Internet Strategies

There has been a dramatic change in the markets worldwide. With globalization of markets, reducing trade barriers, and advanced technology, the internet too has evolved. E-commerce has taken a big leap and this affects the marketing strategies in several ways. The buyer-seller relationship has changed and direct interaction minimized. The established buying patterns are altered and in fact for certain items like music products and software, it has become the distribution vehicle. Thirdly, customer service has changed its pattern.
Ghosh (1998) emphasizes that in a world where everyone is connected to everyone else, companies have to painfully and quickly reinvent the way they do business. Drawing upon this idea, Treese and Stewart (1998) assert that the internet offers two key sources of value – the ability to transform customer relationship and the ability to displace traditional sources of business value. They suggest four key competitive internet-marketing strategies – the Channel Master, Customer Magnet, Value Chain Pirate, and the Digital Distributor.
Channel Master strategy opens up new channels to the customers on the internet. It facilitates better customer service including delivery of products. The customers are directly connected to the companies offering the products and the services. Amazon.com is an example of how a virtual storefront is available to the buyers (Webonomics). Customers have the flexibility to choose the hours of business. Ghosh emphasizes that companies can master their internet channels by providing the same level of service as they would in person. This strategy helps the customer to track the status of delivery too.
The Customer Magnet helps the companies to focus on a specific type of product or service. They then become dominant players in the field, have controlling access to customers and define the business rules. Customers are attracted through meeting knowledge needs and then a virtual community is formed of the people who share similar interests. Tripod has used this strategy and is able to provide online sales to its customers.
The Value Chain Pirate on the other hand, is very useful in eliminating the intermediaries or the cybermediaries or the existing distributor chain. It helps fight competition. The costs are lowered because the agents’ remuneration can be done away with. The travel trade benefits immensely as most airlines have reduced their agents’ commissions. As Ghosh states, in pirating its value chain, publishers can bypass retailers or distributors and sell directly to customers.
New online products and services can be developed through the Digital Distributor strategy. The company can unbundle certain groupings of products, add value by mining the digital assets, and then they are in a position to offer important information to the customers. This can be offered for a nominal charge or even without any charges. A typical example would be to post reviews from the previous customers, which helps new visitors to the site to take decisions.
It is difficult to decide which the best strategy is. A combination of all the above strategies would help sell and fight competition effectively.
References:
Ghosh S (1998), Whats Your Role In The Networked Economy?,
InternetWeek, 18 February 2006
Treese W. G &amp. Stewart L. C (1998), Designing system for Internet Commerce, 18 February 2006
Webonomics 101, The Foundation of E-commerce,
18 February 2006