E-Business Systems and Marketing - Reebok - Essay Example

E-Business Systems As internet is gradually maturing and presenting a paradigm shift in its very ideation, the infrastructure has acquired abusiness character, a transcontinental personality and a vending framework of wide-ranging, business, educational, scientific and personal data. Now the use of internet covers real-time computer conferencing, audio broadcasting, video broadcasting, real time telephony and of course real-time business. E-business in its simplest form can be described as doing business in electronic form. In this study we study how this feature is being exploited by many online stores including Reebok, a global sports and fitness company with a heritage dating back to 1895. The mission statement of Reebok includes two very significant aspects; i. "Our purpose is to ignite a passion for winning, to do the extraordinary, and to capture the customer's heart and mind." ii. "Built on a foundation of trust, listening and innovation, we are our customers' most valued resource for quality products and information and the leading authority in sports and fitness." Through online retailing Reebok is indeed trying to reach nearer the customer and igniting the passion for more purchases. Listening to the requirements of the time and IT era, Reebok has indeed put in lot of successful efforts to make the online retailing site more customer friendly. Reebok has earned a name for itself in the field of sporting goods and sponsorships, therefore to maintain the leading brand identity requires investments with adaptive and corrective actions at crucial junctures. E-business is just one such step. Executive Summary Today we are in the 'information age', which effectively means 1. We have plenty of sources of information. 2. We cannot survive in this fierce world of competition, without credible information and analysis. It can be safely said that, 'Information is power! It is an asset that can help overcome the glorious uncertainties and opens new avenues for doing business. Marketing, plays a crucial role in this entire business process. For an effective marketing strategy psychological needs of the customer(s) are to be kept in mind. These needs must be met in order for a person to be persuaded to purchase a product or service. E-business is no exception. Here the website visitor is persuaded to close the deal successfully by following a five step strategy. This can be done with building trust and confidence by meeting the psychological marketing needs of that visitor and potential customer while escorting that visitor through the selection and purchasing process. These five levels of the sales process are the core components that will move a website viewer from visitor to customer or client. The five levels are; Marketing/Prospecting to the Target Market and Audience: Prospecting is the result of marketing. It's the delivery of targeted qualified traffic to the company's virtual storefront. This can be achieved by search engine optimization, pay per clicks, or advertisements that draw people to the company's site. Once they are there it is the job and responsibility of the company to deliver its Unique Selling Proposition (USP). Though Reebok doesn't appear to be making frantic efforts towards attracting the audience from all around, but once they are in the virtual store, there's lot for the customer to have a look at, different varieties, technologies that are being used in designing the shoes, video bites of sporting personalities etc. Building Credibility and Trust - (viewer needs this to move forward): In a brick and mortar business trust is built by human interaction. Greeting a person when they walk in the door or physically helping them find something that they are looking for, helps in business propositions. For a virtual store the company is supposed to make sure that the site appears to be trustworthy, it has a professional appearance. The company is also supposed to know how long does it take to open the web-page How easy is it navigating through (i.e. user friendly links and terminology on the site) Are there any grammatical mistakes on the site How easy it is to get customer support on the site Reebok scores well on almost all these parameters. www.rbk.com and http://www.rbk.com/fr/default.htm appears a very genuine site with a professional appearance, easily downloadable info, and the terminology used on the site is quite friendly too. Escort and Court the Buyer through the Process - (i.e. Meet their Needs): A person happens on your site because he is looking for a solution to a problem. That solution can be a product or a service. Therefore the offer from the site has to be crisp and as per the needs. Reebok offers a range of products for different segments on its site. Present the Product or Service that meets their needs: The presentation process is how you are presenting your products or services to your visitors as you guide them through the selection process after you have escorted them and found out what their needs are in the previous stage. Successfully Close the Sale: i.e how easy and credible to make online payments and subsequent delivery system. Reebok has it all on its website. It offers a range of products then asks for selection and offers a 'basket' to keep these selected items. And once the shopping is done offers a checkout and safe payment gateway. Introduction: Electronic business in its purest form is the extensive use of computers, communication technology, networking technology and computerized data to perform business processes. In other words, e-business is any system of employees, stakeholders, suppliers, distributors, sellers or customers that use the Internet as the basis for their operations. It can range from using e-mail to communicate with customers and/or conduct business to a web page promoting a company, from a full e-commerce retail site to the integration of procedures and processes using Internet based technology. It takes its cue from terms like e-mail, e-commerce, e-governance etc. The term "e-business" was coined by Lou Gerstner, CEO of IBM. Today leading online stores and companies have moved beyond the 'one-size-fits-all' approach to 'customization' and internet relationship. It is an electronic commerce application used for B2B or B2C. Online shopping has become popular mainly because of its speed and ease of use. Initially users were mostly computer literates, but now the universality of access has made paradigm shift in e-business operations. E-business is more than just e-commerce. It involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer services, and cooperating with business