E COMMERCE

MODULE-III
INTRAORGANIZATIONAL ELECTRONIC COMMERCE

Internal commerce is the application of electronic commerce to processes or operations.

Specifically, we define internal commerce as using methods and pertinent technologies for
supporting internal business processes between individuals, departments, and collaborating
organizations.

It is of two types

1. Private commerce

2. Public commerce

In a general sense, the term Information System (IS) refers to a system of people, data
records and activities that process the data and information in an organization, and it
includes the organization's manual and automated processes.

In a narrow sense, the term information system (or computer-based information system)
refers to the specific application software that is used to store data records in a computer
system and automates some of the information-processing activities of the organization.

These forces are commanding a rethinking of the importance of the networks-computers

and communications and their role in the better utilization of corporate information in
operational and analytical decision making.

Global suppliers

public electronic commerce

The information
banks superhighway

firewall
Accounting engineering
and finance
Corporate secure
internet Customer service
Marketing & advertising
production

sales R&D management

public electronic commerce

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E COMMERCE

Information architecture (IA) is the art of expressing a model or concept of information used in
activities that require explicit details of complex systems.

Among these activities are library systems, content Management Systems, web development, user
interactions, data base development, programming, technical writing, enterprise architecture, and
critical system software design.

Most definitions have common qualities: a structural design of shared environments, methods of
organizing and labelling websites, intranets, and online communities, and ways of bringing the
principles of design and architecture to the digital landscape

What Is Cross-functional Management?

Cross-functional management (CFM) manages business processes across the traditional
boundaries of the functional areas.

CFM relates to coordinating and sneering the activities of different units for realizing the
super ordinate cross-functional goals and policy deployment.

It is concerned with building a better system for achieving for achieving such
cross-functional goals as innovation, quality, cost, and delivery.

MACROFORCES AND INTERNAL COMMERCE

Macro forces and internal commerce highlights the changes taking place in organization
structure and explores how technology and other economic forces are molding
arrangements within firms.

The common focus in most of these modern management particles is the use of technology
for improving efficiency and eliminating wasteful tasks in business operations.

Efficient operations of the macro forces and internal commerce are:

Total quality management

Business process improvement or business process reengineering.

The words improvement and reengineering are often used interchangeably, creating
confusion.

Although the goal of these two are same I.e. productivity gains, cost savings, quality and
service improvements, cycle-time reduction.

One main reason for reengineering is to better complete in global markets.

Global Markets: Definition and Characteristics

Definition:

The Oxford University Press defines global marketing as “marketing” on a worldwide scale
reconciling or taking commercial advantage of global operational differences, similarities and
opportunities in order to meet global objectives.”

Global marketing:

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When a company becomes a global marketer, it views the world as one market and creates
products that will only require weeks to fit into any regional marketplace. Marketing decisions are
made by consulting with marketers in all the countries that will be affected. The goal is to sell the
same thing the same way everywhere.

The Four elements of global marketing of marketing:

Product:
A global company is one that can create a single product and only have to tweak elements for
different markets. For example coca-cola uses two formulas (one with sugar, one with corn syrup)
for all markets.
Price:

Price will always vary from market to market. Price is affected by many variables: cost of product
development (produced locally or imported), cost of ingredients, cost of delivery (transportation,
tariffs, etc.), and much more.

Placement:

How the product is distributed is also a country-by-country decision influenced by how the
competition is being offered to the target market. Using Coca-Cola as an example again, not all
cultures use vending machines.

Promotion:

After product research, development and creation, promotion is generally the largest line item in a
global company’s marketing budget. At this stage of a company’s development, integrated
marketing is the goal.

The global corporation seeks to reduce costs, minimize redundancies in personnel and work,
maximize speed of implementation, and to speak with one voice.

Global marketing Advantages and Disadvantages

Advantages:

 Economies of scale in production and distribution Power and scope.

 Consistency in brand image.
 Ability to leverage good ideas quickly and efficiently.
 Uniformity of marketing practices.
 Helps to establish relationships outside of the "political arena“
Disadvantages:

 Differences in consumer needs, wants, and usage patterns for products.

 Differences in consumer response to marketing mix elements.
 Differences in brand and product development and the competitive environment.
 Differences in administrative procedures and Differences in product placement.

