Entrepreneur Development

MODULE V Issues in Small Business Marketing, Advertising and Publicity, Sales and Distribution.
ion. The Idea of Consortia Marketing, Competitive Marketing or Tender Marketing.
Learning Objectives To Know The Concept Of Small Scale Industry Marketing To Learn The How Advertising, Publicity Is Done By An SSI Entrepreneur To The Know Process Sales And Distribution In An SSI Unit To Know The Aspect Of Consortium And Competitive Marketing
Reference: Management of a Small Scale industry Vasant Desai Essential of Entrepreneurship and Small Business ManagementThomas W Zimmer and Norman .M. Scarborough The Dynamics of Entrepreneurial Development and Management Vasant Desai Entrepreneurship & Small Business Management Khanka S.S - Gupta C.B and
This module is strictly for Private circulation only. This is compiled by using the references mentioned in the introduction of the module. Compiled by SUNITHA.B.K page 1
Introduction Marketing is an essential input for the success of small-scale industries which produces a wide range of products. Marketing Management is a key to the success of small scale sector. It is a key factor in determining the success of an industrial concern. Definitions Marketing is defined as the process of exchange between seller and buyer P.Kotler defines marketing as a human activity directed at satisfying needs and process. In economics terms, marketing covers those activities which relate to the creation of time, place and possession of activities. Features of Marketing It is a creative function. It promotes business and employment. It co-ordinates finance, production and distribution, and determines and directs the scale and value of the total efforts. There is an emphasis on what the customer / borrower wants. There is an emphasis on the social good, on increasing employment, by giving the customer the chance to decide Issues in Small Business Marketing or Problems of Small Scale Industries MARKETING All types of business enterprises face marketing issues, but these issues or problems are more severe in case of small scale units because of lack of knowledge ,inadequate funds and lack of experience. Competition from large scale sector: Because of scarcity of resources, small entrepreneurs usually use inferior technology. As a result their products are not standardized. The obsolete technology used by them gets translated into inferior quality of products. Lack of brand names and places of responsibility for the goods of small-scale industry - Most of the SSI units do not think on building a brand name. Though most of them have names for their product. It goes unnoticed
Improper identification of proper markets and consumers: SSIs units do not invest time to identify the proper markets and consumers. Sometimes they connect to their customers for a very brief period of time and disappear from the market and later reappear. This inconstancy results in lower market share. SSIs entrepreneurs need to know the market in which they selling the product Lack of marketing knowledge: Most of the small scale entrepreneurs are not highly educated or professionally qualified to have knowledge of marketing and its strategies. Their lack of expertise further inhibits their not understanding of the prevailing trends in the market. Lack of sales promotion: Small units lack the resources and knowledge for effective sales promotion. Large scale units mostly have well-known branded names. They also have huge amount of resources to spend on advertisement and other sales promotion tools. Small scale units, on the other hand, have to pay a heavy commission to dealers for their selling efforts, which reduce profits margins. Lack of Research and market investigations and services: Marketing Research is not accepted by many SSIs units as part of their marketing process. Lack of knowledge about introduction of goods in foreign markets: Most of the SSIs units have huge potential to sell their product overseas and there few government agencies like NSIC etc which also help them to do so, but entrepreneurs of SSIs units lack awareness to exploit this segment of the market Poor sales realization: Many SSIs units have improper sales due to improper sales and distribution techniques Defective pricing policy: Most of the SSIs units fixing the price based on the competitors price without any regard to the quality or the value of the product and for the new product they fix price at the highest level that the market will with stand. Both the pricing policies is unscientific defective and commercially dangerous
