E-Business, E-Commerce & Digital Marketing – Comprehensive Lecture Notes

Introduction & Session Structure

• Shorter lecture (2.5 h) than usual; includes assignment briefing.
• Follows previous session’s objectives; today’s focus: e-business, e-commerce, digital marketing and impact on marketing practice.
• Learning-outcome driven: students must explicitly meet module LOs to perform well in assignment/exam.

Learning Outcomes Highlighted

• Define e-business and differentiate types.
• Examine e-business technologies (web, mobile, payment, interactive TV, etc.).
• Present emerging technologies (mobile, wireless, interactive TV, payment systems).
• Identify markets, business models, frameworks for e-business development & implementation.
• Analyse economic implications of Internet use, competitive environment, e-marketing strategy, marketing-mix changes.
• Discuss Internet branding & CRM.
• Explain security, privacy, legal & trust issues + common breaches & counter-measures.
• Demonstrate knowledge-sharing systems, managerial skill sets, risk management.
• Develop & evaluate an e-business strategy covering finance, tech, HR.

Paradigm Shifts & Collective Intelligence

• Quote (Lou Gerstner, IBM): certain technologies transform all institutions, create winners/losers, reshape business & communication.
• Historical "paradigm" milestones: printing press → telephone → digital technology.
• Pierre Levy’s four historical paradigms: Earth → Territories → Commodities → Knowledge/Data.
• Economist cover: “Data is the new oil” – modern economies rely on data as primary resource.
• Data challenge inversion: pre-digital era = scarcity; post-digital = over-abundance (“too much data”).
• AI & algorithms (e.g., Spotify, Amazon) needed to interrogate vast data sets.

Core Internet Characteristics for Marketers

• Instantaneous, simultaneous, low-cost communication.
• Enables transition from segmentation to personalisation/1-to-1 marketing (the "holy grail").
• Creates new distribution channel (Amazon = shop without walls).
• Global reach ➔ “reach & richness” trade-off dissolves (Doyle).
• Rich content: reviews, author info, multimedia augment traditional products.

Key Digital Change Drivers (Doyle)

1. Digitisation
   • Assets & information become interchangeable & replicable quickly.
   • Resource substitution: costly physical resources replaced by digital (banks close branches; online self-service).
   • Virtual environments & metaverse possibilities via broadband, software advances.
   • Digitises marketing processes (product development, place/e-commerce, dynamic pricing, etc.).
2. Development of Networks / Platforms
   • Internet = universal communications layer.
   • Social interaction (“intrinsic value”) adds consumer/shareholder value.
   • Unbundles value chains → reshapes industries (e.g., Airbnb, Uber own no assets).
   • Disintermediation & re-intermediation: producers/customers assume control (music industry, travel – Thomas Cook example).
3. Customisation / Personalisation
   • Data + smartphones allow granular profiling and tailored propositions.
   • Enables lifecycle marketing (student → worker → retiree banking products).
   • Goal: “give customers what they want, when & how”.

Benefits of Digital Tech

For Consumers

• Customised products (Spotify playlists, Nike By You).
• Vast choice (Amazon’s unlimited shelf ➔ long-tail revenue).
• Lower prices (reduced fixed costs).
• Convenience (24/7 self-service, tracking, easy returns).
• Information abundance & transparency (price comparisons pressure).
• Social proof & reassurance (reviews, ratings).
• Entertainment/ intrinsic engagement.

For Organisations

• Direct-to-consumer channels, disintermediation (Netflix vs cinemas).
• New revenue via long-tail & niche audiences (100+ viable streaming platforms).
• Reduced costs (virtual banks, automated supply chains).
• Brand enhancement aligned with preferred consumption style.
• Data-driven decision making and dynamic pricing.

Challenges / Risks

• Hyper-competition: giants vs specialists, middle squeezed.
• Need to re-engineer legacy business models (banks’ outdated core systems).
• Security & privacy concerns: hacks (M&S), GDPR, potential future “data dividends” to consumers.
• Over-supply of data; analytical & talent shortages.
• Technology hype cycles: metaverse stalled; marketers must stay critical/open.

Historical Evolution of Internet & Digital Marketing

1. 1990s (ARPANET → early WWW)
   • Web browsers, Amazon (1994), PayPal, PC gaming; PCs as repositories.
2. 2000s
   • Broadband, Wi-Fi, mobile connectivity ➔ interactivity.
   • Dial-up → always-on shift increased user expectations.
3. 2010s – Omnichannel Era
   • Integration of physical & digital (click-and-collect, subscription boxes).
   • Web 2.0, social media, user-generated content.
4. Present
   • Co-creation & "prosumption" (Busquet & Berthon): consumers create value (TikTok creators, open-source).
   • Platform assemblers (Airbnb, Uber) dominate.

Emerging / Discontinuous Technologies

• Artificial Intelligence (AI): decades old, now mainstream (ChatGPT, DeepMind). Considered "here to stay".
• Metaverse / VR Worlds: attempted push (Meta rebrand) but consumer & tech readiness lag; may re-emerge.
• Internet of Things (IoT): device inter-connectivity for real-time data; more traction B2B (logistics, smart factories) than B2C yet.
• Augmented Reality (AR) & Virtual Reality (VR)
  • High potential for experiential sectors (travel, in-store retail theatre).
  • Hardware comfort/usability still barrier (nausea, bulky headsets).
• 5G / Mobile Edge Computing enabling faster, richer mobile experiences.

