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Guided tour continued

Summary

1 This chapter has focused on online consumers and e-retailers and in doing so hasintroduced some of the key issues that might eventually affect the overall success of

e-retail markets.

2 Online customer expectations are being raised as they become more familiar withInternet and other digital technologies and as a result companies are being forced to

adopt a more planned approach towards e-retailing. Additionally, in doing e-retailmanagers are considering who their customers are, how and where they access the

Internet and the benefits they are seeking.

3 Web sites that do not deliver value to the online customer are unlikely to succeed. E-retailers need to develop a sound understanding of who their customers are and

how best to deliver satisfaction via the Internet. Over time, retailers may begin todevelop more strategically focused web sites.

4 Given current levels of growth in adoption from both consumers and retailers it isreasonable to suggest the Internet is now a well-established retail channel that pro-

vides an innovative and interactive medium for communications and transactionsbetween e-retail businesses and online consumers.

5 The web presents opportunities for companies to adopt different retail formats to sat-isfy their customer needs which may include a mix of Internet and physical-world

offerings. Furthermore, bricks-and-mortar retailers and pureplay retailers use theInternet in various ways and combinations including sales, ordering and payment,

information provision and market research.

6 Web sites focusing on the consumer vary in their function. Some offer a whole suiteof interactive services whereas others just provide information. The logistical prob-

lems associated with trading online are limiting the product assortment some retailersoffer.

7 Trading via the Internet challenges e-retailers to pay close attention to the onlinemarkets they are wishing to serve and to understand there are differences between the

on- and offline customer experiences.

8 The virtual environment created by the Internet and associated technologies is agrowing trading platform for retailing. This arena is increasing both in terms of the

number of retail businesses that are online and the extent to which the Internet isbeing integrated into almost every aspect of retailing. As a result retailers must choose

how they can best employ the Internet in order to serve their customers rather thanwhether to adopt the Internet at all.

References

Aaker, D. and Joachimsthaler, E. (2000) Allen, E. and Fjermestad, J. (2001) E-commerce marketing strategies: a framework and caseBrand Leadership. Free Press, New York.

Anderson, C. (2004) The Long Tail. analysis, Logistics Information ManagementWired. 12.10. October. , 14(1/2), 14–23.

Baker, W., Marn, M. and Zawada, C. (2000) Price smarter on the Net, http://www.wired.com/wired/archive/12.10/tail.html. Harvard Business Review,

BBC (2005) Napster boss on life after piracy. February, 2–7. BBC. By Derren Waters, 22 August.

Benjamin, R. and Wigand, R. (1995) Electronic markets and virtual value-chains on the infor-http://news.bbc.co.uk/1/hi/entertainment/music/4165868.stm.

Berryman, K., Harrington, L., Layton-Rodin, D. and Rerolle, V. (1998) Electronic commerce:mation superhighway, Sloan Management Review, Winter, 62–72.

Bickerton, P., Bickerton, M. and Pardesi, U. (2000) three emerging strategies, McKinsey Quarterly, No. 1, 152–9.CyberMarketing, 2nd edn. Butterworth

Bicknell, D. (2002) Banking on customer service, Heinemann, Oxford. e.Businessreview, January, 21–2.

Booms, B.H. and Bitner, M.J. (1981) Marketing strategies and organisational structures forservice firms. In Marketing of Services, J. Donnelly and W. George, pp. 451–77. American

BrandNewWorld (2004) AOL research published at Marketing Association, Chicago. http://www.brandnewworld.co.uk.

Brynjolfsson, E., Smith, D. and Hu, Y. (2003) Consumer surplus in the digital economy: estimat-ing the value of increased product variety at online booksellers, Management Science, 49(11),

Burnett, J. (1993) 1580–96. http://ebusiness.mit.edu/rPromotional Managementesear. Houghton Mifflin, Boston.ch/papers/176_ErikB_OnlineBooksellers2.pdf.

Christodoulides, G. and de Chernatony, L. (2004) Dimensionalising on- and offline brands’composite equity, Journal of Product and Brand Management, 13(3), 168–79.

Davidow, W.H. and Malone, M.S. (1992) Corporation for the 21st Century. HarperCollins, New York.The Virtual Corporation. Structuring and Revitalizing the

Dayal, S., Landesberg, H. and Zeissberg, M. (2000) Building digital brands, No. 2. McKinsey Quarterly,

de Chernatony, L. (2001) Succeeding with brands on the Internet, Management, 8(3), 186–95. Journal of Brand

de Chernatony, L. and McDonald, M. (1992) Heinemann, Oxford. Creating Powerful Brands. Butterworth

Diamantopoulos, A. and Matthews, B. (1993) Practice. Chapman & Hall, London. Making Pricing Decisions. A Study of Managerial

Emiliani, V. (2001) Business-to-business online auctions: key issues for purchasing processimprovement, Supply Chain Management: An International Journal, 5(4), 176–86.