Weak market segmentation or target: Though SSIs units are not required to take up a gigantic segmentation process. They atleast need to segment the market based on taste, price preferences etc Weak bargaining power: At the time of purchase of inputs, large scale entrepreneurs manage to get huge discounts and credit. Such facilities are not available to small units. Product quality: It is costly and difficult for a small unit to have quality testing and evaluating equipment. Credit sales: The small scale enterprise is invariably called upon to sell on credit. However, when it comes to purchasing inputs, they are denied liberal credit facilities. As a result, they have to borrow excessive working capital than actually needed. This increases the general cost of production and prices, making it non-competitive. Certification-One problem or issues of marketing for a smallscale business is the issue of certification and license. Whatever is the product, it is subject to laws and regulations regarding consistency, purity and the validity of production. Acquiring these certifications is often costly for a small-scale business. However, without them, sales will be more limited. Transportation -Another marketing problem facing the smallscale business is transportation. A large-scale business can buy an item in bulk, which saves money. A small-scale business may not have the money or demand to order such quantity, which raises item cost. This creates a marketing issue: How can a small company sell the same item as its competition at a higher price and remain competitive? That is why many small-scale industries focus upon selling a higher-quality item than its mass-marketed competition. Cost of Ads-A final problem facing small-scale marketing efforts is the cost of advertising. Running a full-page Sunday newspaper ad or TV commercial is no financial hardship for certain large
businesses. However, such costs are obviously prohibitive for smallscale businesses. Thus, many will circumvent this dilemma through forming co-ops to split advertising costs or using local advertising and word-of-mouth. Conclusion of these problems In the Indian context, entrepreneurs in the SSI sector have to face a number of difficulties in marketing their products in a highly volatile and competitive environment. Here marketing management occupies an important place. It is a key for the success of SSI. Apart from professionalization, SSI sector needs a support programme for the promotion of marketing of products of SSI
Marketing Organization Marketing functions in a large number of proprietary small-scale organizations are invariably carried out by the proprietor himself. The marketing function in an organization, by and large, depends upon the nature and extent of marketing functions to be discharged, the areas to be covered, competitiveness, special problems, size and sales and product lines, size of sales force, area of operation and channels of distribution. Marketing Research and SSI Marketing Research is a very important tool for small scale units. It fills the gap between the development of a product and its ultimate sale to the consumer. It should be used by SSI not only when things are going wrong but when the prospects are bright. It enables the small entrepreneur to produce quality goods, sell them in the market and make adequate profits. It enables entrepreneur to improve upon the presentation and packaging of his products, to train and encourage his salesman, and co-ordinate the double action of sales and advertising. The need of the hour is scientific marketing research to promote and accelerate the growth of small scale and cottage industries. Conclusion of Marketing Research towards SSI Marketing Research in fact, is not a panacea for the ills of SSI. Yet it provides some solutions, much insight to the behaviour of the ever changing market and helps the small entrepreneur to take corrective steps. It is in its infancy in regards to SSI. It is timely that consortium effort should be made at Taluka and
district level in areas of concentration of SSI. This will go on a long way in laying a sound foundation for marketing products of SSI in a big way. Sales and Distribution Distribution Channel and SSI Distribution channel is the set of marketing institutions participating in the marketing activities in the movement or the flow of goods or services from the primary producer to ultimate consumer. In marketing goods produced by a SSI, distribution channels indicate routes or pathways through which goods and services flow, or move from production to consumer or producer of raw material to a SSI. The distribution of goods is the most important activity in the process of marketing. The small-scale industrialist has to take positive steps to bring his products to the attention of potential customers in order to create a demand for them. Once a product is accepted by a customer, the small-scale industrialist has to consider the ways and means of arranging for its supply to his consumers. The links between the producer and the consumer are varied; therefore, a small-scale entrepreneur has to select the best channel suitable for his product. Distribution channels can include one or more of these options o o o o o retail selling to final consumer buyers wholesale an intermediary distribution channel sales force employees who sell on your behalf brokers/agents who sell for a commission Internet
Channel Choice Channel choice -The problem of selecting the most suitable channel of distribution for a product is complex one. A number of factors have to be considered and they are Nature of a product. Market trends Middlemen. Brokers. Commission Agent. Banks, Insurance Companies Auctioneers. Common carriers Merchant Middlemen.