Marketing Research:

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It involves the identification, collection, analysis, and dissemination of information. Each phase of
this process is important.

Finally, the findings, implications and recommendations are provided in a format that allows the
information to be used for management decision making and to be acted upon directly.

It should be emphasized that marketing research is conducted to assist management in decision

making and is not: a means or an end in itself.

Marketing Research Characteristics:

First, marketing research is systematic. Thus systematic planning is required at all the stages of the
marketing research process.

The procedures followed at each stage are methodologically sound, well documented, and, as
much as possible, planned in advance.

Marketing research uses the scientific method in that data are collected and analyzed to test prior
notions or hypotheses.

Marketing research is objective. It attempts to provide accurate information that reflects a true
state of affairs. It should be conducted impartially.

An organizational structure is a mostly hierarchical concept of subordination of entities that

collaborate and contribute to serve one common aim.

Organizations are a number of clustered entities. The structure of an organization is usually set up
in one of a variety of styles, dependent on their objectives and ambience.

Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities.

Common success criteria for organizational structures are:

-Decentralized reporting

-Flat hierarchy

-High transient speed

-High transparency

Vertical Organization:

Hierarchically structured organization where all management activities are controlled by a

centralized management staff.

Vertical organization has two problems:

First, it creates boundaries that discourage employees in different departments from

interacting with one another.

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Second, departmental goals are typically set in a way that could cause friction among departments.

A vertical market is a group of similar businesses and customers which engage in trade based on
specific and specialized needs.

An example of this sort of market is the market for point-of-sale terminals, which are often
designed specifically for similar customers and are not available for purchase to the general public.

A vertical market is a market which meets the needs of a particular industry: for example, a piece
of equipment used only by semiconductor manufacturers. It is also known as a niche market.

Vertical market software is software aimed at addressing the needs of any given business within a
discernible vertical market.

Horizontal organization:

A horizontal market is a market which meets a given need of a wide variety of industries, rather
than a specific one.

Examples

In technology, horizontal markets consist of customers that share a common need that exists in
many or all industries.

For example, customers that need to purchase computer security services or software exist in such
varied industries as finance, healthcare, government, etc.

Horizontal marketing participants often attempt to meet enough of the different needs of vertical
markets to gain a presence in the vertical market.

An example could be software that manages services in hotels - amenities solutions.

Vertical organization Comparison with horizontal organization:

A vertical market is a market which meets the needs of a particular industry: for example, a piece
of equipment used only by semiconductor manufacturers.

A horizontal market is a market which meets a given need of a wide variety of industries, rather
than a specific one: for example, word processing software.

New forms of organizational structure:

Two new forms of organizational structures are:

1. Prominent-virtual organizational structure:

In recent years, virtual enterprises have gained much attention as more and more firms from
computer chip manufacturing to aircraft manufacturing.

Virtual organization is defined as being closely coupled upstream with its suppliers and
downstream with its customers.

Virtual organization has been variously referred to as network organizations, organic networks,
hybrid networks and value-adding partnership.

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2. Brokerages organizational structure:

The main goal of electronic brokerages organization is to increase the efficiency of the internal
marketplace.

Internal markets are beginning to appear not only in corporations but even in non business
institutions like the government.

They are created inside organizations, allowing firms, suppliers, government agencies to meet the
new challenges of the fast-changing environment.

Types of electronic brokerages in internal markets:

customer
customer internal markets
customer
customer Order
management Design
& financial brokerages
customer order accounting

Manufacturing
planning and
shipping scheduling
delivery brokerages

Logistics &
Production
SCM
brokerages
brokerages

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WORK FLOW AUTOMATION AND COORDINATION

In last decade, a vision of speeding up or automating routine business tasks has come to be known
as “work-flow automation.

This vision has its root in the invention of the assembly line and the application of Taylor's
scientific management principles.

Today, a similar trend is emerging in the automation of knowledge-based business processes

called work-flow automation.

The goal of work-flow automation is to offer more timely, cost-effective,and integrated ways to
make decisions.

Typically, work-flows are decomposed into steps or tasks, which are task oriented. Work-flows
can be simple or complex.

Simple work-flows typically involve one or two steps or tasks.

