Chapter 3: Online Business Strategies

CHAPTER THREE

ONLINE BUSINESS STRATEGIES

Content
3.1. Internet Goals
3.2. Internet Presence
3.3. Direct Selling Model
3.4. Internet Retailing
3.5. Internet Marketplaces

3.1 Internet Goals

There are many kinds of goals or uses of internet in commercial or non-commercial field.
Some of the important current strategic uses of the internet are listed below:
 On-line communication
 Software sharing
 Exchange of views on topics of common interest
 Product promotion
 Feedback about products
 Customer support service
 On-line journals and magazines
 On-line shopping
 Worldwide Video Conferencing.
 Compared with face-to-face networking, it’s time-effective
 Inputs person directly in touch with important decision makers
 Reach to online universe and build a reputation.
Basic Services of Internet

There are basic types of services provided by the internet network to the users. These services
are explained below:
1. Usenet News:

This service gives a chance to the groups to exchange their ideas, information, and views
about subject of common interest. There are several groups in the internet, which are called
news groups. This service includes main services like, e-mail and news.
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2. File transfer protocol (FTP):

This service helps internet users to exchange and m0000

00000ove the files from one computer to others. These files may contain digital information –
text document, image, artwork, movie, sound, and software.
3. The World Wide Web (WWW):

The World Wide Web is a developing technicality and it is the most popular and promising
method of accessing the internet network. Its popularity has come from using the hypertext
concept which allows us to see the picture, image, text and sound.
Each service has its own features and special address so that the computers using FTP system
have a special address different from the computers using WEB.
4. Instant Messaging

Instant Messaging (IM) is a type of online chat that offers text communication over the
internet in real-time. Because of its real-time nature, it is continuously becoming one of the
fastest-growing forms of internet communication services. There are many instant messengers
that are providing instant messaging. Some of them are Facebook, Whatsapp, Skype, hangout,
WeChat, etc. Among those, Whatsapp has the highest number of user’s actively engaging
(report gathered from stattube youtube channel).
5. Email

Email stands for Electronic Mail. It is a paperless method of sending messages(text, files, or
images) from one person to another or many people at the same time using the internet. In
1996, there was more e-mail than postal mail being sent.
Some of the important features of email are :
 Instant Communications.
 One to One or One to many communications
 Free and easily accessible, the only required is an internet connection.
Some of the most popular email service providers are Gmail, Microsoft Outlook, AOL mail,
Zoho mail, fast mail, hush mail, mail.com, MSN, Yahoo mail, etc.
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6. Video 0Conferencing

Video Conferencing is Internet Service where two or more people located in separate
geographical locations do live audio-video communication. So, it is a real-time conferencing
service on the internet. For proper functioning of the Video Conference, it may require a high
bandwidth of the internet at the sender and receiver sides.
Simply we can say, Video conferencing is the communication of parties all over the world in
visual form.
7. Web Services

There are a wide variety of programming languages used to create various apps. A variety of
programming languages and frameworks were used to construct these applications. For any
reason, we may need to communicate with each other. It's at this point that web services come
into play. Regardless of the programming language used to develop the apps, web services
provide a common platform for different applications to connect with one another.
As a result, it serves as a standard medium for passing messages (data) between a client
application (created with android, vue, angular, react, or any frontend language in general) and
a server application (created with java,.net, python, or any frontend language in general) on
the World Wide Web.
3.2 Internet Presence

In the modern age, we are witnessing amazing development in the computer and networks
fields, particularly in the last decade. The word internet was not as popular as it is today;
because internet users were limited to those who had the ability to communicate and exchange
information via computer networks. Now a day's communication through computer has
become part of our life and we can’t do without it. Fast development in the computer and
networking has changed the life and its methods around the world, and we can see that clearly
in the U.S.A. and European countries, everything there is being done through the internet .for
example shopping, making reservations at hotels and restaurant, booking airplanes, and train
tickets through internet and also pursuing education as well as certain banking activities.
Definition:

There are several definitions for internet, but the popular one is that “Internet is a huge
network of computers, which links many different types of computers all over the world; it is a
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network of networks, which share a common mechanism for addressing (identifying)

computers, and a common set of communication protocols for communications between two
computers on the network.” Internet is asset of computers talking over fiber optics, phone
lines, satellite links and others links. It is a global collection of high powered computers that
are connected to each other with network cables, telephone lines, microwave dishes, and
satellites.
The internet is the world's largest computer network. It is a global information infrastructure
comprised of millions computers organized into hundreds of thousands of smaller, local
networks.
Who are actually available on internet?