Channel Decision Channel Decision A unit must choose whether to attempt extensive, selective or exclusive distribution or a combination of all the three. The decision is taken after a careful analysis of the product, consumer preference, dealers, company objectives and policies, competition and other relevant factors. The company must solve the conflict within the channels and bring its product profitably to the market. Conclusion of Channels towards SSI The future of a large number of smallscale industrialists who deal directly with consumers depends on the marketing mechanisms in operation. In some cases, departmental stores, such as the Khadi Bhandar and the Bata Shoe Co., have become very successful in marketing the goods of the small-scale sector this channel has to be strengthened and expanded to cover other items of production in small-scale sector. Sales Promotion and SSI Sales Promotion in SSI Sales promotion is mainly the method used to stimulate sales, other than through advertising in the usual media. It is the attempt of a unit to stimulate sales, through directing persuasive communication to the buyers. The firms product may have an excellent style and quality, it may be priced at right level, & it may be placed in the right channel, yet it may fail to sell because it is not promoted to the right people in the right way. The survey results conduct with regard to sales promotion showed a gross unawareness on the part of small units about the techniques of sales promotion and their usage. Units manufacturing mass consumption goods were observed to be using methods like discounts, displays, price-off offers, free pack methods, etc. Units manufacturing industrial goods were observed to be using mainly displays, advertising on a small-scale, printed handout, demonstrations, free samples, discounts- mainly cash exhibitions in industrial fairs, etc. Following is the check list, proposed for these units which should be properly attended to before launching their promotion programme. Prepare estimates about the market and its size. Make a survey to ascertain market potential. Make estimates for prices and likely margins. Conduct
surveys for assessing consumer needs and their purchasing power. Develop your products accordingly. Make surveys to obtain consumer opinions about products and their usage, and effect necessary changes in the product. Plan for sales promotion depending upon findings as above and launch it in a systematic way. Measure the actual results of sales promotion launched. Sales promotion is used by a small-scale industry at the time of launching a new product, particularly a consumer product, to secure maximum deal stocking. Creating maximum consumer awareness, acquiring display space and drawing possible customer attention. Though it is costly, it pays rich dividends. In Indian context, sales promotion for SSI may be undertaken by special promotional agencies at a fair price, so that, the industries in this sector are saved from heavy expenditure. More importantly, sales promotion provides feedback or creation of demand, repeat buyers, sales stabilization and quick inventory turnover Advertising and Publicity The biggest constraint for a small business is cash. After investing a large amount of money on setting up a business, a small scale entrepreneur is usually left with just enough to sustain his business for some time. For these small businesses, cost of advertising can be a stretch. But if they do not advertise, they will not see too many customers. A wise man once said, "The person who saves money by not advertising is like the man who stops the clock to save time." This is a dilemma every entrepreneur faces-how much to spend on advertising. Advertising is an important part of the overall puzzle. Advertising exposes a business to the public and helps it get new customers and sales opportunities. People get to know that such a brand/product/service exists. Advertising is a necessity, but to have a healthy brand, spending a huge amount on advertising is not the only option Advertising needs to be used like salt. In just the right proportion,
Types of Advertising Which an Entrepreneur of a SSI Unit Can Use Bus Back Advertising An easy, cost effective way could be to use bus back advertising. These buses roam the whole city or any area and can create a huge impact for the product or service. This will create visibility without compromising on the effectiveness. Radio Advertising A relatively low-cost, high-impact choice for local advertising, it's one of the best ways to reach a targeted market; however, its cost is slightly higher. Repetition is especially important in radio advertising. Internet Advertising Small firm can reach very specific customers. Small companies cant afford to let their marketing get wasted. The Internet offers much broader reach at an affordable cost helping entrepreneurs grow their businesses quickly online advertising can help them track where they are spending. For E.g.: Through Google Ad words, a small company can track customers closely. They can know who have come and bought. They can even know about people who have just checkout their products online but havent purchased. Here, return on investment is more important and with Google, one can even start with as little as Rs 100 a day with of advertising Social Media Social media too is emerging as a effective advertising option. Companies can be on social media sites like Face book and Twitter and even YouTube to reach out. For E.g. a taxi driver in a small city in India used the power of social media to the hilt. He created an interesting, funny and very relevant YouTube video and uploaded it. His business has been roaring since. The Yellow Pages Many people use the yellow pages to find the businesses. It allows an SSI entrepreneur to place the business listing or ad in selected classifications within the book, with the theory being that when people need the product
