Slide 1.

Part 1
Introduction

Chapter 1
Introduction to digital
business and e-commerce

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Learning outcomes

• Define the meaning and scope of digital business

and e-commerce and their different elements
• Summarise the main reasons for adoption of
digital business and barriers that may restrict
adoption
• Outline the ongoing business challenges of
managing digital business in an organisation,
paticularly online start-up businesses

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Management issues

• How do we explain the scope and implications of

digital business to staff?
• What is the full range of benefits of introducing
digital business and what are the risks?
• How do we evaluate our current digital business
capabilities?

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Figure 1.1 Google circa 1998

Source: Wayback machine archive: http://web.archive.org/web/19981111183552/google.stanford.edu . Google and the Google logo are
registered trademarks of Google Inc.,
used with permission.

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Digital business innovation and

opportunity
• Since Google was launched in 1998 which
online start-ups have transformed the way we
work, live and play?
• How has Google innovated in search and its
business model?
• See Table 1.1 for some of the major innovators.

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Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Activity

• List the most important requirements to establish

a new e-business.
• Pay attention to costs!
• Try to be precise as much as possible.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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E-business vs d-business
• E-business:
• The transformation of key business processes through
the use of internet technologies.

• D-business:
• The creation of new business designs by blurring the
digital and physical worlds

• The promise of digital business is that a universe

of applications and digitalized assets that work
together almost automatically will allow very rapid
development of new capabilities that will yield
competitive advantage
Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Figure 1.10 Evolution of web technologies

Source: Adapted from Spivack (2009).

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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E-commerce?

• E-commerce:
• All electronically mediated information exchanges
between an organization and its external stakeholders.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Perspectives of e-commerce

• A communicative perspective:
• the delivery of information, products or services or
payment by electronic means.
• Business process perspective:
• the application of technology towards the automation of
business transactions and workflows.
• A service perspective:
• enabling cost cutting at the same time as increasing the
speed and quality of service delivery.
• An online perspective:
• the buying and selling of products and information online

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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What is the impact of electronic

communication on traditional businesses?
• Digital business transformation: these are the significant
changes to organizational processes, structure, and
system implemented to improve organizational
performance through increasing the use of digital media
and technology platforms, and they include:

• Inbound marketing
• Social media marketing
• Mobile commerce

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New communications approaches

and consumer behaviour
Inbound marketing
The consumer is proactive in actively seeking out
information for their needs, and interactions with
brands are attracted through content, search and
social media marketing.

Zero Moment of Truth (ZMOT, Figure 1.2)

A summary of today’s multichannel consumer
decision-making for product purchase where they
search, review ratings, styles, prices and comments
on social media before visiting a retailer.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Figure 1.2 Zero Moment of Truth

Source: Google, Lecinski (2012).

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Inbound marketing

• Inbound marketing is powerful since advertising

wastage is reduced.

• Search marketing,
• content marketing and
• social media marketing can be used to target
prospect with a defined need.

• Could be a weakness; marketers have less

control than in traditional communication where
the message is pushed!
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New communications approaches

and consumer behaviour (Continued)
Content marketing
The management of text, rich media, audio and
video content aimed at engaging customers and
prospects to meet business goals, published
through print and digital media including web and
mobile platforms, which is repurposed and
syndicated to different forms of web presence such
as publisher sites, blogs, social media and
comparison sites.

- Can it help in triggering demand?

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Social media marketing

 Social media:
 A category of media focusing on participation and peer-to-peer
communication between individuals, with sites providing the
capability to develop user-generated content (UGC) and to
exchange messages and comments between different users.

 Social media marketing:

 Monitoring and facilitating customer–customer interaction and
participation throughout the web to encourage positive engagement
with a company and its brands. Interactions may occur on a
company site, social networks and other third-party sites

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Social media

 It includes:
 Social networking sites (SNS) (see figure next slide)
 RSS feeds
 Virtual worlds
 Blogs
 Video blogs

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Figure 1.3 Social media marketing radar

Source: Smart Insights (www.smartinsights.com). With permission.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Social media categories

 1 Social networking.
 2 Social knowledge.
 3 Social sharing.
 4 Social news.
 5 Social streaming.
 6 Company user-generated content and community

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Social media categories

 1 Social networking. The emphasis here is on listening

to customers and sharing engaging content. Facebook
tends to be most important for consumer audiences and
LinkedIn for business audiences.

