Chapter 10. Internet Commerce
Table of Contents
Objectives .............................................................................................................................................. 1
10.1 Advertising ............................................................................................................................... 1
10.1.1 The DAGMAR Strategy ................................................................................................ 1
10.1.2 The Advertising Plan ..................................................................................................... 3
10.1.3 Advantages to Advertising on the Internet .................................................................... 4
10.1.4 Disadvantages to Advertising on the Internet ................................................................ 5
10.1.5 Advertising to support your site..................................................................................... 5
10.1.6 Other ways to find 'the' website ..................................................................................... 6
10.1.7 Getting Visitors .............................................................................................................. 7
10.1.8 Advertising Review ....................................................................................................... 7
10.2 Selling ...................................................................................................................................... 8
10.2.1 Everyone's doing it ........................................................................................................ 8
10.2.2 Selling is Similar to Advertising .................................................................................... 9
10.2.3 Wholesalers and Retailers .............................................................................................. 9
10.2.4 Security and Selling ....................................................................................................... 9
10.2.5 Usability for Internet commerce sites ......................................................................... 10
10.2.6 The Virtual Shopping Trolley ...................................................................................... 11
10.2.7 Delivery ....................................................................................................................... 11
10.2.8 Selling Review ............................................................................................................. 11
10.3 Review Questions .................................................................................................................. 12
10.4 Discussions and Answers ....................................................................................................... 12
10.4.1 Discussion of Exercise 1 .............................................................................................. 13
10.4.2 Discussion of Exercise 2 .............................................................................................. 13
10.4.3 Discussion of Exercise 3 .............................................................................................. 14
10.4.4 Review Question 1 ....................................................................................................... 14
10.4.5 Review Question 2 ....................................................................................................... 14
10.4.6 Review Question 3 ....................................................................................................... 14
10.4.7 Review Question 4 ...................................................................................................... 14
10.4.8 Review Question 5 ....................................................................................................... 15
10.4.9 Review Question 6 ....................................................................................................... 15
10.4.10 Review Question 7 ..................................................................................................... 15
10.4.11 Review Question 8 ..................................................................................................... 15
10.4.12 Review Question 9 ..................................................................................................... 16
10.4.13 Review Question 10 ................................................................................................... 16
Objectives
At the end of this chapter you will understand:
• How to advertise your website; and
• How to sell goods through an ecommerce website.
10.1 Advertising
10.1.1 The DAGMAR Strategy
Advertising is a subsection of marketing, and marketing is a company's ability to profitably manage its customer
base.
, Internet Commerce
The advent of the Internet is causing the redevelopment of marketing strategies in all business. This unit covers
an existing advertising strategy: DAGMAR — Defining Advertising Goals for Measured Advertising Results.
This strategy attempts to move a customer from a state 'unawareness' concerning the product or service, to a state
of 'action', in which it is hoped that the customer will buy the product. The four stages of DAGMAR are
illustrated below:
Awareness
A major marketing concerning facing the Internet is attracting customers to a website. In traditional media, such
as the press and television, an audience is researched and targeted accordingly. Targeting via the Internet is
difficult, but alternatives exist. For example, raising a site's search profile on the popular search engines such as
Yahoo and Google, or by providing links to your site from Web pages most likely to be visited regularly by your
target audience.
Comprehension
Once the target audience has been attracted, the website must explain, in a concise way, wha the
characteristics differentiating its featured product from that of its competitors are. Pictures might be used, as well
as a list of its technical features and benefits.
Conviction
Once the target audience has been attracted, the website must explain, in a concise way, what the characteristics
differentiating its featured product from that of its competitors are. Pictures might be used, as well as a list of its
technical features and benefits.
Action
Making claims about the product is, however, not sufficient. The audience must also be convinced that the claims
are genuine. For instance, a lifetime guarantee could be given, or the claims could be backed with specific
2
, Internet Commerce
evidence.
The action stage does not necessarily involve a purchase. However, the customer may still want further information
concerning the product, or even demonstration (this is very popular with software). This is often where failure
occurs, due to difficulties in communication via the Internet.
