- E-commerce
- Also known as internet marketing
- Involves conducting commercial transactions electronically on the internet
- Impact of e-commerce on the marketing mix
- Product
- Higher customization and broader product range to suit wide variety of individual and cultural preferences in the global market
- Less packaging is required as it is not needed for added promotion
- Detailed information and digital versions
- Price
- Price transparency leads to higher competition as prices can now be compared easily
- Competition-based pricing is more likely to be adopted
- Cuts intermediation costs
- Near instantaneous price adjustments to suit sudden changes in demand or urgent needs
- Place
- 24/7 accessibility and global reach
- Added convenience for consumers
- Shorter and lessened channels of distribution reduces operating costs
- Promotions
- Quicker and cheaper communication
- Allows interactive promotions
- Relevant markets can be targeted easier
- Types of e-commerce
- B2B – Business to business
- Caters to needs of business, transactions and distribution
- e.g. Alibaba, ECPlaza
- B2C – Business to consumer
- Sells directly to customers and provides other necessary services
- e.g. Tmall, Amazon
- C2C – Consumer to consumer
- Customers trade with each other for either good and/or services
- e.g. Taobao, eBay, Craigslist
- Benefits and costs
- Businesses
- Benefits
- Relatively inexpensive when considering the total size of the potential market reach
- “Big data” collection in order to gain more insight on consumer habits in making purchases
- Rising general technological capabilities of consumers worldwide helps assure more potential customers
- Costs
- Limited ability for consumers to physically interact with the products can cause
- Uncertainty in their decision to purchase
- Higher levels of dissatisfaction due to unmet expectations and can lead to product returns
- e.g. fitting and size of clothes of online clothes vendors
- Consumer fears of internet security and fraud lead to more caution
- Additional shipping charges as well as tax not shown in the product’s listed price can turn consumers away
- Consumers
- Benefits
- Extremely convenient and accessible
- Prices, depending on the type of product, can potentially be lower than in traditional stores
- e.g. digital versions of media
- Added opportunity of re-selling used and/or rare products
- Digital products can arrive near-instantaneously when downloaded
- Costs
- Privacy and security issues
- Possibility of fraud, scams, etc.
- Support services may not be sufficient
- Limited immediate interaction with the business
- May not be completely accessible in some areas
Kim De Leon4.8. E-commerce