Primo blog : Primo blog

Introduction

2007-12-04T13:48:40Z

I am really curious because this subject is completely new for me and, up to 8 weeks ago, I considered it to be quite boring and useless in the real world but now I have to reconsider my thoughts; it is very useful and actually, as I came across some really interesting case studies, people is making a lot of money out of e-commerce.�

�In first lesson we have been given some basic definition:�

Electronic Commerce: is the process of buying, selling, or exchanging products, services, or information via computer networks.

E-business refers to a broader definition of e-commerce and entails everything that adds value through internet.

�E-commerce can be divided in: �

Business to business: it involves electronic business transactions between businesses and other organizations.

Business to employee: it involves the exchange of information, services, or products between a company and its employee.

Consumer to consumer: where consumer sells direct to consumer.

Business to consumer: involves electronic business transactions between a business and an individual consumer.

�Classification of web site:�

Information web site: aim to provide information about the business and its product

Interactive web site : it contains all the information about product and services that an informational site does, but is more interactive.

Transaction web site: aim to sell product and service and typically include features of the information and interactive web sites.

Collaborative web site: it allows business partner to collaborate.

�

Assessing the quality of a website

2007-12-04T13:54:13Z

As for any business, the main purpose of e-business is to make a profit. One of the first step a company should achieve when it decide to sell a product or a service on line is to build its website in the most effective way as possible in order to turn� browsers into buyers.�In order to achieve this objective a web site should satisfy the following characteristics:�

Accessibility

Navigation

Consistency

Performance

Appearance

Quality Assurance

Interactivity

Security

Scalability

�During the course, one of our assignment was to analyze the effectiveness of a particular corporate web site according to the above criteria and compare it with other. We came to the conclusion that the most important thing for a web site is to be clear and make the life easier for the user that is there to find a solution for a �problem� (see purchasing decision process�). The costumer should be able to find what he wants with few clicks. We also noticed that web site of better quality are the one who express their values through the web pages. For instance, Aston martin web site, with its careful choice of colours and the structure, well identify the image of elegance and professionalism that the company aim to communicate.�

Purchasing decision process

2007-12-04T13:55:48Z

Behind the visible act of making a purchase decision lies a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy: �

�
1. problem recognition;
2. information search;
3. alternative evaluation;
4. purchase decision; �
5. post-purchase behaviour.

�Online purchasing decision is very similar to the above pattern. The biggest difference regards� information search and alternative evaluation which are somehow �enhanced� by the use of internet. The use of internet make possible to gather much more information and in much faster way. On internet you can easily evaluate different alternatives and compare them and be in the position to make a better purchasing decision. �

Costumer Loyalty

2007-12-04T14:01:33Z

Today we talked about Costumer loyalty and what it implies in business.Costumer loyalty is the degree to which a costumer will stay with a specific vendor or brand for repeat purchasing. It has two face: behavioural which push the costumer to act, and emotional which is related to costumer satisfaction. An important thing to note is that satisfied consumer are likely to be loyal but not the other way round and this is because loyalty can be created by the company even if the product or service does not satisfy the costumer requirements. In other words sometimes you are loyal because you have to ( for instance, everybody is loyal to the London tube but only because there are no other way to move around London!)�Generally speaking, the introduction of e-commerce has decreased loyalty because customer ability to shop, compare, and switch to different vendors has become easier, faster and less expensive. �There are two problems facing on line business related to costumer satisfaction:

People are still more loyal to physical store than to on line store.

Quality (which together with price is the most important factor influencing costumer satisfaction) is really hard to demonstrate on internet.

�For companies, one of the solution to these problems is to invest money in advertising their brand in order to increase the level of trust of the costumers. This is the strategy carried out� by e bay, whose business rely on the trust it is able to communicate to the costumer and therefore is spending a lot of money trying to give confidence to the brand.E bay has been really a fascinating case for me. It make me think on how a simple idea (sell used staff on internet) can be transformed in an extra profitable business.�On one hand I am impressed by the fact that Internet is changing the way to do business, on the other it is interesting to notice how this new technology and the use people do of it offer new challenge to the �society� ( e.g. should e bay be considered a �black market� or should e bay be taxed?)