To Do
Find out more about cybermarketing in your textbooks and on the Internet.
10.1.2 The Advertising Plan
What does the customer need?
You need to ensure that the website has sufficient information for your potential customer to make an informed
decision as to whether or not your advertised product or service is of interest. Over and above supplying
information, the website should also persuade the customer that the product or company is indeed of interest.
How large and complex does your website need to be?
Much effort and money can be invested in developing a large and complex website to advertise any particular
product. However, if the product is not profitable, then those resources have been wasted. Alternatively, very
little can be invested in developing a simple website. This runs the risk of offering smaller returns than a larger
website would offer. Clearly, the cost for developing an appropriate website needs to be decided.
Is your product conducive to the Web?
Software sells well on the Web, apples and oranges less so. However, the Web has a great deal of flexibility: it
might be difficult to sell films on the Web, but a site listing theatre performances for the local theatre can be very
useful, and might lead to more business.
Do you want to hire someone?
Various experts sell their Web expertise, and they may be able to help with the design, implementation or
maintenance of a website. Do you want to hire them, or do you want to develop the site yourself?
While a simple website requires little expertise, hiring an external company or independent contractor is probably
beneficial for any medium-sized website. A large website may require employing new staff. In this case, all the
work may be kept internal, or another company could be hired.
To Do
Go to the Interactive Advertising Bureau website [http://www.iab.net]. Here you will find a variety of interesting
articles on Internet advertising.
What information should appear in an advert?
There are many levels of advertising. A small company's Web site is likely less sophisticated and, for that matter,
smaller than a large company's (such as General Motor's Web site — the URL is included at the bottom of the
Contents section).
Different forms of information require different levels of sophistication in order to display it. Below is a list of
information that could be provided on a website, ordered from 'least sophisticated' to 'most sophisticated'.
Contact information
Contact information should be provided on any site. Supplying contact information allows a visitor to easily obtain
more details concerning a product or service, if they so wish. Contact information should include the address of the
company, the telephone number, and the name of the person to contact if appropriate. It may also include an
email address.
Product descriptions
3
Table of Contents
Objectives .............................................................................................................................................. 1
10.1 Advertising ............................................................................................................................... 1
10.1.1 The DAGMAR Strategy ................................................................................................ 1
10.1.2 The Advertising Plan ..................................................................................................... 3
10.1.3 Advantages to Advertising on the Internet .................................................................... 4
10.1.4 Disadvantages to Advertising on the Internet ................................................................ 5
10.1.5 Advertising to support your site..................................................................................... 5
10.1.6 Other ways to find 'the' website ..................................................................................... 6
10.1.7 Getting Visitors .............................................................................................................. 7
10.1.8 Advertising Review ....................................................................................................... 7
10.2 Selling ...................................................................................................................................... 8
10.2.1 Everyone's doing it ........................................................................................................ 8
10.2.2 Selling is Similar to Advertising .................................................................................... 9
10.2.3 Wholesalers and Retailers .............................................................................................. 9
10.2.4 Security and Selling ....................................................................................................... 9
10.2.5 Usability for Internet commerce sites ......................................................................... 10
10.2.6 The Virtual Shopping Trolley ...................................................................................... 11
10.2.7 Delivery ....................................................................................................................... 11
10.2.8 Selling Review ............................................................................................................. 11
10.3 Review Questions .................................................................................................................. 12
10.4 Discussions and Answers ....................................................................................................... 12
10.4.1 Discussion of Exercise 1 .............................................................................................. 13
10.4.2 Discussion of Exercise 2 .............................................................................................. 13
10.4.3 Discussion of Exercise 3 .............................................................................................. 14
10.4.4 Review Question 1 ....................................................................................................... 14
10.4.5 Review Question 2 ....................................................................................................... 14
10.4.6 Review Question 3 ....................................................................................................... 14
10.4.7 Review Question 4 ...................................................................................................... 14
10.4.8 Review Question 5 ....................................................................................................... 15
10.4.9 Review Question 6 ....................................................................................................... 15
10.4.10 Review Question 7 ..................................................................................................... 15
10.4.11 Review Question 8 ..................................................................................................... 15
10.4.12 Review Question 9 ..................................................................................................... 16
10.4.13 Review Question 10 ................................................................................................... 16
Objectives
At the end of this chapter you will understand:
• How to advertise your website; and
• How to sell goods through an ecommerce website.
