Website Marketing and Design Session 5: B2B Commerce 1 Poitiers, September 23-27

Website Marketing and Design

Session 5: B2B Commerce

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Poitiers, September 23-27

Part 1 - Introduction to Ecommerce I Perry & W Robson

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What is an EC Business Model?

• The structure & actions by which an org operates within its marketplace– architecture for activities of a business

• The product, service or information flow

• “Buy-side” & “sell-side”: refers to payment direction– With whom is commerce being

conducted• (suppliers or customers?)• In some cases, business is being transacted

with both


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Business-to-Business Commerce

• $ volume much larger than e-tailing, and more rapidly growing

• Intra & extranets provide a seamless link between businesses and their suppliers

• Companies create in-depth Web sites for their main customers– Special pricing– Special configurations– Dedicated support

• This builds loyalty and repeat purchases


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Internet-enabled B2B eCommerce has…

• Had significant impact on all the key organisational processes:– Sales & Marketing (and especially in

advertising)– Finance & Accounting– Supply-Chain Management

• Plus significant use in– Human Resource Management– Research & Development


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B2B eCommerce

• E-commerce creates strong incentives for companies to enhance their online use of personalization– Raises the value of users’ online experience– Improves customer loyalty– Allows for detailed information gathering

• The personalization/e-commerce link is especially strong for business-to-business marketing

eCommerce Impact on Web Sites


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B2B eCommerce

• Total company purchases determines the amount of personalization Dell provides

• Greater personalization leads to even more purchases and a higher customer lifetime value

The Personalization/E-commerce Link

Figure 12.6: E-Commerce Is Reinforced by Personalization

Amountof

Personalization

E-CommerceActivity


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B2B eCommerce

• Acquisition costs have gotten higher– Pioneering sites like Amazon.com received massive

amounts of PR, which lowered their costs of acquisition– As competitors have entered the marketplace,

acquisition costs have climbed– Analysts recommend spending 70% of Year One revenues

and 30% of Year Two revenues on customer acquisition

• High acquisition costs lead to– A search for cheaper acquisition methods– A premium on building customer loyalty– A drive to expand the total amount of online business

done with a particular customer

eCommerce Impact on Web Sites


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What is EC Strategic Planning?

Phase 1 - Goal Setting

Define/Diagnose overall Corporate Objectives

Phase 2 - Situation Review

Perhaps using SWOT Analysis & 5-forces or similar

Phase 3 - Strategy Formulation

Complement or Replace? (use dependence flow chart to decide - spending is greater if replace than if complement) & select from possibilities

Phase 4 - Resource Allocation & Monitoring

Estimate demands, produce budget & document plan (role of webmaster & document layout)


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Need Strategy not just Technology

enabled creates

enabled

defines

Business strategy/

Business process

ValueEcommerce-technology

Source: Wigand, 1997

The “technological imperative” is discredited!


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Web Competitive Strategy

Offensive strategy— usually takes place in an established competitor’s market– Frontal Assault— attacker must have superior

resources and willingness to persevere – Flanking Manoeuvre— attack a part of the

market where the competitor is weak

– Bypass Attack— cut the market out from under an established defender by offering a new type of product that makes the competitor’s product unnecessary

– Encirclement— greater product variety and/or serves more markets

– Guerrilla Warfare— use of small, intermittent assaults on different market segments held by the competitor


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Takes place in the firm’s own current market position as a defence against possible attack by a rival

– Lower the probability of attack

– Divert attacks to less threatening avenues

– Lessen the intensity of an attack

– Make competitive advantage more sustainable

Defensive Strategies


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EC and Industry Attractiveness

• There will be many new entrants• The bargaining power of buyers is

likely to increase• There will be more substitute

products and services• The bargaining power of suppliers

may decrease• The number of industry

competitors in one location will increase


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Also harmful strategic EC effects

• Changing the basis of competition– Can become competitive disadvantage if

the firm doesn’t stay ahead

• Entry barriers– Can lower entry barriers

• Switching costs– Can lead to accusations of unfair trading

practice

• Supplier/customer bargaining power– EC may provide information for shopping or

allow integration


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Value Analysis Questions

• Representative Questions for Clarifying Creation of Value Chain opportunities– Can I make gains by consolidating parts of the

value chain to my customers?– Can I make gains for customers by reducing the

number of entities they have to deal with in the value chain?

• Representative Question for Creating New Values– Can I offer additional information of transaction

service to my existing customer base?– Can I use my ability to attract customers to

generate new sources of revenue, such as advertising or sales of complementary products?


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Coherent Strategic EC and Website Plan

• Documenting the strategy:– must show how you are going to

match technology, external resources & your firm’s strengths to market opportunities you have identified. Make clear your stance on 3 issues:• Customer needs - What is being satisfied• Customer groups - Who is being satisfied• Technologies & functions - How customer

needs are satisfied


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What Should Strategy and Plan Address?

