E-marketing Chapter 11

Members of distribution channels

Producers -manufacturers and their suppliers, originators of product/service *Intermediaries* -firms that match buyers and sellers and mediate the transactions among them Buyers -consumers or users of the product or service can make or impede opportunities for marketing on the internet

Agent models that represent BUYERS include:

Purchasing agents: -bizrate, pricescan, CNET shopper Reverse Auction: -occurs at web site serving as purchasing agent for individual buyers -buyer specifies a price and sellers bid for buyers business -priceline was first major player Buyer Cooperative: (aka buyer aggregator) -pools many buyers together to drive down price of selected items -groupon, livingsocial

Zappos

Sales > $1 billion in 2009 part of Amazon.com operates as a wholly owned subsidiary in Henderson, NV success factors: culture of outstanding customer service -great search engine marketing -strong word of mouth -astute competitiveness -repeat customers

Which of the following is not a customer benefit provided by virtual malls

Shopping agents

Supply Chain Mangement and it's key functions

Supply Chain Management (SCM): coordination of the flow of material, information, and finance key functions: -continuous *replenishment* and build to order to help eliminate inventory

________ functions refer to making contact with buyers and using marketing communication strategies to make those buyers aware of products

Transactional

Online channel intermediaries

Wholesalers: -buy products from the manufacturer and resell them to retailers Retailers: -buy products from manufacturers or wholesalers and sell to consumers Brokers: -facilitate transactions between buyers and sellers -online exchange, online auction Agents: represent either buyer or seller 1. SELLER: manufacturer's agents represent the seller -selling agent (affiliate program) -manufacturer's agent (catalog aggregator) 2. BUYERS: purchasing agents represent the buyer -shopping agent -reverse auction -buyer cooperative

Agent model represent SELLERS include:

agents represent either the buyer or the seller, depending on who pays their fee agent models that represent SELLERS include: -selling agents (affiliate programs) -manufacturer's agents represent more than one seller -metamediaries: Edmunds.com and theknot.com -Virtual malls: yahoo, amazon

Brokerage model

broker creates a market in which buyers and sellers negotiate and complete transactions -they charge seller/buyer a transaction fee, but don't represent either party -Online Exchanges, E*Trade, Schwab and Ameritrade, allow customers to place trades online without a broker. - Autobytel.com is a vehicle exchange and alibaba.com is a global marketplace the B2B market has brokerages -coverage is the leading anonymous exchange for global electronics -Guru.com is an exchange for professional talent Online auctions are available in the B2B (uBid), B2C (priceline), and C2C (ebay) markets

Content Sponsorship as an e-buz model

companies create web sites, attract a lot of traffic, and sell advertising. -all the major portals, google, yahoo and MSN utilize this model -online magazines, newspapers, pandora and craigslist use this -often used in combination

Electronic data interchange (EDI) is based upon which of the following key variables? a. openness of the system b. transport method c. type of technology used for implementation d. all of the above

d-all of the above (openness of the system, transport method, type of technology used for implementation)

Which of the following is an example of an agent that represents the *seller*?

d-all of the above (virtual malls, manufacturer's agents, metamediaries)

Which of the following is a channel intermediary: a. wholesaler b. broker c. agent d. all of the above

d. all of the above

A distribution channel in which the manufacturer deals directly with the customer (e.g., sale of digital products) is called a(n) _____

direct channel

All of the following are intermediary models in common use on the internet except _____

direct selling models

Distribution Channel

group of interdependent firms that work together to transfer product and information from the supplier to the consumer

Logistical Functions

include physical distribution activities such as: -transportation -inventory storage -aggregation of products logistical functions are often outsourced to 3rd party specialists such as UPS or FedEx 3rd party logistics providers such as UPS or FedEx can provide value-added services

Facilitating Function: Financing

intermediaries want to make it easy for customers to pay in order to close the sale credit card companies have formed Secure Electronic Transaction (SET) -legitimizes merchants and consumers -protects consumers' credit card numbers -US customers have a max $50 liability for purchases made with a stolen card

The benefits of market research include ____

it can be helpful in estimating the size of a target market

Regarding mobile commerce, all of the following is true except:

it is a declining area of e-commerce

A distribution channel is composed of all of the following except ____

marketers

An agent that represents a cluster of manufacturers, e-tailers, and content providers organized around a life event or major asset purchase is known as a

metamediary

What do U.S. consumers buy online?