or service, they look up the classification and SSI unit. These ads are updated once year. Yellow Pages are cost effective form advertising. Newspaper Advertising News Paper advertising is costly, but SSI units can advertise in newspapers( preferably local) who often offer special advertising features showcasing particular businesses in their special editions which will be cheaper. Pamphlets and Flyers These are most cost effective form of advertising which can be sent along with the newspapers or pasted on the walls in the target market. Cable TV advertising Cable TV companies offer advertising ideas within the budget of small businesses. Cable advertising is a lower cost alternative to advertising on broadcast television. It has many of the same qualities as broadcast television, and in fact, since it offers more programming, it's even easier to reach a designated audience. Specialty Advertising "Giveaways" -- the pencils, pens, buttons, calendars and refrigerator magnets you see everyday -- are called "Specialty Advertising" in the advertising business. This can be also used a good will measure Other forms include Advertising through Self Help Groups Advertising through Kitty Parties (if it his household products etc) Advertising through small banners Advertising by giving samples
Publicity for SSI Normally publicity raises the awareness for the product or service. For SSI units it is important through publicity that they extol the virtues of the product. Publicity is, in effect, free advertising. Typical examples include
feature stories and product or service announcements that are published in either print or broadcast media. Publicity is especially effective as a promotional tool because people specifically, prospective consumers give more credibility to what they read or hear when it comes from news sources, whereas their belief in advertising is understandably tainted with varying degrees of suspicion. Publicity can be done through Fairs and Trade Shows The government of India under its various regulatory bodies conducts exhibitions and trade fairs for SSI units domestically and globally. This provides unique opportunity to exhibit various products and services. Press Releases SSIs units can give press releases about their products or events in their organisation by doing so they will able reach a vast audience Word of Mouth or Buzz Marketing An unpaid form of promotion in which satisfied customers tell other people how much they like a business, product or service. Here the customer of the SSI unit spreads about the unit. Word-of-mouth advertising is important for every business, as each happy customer can steer dozens of new ones. CONSORTIA MARKETING A small unit in its individual capacity faces problem very often to procure and execute large orders, which inhibits and restricts the growth of small scale units. This problem can be solved through Consortia Marketing Approach. Here groups or consortia of SSI units are formed. The consortia of SSI units manufacturing same products, thereby easing out marketing problem of SSI units. Here the consortia explores market and secures orders for bulk quantities. These orders are then farmed out to small units in tune with their production capacity. Consortia also provide Testing facilities are also provided to enable units to improve and maintain the quality of their products conforming to the standard specifications. Consortia Marketing Approach helps SSI units in achieving the marketing, branding, and systems advantages large organisations while still maintaining their independence.
Consortia Marketing Approach helps SSI units to have access to volumes markets or marketing channels. Consortia Marketing Approach helps homogeneity of products and prices can be achieved Consortia Marketing Approach helps in sharing of relevant costs of procuring the order which in turn helps reduce the financial burden of the SSI Consortia Marketing Approach helps SSI units to participate in national and international catalogue shows, trade fairs etc and have common booking of stalls which again reduces the cost In India the National Small Industries Corporation provides these services to the SSI units Tender Marketing or Competitive Marketing Here a particular organisation or marketing co-operative participates in the tender process of organisation seeking to buy the products. After tender process is completed. On receipt of the orders, Corporation farms out these orders to the units on whose behalf it has quoted. This type of selling products has enabled a large number of small units to compete for the orders which are normally out of reach of the individual units because of the bulk requirement. This type of marketing helps small scale units with ability to manufacture quality products but which lack brand equity and credibility or have limited financial capabilities. It enhances business volume helps small units achieve maximum capacity utilization. It ensures fair margin to small units for their production. Here Small units are helped to participate in large and global tenders up to its capacity and capability. In this type of marketing the SSI units need not bother about advertising and publicity their products and services. In India the National Small Industries Corporation provides these services to the SSI units
MODULE VI E- BUSINESS Meaning, procedures and Relevance of E- Business Objectives of the Module To understand the meaning of e-business To know the start up of the e-business To analyse the advantages and disadvantages of e-business To the implementation of e-business in traditional business
References : How companies must change to win battle by M.Modhal Entrepreneurship Rajeev Roy E-Retailing- Principles and Pratice- D.P.Sharma E-business development for competitive advantages: A case study-Dien D. Phan*Department of Business Computer Information Systems Www.computereconomics.com.