10.1 Advertising
10.1.1 The DAGMAR Strategy
Advertising is a subsection of marketing, and marketing is a company's ability to profitably manage its customer
base.
, Internet Commerce
The advent of the Internet is causing the redevelopment of marketing strategies in all business. This unit covers
an existing advertising strategy: DAGMAR — Defining Advertising Goals for Measured Advertising Results.
This strategy attempts to move a customer from a state 'unawareness' concerning the product or service, to a state
of 'action', in which it is hoped that the customer will buy the product. The four stages of DAGMAR are
illustrated below:
Awareness
A major marketing concerning facing the Internet is attracting customers to a website. In traditional media, such
as the press and television, an audience is researched and targeted accordingly. Targeting via the Internet is
difficult, but alternatives exist. For example, raising a site's search profile on the popular search engines such as
Yahoo and Google, or by providing links to your site from Web pages most likely to be visited regularly by your
target audience.
Comprehension
Once the target audience has been attracted, the website must explain, in a concise way, wha the
characteristics differentiating its featured product from that of its competitors are. Pictures might be used, as well
as a list of its technical features and benefits.
Conviction
Once the target audience has been attracted, the website must explain, in a concise way, what the characteristics
differentiating its featured product from that of its competitors are. Pictures might be used, as well as a list of its
technical features and benefits.
Action
Making claims about the product is, however, not sufficient. The audience must also be convinced that the claims
are genuine. For instance, a lifetime guarantee could be given, or the claims could be backed with specific
2
, Internet Commerce
evidence.
The action stage does not necessarily involve a purchase. However, the customer may still want further information
concerning the product, or even demonstration (this is very popular with software). This is often where failure
occurs, due to difficulties in communication via the Internet.
To Do
Find out more about cybermarketing in your textbooks and on the Internet.
10.1.2 The Advertising Plan
What does the customer need?
You need to ensure that the website has sufficient information for your potential customer to make an informed
decision as to whether or not your advertised product or service is of interest. Over and above supplying
information, the website should also persuade the customer that the product or company is indeed of interest.
How large and complex does your website need to be?
Much effort and money can be invested in developing a large and complex website to advertise any particular
product. However, if the product is not profitable, then those resources have been wasted. Alternatively, very
little can be invested in developing a simple website. This runs the risk of offering smaller returns than a larger
website would offer. Clearly, the cost for developing an appropriate website needs to be decided.
Is your product conducive to the Web?
Software sells well on the Web, apples and oranges less so. However, the Web has a great deal of flexibility: it
might be difficult to sell films on the Web, but a site listing theatre performances for the local theatre can be very
useful, and might lead to more business.
Do you want to hire someone?
Various experts sell their Web expertise, and they may be able to help with the design, implementation or
maintenance of a website. Do you want to hire them, or do you want to develop the site yourself?
While a simple website requires little expertise, hiring an external company or independent contractor is probably
beneficial for any medium-sized website. A large website may require employing new staff. In this case, all the
work may be kept internal, or another company could be hired.
To Do
Go to the Interactive Advertising Bureau website [http://www.iab.net]. Here you will find a variety of interesting
articles on Internet advertising.
What information should appear in an advert?
There are many levels of advertising. A small company's Web site is likely less sophisticated and, for that matter,
smaller than a large company's (such as General Motor's Web site — the URL is included at the bottom of the
Contents section).
Different forms of information require different levels of sophistication in order to display it. Below is a list of
information that could be provided on a website, ordered from 'least sophisticated' to 'most sophisticated'.
Contact information
Contact information should be provided on any site. Supplying contact information allows a visitor to easily obtain
more details concerning a product or service, if they so wish. Contact information should include the address of the
company, the telephone number, and the name of the person to contact if appropriate. It may also include an
email address.
Product descriptions
3
