Online Strategy for the Business

Introduction

Online marketing has been affected by the rise of Internet websites replacing their main products and attracting their target audiences. To some extent, online marketing can be considered as a unique way that helps companies to sell products on the Internet. Traditionally, online marketing has been credited with having a tremendous impact on culture, both positive and negative. The Internet has dramatically changed the marketing environment and channels of distribution. At the beginning o the 21st century, a company cannot succeed and attract a wide target audience without an effective online marketing strategy and services. Online marketing opens new channels of communication and creates new ways of buying.

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Company Background

EDEN is a Czech-Polish joint venture with $150,000 in capital and four Polish and two Austrian shareholders. Today, all shareholders are Czech but the store managers and sales staff are Polish. EDEN is vertically integrated, owning a factory that manufactures elements. The management sees an opportunity to supply the homeowner with excellent bathroom furniture such as carpeting and appliances and seized it. Sales volume for EDEN was 1 billion in 1992 (about the U.S. $90, 000 at 1992 exchange rates), but based on 1991 exchange rates sales were even with the previous year. Traditionally, EDEN carries a variety of bathroom furniture and is divided into four departments. Bathroom products (sinks, mirrors, commodes) comprise half of EDEN’s sales volume; tools and electric appliances are 20%; home improvement goods account for another 20%. Margins on products range from 15% to 19%. The uniqueness of the EDEN”s store layout features a merchandise presentation scheme similar to a catalog showroom.

Nature of Business

Taking into account the nature of business, it is possible to say that bathroom furniture manufactures require an effective and efficient online strategy in order to attract customers and agents from all over the world. Online marketing is important for every modern organization as it allows its management to design and develop effective purchasing strategies and select the best channels of distribution. Modern companies located in Eastern Europe move away from capturing and moving data around the organization to concentrating on converting data into information for managing their operations. The transaction system of online marketing is still its backbone. Modern improvements can be made in the retail sphere, but equally important improvements will also be made on the online marketing side. The key will be to apply Internet technology in order to gain a sustainable competitive advantage. Only by applying Internet technology in this manner can excellent profit performance be achieved. What follows will disclose the threats to companies from each of their potential competitors due to developing Internet technologies that can be applied by others as well as by current retailers. The real challenge for manufactures is because the Internet technologies are available to everyone, the mixing, and blending of different Internet technologies together into an applications system leads to a competitive advantage. Effective online marketing and the structure of purchasing determine the performance of the company and its competitive market position.

In recent years, EDEN experiences some problems with suppliers caused by the increasing role of Internet marketing and online purchases, transportation, and ordering changes.

The old-fashioned system of ordering and the inability of the company’s management to predict sales decline or increase in sales led to an oversupply of some mirrors and additional money spent on warehousing, and a lack of other items “demanded” by customers. Once goods are shipped, they cannot be refused. The shop must buy them. Limited credit terms are available, with EDEN paying for goods as they are sold, but usually within six months of receipt of goods. The main problems occurred with mirrors coming from Germany, Holland, and France. Late delivery and orders cancellation are the main problems faced by EDEN. Single items with pricing information are displayed, orders are placed within the departments, and stock depth is maintained in the warehouse (Thanasankit, 2003).

Online Strategy

Online marketing proposes users easy access to the company’s databases. Direct-response and database possibilities had long known that not every customer had equal value to the online marketing organization. Even some brand strategists had embraced the challenge to develop new technologies (e.g., the rise of online marketing). They all would have to identify the most precious customers; the customers that gave the company more business through referrals; the customers who were not worth catering to at all; the forecast the company would like to convert to customers; and the types of consumers the firm would take into account real prospects. Easy access to databases makes loyal consumers more loyal and satisfied with the product proposed by websites (Chaffy et al 2000; see appendix 1).

The main principles of online marketing are a clear understanding of customers’ needs, competition, effective communication with buyers and suppliers, coordination, and control of overall operations. The companies’ websites attract Internet users and PC users appealing with unique value proposing and services. People tend to spend more time with online television. The internet makes a local company like EDEN a global one that proposes information and video to global consumers. In this case, online marketing cannot compete with the traditional one because it requires sophisticated technology and services (Thanasankit, 2003).

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The internet and online websites become a new sales channel uncontrolled by the state and free for mass consumers. If any element of the channel can be provided in a more cost-effective way, either by another organization or the application of technology, then the producer will have a strong incentive to change their sales strategy. Mainstream media is limited by censorship and regulations, channels of communication, and geographical scope. In other words, this situation creates a channel conflict for mainstream media. Whenever there are a number of different sales channel elements that can address the same customer base, then there is the potential for conflict. The bathroom furniture industry is renowned for having multiple channels which often find themselves in direct competition. There have been many issues when the bathroom furniture manufacture like EDEN, its distributors, and resellers are all combating for the same business (Chaffy et al 2000).