Another way of looking at work-flow is to determine the amount of cross-functional activity.

In other words, companies must adopt an integrated process view of all the business elements

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Organizational integration is extremely complex and typically involves three steps .

Improving existing processes by utilizing technology where appropriate.

Integrate across the business function offer identifying the information needs for each process.

Integrating business functions, application program interface, and database across departments and
groups.

Complex work-flows involve several other work-flows, some of which Executes simultaneously.

Work-Flow Coordination:

The key element of market-driven business is the coordination of tasks and other resources throughout
the company to create value for customer.

To this end, effective companies have developed horizontal structures around small multifunctional
teams that can move more quickly and easily than businesses that use the traditional
function-by-function, sequential approach.

Some of the simplest work-flow coordination tools are electronic forms routing applications such as
lotus notes.

As the number of parties in the work flow increases, good coordination becomes crucial.

Work-flow related technologies:

Technology must be the “engine” for driving the ini tiatives to streamline and transform
business interactions.

Large organizations are realizing that they have a middle-management offer all the drawn
sizing and reorganization of fast few years.

Pressures for more comprehensive work-flow systems are building rapidly.

Work-flow system are limited to factory like work process.

Middleware is maturing:

By this users or third-party providers need to learn how to develop work-flow applications
within middleware environment.

Organizational memory is becoming practical:

The new tools for memory becoming advancing towards what can be called the “corporate
digital library”.

CUSTOMIZATION AND INTERNAL COMMERCE

Technology is transforming consumer choices, which in turn transform the dynamics of the
marketplace and organizations themselves.

Technology embodies adaptability, programmability, flexibility, and other qualities so

essential for customization.

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Customization is explained as :

Logistics &
Production
SCM
brokerages
brokerages

Mass customization, in marketing, manufacturing, and management, is the use of flexible

computer-aided manufacturing systems to produce custom output.

Those systems combine the low unit costs of mass production processes with the flexibility of
individual customization

"Mass Customization" is the new frontier in business competition for both manufacturing and
service industries.

Implementation:

Many implementations of mass customization are operational today, such as

software-based product configurations which make it possible to add and/or change
functionalities of a core product or to build fully custom enclosures from scratch.

Companies which have succeeded with mass-customization business models tend to supply
purely electronic products.

However, these are not true "mass customizers" in the original sense, since they do not
offer an alternative to mass production of material goods.

Four types of mass customization:

Collaborative customization - Firms talk to individual customers to determine the precise
product offering that best serves the customer's needs.

Adaptive customization - Firms produce a standardized product, but this product is

customizable in the hands of the end-user.
Transparent customization - Firms provide individual customers with unique products,
without explicitly telling them that the products are customized.

Cosmetic customization - Firms produce a standardized physical product, but market it to

different customers in unique ways.

Most of the written materials and thinking about customization has neglected technology.

It has been about management and design of work processes.

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 Today technology is so pervasive that it is virtually impossible to make clear distributions
among management, design of work, and technology in almost all forms of business and
industry.

Technology has moved into products, the workplace, and the market with astonishing
speed and thoroughness.

Mass customization, not mass production.

Today the walls that separated functions in manufacturing and service industries alike are
beginning to fall like dominoes.

Customization need not be used only in the production of cars, planes, and other traditional
products.

It can also be used for textiles and clothing.

Technology is also enabling new forms of customized production in apparel industry.

What is Supply chain?

Consists of all parties involved, directly or indirectly in fulfilling a customer request.

SUPPLY CHAIN MANAGEMENT (SCM)

Supply chain management (SCM) is the management of a network of interconnected
business involved in the ultimate provision of product and service packages required by
end customers.

Supply Chain Management spans all movement and storage of raw materials,
work-in-process inventory, and finished goods from point-of-origin to
point-of-consumption.

Supply Chain Management can also refer to supply chain management software which is
tools or modules used in executing supply chain transactions, managing supplier
relationships and controlling associated business processes.

The Management Components of SCM

The literature on business process re-engineering, buyer-supplier relationships, and SCM
suggests various possible components that must receive managerial attention when
managing supply relationships.

