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e-Business Environment and the Marketing System

I) Please describe how relationships are created and enhanced in an e-business environment.

II) Discuss the potential risks of using Web 2.0 tools. Provide several examples.

III) What are the benefits of "build-to order" to buyers and sellers? Are there any disadvantages?

IV) What role does promotion play in the marketing system? Can you think of ways that Internet providers promote various products and services?

V) Some companies give away free or low-cost products on the Internet. Others are amazed at such a marketing tool. Can you think of ways that companies that offer such products can justify the costs? Please explain why they would offer such products to the consumer.

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Please describe how relationships are created and enhanced in an e-business environment. You should be very detailed with this response.

Just because an environment is virtual, does not mean it must be impersonal. Relationships between customer and retailer are essential, since repeat business is essential. Repeat business already assumes a relationship based on trust.

Part of the trouble is that, in order to build relationships, privacy needs to be made relative. To unearth your customer's web surfing habits, basic preferences, interests and possible impulse buys mean some tracking of their movement. Hence, the relationship cannot be based on trust. Nor does it serve the interest of the customer (assuming privacy is an important interest).

Another means to deal with this is to have lots of opportunities for feedback. Easy to perform tasks on the buying page (like marking boxes, etc) might make it easy to tell if the customer is satisfied or not. Have a phone number, since this helps eliminate the "spacelessness" of the online environment. In other words, the building of relationships can develop in other ways. Removing as much of the anonymity of web buying is essential. Permitting an IM function with a real human being might go a long way to creating a personal space and relationship for the future (Chand, 2011).

Trust has two facets: cognitive and affective. The former deals with beliefs based on facts. Is the firm reputable? Are they easy to get in touch with? These are easy ways to build basic cognitive trust. This is the foundation of the latter, or affective trust. This is the sort of trust that keeps customer's coming back. Consider the former to be basic and functional. Things worked out for my order, and hence, if I need, I will return. The other says that if I spend money, I want to spend it on those who I can relate to.

Let's use a real life example. My dentist is a tax protester: http://www.post-gazette.com/stories/local/uncategorized/offshore-no-haven-from-taxman-dentist-learns-447115/, with many inaccuracies, btw). He's been to prison (where he was the prison dentist, which actually meant he was treated very well by the other inmates). He's been in and out of court. He holds that the income tax is unconstitutional, etc.

Now, I go to him solely on that basis. I appreciate his point of view, his willingness to suffer, and his desire that I get to keep more of my money and (hopefully) starve the government of it. I drive 45 min, passing about 9 other dentists, to get to his practice, which is 3 towns away. I have no difficulty spending money on him because, not only is it good for my teeth, but I know he will use the cash to irritate the IRS further. This is a very good example of affective trust. I'd consider giving him money even if I did not need dental work. http://www.leagle.com/xmlResult.aspx?xmldoc=in%20fdco%2020100617c47.xml&docbase=cslwar3-2007-curr

Now, this might be extreme, but it serves. I have a personal stake in seeing this guy succeed. I love the fact that he took on the whole IRS, regardless of the outcome. Hence, I'll go to him no matter what, and, because of this, he opened for me (and only me) last Christmas Eve for an emergency. He would not have done that for any old schmo.

This kind of affection can be built in ways that do not involve the IRS. If customers and retailers have similar charities, interests, causes, etc. Yet, of course, this can be tricky, since causes can attract as many as it repels. But this sort of this remains at the root of affective trust and cannot be ignored. This kind of commonality builds long lasting relationships that go beyond the spending of cash and the receipt of services. Another term for this is "customer commitment" as seen in the Sun piece. When this exists, customers will keep coming back, and spend more than they normally would, since utilitarian calculations are not the only motivation. So we might say that this kind of commitment is one that goes beyond mere goods and services, and is based on something deeper.

When Chick-fil-a irritated the homosexual lobby last year, I was incapable of getting to one of their stores when the protests were going on. The store near me was so packed with supporters (or at least customers) that I just gave up. They outnumbered the protesters by at least 30:1, and continued to pack the place thereafter. The firm gambled and won. They built relationships based on more than chicken (Sun, 2010).

The protests were meant to hurt the firm, but apparently, they did quite the opposite. As it turns out, even those who did not oppose the gay rights movement backed the Chick, largely because they loved the idea of a company doing something that had nothing to do with profits. The mere act ...

Solution Summary

The solution discusses e-business environment and the marketing system.

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