Internet Business and Electronic Commerce - Literature review Example

 Internet Business & E-Commerce E-commerce is the new catchphrase of the online business movement. It attracts the thrill and the focus of the online trading community. It is defined as the transactions that take place over the Internet and other web sources. It involves shopping on the Internet, trading of bonds and stocks, B2C or business to customer transactions and B2B or business to business transactions. Trading online is considered cost-effective by many businesses and the advantages of e-commerce like 24/7 business activities, attracting large audiences, reduced buying time etc. E-tailing and e-trading has compelled many businesses to start their own website. Internet marketing has begun to play an integral role in building a relationship between the customer and the business. Internet is serving as a means of communication amongst people all over the world. It is undergoing changes as technology advances and in turn necessitates businesses to adapt accordingly. In a study conducted in Portugal about the role of websites in Internet marketing, it was seen that websites were used by different sectors for different purposes. For the mass media sector, the website was maintained by an external company and contained large amounts of information. Their website also was illustrative of a communication benefit for the customers. On the other hand, e-commerce sector was characterized with the increased reliance on emails, shorter download time, websites that have developed recently and an economic benefit to the consumers. The tenets of marketing involve three basic components: information, customization and relationship (Zappalà & Gray, 2006). For a website to be effective, it should aid the company to foster a relationship with its customers and to provide them with the information that they need. It is important that the business recognizes the type of customers who would be interested in its products, their needs and demands. Zappalà and Gray (2006) assert that Internet marketing is primarily focused on the provision of information to the customer and so the website must contain details about the product offered and integrates great technical detail. In analyzing the effectiveness of the websites, the first criteria for judgment would be if the websites are providing sufficient information to the customers, in a way that addresses their needs and helps them provide the technical details that they are seeking. The websites that I have chosen for the critical study report are related to the selling of goods online and about news. The websites that are selling products online include http://shopping.yahoo.com/ and http://www.amazon.com/ whereas the ones for updating the users about latest news are http://www.useit.com/, http://www.theregister.co.uk/ and http://www.clickz.com/. The industry that details with shopping entails the pure e-commerce industry. It involves advertising products to a large market segment, providing information about the products and services offered and catering to the orders that the consumers place. On the other hand, giving news and articles about different events encompasses the media sector. Consumers are typically looking for information about certain events. The websites that I have chosen from this industry deal exclusively with news about Internet technology. In providing information about their related fields, all the aforementioned websites have done justice to what they are aiming for. However, the way this information is presented can have a significant impact on the customer and can be a decisive factor in building a relationship with the customers. This has an affect on navigation as well. On comparing the websites, http://www.useit.com/ and http://www.theregister.co.uk/ present information in an unappealing way. This is because there is too much information cluttered on one page. It is difficult to navigate through the information and might discourage customers from using the websites in the future. A good website design includes more focus on how the content is presented rather than the background and the use of color and visual effects to draw the attention of the user (Articlesbase, 2010). In this regard, http://www.useit.com/ falls short of the expected standards of producing an attractive graphic display. However, shopping websites had a very graphical display, involving a combination of colors that were pleasing for the eye, and accentuated the outlook of the goods on display. As a result, this feature could provide these organizations an edge over organizations which use traditional means of marketing. There has been little focus on the language in http://www.useit.com/, considering that it provides news about technology, it needs to use more standard English. For example, in the phrase “as 4 winning examples show”, the writer should have used “four” instead of “4”. Another feature that makes http://www.useit.com/ less attractive is that it uses the default blue links throughout the page. The information that is presented in http://www.useit.com/ and http://www.theregister.co.uk/ is not classified and displayed separately in categories, neither by subject, nor by date, and this makes it difficult for the user to search according to categories. Another feature of a good website design is an interactive layout. The website needs to be simple and the text should not be too big or too small. Moreover, the background should not be too distracting. A bad website feature is that the website has frames that require the users to scroll sideways. In the five websites mentioned above, http://www.useit.com/ was the only website that did not require its users to scroll sideways. A good website also has fewer points for focusing. The design of http://www.theregister.co.uk/ is lacking in this regard. The website has a lot of points for the user to focus on, and hinders in the clarity of the information displayed. Repetition is the key component of a good website and does not allow a visitor to feel that he or she is not on the same website (Williams, 2008). In accordance with Arntson (2007), frames help to divide information on the webpage into different sections and play an instrumental role in effectively controlling the presentation and flow of information. Frames have been used effectively by all the websites except http://www.useit.com/ and one can appreciate by comparing the websites that it is easier to navigate through information in the other websites than in http://www.useit.com/. Also, the text is aligned very much to the left in http://www.useit.com/, which is not a good website design feature. A pivotal aspect of marketing is building a relationship with the user. This can be achieved by using customization. Amongst the websites under review, http://www.amazon.com/ is the only one that allows users to personalize. Customization allows companies to identify the needs of the customers. This will enable them to develop marketing strategies in such a way that promotes users to purchase that product. The question arises that how do trading on the Internet help companies gain an advantage over those organizations that use traditional means of transactions. Department stores can make use of lighting and music to create an ambience that attracts customers. Websites, although can not provide such an environment, but they attract customers in other ways. The reason why websites can not create such an environment is that being present physically in the shopping area allows consumers to physically feel the product, and the additional effect of