1. Background
Buyers get only those goods for which they feel requirement. Quite often the public subjects to criticism intensive advertizing campaigns that they ostensibly «force» consumers to get the firm goods. It isn't absolutely true – we will remember, for example, unsuccessful attempts of company Coca-Cola to present to the market new soft drinks or originally negative reaction of consumers to a car model «Ford Sierra».
Two thirds of new production come to grief already on the first steps on the market. Companies should consider requirements of consumers and the market and to adapt for them the production
The purpose of sales consists in convincing the buyer to get an offered product. Successful marketing provides presence of the necessary product in a proper Internet place and proper time.
These are main principles of marketing – «as a result the consumers always receive what they want».
Marketing is the process uniting possibilities of a company and need of the consumer. So, the buyer satisfies the requirements, and the company receives the income of sold goods.
Global network Internet has made electronic commerce accessible to companies of any scale. The electronic show-window in World Wide Web gives the chance to any company to involve clients from every corner of the globe. Similar on-line business forms the new port for sale – «virtual», almost not demanding material investments. If the information, services or production (for example, the software) can be put through Web all process of sale (including payment) can occur on-line.
Therefore the given theme seems actual for consideration.
E-marketing introduces new features and advantages in comparison with the traditional marketing. Here some of them:
1) Key role transition from manufacturers to consumers
One of the most fundamental qualities introduced by the Internet in the world of modern commerce is key role transition from manufacturers to consumers. The Internet has made a reality for the companies possibility to draw attention of the new client of all for tens the seconds spent by it in front of the screen of the computer. However at the same time it has given the chance to the same user to pass for some clicks of the mouse to any of competitors. In such situation the attention of buyers becomes the great value, and the established mutual relations with clients the main capital of the companies.
2) Globalization of activity and costs decreasing
The Internet considerably changes spatial and time scales of commerce conducting. It is the global communication medium which does not have any territorial restrictions. Access cost to the information doesn't depend on remoteness from it, contrary to traditional means where this dependence is directly proportional. Thus, electronic commerce allows even to the smallest suppliers to reach global presence and to be engaged in business on a global scale. Accordingly, customers also have global choice from all potential suppliers offering the demanded goods or services irrespective of a geographical arrangement. The distance between the seller and the buyer plays a role only from the point of view of transport costs.
The time scale in the environment of the Internet also considerably differs from the usual. High efficiency of communicative properties of the Internet provides possibility of cutting-down of time for search of partners, decision-making, realization of transactions, working out of new production, and etc. Besides, its communicative characteristics possesses the high flexibility allowing easily to make change of the presented information, and, thereby, to support its urgency without a time delay and expenses for distribution.
The effects above also lead to considerable cutting-down transactional costs, that is the costs connected with adjustment and maintenance of interaction between the company, its customers and suppliers. Thus cost of communications, in comparison with traditional means, becomes minimum, and their functionality and scalability considerably increase.
3) Personification of interaction and transition to e-marketing to «one-one».
By using means of electronic interaction the companies can receive the detailed information on inquiries of each individual customer and automatically give products and the services corresponding to individual requirements.
Developing e-marketing is especially important for the large companies. It doesn't mean that it is necessary for them to have own Internet shop. The companies should understand that the Internet means dialogue with clients. So, the social network can help with brand development, but also can destroy it, and for very short time. Investments into construction of system of dialogue with the client represent an important component of all strategy as a whole. Recently miscalculations in strategy of some global brands, such as absence of attention to opinion of clients and isn't enough efficient control ports of interaction with clients, have negatively affected reputation of these brands.
The most of research and practitioners agree that the need to develop a comprehensive understanding of consumer behaviour and creating a compelling online environment are essential for effectiveness of e-marketing (KRISHNAMURTY, S. 2006, p. 3).
The other researchers suggest that effectiveness of e-marketing should be based on total marketing communication of a company even it contradicts with consumer behavior. Total marketing communication proposes that all marketing activities for a company should be complementary to each other and their total sum of efforts should be consistent with the company’s present marketing goals and objectives instead of analyzing consumer behavior (ZONGQING Z., 2004, p. 94).
