How Is E-business Marketed - Essay Example

Answers to Questions asked (Part-I) How is e-Business Marketed The primary objective of any marketing is to first conceptualize the value proposition of an organization by means of market research & study of customer buying behavior and subsequently use most appropriate methodologies to propagate the concept to targeted customers. In e-Business, this methodology is well established when the products can be directly downloaded or delivered electronically - like e-Books, photographs, software, videos, journals, etc. However, the same is somewhat complex when the products are physical and need to be delivered by courier. The primary methodology of e-Business is to present high quality content on shared exchanges, integration of relevant content of business sites of the suppliers (example, SONY, SAMSUNG, LG, etc. product details documented at a high quality and presented through an exchange site where customers visit for products of a particular type, say monitors; the exchange site in turn is integrated with the databases of these companies), RSS Feeds, Search Engine Optimization and Customized Web marketing (like Google Adwords or Structured Mass Mailing). The infrastructure that needs to support the front-end marketing framework comprises of backend On-Line Transaction Processing, Content Integration Platforms and Enterprise Application Integration. The primary challenges are to first ensure that Customers visit the exchange site and then to present absolutely current information of product specifications, product availability, product pricing and backend supply chain management (like delivery mechanism - online as well as via courier services). The transactions occur very fast and completely online and hence the organization cannot afford to have sluggish approach to updating content pertaining to the marketing information. Processing of queries by Customers again need to have a very robust backend system to cater to accurate content mapping, appropriate presentation of content, ad-hoc queries, high availability & performance, etc. Clients are invited to create their personal profile through the mechanism of personalization whereby such accounts can be used to communicate with them regularly with accurate and up to date information pertaining to the product details, pricing, availability, dispatch and services/warranty. (Stonebraker, Michael and Hellerstein, Joseph. M. 2001. p1-7; Osterwalder, Alexander and Pignuer, Yves. 2002. p3). What are the Similarities and Differences in marketing for traditional business as compared to e-Business The primary objectives of marketing (stated in the section above) and the fundamentals of marketing in any business viz., market research, segmentation, product positioning, schemes, customer identification, customer engagement, supply chain, delivery mechanisms, support & warranty system etc. remain the same in both traditional marketing and e-Business. However, the competency modeling of an organization as per the competitive advantages described by Porter's Diamond (Recklies, Dagmer. 2001. p1) varies in both models of business. Businesses can reach Customers (and Suppliers) across regions, continents, cities, cultures, mindsets, etc. by virtue of a well established global computing framework for e-Business. An organization that may not have done well in traditional marketing in a continent, city, culture, segment, etc. might do very well there through e-Business. The fundamental difference that supports this theory lies in the Customer's own choice of purchases whereby the customers preferring e-Business mode of purchasing are normally different from the customers preferring purchases from physical outlets, like shopping marts. However, it is mandatory that a company divulged into e-Business should "get it right" in the first attempt because probability of getting a second chance is very low. This means that the risk of brand dilution in e-Business is very high. The marketing research, customer buying behavior, presentation of a product, branding style, marketing methodology, pricing, supply chain, services & support etc. are different in e-Business than traditional business. For example, the pricing aspects would be different in e-Business simply because the costing contributors are different. E-Business normally does not comprise of field sales staff costing but would comprise of technology costing. Advertisements in e-Business are expected to be cheaper because of usage of cheaper ad delivery mediums. Google Adwords (www.google.com/adwords) for example offers a pay per click advertisement scheme which is very cost effective and ensures desired results because the ads are normally opened by interested buyers only. Overall, a general understanding is that the revenues in e-Business are much higher compared to traditional business even if the products are priced lower. (Coltman and Devinney et al. 2000. p1-12; Hichem and Wahiba. 