Impact of E-Commerce on Marketing
Marketing is one of the business function most dramatically affected by emerging information technologies. Companies can use the web to provide ongoing information, service and support, creating positive interaction with customers that can serve as the foundation for long term relationships and encourage repeat purchases. Even cyber shopping allows customers to sit in the comfort of their homes and purchase their goods. One can shop any kind of product or service in the mid of the night and from any part of the world.
During the agrarian economy, probably the term marketing was not used for trade in agricultural goods or sale of other items. But people engaged in the process of exchanging goods and services used the barter system, in this system, buyers and sellers knew each other and there was mutual dependence on each other for survival during this period. The essence of barter system can be summarized as follows:
Buyers and sellers knew each other.
They operated on mutual co-existence principles
There was no dominance relationship.
There was a high level of loyalty among the sellers and buyers.
During the industrial age the marketing term was coined to signify the need for identification and satisfaction process. In this system manufacturers/sellers did not have a face to face interaction with consumers, which led to problems for producers in understanding customer needs. To avoid this problem marketers are using different tools like advertising, direct marketing and E-commerce to exploit the gullible customers.
According to Ravi Kalakota and Andrew B Whinston, "E-Commerce is the process of buying and selling or exchanging of products, services and information via computer networks including the internet.
Benefits of E-Commerce on marketing
It provides many potential benefits to consumers and organizations. These are:
It enables customers to shop or do other transactions round the clock a day, all year around, through any part of the world.
It provides customers with more choices; they can select from many vendors and from more products.
It allows quick delivery, especially in case of digitalized products like music and books.
It makes it possible to participate in virtual auctions.
It allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences.
It allows customers to receive detailed and relevant information within seconds.
It facilitates competition, which results in substantial discounts.
E-Commerce expands he marketplace to national and international markets. With minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers and the most suitable business partners worldwide.
It allows reduced inventories and overhead by facilitating ‘pull' type supply chain management.
It reduces the time between the outlay of capital and the receipt of products and services.
It decreases the cost of creating, processing, distributing, storing and retrieving paper based information. Apart from this benefit it attracts improved image and customer services.
Impact of E-Commerce on marketing
Product promotion: Electronic commerce enhances promotions of products and services through direct, information-rich and interacting contact with customers.
Direct saving: The cost of delivering information to customers over the internet results in substantial savings to senders.
Customer Service: Customer service can be greatly enhanced by enabling customers to find detailed information online.
Brand Image: Newcomers can establish brand or corporate images very quickly through net and affordable cost.
Advertising: Traditional advertising used mass or direct – one way – communication to persuade customers to buy their products and services. In the electronic period, it is interacting communication – two way- aims at customers to browse, explore, compare, question and even customer design the product configuration.
Customization: The ultimate luxury can get is in terms of custom designed products and services. The net offers a tremendous opportunity to understand customers needs one at a time and offer customized products and services.
Order making process: Taking orders from customers can drastically be improved if it is done electronically, this saves time and reduces expenses, so sales people have more time to sell their products or services.
Intermediaries: In traditional marketing middlemen are supposed to provide pace and time utilities to the ultimate customer, but advancement of information technology is turning intermediation in to disintermediation.
Customer Value: Traditional marketing tries to maximize the value per transactions; here customer attraction is big target. But in electronic marketing, the marketers are trying to form relationship with customers and they are looking for long term value maximization.
Day by day, technology is getting sophisticated and costs are crumbling, making the internet easy and cheap to access. Eventually, even for buying a product from a shop situated near to home, the customer may use the internet to place order, and may get the product delivered immediately. The integration of electronic commerce and marketing will bring a renaissance in marketing function.