The E-Operations Opportunity

Introduction

Forms of marketing have existed as long as products and services. Early people promoted their products (eg. vegetables grown) to entice trade for other products. This demonstrates an early form of creating a desire/need and servicing that with a solution of providing the goods.

With the rapidly advancing technologies that are occurring in modern business, organisations are required to be ready and able to adapt within their ever-changing environment. It is true across all diverse industries that in order to stay competitive, organisations must be able to utilise the various tools that technology has to offer. Technological factors have been of growing importance, particularly in recent years. A major factor involved in these technology issues is the use of the Internet as a major issue to modern organisations.

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The Internet has been rapidly growing since it’s inception and is now commonly used in all sectors of societies, in all corners of the globe. The Internet has quickly become one of the most valuable assets in modern technology, and as such, is developing as an integral part of modern commerce. As with past technologies, the Internet will have future technological advances develop from its own growth.

The Internet has lead to the birth and evolution of electronic commerce which has become a key component of many organisations in the daily running of their business. E-commerce challenges traditional organisational practices and opens up a vast array of issues that the organisations must address. By focusing on the varying levels of an organisation, soon the effects that E-commerce can have become apparent. An understanding of the implication E-commerce has on such organisational divisions can help businesses gain understanding and hence plan for it’s inevitable continuing evolution. In terms of marketing, the modern organisation must be critically aware of the development of E-commerce and the implications that it entails. Marketers develop their own recipe of promotional tactics to fit the product lines or industries in which they compete. Now electronic communication tools are and will continue to be an important ingredient in the promotional mix.

In assessing the implications of E-commerce in terms of marketing, it is important to understand its impact in respect to marketing strategy formulation. As the Internet, and in turn E-commerce has developed, and continues to evolve and grow, it is vital that any organisation in any particular industry must base it’s strategic planning around such a rapidly growing medium. The growth of the Internet is an environmental influence that must be embraced and understood in order to successfully plan for future marketing implementation. In order to successfully realise the impact that E-commerce has in terms of marketing, it is important to break the area of interest into some key areas.

Principles Of Marketing And E-Marketing

Philip Kotler (1994) describes marketing as “a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others”.

“Internet marketing has been described simply as’ the application of the Internet and related digital technologies to achieve marketing objectives’ (Chaffey et al., 2000)

Benefits of e-marketing include getting closer to customers (by tracking them, asking them questions, creating a dialogue, learning about them), save costs (of service, sales transactions and administration, print and post) and finally extending the brand online. It is also an opportunity to reinforce brand values in a totally new medium. For SME’s marketing has been revolutionized via the internet – branding and economies of scale need no longer belong to large companies with money to spend.

Technology is a powerful tool allowing companies globalisation with ease however like any powerful tool it may be dangerous if it backfires. Issues do arise such as positioning and differentiating the product/service. How do you lure your potential customerHow do you communicate with them and finally how do you retain them(Kalakota & Whinston 95).One answer may be to express your brand personality within your site, your USP, your history, your company ethos, your service quality and finally utilising what you learn from evaluating your clients.

Who is e-marketing all about?

Classic marketing emphasizes with the customer – what will delight them“E-marketing concentrates on sell-side transactions and communications” Chaffey (2002)

As David Siegel says “e-marketing is not about building a web-site, but building a web business………..harmonising the power of customers.” Siegel (2000) – the many diverse types of customers.

‘Marketing orientation is a philosophy that places customer satisfaction at the centre of all organisational planning and procedures’ (Withey, 2001). E-marketing simply uses ICT to accomplish this. It is very customer led, it prompts and promotes participation. It creates an opportunity for a dynamic (a two-way flow of communications) dialogue where the customer actually drives the business in terms of what they want, there is no other media that offers this.

In an article in “DOORS” which is the Internet guide in one of the Sunday Times magazines, on February 9th 2003 it confirms that the British people currently lead the world in online shopping – 4% which is twice that of America proportionally, yet the industry had only been five years old – this demonstrates the opportunities available to a net-savvy company who understands and applys innovative online marketing.

The following case study demonstrates how keeping an open mind towards customer attraction can reap plentiful rewards.

‘Easyjet was founded by Stelios Haji-loannou, the son of a Greek shipping tycoon who reputedly used to ‘hate the internet’. In the mid-1900s Haji-Ioannou reportedly denounced the Internet as something ‘for nerds’, and swore that it wouldn’t do anything for his business. However, he decided to experiment with a prototype site, and sat up and took notice when sales started to flow from the site. Based on early successes, easyjet decided to invest in the new channel and proactively convert customers to using it. To help achieve this they set an initial target of 30% of seats by the year 2000. By August 2000, the site accounted for 38% of ticket sales and by 2001 over 90% of seats. Of course, this success is based on the relative ease of converting direct phone-sale customers to online customers.’ (CHAFFEY& SMITH 2002)

E-CRM

“CRM is the process of creating, maintaining and enhancing strong, value-laden relationships with customers…” Kotler (1994).