The wide meaning of internet includes people, groups, organizations, schools, universities,
commercial services activities, formal orientations and free networks that use the protocols of
TCP / IP and always remain connected with the network the whole day. There are various
opinions about the meaning of (availability on internet). Does it mean communication with the
net only? or ability to
Communicate with the system and internet services like FTP, Goper, Telnet, E-mail and
World Wide Web? or does it mean producing and selling goods, services and information to
others? The view of the researcher is that “this concept means two ideas coming together,
having wide availability.
Anyone having a personal computer connected to the internet network is considered available
on internet network, whether he is a producer, a consumer or supplier. It is necessary to
mention that the English language is still the main language used on the internet and has the
biggest share. Some web sites offer documents in other languages and are also supported by
English.
Several researches indicate that, the internet network will constitute new economies and plan
the movement of international Electronic commerce through the next few years and the
number of local subscribers will increase enabling the getting of information much easier for
commercial organization and will develop the internet network at great speed”. Internet
network has imposed new concepts, and the commercial organizations must absorb them.
1. Employment has changed in size, quality and the relationship with their managers.
 Decrease in the jobs that need physical efforts replacing them by computers.
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 Offering new jobs opportunities with good conditions to the person who has the
ability to learn and get knowledge.
 Increased interest in human resources investment.
2. Capital has lost a large part of its share. When it was considered to be the biggest
factor in production in an organization. Human efforts have become the main
controller.
3. Internet is the main element among other factors that have guided the work towards
globalization and the reaction to it is not the same in different part of the world,
developed and developing. The two worlds developed and developing are afraid from
the internet network if it will be better to other world. The developing countries are
afraid of the increasing the gap with the developed countries and the developed
countries are afraid of decreasing the gap with developing countries.

3.3 Direct Selling Model

Direct sales represent the largest and most important revenue stream for e-commerce sites.
The simple and straight-forward mission of an e-commerce site is to sell as many products to
as many online shoppers as possible. Products can be tangible, such as shampoo, sneakers, and
groceries, or intangible, such as digital music or the purchase of a reserved seat on a flight.
Typically, the direct sale of products is made in numbers of units, with each unit multiplied
by the advertised price (three bottles of shampoo at
$5 each is a grand total of $15, plus any shipping, taxes, and other charges that may apply).
Typically, consumers who purchase products do so for one of three reasons:

• They have a need for a certain type of product. Although they may switch brands from time to
time, they have decided in advance that they have a need for a specific product (for example, a
new car if their old one is dying, or a tube of toothpaste once the current one is used up).

• They want a certain type of product. This want may linger for a while, depending on how
expensive or frivolous the product is (such as jeweler), or may be satisfied more quickly
depending on how great the want is (such as the latest video game console). In the mind of the
consumer, the decision-making process in terms of where and when to buy is less urgent
because there is not an absolute necessity to make the purchase.
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• They are compelled to buy an item at or around the time of purchase. Some of the most
valuable real estate in any traditional retailer is the space near the cash register, where
consumers may make last- minute purchases of items that are within their line of vision. These
items tend to be smaller, lower priced items, such as gum, chocolate bars, bottles of water or
soda, batteries, and similar items that people are more likely to decide they want at the last
moment.

A successful e-commerce company will consider each of these purchasing reasons in the
development of its site. Because online stores do not have floor space for displays, salespeople
to point the shopper in a specific direction, or signage hanging from the ceiling, e-commerce
marketers have only two means of pushing their products to consumers: the page layout and a
compelling presentation of their product. We will discuss the set-up of the page for maximum
efficiency later in this chapter.

In the presentation of the product, marketers generally rely on three elements:

• Copy, which can be used to describe the product, its attributes, its value, and any other
important information that the marketer feels will be appropriate to boost sales. Copy
also includes information such as the price of the product, size, weight, and other such
vital info.
• Pictures which are used to provide a visual reference so that shoppers can see what
they are buying. In the case of products that might be less familiar, or whose appeal
might be in the way they look (picture frames or decorative candle holders, for
example), marketers may decide to show the product from a number of different
angles. As with copy, smaller images, called thumbnails, are shown initially, and
larger images are often provided upon further consumer investigation. Other times,
application shots are provided to show how the product might look in its final
environment or when being used by a representative consumer.
• Video of the product is sometimes used to demonstrate how the product works, market
its benefits, or generally build excitement for the product. As we discussed in Chapter
5, online videos can increase audience retention time—a big benefit to e-commerce
marketers who want to keep audiences on their site for as long as possible while
providing them with valuable and engaging product information.
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By effectively managing the presentation of products, e-commerce marketers can capture their
audiences’ attention, feed them the necessary information, and potentially drive them to take
action.
3.4 Internet Retailing

