Description
How internet is used for selling? What are the different business models?
INTERNET & SALES
FIRST CUT
E-Commerce & Internet • E-Commerce
– Use of electronic technology for commerce
• Internet
– Use of www for business
BRIEF HISTORY
• 40 years old Celebrates 25 years in 1993 • Two pronged stimulus in 1968
– Sputnik by Russians – Disaster Scenario Building
• ARPANET sets up in 1968 • ARPANET Splits in 1980 • NSF connects 6 supercomputers in 1985
BRIEF HISTORY
• 1989 - World Wide Web
– Set of rules governing library of files ( text, video etc ) – Called the Web as a file had pathways to others
• 1993 - Mosaic & Netscape - Browsers
– Allow PC users to browse from one file to another
• 1996 - Broad Band
INTERNET IN INDIA
• Hotmail & Sabeer Bhatia • Indiaworld.com & Rajesh Jain • 1999 boom
– Bandwagon effect – No sound business plan – Over eager VCs
• 2000 bust
– US $ 15 billion wiped off
REASONS FOR FAILURE
• • • • Low PC Penetration High access cost Bandwidth Security Issues
REASONS FOR NOT SHOPPING
• Shop Far Away • Is closed during the time convenient for me. • Is located in an inconvenient place
INTERNET CHARACTERISTICS
• Death of Distance • Homogenization of Time • Irrelevance of Location
BUSINESS & INTERNET
Internet
How do I use this to create a business?
Entrepreneur
Existing Business
Internet
How do I use this to enhance my business?
POSSIBILITIES
• Level 1
– Just a website disseminating information.
• Level 2
– Two way information exchange.
• Level 3
– Transaction Facilitation
• Level 4
– Transaction Completion
INTERNET BROAD STRATEGY
• Bricks & Clicks ( Hewlett Packard ) • Clicks Only ( Priceline ) • Clicks & Bricks ( Amazon )
BUSINESS MODELS
• • • •
Sales Model ( Amazon ) Advertising Model ( Google ) Subscription Model ( EBSCO ) Brokerage Model ( Auctions )
BUYING MODELS:TAM
Perceived Usefulness Attitude to Use Intention to Use Use
Perceived Ease of Use
F D Davis, MIT, 1986
INTERNET USER MODEL
Experience with The Internet
Short Term Benefits Use of Internet
Facilitating Conditions
Long Term Benefits
James, Maxwell & Gary Klien - Colorado, Lousiana
BUSINESS POSSIBILITIES
• • • • • • • • • • Supply Chain Management (SCM) Customer Relationship Management (CRM) Partner Relationship Management (PRM) Sales Force Automation (SFA) Marketing Research (MR) Brand Building Promotions Customer Service Human Resource Management Selling
SELLING ON NET
Pre-Sale Pre-Call Preparation Prospecting Sales Transaction Order Receiving Order Confirmation Post Sales Payment Follow up Payment Collection
Approach
Presentation Demonstrations Clarification of Doubts
Delivery
Delivery Confirmation
Relationship Management
Merchandise Return
ISSUES
• Segmentation & Targeting • Consumer Behavior
– Risk, Trust, etc
• Marketing Mix
– – – – Pricing Promotion Products Place
SELLING ON THE NET
?Same segment?
yes
?Same products? ?Same pricing?
Use in sales
?What part of CRBR will it address?
yes
Use in Mktg
No
?What part of Selling Process will it address? ?Do we have the critical mass?
yes
Use Internet?
No
?What resources are required?
?Do we have the resources?
No
?How do we measure success?
