Technology and the marketing mix-Business chapter 16

• Benefits to a business of advertising on social media:

  • Targets specific demographic groups who will share product information through viral marketing (when consumers are encouraged to share information online about the products of a business)
  • Target customers will see the advert when they go on Facebook
  • Speed in response to market changes- information can be updated regualrly
  • Cheap to use- it has low costs if just placing advertisements
  • Reaches groups that are difficult to reach any other way
• Disadvantages of businesses advertising on social media:

  • Can alienate customers if they find the adverts annoying
  • Businesses have to pay for advertising if using pop-ups
  • There is a lack of control of advertising if used by others
  • Messages may be altered or used in a bad way and forwarded on to other users, giving the business bad publicity
• If a business advertises on its own website it will enjoy these benefits:

  • No extra cost if own website is already set up
  • COntrol of advertising as it is on your own site
  • Can change adverts quickly and update pictures/ prices and so on.
  • Interactive adverts can be more attractive than those in other forms of advertising media like magazines
  • Can provide more information in adverts and link to other pages with further information and pictures
  • Attracts funds/ payments from companies that want to advertise or be associated or linked with your website
• Disadvantages of business advertising on their own website:

  • Potential customers may not see the website as the page may come up in a long list of results when using a search engine such as Google
  • Relies on customers finding the website
  • Design costs of the website may be high
• Opportunities of e-commerce to business:

  • Websites can be used to promote the company and its products worldwide more much cheaply than other forms of marketing, like setting up shops in many countries- Orders can be taken over the internet and sent directly to the company warehouse for dispatch
  • Consumers might be encouraged to purchase more products then they intended by attractive and easy to follow websites, for example, giving links to other products that could be bought with the original purchase
• Opportunities of e-commerce to business:

  • Businesses can also easily make online purchases of supplies and materials from other business- this is called business to business (B2B) e-commerce
  • Selling online makes dynamic pricing much easier for businesses. This is when they vary the price of a product being sold online depending on the numbers of customers hitting the product’s web page at a particular time of day or day of the week. It gives great price flexibility and usually leads to higher revenue for the business
• Opportunities of e-commerce to consumers:

  • No need to leave the house to go shopping and this convenience is a major factor explaining the growth of e-commerce
  • Comparisons between prices and products or services offered can be easily made by surfing from one website to another- or using price comparison websites
  • Payment by credit or debit card is very easy
  • Consumers can now easily access products and services from businesses located abroad- this would be very difficult or expensive without e-commerce
• Opportunities of E-commerce to consumers:

  • Consumers can buy some products for prices much lower than they would be without the competition of e-commerce, for example, books, music and insurance policies
  • Customers can buy parts or components from manufacturers without the addition of retailers’ profit margin 
  • Packaging and transport costs have fallen due to competition on the internet so it is cheaper to buy from abroad now
• Threats of e-commerce to business:

  • With so many businesses now offering e-commerce websites, competition between businesses is very high. If a business is charging higher prices, consumers can easily find an alternative supplier
  • Website design must be very clear, attractive and easy to operate. Website designs can be expensive- and will often need to be updated which will lead to further costs
  • Transport costs per product sold are likely to be higher than selling through traditional shops. Each item must be packaged and delivered separately.
• Threats of e-commerce to business:

  • No face to face contact with consumers, business does not gain market research feedback
  • Consumers in most countries have the legal right to reject goods bought through e-commerce as they've not seen, touched, worn the actual good. Returns add to business costs
  • Although fewer shops are needed, a large warehouse and efficient inventory control system are essential to fulfil consumers' orders efficiently 
  • E-commerce is not suitable for businesses that sell personal services like hairdressing or products consumers expect personal face to face service
• Threats of e-commerce to consumers:

  • Consumers need access to the internet. It is still the case that in many countries internet access, especially for low income consumers, is not good
  • Computer systems failures or weak internet connections can result in frustrated consumers who cannot access websites or make their purchases
  • Products cannot be seen, touched or tried on (clothing, for example) and sending products back because they are unsuitable (returns) is often inconvenient
• Threats of e-commerce to consumers:

  • There is no face to face contact with sales staff so it is difficult to find out more information about the goods and services being sold other than that which is provided on the website
  • Many consumers are concerned about identity theft or fraudulent use of credit cards if they buy goods online. Security systems are improving but there are still some risks