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Tasks For the whole group
Tasks for the subgroups |
- The first 2
exercises (Cyberatlas and Web globalization) please read before the
lecture on the topic Internet Marketing Strategy!
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At
the lecture we will create four subgroups (A,B,C and D). Each of these
has to analyse the given exercise and answer the questions during the
lecture. Please follow the links and visit the corresponding web
sites.
Researching Web Marketing on CyberAtlas
The
CyberAtlas.com Web site was acquired in
August of 1998 by
internet.com and has rapidly become the
Web marketer's guide to online facts. If you need to know how many
people use high-speed Internet connections, this is the place to find
it. If you need to know how many on-line users are in any one of more
than 50 nations, there is no need to look any further.
CyberAtlas.com is a research tool for
business people. Since its inception in 1996, the site has been
providing visitors with valuable statistics and Web marketing
information. The goal is to enable its users the ability to understand
business environments that can help them make more informed business
decisions. It gathers online research from the best data resources to
provide a complete review of the latest surveys and technologies
available. What distinguishes CyberAtlas.com from its competitors is the
numerous awards it has received from reputable Web sites such as
PC Magazine and
USA Today. You will find a link to
CyberAtlas.com on many of the well-known major Web sites. Internet
sources cite CyberAtlas as the place to begin your online research.
Let's practice using
CyberAtlas.com to answer the following
market research questions.
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What are some of the latest marketing Web trends?
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Your company is trying to decide what Internet target markets it
should focus on for its upcoming strategic planning meeting. What
information can you find that would help in a brainstorming session
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What are are the latest trends in on-line sales?
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It's your first job out of school, and your boss knows you are an
excellent on-line researcher. She asks you to train a new employee in
the Research department and specifically asks you to share some of top
sources for researching e-commerce marketing. What sites can you
recommend to the new employee?
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Web Globalization
LEAD STORY-DATELINE:
InformationWeek,
December 11, 2000.
More than half of the world's online users don't live in the United
States.
Jupiter Research reports that in 1999,
45 percent of the world's online users were in North America. By 2005,
it is estimated that nearly three-quarters of online users will reside
outside North America. This presents both a market opportunity as well
as a threat. It is a threat to those businesses that operate like
English is the only language, and like the only market worth pursuing is
in the United States. The Internet also presents a great opportunity. It
has opened foreign markets that traditionally have been costly and very
difficult to enter. However, if a company is going to be profitable on a
global scale, their Web operations must too be global.
International Internet sales volume also reflect the importance of
marketing on a worldwide front. According to the
International Data Corp., in 1999, the
U.S. accounted for 62 percent or $80.5 billion of the $130.5 billion of
total Internet spending. It is predicted that share will grow to $726
billion, but it will equal only 45 percent of the projected $1.6
trillion in worldwide E-commerce spending. This means that more than
half of the Internet spending will occur outside the United States.
According to this article, Web globalization is a new type of software
that "helps multinational E-businesses manage, synchronize, and update
the content of multiple-language sites." Web globalization services will
translate the content of a firm's Web site into one or more foreign
languages. In addition, Web-site localization can help a company to
adapt their businesses to a particular market or culture.
The article presents the argument that many business people are
functionally fluent in English, so there may not be a need to translate
a Web site into foreign language. However, if a company wants a
significant presence in a nation, they must translate their Web site in
order to effectively deal with that market.
The globalization process is difficult, and goes well beyond translating
the Web site. Companies must address the individual challenges of
cultural and political differences, as well as legal, distribution,
staffing and payment issues associated with each country.
The article presents a case study of
Hewlett Packard's (HP) efforts to go
global. When the company originally went global two years ago, there
were manual processes for analyzing the foreign markets and determining
which information from their massive databases must be translated. It
was becoming logistically impossible to do manually. The marketing
communications aspect of integrated messaging was a challenge. HP needed
to ensure that regardless of language translation, the same message
about HP was being conveyed. HP implemented a tool called GNET from
Uniscape Inc. (now Trados), which
provided language translation tools, workflow processes and
content-management functions so HP could maintain control and keep track
of who was adding what information. Web site changes were also reflected
across all the multilingual sites. This product is just one of several
vendors that offer software and services designed to help companies
expand operations into foreign markets. Some vendors offer consulting
services so companies can customize their own globalization program.
