Unit 4.8

Question 1

Define E-Commerce

Answer 1

Buying and selling of Goods & services on the internet

Question 2

Features of E-commerce

Answer 2

Global availability- Can buy easily from other countries

Ubiquity- Can buy and sell 24/7

Personalized marketing and segmentation

e.g. Google ads

More reliant on consumer involvement

e.g. user review on Amazon

Online customization

Question 3

The effects of changing technology and e-commerce on the marketing mix

Answer 3

Product

Transformed certain markets

TV - e.g. Netflix

Increased number of bankruptcies

e.g. Blockbuster

Increased customization

E.g. customized Adidas shoes

Packaging less important

Download instructions rather than being printed

Price

Firms don’t need a shop so have lower expenses, and thus can lower prices. However, they need to pay for delivery costs

Increased price transparency so consumers can easily compare prices

Promotion

Can now use the internet to advertise, rather than TV, magazines etc.

Increasing reliance on social media

More targeted ads allows psychographic segmentation

Firms collect data to work out your values and lifestyle, then target ads to this

Place

Businesses are generally reducing the number of their retails outlets and focusing online

Increased need for good logistics

e.g. efficient system to delivery goods

The rise of the concept store

e. g. stores which offer the consumer an experience rather than focusing on purchasing
e. g. Apple store

Question 4

What is Business to Business E-commerce (B2B)

Answer 4

One company sells its product to another company.

Question 5

What is Business to cosumer E-commerce (B2C)

Answer 5

A company sells its products directly to the consumer.

Question 6

What is Consumer to cosumer E-commerce (C2C)

Answer 6

A consumer sells a product to another consumer.

E.g. Ebay

Question 7

Pros and cons of e-commerce on businesses

Answer 7

Pros for business

Reach a large audience

Gain lots of data (eg. clicks)

Lower costs (eg. no rent to pay)

Cons for business

Less consumer interactivity- (employees cannot teach consumers how to use)

IT issues - security, internet speed, internet fraud

Can limit the target market- Not everyone has access to fast internet - the elderly, less developed countries

Increased competition- Consumers focus more on price so it can be harder to establish brand loyalty

Question 8

Pros and cons of e-commerce on Consumers

Answer 8

Pros for consumer

Convenience- open 24/7

Lower prices

Can download certain products immediately (eg. movie streaming)

Cons for consumer

Delivery fees

Can’t try before you buy

Wait for delivery to arrive