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
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