4.8.

E-commerce

 E-commerce
 Also known as internet marketing
 Involves conducting commercial transactions electronically on the internet
 Impact of e-commerce on the marketing mix
 Product
 Higher customization and broader product range to suit wide variety of
individual and cultural preferences in the global market
 Less packaging is required as it is not needed for added promotion
 Detailed information and digital versions
 Price
 Price transparency leads to higher competition as prices can now be
compared easily
 Competition-based pricing is more likely to be adopted
 Cuts intermediation costs
 Near instantaneous price adjustments to suit sudden changes in demand or
urgent needs
 Place
 24/7 accessibility and global reach
 Added convenience for consumers
 Shorter and lessened channels of distribution reduces operating costs
 Promotions
 Quicker and cheaper communication
 Allows interactive promotions
 Relevant markets can be targeted easier
 Types of e-commerce
 B2B – Business to business
 Caters to needs of business, transactions and distribution
 e.g. Alibaba, ECPlaza
 B2C – Business to consumer
 Sells directly to customers and provides other necessary services
 e.g. Tmall, Amazon
 C2C – Consumer to consumer
 Customers trade with each other for either good and/or services
 e.g. Taobao, eBay, Craigslist
 Benefits and costs
 Businesses
 Benefits
 Relatively inexpensive when considering the total size of the
potential market reach
 “Big data” collection in order to gain more insight on consumer
habits in making purchases
 Rising general technological capabilities of consumers worldwide
helps assure more potential customers
 Costs
  Limited ability for consumers to physically interact with the
products can cause
 Uncertainty in their decision to purchase
 Higher levels of dissatisfaction due to unmet expectations
and can lead to product returns
 e.g. fitting and size of clothes of online clothes vendors
 Consumer fears of internet security and fraud lead to more caution
 Additional shipping charges as well as tax not shown in the
product’s listed price can turn consumers away
 Consumers
 Benefits
 Extremely convenient and accessible
 Prices, depending on the type of product, can potentially be lower
than in traditional stores
 e.g. digital versions of media
 Added opportunity of re-selling used and/or rare products
 Digital products can arrive near-instantaneously when downloaded
 Costs
 Privacy and security issues
 Possibility of fraud, scams, etc.
 Support services may not be sufficient
 Limited immediate interaction with the business
 May not be completely accessible in some areas