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Strategies

Introduction to E-Commerce

Generally speaking, “E-Commerce is the exchange of information across electronic networks, at any stage in the company chain, whether within an organization, between businesses or between businesses and consumers, between the public and private sector, whether paid or unpaid.”1)

With the rise of personal computers in more and more households and the importance of the linkage to the internet since the end of the 20th century, a new possibility for companies of reaching their customers arose. This channel allows them to mobilize many more potential buyers of their products by making them available virtually on internet platforms.

According to the 2011 survey of BITKOM only 15% of all questioned persons in Germany have never bought or booked anything on the net.2)) This means that E-Commerce is already omnipresent in most of people’s every-day lives.

E-Commerce Strategies

There are several different approaches formulating an E-Commerce strategy. Here are the most important amongst them:

  • Market penetration

“This strategy involves using digital channels to sell more existing products into existing markets.”3) But besides that, companies my not forget to use this channel also as a platform to introduce new products via a connection with Social Media applications for example.

  • Market share growth

“Companies can compete more effectively online if they have websites that are efficient at converting visitors to sale and mastery of the online marketing communications.”4) As mentioned above, it is nowadays essential to include the customers in interactive communications. This leads to more traffic on the website, which concludes in more buys.

  • Customer loyalty improvement

“Companies can increase their value to customers and so increase loyalty by migrating existing customers online by add value to existing products, services and brand by developing their online value proposition.”5) Similar to the importance of an Employer Value Proposition in field of Human Resources, companies have to focus on a logic set of an Online Value Proposition. If the customer understands and appreciates the company’s online presence, it is more likely that they stay loyal with its products.

  • Customer value improvement

“The value delivered by customers to the company can be increased by increasing customer profitability by decreasing cost to serve (and so price to customers) and at the same time increasing purchase or usage frequency and quantity.”6) In the end the goal here is the same as with the loyalty improvement. The more often a customer visits the website, the probability of a transaction rises.

Internationality

For a company it is relatively easy to attract customers on the local familiar market. A huge amount of data material and scientific surveys exist that give orientation on how the local buyer perceives the company website and its products.

National strategies are therefore easier to set up and to improve than international ones, since it is not only about general user-friendliness but also about different perceptions due to different cultural background.

When expanding E-Commerce business to foreign countries, it is indispensible to understand the mindset (expectations, understanding of products and branding etc.) of the customers of the respective country. Especially the requirements towards provided service can be highly distinctive.

In order to understand all these aspects, an agency specialized in this field can be of great help. The investment might be high in this approach, but the return on investment will be much higher in the long run.

jing he 2012/05/09 23:57

1) Dave Chaffey, E-Business and E-Commerce Management: Strategy, Implementation and Practice, Third Edition, 2007; p. 9.
3) Dave Chaffey, E-Business and E-Commerce Management: Strategy, Implementation and Practice, Third Edition, 2007; p. 242.
4) Dave Chaffey, E-Business and E-Commerce Management: Strategy, Implementation and Practice, Third Edition, 2007; p. 242f.
5) , 6) Dave Chaffey, E-Business and E-Commerce Management: Strategy, Implementation and Practice, Third Edition, 2007; p. 243.
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international/strategies.txt · Last modified: 2012/05/09 21:57 (external edit)