Also, some companies opt to globalize their own Web sites internally, in
order to support their users around the globe, and have more control of
the content and timeliness of changes made to the program.
TALKING IT OVER AND THINKING IT THROUGH!
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Why can Web Globalization be considered both a threat as well as an
opportunity for companies?
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What capabilities can Web globalization software offer a firm?
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What other challenges beyond Web site translation must a firm face in
the globalization process?
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Why might some companies choose to do their Web globalization
internally?
THINKING ABOUT THE FUTURE!
Companies that embrace Web Globalization have a short window to take
advantage of significant foreign market opportunities. Industry experts
claim that the United States is currently more than two years ahead of
Europe in terms of Internet penetration. This lead is likely to shrink
rapidly. European companies are also jumping on the Web Globalization
"bandwagon" in order to broaden their markets.
A
firm diving into Web Globalization, must carefully weigh the tradeoffs
of their options. They may choose to hire a third party to design their
Web Globalization program, in order to enter this arena quickly, paying
a premium for the expertise of someone who "knows the ropes." On the
other hand, they may choose to build their Web Globalization program
internally, to keep tighter control of the content, timing, and the
ability to customize or change the program quickly. Whichever path is
pursued, it apparently is a road worth following, to be competitive in
the global marketplace.
SOURCES:
"Business
On The World Wide Web",
InformationWeek, December 11, 2000.
TASK for Group A
Nothing is Sure but Death and Taxes -
Online Funerals
The Internet
seems like a logical marketing tool for products related to technology.
The Internet has become a virtual shopping mall, offering a wide variety
of goods and services. Several companies see the potential for the
Internet to be a facilitator in that non-technological state we will all
assume at the end of our life - death. WebCaskets offers various
services related to death including the sale of caskets, markers,
memorials, and urns. WebCaskets even offers a 5% discount to
AARP
members.
LifeFiles
provides a directory to funeral homes and crematoriums as well as
offering a variety of other services including online interactive
obituaries, living memorials, counseling, and education.
HeavenlyDoor.com provides links to
products and services that are needed when planning a funeral. Along
with a directory of funeral homes and crematoriums, HeavenlyDoor.com
provides access to other necessary services not often provided by
traditional means. Through their site you can purchase flowers, books,
jewelry, cards, and even make travel arrangements.
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How does it appear the product lines
offered by these three sites varies from traditional mortuaries?
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What unique advantages do these online
funeral service directors serve?
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What unique services does
LifeFiles
offer that are not possible or practical in traditional settings?
The goal of
this exercise is to demonstrate the unique ways in which old products
can be marketed in new ways. It is often difficult to 'think outside of
the box.'
LifeFiles,
Webcaskets, and
HeavenlyDoors.com
each have extended the services typically offered by funeral
directors. Following these example even more routine services and
products may find new ways to enhance their product and service
offerings.
TASK FOR GROUP B
Analyzing Foreign Countries for E-Commerce Opportunities
Idiom Technology, Inc., started in 1998
by a team of
Harvard alumni, provides software and
services for enterprise globalization. They help firms with implementing
a global web strategy. A section of their home site links to
WorldWise which is a free online
resource center sponsored by Idiom Inc.; one just needs to sign up for
it. Once there, the students need to click Register Now (note: the
students can opt out of receiving a variety of updated emails and review
their privacy policy). WorldWise offers a variety of resources including
a step by step guide to the globalization process, a globalization
resource center, links to the best web sites of globalization, columns
and interviews by E-Business global leaders, and the Globalization
Quotient which is a business plan tool that evaluates a firm's readiness
for E-Business globalization.
Once someone has signed up for it, they can take a tour that details
what resources
WorldWise offers. Additionally, by
clicking on Research they can research a variety of topics. For the
purpose of this exercise, we will focus on the "tour" and the "market
selection" items under research.
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For the first set of questions, you will need to take the tour that
WorldWise offers.
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What are the five steps involved in developing an E-Business
Globalization strategy?
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What needs to be done first in the "educate" step and what should
the focus be on per the tour?
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In determining which countries a firm should focus on, what are some
of the issues to consider?
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In organizing an E-Business Globalization strategy what are the four
fronts that need to be addressed?