lighting and music can increase the appeal for the product. However websites can generate appeal for the product by using flash technology. E-commerce websites help to produce desirability for the products (Filipe & Cordeiro, 2009). http://shopping.yahoo.com/ has used this feature and has displayed pictures of products that make them appealing due to their sleek and shiny appearance etc. Pictures of products have been used in a way that accentuates the social value of the product. Electronics are aimed to be sign of status and therefore are made to appear sophisticated and elegant. An advertisement for shopping deals on http://shopping.yahoo.com/ contains vibrant colors and focuses on the shopping bags, giving succinct yet catchy information about the deal to arouse the curiosity of the consumers. Masterson (2010) contends that marketing through websites can help achieve branding of products faster than traditional means. It also helps to build a larger customer base by using company blogs, websites for inbound links and by publishing expert articles on its respective industry. http://www.clickz.com/ provides users with expert advice on digital marketing, and therefore would attract a large clientele. http://www.amazon.com/ provides users a virtual review of the products and the features that are offered in them. By emphasizing upon special features, the company creates a unique image for its products. It also allows users to see the product from different angles, allowing a similar experience as they would gain from physically touching the product. Internet and e-commerce offers companies the advantage to gain more insight in the needs of the customers by analyzing transactional databases. Marketing on the Internet entails the same marketing mix that is used in traditional methods. E-marketing promotes significantly each of the Ps of the marketing mix and therefore provides it an advantage over traditional methods of advertising. However, the Internet is less conducive to the sales of certain products than others. This is often so due to the asymmetric distribution of information between the buyer and the seller (Idanan, 2009). E-commerce raises the risk of fraud, since the buyer might doubt the identity of the seller and the reliability of the product. Also, many consumers may be discouraged from buying products online since the marketers often boasts of features that are not present in the product. Moreover Internet also increases the risk of buying counterfeit products such as medicines. The safety, quality and effectiveness of these medicines are a cause of great concern for the consumers (Parliamentary Assembly, 2008). This has been dealt with by introducing laws that only industries with copyright for that medicine can sell that medicine. People would then be encouraged to use other channels due to the lack of reliability of the medicines that can be bought online. People might also not be encouraged to buy expensive such as jewelry from websites that have been recently established because of the reliability of the websites. When buying online, consumers are trying to seek immunity from Internet fraud. One step that they take is to ensure that they research on the product that they are going to buy, using reliable websites. E-tailers are reducing the risk of shopping online by not accepting debit cards and money transfers. Instead they encourage customers to use secure lines such as credit cards or other online payment protocol. E-tailers help to alleviate the concerns of the consumers about the privacy of their information and the reliability of the company through privacy policies and by posting the company logo on the website. Logos can help create brand and product awareness and can be useful in establishing the authenticity of the product (Rich, 2008). Successful companies who are well-established will be trusted by users more than new beginners. The general trends also show that customers are more likely to consider a company as reliable if its website has an interactive and catch layout, without any junk advertising. E-tailers are also using Internet merchant status at banks to reduce the security concerns of the consumers (Botha, et al., 2008). National retailers offer guarantee on the products that they offer online and works well for sellers on eBay (Sinclair, 2007). Internet can also be used to boast the levels of customer service on an offer. Companies can appoint customer services representatives who can talk to the customers and answer their queries directly and promptly. Customer service representatives can also send emails to the customers, giving them their name and number for contact. The consumers will feel pleased at the personalized treatment that they are getting. A personalized thank you note handwritten by the representative to the customer can increase the satisfaction the customer feels about the product. Customer service can also be boasted by having chats on the Internet. Many sites offer forums for customers to discuss products with customer representatives. E-commerce and e-marketing can have a major impact on the organization. Judging the productivity of the business doing e-commerce through a website encompasses factors such as if the company is making money and if the customers are coming at a rate at which the company was expecting (Kaushik, 2007). Companies can benefit from larger markets and customer bases. They can increase their productivity by trading online with people all over the world. However, the effect of Internet on the productivity of the organization is also dependent on other factors such as the faulty productivity processes. Therefore the degree if influence it has can vary. E-commerce also allows companies to market in new ways. Amazon was the first one to use the shopping cart software and has helped promote the sales significantly since it is easy to operate by service users (Bedord, 2008). Thus, in conclusion, the Internet and e-commerce can have a great influence on the companies that are using them for marketing. In online retailing and promoting products via the Internet, companies can gain advantage over traditional means of marketing by allowing consumers more ease of navigation, twenty-four hours access and global access to the products of the companies. Media sector can also gain from covering technology news on the Internet by providing up-to-date information. They can also allow fans of latest innovations information about the products in detail that they might have difficulty gaining from traditional means such as newspapers. Reference List Arntson, A. E., 2007. Graphic design basics. 5th ed. California (CA): Cengage Learning. Articlesbase, 2010. What are the Characteristics of Good Web Site Design? [Online] Available from: http://www.articlesbase.com/web-design-articles/what-are-the-characteristics-of-good-web-site-design-419450.html#ixzz0rLZp5bJw [Accessed 20 June 2010]. Bedord, J., 2008. I've Got a Domain Name--Now What???: A Practical Guide to Building a Website and Web Presence. California (CA): Happy About. Botha, J., et al., 2008. Managing E-Commerce in Business. 2nd ed. Cape Town: Juta and Company Ltd. Filipe, J. & Cordeiro, J., 2009. Enterprise Information Systems: 11th International Conference, ICEIS 2009, Milan, Italy, May 6-10, 2009, Proceedings. Berlin: Springer. Idanan, J., 2009. E-Commerce. [Online] Available from: http://ivythesis.typepad.com/term_paper_topics/2009/09/ecommerce.html [Accessed 20 June 2010]. Kaushik, A., 2007. Web analytics: an hour a day. Indianapolis (IN): John Wiley and Sons. Masterson, V., 2010. 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