• How is Electronic Commerce going to change our business?

• How do we uncover new types of business opportunities?

• How can we take advantage of new electronic linkages with customers and trading partners?

• Will intermediaries be eliminated in the process? Or do we become intermediaries ourselves?

• How do we bring more buyers together electronically (and keep them there)?

• How do we change the nature of our products and services?

• Why is the Internet affecting other companies more than ours?

• How do we manage and measure the evolution of our strategy?


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Define Implementation Sequence

• Start with organising a project team• Undertake a few pilot projects

(discover problems early)• Sequence in Implementing EC

– Redesigning existing business processes– Back-end processes must be automated

as much as possible– Company must set up workflow

applications by integrating EC into existing accounting and financial back-ends


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Who should handle producing plan?

• Should focus EC efforts in separate “Ecommerce Group” – If IT drives, will underestimate customer

focus– If marketing drives, will underestimate

effort to build & maintain the presence

• EC group needs maintain strong links to other corporate functions– needs to manage intermediaries involved – Group will become central source for best

practices & will help propagate knowledge


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And … What next

• Ecommerce is inevitably incremental– And success grows in unexpected ways

• Successful Ecommerce venture then prompts next question:– grow vertically or horizontally?

• Unsuccessful Ecommerce then prompts to ask why? Perhaps:– The goals were unrealistic– The web server was inadequate to handle traffic– The actual cost savings were not as much as expected– The time was just not right for this idea


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After Strategy - Tactics

• Who will we reach with this site?– Who is the audience – What kind of information wants to be

presented to them

• When will this venture make money?

• What tasks & technology will make it a success?

• Where will the resources for it come from?


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Level of dependence on EC

Start

Customer access to Net?

Low High

Primarily aComplement

effect

Primarily aComplement

effect

Net value Proposition

similar?

No Yes

Product can bestandardised?

No YesPrimarily a

Complementeffect

Primarily aReplacement

effect

Replacement means more costs than complementing, and implies more dependence!


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Method to do Situation Analysis

• Tied together with SWOT analysis• Strengths - ‘muscle’ of the firm• Weaknesses - that limit its powerInternal factors in relation to the external factors of:

• Opportunities - potential for good• Threats - must counter/removeway of judging ‘strategic fit’ of firm

• Understand the O + T by considering the structure of the industry (Porter’s 5-forces)

• Understand the S + W by considering the creation of value chain


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SWOT Analysis Forms Strategy

Basically, priorities are both:fix W/T segment (business survival) but also chase S/O segment (business growth)

Weaknesses (W) Strengths (S)

Opportunities (O)

Threats (T)

INTERNAL FACTORS

EXTERNAL FACTORS

WO Strategies Generate strategies

here that take advantage of

opportunities by overcome

weaknesses

SO Strategies Generate strategies

here that use strengths to take

advantages of opportunities

WT Strategies Generate strategies here that minimize weaknesses and

avoid threats

ST Strategies Generate strategies

here that use strengths to avoid

threats


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SWOT Summary

Internal Factors Weaknesses Strengths

Opportunities External

Go for it!

Factors Threats

Fix it!

H Value

Adding

Beware

Attack

Potential of EC

L

Play Safe

Explore

L Quality of EC Resource H


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5 Competitive Forces that Determine Industry Competition: Porter

Bargaining Power of Suppliers

Threat of New Entrants

Bargaining Power of Buyers

Threat of Substitute Product or Services

Rivalry Among Existing Competitors

Tools such as this useful in EC Strategy

choices

Tools such as this useful in EC Strategy

choices

How can we use all those Ecommerce possibilities looked at in last section to CHANGE the situation to our advantage?


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Competitors

CustomersSuppliers

Use: Beware of:

• Barriers to Entry Low Barriers to Entry• Product Differentiation Little Differentation• Switching Costs Easy Switching Costs• Control of Distribution Lack of Control over Dist.• Quality Control Poor Quality (hurried Product Cycles)

• Cost Advantage People with more money!

Company

EC and the Competitive Environment


End of Session 5 – Break

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Session 6 –Website Design Principles

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Website Tasks

• To ensure the design & implementation, of a successful Website; there is a need for someone (or several people?) to master the following tasks:– Look & Feel– Navigation & Structure– Content– Implementation – Site Promotion – Site Management

}Web-siteDesign


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What makes an Effective eCommerce Site?

• Effective?– “one that suits the need”

• What you want your site to:– Be and Do

• Know your Business Goals– Driven by chosen ecommerce

possibilities (as covered earlier)

• Be clear why you are creating this site


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Know your Audience

• Lots of questions to ask, e.g.:– who?– how many?– how long?– how often?– from where?– etc.

