E-Commerce Introduction

E-Commerce Introduction

E-commerce Name : Dr. Nasim Z. Hosein E-Mail : [email protected] Phone number : 605-626-7724 1 Agenda

Marketing Commerce History of Internet Computer, Networks Intro to E-commerce History of E-commerce WWW What is E-commerce Forces shaping E-commerce E-commerce today Categories of E-commerce

What is a web based business E-commerce marketing strategies Setting up for E-marketing (online) Benefits of E-commerce Strategy Formulation Business Model 2 Definition of Marketing Philip Kotler Social and Managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others. This

definition rests on the following core concepts: needs, wants, demands, products, value, cost and satisfaction, exchange and transactions, relationships and networks, markets, marketers and prospects. 3 Definition (cont) Needs exist in biology they are not created by marketers i.e. shelter, food, clothing, safety, belonging, esteem Wants Need food want hamburger, fries, coke. Desire Wants for specific products backed by an ability and willingness to buy them 4

Definition of Commerce The exchange of goods and services for money Consists of: Buyers - these are people with money who want to purchase a good or service. Sellers - these are the people who offer goods and services to buyers. Producers - these are the people who create the products and services that sellers offer to buyers. 5 Elements of Commerce You need a Product or service to sell

You need a Place from which to sell the products You need to figure out a way to get people to come to your place. You need a way to accept orders. You also need a way to accept money. You need a way to deliver the product or service, often known as fulfillment. Sometimes customers do not like what they buy, so you need a way to accept returns. You need a customer service and technical support department to assist customers with products. 6 History of The Internet Started as a US government project in 1969.

The purpose was to create a net that can function even if one center is destroyed in a military attack. - Hub and spokes can be useless if the hub is destroyed. - Network can continue to be functional even if some nodes are destroyed, as long as information can pass through other nodes. Effective in 1971 with computers on both coasts of the US. 7 In the 1980s Personal computers or terminals were connected to a server.

The server was a mainframe, or connected to a mainframe computer. The mainframe was connected to another mainframe of the company in another location via dedicated lines. Only large companies could afford the expense and investment in equipment. 8 Today Connections across countries and continents made through dedicated fast lines. A company may have one local network (LAN) in NY, which is connected to the Internet through a Regional network. Well established in N.A., Europe and certain Asian countries

9 Computer classifications Mainframes: - term for very large computers - used to handle large amount of data or complex processes - main advantage is reliability Midrange: - medium sized, less expensive and smaller - usually a server Micro-computer: - work stations with computing capabilities - single-users systems linked to form a network 10 What is a network

Series of points or nodes interconnected by communication paths Node is a connection point for transmitting data Network can interconnect with other networks to form global networks 11 Benefits of a network Facilitates resource sharing Provides reliability Cost effective Provide a powerful medium across geographical divide

12 Geographical Distance Local area network (LAN): small area, share a single server Metropolitan area network (MAN): a wider network, can bridge several LANs Wide area network (WAN): a broader area covered, can include several MANs Internet: a network of networks that covers the entire globe 14 Internet addressing system Internet uses TCP/IP, therefore every computer on the Internet has an IP address

IP address is numerical, separated by dots Works with DNS: - com: for commercial purposes - net: for Internet Service Providers - org: for non-profit, non-commercial groups - gov: reserved for government - mil: reserved for military - int: reserved for international organizations 16 Assimilation of Technology Technology first adopted to increase efficiency doing the same tasks faster e.g. word processing instead of typing Technology next adopted to increase

effectiveness doing tasks not only faster but better e.g. spreadsheets transformed finance and accounting (as well as science and other fields) 17 Introduction to E-commerce E-Commerce, Web, Networks, Internet The evolution of new businesses The adoption of Brick and Mortar companies to the new economy Market failures and economic explanations for the new economy 18 History of E-commerce EC

applications first developed in the early 1970s - Electronic funds transfer (EFT) EFT Limited to: - Large corporations - Financial institutions - A few other daring businesses 19

E-Commerce Mechanisms Transformation digital media of economic activity into - Exchange information, content, agreements, and services among parties that are connected to through the Internet. Enables new ways of creating, delivering and capturing value to customers. - Availability - Convenience 22 World Wide Web (WWW)

World Wide Web (Web): - A collection of documents that reside on computers, and that can be accessed by other computers on the Internet. Multimedia documents: - Text - Images - Sounds - Drawings - Video Hypertext: - Links to other documents - Can begin execution of a program

