Assignment-SMU-MK0017

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Q1: What is e-mall? Explain the various types of online stores in an e-mall.

Ans:- “An e-mall is an online shopping center, in which there are many online, or virtual, stores”. The basic four types of online stores have been explained below:

1. General stores/malls

These are general stores that have a presence in the online market. They include stores like Junglee.com and infibeam.com which act as an interface between the buyer and seller. They are stores that have a variety of items for sale and are thus called general stores. They do not specialize in selling any one item.

2. Specialized stores/malls

The specialized stores would sell only specialized items. For example there are Websites selling only mobiles like themobilestore.com and Websites selling only property like 99acres.com.Thus, they specialize in their areas of product and are named as specialized stores.

3. Regional versus global store

Another classification of e-stores is regional and global stores. For example, in the tourism industry, e-stores like Airindia.in are among the local stores of India, while Airtel.com is a global e-store.

4. Pure online organizations versus click-and-mortar stores

The pure online stores sell their products only through the online stores. The best examples of these are Amazon.com and Makemytrip.com, which operate only through the Internet. Some stores are referred to as click-and mortar stores, which mean they have an online presence for selling and generating awareness among their customers but they mainly sell through the physical distribution system. One such example is Archies.com, which has physical presence in stores along with an online presence.

Q2: An electronic marketplace (e-marketplace) refers to a website created for common interest. It integrates the online and physical component of a company. Discuss the five kinds of partners in an e-marketplace.
Ans: - “An electronic marketplace, or e-marketplace, refers to a Web site and portals or a set of linked sites that are common interest to particular types of customers”. The e-marketplace model has come to be a very effective one, which integrates the online and physical component of a company. It has in many ways helped business partners to establish a dot.com strategy in their company. One crucial factor in this context is the costing. If businesses feel that each consumer has to be reached personally and physically, this would be very difficult. Thus, an electronic presence not only makes the process cost-effective, it also reaches the consumer timely. It is easier to establish a strong online presence than a physical store. Also, getting feedback from the consumer one-to-one is difficult but getting the same through a Website is easier. Another problem which companies face when delivering to the consumer is scheduling.

Another problem in this model is the pricing, in an e-business. Consumer pricing has always been a problem for business houses that have adopted the e-marketplace model.

However, the “e-marketplace marketplace and online technology” have not outdated the traditional selling. Thus, most of the e-business companies today are trying a mix of these two concepts. This is exactly what the e-market model means, which is followed today by large companies like Disney

There are five kinds of partners in an e-marketplace:

• Private

• Sell-side

• Buy-side

• Public

• Consortia

Private: Private e-marketplaces, which are owned and set up by individual companies to deal with their own suppliers and buyers. They could be sell-side and/or buy-side e-marketplaces. Private e-marketplaces are similar to public e-marketplaces in terms of function and infrastructure, but their use is restricted to the company and its employees.

Sell-side: The sell-side e-marketplace would be the operations of the e-market, wherein the products are actually being sold to the customers. Here, the operations of logistics and delivery are supreme.

Buy-side: The buy-side e-marketplace would be the interface of the e-marketplace where the consumers will buy the product. Thus, the payment, interaction, pricing would come under the buy side of the e-marketplace.

Public: Public marketplaces are independent Internet-based trading platforms, usually owned and/or managed by an independent third party. Such an e-marketplace represents a community of many buyers and sellers, and where every seller is given equal weight. These are also known as exchanges or third party marketplace.

Consortia: These are internet locations owned jointly by consortia of industry leaders, which allow other companies or individuals to get new suppliers or buyers for their products as well as develop trading networks which makes negotiating, settlement and delivery easier and more efficient.

Q3: Discuss the major legal and ethical issues in e-marketing.

Ans: - The Internet has led to a state that is popularly referred to as the ‘global village’. It has made distances smaller and brought people of different parts of the world closer to each other. It has also made it possible and convenient to conduct trade and commerce across different countries. But there are some legal and ethical concerns are also with e-marketing as follow;

Legal issue

Moreover, the laws of one country may not be applicable in others. Hence, it is felt that the Internet does not have the necessary legal safeguards to govern e-business.