Evans, P. and Wurster, T. S. (1999) Getting real about virtual commerce, Review, November, 84–94. Harvard Business

Fill, C. (2000) Times/Prentice Hall, Harlow.Marketing Communications – Contexts, Contents and Strategies, 3rd edn. Financial

Frazier, G. (1999) Organising and managing channels of distribution, Marketing Science, 27(2), 222–40. Journal of the Academy of

Ghosh, S. (1998) Making business sense of the Internet, 127–35. Harvard Business Review, March–April,

Gladwell, M. (2000) Brown, New York.The Tipping Point: How Little Things can Make a Big Difference. Little,

Harridge-March, S. (2004) Electronic marketing, the new kid on the block. Intelligence and Planning, 22(3), 297–309. Marketing

Introna, L. (2001) Defining the virtual organisation. In S. Barnes and B. Hunt (eds). and V-Business. Business Models for Global Success. Butterworth Heinemann, Oxford.E-Commerce

Jevons, C. and Gabbott, M. (2000) Trust, brand equity and brand reality in Internet businessrelationships: an interdisciplinary approach, Journal of Marketing Management, 16, 619–34.

Further reading

Allen, E. and Fjermestad, J. (2001) E-commerce marketing strategies: a framework and caseanalysis, Logistics Information Management, 14(1/2), 14–23. Includes an analysis of how the

Baker, W., Marn, M. and Zawada, C. (2000) Price smarter on the Net, 4 Ps are impacted by the Internet. Harvard Business

ReviewInternet pricing., February, 2–7. This gives a clear summary of the challenges and opportunities of

Ghosh, S. (1998) Making business sense of the Internet, 127–35. This paper gives many examples of how US companies have adapted their prod-Harvard Business Review, March–April,

Harridge-March, S. (2004) Electronic marketing, the new kid on the block. ucts to the Internet and asks key questions that should govern the strategy adopted.Marketing

Intelligence and Planninggives a review of the impact of the Internet on different aspects of the marketing mix., 22(3), 297–309. Like the Allen and Fjermestad (2001) paper, this

Kumar, N. (1999) Internet distribution strategies: dilemmas for the incumbent, Times, Special Issue on Mastering Information Management, no. 7. Electronic CommerceFinancial

(and their distribution channels. The other articles in this special issue are also interesting.www.ftmastering.com). This article assesses the impact of the Internet on manufacturers

Smith, P.R. and Chaffey, D. (2005) Butterworth Heinemann, Oxford. Chapter 2 is devoted to applying the marketing mix toE-Marketing Excellence: at the Heart of EBusiness, 2nd edn.

Internet marketing.

Web links


Chris Andersonon the topic published in 2006 by Hyperion, New York.has a blog site (www.thelongtail.com), the Long Tail, to support his book


ClickZnications, US-focused. Relevant section for this chapter: Brand marketing.(www.clickz.com). An excellent collection of articles on online marketing commu-


Gladwell.comother books.(www.gladwell.com). Author’s site with extracts from The Tipping Pointand


Marketing on the internet (MOTI)tional establishments (http://iws.ohiolink.edu/moti/by Greg Rich and colleagues from OhioLink educa-). This site provides a succinct summary,


with examples, of how each of the 4 Ps of the Internet can be applied online.Paul Marsden’s Viral Culture site(www.viralculture.com). Articles related to the tipping

point and connected marketing.



intermediary. New channel structures are available through direct sales and linking tonew intermediaries. Steps must be taken to minimise channel conflict.

5 Promotion. This aspect of the mix is discussed in more detail in Chapter 8.

6 Peopledetail in Chapters 6 and 7 where customer relationship management and service, process and physical evidence. These aspects of the mix are discussed in more

delivery are discussed.

Exercises

Self-assessment exercises

1 Select the two most important changes introduced by the Internet for each of the 4 Ps.

2 What types of product are most amenable to changes to the core and extended product?

3 Explain the differences in concepts between online B2C and B2B auctions.

4 Explain the implications of the Internet for Price.

5 What are the implications of the Internet for Place?

Essay and discussion questions

1 ‘The marketing mix developed as part of annual planning is no longer a valid concept in theInternet era.’ Discuss.

2 Critically evaluate the impact of the Internet on the marketing mix for an industry sector ofyour choice.

3 Write an essay on pricing options for e-commerce.

4 Does ‘Place’ have any meaning for marketers in the global marketplace enabled by the Internet?

Examination questions

1 Describe three alternative locations for transactions for a B2B company on the Internet.

2 Explain two applications of dynamic pricing on the Internet.

3 How does the Internet impact an organisation’s options for core and extended (augmented)product?

4 Briefly summarise the implications of the Internet on each of these elements of the marketingmix:

(a) Product(b) Price

(c) Place(d) Promotion.

5 Explain the reasons why the Internet could be expected to decrease prices online.

6 How can an organisation vary its promotional mix using the Internet?

At the end of each chapter you

will also find a full list of

References.

Suggested

articles and

texts for your

Further

Readingare

listed, as are

a number of

useful Web

links.

Summaries

clinch the

important

concepts that

have been

presented in

each section.

Each chapter ends with a number

of Exercises, designed for use in

class, as essay titles, and in exams.

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