Teresa Brackeen EBUS 500. 1 e-Business Principles and PracticesLynn BertschJuly 21, 2004 AbstractPrimus Securities is a full service brokerage firm serving approximately7,000 clients. In order to increase the number of clients being servedPrimus by further developing the website that was created nearly a yearago. By developing and maintaining a website, Primus Securities will needto evaluate customer needs, technology needed, markets strategies, andoperational costs.
Another important factor with maintaining a website isthe ability to cover expenses with the revenue being generated. Primus Securities Website SimulationPrimus Securities is currently a small brick and mortar, full servicebrokerage firm. Nearly a year ago, Primus constructed a website thatprovided information about the firm, frequently asked questions, andfinancial news as well as a search feature that allows the visitor to gainthe necessary information to make a decision that would be suit theirneeds. Presently, 5,500 visitors visit the Primus website each month withan average of 250 consistently returning. A financial research agencyconducted a poll of brokerage sites, and Primus Securities is ranked 50thout of approximately 600 brokerage website as far as the value ofinformation being provided to clients in a pre-transaction stage.
Primusis in need of moving forward with enabling clients to make online trades,with as many visitors returning it is extremely likely that more wouldreturn if they could easily place a trade online. The importance ofkeeping within the firm’s business plan, objectives and goals while furtherdeveloping the website to accept online trading. “With the clearoverarching goal of developing an e-business and website strategy that isconsistent with the strategies of the business, the task is still not easy. However, with the proper strategic framework, the many business andtechnical challenges and conflicting priorities can be easily ranked andweighed for appropriate decision making,” as stated on the e-competitorswebsite. Marketing ResearchDavid Snepenger states, “One of the difficulties companies face withmarketing occurs when the owner/manager thinks he or she knows what thecustomer wants, how they want it, where they want it and when they want it.
Not enough customers, insufficient revenues and excessive inventoriesindicate that the customer’s needs are not being met. Marketing researchcan help find the problem and identify a solution. It helps managers tolook outside of themselves for solutions. ” Marketing research for Primusis necessary to evaluate what is current competitors providing and what isnot being provided.
The firm needs to provide competitive services to itscurrent and potential clients not sub-par online services, which willultimately lose business. Primus has received an encouraging response fromits current clients about its current informational type website; howeverthey have made recommendation as to improving the website, which would beto implement an online trading. Primus needs to answer the following ten questions, while conductingthe marketing research. These questions will assist in determining someimportant factors that the firm will be faced with while further expandingthe website services to be provided. The important questions are:”1.
What should you market goods, services or both?2. Should your marketing feature some sort of price advantage?3. Should you emphasize your self, your quality offerings, your selection,your service or merely the existence of your business?4. Should you take on your competition or ignore all competitors?5.
Exactly who are your competitors?6. What are your best prospects?7. What income groups do they represent?8. What motivates them to buy?9. Where do they live?10. What do they read or watch or listen to in the way of media?”(Snepenger, 1997)The quantitative type of marketing research would be conducted viaonline surveys to current as well as potential (or simply visitors) clientsthat would take the time to complete the survey.
The costs associated withthis type of marketing research would be cost effective. MarketingThe marketing concepts that Primus Securities needs to be aware of is1) understanding the customer, 2) making value for your customer, 3)communicating your value to your target market, and 4) making it easy forthe customer to buy (Snepenger, 1997). Primus Securities overall has agood understanding of the clients they serve. In order to capture a largerportion of the market, Primus is implementing a few marketing tools thatwill be value added features.
A few of these strategies that will be at nocost to the targeted market group is . providing information via SMS and email. The initial cost is slightlyhigher but well worth implementing. By reaching out to potentialclients that have provided an email, address clients could bepersuaded to become clients by providing information on a consistentbasis.
. implementing a discussion board that will provide additionalinformation regarding Primus Securities services. . providing web cast that is available to everyone. This is onlyavailable to individuals that have high speed Internet.
. Providing stock ticker that is powered by Quote. com, the informationprovided to this website is the most current stock quotes available tothe public. This value added feature allows the clients to make thebest possible choices when trading. Marketing is primarily cultivating, developing a relationship with atargeted consumer group. By providing these value added services, in theend, will provide the client the necessary information to make well-informed decisions that affect the trades completed through online tradingmodule.
