet. In this session we will consider how factors such as standards, customer lock-in, and network externalities can influence the design and launch decisions of businesses using the internet. Mohammed, et. al., Internet Marketing, Chapter 8 HBS CASE: AUTOBYTEL.COM Autobytel enjoys first-mover advantage in the Internet new car buying space. According to a number of metrics, it is the online leader in this category. However, a number of competitors have sprung up, raising questions about the long-term viability of Autobytel's purchase referral model. In addition, Autobytel is struggling to accelerate revenue growth. The company has launched several new services and is now seeking to reposition itself in the market. Group Case Assignment: 1. Read the Autobytel case. 2. Prior to meeting with your group, visit the Autobytel s website and those of at least two competitors to review the layout of the site, services offered, and ease of use. 3. With your group review Autobytel s strengths and weaknesses relative to its competition. Prepare a matrix in which rows represent attributes (features or benefits) and columns that represent the competing firms. Use the cell entries to represent each competitor s relative strength with regard to that attribute. Bring a printed copy of the matrix to be turned in as a written group assignment. 4. With your group, evaluate the likely effectiveness of the new services launched by Autobytel.com. Also discuss ways the company can 1) improve its offerings to customers and 2) potentially increase profitability. Be prepared to present at least one option for each in class.

12 Session 8. Wednesday, February 27 PRICING AND CAPTURING VALUE THROUGH THE INTERNET The internet changes a lot of factors influencing pricing and revenue generation decisions. In this session we will consider how the internet can impact the cost structures of businesses, customer psychology, and the cost of shopping should influence pricing decisions. The internet also adds options for targeted pricing and pricing research options. We will also consider models for generating revenue that do not involve charging a fee to users for internet services. Mohammed, et. al., Internet Marketing, Chapter 9 Guest Speaker: Greg Greeley, Vice President of Finance, Amazon.com Individual Internet Exercise: 1. Suppose you wanted to purchase the textbooks for the course and following DVD s: A.I. (preorder) and The Standard Deviants: Shakespeare Tragedies: Origins and Style. 2. Visit a price comparison site such as MySimon.com or another of your choosing to identify potential vendors and their prices. 3. Purchase the DVD s from the following sites: - Amazon.com - Buy.com - BarnesAndNobel.com - Another site of your choice that was found by the price comparison site you used in part 2 - (extra credit: Towerrecords.com, if not your price comparison site above) (By purchase I mean that you should go through the purchase process to determine sales tax (if any), shipping costs and delivery conditions stop before you complete the transaction. For your protection you my wish to use a false credit card number to avoid any unintended charges. 4. Investigate the possibility of purchasing the items used (except for A.I, which is a preorder) at Amazon.com and Half.com 5. Investigate the possibility of purchasing the disks through ebay. 6. Visit Bizrate.com to get evaluations of the sites you visited (if they are listed) Written Exercise: Prepare a brief write-up (2-3 single-spaced pages plus exhibits) that includes the following: A tabular evaluation of each of the websites you visited in terms of - Product selection - Product information - Website performance and ease of use - Price include tax and shipping (account for potential shipping saving from ordering multiple items) - Shipping and handling charges and options - Overall satisfaction (Each cell should include no more than 3 sentences or phrases) A choice of retailer at which you would buy these disks. A purchase strategy you would employ if you wanted to purchase similar products in the future. Discuss the role of price in your approach. Has this experience changed your shopping strategy? Why?

13 Session 9. Wednesday, March 6 GENERATING AND MAINTAINING TRAFFIC In this class session we will explore various ways a business or organization can get people to visit its site and get people to revisit the site with the desire frequency. We also will introduce tools and metrics that can be used to track the effectiveness of a promotional campaign and a site s design. Mohammed, et. al., Internet Marketing, Chapters 10 and 17 (the latter is optional) INTERNET CASE: esurance.com In 1998, a team of insurance and technology industry veterans founded Esurance to make it easier and less costly for customers to buy and manage auto insurance. Esurance provides auto insurance directly to the customer online with the claim that they can offer the highest quality coverage along with excellent service from quote to claim- all for lower rates. Folksamerica Holding Company, a reinsurance organization whose parent is White Mountains Insurance Group, recently acquired the company. Individual Internet Exercise: 1. Visit the Esurance website and request an insurance quote for your automobile (if you would prefer, you may use a hypothetical customer profile). Obtain a screen capture for your quote. 2. Visit Quotesmith.com (a site that provides quotes for multiple insurance companies) and obtain quotes for the same vehicle and driver and automobile you used in part one. Obtain a screen capture for your quote. Repeat the process for at least one other online insurance service of your choice. 3. Based on your experience, identify target markets for Esurance. What would be appropriate advertising vehicles for reaching these targets? 4. What should be Esurance s key messages to drive traffic to their site? Keep in mind the limitations of your proposed advertising vehicles. 5. Turn in a printout with the screen captures showing your different insurance quotes. You should prepare item 2 to be turned in (3 screen captures).

14 Session 10. Wednesday, March 13 Marketing Plan Presentations Each group will present the marketing plan for their Internet business. As discussed above, the presentation should be made as if the audience included a potential venture capitalist or, in the case of a new internet business unit for an existing company, the company s chief executive marketing and financial officers. Each presentation should be between 15 and 20 minutes in length to be followed by five minutes devoted to questions and answers. The presentation length is subject to change depending on the class size. You may assume that the audience is familiar with the credentials of the individual team members. You should devote your time to the problems you see as critical, but you should be sure to cover the following: 1) the business value proposition, 2) the strategic approach, 3) the product or service offering (including sample web pages), 4) the revenue drivers and pricing policy, 5) a plan for generating traffic, and 6) a financial justification showing how and when the site will cover costs or achieve profitability. You should also use your website mockup to illustrate the feel of your business The written plan and website mockup are due at the start of the session. You will be asked to prepare a brief one to two paragraph evaluation of two of the other group presentations to be submitted electronically by Monday, March 18.