23 Web Browsers Computer programs that can: - Display Web documents - Follow links - Execute other programs - Enhance applications such as real-time audio or video Netscape and Internet Explorer The Microsoft legal trouble due to the Explorer. 24 Web Servers

Computers that run server software. A server waits for request to arrive from a user. - The request is typically for a document. The server sends (serves) the document to the requesting computer. Sometimes the server allows a user to fill in information on a document, and the then transfers the information to another program or a server. 25 WWW and Internet The World Wide Web (WWW) is not the

Internet Access to the Internet doesnt mean you have e-commerce WWW works in HTTP Web pages works in HTML Web browser provide access to information on the WWW 27 What is E-commerce Distributing, buying, selling and marketing products and services over electronic systems E-business for commercial transactions Involves supply chain management, e-marketing, online marketing, EDI Uses electronic technology such as: - Internet - Extranet/Intranet

- Protocols 28 Forces Shaping the Digital Age 29 Forces Shaping the Digital Age Digitalization Connectivity & Intranets : connect people within a company. Extranets : connect a company with its suppliers, distributors, and outside partners.

Internet : connects users around the world. Internet Explosion Explosive worldwide growth forms the heart of the New Economy. Increasing numbers of users each month. Companies must adopt Internet technology or risk being left behind. 30 Definitions Internet:

- A collection of computers that speak a common language protocol Intranet: - Private version of the Internet - Main purpose to share company information and computing resources among employees Extranet: - Private network that users outside the company can access - Requires security and privacy - Collaborate with other companies 31 Forces Shaping the Digital Age New Types of Intermediaries:

Direct selling via the Internet bypassed existing intermediaries (disintermediation). Brick-and-mortar firms became click-andmortar companies. As a result, some click-only companies have failed. 32 Forces Shaping the Digital Age Customization and Customerization: With customization, the company custom designs the market offering for the customer. With customerization, the customer designs the market offering and the company makes it. 33

E-commerce as the Networked Economy Create value largely through gathering, synthesizing and distribution of information Formulate strategies that make management of the enterprise and technology convergent Compete in real time rather than in cycle time Operate in a world characterized by low barriers to entry, near-zero variable costs of operation and shifting competition Organize resources around the demand side rather than supply side Manage better relationships with customers through technology 34 E-commerce Today The

Internet is the perfect vehicle for ecommerce because of its open standards and structure. No other methodology or technology has proven to work as well as the Internet for distributing information and bringing people together. Its cheap and relatively easy to use it as a medium for connecting customers, suppliers, and employees of a firm. No other mechanism has been created that allow organizations to reach out to anyone and everyone like the Internet. 35 E-commerce Today The Internet allows big businesses to act like small ones and small businesses to act big.

The challenge to businesses is to make transactions not just cheaper and easier for themselves but also easier and more convenient for customers and suppliers. Its more than just posting a nice looking Web site with lots of cute animations and expecting customers and suppliers to figure it out Web-based solutions must be easier to use and more convenient than traditional methods if a company hopes to attract and keep customers. 36 Four Categories of E-Commerce Business originating from... Business Consumers Business

B2B C2B Consumers B2C C2C And selling to... 37 Distinct Categories of E-Commerce Business to Business (B2B) refers to the full spectrum of ecommerce that can occur between two organizations.

This includes purchasing and procurement, supplier management, inventory management, channel management, sales activities, payment management &service and support. Examples: FreeMarkets, Dell and General Electric Business to Consumer (B2C) refers to exchanges between business and consumers, activities tracked are consumer search, frequently asked questions and service and support. Examples: Amazon, Yahoo and Charles Schwab & Co 38 Distinct Categories of E-Commerce (contd) Peer to Peer (C2C) exchanges involve transactions between and among consumers. These can include third party involvement, as in the case of the auction website

Ebay. Examples: Owners.com, Craiglist, Monster Consumer to Business (C2B) involves when consumers band together to present themselves as a buyer in group. Example: www.planetfeedback.com 39 Convergence of e-Commerce Categories Business originating from Business Consumers And Selling to

