Impact of E-commerce on Marketing Development - Coursework Example

Impact of e-commerce on marketing development Introduction The article on the above topic by Elina Gaile Sarkane is highly relevant in the present era of technological advancement. The new developments in the area of communication and networking have revolutionized the concept of sales and marketing. The increasing popularity of computer usage and internet technology has brought about a new awareness of the vast potential of the medium in almost all the fields. The internet has today become a powerful tool of communication whose effects are being felt globally. Business enterprises and the general public are realizing the potential of internet and its huge impact on their daily life. The fast changing environment of technological innovations has made it imperative for the people at large, to face the challenges of the new age with vigour and imagination. The fast and efficient mode of communication through the internet technology has created a huge database of potential market for the businesses. The need to tap this emerging market has become a necessity in order to compete in the new global environment. The electronic commerce, therefore, has become the need of the hour. The article throws light on the quantitative research conducted by the author Elina to study the impact of electronic commerce on marketing development in Latvia and the Baltic States. Problem Statement Latvia, after 51 years of foreign rule, has gained its independence. The changing socio economic status of the country and its people has brought drastic changes. The emerging economy of the country and the introduction of new technologies, in the various areas of the public domain, have created the need to evolve ways and means to incorporate the changes and meet the challenges of the new socio economic order with confidence. With the advent of computer and the internet, the behaviour of the consumers has undergone a visible change. The changing environment of new mode of communication which seems to have direct bearing on the consumer behaviour, has posed a serious problem to the marketing strategies of the business houses which are still following traditional ways of marketing their goods and services. It therefore has become important that the studies must be conducted to evaluate and assess the impact of changing environment on the various aspects of the business. Purpose of the study The purpose of the study is to analyze the impact of electronic commerce on the marketing strategies of the business and enterprises. The increasing use of computers and internet by the people and the enterprises has changed the perception of goods and services by the buyers and sellers. In the new environment of advanced technology, should marketing strategies need to be changed? Hypotheses The internet has changed the concept of marketing. The use of internet as a more efficient and fast mode of communication has also facilitated dissemination of information thereby providing a wider scope of market to choose from. The changing behaviour of the consumers can also be contributed to the advent of internet. Variables used In the study, consumer behaviour was the dependent variable and the cultural, social and psychological factors became the independent variables while study the impact of shopping through the electronic medium and shopping in the malls. The impact of e commerce was also studied taking into account the pattern of shopping by genders which acted as independent variables. Framework of study The study was conducted taking into account the conceptual model as well as the theoretical model. The samples selected and the questionnaires were prepared as per the theoretical model of survey and a wider conceptual model of the research was used to analyze the data. Review of the literature The various literature throwing light on the growing influence of internet in the various aspect of the business ventures and enterprises, especially in the times when globalization is become a hard reality, helped provide a strong incentive for the need to study the impact of the e-commerce in the marketing strategies of enterprises. As per the article “E-commerce is an economic solvent. It dissolves old business models and changes the cost structure, and rearranges links among buyers, sellers, and everyone in between. The impact of e-commerce is happening in phases” (Kalakota, Robinson, 2002). Smith P.R. and Chaffey D. in the book “E-Marketing Excellence, The Heart of E-Business” argued that E-commerce is commonly thought to include e-tailing, online banking and shopping – it involves transactions where buyers buy and shoppers actually shop. Others suggest e-commerce is any transaction such as a support or an online catalogue search (Smith, Chaffey, 2002). Michael Rappa from North Carolina University considers that “A business model is the methods of doing business by which a company can sustain itself, that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain" (Rappa, 2005). Holistic marketing - this new paradigm combines the best of traditional marketing with new digital capabilities to build long-term, mutually satisfying relationships and co-prosperity among all key stakeholders (Kotler, Dipack, Maessecee, 2003). “We realized that the „objects” of strategy – such as business units, industries, supply chains, customer relationships, organizational structure, and so forth – are held together by a „glue”, and that glue is essentially information” (Evans, Wurster, 2000). These are but few of the literature reviews that have substantiated the need for the study to be undertaken. Study design and sampling The research study conducted was quantitative in nature but encompassed elements of qualitative research also so that better and more accurate conclusions could be achieved. Since the research involved the study impact of e-commerce in the marketing development, Latvia was chosen because it was a small country which had recently gained independence but had made significant advancement in using new technologies with lots of foreign investments. With its growing economy and small enterprises which were increasing using computers, it became a representative state for the whole of Baltic States and thereby an ideal as a model of study. 