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Free «Internet Business Analysis» Essay Sample

For traditional type retailers like Borders and Barns & Noble, Amazon’s strategies have changed the nature of retail marketing by the application of technology. By using technology to identify customers and the type of the products they acquire, it is possible to focus the marketing message down to the level of the individual consumer. In order to compete in book industry, Borders and Barns & Noble transformed their traditional retail channels and use the Internet as one of the mediums of advertising, communication and selling. One of the changes (1) is related to b\new ways and approaches to advertising. Similar to Amazon, Borders and Barns & Noble uses the Internet as a means of advertising. If a company has a site on the WWW that is particularly popular and is visited by large number of potential purchasers then it has value to that company. Other businesses can purchase an advertising 'spot' on this site which will help direct traffic to their own WWW presence. The technology is available to measure very precisely how successful the advertisements have been in attracting interested visitors, allowing the advertiser to be charged accordingly (McFadyen, 2008).


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The second (2) change deals with new market segmentation. With the help of the Internet, Borders and Barns & Noble have reached a point where the majority of the developed world's affluent population has access to this global network. Apprehension about using the network for making financial payments will have disappeared. Using the technology for purchase is as natural to us as our use of the phone or the fax is now. For Borders and Barns & Noble, it is easy and cheap global communications, leading to the market behaving in a more 'perfect' fashion (McFadyen, 2008).

The third (3) change deals with a downward pressure on product margins. When such development is linked to improvements in the physical distribution of goods, which have already occurred, then the options available for the purchaser is radically increased. Differential pricing in distinct geographic regions will be harder to maintain. Cost barriers that have protected markets from greater international competition will reduce. Products and services that involve the exchange and manipulation of information (for example financial services, travel agencies) will, in particular, be exposed to greater competition (Reynolds, 2004). The forth (4) change is new product differentiation The Internet offers a whole new armory of customer care services which can be used to help in the differentiation of a company's products and services. A customer, anywhere in the world, can have access to the latest documentation about the product, direct contact with a customer care representative, details of the latest product announcements and remote access into diagnostic systems. The rules of post%u2010 customer care and sales will have to be rewritten (Reynolds, 2004). The fifth (5) main change is new channels of delivery. In contrast to traditional sales channel, Borders and Barns & Noble sell their products directly to customers without intermediaries and sales agents. The Internet's ability to create radically different means of selling and customer support creates totally new ways of trading. It is likely that the impact of the Internet on the dynamics of the sales channels will dwarf the upheaval that the use of direct telephone selling has caused. When an enquiry, of whatever type, is sent via electronic means, the sender's expectation of the speed of response is increased. If the company still retains its paper-based mentality for dealing with customer transactions then an immediate conflict is created (McFadyen, 2008).

In sum, opportunities open up for joint marketing programs with non-competing companies. When goods are purchased over the Internet the precision of the company's marketing message will be increased radically. It will become possible to provide a segmentation of the marketing message down to the level of the individual purchaser. Developments in this area are moving ahead with considerable pace.


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