partners. Now the internet e-business portals greet each customer by name and present targeted information and services that correspond to each visitor's unique preferences and requirements. This type of personalized attraction increases customer loyalty, enhances revenue for the company and helps in establishing a valuable database of customers. E-business Development The internet may be changing the way we do business, but it hasn't altered the fundamentals of human nature. People still respond to personalized services. They want to be treated as individuals and they appreciate intelligent assistance in finding products and services that meet their unique needs. Businesses that understand their customers and cater to their individual preferences benefit in two key ways; In the short term, they increase the sales potential of every customer interaction. In the long term, they establish a more loyal customer base. With a personalized e-business solution, a company can customize the online experience for every visitor who comes to its internet, extranet, or intranet site. The process is relatively straightforward. Visitor information is accumulated through a registration process and by observing online behavior. Patterns can be analyzed and compared. Market segments can be defined and reliable predictions can be made about the products or services that interest a particular individual or group. Based on this analysis, a unique combination of information and promotions are presented to each user. The 'click stream behavior' of each visitor can be monitored and feedback gathered accordingly. Personalized services can improve efficiency and communication throughout the e-business value chain. Companies can also push targeted content depending on the user's business role and personal preferences, further adding value to the user and strengthening the key business objectives. As is the case with the personal business-to-consumer environment, in this case also the tangible and intangible benefits are quite comprehensible. Information flow can be optimized, so that right information gets to the right person at the right time delivering the right content. But, the company must keep be aware that information overload does more harm and may provide to be counter productive. In order to gain a competitive advantage over others, the sanctity of customer preferential limits must be honored by the company. In fact the concept of e-business is still in evolutionary stages, because of the prevailing uncertainty and doubt over the internet transactions. There have been many frauds concerning net-transactions and it is said that e-fraud is as rampant as e-probity. But till we can trace the timeline of e-business operations to at least a decade back. To make online purchases, EDI or Electronic Data Interchange, was standardized through ASC X12 in the year 1984. This guaranteed that companies would be able to complete transactions through electronic means with one another reliably. CompuServe (the company prefers to call itself The Value Leader in Cyberspace), a company offering computer equipment was the first one to offer online retail products to its customers. In 1979, CompuServe became the first service to offer electronic mail capabilities and technical support to personal computer users. CompuServe broke new ground again in 1980 as the first online service to offer real-time chat online with its CB Simulator. This provided people the first chance to buy things using internet and computer. The e-business venture may not be hugely profitable, but it is still being experimented with because of the 'intangible' benefit of being 'seen' in the public domain. In case of Reebok also, the company may not be getting the desired monetary returns, but still good investment has been made my Reebok on e-tailing because online business immensely helps in brand building and image building exercises. Even the functioning of governments has also been affected using this e-concept. Now even day-to-day operations are changing at every level of public service. The concept of e-governance has now become a trendy concept in both developing as well as the developed nations. This marks a shift from the traditional 'information exchange' to an 'information processing' model of engagement, where citizens are no longer just consumers of government programs and policies but actively engage in shaping them. With the exponential increase of net users, and newer inputs for securing all net transactions, this concept is bound to pick up very soon. Legal and Ethical Issues in e-business: As such there is no central authority over the internet, the network is bare and exposed. It continues to be in tatters and its vulnerabilities, though of a different kind, are a concern of the entire civilized world. The legal aspect of e-business is all about managing risks. It is important to ensure that the content of a new website is accurate and complies with current law. It is also important to regularly review the website once it is up and running to ensure that it continues to comply with the latest rules and regulations. Ironically the beginning of the new millennium saw the internet turning into an instrument of naked terror too. Cyberspace is now a battlefield of virtual, proxy and remote controlled wards between good and evil, civilized and uncivilized and amongst others. Today if companies like Microsoft, Intel, IBM, REebok etc are running successful business online than a terrorist organization like Al-Qaida too is doing a successful online business as well. There are even websites recruiting terrorists online. Such websites have been using innovative techniques like steganography to pass on messages to its members. Steganography involves encrypting the message along with some picture or video. The text message cannot be seen on the screen, but can be decoded by receiver after decrypting the coded messages. For any online communication between a company and an individual broadly the following ethical concerns are highlighted; Obtaining the personal details when the customer has not had any dealings with the organization Monitoring the Internet usage without the knowledge of the net-user Using personal details for other than what has been provided them for Obtaining irrelevant personal details (which might be useful later). This indicates that a delicate balancing act is required to be maintained between business and consumer interests. The model of e-business is in general can be explained with the help of the following chart; Stakeholders like Employees, Investors, Owners, Financers are the ones' who put in their resources together to discuss the prospects of