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Archive for the ‘Business’ Category

The essence of marketing is the exchange process, in which two or more parties give something of value to each other to satisfy felt needs. In many exchanges, people trade money for tangible goods, such as compact discs, clothes, or cars. In others, they trade for intangible services, such as child care, haircuts, or concert performances. In still others, people may donate funds or time for a cause, such as a Red Cross blood drive, a new gymnasium for a church or school, or a campaign to clean up the environment.
Although marketing has always been a part of business, its importance has varied greatly. Table 1.2 identifies four eras in the history of marketing: (1) the production era, (2) the sales era, (3) the marketing era, and (4) the relationship era.

The word marketing encompasses such a broad scope of activities and ideas that settling on one definition is often difficult. Ask five people to define it, and five different definitions are likely to follow. Continuous exposure to advertising and personal selling leads most respondents to link marketing and selling or to think that marketing activities start once goods and services have been produced. But marketing also involves analvzing customer needs, securing information needed to design and produce goods or services that match buyer expectations, and creating and maintaining relationships with customers and suppliers. It applies not only to profit-oriented firms but also to thousands of not-for-profit organizations that offer goods and services.
Today’s definition takes all these factors into account. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives.
The expanded concept of marketing activities permeates all organizational functions. It assumes that the marketing effort will proceed in accordance with ethical
practices and that it will effectively serve the interests of both society and the organization. The concept also identifies the marketing variables—product, price, promotion, and distribution—that combine to provide customer satisfaction. In addition, it assumes that the organization begins by identifying and analyzing the consumer segments that it will later satisfy through its production and marketing activities. In other words, the customer, client, or public determines the marketing program. The concept’s emphasis on creating and maintaining relationships is consistent with the focus in business on long-term, mutually satisfying sales, purchases, and other interactions with customers and suppliers. Finally, it recognizes that marketing concepts and techniques apply to not-for-profit organizations as well as to profit-oriented businesses.

As noted earlier, the potential for the Net to create friction between manufacturers and sales and distribution channels is very real. But when done correctly, utilization of the Internet can actually enhance those all-important relationships with your channels of sales and distribution. 3Com wisely spent money on developing and marketing its Network Designer (Figure 1.10). Turning well-qualified leads over to its resellers can only enhance those existing sales channel relationships and quite probably attract more due to the extra sales support offered. Helping your vendors locate what products are where is another tactic that can be employed.
The Lee Product Locator allows partners, or anyone else for that matter, to search for a distributor that has specific product line in the colors, quantities, and sizes needed . Once the specific item is located, users can then find out how many miles that distributor is from them. BuildSoft  sells construction management software, including tools for CPM Scheduling, Historical and Take-Off Estimating, Purchase Orders/Work Orders,Job Costing, and Accounting. The BuildSoft site also acts as a clearinghouse for building and construction information on the Web and as a gateway to BuildNet, the BuildSoft online services network.

Exide makes it just a little bit easier for its value-added resellers and sales partners to promote their products with the Exide Electronics VAR Guide . The VAR kit enables resellers to “snap in” Exide Electronic product Web pages. The kit provides product pages, including photos, a UPS buyers’ checklist, and educational information on power protection. Also included is coding for online sales and more. The kit is distributed via CDROM or from the Exide site. This is smart thinking: In addition to solidifying relationships with existing sales channels, it extends the company’s message that much further.
One of the most effective sales support case histories I’ve come across has more to do with the powers of observation than with technology Jim Roth works for Document Services Sales Support. The Web site he administers is behind a firewall, so we can’t look at it from the open Internet. The site is devoted to supporting the salespeople out in the field. He checks the logs on the search engine to see what people are keen on.

Distributed databases are another way to provide data for both customers and inhouse employees. APL StackTrain does much more than simply give departure and arrival dates of cargo ships at various ports around the world. At its Web site, you can fill out a form that can immediately be transferred into a bill of lading. It also updates you on the availability of cargo space on ships. You can pull up maps that show its shipping lanes. This is an extraordinary example of pulling information from a very diffused array of sources. The ships, the ports, and all the links within that chain feed into this database presented to you on the Web. It’s a labyrinth of satellite feeds and land lines. This is cutting-edge use of networked customer support technology at the time of writing, but as the velocity of commerce increases, it will become commonplace and we’ll wonder how we ever lived without it. Look for the sourcing of numerous distributed databases to start gaining attention.

As you know, data mining is becoming a hot topic. Companies are often frustrated by not being able to easily access their inhouse information. For example, you may know that you have a product shot somewhere in your organization, but don’t know where it is. Since you can’t find it, you have to schedule a photo shoot to capture a new picture of something you already have . . . somewhere. Both you and your customer will benefit greatly if you can have your databases all relating to each other and participating in a search name-relational database configuration.

