Message and E-Tailing Background- E-Commerce Is the Essay

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Message and E-Tailing

Background- E-Commerce is the buying and selling of products and services over electronic means, usually the Internet. As Internet usage grows, so does trade conducted electronically, allowing for a number of improvements and innovations that follow suit. Most economists see e-commerce as a market segment that leads to intensive price competition and consumers armed with greater knowledge. In two particular industries, e-commerce has actually changed the way the market works on those industries, causing the brick and mortar versions to fade away. One of these is the book industry, in which larger e-commerce firms like Amazon.com, use economies of scale to drop prices, increase variety, and capture the market (The Click and the Dead, 2010).

Levels of Interaction- E-commerce has changed business models globally. The United Kingdom actually has the largest e-commerce market in the world, even higher than the United States. This has certainly changed the dynamics for marketing and advertising all over the world (Robinson, 2010). Even countries who are new to the Internet, or who have limited Internet access expand with e-tailing (e.g. China and almost $40 billion in 2009). E-commerce is an important business tool not only to sell to customers, but also to engage them in the process of computer-based shopping (Eisingerich and Kretschmer, 2008).

Many scholars believed that e-tailing would lead to intense price competition since it increases consumers' ability to shop the market, gather information, and decide with whom and how to purchase. Two particularly market niches have been affected by e-tailing, bookstores and travel agencies. Amazon has really captured the market in books, and there are very few small travel agencies left- consumers can find better deals quicker through the Internet. Instead, what has occurred is a market scaling -- larger companies can usually offer better prices, and even with shipping can usually out-compete the local retailer. This has formed two distinct aspects of e-tailing: the pure-click shops that have no local brick and mortar and who have launched a website without any previous experience.

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These firms are both price and customer service driven. The second type are Brick and Click firms that are existing companies, usually have a brick and mortar location, but also know they need to expand and enhance their distribution profile more (Graham, 2008).

There are three basic interactions between e-tailers and consumers: the product, the process, and finally the partnership.

Product -- Consumer develops and enhances preferences and learns to evaluate difference; E-Tailing strategies include: price discrimination, price attributes, product differentiation, and bundling strategies.

Process -- Consumer takes in information, evaluates it against e-tailer's performance. E-tailer recommends existing and new products; uses strategies to increase trust and turn purchasers into customers; and provides both direct and indirect learning experiences.

Partnership -- Consumers feel loyalty, commitment, trust, and privacy. E-tailers use loyalty programs, social medial, privacy and trust strategies.

Interaction

Product

Process

Partnership

Basic Issue

Learning about product

Development of the sale, knowledge process.

After the sale process; turning purchasers into customers

Medium of Behavior

Electronic, emails or website information

Online catalog

Email notification, phone support if needed.

How enables e-commerce

Acts as an online catalog and inventory mechanism

Allows for a more robust shopping experience; ability to compare as well.

Increases market share, adds customers, increases word of mouth

Looking at the communications matrix and interaction, we then see:

Communication

Product

Process

Partnership

Purpose

Gain Customers

Get purchase decision

Retain customers

Sender

E-Tailer, E-Commerce

Both E-tailer and consumer

Both

Receiver

Consumer, B2B

Both

Both

Message

Reasons to Purchase

How to purchase

Service, follow up

Environment

Virtual

Virtual, could be telephony as well

Virtual, telephony

Technology

Email, Internet, Smart Phone

Email, Internet, Smart Phone

Email, Internet, Smart Phone

Noise

Other ads, competing spots, social networks, predispositions

Multiple shopping experiences

Potential mishaps in shipping, product, etc.

Feedback

Usually causes a purchase if successful

Purchase and beginning of relationship

Can make or break experience

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