The aim of online marketing is to level geographical boundaries and inform potential customers of EDEN about products and their prices. The technological developments that are taking place will extend the range of products used to connect to the WWW and other Internet services. Examples of this development can be seen with small (5 seconds) video clips allowing connection to the WWW. This combination of the WWW’s flexibility and the simplicity of the browser software provides tangible business benefits in terms of reduced training, lower development costs, and an increase in the range of users who can have access to the organization. The benefits of using WWW technology are available to all sizes of organizations, irrespective of whether they intend to possess their own WWW site. Like the telephone connection and communication, the Internet operates internationally. Once connected, the capacity of access is not conditioned by geographic borders. Unlike telephone communication, the costs involved in international connection are not related to the distances involved. Conducting exchange with the adjacent office costs the same as contacting the farthest continent. The mindset that equates distance with price must change when using the Internet (Thanasankit, 2003). As has already been shown, the number and breadth of types of internet buyers who have access to the Internet are increasing quickly. The narrow band of high-income, professional, and predominantly male customers is changing to reflect more precisely the normal demographic sharing. No other communications channel has had access to such a large audience and range of people which increases the capacity to leverage the value of information to a size that has never before been possible (Ezap 1994).

The main opportunity of the online community for EDEN is that many potential buyers do not want to pay for additional services proposed by mainstream media companies. Bathroom furniture products are likely to be characterized by the desegregation of information content to facilitating novel pricing strategies. The units of sale for bathroom furniture products can now be redefined: for example, maps can now be sold centered on a point specified by the consumer rather than as a paper map sheet defined by the manufacture. It has been argued that a change to disaggregated bathroom furniture products implies that there is no need for ‘fair use’ provisions, as every consumer wanting access to products can pay a ‘micropayment’ to the creator for the smallest unit of information required (Thanasankit, 2003).

In this case, the Internet as a channel of distribution is both changing the nature of the media products created and the way that they are sold. There are now emergent information goods that can only be created and sold using the Internet, for example, certain kinds of collaborative games. The low marginal cost regime for digital information representations created by the Internet also has the potential to change the way governments handle information. The companies like EDEN collect a wide range of data for various purposes including governance, regulation, and the operation of services. In its authority role companies usually force customers to give personal details, for example to the census and the electoral authorities. In its services and regulation role, data nad personal information is usually collected as needed from customers and business (Turban et al 2004). Online companies now have to decide whether to make a charge for data use through the Internet (even though the costs are low) in order to pay for the cost of the data production. Therefore, online companies can choose the strategies to be served in making the data available: such as maximum use, value to society, or cost revival (Hanson 2000).

Online Strategy Implementation

The proposed online marketing strategy will not have a great impact on the structure of the business but requires additional training and technological investments. Effective staff management depends on good preparation establishing realistic aims and specific sales strategies. Online marketing provides the tools for evaluating salesmen and allocating sales opportunities. the aim of the online marketing for Eden is to determine sales, profit, and cost strategies, developing corresponding budgets and setting sales quotas for such control areas as sales staff, goods, customers, and geographical regions. The main types of online strategy are regular advertisements (banner ads) and promotional campaigns aimed to attract potential buyers (Turban et al 2004).

EDEN should take into account that training programs may differ in duration from a few days to two or more months. The length of time is connected with the initial skills of employees, the difficulty and changeability of goods in the future, and the requirements of buyers. Diversity of training programs and skills may be used, including lectures, films, television, role-playing, cases, and programmed learning. Regardless of the techniques used, training for effective online communication and marketing should be viewed as a continuing activity (Kalakota and Whinston 1997).

EDEN ‘s customers may be grouped in various ways — by distribution level (wholesalers, retailers), size, industry, method of sales (mail order, retail store), or corporate division. Since customers are often widely dispersed, management should be sure that the increased costs of duplicate customer coverage are offset by the specialized knowledge salesmen offer. Regardless of the sales organization adopted, however, companies should plan for periodic reviews and audits. Existing structures should be assessed against customer, product, or territory needs, and evaluated in terms of alternative forms. In reality, sales territories, once created, seem to take on the status of a proprietary right by the assigned salesmen. Salesmen generally resist reorganization and seem upset to learn that management is realigning “their” territories. Yet, territories grow and decline as product lines and customers change. As they do, potentials shifts and management must make adjustments to meet changing needs (Thanasankit 2003). For instance, as territories grow in potential, they are usually subdivided. Yet salesmen generally view this as an attempt by the company to take away some of the sales and commissions that are rightfully theirs, rather than as a means of providing better service and coverage for markets (Turban et al 2004). Changes in geographical regions and target audiences must be made with considerable diplomacy. The causes for change and the effect on potential should be analyzed with the management staff and with those stakeholders affected. Particular attention should be paid to the marketing situation, and the sales staff involved and prepared for the online marketing should be given assurance that necessary geographical revisions will not affect them adversely in the long run (Kleidl, 2001).