Business Publishers order paper supplies from paper companies Amazon orders from publishers Consumers buy thousands of Harry Potter books from Amazon Consumers Consumers search out sellers, offers and initiate purchases from Amazon Consumers resell

copies on eBay 40 What is a web-based business Business that uses the WWW to fulfill its business process Four basic business processes: - information dissemination - data capture - promotions and marketing - transacting with stakeholders Business objectives interact with web based applications 41 Key Drivers of E-commerce Technological

degree of advancement of telecommunications infrastructure Political role of government, creating legislation, funding and support Social IT skills, education and training of users Economic general wealth and commercial health of the nation 46 Key Drivers of E-business Organizational culture- attitudes to R&D, willingness to innovate and use technology Commercial benefits- impact on financial performance of the firm Skilled/committed workforce- willing and able to implement and use new technology

Requirements of customers/suppliers- in terms of product and service Competition- stay ahead of or keep up with competitors 47 Appeal of E-commerce Lower transaction costs - if an e-commerce site is implemented well, the web can significantly lower both order-taking costs up front and customer service costs Larger purchases per transaction - Amazon offers a feature that no normal store offers Integration into the business cycle People can shop in different ways. The ability to build an order over several days The ability to configure products and see actual prices The ability to easily build complicated custom orders

The ability to compare prices between multiple vendors easily The ability to search large catalogs easily Larger catalogs Improved customer interactions - company. 48 Limitations of E-commerce To organizations: lack of security, reliability, standards, changing technology, pressure to innovate, competition, old vs. new technology To consumers: equipment costs, access costs, knowledge, lack of privacy for personal data,

relationship replacement To society: less human interaction, social division, reliance on technology, wasted resources, JIT manufacturing 49 Technical limitations There is a lack of universally accepted standards for quality, security, and reliability The telecommunications bandwidth is insufficient Software development tools are still evolving There are difficulties in integrating the Internet and EC software with some existing (especially legacy) applications and databases. Special Web servers in addition to the network servers are needed (added cost). Internet accessibility is still expensive and/or

inconvenient 50 Web based technology Websites E-mail Search engines Interactive communications 51 Old Economy Firms Brick and Mortar companies need to adopt to the new economy - Create a new Internet company. - Create a new subsidiary.

- Invest in an Internet competitor. - Buy the technology from a consultant. - Work with other firms to create an exchange. - Integrate with suppliers and or customers. 52 Old Economy Firms Failure of old economy companies to adopt may result in: - Loss of market share. - Inability to meet new economy competitors prices. - Reduced profits and cash flows. - Inability to raise new financing. - Loss of control in an acquisition by a new economy firm. 53

Business Opportunity The Internet revolutionized ways of doing business Entrepreneurs found ways to exploit market failures and earn economic rents New businesses were created that were not feasible earlier The new economy poses threats to old economy firms that do not wish to adapt The transformation is still in process. The evolution continues 54 Benefits and Challenges of E-commerce Benefits Benefits

Challenges Challenges Persistent Persistent connection connection with with customers customers Cannibalization Cannibalization New New value value for for customers customers

Channel Channel conflict conflict Access Access to to new new customers customers Customer Customer confusion confusion Scalability

Scalability Investor Investor confusion confusion 55 Front end systems Direct user interface with business processes Accessible via WWW Front-end systems: - e-CRM - e-marketing - e-services - e-marketplace - e-auction

56 Marketing Strategy in the Digital Age Requires a new model for marketing strategy and practice Some suggest that all buying and selling will eventually be done electronically Companies need to retain old skills and practices but add new competencies 57 E-Business in the Digital Age Involves the use of electronic platforms to conduct company business. Web sites for selling and customer relations Intranets for within-company communication Extranets connecting with major suppliers and

distributors 58 E-Commerce in the Digital Age More specific than e-business. Involves buying and selling processes supported by electronic means, primarily the Internet. Includes: e-marketing e-purchasing (e-procurement) 59 E-commerce vs. E-business E-commerce

is about doing business electronically E-commerce conducting financial transactions electronically E-business is conducting business on the Internet E-business is the transformation of business processes through the Internet 60 E-Marketing in the Digital Age The marketing side of e-commerce. Includes efforts to communicate about, promote, and sell products and services over

the Internet. E-purchasing is the buying side of ecommerce. It consists of companies purchasing goods, services, and information from online suppliers. 61 Types of e-Marketers 62 Click-Only Companies E-tailers Enabler Sites Content Sites

Types of Sites Search Engines and Portals Internet Service Providers Transactio n Sites 63 Reasons for dot.com Failures Poor research or planning. Relied on spin and hype instead of marketing strategies.

