MKTG 404 chapter 15
1: disintermediation vs reintermediation
- disintermediation: intermediaries become superfluous because producers gain exposure to vast numbers of customers in cyber space. They just need a website. Then they just have to search for and contact producers directly to buy electronically. In this case, who needs a middleman? Therefore disintermediation is bound to happen. -reintermediation: shifting, changing, or adding middlemen to the channel. Ex: Amazon, online car dealerships, peapod inc (online grocery store)
Disadvantages of electronic marketing channels
-Lack of contact with actual products and delayed possession: can't be tried out which is important for cars. Can't possess it right away -fulfillment logistics not at internet speed or efficiency: internet processes and transports electrons not physical products so fulfillment and logistics must still be performed. -clutter for buyers and sellers: standing out is hard for a seller -non purchase motives for shopping not addressed: retail innovation
electronic channels on social network sites
-almost half of americans had a facebook or myspace in 2009, 3/4 were between 18-33
3: virtual channel structure vs conventional channel structure
-can the virtual channel structure on the internet provide a sub for physical structure such as stores and malls that are so much part of a conventional channel structure? yes and no. -many people will order stuff online but want to try it on in stores first -many needs can't be satisfied virtually such as haircuts, gas, clothes cleaned etc
channel member selection
-conventional marketing channels will continue and face selection decisions
mobile electronic channels
-enables consumers to conveniently shop online from any location or while on the move -coupon apps -a lot of room to grow
Objectives and strategies of the firm and electronic marketing channels
-firms should have a broad range of options with electronic marketing channels -need to consider if internet based channels fundamentally affect the firms decision about the priority it will give to distribution strategy
Role of electronic marketing channels in marketing mix
-may change the blend of place (distribution)
channel management
-more likely to be challenging and complex rather than less as a result of this technology
10 metrics every e-commerce site should monitor
-new visitor conversion rate -return visitor conversion rate -page views/ visits -items/ order -average order value -landing page bounce rates -landing page load times -traffic sources -orders per customer per year -shopping cart/ checkout abandonment rate
2: information flow vs product flow
-product, negotiation, ownership, information and promotion -the internet is not able to do product flow because it's physical and can't be digitized and is processed more slowly and moves at no greater speed than a jet plane. -the limitation of the internet when used as a marketing channel means there are also limits as to how much of a role it will play in the distribution of goods and services
evaluation and electronic marketing channels
-still relevant -metrics dealing with channel member sales, sales growth, inventory levels, customer service, attitudes and profit are often needed to measure performance
developments and trends in electronic marketing channels
25 in beginning of 21st century to 175 billion in 2010. -will continue growing to 279 billion by 2015. -highest sales were apparel, footwear, jewelry and accessories followed by computer hardware and software. books, music and videos will also continue increasing -no significant differences in spending associated with age and income level but mostly 18-32 years old -
Advantages of electronic channels on social network sites
Advantages: -global scope and reach: gives buyers and sellers access to internet to connect with each other globally -convenience/ rapid transaction processing: don't have to drive or walk anywhere -info processing efficiency and flexibility: a high degree of customization along with a high level of interactivity is possible via electronic marketing channels. Ex: try on things virtually -data based management and relationship capabilities: enables firms to target efficiently on a large and small scale. Even one to one marketing, where the seller adapts its offerings to meet the unique needs of a single customer is feasible online. Electronic tagging, called cookies can be powerful if linked to demographic and psychographic data that customers have provided through prior purchases or surveys -lower sales and distribution costs: reduce distribution costs. In some cases they may contain more rather than fewer middlemen in the channel structure. Ex: using the internet to sell a car saves on advertising and sales commission.
Mobile commerce
electronic channel, still in its infancy, this channel is expected to grow rapidly as consumers become more comfortable with this mode of shopping
structures of EMC's
how much is hype and reality? -disintermediation vs reintermediation -information flow vs physical channel structure -virtual channel structure vs physical channel structure
electronic marketing channels
the use of the internet to make products and services available so that the target market with access to computers or other enabling devices can shop and complete the transaction for purchase via interactive electronic means (stepping over the line) -said to reshape marketing channel structure