There is a need to focus on legal and ethical issues such as site security, confidentiality and international issues in e-businesses. In India, many e-commerce firms are under the scanner for suspected FDI and foreign investment frauds.

Notice (privacy policy): E-business websites should put up clear and unambiguous notice stating the way they collect information from customers, what kind of information is collected, how including what information they collect, how they collect it and how they use it. They should also put a disclaimer to clarify whether they share the customer’s information with other sites.

Online fraud: Fraud has become common with the growth and proliferation of Websites and various online businesses, some of which are not as genuine as they claim. E-marketing fraud generally pertains to stocks and shares, where potential investors are deceived by false promises of easy profits. Other types of fraud includes fake companies selling counterfeit products, fake job offers and schemes, phishing, impersonation which are mainly aimed at extracting users’ personal information for unethical use.

Domain names: An important legal issue is that of Internet addresses, also known as domain names. There are often conflicts over the use of certain domain names, as two or more companies want to have the same domain name. This issue was addressed to some extent when several upper level domain names were added to .com in 2001.

URL squatter

Cyber squatting (also known as domain squatting), according to the United States federal law known as the Anti cyber squatting Consumer Protection Act, is registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The cyber squatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.


Ethical issues

Use of personal data: E-business Websites should notify the customers about the use of their personal data (such as e-mail ID) for purposes other than the business transaction. This includes internal use of the data, for example, to send promotional mails in future, or external uses (such as disclosing or selling the information to other sites or organizations entities).

Web tracking: E-business Websites keep track of their users through log files. These are analyzed and relevant information is extracted from these files. Programs like “Privacy Guardian”, “My Privacy” have been developed to protect user’s online privacy by deleting the information in the browser’s cache memory, as well as surfing history and cookies. They also work against spyware programs like Ad-Aware.


Q4:- Explain the factors that influence e-consumer’s buying behavior.

Ans:- “An e-marketing plan is a structure identifying the major steps to build an effective e-marketing strategy”. For example, popular fast food giant McDonald’s e-marketing strategy is to provide a low-priced product and good value in food category. This is nothing but a price-based differentiation strategy.


(Segmentation, Targeting and Positioning)

There are many factors that influence an e-consumer‘s buying behavior. So, generally, consumer behavior can be predicted by studying these factors.

* Culture refers to a set of attitudes and beliefs. But what is important is that how these attitudes and beliefs developed. As a person is growing up, he is influenced by his parents and other family members from whom he learns about morals, or a sense of right or wrong. Religion, culture, and social norms help shape a person’s opinions, attitudes and beliefs).

*People’s social class and economic status also affect their behavior. These parameters influence a person’s purchasing behavior.

*However, other factors like friends or role models may influence their choices of purchasing a product or service. *Consumers are also influenced by reference groups. These could be celebrities, immediate family members or opinion leaders.

*The economic environment has a crucial impact on consumer behavior. This factor becomes all the more relevant during a recession.

*Other factors including job security, marketing and advertising also influence consumers in purchasing a particular product or service. Apart from external factors, the person’s personality (extrovert or introvert) has an impact on the types of purchases made.


Types of buying behavior: There are four basic known types of buying behavior based on the different products that are purchased.

1. Complex buying behavior,

2. Habitual buying behavior,

3. Variety-seeking buying behavior, and

4. Dissonance reducing buying behavior


Q5:- Functions of E-marketing are represented by 2P+2C+3S formula (Personalization, privacy, customer service, community, site, security, and sales promotion). These functions form the framework of an e-marketing strategy. Discuss this formula with a diagrammatic representation.

Ans: - In contrast to traditional marketing, e-marketing is unique as it has a series of specific, relational functions that can be represented by “the 2P+2C+3S formula – (personalization, privacy, customer service, community, site, security and sales promotion)”. The above-mentioned functions of the e-marketing form the framework of an e-marketing strategy. These factors revolve around the concept of relational functions and they are necessary components of an e-marketing strategy in order for it to be efficient and deliver results. All the elements of the 2P+2C+3S model of e-marketing mix are moderating factors that apply to all the 4Ps separately.


