The Role of IT and the Internet in Business

E-tailing education service expansion strategies

The modern-day rise in competition in the business arena has compelled businesses to devise new and revolutionary ways and means of marketing their products. The success of a marketing strategy is usually measured by the extent to which the product is adopted by the consumers. Businesses have therefore continued to search for new strategies that will help them push their products to the targeted consumers.

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Technological advancements such as Information technology and the internet have proven to be powerful tools that businesses employ to ensure that their products are consumed. The concept of doing business online is broadly referred to as e-commerce. Since most of the products reach the consumers at the retailing level, it is important to have a strong online marketing business strategy that will focus on the retail market (Bakos & Brynjolfsson, 2000, p. 156). As such, Electronic retailing (E-tailing) is one such online method that helps in retailing products online.

The importance of e-tailing reaches far and wide. First, buyers can purchase desired commodities without the hassle of having to be personally present at the point of sale. Besides, many resources are saved in terms of time and costs. Since the concept of e-tailing was introduced in the market in 1997, it has experienced tremendous growth and over 10% of the current day retail transactions are done online.

Bundling and tailor-made bundling Strategies

The main challenge that faces effective e-tailing is the risk of consumers feeling that the products are pushed on them. This coupled with the traditional marketing strategies prove to be a hindrance to effective online retailing. As such, marketers need to devise strategies that ensure that e-tailing remains a favorite mode of trading among consumers. Two such strategies are the use of Bundling and tailor-made bundling.

Bundling is defined as that marketing strategy where sellers combine several products and offer them to the consumers as one product. This is done mostly when selling related products and the combined product is defined as a package offer. The importance of this to the businesses is that they can sell various products at one point in sales and therefore increase their sales volumes and hence their revenues. Its importance to the consumers is that they can purchase several products at a single sale point, therefore, save on time and costs.

Bundling can be an effective strategy for e-tailing since it complements economies of scale to the supplier when developing the products as well as the economies of scope to when distributing (Marian, 2010, p. 65). To the buyers, it is a desirable strategy since it seemingly offers several products at one price. This is usually appealing to the consumers and if combined with the convenience of online trading, it can result in huge sales volume. As a manager of an e-tailing education service, e-tailing would be a strong marketing tool that would not only help achieve economies of scope and economies of scale to the supplier but also offer convenience to the buyers.

Tailor-made Bundling

The importance of tailor-made products cannot be overemphasized. This is because of the increased differentiation in products and the varying tastes and preferences among the consumers (Van Looy & Van Dierdonck, 2003, p. 169). Tailor-made bundling can be an effective strategy more so when dealing with a certain niche market. The importance of tailor-made bundling comes in where the consumers can purchase packages that best fit them.

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Certain products anthology may include some products that may not be of use to the consumer. This particular product will, therefore, play no role in satisfying the need of the consumer. Having a tailor-made bundle, therefore, comes in as a solution to this problem and as such, the consumer can purchase a package that has relevant products that will ensure that he derives the maximum utility from that particular package. E-tailing continues to thrive as an alternative marketing strategy for traditional retailing. The use of tailor-made bundling will, therefore, ensure that the package best suits the needs of the consumers and as such the business will gain both the economies of scope and economies of scale. These two economic aspects are critical to any business that seeks expansion.

Social factors that affect the expansion and the acceptance of service delivery via the internet

The rise of the internet has, however, come not without some challenges. These challenges act as an obstacle to the adoption of the internet as a source of service delivery. Social dynamics are referred to as those influences that people get through the interaction with others either through informal or formal settings. Social dynamics play an important role in influencing the behavior patterns of individuals and groups.

As such, the use of various technological tools largely depends on the existing dimensions that determine the nature of social dimensions in place. Social dimension plays a vital role in determining whether individuals use the various technologies available in the modern-day business world. Sociologists argue that human beings are social beings and as such, adoption of a change in behavior is always preceded by a social dynamic approval among the peers (Bowles & Gintis, 2002, p. 221).

A look at the evolution of bicycles reveals a co-evolving adaptive system. The dynamism identified in the bicycle society shows that the modern-day bicycle evolved from the three and four-wheeled human-powered carriages (Blankendaal, Overbeeke, & Van Nierop, 1997, p. 266). The human social dynamics resulted in the desire for social change that subsequently dictated the innovations that resulted in the societal adoption of the developed modern-day two-wheel bicycle.

As such, various social factors affect the expansion and the acceptance of social delivery via the internet. The extent of trust among internet users is one such social factor that determines whether the consumers will easily adopt service delivery via the internet. It is commonly known that numerous individuals carry out internet fraud. This has caused many people to be skeptical about trading via the internet. As such even if the internet has been a common and popular source of service delivery, many people remain skeptical about its absolute reliability as a service delivery tool.

The band-wagon effect is a social factor that can largely affect the acceptance or rejection of the internet as a source of service delivery. This is brought about by the informal social conversations that happen concerning the positive or negative attributes of the internet (Van Looy & Van Dierdonck, 2003, p. 219). The band-wagon effect usually results in unsolicited negative or positive information about certain products and as such, it can be used to give credit or discredit the internet.

Another social factor that affects the adoption of the internet as a source of service delivery is culture and religion. Culture is a high determinant of the people’s adoption of a certain product and as such determines the acceptance of the internet as a service delivery tool. Conservatism is one cultural aspect that compels individuals to remain adamant to adopt new ideas and as such promote the traditional and proven ways of doing things. People who are conservatives have therefore remained critical of the fact that the internet is a credible service delivery tool.

