E-Marketing Strategy-Business Issues - Case Study Example

1.0 Introduction Marketing is a complex and costly exercise and there are both traditional brick and mortar stores and online stores that cater to customers. The first set of trade banks on the customer visiting them and spending time at the store to locate and find their needs. This means that the customer has to physically be present and give up on other activity to shop. On the other hand others are beginning to realise that the customer is rushed for time and offer their wares on the online shop thus reducing the visiting time for them. The shortcoming of the first model is that they are costlier to maintain due to the high cost of establishing and maintaining physical stores and filling them up with merchandise. This means heavy investments in inventory and maintenance of the stores. Naturally this makes the end product costlier. In the second model there is no need for an inventory and shipments can be made from the factory maintained central warehouse or other distribution points at lower cost. This is essentially E-Marketing that is less expensive and has a greater reach. Online business has also become a trend with customers preferring this mode for ease of access and ease of payment. Electronic market places allow companies to present their firm and their products on a especially dedicated internet platform. They offer public authorities the possibility to get an overview of the market. Simple forms of electronic market places could be compared with electronic business directories. Combined with an e-catalogue electronic market places can also become a platform that allows public authorities to order products. 2.0 Fundamentals of Online Business It is thought that extending business online just means launching a website about the products and/or services of the company. However a successful e-marketing initiative for extending business online the behaviour of the target audience is important. The design of the website has to be appealing; the Content needs to be useful, Search Engine Optimization are necessary for quick access and the features and technology deployed should be easy to use. Once the site is up and running several strategies are to be executed to drive traffic to the site regularly such as; linking with other sites, advertising where necessary, submitting to search engines, etc. Last but not the least there is need to maintain updated and relevant information on the site to retain the interest and loyalty of the customers. 3.0 Novel Techniques E-commerce, although an integral part of extending business in this century, is not something that can be achieved without devoting a decent amount of time and effort. And unless executed with expertise, it is likely to flounder in the abyss of cyber space. The evolution of web 2 with interactive sites have opened a new era of bringing consumer communities together and sharing of experiences has helped crossing of previous barriers; and the old word of mouth publicity is of immense value. This has had profound effects on the minds of the consumers and they have become more conscious and responsive. E-Commerce can become an integral part of the sales strategy. While it is one of the least expensive mediums for reaching out to new markets, if implemented successfully, it also offers a smart way of doing business and expanding it further. The E-Commerce platform is Designed & Developed to maximize its reach to potential customers and provide them with a convenient, gratifying and a secure shopping experience. 3.0 Design and Layout The novel feature of this business will be that it is an on-line Business-to-customer (B2C) business venture which will have a virtual shopping space on the World Wide Web. This concept expands the coverage area of the operations, frees it from the confines of four walls and offers the customer a wide variety of choice from the comfort of home or office. A full catalogue of the products and spares, which is continually updated with new combinations, is available for the customer to browse at leisure. The on-line store will be a unique and ultimate shopping experience for visitors and customers alike. One can window shop without crowding and enjoy the visit with a comfort minus the hassles and at a time that is chosen by the visitor. The shop is never closed and works 24x7x365 to suit the moods and needs of the modern day shopper. Orders can be placed readily for any product and the price to be paid is always known. Payments were never so easy. Cash is out and card is in. The individual and institutional customers can plan their payments and the payment gateway is secure with a wide variety of choices. The navigation of the site will be user friendly and will be designed with a pleasing background. The site will be made interactive and a FAQ that will assist the visitor or customer on most likely questions and answers and for more discerning queries will save time in repeating solutions. There will also be an option to email online with assured answers within a very short period of time. This web-store will be strategically placed with search engines and tagged specifically so that its visibility will be increased. Further measures for user awareness such as ads and banners on most frequently visited sites will be placed to increase hit rates. 4.0 B2C Marketing Internet plays a vital role today. Most users go online to search for their requirements and almost all information is available here. The company will miss out a large chunk of prospective customers if does not have a web presence. It has thus become a necessity not only to have a pleasant website but ways and means have to be adopted to get noticed on the web. Use of search engines and keyword/tag tracers will be essential. The website has to be very attractive as the surfer is literally surfing the web and will stop at a site only if it attracts him in the first 15 or 20 seconds. The customer should be able to order his needs on line. This means the B2C or Business to Customer management has to be fast and accurate as this is like a counter sale and immediate response and confirmations are a must. 5.0 Addressing New Markets Two Cities will be looking to cater to the UK and EU markets where the potential is tremendous as the population is educated and is also net savvy. They are part of the post modern society that is far more liberal than its ancestors. The company will be offering a new vision to its customers and introducing them to a low cost and quick acquisition of the product or its parts/accessories. 