Okay, I won’t drag out the Federal Express example and tell you how it saves $3.00 or more each time someone uses the Web to track a package instead of calling its 800 number and having a human do it. Nor will I roll out Amazon’s searchable database of over two million books, or the U.S. Post Office’s ZIP code locator, or Visa’s ATM finder. “Been there, done all that,” you say. While these are very good examples, there are others coming online now that can show us new things to learn from. It’s well worth your while to dig deeper into using the Net as a tool for customer support. In the survey of the American Marketing Association referred to earlier, 19 percent of respondents said they are currently using the Net for such purposes, while 53 percent plan on having some component of customer service on their Web site by the end of 1999. You may not be planning on utilizing your site for such activities; however, the chances are good that your competitors are.
Very often, there’s friction between the manufacturer of a product and the existing sales channels when that manufacturer opens up a Web site that speaks directly to the end user. 3Com has gone in the other direction. It uses its site to support its sales channels, even for complex network configurations. The Network Designer (which I had the pleasure of critiquing while in beta) lets end users put together their own network with all the different options and variations. The site then directs customers, using their newly customized network, to a nearby reseller.
3M is a very good example of a company that has designed a customer-focused Web Site. With the use of a search engine that accesses relational databases, visitors can easily find their way to over 50,000 products that 3M offers in nearly every industry imaginable. 3M had the good sense to look at itself from the outside in, rather than the inside out, which is a discipline any company needs to consider when designing its Web site. We will discuss this further, “Your Brand Image and the Internet.”
As we know, answering Customer service questions that can be answered on a Web site instead of by an actual person saves significant amounts of money. But simply slapping up a bunch of help files and product offerings will not induce the customer to use your Web site rather than the telephone. The challenge here is to make your Site not as effective as the alternative phone call, but more effective. One solution that I respect a great deal in this category is the step-search feature ofTered by Saqqara. Step-search asks you only a few questions at a time. Based on your answers, step-search will come back and present you with an appropriate array of options. This solution goes a long way toward avoiding the user frustration found at many customer service sites on the Internet. Here’s why: Very often, customers are asked to fill out lengthy forms on a site and then submit them. Imagine if you take 20 minutes to fill out one of these long forms only to find at the very end that “You cannot get the red Chevrolet Lumina with manual transmission and air conditioning. Please start over!” Step-search avoids both wasted time and frustration.

Another way to keep customers hitting your Web site instead of your 800 customer support phone lines is to have a discussion group in the customer service area of your site. This discussion group can have many “threads,” or discussion topics. It looks something like a Usenet group or a bulletin board. Each thread may represent a particular product of yours. Thereunder, you might find subthreads, where customers can discuss various aspects of that product. You’ll most definitely want to moderate these discussions and interact with them often. There are many free and reasonably cheap software programs that your Webmaster can put up on your site that run very easily managed discussion lists/bulletin boards. Take a look around, and discuss your needs with your site designer. Make sure you use a program that either you or an assigned employee can learn quickly and easily, since you’ll want to update it regularly to provide fast customer support.
This solution has an upside and a downside. The upside, as previously mentioned, is that it can save you money. You’ll also be delighted when customers answer questions to problems other customers pose. Some of these answers are ones that you might not have even thought of. You can simultaneously collect more solutions about your own products from your customers, while not having to answer those questions yourself: additional input with less output—a powerful combination. The downside is that you might find irate customers trashing your product on your own Web site. To your horror, you may indeed be sponsoring a revolt aimed at yourself! If the complaints are legitimate, then you’re going to have to face the music sooner or later. Isn’t it better for you to see this happen on your own site rather than in an open Usenet newsgroup? Most definitely. At your “home,” you can handle the “spin control” much faster and more effectively
If your public relations people start squawking, tell them this is a policy of containment. If you deal with the problems in a forthright manner, it will be seen as such, more often than not. If you try to squelch the complaints in a heavy- handed manner by editing them or replying in an arrogant manner, you’re opening up an online can of worms that is best avoided. If the complaints are not warranted, and they’re posed by a few persistent cranks out there, the rest of the discussion group will typically see this and appreciate it for what it is. There is something to be said about dealing with your vulnerabilities in an open and upright manner. It can add luster to your credibility and that of your products.

Many business-to-business purchases involve large dollar volume. When that sort of volume is changing hands, the seller wants to be very sure that you are who you say you are. Rather than each seller developing his or her own standards to authenticate and run a credit check on you, in order to process payments in real time or near real time, a single system is being devised to make it easier for both buyer and seller to transact large purchases online. This is similar to the SET standards that are being developed for online retail customer buying, which is covered in Chapter 6, “Retail: Setting Up Shop on the Net.”