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For the next series of questions, click on Research and then click
Market Selection and then click Overview (read this and then click
back) and then click Criteria and read this. For the individual
questions, you will need to look at the left hand side of the screen
for the Analyze Markets by criteria as well as click profile for a
particular country under the Market Selection section.
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What are the top six countries in terms of population online in
1999?
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What are the top six countries in terms of GDP per capita 2000 (in
US $)?
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What are the top six countries in terms of E-Commerce revenues in
1999 (in US $)?
-
Based on the answers above, what countries (other than USA) do you
think would be feasible for a firm to consider in an E-Business
Globalization strategy? Then for each of the countries you are
considering, what specific issues arise in their profiles that need
to be considered by a firm in starting a globalization strategy?
Finally, pick one country that you think would be the best start for
a firm in conducting an E-Business Globalization strategy.
TASK FOR GROUP C
Nokia Rocks its Rivals
LEAD STORY-DATELINE:
Fortune,
March 4, 2002.
Despite the overall losing year the telecom industry had in 2001 (in
which all the telecom companies but
Cisco lost money on operations), the
cellular giant
Nokia reported $4.8 billion in
operating profits. When industry sales of cellular handsets dropped six
percent, Nokia's sales rose nine percent as Nokia grabbed market share
from its rivals, winning 37 percent of the global market last year. This
market share is more than twice that of
Motorola, once a market leader.
However, the article reports that all is not coming up roses at
Nokia. A top brokerage in London has
downgraded the Nokia stock, and its share price has dropped accordingly.
Why? Analysts are skeptical about the growth for this year, particularly
in the Chinese market, which accounts for 11 percent of Nokia's sales.
They are also skeptical that the new phones due out this year that were
expected to be the driver of Nokia's growth will "impress consumers
enough to make them buy." Growth in the cellular phone business is
definitely slowing, as most people in developed countries already have
one. This confronts Nokia with the challenge of how to keep growing when
the industry has matured. Nokia sees its growth opportunity in pushing
phones into newer markets such as Russia, China and India, where fewer
people can afford them. Additional growth may be found by persuading
existing subscribers that they need a second phone or one that's more
"state of the art."
Nokia hopes to have revenue growth of
25 percent to 35 percent by the fourth quarter of 2002. In order to
accomplish this, the company must capitalize on a quantum leap in the
technology of the world's wireless networks: the use of packet-switched
networks to route signals in the same efficient manner as those sent via
Internet. This use of 3G (third generation) technology will enable Nokia
customers to surf the Internet from their phones as easily as they can
from their PCs. In addition, the phones will be able to send and receive
images much more cheaply and quickly than current models.
The article characterizes the
Nokia Corporation as "a little bit
Wintel, a little bit
Apple, a little bit
Dell, and a whole lot
Coca-Cola." Nokia has hurdled over
rivals to provide "the best products, the best manufacturing logistics,
and the best brand name in telecom." It has brand recognition similar to
Coca-Cola, as it is ranked the world's fifth most valuable brand, which
is amazing seeing that it only came on the
New York stock exchange in 1994. Nokia
is banking on their brand recognition to win over new customers when
they replace their existing phones. Research suggests that 80 percent to
90 percent of the world's 930 million cell phone subscribers will buy a
Nokia when they replace their existing phones.
The article compares
Nokia's mastery of logistics to that of
the
Dell Corporation, based on its ability
to deliver the right product at the right time. It is a master at being
virtual partners with its suppliers.
Nokia exhibits an "Apple-like
flair" for designing the most consumer friendly devices that meld form
and function.
In
order to succeed in the maturing cellular industry,
Nokia must alter its strategy. Demand
for its "plain-vanilla phones" is nearing saturation in many countries.
In addition, Nokia has reached the upper limits of its market share
potential. Therefore, analysts point out the need to drive up the prices
of its phones by introducing new, unique products that will drive people
to want to purchase a new phone and be willing to pay more for it. This
presents a challenge, given that when products enter "commoditization"
as cell phones have, prices tend to decline. Nokia must do a good job of
communicating to customers the benefits of its services and how they can
be used to improve one's lifestyle. Nokia's response to this challenge
is to "blitz the market with 20 promising new products in the first half
of 2002." It will introduce new phones that offer multimedia messaging,
enabling consumers to send not just voice, but also graphics, audio
clips, and photographic images over cell phones. It will offer the
digital-camera-in-a-phone (7650). It also hopes to incorporate
entertainment services into its phones, whereby a user could use his or
her phone to play games, do electronic shopping, and even have access to
office applications.