Brick and Mortar & Brick and Click

2007-12-04T14:20:42Z

Today, studying the transformation of John Lewis from a brick and mortar company to a brick and click company, we focused on the implications� and the possible disadvantages arising from this transformation. Generally speaking, until recent years, successful� Brick and mortar companies (as John Lewis) have had very small incentives to start an on line activity. Their business was already enough profitable and there was no need to undertake new unknown project. In addition, because generally these companies are identified with a physical structure there was the danger to affect the costumer�s company perception. So why take additional risk?Especially in recent years things have changed and company simply cannot ignore that more and more people buy products on line. Refuse to adapt to the new environment would mean soon be out of business.�One of the biggest issue for brick and click company is deciding how to allocate resources between different channels competing for the same costumer. Now the company has to manage the conflict arising by the competition between selling on store, on catalogue and on line. In recent years, due to this problem, the catalogue channel has decreased sharply. The issue of channel conflict will be always challenging for company having multichannel distribution systems and the managers need to analyze their marketing channel strategy and develop a strategic mix in order to manage potential channel conflict.

Web Advertising

2007-12-04T14:22:40Z

Internet have changed the way to advertise product and services.�Advertising is an attempt to disseminate information in order to affect buyer-seller transaction (Turban et al., 2006) and, through the use of internet, these information are disseminated faster and cheaper than ever.� There are some consideration that make internet advertising better than traditional method:�

Consumer spend more time on line and less time watching television.

Many internet users are well-educated and have high incomes and therefore they are a desired target for advertisers.

Traditional way of advertisement don t allow to track the number of people who actually view an ad while with internet you can even know the time that a costumer spend looking at the ad.

Web advertising is more cost effective than traditional ad method.

�One of the company that own most of its success to web advertising is easy jet.Its strategy of advertising everything on line along with the functionality of easy jet web site where clients can easily find all the information they require has guaranteed to easy jet a great success.� Easy jet has been a company whose 90 percent of the sales are made on internet and it is funny to think that the founder, in 1990, declared that he would have never used internet in his business. �

On-Line Market Research

2007-12-04T14:31:32Z

Website can be useful sources of marketing information. Organizations can analyze how individuals navigate through their site. In doing so they can establish the type of information clients are seeking, the length of the time they spent on their webpage� and their actual purchase. The company can build up a profile of interest with similar interest and purchasing habit. Through monitoring their website usage companies can also analyse the effectiveness of promotional campaigns such as discount vouchers. (Boots case study)The internet offers a new approach in carrying out a questionnaire survey. The questionnaire can circulate by e-mail. This provides a very low cost method of disseminating a survey. This approach can be the added advantage that it can be more interactive than a traditional mail survey. However there are some disadvantages with internet surveys. The results may be misleading by the fact that internet users are generally found among more affluent costumer and in younger age groups. Another thing to consider is that an e-questionnaire destroy anonymity and therefore creates reservations about the reliability of costumer response on personal issues.

�On line market research method available for companies are:

Web-based surveys

On line focus group

Hearing directly from costumers

Costumer scenarios

Tracking customers movements

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Case study � Second life

2007-12-04T14:34:20Z

Today we focused on a really interesting case study. Second life is an internet based virtual world launched in 2003. It is one of several virtual world aiming to create a kind of parallel life in which people can interact, play, do business and communicate. Second life has its own currency, the Linden dollar, exchangeable for real world currency and there are even some counties that have their own embassy.

There are as many opportunities for innovation and profit in Second Life as in the Real World. Open a nightclub, sell jewelry, become a land speculator.

In particular we analyze the price strategy of the company: originally, to participate to second life there was a monthly fee for each account but later, because the low rate of subscription, the creator of second life decided to eliminate the fee for the basic account (with a basic account there is no right to own land) but keep this fee for the premium account. Other than the fee, maybe the most important way to make money for second life is through advertisement. Due to presence of so many people �playing with second life� more and more companies are choosing second life as favourite channel to promote their product a services. �

Conclusion

2007-12-04T15:32:52Z

The evolution of the internet, from being an easy way to spread information to being a new way to do business, has created new possibilities and new threats for companies all over the world. E-commerce is still pretty much at its infancy stage but I think people can already feel the enormous potential and it could easily become the common mode of business transactions in the future. E-commerce allows consumers to carry out transactions anytime, anywhere, as long as there is a personal computer with Internet connection.The future has already begun��