137 respondents was adequate sample size because it comprised of a wide range of variety within the sample. The study design has incorporated the two important threats to the internal validity. The first is the probable lack of maturity of the respondent who might prefer the use of e-commerce as a means of social status and not really as an effective way of conducting business or shopping. The second threat could be the under developed infrastructural support to the e-commerce activity which could imbibe distrust among the consumers for the electronic business. Threats to the external validity may comprise of the problems in the study to promote an accurate and unbiased results. In this case, some of the sample respondents may have manipulated their responses so as to appear more computer savvy. The other threat could be the lack of available resources which could impede the execution of e-commerce deals and hence create unnecessary bias in the respondent(s). Extraneous variables are those variables that might affect the correct interpretation of the data collected in the survey. In the present study, they might be those responses that are deliberately misinformed to the investigators. It therefore becomes the responsibility of the investigators who choose the respondents to take special care while the questionnaires are being filled by the respondents. Questionnaires as study instruments were used mainly because they provided a fair means of interacting directly with the users. The samples were selected by carefully considering all aspects of consumer traits and background like people of mixed gender who exhibit marketing tendencies and are open to new ideas and technologies. Confidentiality clause made sure that the information and details given by the respondents were kept confidential. The statistical analysis of the data clearly showed tendencies and traits of consumer with regard to e-commerce, thereby helping to predict the future trend and prospects of e-commerce with relative accuracy. Strengths and limitations The two strengths of the study included were the wide diversity in the sample selected which ensured wide scope of consumer behavioral pattern and the second one was choosing Latvia as an ideal model for the study. The limitation was that we had to take into account only one aspect of the impact of the e-commerce and the study was designed to predict the future trends of consumers to use e-commerce. The other limitation was that the role of children as e-customers was not considered especially when they are proving to be the major futuristic consumers. Conclusion The article espousing the details of the study conducted on the impact of e-commerce on the marketing development, has successfully established that the e-commerce is fast emerging as a major platform of a new market designed to cater to the future. The internet has revolutionized the communication and has created a whole new segment of market with diverse needs and expectations. The e-commerce has opened new frontiers of market that has unlimited scope and opportunities. It has a vast potential that goes beyond the local market and embraces a global vision which could turn out to be economically more lucrative while at the same time, promoting global values. The study has proved the relevance of e-commerce in the fast changing global economy and necessitating the urgent need to address the change in market strategies so that the challenges of the cyber market could be met. Annotated Bibliography of the article Evans Ph., Wurster T.S. (2000). Blown to Bits: How the New Economic of Information Transforms Strategy. Harvard Business School Press. Phillip Evans is a Senior Vice President of ‘The Boston Consulting Group in Boston and Thomas S. Wurster is Senior Vice President of ‘The Boston Consulting Group in Los Angeles. They have co authored the book which emphasizes the need to change the corporate and business strategies to incorporate the new age technology which is customer oriented and more extensive. Gaile-Sarkane E (2003). Electronic Commerce: Information, the Information Society, E-commerce (pp.8-12). Riga: Publishing House of Riga Technical University. She is in the department of Economics and Management in Riga Technical University, Latvia and has conducted a study to see the impact of e-commerce in the marketing development in the changing environment of science and technology. Kalakota R., Robinson M (2001) E-business: Roadmap for Success 2.0. Addison-Wesley. Dr Ravi Kalakota is managing partner and Vice Presiden of Strategy and Management for the Global Commercial industries practice of Unisys and Marcia Robinson is President of ebusiness strategies and these two have co-authored the book which has helped to popularize and demystify the concept of e-commerce and have explained why this model of conducting business is necessary. Kotler Ph., Dipak C. Jain Maesincee, S. (2003) „Marketing Moves” [electronic source] – Read on 23 August 2006. Avalable: http://www.superbrand.net [26 October, 2007]. Phillip Kotler is the Professor of International Marketing of Kellogg School of Management at Northwestern University of California, Dipak Jain is the Dean of the same University and Suvit Maesincee is Professor of Marketing at the Sasin Graduate Institute of Business Administration at Chulalongkorn University in Bangkok, Thailand. The authors promote the concept of holistic approach to market strategy which makes the needs and requirements of the consumer, the major player in the market. Rappa M. Managing the Digital Enterprise. Available: www.digitalenterprise.org/models/models.htm [26 October, 2007]. The author is Alan T. Dickson Distinguished Professor of Technology Management and founding Director of the Institute of Advanced Analytics at North Carolina State University. In the book he has predicted that the digital technology is the future and how to incorporate it in business and personal life. Smith P.R., Chaffey D. (2002) E-Marketing Excellence. The Heart of e-Business (pp.35-78). Elsevier Butterworth Heinemann. P. R. Smith is Consultant, Business writer, International Speaker and Originator of SOSTAC and D. Chaffey is an eminent IT expert and have co-authored the book which elaborates on the merits and demerits of e- business giving an insight into the business of e-world and benefits and scope of e-commerce through judicious application of appropriate technologies. Read More