Lambert and Cooper (2000) identified the following components which are:

-Planning and control

-Work structure

-Organization structure

-Product flow facility structure

-Information flow facility structure

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-Management methods

-Power and leadership structure

-Risk and reward structure

-Culture and attitude

Reverse Supply Chain Reverse logistics is the process of planning, implementing and
controlling the efficient, effective inbound flow and storage of secondary goods and related
information opposite to the traditional supply chain direction for the purpose of recovering

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 THE CORPORATE DIGITAL LIBRARY

DIMENSIONS OF THE INTERNAL ELECTRONIC COMMERCE SYSTEM

MARKETING A BUSINESS CASE FOR A DOCUMENT LIBRARY

TYPES OF DIGITAL DOCUMENTS

ISSUES BEHIND DOCUMENT INFRASTRUCTURE

CORPORATE DATA WAREHOUSES

DIMENSIONS OF THE INTERNAL ELECTRONIC COMMERCE SYSTEM

These are the following dimensions for internal electronic commerce organization:

User modeling and interaction:

User models are interposing between the user interface and information sources to filter the
available information according to the needs of the task and user.

It associates with each task or each person is a user agent or set of user agents.
Tasks of user agents are:

- Maintaining of model & current state of the task

- Determining of information for each step of the task

- Appropriate combining of information with user.

Addressing the issue of displaying information to the user.

Considering of wide range of display devices.

Determining the most appropriate methods for display.

In this user agent tackle two issues:

1. Generation of documents

2. Presentation of documents.

Effective utilization of information

Organization decision making cannot be supported with a single tool, a set technology
tools are required for effective utilization of information.

Organization needs online –transactions for design, production, logistics and profitability.

Types of On-line transaction:

Two types of on-line transaction are :

1. On-line transaction processing (OLTP).

2. On-line analytical processing (OLAP).

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 OLTP involves the detailed, day-to-day procedures such as order entry & order
management.

OLAP refers to the activity involved in searching the wealth of data residing throughout an
enterprise for trends, opportunities.

Navigating the info sphere

It involves two elated activities:

- Information search, discovery and retrieval.

- Presentation of retrieved Information.

This view is changing in three ways.

1. Characterization of accessible information

2. Search concepts from this information.

3. Development of information filter

It is used for easy understanding of information.

Organization must predefine rules for visualization.

This process will highlight the trouble spots and area of opportunities.
Presentation increases the fallowing tasks of information :

1. Accessing ability of information.

2. Collecting of information.

3. Queue of information.

4. Organizing of information.

Digital Library Layer

Many organizations manage their information through corporate library, if it provide the
architecture to model, map, integrate & information in digital documents is called digital library.

It provides information structures by this organizations &workers access vast amount of data
encoded in multimedia formats.

Digital libraries are of two types:

Electronic document-based digital libraries.

Data-base oriented warehouses.

Document digital library:

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The term document is used to denote all non data records I.e. books, reports, e-files, videos and
audios.

Digital library is simply a distributed network of interlinked information.

Data warehouses:

It is a central repository for combining and storing vast amount of data from diff sources. Sources
are main frame database, lint-server database, text reports….etc.

MAKING A BUSINESS CASE FOR DOCUMENT LIBRARY

This section highlights the role that documents play in today’s organization and how business can
better meet their customers’ needs by improving document management support.

Logical cases
Customers & contracts Government
&stake-holders regulations

R&D
Sales & engineering
marketing Corporate
digital library Human
resources
Service and
supports
Manufacturing
Documentation, and
manuals, production
records Accounting
and finance

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Digital Document Management Issues and Concerns

Ad hoc documents: Letters, finance reports, manuals are called ad hoc documents, which
are prepared by managers &professionals.

Process-specific documents: invoices and purchase orders which are created, constructed
and distributed by support personnel. these are form based.

Knowledge-oriented documents: these are technical documents, catalogs of product

information, and design documents.

Types of Digital Documents

Four types of digital documents are:

Structuring applications around a document interface

Structuring interlinked textual & multimedia Documents.

Structuring and encoding information using document-encoding standards Scanning

documents for storage and faxing.

Document Imaging

Document imaging emulates microfiche and microfilm.

An imaging system passes appear document through a scanner that renders it digital
and then stores the digital data as a bit-mapped image of document.

