Hence, its customers may already have faced the inconvenience of having to travel to the retailer's location, may encounter the frustration of finding that the shop does not carry the item they wish to purchase. Online retailers do not face the same space restrictions their bricks and mortar competitors. Online consumers are buying into a trading situation that is inherently laden with uncertainty, lack of cues to reinforce trusting relationships and risk. Risk and trust are multi-dimensional constructs and have been found to improve online sales effectiveness if perceived risk is reduced and trust established.
Customers now expect that if they are prepared to provide detailed personal and financial information it will be stored securely Chaffey, et al. The digital age is also providing companies with a new and richer source of customer information with which they can target selective audiences. Today, many web sites will gathering significant amounts of customer data in return for free information or other services.
This personal information is sold, for direct marketing. However, the fact that these increasingly rich sources of customer information can and are being collated into large customer databases is the source of much concern and debate. Are consumers sufficiently well protected from companies that can abuse this information? Consumers are becoming increasingly concerned about the amount of information that is being gathered on them and how this information is used O'Connor, et al. Since the s, consumers' risk perceptions have been widely discussed in the literature and have been shown to affect all purchase decisions and consumer behavior Perceived risk significantly guides consumer behavior, because people wish to avoid making mistakes.
Compared to traditional shopping, e-commerce is perceived as more risky by consumers because it is less familiar to them. Furthermore, they cannot personally verify product's or service's quality before deciding on it nor control the safety of the personal of financial information submitted.
And because the e-service provider is often unknown, its behavior or motives may be difficult to predict. Trust is a cornerstone of e-commerce. The notion of trust has a long history, various approaches have been developed to foster trust building between business partners. The dynamic modes of e-commerce stemming from globalisation and the development of new technologies challenge the traditional trust relationship. The absence of interpersonal physical proximity and the lack of overall control in virtual environments create the perception that business in electronic environment is inherently insecure and cannot be trusted.
In typical Business-to-Customer B2C e-marketing like eBay, for example, goods and services are traded between anonymous sellers and buyers. The basis of business fully depends on seller's description. As buyers normally do not inspect the item to be traded, trading parties might be tempted to cheat. Lack of trust, however, is still the biggest impendent for the development of such e-market place.
Problems such as disguised identities, misleading item descriptions, the ineffectiveness of e-market's support to dispute resolution and complex cross-border issues seriously hamper the development of such e-markets. Despite the considerable efforts in both business and technology aspects, lack of trust is still a major barrier for the development of e-commerce.
This because trust in e-commerce involves very complex and dynamic issues, no study cannot address all key aspects of this phenomenon. Most of the studies only touch on a small subset of possible complexities. A recent investigation revealed that from published articles only three were related to the topic of trust Ngai and Wat, Although the research in this area has increased remarkable in the last few years, most of these studies are either derived from traditional trust building approaches or focusing on only technical issues.
With trust search in e-commerce still being in its infancy, most of the current literature revolves around the role of trust and does not offer an insight as to how trust may actually be developed and maintained Papadopoulou et al. To providing a secure channel, customer service including the return of merchandise, and consummating the transaction in the absence of the physical product, there are other risks associated with the purchase decisions. With an understanding of these risks and the consumers' perceptions of them, the e-marketer will be better able to identify and predict the consumers' behavior and manage risk reduction and trust building marketing strategies.
This paper investigates how the risk and trust factor theories work together in an online environment as part of the five stage purchase process model.
In an online environment consumers tend to reduce risks by selecting an e-vendor they believe can be trusted or brands they are familiar with Chen and He, Therefore the concepts of risk and trust are bound together. Usually if the customer is more aware of the possible risks, the lower the level of trust and higher the need to control the transaction Olivero and Lunt, Internet vendors can counteract this by increasing the company's integrity in the customers' eyes Lee and Turban, Internet usage, however, does reduce the existence of concerns about privacy as well as security issues, thus increasing the trust factor Miyazaki and Fernandez, How do the concepts of risk and trust relate to and integrate with the five-stage Consumer Purchasing Decision Process?
