Week 4: Marketing in a wired world

1) A decrease in prices is inevitable in an online marketing environment. Do you agree or disagree?
When discussing the statement a decrease in prices is inevitable in an online marketing environment there are many different opinions to this statement. In the lecture slides there are two views which are pro and con for this issue.

View 1 is decreased prices inevitable and View 2 which is decrease in prices is unnecessary. In my opinion I have mixed feelings about this issue. Generally when purchasing a product online there is a conceived notion that the price of the product would be cheaper than buying the product in store. Ideally when purchasing products online seem to be cheaper because of the wait time for the product. Instead of buying the product in store at the exact time of purchase and having the product, the product needs to be ordered and the consumer needs to wait.

On the other hand a decrease in prices is unnecessary because consumers buy the products online because it’s more convenient. There is a perceived notion which is that the prices are the same and does not really matter. The notion is that buying products online are easier and less time consuming because you can just purchase which ever item you want without leaving your home.

Overall marketing online is cheaper than marketing offline because the company website and other mediums are less expensive than offline marketing. Offline marketing which is generally television, radio, magazines and newspapers are more expensive in the long run then online marketing.

Overall I agree in which that a decrease in prices are inevitable because most consumers have the idea that buying products online means cheaper prices.

2) Disintermediation will ultimately lead to channel conflict. Discuss.
When discussing disintermediation first of all have to define what this actually means. Disintermediation is “removing the middleman”. Ideally this means that companies make transactions directly to the customer instead of using such intermediaries as retailers. An example would be buying a laptop through the company such as Dell instead of buying the product through a shop called Harvey Norman.

The lecture slides discussed channel conflicts. In this situation channel conflict can depend on:
· Communication channel
· Distribution channel to intermediaries
· Direct sales channel to customer
· Or a combination of all.

When discussing disintermediation leading channel conflict ideally the idea of disintermediation is to cut out the intermediaries to decrease confliction. By cutting out the middle intermediaries such as broker or wholesaler this decreases the chance of “lost in translation”. So when there is an issue with a product or missing the delivery the business can track where the issue is because there is no middle area. Such as when making a purchase through an online supplier such as Dell, if the product is not delivered within the cited time then the consumer can call the company and the company will know when the product was sent to be delivered and would be able to fix up the situation. When there are intermediaries such as wholesaler or retailer there is more of a chance that when a product is lost, the time to find where and who made the mistake will take longer to fix the situation.

On the other hand disintermediation could lead to channel conflict in which the company has to promote and sell the product through different mediums. This is because selling direct from the company can be harder than selling through intermediaries. Intermediaries such as retailer can sell products in different locations and increase the product recognition. Channel conflict can become an issue if the company has a tough time selling the product direct. The communication channel can become an issue if the company only uses the company website. If the company only uses their company website then the company may not have a large recognition factor causing major difficulty.

Overall disintermediation has potential to cause channel conflict but ideally the use of disintermediation is to prevent that.

3) What are the five elements of promotion and what are some examples of combining online/offline promotion?
The five elements of promotion are:
· Advertising
· Sales promotion
· Personal selling
· Public relations
· Direct marketing

Advertising is when a company tries to sell a product. Advertising ideally is to “persuade and to inform” (Tutor2u, n.d). Examples of online advertising are websites, social websites. Examples of offline promotion are television, radio, magazines, billboards and newspapers.

Sales promotion is when types of packages are made to increase sales. Examples of online promotion are sales on the businesses website which state a promotional deal such as buy online and receive a 10% discount or multiple purchases. Offline promotion is like in store sales promotion which is like discounts or special deals.

Personal selling is ideally when a customer is approached or receives assistance by a sales representative in person or verbal conversation.

Public relations are when a business receives publicity for free. An example would be videos made on you tube such as someone using the product or talking about it. Another example would be a reporter writing an article about the service or product of a business. Another example is the television report on the business.

Direct marketing is when there is a relationship between the company and the individual (Tutor2u, n.d).

Ideally when combining online and offline promotion this is generally through the company’s website combining the products selling online and offline. An example would be selling a product such as an ipod in store during a sales promotion and linking the sales promotion to the online website to increase sales. The online and offline promotions have to be consistent. The reason for combining both online and offline is because this allows consumers to look for specials or prices which reflect the instore and online presence.

References:
Tutor2u.(n.d). Promotion. Retrieved August 23, 2009 from: http://tutor2u.net/business/marketing/promotion_factors.asp
Lecture slides by Ian Knox.