Joel Reedy and Shauna Schullo

1
Chapter 6

• Concept of the Virtual Store for Marketing
  Products and Services

2
Differences in the Practices of Virtual Retailing
and Traditional Retailing

• Follow the functions of the traditional retailer
  but as a back office operation, hidden from
  public
• Web site merchandise represented by invisible
  electronic data entries
• Generally prices are lower because of reduced
  operating/overhead costs

3
Differences in the Practices of Virtual Retailing
and Traditional Retailing

• Housed and promoted on electronic media (Web
  sites, e-mail, listservs, discussion groups,
  portals, so forth)
• Interactive ordering and shipped directly from
  manufacturer or wholesaler
• Interactive customer service in real time

4
The Advantages of a Virtual Store

• Expand awareness of store existence and
  merchandise offered
• Increase sales areas to a wider geography
• Offers promotional flexibility as to purpose of
  Web presence
• Online sales
• Online advertising, sales promotion, public
  relations, cybermarketing
• Online customer service and order tracking
• Ongoing sales or communications activities

5
The Advantages of a Virtual Store

• Capital expenditure less in starting online
  consumer or business-to-business marketing
  progress
• Flexibility in being able to sell from any
  location
• Web sites operate 24/7, valuable to marketers
  selling overseas
• Corporate credentials or catalog/specifications
  sheets can be printed from the Web site
• Electronic systems to automatically update
  prices, specifications or other time-sensitive
  data, hourly if necessary
• Promotions or changes can be integrated quickly
  into the companys Web site

6
The Advantages of a Virtual Store

• Customers inquiries can be investigated more
  quickly
• The Web allows companies to render fast and
  responsive customer services
• Order status obtained immediately
• Opportunity to test new products and services
  among wide or targeted markets
• Experimentation with new technology
• Discussion/listserv forums are effective feedback
  mechanisms from selected market segments or test
  group

7
The Disadvantages of a Virtual Store

• Not every product or service is appropriate to
  Web sales.
• Web site creation, product offerings updates,
  and site maintenance require extensive time on
  the marketers or assistants part.
• 24/7 service pledge is a double-edged sword-
  promise to be there but must be there
• Web competitive marketing is a time-intensive
  activity
• A good Web master should be surfing the
  competition at least one afternoon each week
• Double checking the position ranking on search
  engines is important

8
The Disadvantages of a Virtual Store

• Marketer is dependent on redundant systems
  equipment, communications, and its ISP
  connections
• Another double-edged sword is the anonymity of
  identity on the Web
• Limited penetration and exposure to the Web by
  the general public

9
The Value of the Virtual Storefront and the
Cybermall

• Plan strategically by playing from your
  electronic marketing strengths
• Reliability
• Consistency
• Privacy
• Accessibility
• Accuracy
• Responsiveness

10
The Value of the Virtual Storefront and the
Cybermall

• Retailing power builds on the fundamental usage
  nature of the Internet
• Demographics of connectivity
• Content completeness and frequent changes
• Customer motivation

11
The Value of the Virtual Storefront and the
Cybermall

• A Cybermall the banding together of several
  cyberstores, giving the merchandise one location
  or address
• A linked storefront is an alternative to
  banding with a cybermall the storefront address
  is hyperlinked within a popular general interest
  site such as Starbucks site
• A stand-alone site/address
• Advantages and disadvantages in each situation

12
The Security Concerns the Following Reasons for
Consumers Not Purchasing Online

• Providing credit information online is just
  plain foolish
• Uncomfortable in providing credit/purchase
  information online
• Toll-free call/fax is tied with secure
  transmission
• Clear preference for the involvement of a third
  party in the transaction preference for
  involvement by a credit card company or the bank

13
What Are Online Information Seekers Seeking?

• Men are more frequent purchasers than women, and
  men make purchases exceeding 50
• Common items of interest are software, hardware,
  and electronics
• Purchase represents price shopping for the least
  expensive products

14
Deciding on Online Marketing Objectives

• What are the appropriate goals for online
  marketing of your product or service?
• The competitive difference of this online
  vehicle compared to traditional media is online
  interactivity with customers
• Sampling might include free incentives such as a
  free online quotation for auto or life insurance

15
Commerce Image and Identity Development

• Identify qualities your target market would value
  in online awareness and delivery
• Building image is the impression that the
  marketer wants the market to have of the product
  or service
• A purpose of a brand name is to differentiate
  similar products

16
Searching for Product or Service Differentiation

• The marketer should consider traits, perceived or
  real, as the foundation of a differentiation
  strategy that hopefully no other competitor can
  easily match
• Strategy of selecting different features valued
  by different people is called a niche marketing
  strategy

17
Searching for Product or Service Differentiation

• Customization and personalization are critical
  factors in creating and sustaining competitive
  unhanded on the Internet
• Personalization of services and the development
  of new services such as online help facilities
  that are based on the experience of multiple
  users
• Marketers can capture more of the value chain
  for their products example might be eliminating
  distributors or suppliers

18
Searching for Product or Service Differentiation

• Other differentiation strategies have been
  developed from
• From countries of origin French wine, Swiss
  watches, American entertainment
• From ethnic groups Jewish bagels, Chinese
  fortune cookies, Cuban bread
• From geographical locations Californias Napa
  Valley wine, Colombian coffee

19
Searching for Product or Service Differentiation

• Other differentiation strategies have been
  developed from
• Usage patterns Dr. Pepper 10-2-4, brushing teeth
  followed by mouth wash
• Special occasions Anniversary diamonds by
  DeBeers, graduation wrist watches
• Celebrations or time Korbell champagne at New
  Years, Thanksgiving turkeys