CHAPTER

E-COMMERCE AND VIRTUAL MARKETING

What Is E-Commerce? The Growing Importance of E-Commerce Virtual Marketing and Distribution The Role of Promotion for E-Commerce

8-1 8-2 8-3 8-4

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2009 South-Western, Cengage Learning

Courtesy, CISCO SYSTEMS, INC.

Focus Questions: Do you agree that using the Internet is the same as socializing and shopping with your friends at the mall? What problems might a business encounter if it tries to use the Internet only to sell products without realizing the other ways people use the Internet?

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8-1
WHAT IS E-COMMERCE?
GOALS Describe the three stages of development for e-commerce businesses. Discuss the importance of the marketing concept to successful e-commerce.
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MARKETING 2009 South-Western, Cengage Learning

The Expanding World of E-Commerce

Business on the net From bricks to clicks Stages of development
Information stage Interaction stage Full integration stage

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Success in E-commerce
Advantages of e-commerce Disadvantages of e-commerce The marketing concept applied to ecommerce

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8-2

GROWING IMPORTANCE OF E-COMMERCE

GOALS Identify evidence of the growth of the Internet. Describe the various business uses of the Internet for e-commerce.

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Growth of the Internet

Countries with the highest number of Internet users in 2007 (in millions)
Country
Number of Users

Country

Number of Users

United States China Japan Germany India United Kingdom

211 137 86 51 40 37
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South Korea Brazil France Italy Russia Canada

34 32 31 31 24 22

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Business Uses of the Internet

Communicating Gathering information Improving operations

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8-3

VIRTUAL MARKETING AND DISTRIBUTION

GOALS Differentiate virtual marketing from traditional marketing. Describe distribution methods used in e-commerce. Identify distribution problems experienced by e-businesses and how they can be resolved.

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Distribution for E-Commerce

Finding and buying products Order processing Product distribution

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Cost Savings
Average Cost Savings for Businesses when Customers Use the Internet to Make Purchases
Product Savings

Computer software Banking services Airline tickets Stocks Books Toys and gifts

99% 89% 87% 78% 56% 48%

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Distribution Problems and Solutions

Transaction security Expanded distribution and customer service

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8-4 THE ROLE OF PROMOTION

FOR E-COMMERCE
GOALS Describe how companies use promotion on the Internet. Identify ways to increase the effectiveness of online promotion.

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Communicating with Internet Users

Advertising expenditures Promotion methods
Online advertising Web sponsorship Priority placement Information websites

Other types of promotion

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Preparing for E-Commerce Marketing

Planning the shopping experience Effective promotion methods

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Customer Satisfaction with Types of Shopping

Type Shopping online Shopping in stores Shopping with catalogs % satisfied 73% 60% 56%

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Features Likely to Increase Online Purchasing

Close-up images of products Information on product availability Product comparison guides An easy-to-use search function Toll-free customer service number Consumer reviews and product evaluations An easy-to-use shopping cart and check out feature Chapter 8
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