One of the most controversial question in this field is how to measure the effectiveness of e-marketing activity. Experts in e-marketing don't have any unity on this question. So, a number of scientists – Zhivetin, V.V., Samohvalov, V.L., Chernov, N.P., Feraponova I.A. (2008, p. 12) – consider that efficiency of a e-marketing policy in relation to the concrete company develops of results of perfection of industrial-marketing activity in following basic directions: optimum use of potential of the market; increase of reliability of look-ahead estimations; a finding of a segment of the market of the given goods, etc.
M. Tugan-Baranovsky, L.V. Balabanov (2006, p. 165) suggest to estimate efficiency of e-marketing in the following directions: buyers, marketing integration, adequacy of the information, strategic orientation, operative efficiency. But they don't define an estimation system and algorithm to calculate the marketing effectiveness.
The majority of experts in American companies assert that the effect of e-marketing activity consists in growth of sales volumes and profit. According to Jashevoj G. A (2007, p. 342), on the end results influence except marketing and other components of potential of the enterprise – management, shots, production potentialities (the equipment, technology), the finance, therefore such estimation is too simplified.
G. Assel (2007, p. 230) suggests to estimate efficiency of marketing activity, as efficiency of expenses for marketing. Thus by means of economic-statistical methods dependence between expenses for marketing and result – sales volume or profit is investigated. It is clear to me that such method of an estimation is an estimation of efficiency of expenses, instead of the most marketing activity.
M. MakDonald (2002 cited in Kotler, 2009, p. 39) asserts that the empirical approach is more preferable, than quantitative, based on statistical check of narrow deductive hypotheses. The analysis of marketing efficiency should be in the following directions: the internal relation of management of the companies to marketing (its definition, a role and functions); the organization of this activity (involving in process of strategic planning, level of coordination and an information exchange between marketing functions); practical execution of marketing functions (use of marketing probes, planning, participation in working out of the new goods and etc.).
There is also an opinion that marketing doesn't submit to any rules. Therefore application of quantitative methods at planning or an estimation of actual results of marketing action is complicated. Supporters of this opinion consider that not all purposes can be formulated quantitatively.
Application of quantitative methods is limited due to the following reasons:
- complexity of object of studying, nonlinearity of marketing processes, presence of threshold effects, for example, a minimum level of stimulation of sales, time logs (for example, reaction of consumers to advertizing often isn't carried out immediately);
- effect of marketing variables interaction are interdependent, for example, the price, assortment, quality, release volume;
- complexity of measurement of marketing problems; it is difficult to measure reaction of consumers to certain stimulus, for example, advertizing, indirect methods of an estimation therefore are often applied;
- instability of the marketing interrelations caused by changes of tastes, habits, estimations, etc., relative incompatibility of the personnel which is engaged in marketing and application of quantitative methods in its estimation. The first give a priority to the informal methods, the second – to mathematical modeling.
The marketing expert, the professor of the London business school Kenneth Simonds, notices that in marketing nothing ever repeats, all variously for different situations. Marketing is focused on concrete buyers, and all buyers are different. The general rules – enemies of marketing. Therefore definition of effect of marketing activity is, first of all, diagnosing, instead of working out of techniques, theories.
Nevertheless the benefits from e-marketing and a lot of contemporary literature about the ways to gather and analyze consumer behavior as the platform for creating an effective e-marketing strategy there is a huge gap in existing literature about an approach to link up strategy formulation with empirical data (NANSI, S. and MURTHY, V.K., 2003 p. 321).
A huge job has been done in the field of researching effectiveness of e-marketing based on consumer behavior. One of the main works in this field is Contemporary research in e-marketing by KRISHNAMURTY, S. My research proposal is about the ways to increase e-marketing effectiveness of Print Express Company based on gathering and analyzing data about consumer behavior.
In order to be able to propose ways to increase effectiveness of Print Express Company’s e-marketing we should discuss basic academic theories and concepts that explain the way of interaction between company and customers.
1. The industrial concept, or the concept of manufacture perfection. The company adhering to such concept, have mainly serial or a large-lot production with high efficiency and the low cost price, and sale of the goods exhausted by them is made by means of numerous trade enterprises. It is possible to carry the following to the basic preconditions of existence of this concept of steering of marketing activity:
– the most part of real and potential consumers have low incomes;
– demand is equal or exceeds the offer a little;
– there is a fast drop of high production costs (usually on new production) that leads to a gain большей market shares.
2. The concept of goods perfection is based on orientation to consumers to surpass analogs in technical characteristics and by that bring more benefits to consumers. Manufacturers thus direct the efforts to improvement of quality of the goods, despite higher costs, and, hence, the prices.