Spent too heavily on brand identities. Devoted too much effort to acquiring new customers instead of building loyalty. 64 Click-and-Mortar Companies Most established companies resisted adding Web sites because of the potential for channel conflict and cannibalization. Many are now doing better than click-only companies. Reasons:

Trusted brand names and more resources Large customer bases More knowledge and experience Good relationships with suppliers Can offer customers more options 65 Setting Up for E-Marketing Online Marketing 66 Setting up for E-Marketing Options Creating websites Placing online ads and promotions

Creating or using Web communities Using E-mail Corporate websites Build goodwill and relationships; generate excitement Marketing websites Engage consumers and attempt to influence purchase Website

design 7 Cs of effective website design 67 Conducting E-Commerce Seven Cs of Website Design Context Communication Content Connection Community Commerce

Customization 68 The 7Cs of Website design Context Content Sites layout and design Text, pictures, sound and video that web pages contain Commerce Community Sites capabilities to enable commercial transactions

The ways sites enable user-touser communication Connection Customization Degree site is linked to other sites Sites ability to self-tailor to different users or to allow users to personalize the site Communication The ways sites enable site-touser communication or two-way communication 69 Fit and Reinforcement of Cs

Business Business Model Model Individually Supporting Fit Context Context Content Content Community Community Customization Communication Customization Communication Connectio

Connectionn Commerce Commerce Consistent Reinforcement 70 Setting up for E-Marketing Options Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail

Online forms of ads and promotions Banner ads/tickers Skyscrapers Interstitials Content sponsorships Microsites Viral marketing Future of online ads 71 Web Advertising

Banner ads: allows for more targeted advertising Pop-up ads: pop-under ads are displayed in a separate browser window beneath your main browser window and remain there until you close them This is a pop-up ad Click here to close me Skyscrapers: An advertisement on a Web site that is vertically oriented on the page and larger than the typical banner ad 72 Web Advertising

Interstitials: are usually full-page ads displayed while a user is in transit from one page to another, triggered by code included in the link 73 Web Advertising Content Sponsorship: are sites that pay for placement in search results on keywords that are relevant to their business The upper: This is the part of the shoe that wraps around and over the top of the foot. It may be made of leather or a synthetic material that is lighter and breathable (to reduce heat from inside the running shoe). The tongue of the upper should be padded to cushion the top of the foot against the pressure from the laces. Often, at the back of the running shoe, the upper is padded to prevent rubbing and irritation against the achilles tendon. The heel counter: This is a firm and inflexible cup which is built into the upper of running shoes and surrounds the heel. It is usually very firm so that it can control motion of the rearfoot. Post or footbridge: This is the firm material in the midsole which increases stability along the inner side (arch side; medial side) of the running shoe. 74 Web Advertising

Microsites: limited areas on the Web managed and paid for by external companies http://www.autotrader.com/ 75 Viral Marketing Gillette used viral marketing to introduce the 3-bladed Venus razor for women, greatly expanding the audience reached by its Reveal the Goddess in You truck tour and beach-site promotions. 76

Setting up for E-Marketing Options Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail Web communities allow members with special interests to exchange views Social communities Work-related communities

Marketers find welldefined demographics and shared interests useful when marketing 77 Setting up for E-Marketing Options Creating websites Placing online ads and promotions Creating or using Web communities Using E-mail E-mail

marketing Key tool for B2B and B2C marketing Clutter is a problem Enriched forms of e-mail attempt to break through clutter 78 Benefits of E-commerce To consumers: 24/7 access, more choices, price comparisons, improved delivery, competition To organizations: International marketplace

(global reach), cost savings, customization, reduced inventories, digitization of products/services To society: flexible working practices, connects people, delivery of public services 79 Benefits to Consumers Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate 80 Benefits to Organizations Powerful tool for building customer relationships

Can reduce costs Can increase speed and efficiency Offers greater flexibility in offers and programs Is a truly global medium 81 Benefits to Society More individuals can work from home Benefits less affluent people Third world countries gain access Facilitates delivery of public services 82 Discussion Questions What features do you look for on a Web site that you feel make the site

appealing? What are your major concerns about making online purchases? What types of things can an online retailer do to create a more secure buying environment? 83 Online Ads and Promotion Forms of online advertising & promotion: Banner ads & tickers (move across the screen) Skyscrapers (tall, skinny ads at the side of a page) Rectangles (boxes that are larger than a banner) Interstitials (pop up between changes on Web site) Content sponsorships (sponsoring special content) Microsites (limited areas paid for by an external company)

