Executive Summary 2
Introduction 2
1.) Research and Data Analysis 3
2.) Information Technology 5
3.) Customer Relationship Management 9
4.) Financial Analysis and Accounting 13
5.) Marketing in Addition to PPC 15
Executive Summary
The report aims to assess the technologies in business necessary in building an online store. There are several options that a starting entrepreneur can choose from, but the approaches used and technologies applied in the process makes the difference in assuming success. The business objective is to create an online store website and a retail store that will carry designer headphones. The main sales channel would be the online store in which most of the sales transaction will take place. Having said that, it is important to select the best tools in the market that will maximize resources while increasing sales. The report will also include assessments of technologies such as shopping cart system, CRM, financial and accounting applications. A final recommendation will be provided to assist in decision-making.
Introduction
Designer headphone is a $1.5 billion industry catering to the young generations of music and other media lovers. The number of existing brands in the market encompasses several opportunities for new businesses to emerge. In addition, new technological innovations area allowing a diversification of entry points for new businesses. Among the most popular business platforms today is online selling where customers can shop at the comfort of their homes for items such as designer headphones. The report will highlight the important areas in starting up an online store including the selection of the right shopping cart system, CRM solution, and other tools that will render greater success for the business. In addition, the management approach perceived to be best suited for the chosen business will also be assessed. The report assumes that the main considerations in selecting technologies for the business are the cost-effective factors, user-friendliness, and business compatibility.
1.) Research and Data Analysis
Designer headphone is not only about style; it is also about what’s hip and trendy with utmost regard to quality and durability. Using Google Keyword Planner Tool, the best type of headphones will be determined that will be focused on for selling. The keyword search returned with the following results:
- Dr. Dre (Beats
- Bose
- Sennheiser
- Shure
- Audio Technica
- Skull Candy
- A spreadsheet was developed to indicate a more detailed result of the Keyword search showing demand units based on sales average, average monthly online search and search keywords that commands the highest search average.
- Based on the result of keyword search, demand, and average monthly search, the most commendable brand to sell are Skull Candy and Beats by Dr. Dre. It is apparent that Beats has the highest demand for high-end headphones particularly the wireless types. The brand shows being searched online at an average of 165,000 every month. However, Skull Candy brand commands the highest online search average with 301,000 monthly searches. In terms of demand, Skull Candy comes only second to Beats with a volume demand of 12 million units, while Beats encompasses a volume demand of 15,000 annually. Therefore, in terms of high selling output, both Beats and Skull Candy should be selling focus of the business.
2.) Information Technology
In order to build an Online Store, a shopping cart system is needed to serve as the POS system that will process the overall sales transaction of the online store. Choosing the right shopping cart system should consider the five most important features. This includes the ability to import inventory data into spreadsheet, good search optimization feature, transaction security level, fast checkout, and ability to use Authorize.net. Two shopping cart systems are widely used in the online store industry namely Big Commerce and X-Cart.
- Another popular system used by online stores is the Ultra Cart system. Ultra Cart is similar to other cloud-based carts such as X-Cart and Big Commerce. To compare Ultra Cart with the other two, it is known to bringing traffic to the online store website that helps in boosting sales. On the other hand, Big Commerce and X-carts does not have worldwide ranking, as they do not appear prominently in Alexa rank. This means that Ultra Cart is a better choice in terms of search optimization features. With regards to spreadsheet import data function, all of the three systems deliver the same inventory function, but X-cart provides the most detailed spreadsheet. When it comes to checkout options, Ultra Cart will be the best pick because it offers a wider range of payment option for the customers. Big Commerce and X-cart are limited to popular payment facilities such as debit card, PayPal, Checks, Money Orders, and Credit Card. Meanwhile, Ultra Cart provides supports wider payment alternative such as Google Checkout, COD, Purchase Order, SaftPay, and Wire Trasfer. In terms of transaction security, all of the three systems are using Authorize.net and data encryption functions that protect both buyers and the seller from fraud.
Figure 1 Big Commerce Admin Page
Figure 2 Ultra Cart admin page 1
Figure 3 Ultra Cart Admin Page 2
Figure 4 X-cart demo store
- Setting up an online store also requires adding an SSL security seal to the store website. SSL (security socket layer) security seal is referred to as an encryption technology used to protect transaction data in the online store. The technology creates a security bridge between the web host and the customer’s web browser. This feature eliminates the possibilities of message forgery, tampering, and eavesdropping (sslshopper.com). Websites particularly online stores needs to install SSL encryption to web server to prevent fraudulent activities and to ultimately protect the interest of the seller and the shoppers. In order to get an SSL seal, the online store administrator must secure a certificate from $49 to $ 79 and same amount for certificate renewal. This certificate can be purchased from accredited SSL vendors and applied conditions vary from vendor to vendor. There are several vendors that offer an SSL certificate such as Verisign, Trustico, Volusion, and RapidSSL. Hwever, the most widely used certificate vendor is Verisign, which is also recommended for the planned online store.
3.) Customer Relationship Management
Managing customers will require the use of web-based CRM platforms that offers flexibility across marketing, sales and customer service activities of the business.