 2 Social knowledge. These are informational social

networks like Yahoo! Answers, where you can help an
audience by solving their problems and subtly showing
how your products have helped others. Wikipedia is
another site in this category, although it has relatively little
application for marketing.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Social media categories (continued)

 3 Social sharing. These are social bookmarking sites like

Delicious (www.delicious.com) which can be useful for
understanding the most engaging content within a
category.

 4 Social news. Twitter is the best- known example.

 5 Social streaming. Rich and streaming media social

sites for sharing photos, video and podcasting.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Social media categories (continued)

 6 Company user-generated content and community.

Distinct from the other types of social presence which are
independent of companies, these are the company’s own
social space which may be integrated into product content
(reviews and ratings), a customer support community or a
blog.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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M-commerce

• M-commerce:
• Electronic transactions and communications conducted using mobile devices such
as smartphones and tablets, and typically with a wireless connection.

• 80% of mobile time was in apps rather than the browser. You do have to be careful
in interpreting this, though, since Facebook, games and utility apps will naturally
have the greatest time spent and browser use is still significant.

• Location-based use of mobile devices is another significant trend as users may use
apps or browsers while shopping, for example. Related to this activity is location-
Based tracking of goods and inventory as they are manufactured and transported

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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What is the difference between digital

business and e-commerce?

Figure 1.4 The distinction between buy-​side and sell-​side e-commerce

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Definitions

• Electronic commerce
All electronically mediated information
exchanges between an organisation and its
external stakeholders.
• Digital business
How businesses apply digital technology
and media to improve the competitiveness
of their organisation through optimising
internal processes with online and
traditional channels to market and supply.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Intranets and extranets

 many digital business applications that

access sensitive company information
require access to be limited to qualified
individuals or partners
 If information is restricted to employees
inside an organisation, this is an intranet
 If access to an organisation’s web services
is extended to some others, but not
everyone beyond the organisation, this is
an extranet

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Figure 1.5 The relationship between intranets, extranets and the Internet

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Understanding different types of

online presence (Activity 1.3)
1. Transactional e‐commerce site.
2. Services‐oriented relationship‐building
website.
3. Brand‐building site.
4. Portal or media site.
5. Social network.
• These aren’t mutually exclusive, but there is
usually a focus of each website.
• Examples of each?

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Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Digital marketing definition

• Digital marketing involves:

• Applying these technologies which form online channels to market:
• Web, email, databases, plus mobile/wireless and digital TV.
• To achieve these objectives:
• Support marketing activities aimed at achieving profitable acquisition and
retention of customers . . . within a multichannel buying process and
customer lifecycle.
• Through using these marketing tactics:
• Recognising the strategic importance of digital technologies and
developing a planned approach to reach and migrate customers to
online services through e-communications and traditional
communications.
Retention is achieved through improving our customer knowledge (of
their profiles, behaviour, value and loyalty drivers), then delivering
integrated, targeted communications and online services that match their
individual needs.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Figure 1.7 The three main options for online media investment

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Figure 1.8 Digital and offline communications techniques

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Summary and examples of transaction alternatives between businesses,

Figure 1.11
consumers and governmental organisations
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Figure 1.13 A simple stage model for buy-​side and sell-​side e-commerce

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Digital business opportunities

• Reach
– Over 1 billion users globally
– Connect to millions of products
• Richness
– Detailed product information on 20 billion+ pages
indexed by Google. Blogs, videos, feeds…
– Personalised messages for users
• Affiliation
– Partnerships are key in the networked economy.

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Internet risks – what can go wrong with a

transactional site?
•
•
•

Potential answers:
• Site downtime affecting whole site or some
processes
• Security attack, e.g. denial of service, content
hijacked
• Wrong content presented for site visitor
Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Cost/efficiency and competitiveness

drivers
• Cost/efficiency drivers
– Increasing speed with which supplies can be obtained
– Increasing speed with which goods can be dispatched
– Reduced sales and purchasing costs
– Reduced operating costs.
• Competitiveness drivers
– Customer demand
– Improving the range and quality of services offered
– Avoid losing market share to businesses already
using e-commerce.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Additional activity – drivers and

barriers to adoption
• You are in a team of advisers at a local business
link (a local government agency encouraging
adoption of e-commerce).
• List:
– Drivers to adoption of sell-side e-commerce by
business and how you can reinforce these by
marketing benefits
– Barriers to adoption of sell-side e-commerce by
business and how you can reinforce these by
stressing benefits.

Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
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Drivers of consumer adoption

Driver? Marketing approach

1

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Barriers to consumer adoption

Barrier? Marketing approach

1

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