• The above questions ALL need answers!– Informed by market analysis?


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Audience Analysis

• Who do you want to reach– Why might they come?– Where would they be in the sales cycle?

• Based on your business goals– What action do you want them to take?

• Web-site design is very different for:– a daily visit site– a newsletter site– a technical support site


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Why might they come?• To….: • …read a product description with detailed up-to-date

information• …complete a reader survey• … request a subscription to a service, or an

introductory meeting, or a phone call• … participate in an on-line discussion• … add your URL to their list of favourites• … select your site as their browser’s default home

page• … visit your site weekly, twice a week, daily or

infrequently• … purchase a product or service• Etc.


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Where do they come from?

• Any number of technical constraints might apply, e.g:– Bandwidth (connection speed)– Browser type– Screen Size & Colour Depth (resolution)– Video & Sound Capacity

• All too often:– designers = High Specification PC, with a Fast

connection, on a Network– customers = Low Specification PC, with a Slow

dial-in connection, using a 56k (or slower?) modem


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Web-Site Design

• Three Major Tasks to Produce Website:– Look & Feel– Structure & Navigation– Content

• Difficult to separate these, and there is considerable disagreement over which is most important, however all agree:– should be easy to find your way around– should be uniformity in the presentation of the

whole web-site, within sections, and of individual pages

– should keep the content of the site up-to-date


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Look & FeelRequires a number of design

decisions:

• What are your assumptions about user communication & learning preferences?– Will information be consumed on screen

or printed for later?– How patient will your audience be? – Simple, clean designs will be fast and

clear, but can seem ‘dull’– Complex multimedia sites may be more

‘interesting’, but might be slow & confusing


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Look & FeelIs created by design decisions about:

• Design & Graphic Style– Award winning, avant-garde, friendly &

reassuring, ‘in your face’, etc.– Ambiance & ‘playfulness’

• Colour Palette– Earth tones, psychedelic colours,

soothing pastels, etc.• try to use contrasting, not conflicting,

colours!

• Logos & Branding– Style, location & frequency


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Look & FeelIs created by design decisions about:

• Media Mix– text, static graphics, animations, sound,

video, etc.• Balance of Text & Graphics

– lots of text with few graphics– lots of graphics with brief captions

• balance might change in different sections of the Web-site

• Typography– big & bold, ornamental, youthful,

elegant & restrained, etc.


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Look & Feel - Examples

• The ESCEM Group– http://www.escem.fr/

• PC World Magazine– http://www.pcworld.com/

• Amazon– http://www.amazon.com/

• Disney Corporation– http://disney.go.com/

• Yahoo– my.yahoo.com

http://www.escem.fr/

http://www.pcworld.com/

http://www.amazon.com/

http://disney.go.com/


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Web Accessibility Initiative

• On April 7, 1997, the World Wide Web Consortium (W3C) launched the Web Accessibility Initiative (WAI ) – An attempt to make the Web more accessible

• Accessibility – Refers to the level of usability of a Web-site for

people with disabilities• The vast majority of Web-sites are considered

inaccessible to people with visual, learning or mobility impairments

– A high level of accessibility is difficult to achieve.• People with a low specification PC may also suffer from

poor accessibility


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Structure & Navigation

• Web-site Structure– Narrow & Deep– Wide & Shallow

• Elements that define the site structure– Menus (Text-based and/or Graphical)– In-content Hyperlinks

• Page Structure approaches– Plain, Framed, Table-based, Graphical

• Site Maps (Text-based and/or Graphical)– Help you plan & user understand


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Things NOT to do!

• Don't have too much information on a single Web-page.

• Too much information(?):– becomes data; i.e. may not be read, or

understood.

• Keep it short & snappy:– break things up into a number of

shorter, hyperlinked, pages.


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Things NOT to do!

• Don't leave the important stuff for the bottom

• Say what needs to be said at the top of each Web page:– someone may not make it down to the

bottom of the page

• Another reason to keep it short & snappy:– Web-pages are meant to be read on a

computer screen, a totally different shape to an A4 paper document


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“Keep it Simple”

• And your Web-site will be:– easier to build; consistent structure &

easy navigation, common ‘look & feel’, easy to understand content, etc.

– easier to maintain; no Web-site is ever complete, they are always ‘under construction’, so NEVER say so!

• And remember that “less is definitely more”:– except when it comes to testing!


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Web Design Principles

Start here:http://www.starlingweb.com/wai/wcag/gid1-0.htm

Guidelines from W3C:http://www.w3.org/TR/WAI-WEBCONTENT/

http://www.starlingweb.com/wai/wcag/gid1-0.htm









End of Sessions 5-6:Lunch!

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Documents

Website Marketing and Design Session 5: B2B Commerce 1 Poitiers, September 23-27