Introduction E-commerce describes the process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the Internet. E-business refers to a broader definition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and processing electronic transactions E business primarily stands for internet enabled business. The enabling process is based upon application of internet technologies (Intranets, Extranets) and related standards (HTTP, HTML, XML, CORBA, etc) The term E-Business was first used by IBM in 1997.(by then CEO Louis Gerstner,) As they launched their first campaign built around the term. Until then ecommerce was the term E-Business means A secure, flexible and integrated approach to delivering differentiated business value by combining the system and the process that run core business operations with the simplicity and reach made possible by Internet Technology. E Business - Utilization of information and communication technologies in support of all the activities of business. It is transformation of existing business processes to make them more efficient
E-business includes interaction between suppliers, customers, business partners, but uses it with a broad perspective emphasizing on internal business processes. While the term e-business is very recent too many of us, but many advices, strategies have been given for the use of internet in this field in a much better way. In addition to the use of computers in business, one must now recognize a major trend in the convergence of sciences involving electronics, computers, information management, etc.
The Three Principal Categories of E-Business Applications Are 1. Electronic markets or e-marketplaces: buying and selling goods and services. 2. Inter-organizational systems: facilitating inter and intra-organization flow of goods, services, information, communication, and collaboration. 3. Customer service: providing customer service, help, handling complaints, tracking orders, etc. E-BUSINESS WORK-FLOW DIAGRAM
CATEGORIES OF E-BUSINESS: E-business can be divided into the following categories. Business To Consumer(B2C) Business To Government(B2G) Consumer To Government(C2G) Business To Business(B2B) Business To Government (B2G) Government-To-Business(G2B) Government-To-Government (G2G) Government-To-Citizen (G2C)
Business to Consumer (B2C) During the first wave of e-business much of the media attention was focused on the B2C market. At the time it appeared logical, as consumers were using applications such as email and bulletin boards, and performing research. Despite the success of B2C firms, the actual and projected growth of B2B to B2C markets. B2C (Business-to- Consumer) B2C (Business-to- Consumer) is basically a concept of online marketing and distributing of products and services over the Internet. It is a natural progression for many retailers or marketer who sells directly to the consumer. The general idea is, if you could reach more customers, service them better, make more sales while spending less to do it that would the formula of success for implementing a B2C e-commerce infrastructure. The B2C category is most widely used by manufactures, publishers, distributors, direct sales firms, specialty retailers, insurance providers etc.
Business to Government (B2G) In most of the countries government has embedded a program aiming at the prosperous up-liftment of the country to become a world leader in the knowledge economy revolution. The e-commerce group is tasked with enabling e-commerce for the as a whole by developing an e-commerce framework that is conducive to developing a confident and skilled population. It is expected that this will be achieved by helping businesses get the skills and the technologies they need and by closely monitoring ecommerce activity. Consumer to Government (C2G) The government has developed a policy for the taxation of e-commerce and is hoping to resolve and clarify particular technical issues. The Government recognises that ecommerce presents both challenges and huge opportunities for taxation and tax administration for the public. Business to Business (B2B) The broad definition of B2B e-business helps explain why the marketplace is expected to continue to grow so quickly. According to Cunningham the B2B definition can include: 'Transactions conducted over public or private networks, including public and private transactions that use the Internet as a delivery vehicle. The transactions include financial transfers, online exchanges, auctions, delivery of products and services, supply-chain activities and integrated business networks. Two of the most commonly used categories are: Business to business and Business to consumer. Business to business e-business is nothing but experiencing an explosive growth rate on the internet. The original first stage of commerce on the Internet was that of E-Commerce, which is business to consumer activities. Business to business goes well beyond that popular form of consumer purchasing. It is intended to bring "Just in Time" concept to a greater height which allows business to coordinate with its business associate for real time transaction and improving efficiency and productivity for both organizations. Because Time is money; people are money, good management of both means more money for the business and less expenditure on others.