WEB TRANSACTION MODEL
Validation of Ability to pay & execution of Secure transactions
Facilitating Partners
Net Based Delivery
Fat Bandwidth
Digital Products on Net Browsing Interface Hard Real World Delivery Channel
E-Customer B2C B2B etc
Source : Own Mfg Dist
Delivery Partners
Logistics
OLD VALUE CHAIN
Sales Executive Dealers / Distributors Supply Side Warehouse / Packaging Cash / Cheque / Draft AD Agency / TV / Paper Demand Side
NEW VALUE CHAIN
Security, Payment Services, Payment Instruments, EDI Physical network requirements- PC, Modem etc, ISP, Satellite etc Network Infrastructure Supply Side
Commerce Infrastructure
Commerce Applications New Intermediaries
Demand Side
Auctions, Market Makers, Brokers, New types of agents
Products, Services, Information, Business Models
NEW VALUE CHAIN
Network Infrastructure Supply Side
Commerce Infrastructure
Commerce Applications New Intermediaries
Demand Side
SELLING DIRECT
• Advantages
– Latest Technology to Customers – Lower Inventory – No Channel Clogging – Direct access to customers for cross selling or up selling – Selectivity in customer choice – Market Research
• Dis- Advantages
– Restricts access to those who use this channel – Not a part of retail assortment – No touch & feel factor – Image of firm due to low status of mail order.
SOME STATISTICS
INTERNET USAGE IN INDIA
REASONS FOR ACCESSING NET E-MAIL 92%
ENTERTAINMENT
EDUCATION CHATTING JOBS
55%
51% 46% 38%
BUSINESS INFO
SPORTS INDIAN NEWS GAMES INTERNATIONAL NEWS TRAVEL INFO E-SHOPPING OTHERS REAGIONAL INFO
37%
27% 23% 21% 20% 14% 10% 9% 6%
REASONS FOR BUYING ON NET
• • • • • • Easy to Place an order : Large Selection : Cheaper Products : Faster Service & Delivery : No Sales Pressure : Detailed Info Available : 83% 63% 63% 52% 40% 40%
WHAT DO PEOPLE LOOK FOR?
• Easy to place an order : • Large Selection : • Cheaper Products : • Faster Service & Delivery : Convenience Shopping Price Responsiveness
• No Sales Pressure :
• Detailed Info. Available :
Personality Traits
Low Risk
doc_758879663.ppt
How internet is used for selling? What are the different business models?
INTERNET & SALES
FIRST CUT
E-Commerce & Internet • E-Commerce
– Use of electronic technology for commerce
• Internet
– Use of www for business
BRIEF HISTORY
• 40 years old Celebrates 25 years in 1993 • Two pronged stimulus in 1968
– Sputnik by Russians – Disaster Scenario Building
• ARPANET sets up in 1968 • ARPANET Splits in 1980 • NSF connects 6 supercomputers in 1985
BRIEF HISTORY
• 1989 - World Wide Web
– Set of rules governing library of files ( text, video etc ) – Called the Web as a file had pathways to others
• 1993 - Mosaic & Netscape - Browsers
– Allow PC users to browse from one file to another
• 1996 - Broad Band
INTERNET IN INDIA
• Hotmail & Sabeer Bhatia • Indiaworld.com & Rajesh Jain • 1999 boom
– Bandwagon effect – No sound business plan – Over eager VCs
• 2000 bust
– US $ 15 billion wiped off
REASONS FOR FAILURE
• • • • Low PC Penetration High access cost Bandwidth Security Issues
REASONS FOR NOT SHOPPING
• Shop Far Away • Is closed during the time convenient for me. • Is located in an inconvenient place
INTERNET CHARACTERISTICS
• Death of Distance • Homogenization of Time • Irrelevance of Location
BUSINESS & INTERNET
Internet
How do I use this to create a business?
Entrepreneur
Existing Business
Internet
How do I use this to enhance my business?
POSSIBILITIES
• Level 1
– Just a website disseminating information.
• Level 2
– Two way information exchange.