2005. p1-6) What are the similarities and differences in a marketing plan for B2C and B2B e-Businesses At a glance, not much of differences are evident in a B2B or B2C framework. The Presentation & Personalization Interface to Customers, Backend Technology Integration, Supply Chain, Support & Warranty and Payment mechanism appear similar from marketing style, thought process, technology and implementation perspective. The primary differences between B2B and B2C marketing systems are pertaining to the "extent of accountability" that drives: (a) Extent of technology integration (b) Level of contractual obligations and bindings (c) Level of Customer services and Expectations of Customers (d) Mechanisms of transactions between supplier and customers In B2C, the engagement with the Customer is through electronic means only between the seller and buyer. The marketing is carried out primarily through electronic content (e-Catalogues) and queries over information engines having loose backend integration with ERPs, CRMs, Supply Chain Systems, etc (via XML systems). The personalization offered to customers is minimal that keeps the most essential transaction details for the Customers. The content design puts more emphasis on branding of product than the supplying company. Not much of details about existing customers, engagements, track records, etc are needed in B2C mode. Purchasing is unorganized, brand & emotions driven, Business volumes are small and Payments are made normally via credit/debit cards operating through payment gateways only. Fraud control mechanisms (and accountability) from either sides is limited. Customer services are delivered mostly via E-Mail and limited phone calls. The customer expectation is limited as they do not expect too much of personalized treatment given that both sides are anonymous to each other. In case of dissatisfaction by a customer, not much can be done although genuine B2C sites take care of all precautions to ensure safe shopping by the customer. The advertisement costs in B2C framework is normally higher than B2B because of the high reach required to assure sales. Moreover, B2C framework accepts a number of value added services like e-Procurement Management, Supply Chain Management, e-Logistics, etc. These services are accepted by customers in order to achieve more trust amidst anonymous interactions. (Nykanen 2007. p7-20; Shon, Tae-Hwan and Parker, Craig. M. 2003. p4-7) In B2B, the marketing is more than e-Brochures or electronic queries promoted through search engines or exchange sites. In this framework, the accountability of fair business relationships lies with the exchange sites, the suppliers as well as the customers. The customer expectations of personalized treatment are very high as the transaction magnitudes are higher than B2C. The marketing is conducted via e-Brochures, e-Exchanging, e-Auctions, Special order zones, on-line stores, on-line supply chains, RSS feeds, Search Engine Optimizations and mass mailers. A substantial aspect of B2B marketing and engagements happen outside the e-Business framework (due to larger commitments, humans do meet and interact) - the business transactions, however, happen over the Internet by integrating the extranets (or sometimes portals) of the buyer and seller. The technology integration is normally much more in-depth, with ERPs, CRMs, Workflows, etc in the backend and support services are delivered via named staff at either side. The SLAs are more stringent, personalization is in-depth and the products, services, delivery model & supply chain are normally well defined, agreed & documented in a contract which in turn is managed via an integrated Contract Management System. The buyers place bulk repeat orders for same products again & again and expect recognition, reasonable level of transparency in information, standby arrangements & high level of supplier commitment. B2B market-space however, doesn't expect marketing of high end value added services because the human connectivity automatically invokes usage of other means which are traditional. Example, payments are not always electronic in B2B, the other means like remote checks or wire-transfer are also used in B2B. (Nykanen 2007. p7-20; Shon, Tae-Hwan and Parker, Craig. M. 2003. p4-7) An Example of a B2B and B2C website that employs a good marketing strategy: A good example of B2B marketing strategy can be found at the Red Hat Partner program (http://www.redhat.com/partners/programs/). Red Hat is one of the best contributors to Linux Open Source and created platforms on which a large number of applications have been developed by technology companies (including companies like IBM). Post this success, they themselves have become an exchanger for Red Hat Linux (or Fedora) based solutions between customers and the partners via their portal. Customers can login and search for a wide variety of solutions on Red Hat platform, read e-Brochures, engage with the partner and then carry out purchase transactions by verifying credentials, customer base, used cases and above all, the accreditation by Red Hat Inc. operating as the exchanger. One of the best and most trusted B2C portal is www.ebay.com. The level of details that this portal presents about each product is a real example of how B2C marketing can be made a success. eBay practices almost every known method of B2C marketing and in some cases does well in the role of a B2B exchanger as well. Their parallel service for payments (commonly known as Paypal) is an ideal example of how an exchanger can take accountability of payment guarantees as well as address grievances of consumers. They have integrated their services with local banks and law enforcement agencies in a number of countries to ensure resolution of conflicts at a global level. Part II: The paper on Legal, Ethical and Regulatory aspects of E-Business follows from the next page. Running Head: eBusiness Ethical, Legal and Regulatory issues of Electronic Business (Style: APA) Writer ID #: 19714 Order No. 244266 14 October 2008 Abstract In the modern era of business, electronic means of business transactions has achieved a level of immense maturity in multiple modes of interactions - Business to Business, Business to Customer, Customer to Customer, Business to Agent, Agent to Customer, etc. Business transactions are executed through interfaces in electronic businesses are Extranets over Internet (B2B, B2A, A2C, etc.) or directly through an Internet enabled Enterprise Portal (B2C or C2C). This paper presents some ethical, legal and regulatory challenges of e-Businesses prevalent in the modern world. Table of Contents: Introduction: Electronic business is a wonderful means for success of an organization even in the markets where traditional marketing styles might not have ensured success. It breaks all barriers that are put forward in traditional, face-to-face marketing styles where human engagement is the primary aspect to be managed. Electronic business ensures electronic means of transactions thus ensuring high level of ethics and confidence because details at every level gets recorded in a decision support system which are later available via queries and reports. The layers of business that directly support e-Business can be classified as - Customer Relationship, Product Innovation, and Infrastructure Management. Customer Relationship Layer takes care of marketing of products and personalization for customers in terms of saved queries, purchase history, saved chatting history, etc. Production Innovation Layer ensures product information, stock details, prices, capabilities, etc. and Infrastructure Management Layer comprises of the technology framework in which components & networks of all contributors, partners & stake holders are included (Yves, Pignuer. P1-2; Osterwalder, Alexander and Pignuer, Yves. 2002. p1-8). The information gathered through such structured systems reinforced with local & global cyber laws and cooperation by ISPs & Fair Trade Advocacy Groups can ensure that the ethical, legal and regulatory challenges in e-Businesses can be mitigated effectively. Ethical, Legal and Regulatory Issues pertaining to e-Business: Electronic Businesses have taken business transactions to the global level whereby the buyer or seller seldom see each other or talk to each other. In such a scenario, applicability of ethical issues and the corresponding laws, orders and governances are a big challenge. Ethics in business transactions apply to both buyer & seller and largely are dependent upon accurate identity management and trust management from either sides to ensure secured business engagement. The fundamental legal & ethical challenges in e-Businesses are: (a) Enforcement of contracts over Internet - support by local & global laws (b) Validity of On-line exchange/negotiation of terms and conditions (c) Accountability of the product offerer and the exchange site (d) Delivery terms, money back guarantee, product warranty, supply chain, follow-up mechanism, complain handling, etc. (e) Protection of e-Consumers in national and international scenarios (f) Copyrights, liability of self owned or third party contents, etc. (g) Criminal and Civil Liability (h) Identity and other data protection (i) Secured financial transactions (j) Detection and prevention of frauds (Schubert, Petra and Kummer, Mathias, et al. p2-6) The challenges are not complex in B2B environments because substantial amount