Unit VI Essay Question

BBA 3331, Introduction to E-commerce 1

Course Learning Outcomes for Unit VI Upon completion of this unit, students should be able to:

4. Explain the four infrastructures influencing e-commerce strategy. 4.1 Identify basic digital commerce marketing and advertising strategies.

7. Analyze the impact of e-commerce on businesses.

7.1 Determine the challenges and benefits of online marketing communications.

Course/Unit Learning Outcomes

Learning Activity

4.1 Unit Lesson Chapter 6, pp. 335–386 Unit VI Essay

7.1 Unit Lesson Chapter 6, pp. 335–386 Unit VI Essay

Reading Assignment Chapter 6: E-commerce Marketing and Advertising Concepts, pp. 335–386 To access the following resource, click the link below. Carmichael, E. (2015, April 18). Jeff Bezos’s top 10 rules for success [Video file]. Retrieved from

https://www.youtube.com/watch?v=pAdjNuE6EZQ Click here to access a transcript of the video above.

Unit Lesson In the last unit, we overviewed security and the types of challenges e-commerce entrepreneurs must overcome to maintain their customers’ information and company trade secrets, but the challenges do not end there. An e-commerce enterprise must build a brand name and presence on the Internet as mentioned in Unit IV. Branding speaks to design, colors, logos, and graphics. There are many companies out there that are spending a lot of money on getting customers’ attention. A regular customer is exposed to about 4,000-plus ads per day (Marshall, 2015). From TV news, drive-time radio, TV, the Internet, and social media, Americans are exposed to an average of 294 ads per hour (see Table 1 for a breakdown). Other studies have speculated that exposure to ads ranges from 3,000 to 20,000 exposures per day. These numbers also include brands while visiting a grocery store (Johnson, 2014). This is a considerable increase in brand exposures compared to 2,000 messages a day just 30 years ago.

UNIT VI STUDY GUIDE

Business Concepts in E-commerce

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Source Average Number of Ads Per Hour

TV News 48

Drive-Time Radio 20

TV Other 30

Internet Surfing 16

Internet Applications 45

Social Media 5

Billboards 130

Total Ads Per Hour 294 Table 1: Total consumer ad exposure per hour (Sanders, 2017)

How does a company go about building its brand on the Internet? E-commerce businesses are still using the same approach that traditional advertisers used—getting the message to the target audience by any means possible. Branding cannot be seen and is not a logo or a fancy name. Branding can only be felt. Think of Apple products. Consumers experience a state of excitement or bliss when they get their Apple devices. A great brand mixes emotion, engagement, and expectation. E-commerce entrepreneurs know that building a powerful brand is hard and important work. How do we differentiate between a good brand and a bad brand? The answer is simple. Make your brand consumer-centric. Let’s not forget that the power of choice has shifted to the consumer. Always remember that the entrepreneur builds the business for the customer. There are many stories on the Internet that detail how e-commerce businesses have succeeded because of their branding, including Amazon (amazon.com). People get attached to brands with emotional stories, and Jeff Bezos certainly has an emotive story (see Required Reading for this unit). With Jeff’s story, Amazon became one of the most successful e-commerce sites in the world.

Core concepts

Developing a Brand Strategy When you have a cold, you may ask someone to pass you a Kleenex, not a tissue. In many countries, people refer to a vacuum cleaner as a Hoover. Think of the Nike logo (as shown in the image). There are no words or slogans to remind you of the company name; there is just a swoosh emblem, which reminds you of Nike. It is branding at its best. If you notice in the aforementioned examples, it is the brand name and not the product that sells. Most people buy products and use services because of an emotional connection to the brand. For e-commerce enterprises, building a strong customer base starts with a good branding strategy. A branding strategy defines how your customers perceive and see your product and overall business (Schreiber, 2015). A strong e-commerce brand name helps the enterprise stand out from the competition, regardless of the price of products and services.

CORE CONCEPTS

Branding cannot be seen and is not a logo or a fancy name. Branding can only be felt. Branding is an indicator that your e-commerce company is doing something right.

Sneaker showing Nike logo (Pexels, 2016)

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According to Schreiber (2015), building a brand strategy requires understanding the business, performing market research, and identifying a customer base while being able to determine the elements below.

1. Value proposition of the company: A value proposition is a unique selling point that distinguishes your product or service from the competition. In other words, what makes your product unique? It is the first step in a company’s branding strategy.

2. Brand quality: Many companies are built on quality. As an example, the Maytag commercials are branded on the quality and durability of their products. Quality is an effective way to build brand loyalty.

3. Dynamic branding rules: If a product or service is unique, branding should be around the uniqueness or quirkiness of the product. Taking risks in branding can benefit the enterprise.

4. Customer experience personalization: As noted in Unit II, personalization goes a long way in building your company’s brand name. Amazon is a great example of personalization. The site matches the user’s browsing and purchase history to provide products and pricing to align with the customer’s choices.

5. Giving back to customers: E-commerce enterprises can benefit from branding their business with the spirit of giving. As an example of giving, Amazon has their Smile program where every purchase supports the customer’s charity of choice or the American Red Cross. Sharing gratitude with customers positions your brand as thankful, and, at the same time, it retains customers for life.