Viral marketing (Internet version of word-of-mouth) 84 Business Pressures The term business environment refers to the social, economic, legal, technological, and political actions that affect business activities Business pressures are divided into the following categories: - Market (economic)

- Societal - Technological 85 Major Business Pressures & the Role of EC 86 Organizational Responses Strategic systems - Provide organizations with strategic advantages, enabling them to: Increase their market share Better negotiate with their suppliers Prevent competitors from entering into their territory

Continuous improvement efforts - Many companies continuously conduct programs to improve: Productivity Quality Customer service Business process reengineering (BPR) - Strong business pressures may require a radical change - Such an effort is referred to as business process reengineering (BPR) 87

Organizational Responses Business alliances - Alliances with other companies, even competitors, can be beneficial - Virtual corporationelectronically supported temporary joint venture Special organization for a specific Time-limited mission Electronic markets - Optimize trading efficiency - Enable their members to compete globally

- Require the collaboration of the different companies and competitors 88 Organizational Responses Reduction in cycle time and time to market - Cycle time reductionshortening the time it takes for a business to complete a productive activity from its beginning to end - Extremely important for increasing productivity and competitiveness - Extranet-based applications expedite steps in the process of product or service development, testing, and implementation 89 Strategy Formulation

Porters three generic strategies for business: - focus - low cost leadership - differentiation Differentiation in the new e-commerce sector is the key to success 90 Classic Framework for Strategy Management Mission Goals External Analysis Strategy Formulation

Internal (Company) Analysis Corporate Business-unit Functional Operating Implementation Control and Monitoring 91 E-commerce and Organizations Organizations that undertake e-commerce do so

from two possible starting points: - new online organizations - traditional established organizations Factors for success: - first-mover advantage - differentiation in the marketplace - flexibility and agility in the electronic marketspace 92 Seven dimensions of E-commerce Strategy Four Four positional positional factors factors Three Three bonding bonding factors factors

Technology: Leadership: Technology: goal goal must must be be Leadership: vision vision of of CEO CEO for for eeunderstood understood within within its itsmarket market and and commerce commerce Infrastructure: industry

industry Infrastructure: technology technology Market: support Market: must must determine determine its its support for for new new model model of of target business target market market and and whether whether itit is

is business Organizational still still open open to to new new entrants entrants Organizational Learning: Learning: does does Service: the Service: must must know know its its the organization organization support

support internal internal customers learning customers expectations expectations learning Brand: Brand: must must understand understand ifif itit has has the the ability ability to to create create aa strong strong brand brand

93 Technology Leadership Involves more than hardware and software Seven major areas: - strategy: focus upon alignment and planning - structure: focus upon becoming an e-organization - systems: technology integration - staffing: developing a strong pool of skills - skills: developing the necessary knowledge - style: add value to customers - shared values: must build value to the organization 94 Service Leadership Established

strategies of customer still apply Internet service strength derived from providing additional information to the customer Internet provides a low-cost, high-quality service channel with a global reach Call centre strategy must be defined E-mail interface channel must be defined 95 Brand Leadership Branding strength comes from being a first mover Brand reinforcement is a continuous task Brand positioning can be defined using the Internet service value chain Brand followers need to reposition as

quickly and effectively as possible Four brand 96 Developing a Winning E-strategy Ensure that the project is backed by senior management Develop a strategy before a Web presence Develop a strategy by focusing on technology, branding, marketing and service Identify and use knowledge in the organization Strategy must add value for customers and must change as the requirements of the customers change 97 The Three Approaches to Strategy

Position approach: Where should we be vs. our competition? Resources approach: what resources should we possess? Simple rules approach: What processes should we follow? 98 Three Approaches to Strategy Position Strategic Logic

Establish position Strategic Steps Identify an attractive market Locate a defensible position Fortify and defend Leverage resources Establish a vision Build resources Leverage across markets

Pursue opportunities Jump into the confusion Keep moving Seize opportunities Finish strong What should we be? Source of Advantage Unique, valuable,

inimitable resources Works Best In Rapidly changing, Moderately changing, well structured markets ambiguous markets Sustained Strategic Question

Where should we be? Simple Rules Resources Unique, valuable position with tightly integrated activity system Slowly changing, wellstructured markets Duration of Advantage Risk Performance Goal

Sustained It will be too difficult to Company will be too alter position as slow to build new conditions change resources as conditions Profitability change Long-term dominance How should we proceed? Key processes and unique simple rules