of Human interactions occur in addition to the electronic interactions. As a matter of fact, the contracts in B2B framework are strongly enforceable given that a complete framework for contract management is in place that comprises of - Contract Repository, Notary, Contract Monitor, Contract Enforcer, and Contract Validator: Contract Repository is an on-line repository of standard contract clauses and templates that can be used by the parties to draft a contract. Notary is a repository that stores signed (executed) contracts which can later be used as an enforceable legal document. Contract Monitor is a tool used for monitoring the performance of both parties against the terms of the signed contract. Contract Enforcer is a tool that monitors breaches and sends warning and enforcer messages to all signing parties. It can even take actions like invoking financial penalties or suspend access to the system. Contract Validator is a tool that validates the legal enforceability of a contract as per applicable laws and regulations in a country, region or globally. This tool validates Competence, Clarity, Legal Purpose and legal considerations before validating a contract draft. The technology for deploying electronic contract management systems uses the "Contract Business Language" built by Commerce One in XML. Such a framework ensures that the partner network, exchanger and the customer are very tightly coupled among each other in a legal framework. In B2B transactions, the exchanger plays a major role in helping to execute contracts, protected storage & retrieval of contracts, engagement with legal & law enforcement agencies, managing duration & jurisdiction of the contracts, geographical area of the contract, agreement in payments terms, ensuring protection against payment & delivery defaults, managing conflicts, and ensuring a role as an escalation point. The B2B exchange operators develop and manage separate areas for contract management. They offer features like contract templates, electronic negotiation interfaces, electronic signature of contracts (digital signatures), electronic tracking of deliverables against contracts (example, electronic scheduling and reminder system against deadlines), monitoring trends in engagement of the parties that entered into a contract, enforcing timely instructions & issuing warnings to engaging partners such that they do not transition into a conflicting situation, etc. (Goodchild and Herring et al. 2000. p1-4) Ethics, Laws and Regulations are a bigger challenge in B2C systems. Practically, every country in the world have written and implied Cyber Laws which are enforceable against objective evidences collected that are acceptable by the applicable courts of law. The biggest challenge here is the traceability back to the individual/group who can be sued in court in case of a breach of applicable law. Common breaches in a B2C e-Business system include: Usage of stolen credit cards against a spoofed identity - the information furnished in the personalization form is pertaining to the original person whose stolen card is being used. Fake E-Commerce sites posing as representatives of a known brand that originally owns the intellectual property rights against the products sold by the fake site. Misuse of Customer's personal data - leakage of such data results in huge unsolicited mails (spams) pertaining to product offerings that he/she never subscribed for. Capture and Misuse of credit card details - an unscrupulous e-commerce portal storing the credit card details of a buyer and then misusing it to practice financial fraud and money laundering. Fake e-Commerce sites making big promises but not delivering or under-delivering a product that is ordered - example, a SONY camera offered but an assembled one delivered having no information about the manufacturer/brand. Fund transfers for dangerous motives behind apparently genuine E-Commerce transactions - this mechanism has been used by terrorists to transfer money across the world without the law enforcement agencies being able to sniff about them. The consumers (and suppliers, banks, payment gateway providers, etc.) are normally protected by the cyber laws and regulations applicable in the country. Most of the countries have provisioned for laws that allows proceedings against a company or individual not residing in that country. The challenge, however, is to trace the defaulter such that the person, group, firm, etc. can be brought to the courts. The Internet Service Providers have a major role in helping the law enforcement agencies to catch the culprits. Internet is made of IP addresses and Domain Name System (DNS) entries. For an E-Business site to be hosted, the following assignments are required (www.dnsstuff.com): Valid IP addresses on the Internet Valid domain