6.0 Marketing Strategies – The Supply Chain Whether it is the brick and mortar store or an online store, some fundamentals do not change; although the relationship can be different in the two cases. One of them is the existence of a strong and dependable Supply Chain. A good supply chain ensures timely availability of goods at reasonable cost. Both are essential for competitive advantage (Porter 1996). Three or more organisationally distinct handlers of products, where products include physical goods, services and information, make a supply chain. Due to this multi-organisational nature the supply chain management has emerged as the core strategy of the firm for competitive advantage with a focus on building and maintaining inter-firm relationships. This is now widely understood as the strategy for competitive advantage that is now sought not at the level of the individual firms but at the level of the entire supply chains that combines to deliver satisfaction to the consumer. 6.1 Distribution and Logistics The other vital link is the management of logistics. Unless deliveries are well planned there will be chaos and ultimate failure of the organization. With the spread of overseas markets companies have had to re-think their position in asset building for logistics. The cost and expertise is too much and the spread very wide there is a need for outsourcing these activities to specialists who could deliver the result at fixed costs and in an agreed time frame. Here is where the Distribution network of Two Cities will become useful to support the E-Commerce initiative. The orders taken from individual customers should be passed on to the nearest Distributor for delivery. Quick deliveries will create goodwill and loyalty. This will also strengthen the inter-firm relations and create a larger business for both the principal as well as the distributing channel partner. 6.3 Trust In a mutually advantageous partner relationship is built on trust, sharing and transparency (Womack and Jones 1996). Trust is a vast and multi-dimensional concept. It begins with the belief that at the individual level trust is considered to be related to trust at the firm level (Jefferies & Reed, 2000). When we talk about what we can trust, it has been universally accepted that partners can trust in each other’s capabilities and benevolent intentions (Mayer et al., 1995). The why of the trust has been identified as calculation-based, knowledge-based, and emotion-based trust (Lewicki & Bunker, 1995). Trust can also be seen as playing multiple causal roles, as outcome, antecedent, and mediator (Rousseau et al., 1998). When two partners have collaborated in the past the out come is trust. With a history of collaborations between them the antecedent role of trust will come into play. In a new collaboration trust plays the role of mediator for concluding contract. It has been observed that Trust is a critical ingredient for inter-firm cooperation (Vangen & Huxham, 2003). Trust between partners generates constructive attitudes and behaviours, and decidedly helps to augment the effectiveness of the relationships (Morgan&Hunt, 1994). Trust is also important for negating uncertainties. 7.0 Building the Web-Store The key factors that we will focus on while building your Online Business include: Attracting potential customers Providing Brand identity Building trust relationships Providing easy-to-use interface Maintaining security Building customer loyalty 7.1 Benefits of E-Commerce Increase in sales revenue Low-cost/high-payback alternative to traditional physical store or mail-order catalog High-value services at low cost Easier to scale up online Tap a growing segment of customers who are comfortable purchasing goods online Avoid losing sales to competitors who are online Immediate international sales presence Operate 24 hrs/day, 365 days/year Expand customer base Set up shop anywhere, independent of geographical locations Low-cost way to turn your Web site into a profit center Reduce Customer Support costs via email and regular Newsletters Create customized mailing list E-Commerce can become an integral part of your sales strategy. It is one of the low cost mediums for reaching out to new markets and if implemented successfully, it also offers a smart way of doing business and expanding it further. E-Commerce platform is Designed & Developed to maximize its reach to potential customers and provide them with a convenient, gratifying & secure shopping experience. This is a great way to retain customers as they find it easy to return to a web store as compared to a physical store. 8.0 Customer Retention Customer Retention (CR) has been defined as the continuation of the business relationship created between a supplier and a customer (Gerpott et al, 2001). The value of retention of both customers and suppliers is therefore paramount. Marketing strategies are now paying more attention to building on this relationship. From a short-term goal of a single transaction, the focus has shifted to building a long-term relationship. A new term of having a Customer Life-Cycle Value was coined by Grönroos, (1982) and was alternatively described as Time Life Value by Hwang et al, (2004). Customers should be evaluated by their potential spending power rather than maximizing on one single transaction entered into with them (Andersen, 2001). When value is determined in this manner it will encourage companies to give (CR) a prominent place in their marketing plans. It will give an entirely new perception to the marketing strategy as this becomes an important factor in the measurement of the potential and will be considered as a critical concern for management. This Life-Cycle has become the cornerstone of marketing strategy. Two Cities will benefit twice over by a web presence. It will not only build up a relationship with the end customer but also build bridges with its distributors. Along with B2C marketing B2B marketing has become synonymous with relationships. Indeed marketing has been very aptly described simply as the process of managing relationships (Gronroos,1996). 