Internet Marketing

Business Models (Notes from Wednesday 09/17/2008)

Amazon’s model: traffic aggregated > e-commerce, commission, advertising

Wall Street Journal: content provider (subscriptions)

Direct response medium > TV a call for action

Best Source of Marketing: Word Of Mouth

Another great source of marketing: Testimonials

Critical Strategy Elements From Direct Response Perspective

Things to consider:

• The offer
• The service & support
• The creative execution
• The media
• The e-mail list

Landing website: usually the homepage

Drop-ship: selling product from someone else’s stock, seller does not actually stock any product.

Switching costs: the costs inferred in changing suppliers.  These costs are absolutely important when the decision involves saving additional $$.

The internet has made testing new products in the market much easier due to the quick response and inexpensive setup.

Notes from Sep. 15th ‘08

At first we covered a bit of the current events on class.  We discussed the acquisition of Napster by Best Buy.  This acquisition I think will help Best Buy in selling more copyrighted music online.  Since Napster was the pioneer on P2P sharing, they can put this technology to use in order to aim at the competition, specifically, iTunes.  Remembering Napster, its popularity declined after being the scape goat of songwriters’ lawsuits for copyright infringement after the government changed the laws in the US.  This was one of the reasons why Kazaa was able to incorporate in other countries like Australia where the laws are favorable to them and open the doors to other P2P programs to exist.

We also discussed the Windows Vista OS and the headaches it’s bringing to its users.  Vista has those problems because Microsoft wanted to mimic Apple’s user interface with large icons and widgets not taking into account that this will eat-up the system resources making the computers slow and allowing higher risks for system crashes.  We also discussed the compatibility issues between Microsoft Office versions and how they can make your life miserable, especially during presentations.  This is where Google can take a shot at Microsoft by offering an online productivity software version where no matter where you are you can open create edit and save documents without having to worry about having a compatible version, of course, granted you have an Internet connection.

Professor Wymbs also commented how UK e-commerce websites are doing better than US according to a recent survey.

The Value Proposition

Target Customer (has needs –> / <– value for) Value Proposition (matches –> / <– enable) Capabilities

The Functions Of Business Models

• Articulate Value Proposition (be clear and precise about the message)
• Identify the Target Segment (remember the better you target the higher the response)
• Define the Structure of the Value Chain (distribution channels)
• Define Cost Structure & Profit Potential (costs, expenses, revenue, profits)
• Explain Position in the Value Network (differentiation)
• Set Forth Competitive Strategy (how to create and sustain competitive advantage)