investing in the online retailing business, the plan outlays and the strategies. Input is taken from existing customers, resellers, business partners, suppliers and distributors about the feasibility and prospects of such a venture. E-business is not just about displaying the items/ products and info. It also involves many legalities like; i. Privacy laws: Since the website will be collecting the personal information of its customers (through registration), it must not be disclosed for a purpose different from the original purpose of business, except in limited circumstances like on matters concerning security of state. ii. Contracts: Contract law will also apply to on-line contracts. For a binding contract the company must establish the essential terms of the contract, the offer made, the acceptance and the relevant consideration. This can be done through electronic communications or directly on the website. iii. Terms and conditions: It is essential for any e-business to outline terms and conditions on the website which govern the manner in which the website is to be used and the specific obligations that the user must accept prior to using the website. iv. Trade practices: There has to be a 'Trade Practices Manual' to follow which prohibits misleading or deceptive conduct or any behavior which is likely to mislead or deceive. Consumer sensibilities are also taken care of in fair trade practices. v. Intellectual property: Various intellectual property issues will arise with respect to an e-business. It is important that all intellectual property rights applicable to the e-business are properly identified. vi. Copyright: Copyright owners enjoy certain exclusive rights in relation to their creations. Any website will have copyright content on it and one should take measures to protect the rights by obtaining an assignment or license of the copyright in the material created by the website designers so future websites can be control. vii. Trade marks: If any company is using, words, devices or sounds on its website as a trade mark, the company should seek advice about registering one or more as trade marks through specialized trade mark attorneys or intellectual property solicitors.. viii. Confidential information: No confidential information should be published on the business portal. ix. Digital signatures: Digital signatures are electronic codes specific to individual users, which can be used to identify the originator of a message or file, and to indicate approval of information transmitted. x. Security: Managing legal risk on a website necessitates implementing security measures for the company and its website and for users/ customer of the website. Security measures, both in relation to hardware and software are to be implemented, to protect confidentiality and ensure authentication and verification of parties to contracts. xi. Jurisdiction: The laws that apply to electronic transactions will be governed by the applicable jurisdiction. This can be a complicated issue in relation to the World Wide Web, particularly regarding contracts where the contract is formed between parties in different countries. Each contract, as well as the website terms and conditions, should specify the applicable law. Having taken care of all these issues, suitable mechanism is put in place to manage the supply chains and selling chains. Supply chain is of course managed using Enterprise Resource Planning. ERP is an information system that integrates all manufacturing and related applications for an entire enterprise like Logistics, Production and Distribution. Online stores too require effective management of inventory, resources, and business processes across departments in the enterprise. This management has to be adaptively upgraded depending upon the feedback received from the venture. On the other hand customer relationship management involves marketing efforts & promotion, sales teams management, and customer services. This process too is an evolutionary process and involves continuous interaction with the market place and the customer preferences. Conclusions: Reebok has its online store broadly divided into three regions North America, Europe and Asia. These three regions are further subdivided into countries catering to the specific needs of the people from these countries. This way the regional/ local legalities are also taken care of. The website having the local flavor, local content and local contact points helps in encouraging the customer to go for the deal. There are a wide variety of alternatives available on the online store. This definitely gives Reebok an edge over its competitors. In fact to have a sound and competitive business strategy, the company should take into notice; Faith: Reebok has been in the business since 1890s. Therefore it knows how to manage customer relationship. Having earned the confidence of its customers over the years though the retail outlets, it is now the turn of online retailing. Fear: The fear of loosing the lead if the company doesn't adapt the latest techniques for approaching the customer has encouraged Reebok to take up its e-business composition seriously. Fact: The factual position as of now is, the customer doesn't have much of a time to go to a store, spend couple of hours and then bring the bagful of goodies. Now the customer wants his bag to be delivered at his premises. This has further driven the urge of going in for e-business. Reebok is a well known brand all around the globe in general and in these regions in particular. It is not possible for Reebok to open up big showrooms catering to all these places. Customer prefers to buy after having a look at the range of products and then opting for his choice. Reebok has displayed a wide variety of its sports goods all over the website. Payment options are available through credit cards and gift certificates. Making payments through credit card has its security concerns. An essential issue for business document interoperation is how a business document can be faithfully sent and received between any two autonomous business communities through computers, and the document sender and receiver have not misunderstood the uses of the exchanged documents. This faithfulness requires not only the consistent document structures but more importantly also the consistent meaning-level interpretation of document contents between the sender and the receiver. www.rbk.com supports Verified by Visa (VbV), a security technology that authenticates the customers' Visa card and ensures that only the authorized cardholder is placing the order. Customers' can very well take this promise on its face value, because of the brand value of Reebok. Read More