CHAPTER 2 CONCEPT OF ELECTRONIC COMMERCE

Why Should Companies Use Electronic Marketing  What is the purpose for engaging online communication?  Why should the company go online?  What do we hope to achieve with an online presence?  Who will be in charge of the Wib site creation?  Who will set the budget for Web site production and implementation?  Does the company have the talent to allow the Web site to grow?

Objectives and Expectations for Internet Activities  Definition of EC: E-Commerce is a system of online shopping and information retrieval accessed through networks of personal computers.  E-commerce is the end result of e-marketing.  E-marketing resources are the means, tools by which e-commerce is executed more efficiently and effectively.  Internet is promotional faucet to tap into the flow of consumers and prospect purchases.  Internet is a part in the promotional mix.

Virtual Retailers  It is a flat TV screen.  Amazon.com Vs. bn.com.  Importance of demographic, psychographics and behavioral characteristics.  Web master Vs. interactive advertising agency.  Internet provider/internet service provider: Arrange for necessary equipment(server, internet connection and the system maintenance) to handle tha daily activities.

Evaluation of On-Line Marketing Situation  Knowing at what point to start is the key to successful marketing efforts.  Crating on-line awareness for product/service.  To be capable to react quickly customer service inquiries.  Technical support by .  Data base development for customer tracking.

Relevant Research Process    Personal Characteristics: Gender Age Marital Status Educational Level Ethnicity Occupation Household income

Relevant Research Process (cont.)  Internet Usage Profile Internet access option and cost Length and frequency of use  Primary Research  Secondary Research  Steps in Research Process Define the required relevant research To ascertain if and where the information can be obtained

Relevant Research Process (cont.)  New product and Service Definitions: Need identification Product/service development Identify expected benefits to intended audience  Environmental Factors: Economic Cultural Legal Political  Tracking Customer movement on the internet. Cookie files attached to user’s browser They do it, but it is considered unethical attitude

On-Line Market Research  The research process: Problem definition Methodology Data collection and analysis Findings, recommendations and implementation  Faster and cheaper  Large sample size  It is done interactive manner with customers  Provides early information about product and customers

On-Line Marketing Research Methods  s.  Focus group conducted in chat room.  Surveys placed on web cites.  Data entry error is eliminated.  Graphics, logo and link to other web pages may be added.  Respondents may be from foreign countries.  Respondents may answer at his/her convenience.  Problems with on-line market research: Long download time Long processing time

Limitations of On-Line Research  It is not suitable for every client.  It is skewed toward certain population groups.  Sample may not be representative.  Web based surveys have lower response rate than surveys.  Respondents may not trust the truthfulness of web based research.