The problem with the imaging approach is that the output contains only images

not text. The following imaging standards are prominently used:

TIFF (tag image file format): format for interchange of bit-mapped images.
ITU-TSS (international telecommunication union-telecommunication
standardization sector) Group IV T.6 facsimile: this standard is used for
compression and exchange of bit-mapped files.

Structured Documents

A structured document provides clear description of document content.

Structured documents apply data-base structuring capabilities to individual

documents and document collections.

Standard for structured documents are:

SGML (Standard Generalization Markup Language):

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 It is an ISO standard for interchange & multi formatting description of text
document in terms of logical structure.

ODA (Office Document Architecture):

It is an ANSI & ISO standard for interchange of compound office documents.ODA

specifies both content & format.
CDA (Compound Document Architecture):

It defines set of rules for content and format .It defines services for compound
documents.

RTF (Rich –Text Format):

It is developed by Microsoft for interchanging of desk top documents.

Hyper Text Documents

Hyper text is a way of making document-based information more

mobile. Reasons for mobility of information are:

Information in enterprises is seldom located on server but is distributed throughout

the organization.

Accessing & retrieving large monolithic document is time

consuming. Reuse of document for composing new documents
is difficult task.

In this relationships between documents can be represented through hypermedia

links i.e. hyperlinks.

Standards of Hypermedia:

HyTime: it adds time based relationships like synchronization, it is extension of SGML.

HTML: developed by WWW to support distributed hypermedia.

MHEG(multimedia /hypermedia encoding/exporting Group):standard for presenting

objects in multimedia

Active documents

Active document represents what is known as document oriented

computing. Active document provide an interactive interface between
documents.

Active documents are especially powerful because they combine composition of

information with the distributed nature of information.
Ex: spreadsheet, word-processing..etc

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Issues behind Document Infrastructure

Document infrastructure addressed these questions:

What is the proper architecture for the corporate digital

library? What are appropriate model?

What protocols required?

What are the best human interfaces?

How does one represent and manipulate the information processing activities
occurred in the digital library?

Document Constituencies:

The emerging document processing & management strategies must address these
constituencies.

They need system to access distributed repositories& to manipulate them in a

number of ways.

Document-oriented processes

Components of Document-oriented processes are:

Document creation

Document media conversation(it accept multiple forms of

input) Document production and distribution

Document storage and retrieval

Document-based framework flows:

The following Four activities make up the document-based framework flow:

Document modeling: it defines the structure and processes the document.

Transformation: creates modules for capturing and validating.

Synthesizing: create value-added information from the combination of two or more

documents.

Business modeling: defines the structure and processes of the business environment.

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 Corporate Data Warehouses
Architecture of the data warehouse is as follows:

Data migration Corporate data Data replicated

from operational warehouse from operational
database database

Query monitors
search and
retrieval
clients clients

Middleware for
data access

E-COMMERCE 27

Data warehouse is used store information of the organization.

Data warehouse is needed as enterprise wide to increase data in volume and complexity.

Characteristics of data warehouse are:

An information-based approach to decision making.

Involvement in highly competitive & rapidly changing

markets. Data stored in many systems and represented
differently.

Functions performed by data warehouse are:

Allow existing transactions and legacy systems to continue in

operation. Consolidates data from various transaction systems into
a coherent set.

Allows analysis of virtual information about current operations of decision support.

Types of data warehouses

There are four types of data warehouses:

Physical data warehouse: It gathers corporate data along with the schemas and the
processing logics.

Logical data warehouse: It contains all the Meta data and business rules.
Data library: This is sub set of the enterprise wide data warehouse.

Decision support system (DSS): These are the applications but make use of data
warehouse.

Managing data

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To manage data fallowing steps are needed:
Translation
Summarizing
Packaging
Distributing

Garbage collection

Advantages of data warehouse:

Timely and accurate information become an integral part of the decision-making process.
User can manage and access large volumes of in one cohesive framework.

Data warehousing has wide spread applicability.

It provides point-of-sales reports instead of end-of –day reports.

Advertising and Marketing on the Internet

The new age of information-based marketing.

Advertising on the internet.

Marketing research.

The New Age of Information-Based Marketing

The new age of information-based marketing differentiate interactive marketing into four
areas:

Retailers vs manufacturers
Target and micromarketing

Small business vs large business

Regulatory and legal implications of cyberspace marketing.