In order to retain the customer a thorough understanding of their needs must be acquired in order to be identified and then met or even exceeded as mentioned before ‘what will delight the customer!’

‘To engage a customer in an online relationship the minimum information that is needed is an e-mail address.’ Chaffey (2002). Following this and certain segmentation the beginning of a relationship to be nutured and constantly reviewed is available to companies. CRM must be very careful to identify any issues which may be ongoing with customers as outlined in the case study below of Tesco.com – Grocery.

Sending directed marketing emails to a customer when the customer is awaiting a response from a long overdue complaint might only aggravate the situation more – why try and sell them more when you are not responding to their needs in the first place Following a service complaint to Tesco.com an extremely efficient autoresponder .

This raised customer expectations and eventually led to lost sales, raised anger and damage to their brand which they have spent a fortune building when no further contact was received for six weeks, which incidentally only happened following a further complaint and another autoreponse.

The Role Of E-tools – Theory Vs Reality

A variety of push and pull techniques to attract and retain customers are outlined in the following e-tools section.

The E-Operations Opportunity

Initially, the e-operations applications of most organizations consisted of electronic versions of policy documents and newsletters mounted on an intranet. Companies need to examine the role of information on three different dimensions: the information content of the product, information intensity along the supply chain and information dispersion across the value chain.

The E-Marketing Opportunity

E-marketing strategy leverages new technology to get more-effective ways of selling a business’s product to existing or new customers. There are three broad categories of e-marketing opportunity: Enhancing the selling process, enhancing the customer’s buying experience and enhancing the customers usage experience. Web-based initiatives in the low-perceived differentiation and low-frequency quadrant need particular attention: customers who are only occasional buyers may not find the Internet the most convenient vehicle for the refinement of choice unless they are regularly logged on for other purposes.

The E-Service Opportunity

E-services represent the ultimate aspiration of the Information Age, with their electronic orchestrations of offerings that p the breadth and life p of a customer’s needs within a chosen and defined market space. E-service starts with a full understanding of customers’ needs across a given market space, a rich and expert picture of what happens to customers in the space, and what they are seeking to achieve. E-service also requires authoritative knowledge of the products and services of all providers that might contribute in the target market space.

To identify the e-service opportunity, a company must first define the target market space. Next the company must decide whether the market space should be built around the customer’s needs over time or around an event in the customer’s life. The final e-service issue is who needs it. The answer: all sectors. If another company seizes an e-opportunity, it will own the customer relationship.

Determining The Sustainability Of E-Opportunity Initiatives

An analysis of e-opportunity is incomplete without a look at the potential for sustaining any competitive advantage gained by e-operations, e-marketing, and e-service initiatives.

The first and most obvious axis of sustainability, generic lead-time, is a function of the technological and business changes required to implement a strategic initiative. The second axis of sustainability, asymmetry barriers, involves competitor analysis. The third axis of sustainability involves customer analysis.

Initiatives that organize customers into a community that adds value through mutual exchange can raise preemption barriers. Attention to the sources of sustainability remains a critical part of strategic development.

Understanding the domains of e-opportunity

For traditional bricks-and-mortar companies, components of e-operations and e-marketing are likely to represent immediate opportunities with real economic benefits. In an uncertain environment learning from experience is critical. Few believe that we have penetrated even a fraction of the e-territory before us. More detailed maps that might enable the strategist to identify and select the precise rout to a desired destination will take time to emerge. Meanwhile, businesses must select their corse and, with compass in hand, stay as close as the new territory will allow to a bearing that leads to the other side of the jungle.

Electronic Database

Like a filing system that holds a shared collection of data and its relationships that is used to meet the information needs of an organisation. This proves to be a very useful tool in marketing as ‘with the aim of eliciting a desired measurable response in target groups and individuals, database marketing uses database technology and sophisticated analytical techniques combined with direct marketing methods’ (Kotler, 1994). The database can be used for the likes of developing names and addresses for the purpose of direct mail campaigns, building customer profiles, monitoring demographics, building customer relations, identifying niche markets and aiding market research.Waterstones the booksellers are currently trying to increase their information on customers by tempting them to leave email addresses in return for being entered into a prize draw for a holiday – this is one way of gaining information which can be from an everyday customer not just those who are registering on-line. A constantly ‘honed’ database can be one of the most accurate measures of client information.

Conclusion

There is now a great dependency on e-business technologies. Naturally they are not 100% reliable and can present problems concerning such things as cost, achieving competitive advantage, applying the technology to specific problems and structures and of course high speed of evolution. However, when consideration is given to the time, money and effort saved by computers, particularly in the marketing function’s complex and huge environment, the benefits clearly outweigh the drawbacks. The discussed areas are only the tip of the iceberg – there is evidence of computers being used successfully as a marketing tool everywhere.

References

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