Today We discussed Relationships and Pricing.

Relationships create a bond. In marketing Firm and Client have relationships.

Pricing on the internet is dynamic, such as auctions (EBAY).  Types are Pricing are: cost plus, competitive, demand, loss leader, luxi?, EDLP, Frenzy, high/low.

Dynamic Pricing Strategy

1. Dynamic pricing is one of the most significant contribution the internet and the 21% have made to pricing strategy.
2. The internet has enhanced dynamic pricing in two ways; (1) it decreased menu costs, and (2) interactivity.

The types of Auction are: English auction, RFP, Dutch Auction, First Price Sealed-bid auction (securities), Group buying, Exchange.

Visit one B2C and one B2B Web site. Examine each carefully, identifying as many relationship building techniques as possible. Do you find extensive differences between the B2C and B2B sites? Be prepared to discuss your findings, and the similarities and differences between programs on the two sites, in class.

Keep a log of the contacts from a particular site for a week. In general, what are they learning about you from these interactions? Specifically, what data might they have added to your record in their database.

Chapter8:

CRM strategy and programs. The steps are as follows:

• Identify your customers by individual or household name and address or e-mail address.
• Differentiate them according to their needs and their actual or potential value.
• Interact with customers based on their own needs. From the organization’s perspective, the interactions should become more cost-effective. Each interaction should be used as an opportunity to increase the store of data about the individual or household.
• Customize at least some aspects of the organization’s dealings with the customer. This could be things such as tailored communications and specialized offers that allow the enterprise to recognize the customer as a valued supporter and that present opportunities for growing the value of the individual customer.

Transactional marketing is centered around products and single economic exchanges. Marketers engage in one-way communication in the mass media, targeting market segments identified by conventional marketing research

Traditional marketing is generally stated in terms of market share. The approach is product-focused, not focused on a customer-oriented value proposition.

Sales force automation: processes and the software that supports them, that permit salespeople to work more effectively both in and out of their offices by providing electronic access to important documents and customer data.

The Process of Customer Relationship Management

1. Relationship marketing requires significant changes in the way marketing is done. The emphasis must move from promotional campaigns and marketing research projects to ongoing dialog that is captured and stored in a customer database.
2. It must be treated and managed as an ongoing process, not as a series of discrete events.

Targeting, Personalization, and customization

Today we started of by discussing about Ebay.  Ebay today acquired Bill Me Later, an online payment firm used by many e-commerce businesses.  This aquisition will potentially help Ebay maximize it’s profits.  Like other e-commerce sites financing is a key way to increase revenue, financial plans have interest for payments that will bring revenue.  Bill me later works the same way, if you don’t pay the whole amount the first time it will add interest to your future payments.

Then we viewed a video of Search Marketing by Mike Moron.  It discussed how to searches work and how a business can successfully have it’s website be result of top search results.

Organic search is a non-paid result and there no per-click fees chosen by the search engine. It also allow you to control your own content.  For organic searches, they have a query that searches through its “search index” which is form of database alphabetically ordered and is connected to related documents.  Then it is Ranked (sorted) by matches of keywords, relevance, inbound links going to that page is considered a vote.  Then its finally displayed on the results page accordingly.

Paid search is obviously paid, there are pay-per-click fees, made up off KEYWORDS.  The keywords are bid by the businesses.  The sites are ranked by bids and click-thru’s.  A paid search works similarly to a organic search…There’s a query, query is searched on the ad database, Rank is matched and then displayed on result.

Spiders are a bot that crawls through websites and searches the website for keywords, links, and such to add to its database.  Spiders cannot find websites with flash or javascript links.

We spoke about the 7c’s and viewed and discussed my websites.

Ivillage.com was community based site for women. It had polls, news, message boards, and many other links. It is sponsored and has several ads all over the site. Starmedia.com is portal for Hispanics. The difference between Baruch, Harvard, and Columbia websites were its colors. Some had readable colors such as Columbia, which had white background and dark letters. The worst was Harvard’s websites color, the crimson header was ok, but the golden background and colors weren’t really flowing. Baruch’s site had too much dark colors, dark blue background, and light blue navigation. It is hard to read the body.