(E-marketing 2P+2C+3S formula)

2Ps

*Personalization: This is an extremely important component of e-marketing, as it recognizes and establishes a direct, personal relationship with a customer. This way, some vital information about the customer is gathered which helps the company to customize its service to that particular customer.

*Privacy: This factor is closely related to personalization, that is, how the information about the individual user is obtained and stored. Also, who will be able to use it and for what purpose. Thus, before initiating an e-marketing strategy, the company must put in place a policy for the collection, storage and usage of the data.

2Cs

*Customer Service: This is a necessary feature in any transactional service, and any e-marketing programs will be incomplete without it.

*Community: The community refers to the groups of clients or customers who interact with the company. The larger the network and its reach, the better it is for the success of the e-marketing programs.

3S

*Site: Site refers to the location where the e-marketing activities take place. Generally, the site is the Website.

*Security: This is an essential element in the e-marketing mix, in order to ensure the security of the transactions over the Internet, which should not be accessible to any outsider.

Sales promotion: This is also commonly adopted in traditional marketing, and involves offers and discounts, etc, to attract customers and boost sales. In e-marketing, too, sales promotion is a good way to achieve a boost in sales in a short period.


Q.6. Discuss the selling methods and sales promotion of E-marketing.

Ans: - A) Selling Methods: - It comprises a body of methods used in the profession of selling, also known as personal selling. The major techniques used for selling are as follows:

1. Virtual Sales Staff: - The Virtual Sales and Marketing Team solution immediately provides a company with a senior team of sales and marketing professionals. It avoids the lengthy hiring process for sales and marketing staff. The following are different methods of carrying out virtual sales and marketing:

*Crowd sourcing: This is a process that involves outsourcing tasks to a distributed group of people. This process can occur both online and offline.

*Micro work: Micro work is a series of small tasks that have been broken out of a larger project and can be completed via the Internet. Micro work is considered the smallest unit of work in a virtual assembly line. This is a crowd sourcing platform where users perform small tasks.

*Crowd voting: This is a process of collecting opinions and judgment on a certain topic by a Website. For example Ink fruit in India allows crowd voting on t-shirt designs. It is also crowd sourcing, because designing is open to everyone.

*Wisdom of the crowd: With this method one collects large amounts of information and aggregates it to gain a complete and accurate picture of a topic, as per the idea that a group of people are often more intelligent than an individual.

*Crowd funding: This is the process of funding your projects by a multitude of people contributing a small amount each in order to attain a certain monetary goal.

*Crowd purchasing: This means to leverage the collective purchasing power to win the best possible deals. Group purchasing Websites like groupbuyingsite.com could be the best example here.

*Inducement prize contests: Web-based idea competitions, or inducement prize contests, often consist of generic ideas, cash prizes, and an Internet-based platform to facilitate easy idea generation and discussion.

2. Affiliate Marketing

Affiliate marketing is a performance-based marketing in which the company rewards one or more affiliates for the number of visitors or customers which have been brought by the affiliate’s own marketing efforts.

There are four key players involved in affiliate marketing: the merchant (or the ‘retailer’ or ‘brand’), the publisher (or ‘the affiliate’), the network (affiliate payments and offers), and the customer.


B) Sales Promotion

Sales promotion is one of the seven ways of enhancing sales. The other six parts are advertising, personal selling, direct marketing, publicity/public relations, corporate image and exhibitions. The most common devices used in sales promotion include incentive programs and loyalty programs.

1. Incentive Programs

Retention of existing customers is a very important aspect of any business. The membership cards which offer 10 per cent discount on every purchase of, say, more than ` 200 and the discounts on shopping over the net are some examples of incentives — which can be advertised over the Web.

2. Loyalty Programs

This is another way is promotions for retaining the online customer range from loyalty programs and feel-good approaches, such as thank-you notes and birthday cards.