mostly: clothing and accessories -> electronics -> other merch -> furniture and furnishings least: food, beer, wine + computer software

Facilitating Function: Market Research:

-major function of distribution channel -assessment of the size and characteristics of target audience *benefits include*: -some info is free -employees can conduct research from their desks -internet-based info tends to be timelier -web-based info is in digital form -e-marketers can receive detailed reports

Transactional Function

-making contact w/ buyers -marketing communication strategies -matching products to buyer's needs -negotiating price -processing transactions

Solutions to the last mile problem

-smart box -retail aggregator model: delivery at convenience stores or service stations -shipping product to participating retailers in a network -e-stops, storefronts for customer package pickups -order online for retail delivery

Distribution Channel as a System

1. distribution functions that are *downstream* from the manufacturer to the consumer 2. the supply chain, *upstream* from the manufacturer, working backward to raw materials 3. consider the supply chain, manufacturer, and distribution channel as an integrated system called the value chain or *integrated logistics*

The Last Mile Problem

25% of deliveries require multiple delivery attempt 30% of packages are left on doorsteps, possible theft

Shopping cart abandonment

65-75% average shopping cart abandonment why? -high shipping prices -comparison shopping -product prices too high -site requires personal info

Infomediary

online organization that aggregates and distributes information -acting as a personal agent for web users ex. market research firms and product review sites some infomediaries compensate consumers for sharing demographic and psychographic info and receiving ads targets to their interests

Affiliate Programs

pay commission to web site owners for customer referrals -must result in a sale 1. consumer shops online 2. consumer visits affiliate website 3. consumer goes to seller website and makes purchase 4. seller pays affiliate for reference

The most effective online marketing communications ____

represent a coordinated effort among channel members

________ is an online organization that aggregates and distributes information. A market research firm is one example of such an organization

An infomediary

3 main intermediary models

Brokerage modes Agent Models Online retailing

________ pool many buyers together to achieve larger volume purchases and drive down the price on selected items

Buyer cooperatives

A brokerage model's primary benefit(s) to the buyer is _____

D - all of the above (convenience, speed of order execution, transaction processing)

________ save(s) customers money by avoiding the middleman; sometimes it leads to more rapid delivery of the product

Disintermediation

Online Retailing: E-commerce

E-commerce: most visible e-buz model -merchants set up online storefronts and sell to businesses and consumers (zappos) online companies can sell a wider and deeper assortment of products in smaller quantities than offline stores because they are not bound be space constraints -the *"long tail"* refers to the ability to increase revenue by selling small quantities of large numbers of products profitably online

________ is the computerized exchange of information between organizations, typically used to reduce or eliminate paperwork

Electronic data interchange (EDI)

Length of channel and its related terms

the length refers to the number of intermediaries between the supplier and the consumer -shortest distribution channel has no intermediaries (direct distribution) *indirect distribution channel*: one or more intermediaries incorporated -includes suppliers, a manufacturer, wholesalers, retailers and end consumers eliminating intermediaries can REDUCE COSTS Disintermediation: process of eliminating traditional intermediaries (reducing costs)

Which of the following is true of logistical functions: a. they include physical distribution activities b. they include aggregating products c. they are often outsourced to third-party specialists d. all of the above

they include physical distribution activities, they include aggregating products, they are often outsourced to third-party specialists

Functions of Distribution Channel

transactional, logistical, facilitating

Radio frequency identification (RFID)

used to transmit a signal to scanners

Social (F) Commerce

uses media and consumer interactions to facilitate online sales product rating, recommendation, and review sites that provide space for users to post allow for the sharing aspect critical to social commerce 18-23% of pinterest users also visited online retailers social sign-in -half of social media uses fb to sign into other sites

Mobile (M) Commerce

when consumers make a transaction w/ a smartphone or other mobile device -subset of e-commerce -77% of US population has a mobile phone, half are smartphones that enable e-commerce -m-commerce was projected to reach 5.9% of all e-commerce sales

ERP System and EDI System

enterprise resource planning (ERP): manage in-house inventory and processes. -part of supply chain Electronic data interchange (EDI): B2B commerce, particularly effective for establishing structural relationships between businesses.

Supply chain management refers to the coordination of flows in three categories: material, information and ____

financial