9.0 Evaluation Under the current scenario Two Cities is an important supplier of Lawn Mowers in the niche market; supplying the machines to both individual customers, large customers and institutional customers. Its major market is in UK although a fifth of its revenues are also generated from exporting to the European Union. The export market is an expanding one and with greater activity of the Green Movement the demand for Lawn Mowers is bound to increase. Quality and Brand have become important for consumers. Integration of European Union (EU) as one market with a common currency has made it easier for sellers and buyers to facilitate trade and commerce. With the advent of Internet and the entire area becoming net savvy, businesses have successfully turned to this medium for selling their wares. Even large items like automobiles are now available and sold through the net. Therefore selling Lawn Mowers through the internet is very feasible. Selling spares becomes even more practical as these are comparatively low cost items and do not require a sales pitch as intensive as in the case of the machines. Consumers immediately recognize the needs and order straightaway. Indeed they would prefer to buy online since it saves them the time to go an pick up the item. Online shopping also eliminates the possibility of an error that might occur if orders are placed on telephones. The customer actually identifies the requirement by visual or number and by its relevance and this offers a greater confidence in the transaction. Payment for smaller items through credit cards is a norm and will be welcome by the customer. Payments for larger amounts are also made feasible and easy through payment gateways provided by banks and net-banking transactions are quite common these days. Deliveries too can be arranged through the nearest distribution channel and quick delivery ensures a satisfied customer. The greater advantage by involving the distribution channel is that they get the commission on the sale for handling the account. While it is true that its cuts the margin for Two Cities but it will ensure greater loyalty from the distributor who will order for some minimum quantity with himself to qualify for the service. This itself will ensure higher sales that will compensate for the slight loss of commissions paid on this account. Another benefit will be improved customer relationship. When a customer knows that there is an online store managed by the company he is assured of not only continuous supply but also of best prices and uniform standard quality of products. This will also build up a centralized customer database which can be effectively used for sales promotion and other brand building and communication activities by the company. From this site too the customer will learn of various new products and distribution centres. 10.0 Conclusions Within UK and the EU there is great internet penetration and consumers go for online purchase for most consumer goods. While the older concept of marketing and sales revolved around a visit to the corner store, the shopping mall and the franchise outlets, the new and more acceptable form for the younger generation is the online store. They also can visit a much larger number of stores from a great number of locations, both national and international, that is not conceivable in a physical shopping environment. The virtual environment created by the virtual marketing exercise has opened up a new worldwide market that was not possible before for both the seller and the buyer. This exposure is not at the expense of the traditional brick and mortar stores. It actually activates those dormant consumers who had to curb their desires for want of time and mobility. Today the market has become mobile and is accessible from one’s own chair and desktop/laptop. Going even further a number of markets like fast food and travel have already become accessible from mobile phones as well. Without any doubt that widening of market always offers comfort to manufacturing. However this exercise is usually fraught with high initial costs as well as long gestation period waiting for enough footfalls to make it a viable venture for return on investments (ROI). But the initial expenditure on creation a website is no where near the cost of setting up of even one store. Moreover one website covers a large area, indeed the whole world as in the case of www.amazon.com, which even a dozen or more stores cannot compete with. The customers and visitors also come by more quickly and easily and visibility is huge. The ROI is achieved very quickly and technology is quite reasonably inexpensive. Advertisement, promotion, displays, information and the personal touch are easier on the web than ever before; indeed now ways are being discovered daily to make the web a more realistic experience for both the seller and the shopper. Web 2.0 has introduced the interactive element that is almost like talking face to face with the customer. Customer feedbacks have long been considered important for product and service improvements and they can be had almost instantly. Such interactive exchanges also make for great relation building maneuvers and develop affinity for the product and the company. This is hardly possible at the store as the size and environment is intimidating to the average customer. Relatively the anonymity in the web allows for more in-depth and closer relationships and a far more frank judgment that can be acted upon quickly. 11.0 Recommendations We therefore recommend that Two Cities should not be left behind in the race. The company already enjoys a considerable respect in the market that should be logically enhanced with a web presence. This will augur well for both customer and distributor channel relationships and the company will be able encash its true potential. This is a presentation for the benefits to be realised by a web presence and we shall be too happy to get a chance to offer our services in this direction. [3097 words] Bibliography Andersen, P.H., (2001), “A foot in the door: Relationship Marketing Efforts Towards Transaction Oriented Customers”, Journal of Market-Focused Management, 5, PP 01-108 Gerpott, T., Rams, W.; Schindler, A., (2001), “Customer Retention, loyalty, andsatisfaction in the German mobile cellular telecommunications market” Grönroos, C., (1982),‘An Applied Service Marketing Theory’, European Journal ofMarketing 16(7):30-41. 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