TALKING IT OVER AND THINKING IT THROUGH!
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What two areas of market development are being pursued by
Nokia to stimulate growth?
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Why is
Nokia characterized as "a little bit
Apple, a little bit
Dell, and a whole lot
Coca-Cola"?
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What challenges does
Nokia face in stimulating growth of
its cellular phones?
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What type of services does
Nokia plan on introducing in order to
stimulate its growth?
THINKING ABOUT THE FUTURE!
There is no doubt that
Nokia has vision for uncovering growth
opportunities beyond just supplying phones. It also offers entertainment
and overall communication services. However, in order for this dream to
become a reality, there are some difficult hurdles for Nokia to
overcome. To some degree, it is at the mercy of other telecom companies'
willingness to invest in the infrastructure of wireless networks. In
order to get consumers excited about using multimedia messaging to send
and receive graphics and photographic images, there must be ubiquity,
where the person on the other end is connected to a network that enables
them to receive these messages. There must be collaboration among the
industry, even between competitors, to ensure interoperability, and
connectivity with PCs. This is a gigantic task, yet achievable with the
strong leadership of Nokia.
SOURCES:
"Nokia Rocks its Rivals,"
Fortune, March 4, 2002.
TASK FOR GROUP D
E-Business an Exciting Look into the Future: A Case Study
Steven and Susan Polis Schutz were hippies in the Sixties. Their
web-based company
Blue Mountain Arts now delivers the
passion of that era on artful greeting cards. What made this venture
possible is that their 23-year-old son Jared is a tightly wired computer
entrepreneur. He has successfully connected the laid back ideas of the
hippie generation with the lightning speed of the Internet. Their
mission is helping people around the world communicate their deepest
feelings for free.
In
February of 1999, bluemountain.com was ranked the 10th most visited Web
site, surpassing
Amazon.com and
eBay, according to Media Matrix, a
marketing research firm.
Blue Mountain Arts holds less than 1
percent of the traditional greeting card business, yet it dominates the
Internet greeting card business. Jared shares his perspective on the
highly competitive Internet business. "We don't consider any of the
other electronic greeting card companies to be competition. Our main
competition is going to be the other top 10 sites."
Analysts believe the company gained an edge by launching the site in
1996 when most businesses were still figuring out how to take advantage
of the technology. "It's a completely remarkable phenomenon even for the
Web," said Drew Ianni, an online advertising analyst for
Jupiter Communications (now Jupiter
Media Metrix). "I would be hard pressed to think that any company could
do what they have done starting out from scratch today." The strength of
the company comes from the Schutzes, who met in graduate school while he
was a graduate student in physics at Princeton and she was getting a
bachelor's degree in English at Ryder University.
It
was their desire to work together that brought about
Blue Mountain Arts in their home. They
started out putting her poems and his artwork on a silkscreen poster and
first sold them on consignment through bookstores. The company gradually
branched out into stationary, books, and other products. Since their
folksy traditional Internet greeting cards are free, their publishing
company financed the site. As of February 1999 the company had about 140
employees, including artists, designers and Web site specialists.
The Schutz's hard work and creativity have paid off big time. On Monday
October 25th, 1999, Excite@Home, which offers high-speed Internet access
via cable TV, agreed to buy
Blue Mountain Arts Publishing Co.'s
Bluemountian.com for US$780 million in cash and stock. According to
Wired News, the acquisition of
Bluemountain.com could help boost the audience of Excite@Home's network
of sites into the ranks of the top five on the Internet, surpassing Walt
Disney Co.'s
Go.com.
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What did Jared mean when he said, "We don't consider any of the other
electronic greeting card companies to be competition. Our main
competition is going to be the other top 10 sites?"
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What benefits would
Bluemountain.com gain through a
merger with Excite@Home?
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How does
Bluemountain.com compare to one of
the commercial on-line services such as the homepage of your server?
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How can
Bluemountain.com use the site as part
of an integrated marketing communication tool?
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Now have some fun and send your friends and family some great cards
from
Bluemountain.com. Do you think they
will send you one in return or to some of their other friends (please
explain)?
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