E – Commerce
Introduction
E – Commerce, or electronic commerce consists of a variety of commerce over an electronic system, one more commonly used is the Internet. Most common of commerce available is the buy-and-sell of any product with the use of an electronic modem. In such a trade, items sold and bought via Internet is usually physical items, which involves physical aspects of trade. But it is not always true that only physical items can be used in the trade. With the modernization of technology and the advent of the Internet, more and more items are now included in e-commerce. Again, those items may or may not be physically solid items. They may be passes, or may even be things that can only be utilized with the use of the Internet.
With the advent and the expansion of the Internet, commerce that involves the use of the Internet has continued to flourish. Things such as electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI) have felt a boom since the continuous flourishing of the Internet (, 2007).
Discussion
Definition of E-commerce
Again, E – Commerce, or electronic commerce consists of a variety of commerce over an electronic system, one more commonly used is the Internet. Most common of commerce available is the buy-and-sell of any product with the use of an electronic modem. In such a trade, items sold and bought via Internet is usually physical items, which involves physical aspects of trade. But it is not always true that only physical items can be used in the trade. With the modernization of technology and the advent of the Internet, more and more items are now included in e-commerce.
Business Opportunity and Trends
The logic of networks e-commerce can be incorporated through certain industries that move towards a shift of modern information age like for example, in lieu to the textbook industries, books that are sold on the internet as it can be purchased through internet transactions and order processes that involves the buying and selling of certain book items, one example could be, Amazon.com as the company sells books through on-line ways as the logic of networks being one of Castells concept reflects how Amazon.com is reinventing its mode of business through selling books on-line.
Moreover, there can be deep connection amid how societal process is prepared and the values that the processes exemplify. There has been uneasy version of structural as well as cultural logic fixed in countless project reflecting incorrectly exacting agenda of the members and what really drives the development of the network society. Thus, the network society is a logical attainment in its rights and flexible structure as modified to mirror observed findings. For , the worth of theory lies in the capacity to aggravate and arrange empirical learning as for him, there show important unwillingness to give something in conditions used in explicit ways. Aside, it can come in that such places then provides approaches to community within range of welfare upon the offering of links that attach such field as what is argued of the dynamics along the network culture. Thus, if you go to Amazon.com website, the flow of networking is simple you can just click the intended information of the book you want to buy and can read some of reviews regarding the contents of the book and you can also search inside the book before deciding to purchase it on-line, the realization behind the formation of textbooks and Amazon’s other services offered are powered by the information society as it discusses the value of network logic within a desired information flow.
Consumer Behavior
Consumer behavior is perhaps one of the most interesting aspects of marketing because it deals with the individual characteristics of consumers. It is basically the buying behavior of the final consumers which are the individuals and households who buy the goods and services offered in the market for their personal consumption ( & , 2001). The main concern in marketing in relation to this aspect is whether consumers actually respond to the marketing strategies employed for the product (, 2004) which also gives rise to the model of consumer behavior within which most market researches circle around.
A good consumer behavior model was introduced by & (2001), which discusses the process with which the consumers respond to the different product features, prices and advertising. The starting point consists of the stimulus-response model wherein marketing-focused factors, which involve product, price, place and promotion and other stimuli, which include outside factors in the market environment, enter the “black box”. This contains the individual buyer characteristics and decision processes. The third component of the model involves the actual responses to the marketing efforts, which can translate into product choice, brand choice, dealer choice, purchase timing and purchase amount among others. It is fitting the end goal of marketing which is to gain consumer loyalty ( & , 1997, & , 1997; , 1986).
Factors: Environmental Analysis
In order to analyze the macroenvironment, PEST Analysis is used. PEST analysis is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning.
The macroenvironment includes Political and legal forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.
Strengths
Majority of the goods that are sold via e-commerce are low priced sue to low cost of operations. Also, e-commerce is more convenient to customers. Consumers could avoid the long checkout lines, crowded parking lots, and traffic. There are many choices of shopping methods; browsing the aisles, using product search, and choosing from a shopping list customized from frequently bought products. They could shop 24/7 since the stores are open for 24 hours in 7 days. The store also offers variety of selection from fresh to processed food and whatever shoppers would need.
Threats
However, despite the strengths, the store has also its weaknesses. One of which is inventory inefficiency in which they would experience stock outs. Moreover, with the presence of superstores, their current marketing strategies have been overshadowed. In addition, low performance of workers also has negative effect on the efficiency of the store.
Opportunities
E-commerce has also some opportunities. With the problem of information dissemination, an opportunity to acquire new technology for more efficient operations can now be possible. Also, e-commerce has been already known by the people as a store open in 24 hours they have the advantage over it. In addition, the company also got the most strategic locations of their stores. Moreover, e-commerce can still expand their business and open some more stores especially in China which got the opportunities of expansion with its large market.