BUSINESS TO GOVERNMENT (B2G) Referred to as a market definition of "Public Sector Marketing. Encompasses marketing products and services to the Government. Does it through Integrated Marketing Communications techniques such as strategic public relations, branding, advertising, web-based communications to the Business. GOVERNMENT-TO-BUSINESS(G2B) Online non-commercial interaction between local and central government and the commercial business sector. Does not happens with private individuals. GOVERNMENT-TO-GOVERNMENT (G2G) Online non-commercial interaction between Government organisations, departments, and authorities and other Government organisations, departments, and authorities. GOVERNMENT-TO-CITIZEN ( G2C) Online non-commercial interaction between local and central Government and private individuals. Not with commercial business sector. For example Government sectors become visibly open to the public domain via a Web Portal. Thus making public services and information accessible to all. Forms of e-business E-tailing (or electronic retailing) E TICKETING E LEARNING E TRADING Electronic Banking E-auction WEB CONFERENCING
INFORMATION BROKERAGE
Reasons for Opting for e-business Expand market reach- collect experience with a new customer segment Visibility- generate more visibility in your target market and gain mind share Responsiveness-increase responsiveness to customers and partners New services-provides new services and tools Strengthening business relationships-real time data increase the profit Cost-reduction How use e-business in a company Applications After sales service; ie. billing, demand planning, engineering, inventory planning, purchasing, receivables Business analytics; ie. financial performance, marketing, workforce, production, enterprise management Consultant management Customer relationship management; ie. account management, customer self-service, contact management & communications, promotions, surveys, quality,help desk, field service E-procurement E-store/e-exchange/product catalogue; ie. delivering b2b and b2c ecommerce, Finance; ie. asset management, accounting, budgets, invoicing, payables & receivables, investments, government tax returns & payments, payroll administration Grant & donation management
Human Resources Management; ie. resource planning, benefits administration, reward programs, recruiting & hiring, workforce management, pension administration Investor relations Marketing and sales activities; ie. products, technical information, sales support, product life cycle management, corporate resume, portfolio, customer lists, customer service Materials management Order management & customer fulfilment Project management Public Relations Strategic partner collaboration
PROCEDURES OF E -BUSINESS
Choose the product ( for new business) Test marketing through social networking sites etc ( for new business) Consider the structure of your e-business ( with emphasis on etechnology) Choose a name for your e-business Findings designers of websites and e-system and settling on a design Build a website for e-business and E-mail Systems. Must buy domain name; many people don't take businesses that host on free servers seriously. Get a Tax license No registration required till external funding
permissions for starting a e-business similar that of a ordinary business
Relevance of e-business
Performance Potential Relevance is determined by the benefits of e-business. Efficiency (doing things right) on the one hand, is primarily reflected in the percentage of existing business relocated from traditional channels to the internet. This substitution is caused by shorter process cycle times or lower costs. Lower Cost stands for cost efficiency by low transaction costs, experience effects by high volume as well as time efficiency by reducing logistical processes (inventory, transport) to a minimum. Effectiveness Effectiveness of e business is reflected in its potential may derive from higher quality ( e.g. of multimedially enriched information), more reliability ( e.g.telesupport), more customizing (e.g. recipient location based delivery of information) and shorter response times ( i.e., better up-to-date- content of information and software). E-customer relationship management programs improve customer retention, thus avoiding high costs of acquiring new customers ( rule of thumb : acquisition causes five to six times as much transaction costs as retention) Range of concerned industries Ebusiness is extremely relevant because almost all business processes are clickable. Order fulfilment e.g. can rely on the internet, since no physical products causing logistics problems are involved. For some physical products from the manufacturing industries only some processes (communication, contracting,..) may be directly supported by internet. Since production and logistics are not integrated into the web, relevance is significantly smaller for these industries. The outputs of many manufacturing industries are so specific (like solutions, systems or simply innovative products) that they are not clickable. The same applies to many services Innovativeness
