CHAPTER 2

CONCEPT OF ELECTRONIC COMMERCE

Why Should Companies Use Electronic Marketing What is the purpose for engaging online

communication? Why should the company go online? What do we hope to achieve with an online

presence? Who will be in charge of the Wib site creation? Who will set the budget for Web site production

and implementation? Does the company have the talent to allow the

Web site to grow?

Objectives and Expectations for Internet Activities Definition of EC:

• E-Commerce is a system of online shopping and information retrieval accessed through networks of personal computers.

E-commerce is the end result of e-marketing. E-marketing resources are the means, tools by

which e-commerce is executed more efficiently and effectively.

Internet is promotional faucet to tap into the flow of consumers and prospect purchases.

Internet is a part in the promotional mix.

Virtual Retailers It is a flat TV screen. Amazon.com Vs. bn.com. Importance of demographic, psychographics and

behavioral characteristics. Web master Vs. interactive advertising agency. Internet provider/internet service provider:

• Arrange for necessary equipment(server, internet connection and the system maintenance) to handle tha daily activities.

Evaluation of On-Line MarketingSituation Knowing at what point to start is the key to

successful marketing efforts. Crating on-line awareness for

product/service. To be capable to react quickly customer

service inquiries. Technical support by e-mail. Data base development for customer

tracking.

Relevant Research Process www.forrester.com www.decisionanalyst.com Personal Characteristics:

• Gender• Age• Marital Status• Educational Level• Ethnicity• Occupation• Household income

Relevant Research Process (cont.) Internet Usage Profile

• Internet access option and cost• Length and frequency of use

Primary Research Secondary Research Steps in Research Process

• Define the required relevant research• To ascertain if and where the information can be

obtained

Relevant Research Process (cont.) New product and Service Definitions:

• Need identification• Product/service development• Identify expected benefits to intended audience

Environmental Factors:• Economic• Cultural• Legal• Political

Tracking Customer movement on the internet.• Cookie files attached to user’s browser• They do it, but it is considered unethical attitude

On-Line Market Research The research process:

• Problem definition• Methodology• Data collection and analysis• Findings, recommendations and implementation

Faster and cheaper Large sample size It is done interactive manner with customers Provides early information about product and

customers

On-Line Marketing Research Methods E-mails. Focus group conducted in chat room. Surveys placed on web cites. Data entry error is eliminated. Graphics, logo and link to other web pages may be

added. Respondents may be from foreign countries. Respondents may answer at his/her convenience. Problems with on-line market research:

• Long download time • Long processing time

Limitations of On-Line Research It is not suitable for every client. It is skewed toward certain population

groups. Sample may not be representative. Web based surveys have lower response

rate than e-mail surveys. Respondents may not trust the truthfulness

of web based research.