What is E-Commcerce?

The buying and selling of goods or services over electronic systems

Features of E-Commcerce

• Ubiquity - available anywhere at any time

• Customisation - can be personalised

• Global reach - traverses national boundaries

• Integration - Combines audio, video, text,

• Impersonal interaction

• Low barriers to entry

Impact of E-Commerce on the Marketing Mix

• Price

  • Internet increases price transparency, making it much easier for consumers to compare prices across different suppliers.

  • E-Commerce cuts out the middleman, producers can sell directly to consumers, increasing profit margins/reducing prices

  • Prices can be adjusted instantly

• Product

  • Customer has the potential to be able to customise their order

  • Can stock a wider range of products

  • Detailed information on product can be stored online

• Place

  • Wider customer base

  • Reduces the need for physical stores, decreasing costs

  • Increased convenience for customers

  • Higher shipping costs

  • Reduces the need for intermediaries

• Promotion

  • Opportunity for online promotion

    • Pop-up, banners, viral marketing, social media, etc

  • Website as POS opportunity

  • Use of discount codes

  • Opportunity to collect email addresses and data of customers in order to send direct marketing materials

  • Tailoring promotional materials to individual needs

B2B

• Business-To-Business

  • Businesses trade with other businesses

    • Producers to wholesalers

    • Suppliers to producers

    • Producers to retailers

    • Business service providers

  • Often involves transactions of a large volume of goods

B2C

• Business-To-Consumer

  • Business trades directly with customer

    • Purchasing from factory

    • Ordering from the business' website

  • Often cheaper as there is no middleman

C2C

• Consumer-To-Consumer

  • Trade between customers

    • Collectors items

    • E-Bay

    • Carousell

E-Commerce for Businesses

Benefits

• Another additional revenue stream

• Increased customer base

• Opportunity to enter international markets

• Increased flexibility - can be updated very quickly

• Easy for customers to search for

• Direct channel of distribution - higher profit margins

• Options for instant download/e-ticketing reduce costs

• Cheaper than printing catalogues

• User manuals and software downloads available online

• Reduces overhead costs

Disadvantages

• Set up and maintenance costs can be high

• Not appropriate for all goods

• Information overload

• Some customers do NOT have access

• Internet prone to hackers & breakdowns

• Customers normally pay with credit card, therefore finance charges

• Potential for fraud

• Prone to hackers and breakdowns

Benefits of E-Commerce to Customers

Benefits

• Customers can compare competitors more easily

• More choice

• More convenient

• Lots of information can be made available

• Customers have lower shopping costs

• Can shop 24 hours a day

• Can make decisions without hassle from sales staff

Disadvantages

• Not all customers have access to internet

• Slow internet speed makes some websites difficult to navigate

• Some customers worry about security of online payments

• Information overload

• No chance to see and try products before you buy

• Time delay between ordering and receiving

Issues and Decisions with E-Commerce

• Payment systems

• Security

• Distribution methods

• Maintenance and updating of the site

• After sales service

• Legal issues

• Potential for job loss

• International currency flows