Unpredictable Managers will be too tentative in executing on promising opportunities Growth 99 Business Model 100 Business Models A method of doing business by which a company can generate revenue to sustain itself

Spells out where the company is positioned in the value chain Business models are a component of a business plan or a business case 101 Business Plans & Business Cases Business plan: - A written document that identifies the business goals and outlines the plan of how to achieve them Business

case: - A written document that is used by managers to garner funding for specific applications or projects; its major emphasis is the justification for a specific investment 102 The Content of a Business Plan Mission statement and Marketing and sales company description plan

The management team Operations plan The market and the Financial projections customers and plans The industry and Risk analysis Technology analysis competition The specifics of the products and/or services 103 Structure of Business Models All business models must specify their revenue model (the description of how the company or an E-commerce project will earn revenue)

Value proposition is the description of the benefits a company can derive from using EC Revenue sources are - Transaction fees - Subscription fees - Advertisement fees - Affiliate fees - Sales - Other models 104 Business Models in E-commerce Method of doing business Well-planned model gives a competitive advantage Impacts on sustainability and growth

Three areas: - value stream - revenue stream - logistical stream 105 Transaction costs Cost of providing some good or service through the market Effects of e-commerce and the internet that impacts the business model Searching for an obtaining information Participating in a market Policing and enforcing transactions Bargaining and decision costs Actual cost of buying or selling the product 106

Value Stream Create long-term sustainability Benefit for business stakeholders Can be achieved in four ways: - creation/participation in an e-marketplace - creation/participation of virtual communities - additional value offers - exploitation of offers 107 Creation/participation in an e-marketplace Reduce transaction costs directly/indirectly Economics of e-market similar to traditional market Can be setup by supplier/buyer or run independently Buyer value: - reduced costs - improved service

- convenience Supplier value: - reduced costs - differentiation - reduced lead time 108 Creation/participation of virtual communities Bringing together members of a community Larger communities mean larger sources Improves customer service 109 Additional value offers

Value is added by improving product mix Through association or partnership Can be achieved with minimum costs Can be integrated into the host sites 110 Exploitation of offers E-commerce/Internet economy founded on information Value can be added by using this information Target customers demographically Can bridge the uncertainty gap Can post RFPs

111 Revenue Stream Short-term realization of value proposition Direct: - cost reduction - free offerings of service/products - pricing strategies Indirect: - internet advertising - selling customer information - joining affiliate programs 112 Logistical stream Examines

organization restructure to deliver value added and revenue streams Issues such as: - organizational culture - pre/post restructuring - implementing information - communication and training - reward systems for motivation 113 Kinds of business models Brokerage: market makers bring together buyer and sellers Advertising: web advertising providing advertising messages Infomediary: collecting and disseminating information

115 Assessing a business model Can be assessed by looking at the marketing strategy Can also be assessed by technology - imitation - complementary assets Financial measures Competitor benchmarking Market analysis 116 Traditional vs. New Business Models Traditional Production

New Business Distribution Mass Manufactures push Middleman Personalized Customer Pull Direct Communications Closed Open Finance

Slow Difficult Local Mass Physical Fast Easier Global Niche Virtual Markets Assets 117 Consumer Decision Process Problem

Problem--Recognition Recognition PRE-PURCHASE Information InformationSearch Search Evaluation Evaluationof ofAlternatives Alternatives PURCHASE Purchase PurchaseDecision Decision Satisfaction Satisfaction

POST-PURCHASE Loyalty Loyalty Disposal Disposal 118 Consumer Decision Process Flower Example Flowers Problem Problem--Recognition Recognition Pre-Purchase Need recognition, potentially triggered by a holiday, anniversary or everyday events

Search for ideas and offerings, including: Available on-line and off-line stores Gift ideas and recommendations Advice on selection style and match Evaluation of alternatives along a number of dimensions, such as price, appeal, availability, etc. Purchase decision Message selection (medium and content) Information InformationSearch Search

Evaluation EvaluationofofAlternatives Alternatives Purchase Purchase PurchaseDecision Decision Post-sales support Order tracking Customer service

Education on flowers and decoration Post sales perks Satisfaction Satisfaction PostPurchase Loyalty Loyalty Disposal Disposal 119 Metrics

Metrics: If it moves, measure it! Measures of performance; may be quantitative or qualitative Response times Site availability Download times Timeliness Security and privacy On-time order fulfillment Return policy Navigability

120

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