3. The sale concept, or the concept of an intensification of Internet commercial efforts, assumes that consumers will buy the offered goods in sufficient volume only in the event that the company makes certain efforts on Internet advancement of the goods and increase in their sales. The sale concept can be effective for a long time that speaks following reasons: many buyers consider that they in a condition to protect the interests; the buyers unsatisfied with purchase, soon forget about the feeling of disappointment and will address hardly probable with the complaint in a society protecting their interests; always there is enough great number of potential buyers.
4. The socially-ethical concept of marketing is based on the new philosophy of business focused on satisfaction of reasonable, healthy requirements of demand carriers. Its purpose consists in maintenance of long-term well-being not only the separate enterprise, but also a society as a whole. The such orientation of image of firm also should involve buyers as the factor of competitiveness of the given firm among the others.
The concepts above characterize the various periods and the basic social, economic and political changes which have occurred in the developed countries in leaving century.
2. Industry Background
The last results have shown that using Internet technologies in marketing can bring real economy and profit. It is connected with the big benefits and conveniences for both consumers and companies. In the approaching global computerization which approach is planned for the near future, the marketing role in the Internet considerably will grow. It also causes an urgency of the theme chosen by the author.
As object for this research proposal I chose Print Express Company which carries out its activity in Moscow since 1999.
The impact of these research is hoped to bethe conclusion about the importance of application by the Russian companies of global network possibilities in marketing activity and increase of e-marketing effectiveness.
3. Research aim, research questions or hypotheses and objectives
The problem of e-marketing economic effectiveness pursues two aims:
1. To prove efficiency of e-marketing activity at a working out or decision-making stage.
2. Definition of final effectiveness of e-marketing activity after the termination of the certain period of time, proceeding from actually reached results.
Definition of economic e-marketing effectiveness is necessary to reveal also the factors influencing an indicator of e-marketing effectiveness, their interdependence, and character of their influence on an efficiency indicator.
I need to research the following questions:
a) Is e-marketing an effective activity compare to traditional way of marketing?
b) What are the ways to increase effectiveness of e-marketing activity?
To define e-marketing effectiveness it is necessary to solve out the next objectives:
1. To estimate the company’s marketing activity in the following directions: marketing probes, market segmentation and goods positioning, the analysis of the organization of marketing, e-marketing planning, e-marketing working out.
2. To define criteria concerning which process measurement in realization of e-marketing plan (control of e-marketing activity results) will be carried out.
3. Definition of the expenses connected with carrying out of e-marketing strategy.
Directly indicator e-marketing effectiveness is defined by comparison of the reached effect as a result of marketing activity (which more often, but it is not obligatory, is expressed in the form of profit or the income) to the expenses which have caused this effect.
4. Research Methodology
In order to define effectiveness of Print Express Company marketing activity it is necessary to carry out an estimation of marketing effectiveness regularly.
At the considered company the complex estimation of marketing activity was never carried out. Therefore within the limits of the given project I attempt to estimate quality of marketing activity of Print Express Company in order to achieve my research objectives.
In order to estimate marketing activity effectiveness of the company named above I chose direct method of estimation by making a questionnaire (the Appendix 1), containing 15 questions on performance of functions. Each question has 3 options to answer which are estimated in points from 0 to 2. The Maximum quantity of points on each question is equal 2. On the basis of the received answers the points estimating efficiency of various directions of marketing activity have been put (Appendix 2).
I carried out the research in Print Express Company Marketing and Sales department directly.
Given results testify that despite lacking a system and structure of Print Express Company’s e-marketing activity.
1. Lack of e-marketing strategy. Delivering information is a service that needs to be focused on definite market demand backed by appropriate product, strongly targeted customers and becoming pricing model.
2. Unadjusted product strategy. When Print Express Company was launching its product the market it was targeting was still in pregnancy, it was nascent market. Established companies who really had understood the importance of e-commerce in the future were focusing on in-house solutions developing. Growing companies hadn’t realized this importance yet, but those who had were open to experiment with simple and low-cost decisions. And these two groups of customers were on the extreme edges of the market and making decision model.
3. Unjustified pricing model. Firstly, the price of the product for the growing and still scaring market is too high. Secondly, the pricing model targets long-term partner relationships, that was to ealy for the nascent market that preferred short-term relationships.