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The point is that EDEN employees should consider sale potential and expected returns and relate them to sales time and resource investments. It has been found that EDEN employees often spend less than the warranted amount of time with a good forecast and too much time with poor prospects or with relatively easy accounts and pleasant sales conditions. Consumption and purchasing of bathroom fortunate are usually treated as separate and distinct practices. Though, from an online marketing perspective, and in the broadest and most realistic analysis, the consumption process involves more than the actual use of products and services and the practices of household buyers. It involves significant factors surrounding buying decisions and buyer behavior, the consumption of online products and services per se, and the environment in which they are consumed. In transactions involving bathroom furniture goods, they usually are not. Though, by studying EDEN’s consumers (as individuals and members of groups) and by investigating the issues influencing their buying and consumption practices, the EDEN management can achieve a good base for comprehending both (Kleidl, 2001).

Technologies

The technologies introduced by EDEN will include a website and databases. The purchasing process and the related acts of accumulation and consumption will be tools of achieving strategic aims both of the purchaser and those he represents. The acts of accumulation and consumption indicate the differences between consumers and purchasers, and between consumption and buying. Both industrial purchasing agents and “consumer purchasing agents” are essentially engaged in solving problems (Thanasankit, 2003).

Two significant classes of customers are ultimate (household) consumers and industrial or business partners. The ultimate consumer is one who purchases goods to satisfy personal wants or those of family or friends. The intermediate customer purchases goods for business purposes with the profit motive in mind. Most of the literature focuses primarily on the ultimate consumer — on understanding his (her) role in our marketing and economic system; on consumers as decision-makers; on factors that shape consumer objectives and influence purchases; on the impact of consumer attitudes, opinions, motivations, images and expectations on marketing activities; and on the importance of consumer-related information to corporate change, survival, and. enlargement. EDEN shall place the main emphasis on online technologies for a good understanding of the family consumption process and buyer behavior has a direct carry-over for understanding industrial buying and consumption (Thanasankit, 2003). Decisions will be required about the wisdom and cost implications of running online marketing and online sales channels and the conflicts that can be created. Additional challenges will come from the access into the online market of new competitors who do not have to support existing infrastructure and who can set up new buyers’ expectations of pricing levels which can quickly change the traditional structure of an entire industry (Kleidl, 2001).

Conclusion

The proposed online marketing strategy will help EDEN to create a global brand image and attract potential customers from all over the world. The customers will be able to communicate with the company online and make their orders immediately after consultations with managers. The role of the staff should be geared to company and marketing department objectives. The starting point of the online marketing program is EDEN’s goals and strategies. Volume, profit, industry, country, product, image, and rate-of-return strategies control the direction and scope of online sales activities. The practical range of online sales opportunities for EDEN may vary from the company’s own sales staff and the use of a variety of wholesalers including sales agents and manufacturers agents to the removal of salesmen by such techniques as online mail order. EDEN should take into account that purchasing decisions are affected by the customer’s lifestyle. The lifestyle may be divided into action and orientation space. Website and web banners, online communication, and online community will help EDEN to attract more customers and increase sales volume. The online strategy will have a great and positive impact on the company’s sales and will help it to create a strong brand image and popularize its products.

References

Chaffy, D., Mayer R., Johnson, K., Ellis-Chadwick, F. 2000, Internet Marketing, Strategy Implementation, and Practice. London: Pearson Education.

Ezap, P. 1994, Database Marketing Research. Marketing Research. 6 (4), 35-41

Hanson, W. 2000, Principles of Internet Marketing. Cincinnati, OH: South-Western College Publishing.

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Kalakota, R. & A. Whinston. 1997, ELECTRONIC COMMERCE: A Manager’s Guide. USA: Addison Wesley Longman, Inc.

Kleidl, B.A. 2001, Srategic Electronic Marketing: Managing Business, Cincinnati, OH: South-Western College Publishing.

Thanasankit, T. 2003, ECommerce and Cultural Values. United States: Idea Group Inc.

Turban, E. D. King, J. Lee, and D. Viehland. 2004, Electronic Commerce: A Managerial Perspective. New Jersey: Pearson Prentice Hall.

Appendix

Online Strategy Structure
Online Strategy Structure
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