• Level 3
– Transaction Facilitation
• Level 4
– Transaction Completion
INTERNET BROAD STRATEGY
• Bricks & Clicks ( Hewlett Packard ) • Clicks Only ( Priceline ) • Clicks & Bricks ( Amazon )
BUSINESS MODELS
• • • •
Sales Model ( Amazon ) Advertising Model ( Google ) Subscription Model ( EBSCO ) Brokerage Model ( Auctions )
BUYING MODELS:TAM
Perceived Usefulness Attitude to Use Intention to Use Use
Perceived Ease of Use
F D Davis, MIT, 1986
INTERNET USER MODEL
Experience with The Internet
Short Term Benefits Use of Internet
Facilitating Conditions
Long Term Benefits
James, Maxwell & Gary Klien - Colorado, Lousiana
BUSINESS POSSIBILITIES
• • • • • • • • • • Supply Chain Management (SCM) Customer Relationship Management (CRM) Partner Relationship Management (PRM) Sales Force Automation (SFA) Marketing Research (MR) Brand Building Promotions Customer Service Human Resource Management Selling
SELLING ON NET
Pre-Sale Pre-Call Preparation Prospecting Sales Transaction Order Receiving Order Confirmation Post Sales Payment Follow up Payment Collection
Approach
Presentation Demonstrations Clarification of Doubts
Delivery
Delivery Confirmation
Relationship Management
Merchandise Return
ISSUES
• Segmentation & Targeting • Consumer Behavior
– Risk, Trust, etc
• Marketing Mix
– – – – Pricing Promotion Products Place
SELLING ON THE NET
?Same segment?
yes
?Same products? ?Same pricing?
Use in sales
?What part of CRBR will it address?
yes
Use in Mktg
No
?What part of Selling Process will it address? ?Do we have the critical mass?
yes
Use Internet?
No
?What resources are required?
?Do we have the resources?
No
?How do we measure success?
WEB TRANSACTION MODEL
Validation of Ability to pay & execution of Secure transactions
Facilitating Partners
Net Based Delivery
Fat Bandwidth
Digital Products on Net Browsing Interface Hard Real World Delivery Channel
E-Customer B2C B2B etc
Source : Own Mfg Dist
Delivery Partners
Logistics
OLD VALUE CHAIN
Sales Executive Dealers / Distributors Supply Side Warehouse / Packaging Cash / Cheque / Draft AD Agency / TV / Paper Demand Side
NEW VALUE CHAIN
Security, Payment Services, Payment Instruments, EDI Physical network requirements- PC, Modem etc, ISP, Satellite etc Network Infrastructure Supply Side
Commerce Infrastructure
Commerce Applications New Intermediaries
Demand Side
Auctions, Market Makers, Brokers, New types of agents
Products, Services, Information, Business Models
NEW VALUE CHAIN
Network Infrastructure Supply Side
Commerce Infrastructure
Commerce Applications New Intermediaries
Demand Side
SELLING DIRECT
• Advantages
– Latest Technology to Customers – Lower Inventory – No Channel Clogging – Direct access to customers for cross selling or up selling – Selectivity in customer choice – Market Research
• Dis- Advantages
– Restricts access to those who use this channel – Not a part of retail assortment – No touch & feel factor – Image of firm due to low status of mail order.
SOME STATISTICS
INTERNET USAGE IN INDIA
REASONS FOR ACCESSING NET E-MAIL 92%
ENTERTAINMENT
EDUCATION CHATTING JOBS
55%
51% 46% 38%
BUSINESS INFO
SPORTS INDIAN NEWS GAMES INTERNATIONAL NEWS TRAVEL INFO E-SHOPPING OTHERS REAGIONAL INFO
37%
27% 23% 21% 20% 14% 10% 9% 6%
REASONS FOR BUYING ON NET
• • • • • • Easy to Place an order : Large Selection : Cheaper Products : Faster Service & Delivery : No Sales Pressure : Detailed Info Available : 83% 63% 63% 52% 40% 40%
WHAT DO PEOPLE LOOK FOR?
• Easy to place an order : • Large Selection : • Cheaper Products : • Faster Service & Delivery : Convenience Shopping Price Responsiveness
• No Sales Pressure :
• Detailed Info. Available :
Personality Traits
Low Risk
doc_758879663.ppt