The seven design elements of the customer interface:

Context: site’s layout and design
Content: text, pictures, sound and video that the webpages contain
Community: the ways sites enable user-to-user communication
Communication: the ways sites enable site-to-user communication or two-way communication
Customization: site’s ability to self-tailor to different users or to allow users to personalize the site
Connection: degree site is linked to other sites
Commerce: site’s capabilities to enable commercial transactions

The look and feel of a website is determined by it’s Context, Dimensions of Context. Functionally-oriented site focuses largely on the core offering. Product/Service/Info. Aesthetics of the site is focused on the design of the site, color scheme and visual themes.

The dimensions of content are the offering mix which is what the site is offering. Appeal mix refers to the promotional and communication messaging projected by the company. The Multimedia mix refers simply to the mix of media.  Content Type is information presented on a website with a high degree of time.

We are concerned about Community because it provides incentives to individuals to come to the site. Reviews, Forums, chatrooms are community feature.

Levers used to customize a site are Personalization(user) or Tailoring(organization).

Firms can maintain several types of communication with its customer base such as Broadcast, Interactive, and Hybrid.

A firm communicates with other business through creating links on there site, homesite background which shows the other site with the main site in the background, outsourcing content to sites, having a percentage of homesite content, and pathway connections.

The Main features of commerce that support the various aspects of trading transactions are registration, shopping cart, security, cc approval, one-click shopping, orders through affiliates, configuration tech, order tracking, delivery options.

Today we discussed mostly about chapter 4. We discussed data-mining/database, Internet customer, and customer behavior on the net.

We found out the woman in gaming are increasing fast, and women prefer puzzle based games.

Data is gathered from various ways: purchase data, census, associations, research firms, surveys, focus groups, interviews, websites, acct. data, cell center, and customer inquiries. Data mainly comes from the customers but those data are not organized or formatted because it hasn’t been established.

Data mining is a set of statistical routines that permit pattern detection in large data sets.

We use the internet to complete tasks such as pay bills, entertainment, purchase, communication, research, and etc…

Figure 4-8: Hierarchy of customer-focused marketing strategies

Informational

Interaction

Transaction

Personalization

Customization

Internet user segments are grouped by geographic, demographic and seniors. They are also grouped according to the style of internet usage: Connectors are relatively new to the internet, simplifiers are people who use the net to make their lives more convenient, routiners are use the net for information and not really purchasers, surfers use the net most of the time for various tasks including purchasing, bargainers search for the best deals online, and sportsters use the net exclusively for sports and entertainment.

Today, we discussed The Business Model and The Revenue Model in more detail. Amazon’s business model is “aggregator” and its revenue models are e-commerce, ads, and affiliation. The revenue models are the ways that an online business can collect revenue. Revenue models include: access to the internet, advertising, sponsorships, donations, memberships/subscriptions, transactions, e-commerce, and etc… The business models are: aggregator, ASPs, Content Provider, Fund raiser, infomediary, marketplace, M2M, Multichannel, open source such as linux, peer to peer such as kazaa, and portal such as yahoo.

Direct Response Medium(ch.4), it’s interactive, information-driven, immediate, and involving. Direct-response strategies are acquisition, conversion, and retention. It’s easier to keep current customer than acquiring new ones. Contracts are one way businesses keep customers, it has switching costs.

Critical Strategy Elements of direct response are the offer, the list, the media, the creative execution, and the service and support. We compared Aston Martin to Camry, to obtain a list of people who are attracted to Aston Martin, a list of people that like James Bond.

Customer Lifetime Value (CLV) is the net present value of the future stream of net revenue from an identified customer. This can be attained with retention by offering superior customer services or adding value to customer purchases.