Omnichannel Retailing & Showrooming

• Customers engage through multiple touchpoints; data/experience follow seamlessly.
• "Showrooming": visit physical store for demo, purchase online later.
• Example: Tesco converts large-store space into click-and-collect hubs.
• Physital = physical + digital (AT Kearney).

E-Business & Infrastructure Elements

• Front-end: websites, mobile apps, marketplaces.
• Back-end: servers, cloud (AWS), databases, CRM, analytics.
• End-user devices: PCs, tablets, smartphones, wearables.
• Networks & platforms: broadband, 4G/5G, social networks, app stores.
• Payment gateways: PayPal, Apple/Google Pay, Revolut.

Supply-Chain Digitisation

• Just-in-time, real-time inventory, robotics in fulfilment (Amazon Dartford centre).
• Boeing/Airbus global part networks managed via digital SCM.

AI & Machine Learning in Marketing

• Machine Learning (ML): learns patterns from historical data; not explicitly programmed.
• AI applications:
  • Recommendation engines (Spotify, Amazon “customers also bought”).
  • AI-generated content (copy, PR, stories).
  • Smart content personalisation (dynamic website modules).
  • Predictive analytics: behaviour, churn, CLV.
  • Dynamic pricing (Uber surge).
  • Chatbots/voice assistants (Siri, Alexa) ➔ automated service triage.
  • Creative copywriting & image generation (DALL-E, Midjourney).

Digital Marketing Tools (Marketing-Mix Impact)

• Websites: central hub; credibility, rich multimedia, ecommerce, data capture.
• Search Engine Optimisation (SEO): structured indexing, backlinks, meta-tags; goal: first-page organic reach; combats bounded rationality.
• Pay-Per-Click (PPC) advertising: measurable, budget-capped, targeted.
• Content Marketing: storytelling via blog, video, podcast, infographics.
  • Example: $\text{BMW Films – “The Hire”}$ short-film series; subtle product placement.
• Social Media Marketing: engagement, brand personality, communities; platform differentiation (X for real-time, Insta for visual, TikTok for short video).
  • Qualitative research method: Netnography (Kozinets) – observing online communities.
• Email Marketing: permission-based, highly intrusive & personalised, drives repeat purchase, reminds lapsed customers; zero-marginal-cost.
• Mobile / SMS / App Push: location-based, immediate.
• Influencer & Creator Economy: user-generated value; new talent markets.

Developing an E-Marketing Strategy (S-M-A-R-T)

1. Set Objectives – $\text{Specific}$, $\text{Measurable}$, $\text{Achievable}$, $\text{Relevant}$, $\text{Timely}$.
2. Identify KPIs – page views, unique visitors, CTR, conversions, $\$<br /> revenue$, CAC, CLV.
3. Customer & Competitor Analysis – segmentation, personas, digital footprint.
4. Channel Mix Selection – SEO, PPC, social, email, affiliates, marketplaces.
5. Content & Personalisation Plan – automation, A/B tests.
6. Budget & Resource Allocation – agile, performance-based.
7. Legal & Ethical Compliance – GDPR, cookies, accessibility, ADA, AI transparency.
8. Measurement & Optimisation – web analytics, dashboards, iterative improvement.

Security, Privacy & Trust Issues

• Types of breaches: phishing, DDoS, ransomware, data leakage.
• Counter-measures: encryption, multi-factor auth, firewalls, ISO 27001, SOC 2.
• Consumer trust tied to transparent data use; trend towards potential “data dividends”.

Discontinuous Change & Managerial Implications (Peter Doyle)

• Internet “changes everything” – continuous re-engineering required.
• Move fast: “1 digital year ≈ 7 pre-digital years”.
• Adopt offensive posture & invest in human capital (scarce AI/digital talent).
• Build/participate in networks/platforms.
• Customise marketing; exploit market granularity.
• Think outside the box; anticipate future tech/consumer shifts.

Examples & Numerical References

• Moore’s Law: processing power doubles every $1.5\text{ years}$.
• Response rates pre-digital mailers: $3\%{-}4\%$.
• Music industry: Spotify et al. control $\approx 80\%$ online music revenue.
• Google/Facebook previously held >80\% digital ad revenue share.
• Cost of customer acquisition vs retention: acquiring can be $6\times$ more expensive.

Assignment Guidance (brief)

• Case study on Handle.com (home-moving disruptor) – answer four Qs (20 % each) focusing on disruption, CRM, comparative analysis, marketing engagement.
• Part B (30 %) – social-media customer service rationale, review, crisis-management strategies.
• Use APA referencing; plagiarism threshold <8\%.
• Start early; perform “grunt work” (secondary research, competitor scanning).
• Structure answers clearly, ATQ (“Answer The Question”); integrate theory + critical appraisal.

Future-Proof Skills for Students / Practitioners

• Master data analytics, AI literacy, creative digital storytelling.
• Develop agility & continuous-learning mindset.
• Ethical awareness & regulatory compliance (AI governance, privacy).
• Cross-functional collaboration (tech + marketing + design).
• Ability to translate customer insight into omnichannel experiences.