Many practitioners and researchers refer to e-business as a business revolution implying that e-business stands for a genuine innovation. E business mark a significant and therefore innovative change with respect to current practices of doing business. Customer focus, speed management, virtualization, empowerment of customers and suppliers by high performance management information systems, supply chain management, outsourcing and value nets have been enhanced because of e-business implementation Worldwide Presence A firm engaging in e-business can have a nationwide or a worldwide presence. IBM was one of the first companies to use the term e-business to refer to servicing customers and collaborating with business partners from all over the world. Dell Inc. too had a flourishing business selling PCs throughout the US, only via telephone and the Internet till the year 2007. Amazon.com is another success story that helps people buy internationally from third parties. Hence, worldwide presence is ensured due to e-business Developing a Competitive Strategy Firms need to have a competitive strategy in order to ensure a competitive advantage. Without an effective strategy, they will find it impossible to maintain the advantage and earn profits. The strategy, that the firms can pursue, can be a be a cost strategy or a differentiation strategy. For instance, till the year 2007, Dell Inc. was selling computers only via the Internet and the phone. It adopted a differentiation strategy by selling its computers online and customizing its laptops to suit the requirements of the clients. Thus, e-business resulted in Dell Inc. managing to capture a vast segment of the market using the differentiation strategy. Better Customer Service E-Business has resulted in improved customer service. Many a times, on visiting a website, the customer is greeted by a pop-up chat window. Readily available customer service may help in encouraging the customer to know more about the product or service. Moreover, payments can be made online, products can be shipped to the customer without the customer having to leave the house.
Major success factors for e-business include Internet technology fully integrated into the companys overall strategy. Competitive advantage maintained in both operational efficiency and distinctive strategic positioning. Basis of competition not shifted from traditional competitive advantage, such as cost, profit, quality, service, and features. Companys strategic positioning well maintained. Support from top management. Buyer behaviour and customer personalization. Quick time to market. Right systems infrastructure. Good cost control. Good e-business education and training to employees, management and customers. Customers and partners expectations well-managed. Good products and services offered by e-business. Current e-business systems expanded to cover entire supply chain. New competitors and market shares tracked. Website of high qualities that meets or exceed user expectations. Companys virtual marketplace established E-business Benefits ( this can be used for relevance of e-business) Highly Accessible -Businesses can operate 24 hours a day, 7 days a week, 365 days a year Increased Customer Loyalty -Additional channels to contact, respond to, and access customers helps contribute to customer loyalty Improved Information Content-In the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes. Electronic catalogs and Web pages present customers with updated information in real-time about goods, services, and prices Increased Convenience e-business automates and improves many of the activities that make up a buying experience Increased Global Reach -Businesses, both small and large, can reach new markets
Decreased Cost -The cost of conducting business on the Internet is substantially smaller than traditional forms of business communication
Disadvantages of e-business The main disadvantage of e-business is the high costs of optimization that is needed to make a website more visible in search engine results to sell more. Due to the rising competition, even an old business will need to spend a lot of money into hiring a company that can optimize its website in order to get more traffic and more customers E-business can run into problem due to one dissatisfied customer. In many instances it happens that one unhappy customer posts a comment on any forum or related platform and it can lead to negative reviews and comments regarding your business that can lead to loss even if it was just once E-business is limited in many instances. While it claims to cater to worldwide customers, yet it is not the case and many of the customers who can view the products or services cannot avail them due to nonavailability of delivery service in some area and it restricts your business to only some parts of the world Costly E-Business Solutions for Optimization: Substantial resources are required for redefining product lines in order to sell online. Upgrading computer systems, training personnel, and updating websites requires substantial resources. Moreover, Electronic Data Management (EDM) and Enterprise Resource Planning (ERP) necessary for ensuring optimal internal business processes may be looked upon, by some firms, as one of the disadvantages of e-business.
End of Sixth Module

Entrepreneur Development

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Entrepreneur Development

Uploaded by

Copyright:

Available Formats

MODULE V Issues in Small Business Marketing, Advertising and Publicity, Sales and Distribution.

ion. The Idea of Consortia Marketing, Competitive Marketing or Tender Marketing.

permissions for starting a e-business similar that of a ordinary business

End of Sixth Module

You might also like