Understanding the e-Market and designing products to fit

Alan Dix

aQtive limited
Birmingham Research Park
Vincent Drive
Birmingham, UK
B15 2SQ


Lancaster University


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Talk given at day conference on E-commerce - issues and directions, Imperial College London, 13th Jan 2000

View slides in html or download powerpoint slides (648K)

Full reference:

A. Dix (1999). Understanding the e-Market and designing products to fit.
E-commerce - issues and directions, Imperial College London, 13th Jan 2000

URL for related work: http://www.hcibook.com/alan/ebulletin/


market ecology - interconnections and dynamics

Traditional marketing is well understood - identify the target market and its needs, find channels to them etc. In a sophisticated organisation the marketing will feedback into product design albeit over quite a long timescale. In the Internet market things are very different. Most critically it is interconnected with web pages, email, news group, online chat etc., not just locally, but globally - a product on a web page in China may be viewed buy a customer in Brazil. Just as in diverse areas of complexity - the weather, economies, etc., we see emergent behaviour that is no localised, subject to rapid change and hard to predict - the eButterfly effect.

market engineering - making the market

At first this sounds as if Internet marketing will be uncontrollable. However, it is possible to manage this complexity. the first step is to understand the market and its interconnections qualitatively: who are the different groups, how do they communicate; and quantitatively: how many and how fast. As in engineering disciplines, the former gives us the model the latter the parameters for the model. The latter may be difficult to measure precisely making exact predictions difficult, however, the model itself is often enough to allow us to weigh up different marketing options.

Most exciting is that once we understand the market, we can design products and marketing strategies that exploit it and even products that change the dynamics of the market.

Traditionally the medium of marketing (magazines, broadcast media, billboards) is very different from the market itself (children buying chocolate bars in the supermarket). However, for Internet products, the market is the medium. Look at Apple's home page - one of the main items is iCards - electronic postcards. Similarly, at aQtive last Christmas we pioneered electronic Christmas crackers! These are examples of Internet products that introduce new communication channels and hence modify the market itself.

market evolution - what may happen

Have you ever been eShopping? A book, CD or computer? Or perhaps have you simply been eBuying? At the risk of being sexist, if you are a man and don't quite get the distinction - ask a woman. Shopping is an experience, not just an economic transaction. Web sites are increasingly aware that the experience they offer, whilst often giving far more information and choice than in a high street shop, is still a poor experience for the customer.

In the ecommerce world everyone is talking about dis-intermediation - reducing the number of intermediaries in the supply chain. However, be on the watch for re-intermediaries as networked markets require new forms of virtual and physical personal presence. For one example of this see Ottakar's web site which doesn't just sell books online, but also sets this in the context of its local stores network.

I have a dream - ever since I lived in a small village some years ago with the nearest village shop several miles away. A dream from before the days of the Internet, but now cast into a new light. What if the village shop or urban corner shop became the focal point for electronic commerce. The automated supply chain re-optimised for small home delivery is also ideally suited to delivering small just-in time orders to local shops capable of supplying a large range of stocks with short in-store stock levels. Home delivery is an increasing problem, with some companies offering multi-thousand pound lockers to help. The village shop is again ideally placed to be that delivery point. Go to it to order as well for more personal service, but with the buying power of the whole Internet in easy reach

When Postman Pat next goes to pick up the post, Mrs Groggins, the friendly village postmistress, will have become Mrs Groggins, the information scientist, guiding her customers through the maze of electronically available goods. Greendale will never be the same again.

keywords: ecommerce, internet marketing, electronic village shop, market ecology, market engineering

Alan Dix 25/10/2000