The front end is the everything that takes place before a purchase is made, all the marketing and promotions.  The back end is everything that takes place after a purchase such as fulfillment of the purchase and customer service.

Apple has effective ads; they manufacture their products such as the ipod, iphone, etc. Apple targets the younger generation that want to be trendy. It has mass distribution, many retailers such as Best Buy, Circuit City Apple products, this way it can reach more consumers.

We also discussed the Value Proposition and The Business Model.

The Value Proposition: TARGET CUSTOMER >>> VALUE PROPOSITION >>> CAPABILITIES

Our group spoke about the Kindle. It is an e-reader or wireless reading device by Amazon. Has storage of over 200 titles. It can read word documents and pictures. It’s portable, has cell-phone technology to connect online. Newspaper is delivered automatically. Price is $359, no monthly bills. It has been lowered from $399. Amazon does not charge any service charges such as for wireless connectivity. It only charges for the books that are being purchased. The best-sellers are $9.99, also there subscriptions which range from $.99 to $14.99 depending on the type of subscription. It has free access to Wikipedia. It comes with New Oxford American Dictionary. It targets young professionals that like to read on the go. It might be a great addition for colleges once it’s adapted. It will allow college students and professors convenience. They won’t have to carry heavy books, just one thing 10 lbs device that can carry digital copies of 100s of books. Its distribution is only amazon.com currently. They might consider distributing it on shelves later on in such places as Barnes & Nobles or Best Buy to have a wider distribution to the costumers.

Today, we discussed further about the value chain concept and the differences between Apple, Dell, and Zara.

UPC (Universal Product Code) and RFID (radio frequency identification), are used in many products to track inventory and purchase.  Apple’s segmentations are the X and Y generations. Apple is trendy, creates a community, high value/differentiation, good functionality, has consistency, value customer input, and has design/leading edge technology.  Zara treats customers as fashion experts and values their opinion on clothing line and if a trend is found, they implement it.  Dell allows customers to customize their computer. The customization is limited to the base of the hardware and cannot start from scratch. They have just-in-time inventory that allows for faster delivery. Dell’s manufacturers such as processors factory are nearby for fast delivery to Dell.

The Value Chain Concept by Michael Porter provides a useful basis for understanding How the enterprise produces value for its customers.

1. Value chain is the integrated channel that stretches from suppliers through the producer and on to the end user.
2. Value chain in the internet means the seamless, end-to-end integration of activities throughout the channel of distribution.
3. Business processes: The Supple Chain & The Channel of Distribution

The Value Chain Concept: Supply Chain >>> Manufacturer >> Channel of Distribution > End User

The Supply Chain is the downstream portion of the value chain, it’s the channel from the suppliers to the producers.

Today, we started of with creating teams. Then spoke about the drivers of the internet economy and began and ended discussion about Michael Porter’s value chain.

Integrative elements that DELL has employed on a) the supply side by managing its supply chain as single organization,  being able to control costs which creates customer value, running extensive metrics in real-time, and targeting global growth. B) The Customer side by keeping close customer relationships, and Speed allowing fast customization and delivery.

The stages an enterprise is likely to go through en route to a virtual value chain are:

1. Visibility: their information system allows them SEE the supply chain processes more clearly.
2. Mirroring: creates a parallel system in which information MIRRORS the physical activities of the supply chain.
3. More Value to the customers: use information to deliver value to customers in different ways and to create new value.

The business practices used by Zara to be more responsive to customer needs and successful financially are by allowing customers to make inputs about fashion trends, and if a trend is discovered they implement it. This process lets customers feel valuable in the research process.  They implement their trends in about two weeks to its stores.  Also they own their own production facilities so they make all the clothes and raw materials instead of being outsourced.

Internet has increased productivity

• The Moore’s Law, computing power doubles as cost is cut in half.
• Power of the network increased.

The Value Chain Concept:

1. Supply Chain Management
2. Product Development and Management
3. Customer Relations Management