Primus Securities is providing many functions of the website at nocost; the reason for providing these services at no cost is to attract newvisitors to the website, which may lead to a client of online trading. Byoffering many of the services at no cost, it was risky, but by the thirdquarter the profits were $331,526 with approximately 123,000 visitors tothe website. The risk of providing many of the services at no cost isbecause many of the online competitors like e-Trade, Ameritrade, andbrokerage companies that have online services like SunAmerica,Linsco/Private Ledger. Advice via email is a paid value added feature. This assessed fee isbecause it takes a staff member to research and answer the question. Theclient or potential client is paying a fee to cover the cost of the staffmember’s salary.
Along with salary expenses, it was also determined manyof the questions being asked may be easily answered by our frequently askedquestion portion of the site. By implementing a fee per question asked viaemail would deter clients and potential clients from asking unseriousquestions. A majority of the questions asked would be of quality becauseof the cost associated. TechnologyPrimus Securities will be using a co-hosting environment.
Accordingto EPI Internet Direct, “Co-Hosting, also known as co-locating, is aninexpensive alternative to hosting servers on the end of your own expensiveleased line. Ideal for individuals, small businesses and small independentISP hosting partners, you provide the server; we provide the high-speednetwork connection and the IP addresses. You don’t need to pay for a leasedline just to site your own server on the Internet, and you have access tothe network bandwidth you need. ” This will enable the firm to have morecontrol over the availability to visitors.
This environment also providesa more convenient way of securing e-commerce, which in turn, Primus willprovide the security that many of the clients and potential clients will beseeking. The ability for hackers to tap into their personal informationwill be deterred by firewalls and encryption protection. The type of server recommended would be a stand-alone Microsoft SQLserver. Webopedia’s definition of an SQL server is “Generically, anydatabase management system (DBMS) that can respond to queries from clientmachines formatted in the SQL language. When capitalized, the termgenerally refers to either of two database management products from Sybaseand Microsoft. Both companies offer client-server DBMS products called SQLServer.
” OperationsThe operation of the website must be maintained and kept up to datewith useful information, so the clients could make well-informed decisionsbased on the information being provided via the website. The amount itwill cost Primus to internally maintain the news and views portion of thewebsite is costly at $200 one-time cost and recurring cost to maintain theupdated information is $40,500 monthly. The choice would be to outsourcethe portion at a one-time cost of $200 and a monthly recurring cost of$15,000. “Today, outsourcing is moving to a new stage. It has become astrategic tool, which not only enables companies to cut costs and improveservices in the short term but also creates new resource structures,increases return on investment and contributes to long-term value.
” (TMSystems) Furthermore, a list of other benefits to a firm consideringoutsourcing a portion of their operation: . Focus on core business activities and expertise thus enabling optimalutilization of resources . Fast entry into market . Minimizes major capital investments in a billing system, training andwork force management . No duplication of services . Cost effectiveness .
High productivity & good quality services from experts in the field . Customer friendly and knowledgeable human service . Increases RoI (Return on Investment)(TM Systems)The strategic decision made for Primus Securities have beencalculated with a careful eye on developing revenues while maintaining alevel of value added features that will not compromise the integrity ofPrimus Securities. Recommended StrategiesRecommendations for future strategies for updating the website is: . Multi-lingual site, by implementing a choice of different languagesallows language barriers to not be an issue; therefore reaching beyondthe scope of English speaking population moving forward globally.
. Create a subscription type-site, which would provide an in depthanalysis of stocks, this would generate revenue beyond the commissionbeing charged. . Provide a discount for clients that are trading above 2500 shares,this will attract clients with money.
ConclusionPrimus Securities is fully aware of utilizing the technology that isavailable to them. The firm is taking steps to capture a large portion ofthe market that is available, by complimenting the website with a few valueadded features along with online trading. The creation of these featureswill assist with increase the profitability of Primus Securities as well asproviding current clients with useful features. In order for Primus tocontinue with their success, it is imperative they take the developmentslowly, methodically with sound advice from professional IT personnel. Referencese-Competitors. Retrieved July 19, 2004 from http://www.
e-competitors. com/Issues/developing_e-business_strategy. htmEPI Internet Direct. Retrieved July 20, 2004 fromhttp://www.
epidirect. com/Servers/CoHost/SFees_US. htmSnepenger, David J. April 1997. Marketing Research for Entrepreneurs andSmall Business Managers.
Retrieved July 19, 2004 from MarketingResearch for Entrepreneurs and Small Business ManagersTM Systems. Retrieved on July 21, 2004 fromhttp://www. tmspl. com/whyoutsourcing. htmWebopedia Computer Dictionary.
Retrieved on July 21, 2004 fromhttp://www.webopedia.com/TERM/S/SQL_Server.html