This business-to-business system is called Open Buying on the Internet (OBI). American Express, wanting to play a pivotal role in this process, was heavily involved in the initiation of OBI. Big players on both the buying and selling sides, such as Ford, Microsoft, Oracle, GE, and Office Depot, are participating. This process is particularly helpful when dealing with a vendor or supplier from whom you may buy various services or products over the course of a month on an ongoing basis. Among other things, OBI is designed to have purchases that take place in different buying sessions consolidated and reconciled. The amount of bookkeeping is reduced substantially on both sides of the transaction, and the single payment at month’s end can be transferred quickly.

Chances are there’s something significant already happening on the Internet in your niche in the purchasing area. Most industries now have their early starters grabbing the first, second, and third slots.
The fact that computers are the biggest category doesn’t surprise anyone. Since it’s the most mature thus far, it’s worth looking at how merchandise in this category is being traded on the Net. One of the first commerce centers in the high- tech/telecommunications arena was MarketPlace 2000. You can learn a great deal about how your industry’s commerce center might look in the future by visiting this site . You will find auctions for fully configured computers or components, such as motherboards, monitors, hard drives, and so forth. Very often, you can buy these components one at a time, or save a bundle of money by buying in volume. You can bid on a mainframe computer in an auction room if you like, or meet other people in the sales chain with whom you can forge a buy/sell relationship on or offline and read news updates about the industry. Simple classified listings are now a staple of just about all industry commerce centers.

News, in this case, has become just one commodity to be had at this trading post. Is the MarketPlace 2000 a publication? Yes, but it is also a type of commodity pit. It’s two mints in one! Is it redefining how we think of a trade publication? Well, weren’t there always classified ads in the back of trade publications where people sought buyers and sellers for their brand of arcania? Of course. The Net has simply made this traditional practice more interactive.
“Big deal,” you say. You expect computers and travel (because they’re merely packages of information that the Net can easily promote and sell), but what about an industry that doesn’t cater to such a wide group of people? Perhaps I can interest you in a refrigerated shipping container that can be transported from ship to flatbed truck and then to railroad. If you’re interested, take a look at TransAmerica Leasing. This site can match up your needs with a seller. At the time of this writing, the transaction happens ofihine, but so what? The commodity of serving as a conduit between buyer and seller is the Internet’s first point of value. This site does more than match up goods with a customer, though. We’ll return to TransAmerica later in this chapter to see how it serves an overlapping community of interest: its existing customers.

Intermodal refrigerated containers don’t really turn you on? How about a cappuccino machine that will make 200 cups of coffee for your closest friends? Or perhaps you’d like to buy a diner booth for your living room? Check out the food service site that serves as a crossroads for such restaurateur supplies. It’s quite conceivable that indigenous products for a given industry might have an outside market. I don’t think that people will be putting 4-ton steel fittings on their front lawn, but I could see where they may want their own milkshake machine, or an industrial-rated stove or refrigerator.

Nowhere else is the open market principle more apparent than in the scores of auction sites that now populate the Web. Some are real-time auctions, in which the price goes up with each competing bid (http://www.onsale.com), while others are Dutch auctions (http://klickklock.com), in which the price keeps dropping until someone buys the merchandise. Still others arc silent auctions; you put a bid in and return now and again to see if someone else has countered your offer. Rather than going to every single site to see if they’re hawking what you’re in the market for, you should check out http://www.usaweb.com, where you’ll find a search engine that keeps track of what many auction sites are selling . Enter the word printer in the BidFind search field and it will present you with those sites auctioning off printers. This site also points to over 100 auction sites on the Web, and even many auctions offline as well.
If you’re looking for the state-of-the-art computer that just came out yesterday, you may not find it on these auction sites. More often than not, the merchandise auctioned off is close-out products. Very often, there are odd lots bought up that aren’t worth putting in the manufacturer’s catalog again because there aren’t enough left. The computers may be last year’s model, without the various bells and whistles, but you may not want or need these extra features anyway. I recommend that you check brand names very carefully, along with the warranties and return policies. in many cases, sales are final.

The first auction site I knew of was wehkamp.nl in Holland. It used its Web site to “blow out” old inventory An enterprising student tracked how much each item typically sold for and charted it on his own Web pages. Much to the chagrin of Wehkamp, bidders could visit the student’s site to see the highest and lowest prices a product would sell for. It won’t be any surprise to me if such information also becomes available for the U.S. auction sites. It enables the potential buyers to make smarter bids. Perhaps by the time you read this, these sites will spring up state-side. Look around for them!
Be careful. These auction sites can be addictive to the point of distraction! People get caught up in the bidding excitement and sometimes pay more for things than they might have elsewhere. I also know people who buy things for which they have no need, just because the costs are low.