Weaknesses
With the lax government regulations in trade, more international competitors are entering the trends. However, the lack of knowledge in computers and the internet would gradually slow down the trade.
PEST Analysis
Political
The law does not currently recognize an e-commerce transaction as being inherently different from a non e-commerce transaction. However, due to the online nature of e-commerce, particular aspects of the law apply differently where a transaction takes place online. This section will briefly consider those aspects of the law that apply to both online and offline transactions. This will be followed by an introduction to those areas of the law that has particular application in the case of e-commerce. Much of the value in an idea for an e-commerce website can be tied up in the Intellectual Property Rights (IPR's).It is essential, particularly when trying to attract seed money from venture capitalists, that these IPR's are delineated and transferred to the trading vehicle. They may be owned by a number of different people and so IPR assignments will need to be executed at an early stage. In any event businessmen notoriously underestimate the value of IPR’s. Appropriate steps must be taken to protect this value and to take steps to safeguard any brand name and associated goodwill.
The anti-piracy laws carry over internationally, especially as all countries that partake in this are also affected either socially or economically by the outcomes of these laws. ’s article “” (1999) focused highly on analyzing the reason for formulating the international anti-piracy laws, one of which is to ensure the cash-flow that helps the performers and the workers of the entertainment industry, including the producers, directors, writers, performers, and others, as well as help them continue with their revenues and aid with other matters that will boost other projects that they may have. New recording technologies have heightened these international laws, as well as the introduction of globalization and the free-trade economy wherein countries are allowed to exchange their products; with travel and giving of data now becoming easier and faster, and thus resulting to more inclinations of films to become transported and distributed, and indeed smuggled, to other countries despite the imposition of laws and regulations that will help in regulating the transfer and the distribution of these films. In the analysis of the different treatises that countries have undertaken in an effort to help their several entertainment industries including film, one of the problems that these organizations have is the lack of members or co-operation between the members, and as such countries or industries are forced to abide by the sometimes lax or strict rules that have been imposed upon them, and unless firmer methods of finding bootleg copiers as well as sterner punishments are handed to the offenders, then there is the high possibility that this practice will continue on; yet the author offered another method which artists, performers, and other members of the entertainment industry may be able to deal with this problem, and it is through finding ways in compromising with the copiers and finding a way to globally deal with the situation through knowing the effects and the methods that the copiers and the distributors follow and be able to use these for themselves as part of their empowerment method.
Economic
Economies of scale are achieved when more units of a good or a service can be produced on a larger scale, yet with (on average) less input costs. Alternatively, this means that as a company grows and production units increase, a company will have a better chance to decrease its costs. According to theory, economic growth may be achieved when economies of scale are realized.
While cost reduction efforts appear to be extremely popular among companies attempting to strengthen their competitive position, the effect of traditional cost reduction strategies on company productivity is less clear, and may in some cases be detrimental to long-term financial performance.
Particularly during times of economic recession, it is important for companies to identify cost-reduction strategies that create long-term benefits for the company. It is hypothesized that reducing unit costs through the use of volume and learning economies of scale can provide significant productivity benefits to a company, provided policies regarding flexibility and innovation do not create barriers to strategy implementation.
The importance placed on increasing company productivity has gained considerable momentum in recent years as companies struggle to keep pace with increased competitiveness and consumers' increasing awareness of product quality. Since company productivity is generally defined as a ratio of output to input (for example, revenues divided by costs) management strategies for improving productivity have usually included some form of cost-reduction effort.
While many of these efforts are necessary and indeed enhance company productivity, some cost reduction strategies actually reduce the company's ability to be less able to provide customer service, to react quickly to changes in customer tastes, to maintain an innovative approach to process/product design and marketing and to simply maintain product output levels at some adequate level of quality.
Socio-cultural
Many people will be delighted with the advent of e-commerce. Thru e-commerce, cultures, as well as finances can be brought together by simply being logged on to the internet. Trade between nations will include the trade of ideas, thus, making a great impact, not only on the global economy, but on the global and international culture as well.
Technological
With regards to the technology, the world has undergone a process of rapid modernization over the last ten years, investing in an extensive renewal of its transport, telecommunications and banking infrastructure. All main economic centers now have good transport links. Furthermore, physical contact need not be the case when dealing in the internet.
Conclusion
In the intense competition in the Internet market, companies must also intensify their marketing strategies. Computer and Internet related companies must go through challenges in their business operations and thus needed to change their marketing strategies. With their identified marketing issues, it has been suggested that these companies should have market segmentation and product differentiation.
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