3.4.1. E-Retailing: The Virtual Channel

Internet is being used as a channel to market, examining the activities retailers are engaging
with online with customers. Retail channel is a term introduced by Doherty et al. (1999) to
describe companies’ multi-purpose adoption of the Internet, using it as both a communication
and transactional channel concurrently in business-to-consumer markets. Traditionally the
term channel describes the flow of a product from source to end-user. This definition implies a
passive unidirectional system whereby the manufacturer or producer markets through a
wholesaler or retailer to the consumer.
Recent developments in information technology are changing this orientation by enabling
retailers to focus their marketing efforts on managing customers more effectively (Mulhern,
1997). Therefore, the Internet brings the customer even closer to the retailers via a new
combined marketing and distribution channel, in effect an interactive retail channel. This
move may also suggest a shift towards a bidirectional retailer–consumer relationship, in which
more power accrues to the customer (Hagel and Armstrong, 1997). As a result of the
technological capacity e-retailers are becoming increasingly creative with how they are using
the Internet and associated digital technologies to serve the needs of their online customers.
3.4.2 E-retail activities

These will primarily fall into one of two categories: Information Functions or Interactive
Functions.

Information functions

Web sites provide retailers with an important opportunity to give customers information.
Many companies see the web as a means of expanding customer services through offering
their customers wider ranges of information than is possible in-store. One of the greatest
advantages of the web according to UK retailers is its ability to facilitate the dispersion of
low-cost information. Retailers have been proactive about providing information on their web
sites, and offer a wider range of different types of information:
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• Product information includes product descriptions and prices, promotional information and
web advertisements, colour swatches and graphical images.
• Financial information includes company reports, annual statements and investor information.
• The depth of coverage can vary considerably, as can the extent of accessibility.
• Company information includes such items as history of the company, store location
information, details of employees and company incentive schemes.
• Press releases appear in various forms. Some companies use press releases as part of their
consumer promotions whereas others include such information in their corporate web sites
aimed at enhancing the overall profile of the brand(s).
• Recruitment information – companies have recruitment features providing potential
applicants with job details.
Interactive functions

Interactive use of the Internet involves more than simply the provision of promotional
information. It includes activities such as ordering of catalogues, promotional literature and
‘free gifts’ and encouraging customers to provide market research data as well as sales
ordering and payment transactions. Interactive ways of using the Internet and the web include:
• MARKETING COMMUNICATIONS TOOL – the Internet is frequently used as an
advertising channel. Traditional advertising channels such as broadcasting and print
media enable a one-to many dialogue based on communications theory (Schramm,
1955) between senders and receivers. The communication process is normally
constrained by time, namely the speed of response of participants, but communication
can become ‘conversations at electronic speeds’ if conducted via interactive services
such as the Internet (Fill, 1999).
• DIRECT COMMUNICATION – as an interactive channel for direct communication
and data exchange the Internet enables focused targeting and segmentation
opportunities for more closely monitoring consumer behavior. E-mail provides a direct
non-intrusive means of communication between firm and customer.
• ONLINE COMMUNITIES – are also developing on the web and facilitating
interaction between individuals and companies. Car manufactures such as Citroen and
Volkswagen support many enthusiasts’ sites in order to reinforce the emotional bonds
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between the product and the consumer via the web.

• MARKETING RESEARCH TOOL – the Internet’s interactivity facilitates the
collection of consumer data, providing the opportunity to gather personal information
from online consumers while they browse through web sites, complete online
questionnaires and respond to e-mails.
• SALES CHANNEL – the selling of goods and services online can take several
different forms: the order is placed online while the delivery and payment are made
through real-world channels; online ordering where the delivery of goods is required in
the real world and the payment facility has options online or offline; the total process,
namely the order, payment and delivery of the product occurs via the Internet.
In summary, businesses may choose to utilise the Internet and the web in a number of different
ways to communicate and interact with their online consumers. The particular methods that
they adopt to build an online brand may vary, from just providing information to online
transactions including ordering and payment for goods and services.
3.2. Internet Marketplaces

Internet marketplace connects Sellers and Buyers through the Internet and thereby fosters
efficiency in an otherwise inefficient market. An internet Marketplace is an ecommerce
platform that enables Individuals as well as Business to either list their items for sale or set up
online stores on the online platform and leverage this platform and its services for example
search, viewing product information, buying, payment, order management etc

What sets an internet Marketplace apart from B2B eCommerce sites is that fact that a
marketplace is an aggregation of sellers and their inventory. From a buyer's perspective,
he/she gets to choose from multiple sellers and therefore can pick & choose / bargain hunt as
required. Because of the larger number of sellers in a marketplace, the consumer gets the
benefit of greater choice in inventory and also because of the inherent competition between
sellers selling similar products, the buyer also gets the benefit of lower prices and better
customer service. The seller primarily needs to focus on sourcing, listing his inventory,
managing orders and fulfilment and customer support. The marketplace platform takes care of
the Technology infrastructure, payment processing, managing fraud & risk etc. (source:
https://www.quora.com/What-is-an-internet-marketplace-What-is-the-definition).
Examples of some online marketplaces are Amazon.com, Alibaba, eBay, etsy, Flipkart,
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Rakuten, Snapdeal.