In the following paper I will be examining e-commerce in terms of marketing entry strategy and business-to-consumer operations. Marketing mix and strategies for effective product distribution through the channel of e-commerce is reviewed to cover the topic. Ultimately, conclusions and recommendations end up the paper.
As illustrated in Figure 1, business to consumer (B2C) refers to the selling of goods and/or services directly to consumers by businesses. The classic example is Amazon (www.amazon.com) which offers in excess of 1.5 million book titles online and has extended its sales into other products, including music CDs, videos and games. Business to business (B2B) refers to the selling of goods and/or services by one company to another as part of their supply chain, and is likely to contribute to at least 80 per cent of the growth of e-Commerce in the next five years. An example is Marshalls (www.marshalls.com).
There are significant overlaps between Internet strategy and Internet marketing, particularly if a company adopts a broad perspective of marketing by engendering customer focus throughout the business, as described above. Indeed, the two terms can be regarded as synonymous. Chaffey (2002) regards Internet marketing as a subset of Internet strategy that he calls 'sell-side e-commerce', meaning that it focuses on building relationships with customers, in parallel with 'buy-side e-commerce' that focuses on supply chain management. Chen (2001) regards Internet marketing as dealing with operational rather than strategic issues, but includes customer relationship management in the 'operational' category. In this book, we use the term 'Internet marketing' in a broad sense, while still distinguishing strategic aspects and operational aspects.
Usually, when speaking of B2C operations, the business of e-retail is implied in the term.
The business of e-retail has been defined as the sale of goods and services via Internet or other electronic channels, for personal or household use by consumers (Harris and Dennis, 2002). This definition includes all e-commerce activities that result in transactions with end consumers (rather than business customers), i.e. B2C rather than B2B. Some e-marketing activities that do not directly involve transactions, such as providing (free) information or promoting brands and image, are considered to be part of B2C but are not normally considered as being within the scope of e-retail.
Despite the dot.com crash of 2000, e-retailing has been growing, particularly for the 'top eight' categories that account for three-quarters of all European sales. These major growth areas comprise: books, music and DVD movies, groceries, sex products, games and software, electronic and computer equipment, travel, and clothes.
Disadvantages of E-Commerce as an international marketing entry strategy
Over perceived benefits of E-Commerce as an international market entry strategy that will be discussed later in this paper, this kind of product or service distribution has its disadvantages. Retailers, for example, may lack the technical know-how, the substantial investment required or