4.8 E-commerce Flashcards
E-commerce
The buying and selling of goods and services on the internet.
Features of e-commerce
- global reach
- 24/7 accessibility
- access to information
- consumer reviews
- impersonal interactions
E-commerce and place (marketing mix)
Reduces the number of intermediaries in the supply chain, and increases opportunities to find suitable products and services.
E-commerce and promotion (marketing mix)
Supports innovative promotion, e.g. purchase suggestions based on search behaviour.
E-commerce and price (marketing mix)
Lower overheads reduce the prices of goods. Customers compare prices using search engines and price comparison sites.
E-commerce and product (marketing mix)
Allows firms to offer a wider range of products and provide more information on specifications with greater customisation opportunities.
Types of e-commerce
- business-to-business (B2B)
- business-to-customer (B2C)
- customer-to-customer (C2C)
Business-to-business (B2B)
E-commerce conducted directly for business customers rather than the end user.
Business-to-customer (B2C)
E-commerce business conducted directly for the end-user.
Customer-to-customer (C2C)
Transactions between one consumer and another.
Potential costs of e-commerce to firms:
- It is harder to develop online brand loyalty as customers can search for cheaper alternatives
- It is expensive to develop reliable, secure sites with payment facilities and links to distribution systems
- Vulnerability to cyber-attacks from competitors, spammers and hackers, and loss of commercially sensitive information
- Some products are difficult to market online as customers want to try them out before buying
Potential benefits of e-commerce to firms:
- Potential access to global markets
- Increasing opportunities for small producers in niche markets.
- Cost savings and improved efficiency
Potential costs of e-commerce to customers:
- Fewer quality controls on online businesses and product quality may be less than in physical retail outlets.
- Laws protecting shoppers in one country may not apply to purchases from foreign sites.
- Customer security may be compromised online, e.g. fraudulent operations.
- Cybercrime is growing, with hackers and spammers disrupting commercial activities and stealing information.
Potential benefits of e-commerce to customers:
- lower overheads than physical competitors and consequently lower prices
- a larger range of products available
- search facilities to find the correct product and information more easily
- reduced transaction times
- purchase tracking
- higher service levels, e.g. links to frequently asked questions
- encrypted payment systems