- CRM is basically a virtual customer service desk, which is an ingenious idea to use particularly in an online store. This is due to the fact that not all customers can be easily reached personally in an online setting. It is useful in minimizing transaction problems given that CRM reinforces customer contact without having to deal with each one by one. Managing relations with the customers enabled longer-lasting business relationships enabling stronger loyalty (smallbusiness.chron.com). However, CRM also encompasses a number of pros and cons For example, CMR puts everything in one place. This is an advantage for a startup business particularly those with limited number of personnel. In addition, CRM keeps all information in one place can be utilized for multiple purposes easing access for the staff. Furthermore, CRM provides remote access to customer data, which includes access to generated reports and analytics. On the other hand, the downside of CRM is security issues. Given the fact that all customer information was placed in one place, a security breach would compromise customer data (wavecentric.com). In addition, maintaining the system is not always a walk in the park. There are technicalities that require expertise of an IT, which for a small business is quite costly keep one on board. Lastly, CRM automates all aspects of customer relations. However, it also eliminates the human factor in the process, which for at most times works effectively in interacting with customers. Not all customers would want to talk to machines or deal with web-based feedback forms and human intervention is an experience that CRM cannot provide to the customers.
- Zoho.com and Salesforce.com are examples of CRM providers. Another example is MhelpDesk, which provides CRM solutions to more than 6,000 companies worldwide. MhelpDesk generally aims to improve work order visibility for the business with its user-friendly interface. On the other hand, Salesforce.com is far more innovative when it comes to cloud-based CRM. Its advantage over the others is its larger server capacities that enable access to CRM information virtually anywhere through an Internet connection. Meanwhile, Zoho.com offers services similar to Salesforce.com, but with more diversity because its function is not limited to customer management. Zoho.com offers applications specific to the business objectives such as SharePoint integration for information management and sharing. In terms of functionality, all of the three systems encompass similar features. This includes, customer data inputs, social media interface, billing, staffing, work allocation, and reports generation. However, Zoho.com provides a user-friendlier interface where the users can manage settings and data inputs from the menus populated at a single page. Unlike Salesforce.com and MhelpDesk in which the interface are multi-layered. Getting used to the functions of Salesforce.com and MhelpDesk will need some time unlike Zoho.com. On the other hand, Zoho.com requires a $30 subscription fee subject to increase as the business expands. This is much lower than the first user package offered by MhelpDesk at $75 per month. In comparison Salesforce.com offers wider user price option where a small group performing basic sales can register for $25 per month. Therefore, in terms of price, interface and perceived ease of use, Salesforce.com is recommended for the online store.
Figure 5 Zoho.com admin page
Figure 6 Zoho.com admin page 2
Figure 7 Salesforce.com admin panel
Figure 8 MhelpDesk admin panel
- The recommended CRM system (Salesforce.com) offers the iContact feature that will help the business in its marketing and e-mail campaigns. The application pairs the customer information to social media network to engage, retain, and convert customer leads. Meaning new offers are automatically sent to the customer’s email and posted in their social media page for awareness. The responses obtained from the campaign are analyzed by the system to assess effectiveness of the campaign. This functionality further establishes the previously made recommendation to use Salesforce.com.
4.) Financial Analysis and Accounting
The online store is also considering advertising using par-per-click ads on Google and in other affiliate websites. This plan looks into the financial aspects of the business due to the costs involve in advertising placements online.
- Conversion tracking sheet (see separate spreadsheet)
- Example Scenario analysis (see projection worksheet)
- The accounting and finance functions can be handled using either of the two applications namely Quickbooks and Kashoo. To compare the two, Kashoo is considered as more user-friendly even for those with no accounting experience. This is because the application is more intuitive and the interface includes a wizard tool that converts large figures. On the other hand, Quickbooks encompasses features that allow difficult and confusing formulas to an automated resolver. The similarities of the two are their capability to sync bank information, tax and payroll into one spreadsheet report. Furthermore, Kashoo has multi-currency function as compared to Quickbooks where the currencies will need manual input. The only advantage that Quickbooks have over Kashoo is operating system compatibility. The former is Macintosh ready; while the latter can inly be used in Windows based systems.
Figure 9 Kashoo interface
Figure 10 Quickbooks interface
Based on the assessments made, it is recommended to use Kashoo due to lower cost, intuitiveness, and user-friendly characteristics that will render greater accuracy even for users with no subsequent knowledge in accounting and finance.
5.) Marketing in Addition to PPC
Another advertising option to market the online store, as alternative to PPC is the use of placement banners.
- Ad banners for website placements are measured in pixels. There are common, but not standard banners often used on websites. In addition, the size for banner placement vary according to website policies. In order to get an idea for the banner, the below table suggests size and weight of each of the banner.
Standard Web Banners
Common, But Not Standard Banner Sizes
- Among the presented standard sizes, the one that generates the highest click-through-rate is 160 X 600.
- The three websites that accepts banner placements for designer headphones are Zalora.com, digitaltrends.com, and artistdirect.com. The websites offer banner placement ads at a standard size ranging from 230 X 30, 120 X 600, and 160 X 600.
- Banner ads placement sold in the aforementioned websites charge CPM rates as follows:
Zalora.com - $8/1,000 impression on a 120 X 600 banner size
Digitaltrends.com - $6//1,000 impression on a 120 X 600 banner size
Artistdirect.com - $11.25//1,000 impression on a 120 X 600 banner size
- Given the rates indicated above, the recommended website to place banners at would be digitaltrends.com. On the other hand, it would be feasible to consistently place ad banners in one website because there should also be a consideration on the volume of visits that the website generates. Considering the cost, of banner placement for digitaltrends.com, it is recommended to limit the ad banner placement for 10,000 impressions. This is because the expected click rate for ad banners is estimated for only 20 clicks for every 1,000 impressions. Meaning, for 10,000 impressions, the captured viewers would be at 100 clicks, which cost $60.
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