FINAL LECTUREB2BX SUMMARYRelationshipSERVICE/FULFILLMENTPowerPoint PresentationSlide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12ADVERTISINGSlide 14PRICE AND CHANNELSSlide 16RELATIONSHIPFAILED ASSUMPTIONSLESSONS FROM FAILURESFUTURESlide 21Slide 22FINAL LECTURE•Wrap up B2BX•Review Relationship/service/fulfillment•Course Review•Future of the InternetB2BX SUMMARY•Why Most Fail:–Not Consider Relationship/Trust–Long Term Contracts Dominate–Problem is eProcurement/Partners -- PVN–3rd Party Fail Unless Wider CBP–Manufacturer Power -- Consortia or In House–Not Able to Run with the Big Dogs -- Telcos, Manufacturers, Oracle/IBM•Lesson–Talk to Customers–Refine Understanding of Need and Relationships–CBP Not Only TechnologyRelationship •Life Time Value•Trust -- confidence -- relationship•CRM -- multichannel communication•Segment -- focus to build depth•Permissive Marketing -- promotion and price for loyalty•Channel -- Service Function •Evaluation -- Loyalty measuresSERVICE/FULFILLMENT•Critical element in satisfaction/relationship•Internet Can Help–Tracking -- FedEX–Dell -- same file as 800 and service–Xerox/Sun -- self service–eService -- priority, track, resolve, evaluate•Channel Partner Software•Link TQM to Internet•Continuing Innovation -- product designUnderstanding CustomersConsumer BehaviorB2C vs B2BRelationship BuildingFulfillmentServiceDistributionChannelLogisticsCustomer AcquisitionAdvertising / PR / SellingPricing & PromotionStrategy FormulationTrust vs. PushProduct DesignSegmentationPositioningCONSUMER BEHAVIOR•Concept/Theory–Information Processing–Behavioral Theory•Tool–Flow Chart–Steps, Information, Decision Rules, Actions, Post Purchase–Decision Unit, Multiple Participants•Action–Design site for Conversion and Retention•Case–Mother Nature: Acquisition and Retention–Dell: Conversion–Marketsoft: Sell to PainINITIATIONAWARE/LEARNDECIDEBUYPOST PURCHASE•What starts process?•Role of past experience?•Friends make input?•Sources of information; Friends / media / web/ store?•Active search? How much time?•Where shop – store / catalog / internet?•What learn? Products / technology / user experience / trends?•Compare products?•Role of price / quality – evaluation criteria•Need to touch and feel?•Impact of brand and trust?•How do buyers gain confidence?•Security / privacy assurance needed?•Need push to action – close sale•Word of month to friend/community•Relationship contractQuestions to Ask•Source of input.•ADS/catalogs/email?•Life time service?•Delivers promised value•Special offers•Guarantees / refund policies?TRUST•Concept/Theory–Psychology–Trust Cues and Perception•Tool -Virtual Advisor–Trust Cues •Actions–Decide on Push -- Trust Dimension–Design in Trust -- Currency of the Internet–Real or Virtual Advisors–Alternative Methodologies•Case–InSite: Advisor–Dell: Recommend / LearningPushCommodityPrice most importantDeal prone segmentNeed short term resultsFull TrustHave best productHave good design feedbackBuyers getting info anyway (infomediaries)Trust key element Expensive/complex productsCulture to sell our products onlyStrong channel attitudesEvolutionary stopHave both price and relationship segmentsHow much trust should you have in your eBusiness strategy?PRODUCT DESIGN•Concept/Theory–Build Process•Tool–Models / Market Research–Information Acceleration–Listen In•Actions–Prevent Failure–Do Research and Budget–Hire Modeling Capability•Case–Market Soft: eLeads and eOffers – suite–Prime Response: Depth - BreadthSEGMENTATION•Concept/Theory–Taxonomy–Segment for Competitive Advantage•Tool–Clustering–Demographic, Psychographic, Product–Data Mining•Action–Decide Basis of Segmentation–Use Data and Analytic Services–Personalize•Case–Mother Nature: Lifestyle – Data Mining–Dell: Sophisticated Buyers–MarketSoft: Marketing Manager–Prime Response: Vertical Markets–Terra LycosPOSITIONING•Concept/Theory–Psychology–Perception Simplicity•Tool–Perceptual Map–Needs Seen by Customers–Preference Vectors•Action Do Maps–Find Competitive Value Added–Do Vectors and Benefit Segmentation–Be First in But Position in Best Spot•Case–InSite: Advisor–Market Soft: Suite–Prime Response: Campaign Management versus New Competition–Terra LycosADVERTISING•Concept–Psychology–Communication•Tool–Copy Evaluation Framework•Action–Advertising Goals–Multichannel -- Sales/PR/Telemarketing•Case–SemiSales–Mother Nature -- Acquisition–Dell -- Catalog (separate URL)AD EVALUATION FORMATTENTION 1 2 3 4 5 6 7BRAND ASSOCIATION 1 2 3 4 5 6 7BRAND RECALL 1 2 3 4 5 6 7PERCEPTIONINFORMATION 1 2 3 4 5 6 7CBP/CSP 1 2 3 4 5 6 7POSITIONING 1 2 3 4 5 6 7EMOTION 1 2 3 4 5 6 7ACTION – VISIT SITE / BUY 1 2 3 4 5 6 7CREATIVITY 1 2 3 4 5 6 7TARGET GROUP 1 2 3 4 5 6 7OTHER 1 2 3 4 5 6 7Extremely BadExtremely GoodPRICE AND CHANNELS•Concept–Economic Theory–Logistics•Tool–Avoid Price War by Differentiation and Segmentation–Channel Function Map•Action–Consider Incentive Site–Manufacturer Direct as Complement–B2BX lessons•Case–Terra/Lycos–SemiSales/ANX/Logistics.com–Mother Nature and Kozmo price to profitPALM.COMBIG CHAINS (PD, I, IV, S)PALM(S)DISTRIBUTOR (I, PD, IV)WHOLESALE (I, PD, IV)SMALL ELECTRONICS (I, IV, S)MACS MERCHANDISE (I, IV, S)CUSTOMEReCOM SITES(I,S)RELATIONSHIP•Concept–Psychology–Customer Satisfaction•Tool–Trust Based Marketing–CRM•Action–DO IT -- obvious–Trust/Franchise/Long Run–Service/Fulfill -- TQM•Case–Mother Nature -- Life Time Value–Dell -- Premier Pages/Repeat -- E2E–InSite -- Advisor builds relationship–Prime Response -- Communicate–B2BX -- all about RelationshipsFAILED ASSUMPTIONS•People will Flock to the Internet to Buy•Self Service Sites are Enough for Conversion•The Internet Technology will Create a New Economy•B2BX Have to Work Because Can Match Information•Must Be First -- Claim High Ground•Worry About Business Model Later•Frictionless Prices -- Price Competition and Comparators•Established Companies are Not Innovative•VC Capital Will Keep Coming •Need Young New Thinking Tech Management•Buzz and PR are the Key to Success•Must Set Up Internet as Separate Company•Internet will Replace Existing ChannelsLESSONS FROM FAILURES•Must have Strong CBP to