Differences in the practices of virtual retailing and traditional retailing
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Electronic Marketing Chapter 6 Concept of the Virtual Store for Marketing Products and Services Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Retailing Approaches: Virtual versus Tangible • Follow the functions of the traditional retailer but as a “back office operation,” hidden from public • Web site merchandise represented by invisible electronic data entries • Generally prices are lower because of reduced operating/overhead costs Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Retailing Approaches: Virtual versus Tangible • Housed and promoted on electronic media (Web sites, email, listservs, discussion groups, so forth) • Interactive ordering and shipped directly from manufacturer • Interactive customer service in “real time” Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Advantages of a Virtual Store • Expand awareness of store existence and merchandise offered • Increase sales areas to a wider geography • Promotional flexibility as to purpose of Web presence • Online sales • Online advertising • Online customer service • Sales or communications activities Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Advantages of a Virtual Store • Capital expenditure less in starting online consumer or business-to-business marketing progress • Flexibility in being able to sell from any location • Web sites operate 24/7, valuable to marketers selling overseas • Corporate credentials or catalog/specifications sheets can be printed from the Web site • Electronic systems to update prices, specifications or other time-sensitive data hourly if necessary • Promotions can be integrated quickly into the company’s Web site Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Advantages of a Virtual Store • Customers’ inquiries can be investigated more quickly • The Web allows companies to render fast and responsive customer services • Order status obtained immediately • Opportunity to test new products and services among wide or targeted markets • Experimentation with new technology • Discussion/listserv forums are effective feedback mechanisms from selected market segments or test group Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Disadvantages of a Virtual Store • Not every product or service is appropriate to Web sales. • Web site creation, product offerings’ updates, and site maintenance require extensive time on the marketer’s part. • The 24/7 service pledge is a double-edged sword. • Web competitive marketing is a time-intensive activity – A good Web master should be surfing the competition at least one afternoon each week – Double checking the position ranking on search engines is important Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Disadvantages of a Virtual Store • Marketer is dependent on redundant systems equipment, communications, and its ISP connections • Another double-edged sword is the anonymity of identity on the Web – Limited penetration and exposure to the Web by the general public Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Value of the Virtual Storefront and the Cybermall Plan strategically by playing from your electronic marketing strengths • Reliability • Consistency • Privacy • Accessibility • Accuracy • Responsiveness Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Value of the Virtual Storefront and the Cybermall Retailing power builds on the fundamental usage nature of the Internet • Demographics of connectivity • Content • Customer motivation Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo The Value of the Virtual Storefront and the Cybermall • A Cybermall: the banding together of several cyberstores, giving the merchandise one location or address • A “linked storefront” is an alternative to banding with a cybermall; the storefront address is hyperlinked within a popular general interest site such as Starbucks’ site Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Security Concerns: Reasons for Not Purchasing Online • Providing credit information online is “just plain foolish” • Providing credit/purchase information online • Toll-free call/fax is tied with secure transmission • Clear preference for the involvement of a third party in the transaction; preference for involvement by a credit card company or the bank Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo What Are Online Information Seekers Seeking? • Finance Web sites were found to be the “stickiest” of all – 44% have visited a financial Web site at least once • Consumers appear to navigate through commercial sites for information • Cyber merchants must recognize the payment transaction is risky, so the perception and reality of secure payment must be addressed in a fail-safe manner Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Deciding on Online Marketing Objectives • What are the appropriate goals for online marketing of your product or service? • The “competitive difference” of this online vehicle compared to traditional media is online interactivity with customers • Sampling might include free incentives such as a free online quotation for auto or life insurance Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo E-Commerce Image and Identity Development • Identify qualities your target market would value in online awareness and delivery • Building image is the “impression” that the marketer wants the market to have of the product or service • A purpose of a brand name is to differentiate similar products Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Searching for Product or Service Differentiation • The marketer should consider traits, perceived or real, as the foundation of a differentiation strategy that hopefully no other competitor can easily match • Strategy of selecting different features valued by different people is called a “niche marketing” strategy Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Searching for Product or Service Differentiation • Customization and personalization are critical factors in creating and sustaining competitive advantage on the Internet • Personalization of services and the development of new services such as online help facilities that are based on the experience of multiple users • Marketers can capture more of the “value chain” for their products; example might be eliminating distributors or suppliers Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Searching for Product or Service Differentiation • Other differentiation strategies have been developed from: – Countries of origin: French wine, Swiss watches, American entertainment – Ethnic groups: Jewish bagels, Chinese fortune cookies, Cuban bread – Geographical locations: California’s Napa Valley wine, Colombian coffee Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo Searching for Product or Service Differentiation • Other Differentiation strategies have been developed from: – Usage patterns: Dr. Pepper 10-2-4, brushing teeth followed by mouth wash – Special occasions: Anniversary diamonds by DeBeers, graduation wrist watches – Celebrations or time: Korbell champagne at New Year’s, Thanksgiving turkeys Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 3/21/2016 2004 Joel Reedy and Shauna Schullo