Building a Brand How does a company build a brand and effectively execute its branding strategy? It is contextual to the e- commerce product or service, but a common approach is to let your potential customer base know that they need your product or service. In other words, use online methods (e.g., social media) to deliver the message. Another common trend is to use social media analytics to track potential customers’ historical online data for targeting purposes. Digital branding has surfaced to assist online businesses to leverage the different online channels to communicate a company’s brand. Digital marketing organizations or agencies specialize in digital branding. Digital marketing companies are always searching for new methods of analyzing collected data and how they can use it to generate new leads. Given the growth of Internet usage, the potential market has increased exponentially. As of 2017, there are roughly 3.8 billion Internet users, although the number is constantly changing (Internet Live Stats, n.d.-c). Although the rate of Internet user growth has slowed down from around 30% in the early days of the Internet to about 2%, the figure is still significant (Laudon & Traver, 2018). E- commerce enterprises can leverage this growth to find and identify their specific demographics for their products and services. As an example, Google analyzes an Internet user’s search criteria to target the user with relevant ads based on the user’s search phrases. Google, the major search engine used on the Internet, processes over 40,000 searches every second, about 3.5 billion searches per day, and over 1.2 trillion searches a year globally (Internet Live Stats, n.d.-b). Additionally, there are over 2 billion active Facebook users (Internet Live Stats, n.d.-a). Lastly, to get an indication of the extent of the online competition, as of Fall 2017, there were over 1.2 billion active websites on the Internet (Internet Live Stats, n.d.-d).

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Branding requires different forms of delivery. Digital media companies are always coming up with new and inventive ways of ad delivery to potential customers. The availability of the Internet offers new options for content delivery. Furthermore, with the pervasiveness of smartphones, the mobile user segment has become more accessible to marketers. Because of the ubiquity of the Internet, video has become a preferred form of advertisement. A clear example is Google’s YouTube, where 400 hours of video content is uploaded every minute, and 1 billion hours of video content are consumed every day worldwide (Statista, n.d.). The 15- to 30-second video ads attached to viral videos could generate an exponential rate of click-through hits. A published study concluded that the average citizen consumes about 5.5 hours of online video every day (“US Adults Spend,” 2015). Video advertisement is a lucrative business, and it seems to be working. Weiss (2016) noted that YouTube estimates to have ad revenues of $27-plus billion by the year 2020, which is on par with Facebook’s ad revenue of around $26 billion. E-commerce entrepreneurs can significantly benefit from video advertisement. Web analytics are used to specifically target potential customers on both Facebook and YouTube. An e-commerce company can precisely reach the audience who would be interested in the company’s products and services. Depending on the desired target demographic, a company can choose many modalities for advertisement (e.g., desktop or mobile users, the time of day, geographical region). Again, the idea is to reach the right audience with the right branding message through as many different channels as possible. If one strategy does not work, the company can try another until the proper audience responds to the message. Another approach worth mentioning is that Google Analytics coupled with Google AdWords. This service, for a fee, tracks user searches to narrow down interested potential customers by region and, depending on the data available, other user characteristics such as shopping habits and past purchase history. Conclusion The evolution of communication networks and, specifically, the Internet has enabled e-commerce entrepreneurs to have the same opportunities of advertisement as large companies. The global presence and scalability of digital media affords e-commerce businesses the ability to build brands and deliver their message efficiently and cost effectively around the world. Remember, successful e-commerce companies build great brands by creating close relationships with their customers and are open to investing time in cultivating that brand so that, at the end, the company’s message evolves to be more than a brand but, rather, is a part of the customer’s identity.

References Internet Live Stats. (n.d.-a). Facebook active users. Retrieved from

http://www.Internetlivestats.com/watch/facebook-users/ Internet Live Stats. (n.d.-b). Google search statistics. Retrieved from http://www.Internetlivestats.com/google-

search-statistics/ Internet Live Stats. (n.d.-c). Internet users. Retrieved from http://www.Internetlivestats.com/internet-users/

YouTube website layout (JuralMin, 2016)

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Internet Live Stats. (n.d.-d). Total number of websites. Retrieved from http://www.Internetlivestats.com/total- number-of-websites/

Johnson, S. (2014, September 29). New research sheds light on daily ad exposures [Blog post]. Retrieved

from http://sjinsights.net/2014/09/29/new-research-sheds-light-on-daily-ad-exposures/ JuralMin. (2016). Youtube-website-page-layout-template-internet-web [Image]. Retrieved from

https://pixabay.com/en/youtube-website-page-layout-1684601/ Laudon, K. C., & Traver, C. G. (2018). E-Commerce 2017: Business, technology, society (13th ed.). Boston,

MA: Pearson Education. Marshall, R. (2015, September 10). How many ads do you see in one day? Retrieved from

https://www.redcrowmarketing.com/2015/09/10/many-ads-see-one-day/ Pexels. (2016). Feet-footwear-Nike-shoes-sneakers-white [Photograph]. Retrieved from

https://pixabay.com/en/feet-footwear-nike-shoes-sneakers-1840619/ Sanders, B. (2017). Do we really see 4,000 ads a day? Retrieved from

https://www.bizjournals.com/bizjournals/how-to/marketing/2017/09/do-we-really-see-4-000-ads-a- day.html

Schreiber, T. (2015, January 15). 5 brand strategies to uniquely position your ecommerce business above the

competition [Blog post]. Retrieved from https://www.shopify.com/blog/16692816-5-brand-strategies- to-uniquely-position-your-ecommerce-business-above-the-competition

Statista. (n.d.). YouTube - Statistics & facts. Retrieved from https://www.statista.com/topics/2019/youtube/ US adults spend 5.5 hours with video content each day. (2015). Retrieved from

http://www.emarketer.com/Article/US-Adults-Spend-55-Hours-with-Video-Content-Each-Day/1012362 Weiss, G. (2016). Analyst: YouTube estimated to have revenues of $27 billion in 2020. Retrieved from

http://www.tubefilter.com/2016/04/15/youtube-estimated-revenues-27-billion-2020/