Cases and Forsythe and Shi specify eight risk-dimensions specific to internet shopping that have been found from four different risk sources. The product itself poses a performance risk which is best described as disappointment that the product did not perform as well as the customer thought it would. In conventional shopping, the disappointment might have been avoided by trying the product beforehand. The remote transaction involves risks associated with time time may be wasted in contrast with conventional shopping , financial the absolute cost may be higher than in conventional shopping and delivery the product may not arrive or may arrive late.
Additional risks associated with the Internet include social how friends and family might react , privacy personal information is not secure and payment there might be financial consequences from sharing the credit card number.
Lastly the reliability of the information contained in the website posses a source of risk. According to Cases' results, social risk was the least concern among e-shoppers. Privacy, source, performance, and payment risks were considered as the most crucial forms of risk in electronic commerce.
Privacy risks could emerge in any form of internet browsing without the browser's knowledge, but when a customer makes the purchase themselves, the perceived risks are at their peak as the customer is required to submit personal information which would place the privacy risks at the Purchase Decision stage. Some websites require registration information to be submitted before browsing their catalogue. This spreads the privacy risks to the Information Search and Evaluation phases as well.
In addition gathered personal information is stored so that even after the purchase is made, the privacy risks affect the Postpurchase stage as well. The source risks refer to the credibility of the information which naturally affects the Information. Search and Evaluation stages the most. In an online environment, performance risk exists because of the customer's inability to test the product before purchasing it. Concerns about the product's performance emerge when the product advances to the consideration set and these concerns are likely to grow steadily as the consumer approaches the final purchase decision.
However, if the customer has had a chance to try the product at some point, or has a money-back guarantee, the concerns about the product's performance should be reduced Akaah and Korgaonkar, The same philosophy can be utilized when considering concerns about monetary loss financial risks. As the amount of trust towards a certain e-marketer affects how the customer perceives the risks associated with an online purchase from that e-vendor, and the amount of risk associated with online shopping affects the customer's trust towards e-marketers in general, it is assumed that when one of these risks affects the purchase process, the other is affected as well.
Thus the combination of these two affect the purchase process. The different types of risks in combination with the trust factor affect on some level the entire purchase process, and therefore, these concepts must be studied in conjunction with the five-stage Consumer Purchase Decision process model. Figure 1 shows a realization of the model with the integration of the external factors of risk and trust.
The model proposes that the risk and trust factors play an important role in every stage of the buying process in spite of the fact that their effects ultimately culminate in the purchase decision stage. The model with the integration of the external factors of risk and trust.
The new future is unfolding now, retailing landscape will have transformed completely. Retail business will have to innovate continuously as an increasingly digital environment gives shoppers dramatic new choice. Shoppers will interact with retailers and suppliers more than ever before, with online capabilities and communities playing a bigger and bigger role in the relationship. Social network site won't just be a consumer to consumer conversation as retailers and suppliers will tap into what is being said.
Indeed, the process will being to resemble the mechanics of collaborative product development. Smart retailers and savvy suppliers will learn from what they hear shoppers talk about, and they'll provide more of whatever makes their customers happy. They'll learn more about the need of consumers.
This new empowerment of the public will also have a major impact on the retail world. Shopping social network website: Shoppers share information about the hottest stores, designers, trends, and must-have products- all online. Retailers and suppliers will be able to monitor social networking sites to find out what consumers want and take early action to develop and stock those products. The impact of an increasing number of consumers and businesses accepting the Internet and other forms of digital media as a stable channel to market is an increase in customer expectations, which creates competitive pressures and challenges for e-retailers.
Due to advances such as speed and interactivity brought about by digital technologies and the extension of trading time, customer expectations of levels of service have risen significantly. Therefore organisations are required to adopt a more dynamic and flexible approach to dealing with these raised expectations. For the e-retailers it is important to identify any performance gaps and develop strategies which help to close the gaps.
For example, in the case of logistics, research has found that utilizing carriers that have higher levels of positive consumer awareness with appropriate online strategies can contribute to the consumer's willingness to buy and overall satisfaction with the online buying experience.
Therefore, development of strong awareness and brand image among consumers can prove to be a beneficial strategy for both the e-retailer and the carrier. Strategic implications for retailers wishing to be successful online are far reaching and require a retailer to develop a carefully informed strategy, which is guided by a business model that can satisfy corporate objectives through the deriving value from corporate capabilities whilst effectively meeting the expectations of the online consumer.
