Technological Environment and E-Marketing

Overview
E marketing is a term that can be used to label the potential of information technology and the internet on marketing. E-marketing is perhaps the single most important development in technology in the history of marketing,particularly in its ability to leap over distance.

Distance and Business

Distance was ,in the pre-modern world, a variable of the greatest marketing significance. The primary trading partners of every country were the proximate neighbors. There had always been a positive correlation between trade and proximity. However, the internet is totally independent of distance.

 Today the world has become a level playing field .Anyone anywhere in the world can communicate in real time with no premium charged for distance. The improvement of transportation and communications technologies has been a major driver pushing the world toward greater globalization. A web presence is instantly global. The global reach of credit card issuers, package delivery services and the internet has created a whole new level of possibilities for global retail and business to business marketing for even the smallest firms.

Communications
E-Mail is a major new age communication tool that supplements the fax and the telephone to eliminate the barrier of distance. It is instant, cheap and insensitive to time zone.You can read e-mail when you wish regardless of time zone considerations. E-mail is a marketing tool that offers unprecedented power for one-to-one messages for both B2B and B2C communications.

Beyond Segmentation
The aim of marketing segmentation has always been to create a unique value offer for many customers as possible. Before the Internet this meant, creating an offer for a segment of the market that was an aggregation of customers. Almost overnight, the World Wide Web has led to creation of marketing programs that target a segment of one.

 Infact the whole notion of segmentation has to be reconsidered. While segmentation was a goal in marketing because it was too expensive to address the individual customer. With the tools of the Internet and IT, it is now possible to respond to the individual customer regardless of where the customer is located.

Relationship Marketing
Another major thrust in marketing in recent years has been relationship marketing. The internet has opened up immense new possibilities for creating a relationship with global customers, potential customers, suppliers and channel members. The end of segmentation means that marketers can now focus on delivering value to individual customers.

Interactivity
Before the emergence of the Internet and IT, communications between companies and its customers was generally limited to one way. Companies made offers and customers voted in the market place. The possibility of an interactive relationship between customers and prospects has now emerged. This is particularly true for online retailers.

Speed to Market
Globalization has unfolded in stages. The first stage was the move of companies to make sure that their products were sold in global markets. Before the internet and IT created a new world of instant global communication,the pace of information and company communications was slow. Products were introduced in one country at a time or at best one region at a time.

Drivers of the Technology Revolution

Price Plunge
The changes with the most dramatic impact on globalization occurred in the fields: Transportation and Communication. On the communication side, the reduced cost of longdistance communication is most remarkable. In transportation , key advances have been made in air travel and the speedier loading and unloading of container shipments. A very crucial cost reduction has taken place in the cost of computer processing power.

Technological Convergence and Ubiquity of Technology

In information and communication technology, it is not only the improved speed and reliability of devices that have brought about the rapid technological change but also the convergence between the transmission of information and the processing of information. A second development has been labeled technological ubiquity.Technology is present in kitchen device, car, exercise machine etc.

Explosive Growth of Internet

The internet represents one of the most important driver of the technological revolution as it has led to the development of an entirely new form of doing business called e-commerce or e-business.

The Development of E-commerce

Starting with electronic data exchange, the Internet has undergone a metamorphosis from a medium primarily used to advertise a product or service to an e-commerce platform combining information, transactions, dialogue and exchange.

New Technologies and Rules of Competition

In addition to increasing volatility ,e-economy presents the global marketer with a new set of business rules. Among them the most important are: Secure a dominant market position as quickly as possible. Form alliances based on their potential for market access and synergies Anticipate very high start-up investments. Defend positions through an ongoing process of innovations.

Importance of Dominant Market Positions

In Industrial environment ,scale advantages have their limits. The cost of adding labour and material will exceed the added return. This effect permits the smaller competitors to compete against those with larger market shares. Under the new technological regime,the rule of decreasing returns on scale no longer holds universally.

 In many cases, the optimal output is not defined by the factory size but is based on the point of market saturation. This can be observed in the markets in which fixed costs are much higher than variable costs. Examples-Pharmaceutical and Computer Software, which demand a high degree of intellectual factor input. The same hold for goods and services that become more valuable when used by more people,that is the products which become a standard. Being placed in the technological environment it is important for the companies to gain market share quickly and achieve strategic control.

Importance of Strategic Alliance

While cooperation and strategic alliances as such are not a new phenomenon, the changes in the technological environment have not only made cross-country alliances easier to manage,but have also influenced the motivation behind the alliances.

Importance of Anticipating High Start up investment

Increasing return to scale in many e-based industries necessitate high start-up costs in order to achieve the desired market share. A Substantial part of the investment must be committed for years before the revenues eventually exceed the costs. Many e-based company need backing of well established corporations or are force to raise capital at the stock market.

Importance of Ongoing Innovation

In traditional technical environment, innovations were primarily a means to gain a few points of market share. In todays technological environment, the situation is drastically different. Not only has the diffusion speed increased significantly, but the penalties for falling behind the latest world class technological standard are quick and sharp. Many companies are encouraging their employees, customers and suppliers to submit ideas for new products or improvements through interative websites or e-mail.

Components of Electronic Value Chain

Context Suppliers Sales Agents Purchase Agents Market Makers Payment and Logistic Specialists

Context Suppliers
Also called portals, support the use of the electronic channel both for customers and suppliers. Their key functions are to offer access to the channel and reduce complexity of electronic environment.

Sales Agents
Sales agents support suppliers primarily through offering high quality address banks of potential customers. It helps companies to target consumer group and provide special product offerings.

Purchase Agents
On the customers side, electronic purchase agents helps the internet shopper to find out the desired goods or services. They help the customers into locating the product over the net.

Market Makers
Market Makers are the mediators that bring together buyers and sellers and increase market efficiency. Typical examples are numerous auction sites .

Payment and Logistic Specialists

One of the main stumbling blocks for the use of electronic markets continues to be the means of payment via internet. Traditional credit card companies such as Visa are managing the transfer of payments and the associated risks. Physical distribution via internet is only possible for software products or information services(stock markets,databases etc.). All the other products have to be shipped via traditional channels.