Business-to-business (B2B) Business-to-customers (B2C)
B2B business-to-business, online trade conducted directly for the business customer (Amazon.com supplying books to other book retailers)
B2C business-to-consumer, online business conducted directly for the end-user (consumer)

  1. Analyse the effect of e-commerce on the marketing mix.
Marketing_Mix.jpg


Price

-Internet increases price transparency
-Allows businesses to cut out intermediaries such as wholesalers and main-street retailers
-E-commerce firms add shipping costs to the price of their products, making prices less competitive
-E-tailers have to be aware of international trading standards and regulations (import taxes)

Place

-Provides opportunities for delivery and courier companies (DHL;FedEx)
-Convenient (no need to travel to retail outlets as purchases can be made online)
-Different languages available

Product

-Product range can be displayed online -> more convenient for customers to access this information
-Packaging becomes less of an issue with e-tailers--> Less wastage
-Additional detailed information and regular updates about the product can be placed on the firm's website.

Promotion

-Create online sales channel that supports the needs of the international community
-More detailed information can be communicated via internet advertisements
-using online video clips, audio and photos
-Viral marketing (word-of-mouth marketing) --> focuses on emails and banner advertisements--> cheap method :)
-Email spam :(
-Lure customers by using competitions and prizes on their website
Threat to businesses selling price inelastic products (premium brands) /to businesses that enjoy regional monopoly
-NO longer the same degree of privilege or autonomy for businesses in being able to set higher prices

*Consumers choose the product that offers the best vale for money in terms of reliability and the brand image.




2. Discuss the costs and benefits of e-commerce to firms and consumers.
e-commerce-style.jpg

Photo from http://bizcem.com/conceptual/relationship-between-e-commerce-and-e-business/

Costs

-Set-up costs is high
-Credit card companies impose finance charges for using their services
-Fraudulent trade
-Spam and unethical marketing opportunities
-May not be suitable for some businesses
-Job losses

Benefits

-Gives businesses another channel of distribution. Allows organizations to sell in any part of the world at any time of the day.
      • increases customer base
-Opportunity to respond to competitors more quickly
-Excessive packaging can be reduced
-Retal outlets's higher overheads could be reduced by operating online (XXrent, storage, insurance payments, staffing costs)
-Customers save associated transaction costs (travel time, transportation costs)
-Speedy completion of transactions is possible
-Customers have more choices and convenience (reduced barriers to entry, allows unknown firms to establish new businesses)