Introduction to the Concept of Board of Directors
Any public limited or private company needs to have a board of directors constituted for the purpose of oversight and accountability to the company. The concept of the board of directors is that it provides an umbrella for the company to operate in and ensures that the decisions and actions taken by its management are […]
Marketing Research: Step by Step Execution
The main purpose of marketing research is to lower the uncertainty and risk in marketing decision-making. To achieve this, several stages are followed which are depicted in the flow diagram below. Let us look at each stage meticulously. The research process begins with a brief from the client. Client may find a research partner if […]
In House learning and Development Unit
The learning and development centers in an organization are not a small part of the bigger HR department, handled by people with generic skills, anymore. They have expanded and become important departments in their own rights, adding tangible values to the growth of the organization. Companies have long realized the need to manage and build […]
Types of Captive Insurance Companies
In the previous article, we have studied about the concept of captive insurance companies. We have also enumerated the various advantages of using captive insurance companies over traditional insurance companies. However, there was an underlying assumption that all captive insurance companies are the same. That is not the case! There are various types of captive […]
Information System for Decision Support
Introduction In the current globalized business environment, decision making is becoming more and more difficult. Some of the problems faced by business are as follows: There is large volume of internal organizational data on hand thanks to the modern data-storage system. However, not all data available would be useful for decision. The flow of information […]
The environment under which organization functions determines how it will conduct its business. Organizations have to constantly monitor and appraise the external business environment. Organizations have to make changes in its operations in accordance to the environment as to be profitable and effective. Therefore, understanding the business environment is important before developing any marketing strategy.
Specific forces such as a market place, customers, organization, etc. which directly affects organization are referred to as micro-environment.
The internet has made a direct impact on the micro-environment of the organization.
The market place for an organization includes interaction between all the elements of the micro-environment. There are five forces which impact organization in the marketplace. The impact of internet on the five forces is as follows:
Bargaining Power of Customers: with the advent of the internet, customers have wider choices of products than before. The increase in competition has reduced the price level as customer demand more transparency in operations. Thus the bargaining power of customers has increased.
Bargaining Power of Suppliers: again with wider choice due to the internet. The bargaining power of the supplier has gone down
Threats of substitute: the internet has enabled quicker introduction of products and services. The organization must carefully observe the introduction of substitute in the market as to avoid losing market share.
Barriers to entry: the internet has substantially reduced establishment costs, especially in the services industry. Therefore, organization has to carefully observe the movement of the new entrants in the market.
Competition: the internet has started the trend of faster commoditization of products. Thus companies need to find new ways through which it can differentiate itself from competition.
An organization's success is dependent on strong customer base. Therefore, customer needs and requirements require a better understanding from the organization. A qualitative and quantitative analysis needs to be developed by the company to track consumer behavior and create more consumer insights. These consumer insights can be used by marketing groups to develop specific strategies.
Companies are using demand analysis to understand and determine the potential of the new business proposition among customers. Companies also deploy qualitative analysis to understand perception of a consumer towards new products and services.
After assessing demand and perception among consumer for the products and services, companies develop marketing communication to target specific potential customers and convert them to actual customers. This conversion marketing technique helps companies improve their customer base.
Online sites track the way consumer navigates to reach particular destination or buying decision. This helps companies to design better websites. The internet search engines are the first stop for many consumers to begin searching for a particular product or service. Hence it is important to understand the phrases or sentence consumers are using to reach a particular product or service.
Companies divide consumer into a particular group or segment based upon their demographics and psychographics.
It is very important for an organization to understand how the internet works in a multiple channel scenario. Thus, companies develop different models to understand online buying behavior.
Companies have started creating personas which summarize the customer needs, requirements and environment based on their internet usage. Based on this persona, companies develop a customer scenario. This customer scenario is series of task or path taken to come at a desired buying decision.
This customer scenario is part of the overall buying experience and it involves multiple channel partners. Therefore multi-channel strategies have to be built in assessing overall customer online buying behavior.
Online business is dynamic in nature. Therefore, it is important for organizations to monitor usage of the internet by the competition. The internet is the new medium through which companies undertake the task for customer retention and acquisition.
This dynamism has introduced new services and innovative marketing mix more frequently compared to traditional marketing techniques. Benchmarking also has become dynamic and cannot be considered one of, activity, but has to be continuous.
The strategies of traditional competitor are well known. However, with the internet and globalization, new entrants are always posing a constant competition to the organization.
Companies for benchmarking should analyze competitor’s web site, identify the current trends and keep an eye on future trends.
Total customer satisfaction is the key in developing long and fruitful relationship with consumers. Therefore, it becomes important for the organization to monitor supplier, as they do affect quality or experience for customers.
Marketing intermediaries are companies which help the organization sell, promote and distribute products and services in the market. For internet marketing, there are online intermediary websites. These intermediary websites work as a platform between consumers and business suppliers. The online social networks also act as an intermediary. They provide a platform which facilitates collaboration and exchange between various individuals.
The companies need to maintain constant watch on the internet environment. This will help organization respond to ever changing and evolving internet micro environment.
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