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Secularism is another important social factor that determines the acceptability of the internet as a service delivery tool. It is defined as the transformation of society from a religious and conservative cultural lifestyle to a non-religious lifestyle that is characterized by rationalization and capitalism. The subscribers to secularization will always be rational and as such any invention that comes up offering advanced and simplified methods of operation will always receive a huge welcome following from such people. As such the use of the internet was first adopted by the irreligious people and consequently, its use as a service delivery tool continues to be common among such people.

Strategies that can help avoid commodity magnet in the service management

Mere marketing activity is not sure proof that products will be bought by consumers. The modern-day marketing field is characterized by cut-throat competition and while marketing is a must, a business ought to employ other strategies that complement marketing to ensure that there is no commodity magnet. These strategies complement traditional marketing activities and ensure that a product enjoys a continuous preference among the consumers.

Firms ought to have a broad view of marketing that will not only focus on the external presentation to the customer through advertisement but also have an internal product-based strategy that will ensure that the service offered is of high quality. The advertisement was traditionally known to be the single most activity that kept goods and services moving among the consumer. However, in the wake of information motivated consumers, firms are compelled to come up with means and ways of ensuring that their products are preferred among the consumers (Svend, 2010, p. 103). A firm that fails to devise new service delivery methods will fail to realize its goals and objectives since most of its products will fail to appear unique and hence fail to develop the brand visibility among the consumers.

One such strategy that can be employed to reduce commodity magnet in the service industry is employing the service innovation strategy. Service innovation strategy is the strategy that is adopted to design a new and significantly improved quality of service by the service delivery. This can take many forms and its end product is a satisfied consumer. The service innovation strategy may involve such factors as a new customer service approach, a new and better service delivery procedure or incorporation of technology in the service delivery or a combination of all these.

The importance of such a strategy in the service industry is that customers will have a more friendly experience more so when consuming the service. This can help promote the product and ensure that the consumers develop product loyalty which is a vital aspect of dealing with the commodity magnet.

The other strategy that can be employed to avoid commodity magnet is the incorporation of price compression/ innovation strategy. Price is usually a key determinant of whether the consumers can purchase a certain commodity or not. Most companies compete using the price as the competition factor. A service business can as well incorporate the price innovation as a strategy to avoid commodity magnet. This is because most consumers are familiar with affordable products more than the unaffordable ones (Marian, 2010, p. 96). Once employed in the right manner, this can be a very successful strategy. A company should, however, be cautious not to compromise on the quality when reducing the price of the service being offered. This plus other strategies such as the value-added strategy can be of invaluable worth to any service company that seeks to avoid commodity magnet.

Continuation of the Dialogue

Ginger Rooney: I think that you have been romanced by a consultant’s very savvy presentation

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Pat Penstone: People need to be told what they want- and people will recognize quality when they see it. That is why we need this system

Ginger Rooney: The system will be a very helpful tool in ensuring that the service delivery in this company is improved.

Pat Penstone: You see, in marketing, it is said that the customer is always the king and as such, whatever the customer views as of high quality is what the supplier ought to present. That is why I am confident that the system will play an important role in identifying what the customer values and subsequent help in improving service delivery.

Ginger Rooney: During the presentation, the consultant said that the system has been designed with the incorporation of high intelligence such that the accuracy level will be above 95%!

Pat Penstone: As the consultant said, this system will surely help in managing the marketing strategy as well as incorporating the much-needed change in the area of marketing through the use of a marketing information system.

Ginger Rooney: That is very true. Besides, this marketing information system will also come in handy in the strategic and operational levels; which will perfectly link the marketing department with the other functional areas of the organization. I am also confident that the CEO will be very well pleased with the incorporation of a marketing information system because I am sure that this is just what he was looking for.

Pat Penstone: I am yet to believe that this system will offer Internal records systems, marketing intelligence systems, marketing research systems, and marketing decision support system. Once tabled, this system will need no further approval as the organization will surely have a system that will incorporate marketing with other departments of Quality Healthcare.

Ginger Rooney: I think we also need not look at any other system as this fully satisfies the needs of the company and as such it will ensure that the company fully manages its marketing strategy while having the marketing intelligence system.

Pat Penstone: That is very true and I think our search for an improved marketing strategy is over. By end of business tomorrow, the CEO will have this system as the only recommendation since no other appears to even come close to this one in terms of service delivery, reliability and usability.

References

Bakos, Y., & Brynjolfsson, E. (2000). Bundling and Competition on the Internet: Marketing Science. Journal of International Marketing, 16-69.

Blankendaal, A. C., Overbeeke, C. J., & Van Nierop, O. A. (1997). The Evolution of the Bicycle: A Dynamic Systems Approach. Journal of Design History, 253-67.

Bowles, S., & Gintis, H. (2002). Social dynamics and community Governance. Economic Journal, 419-36.

Marian, B. W. (2010). Essential Guide to Marketing Planning. New York: Pearson Publishers, 206-79.

Svend, H. (2010). Global Marketing: A Decision Oriented Approach. New York: Pearson Publishers, 169-281.

Van Looy, B. P., & Van Dierdonck, R. (2003). Services Management. Essex: Pearson Education, 106-201.

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