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CHAPTER 2
CONCEPT OF ELECTRONIC
COMMERCE
Why Should Companies Use
Electronic Marketing
 What is the purpose for engaging online
communication?
 Why should the company go online?
 What do we hope to achieve with an online
presence?
 Who will be in charge of the Wib site creation?
 Who will set the budget for Web site production
and implementation?
 Does the company have the talent to allow the
Web site to grow?
Objectives and Expectations for
Internet Activities
 Definition of EC:
• E-Commerce is a system of online shopping and information
retrieval accessed through networks of personal computers.
 E-commerce is the end result of e-marketing.
 E-marketing resources are the means, tools by
which e-commerce is executed more efficiently
and effectively.
 Internet is promotional faucet to tap into the flow
of consumers and prospect purchases.
 Internet is a part in the promotional mix.
Virtual Retailers
 It is a flat TV screen.
 Amazon.com Vs. bn.com.
 Importance of demographic, psychographics and
behavioral characteristics.
 Web master Vs. interactive advertising agency.
 Internet provider/internet service provider:
• Arrange for necessary equipment(server, internet connection
and the system maintenance) to handle tha daily activities.
Evaluation of On-Line Marketing
Situation
 Knowing at what point to start is the key to
successful marketing efforts.
 Crating on-line awareness for
product/service.
 To be capable to react quickly customer
service inquiries.
 Technical support by e-mail.
 Data base development for customer
tracking.
Relevant Research Process
 www.forrester.com
 www.decisionanalyst.com
 Personal Characteristics:
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Gender
Age
Marital Status
Educational Level
Ethnicity
Occupation
Household income
Relevant Research Process
(cont.)
 Internet Usage Profile
• Internet access option and cost
• Length and frequency of use
 Primary Research
 Secondary Research
 Steps in Research Process
• Define the required relevant research
• To ascertain if and where the information can be
obtained
Relevant Research Process
(cont.)
 New product and Service Definitions:
• Need identification
• Product/service development
• Identify expected benefits to intended audience
 Environmental Factors:
•
•
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Economic
Cultural
Legal
Political
 Tracking Customer movement on the internet.
• Cookie files attached to user’s browser
• They do it, but it is considered unethical attitude
On-Line Market Research
 The research process:
•
•
•
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Problem definition
Methodology
Data collection and analysis
Findings, recommendations and implementation
 Faster and cheaper
 Large sample size
 It is done interactive manner with customers
 Provides early information about product and
customers
On-Line Marketing Research
Methods

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E-mails.
Focus group conducted in chat room.
Surveys placed on web cites.
Data entry error is eliminated.
Graphics, logo and link to other web pages may
be added.
 Respondents may be from foreign countries.
 Respondents may answer at his/her convenience.
 Problems with on-line market research:
• Long download time
• Long processing time
Limitations of On-Line Research
 It is not suitable for every client.
 It is skewed toward certain population
groups.
 Sample may not be representative.
 Web based surveys have lower response rate
than e-mail surveys.
 Respondents may not trust the truthfulness
of web based research.