Retailers’ vs Manufacturers:

The role of Retailers and manufacturers are fast reversing in electronic commerce.

Retailer’s vs Manufacturers have the fallowing methods:

Market research and customer prospecting.

Market presence method

Product or services building method

Information-based products pricing and priority method.

Target and Micromarketing:

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 Electronic commerce, technology has put target and micromarketing within the
research of small business.

It gives information to the micro marketers not only about its own business but also
consumer’s information.

Consumer target is two-way flow of communication between seller and

buyer. Direct mail and telemarketing are two fast growing ways to micro
market.

Technology is an essential tool in micromarketing.

There are two main types of micromarketing:

Direct-relationship micromarketing: is aimed at stimulating sales at retail

establishments through direct contacts with consumers.

Direct-order micromarketing: is focused on selling products directly to consumers in

their homes or businesses.

Small vs large: Thread avoid vs goliath syndrome

The key distinction between small and large business remains access to national and
international marketing for advertising purposes.

Today, exorbitant advertising cost represents the barrier to reaching the customer
effectively. Internet and other networks plays good role in advertising.

The major difference between the internet and other I-way advertising media are
ownership and membership fees.

Due to the empowering effect of internet-facilitated advertising however, the

balance of power between large and small companies may change in future.

Advertising on the Internet

The notion of advertising and marketing became inevitable after 1991 when the
internet was opened for commercial traffic.

There are very good reasons for embracing the inevitability of growing of
commercial advertising on the internet:

- Advertising conveys much needed information

- Advertising generates significant revenue

Key components for making internet advertising effectively are:

Advertising process
Core content

Supporting content

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Market and consumer research
Repeat customers

On-line advertising paradigms:

Two different advertising paradigms are emerging in the on-line world, they are:

1. Active or push-based advertising

2. Passive or pull-based advertising

Active or push-based advertising:

Active or push-based advertising is of two types they are :

The broadcast model:

Broadcasting message provides a means for reaching a great number of people in short
period of time.

It mimics the traditional model, in which customer id exposed to the advertisement during
TV programming.
It basically uses direct mail, spot television, cable television.

Text-based broadcast messages also used in advertising in Usenet news groups.

Disadvantage of the direct mail include relatively high cost per contact.
Junk mail is the just poorly targeted direct mail.

It is most intrusive of all forms of internet advertising, because it is easily implemented

using electronic mail.

Junk mail creates unwanted expense as well as an annoyance.

Passive or pull-based advertising

- Pull-based advertising provide a feedback loop, company and customers.

On-line pull-based advertising includes the following:

Billboards

Catalogs or yellow pages

directories: endorsements

Based on the above three we have the fallowing models:

The billboards or www model:

Billboard advertising is often used to remind the customer of the advertising messages
communicated through other media.

The advantage of this model is no customer charges.

In this message must be simple, direct.

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Catalog and yellow pages directory model:

Traditionally, the most visible directory service of advertising is the yellow pages.

Catalog model is the least intrusive model but requires active search on the part of customer.

Yellow pages are low in cost in terms of production and placement.

Disadvantage of yellow page include lack of timeliness and little creative flexibility.

Customer endorsement model:

In endorsements people tell their experiences with products and

services. These are in question and answer format.

Marketing Research

Market research is extremely important for companies in terms of how they allocate their
advertising dollars in sales promotions, how they introduce new products, how they target
new markets.

Broadly marketing research is divided into three faces:

Data collection

Data organization

Data analysis and sense making

Data collection:

Markets mainly relied on source database for understanding consumer behavior.

Source data base mainly comprise of numeric information.

Delivery of source database services fallows two main patterns.

Data collect and collate data, making it available by data base producers.

Data collect and collate data, making it available by central hosts like CompuServe,
American online..etc.

Data organization:

Everyone is collecting data from electronic commerce, but very few are organizing it
effectively for developing a marketing strategy.

The key abilities in their environment are:

Leverage its established database into customized offerings by audience and

markets. Leverage its established database in terms of horizontal growth.

Data analysis and sense making:

The ability to link database to analytic tools like econometric programs and forecasting

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models is called data analysis.Market research is undergoing major changes; the next
generation of source database will definitely include multimedia information.

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