What is e-procurement?
The electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier
Organizational risks
If the cost savings referred to earlier in the chapter are to be achieved it may be necessary to redeploy staff, or in the worst case make them redundant. For a medium-sized company such as Cambridge Consultants the purchasing team of five people was reduced to four. The threat of redundancy or redeployment is likely to lead to resistance to the introduction of the system and this needs to be managed. The purchasing manager will have to carefully explain the reasons for introducing the new system, emphasizing the benefits to the company as a whole and how it should enable more variety to be introduced to the buying role
B2B electronic marketplaces, exchanges and hubs
Virtual locations with facilities to enable trading between buyers and sellers.
Private B2B exchanges
A manufacturer or major supplier to different manufacturers creates a portal which is used for managing all aspects of procurement.
Metamediaries
Third parties that provide a single point of contact and deliver a range of services between customers and suppliers.
Software (intelligent) agents
Software programs that assist humans by automatically gathering information from the Internet or exchanging data with other agents based on parameters supplied by the user.
The main types of electronic marketplace in the terminology of Kaplan and Sawhney
(2000) are combinations of:
Systematic sourcing of operating resources (MRO hubs)
Systematic sourcing of manufacturing resources (catalogue hubs)
Spot sourcing of operating resources (yield managers)
Spot sourcing of manufacturing resources (exchanges)
Summery Ch# 8 E-marketing
The marketing concept
The management of the range of organizational activities that impact on the customer as part of marketing.
Marketing orientation
Coordinating all organizational activities that impact on the customer to deliver customer requirements.
Distinguishing between e-marketing, e-business and e commerce
(a) Electronic business has some degree of overlap with electronic marketing. From the discussion
of the marketing concept above we can reject this since both e-business and e-marketing are broad topics.
(b) Electronic business is broadly equivalent to electronic marketing. This is perhaps more realistic, and indeed some marketers would consider e-business and e marketing to be synonymous.
(c) Electronic marketing is a subset of electronic business. It can be argued that this is most realistic since e-marketing is essentially customer-oriented and it has less emphasis on supply chain and procurement activities in comparison with e-business.
Demand analysis for e-business
Assessment of the demand for e-commerce services amongst existing and potential customer segments.
Online revenue contribution
An assessment of the direct contribution of the Internet or other digital media to sales, usually expressed as a percentage of overall sales revenue.
In an e-marketing planning context market segments will be analysed to assess:
1 Their current market size or value, future projections of size and the organization’s current and future market share within the segment.
2 Competitor market shares within the segment.
3 Needs of each segment, in particular unmet needs.
4 Organization and competitor offers and proposition for each segment across all aspects of the buying process
Tipping point
Using the science of social epidemics explains principles that underpin the rapid spread of ideas, products and behaviours through a population.
Promotion
The element of the marketing mix that involves communication with customers and other stakeholders to inform them about the product and the organization.
Physical evidence variable
The element of the marketing mix that involves the tangible expression of a product and how it is purchased and used.
Actions
The actions component of e-marketing planning refers to activities conducted by managers to execute the plan. Questions that need to be resolved when specifying actions include:
• What level of investment in the Internet channel is sufficient to deliver these services?
• What will be the payback?
• What training of staff is required?
• What new responsibilities are required for effective Internet marketing?
• Are changes in organizational structure required to deliver Internet-based services?
• What activities are involved in creating and maintaining the web site?
Ch # 9 Customer relationship management
Electronic customer relationship management (e-CRM)
Using digital communications technologies to maximize sales to existing customers and encourage continued usage of online services.
Benefits of e-CRM
Targeting more cost-effectively. Traditional targeting, for direct mail for instance, is often based on mailing lists compiled according to criteria that mean that not everyone contacted is in the target market. For example, a company wishing to acquire new affluent consumers may use postcodes to target areas with appropriate demographics, but within the postal district the population may be heterogeneous. The result of poor targeting will be low response rates, perhaps less than 1 per cent. The Internet has the benefit that the list of contacts is self-selecting or pre-qualified. A company will only aim to build relationships with those who have visited a web site and expressed an interest in its products by registering their name and address. The act of visiting the web site and browsing indicates a target customer. Thus the approach to acquiring new customers with whom to build relationships is fundamentally different, as it involves attracting the customers to the web site, where the company provides an offer to make them register.
Lower cost. Contacting customers by e-mail or through their viewing web pages costs less than using physical mail, but perhaps more importantly, information only needs to be sent to those customers who have expressed a preference for it, resulting in fewermail-outs.Once personalization technology has been purchased,much of the targeting and communications can be implemented automatically
Nature of the buying unit
Business purchases typically involve a more complex decision-making process since more people are involved.
Cost per acquisition (CPA)
The cost of acquiring a new customer. Typically limited to the communications cost and refers to cost per sale for new customers. May also refer to other outcomes such as cost per quote or enquiry.
Spiders or robots
Spiders are software processes, technically known as robots, employed by search engines to index web pages of registered sites on a regular basis. They follow links between pages and record the reference URL of a page for future analysis.
Technology solutions for CRM
1: Personal and profile data. These include contact details and characteristics for profiling customers such as age and sex (B2C) and business size, industry sector and individual’s role in the buying decision (B2B).
2 Transaction data. A record of each purchase transaction including specific product purchased, quantities, category, location, date and time, and channel where purchased.
3 Communications data. A record of which customers have been targeted by campaigns, and their response to them (outbound communications). Also includes a record of inbound enquiries and sales representative visits and reports (B2B).
Marketing communications techniques to achieve acquisition, retention and
extension include traditional online mass-media techniques and specialized online
techniques such as search engine registration, link-building, e-mail marketing and
banner advertising.
Technology solutions for CRM are aimed at providing interaction between
employees and customers across multiple communications channels with all
customer information stored in a single database to provide complete visibility of
the customer by employees. Managers look to minimize the number of solutions
partners they work with to achieve these goals.