names on the Internet - registered by Registrars allowed legally against a global compliance framework governed by Internet Assigned Number Authority (IANA) Valid DNS server entries on the Internet Valid hosting server details on the Internet Valid mail exchange records on the Internet (against a domain name) Given these details, it is very easy for an ISP to trace back to the person, group or firm responsible for the breach. Moreover the genuine e-Business exchange companies can have a detailed mechanism of checks and balances to verify the identity information of a buyer as well as a seller. An excellent example is the mechanism used by Paypal (www.paypal.com). They ask for a valid credit card number, verify the card against the username by charging $1 on the card and then asking the card owner to enter a four digit code from the credit card statement in the on-line form. It is apparent that this code will not be accessible to the person who might be using a stolen card. He/she has to further steal the statement of the card which again is not easy to obtain from an on-line login or a mailed envelope and moreover is banned to be obtained telephonically. All credit card companies inform Paypal if such a code is asked over phone in which case the card is disqualified. With this mechanism, the name, address, and bank details of both buyer and seller are authenticated which can then be used by the buyer or seller as trusted data. (Kjellqvist, 2004. p1-7) Another mechanism of fraud prevention is to transact with E-Business sites which are certified by Fair Trade Advocacy groups. Most prominent among them are Fair Trade labeling Organization (FLO), International Federation of Alternative Trade Organizations (IFAT), The Network of European Worldshops (NEWS) and the The European Fair Trade Association (EFTA). These four organizations, in turn, have formed a single umbrella called FINE. (Molla, Alemayehu. 2007. p9) Conclusion: E-Business is a wonderful means for an organization to become successful in the world of on-line customers. B2B and B2C are two organized mode of e-Business whereby B2B is concerned with formal engagements managed by B2B exchange portals and B2C is more of a loose ended business framework where management of identity and trust is a challenge. Legal and ethical issues pose serious challenges in B2C mode whereby B2B mode still has a manageable mechanism and technology to mitigate these challenges. Local cyber laws, measures taken by genuine E-Business companies, ISPs and Fair Trade Advocacy Groups can ensure that the culprits practicing money laundering and frauds on the Internet can be traced and executed under the applicable laws. Reference List: Coltman, Tim and Devinney, Timothy. M. et al. (2000). E-Business - Revolution, Evolution or Hype. Australian Research Council. P2-29. Goodchild, Andrew and Herring, Charles et al. (2000). Business Contracts for B2B. University of Queensland, Australia. P1-4. Hichem, Aouini and Wahiba, Mahmoudi. (2005), e-Business - Modelling and Opportunities. BESTMOD Laboratory, ISG, Tunis. P1-11 Kjellqvist, Henrik. Ethically Regulating the Internet. (2004). Department of Computer Science and Engineering, Mlardalen University. P1-7. Molla, Alemayehu. (2007). Exploring the space and practice of E-Business in the fair trade supply chain. School of Business Information Technology. RMIT University. Australia. P9. Nykanen, Oli. (2007). Measuring Differences in Service Expectations in B2B and B2C customers. Lappeenrnta University of Technology. School of Business. P7-20 Osterwalder, Alexander and Pignuer, Yves. (2002). An eBusiness Model Ontology for Modeling eBusiness. 15th Bled Electronic Commerce Conference - e-Reality - Constructing the e-Economy. Slovenia. P1-10. Purdue University On-Line Writing Lab (OWL) (2008), APA Formatting and Style Guide, Retrieved October 13, 2008, from http://owl.english.purdue.edu/owl/resource/560/01/. Recklies, Dagmer. (2001). Porter's Diamond - determining factors of National Advantage. Recklies Management Project GmbH. p1. Schubert, Petra and Kummer, Mathias, et al. (2004). Legal Issues of Personalized E-Commerce Applications. University of Applied Sciences Basel and Weblaw GmbH. Switzerland. P2-11. Shon, Tae-Hwan and Parker, Craig. M. (2003) Characteristics of Australian B2B marketplaces. Deakin University. Australia. P4-7. Stonebraker, Michael and Hellerstein, Joseph. M. (2001). Content Integration of e-Business. Cohera Corporation. CA. P1-7. Yves, Pignuer. Ontology for E-Business Models. HEC Lausanne. P1-2. In addition to the cited references, I would like to extend my special thanks to all those who extended to me knowledge and information that helped me to put together this paper. On their request, their names have not been published herewith. End of Document Read More