The target market and the product category can have a significant influence on success. It is now widely acknowledged that there is a need for a company to have a coherent e-strategy underpinned by a clear vision of how it may take advantage of the Internet.
An online retailer's strategy is likely to be affected by the type of online format it adopts, the type of products and services it sells and the market segments it chooses to serve. Two customers in the same segment are likely to have different tastes, attitudes and purchasing behavior.
Advances in information technology have enabled marketers to gather large amounts of data on consumer behaviour and use that data to segment customers based on such variables as product usage, loyalty, purchasing patterns and benefits sought. The increasing use of electronic point-of-sale information is providing companies with detailed information by individual customer.
In the retailing industry, product purchasing information gathered through systems is combined with personal information that customers provide when they sign up for loyalty schemes, giving the retailers a deep understanding of how their customers buy products from their stores and how those purchasing patterns change over time. Direct marketing can help win back that brand loyalty by keeping a particular product or service in the customer's mind on a regular basis.
Not all customers are profitable. And those who are often only become so after the company has recouped the costs of recruiting them in the first place. Companies are beginning to understand the desirability of retaining customers and maintaining their royalty. Regular communication, via direct marketing, can help. Dell computer corporation is the world's largest direct seller of computer system.
Today, nearly half of all Dell computer product are purchased via the internet. Dell has made excellent use of online applications to get consumer input about its products prior to launch Adamson, In the late s, customer readiness to use the Web for buying had increased to the point where selling via the Internet was the logical next step - especially for a PC company. By definition, everyone on the Web was part of the target audience for Dell's product. Dell's transition to digital was not an overnight event.
This transition to a hybrid business model is typical of smart organisations that are in the process of going digital. Dell drove the mix to evolve toward digital very, very quickly. The key step was the creation of Dell's on-line configurator, a digital system for designing a customer's own PC and one of the world's first Choiceboards. Its unique value proposition for customers includes fast response and high customization through its configurator system.
It also includes ease of interaction, self-service in numerous functions, form price checking to order-status checking to PC design , and the bility to provide corporate customers with extensive and accurate information about purchase patterns and usage.
Because of its direct connection to customers, Dell enjoyed real-time feedback about product offerings, service, and the competition. This feedback helped Dell avoid some of the more serious missteps of its competitors. Even while we are ahead of the game and in Q2 we were far from the other groups, each quarter the other groups are getting closer and closer.
We selected Mercedes since they were willing to pay high price for quality and their market share was very competitive. We discussed possible Innovation and opportunities to Identify, evaluate and activate emerging opportunities. Once potential customers were aware of the product, direct sales and retail promotions could then close the deal. Analyze marketing situations, offer solutions, and justify recommendations We analyzed the industry current size by market place to determine future expansions, sales people, support and training.
Our target market, based on our performance we analyzed with detail the possibility and financial capacity to enter other markets and what strategies are we going to use to design our new computer, determine the right prices, services and the right marketing ads. Distinguishing characteristics of our potential customers allowed us to enter the right computer products, the right price, the right marketing approach based on location, historical data and a big piece was taking the risks and chances.
The size of the primary target market is our main focus and our goal is to get stronger with Mercedes until the numbers tells us the opposite.
New locations and how much market share can we gain the market share percentage and number of customers we expect to obtain in the defined geographic areas.
We are now present in all places we the hope of getting market share from our competitors. We still are looking at their strategies, learning from the successes and also from their mistakes. These issues may affect the competition in a positive way. One the reputation of any company has broken it would take a lot of effort to remedy it.
Putting the competition in advantage and will gain good reputation over issues over truth and honesty. Apply marketing concepts and tools to solve business problems in your work environment I work in the healthcare industry, and my company has gain market share rapidly by focusing on customers and their needs. Their marketing has improved as well by utilizing the right approach and creating new opportunities for physicians with better and more attractive compensation and benefits.
This strategy was very clever if you think about what runs patient levels.
Marketing is a major component for most business in the United States but is only just beginning to take hold in the healthcare field. Within the healthcare arena the concepts of marketing .
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