CHAPTER 6 Concept of Virtual Store for Marketing Products and Services

Chapter Objectives To differentiate between the practices of virtual retailing and traditional retailing and relate each to EC. To present the advantages and disadvantages of opening the virtual store. To discuss the strategies in building awareness for the virtual store.

Virtual Vs. Tangible Retailing Approaches Electronic retailing is hidden from physical contact to the public. Invisible electronic merchandise or offerings Housed and promoted on an electronic medium such as Web sites, s, listservs, discussion groups. Delivered by an electronic distribution system often the WWW. Directed to shoppers to complement stand alone or mall store. It is convenience to everyone in the global market place. It helps the distribution, as well as make better use of company’s resources with a 24 hours shopping service.

Virtual Store The Advantages: To expand market coverage and distribution to a wider market. A company having a web page is interested in: On-line sales. On-line advertising On-line customer service Sales and communication activities. Flexibility could be maintained for sales and service in any location Web sites operates 24 hours a day, and it is valuable for those firms that market overseas. Firm’s credentials and qualifications may be important to dispense marketing and sales materials on the Web.

Virtual Store (cont.) The advantages (cont.) Electronic systems allows to update prices, specifications, and services on hourly basis. Company-sponsored promotion are translated into Web pages. Customer inquires can be investigated more quickly. The Web allows the company to render fast and responsive customer service. Order status can be ascertained immediately. It provides an opportunity to test a new product/service. Experimentation with new technology is possible using Web- based testing. Discussion/listserv environment is on which an effective marketing program could tap selected test markets.

Virtual Store (cont.) The Disadvantages: No every product/service is appropriate to Web sales exposure. Perishable goods are not being sold on the Web. Maintenance, site offerings, communication are time intensive activities, and require the work of multiple Web masters. Marketer’s organization is dependent upon equipment, communication software and its Interactive Service provider (ISP) connection. Virtual store front continues to serve as long as the server is running or internet provider is being paid. Twenty-four hour service is a serious commitment by the Web based virtual store. Anonymity of identity of Web based company is a risk. Consumer may not be certain who the company is, or what it stands for.

The Value of Virtual Storefront and the Cybermall The Web based virtual store should deliver: Reliability Consistency Privacy Accessibility Accuracy Responsiveness Retailing power will be based upon: Demographic of connectivity: A match between demographic of Web user and product the company is offering on the Web. Content Customer motivation: technological shoppers are surfing breath and depth within the product category.

Value of Virtual Store front and Cybermall (cont.) Several cyberstores band together to give the merchandise in one location or address, this gathering of Web sites is considered to be a cybermall. Exp.ebuy.com Alternative to banding with a cybermall is to be ‘linked storefront’ in which the storefront address is hyperlinked within a popular site The security concerns the following reasons for not purchasing online: Providing credit information or credit/purchase information are foolish attempt.

Building Cyberstore’s Awarness Empathy for the customer’s wants and desires is one of the key ingredients for storefront success: Customer satisfaction Marketer should try to match corporate strategy with contents of site, appearance, and site security for customer ordering and privacy.

Deciding On-Line Marketing Objectives What are the appropriate goals for online marketing. Competitive differences of the online marketing compared with traditional media. Time for delivery Strategies used in direct marketing may be used in online Sampling or couponing.

Sample Web Findings Average Web order is 12% lover than retail, but similar to catalog. Average Web order doubled when a household received a catalog. Previous retail & catalog interest increased response rate by 30% Buyers converted from primarily female to primarily male. Average age remained consistent, but generated a shift in age ranges. Source: Presentation at Professors’ workshop of Direct Marketing Association in New York.

Bloomingdale’s Marketing Data Base 4.5 million households 14 million accounts 56.5 million transactions Multi-Channel marketing On line access to 24 months data

E-Commerce Image and Identity Development Identify qualities that target market value in online. Building image in online is the part of the impression of the good to consumers. A big part of a brand name in online is to differentiate similar products.