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Marketing Channel: The Internet provides an inmportant new channel to sell to consumers, AS a
Nw channel, the Internet has the following characteristics:
marketing.
inexpcnsively store vast amounts sofof iinformation at different virtual
The ability to of of locations.
availability
The information. powerful and inexpensive means searching, organizing and disseminating
such
Interactivity andthe ability to provide information on demand.
The ability to provide perceptual experi
ences that are far superior to a printed
catalogue, although not as rich as personal
inspection. Bird's-eye View
. The capability to serve as a transaction The main advantages of
medium. e-commerce include
the ability to conduct business
The ability to serve as a distribution medium 24X7 in a global
for certain goods (like software). market place speedily, with reduced costs in an
Relatively low entry andestablishment costs environment which is independent of operating
for sellers. systems and hardware.
Disadvantages of E-commerce
Some disadvantages and constraints of e-commerce include the following.
Time for Delivery of Physical Products: It is possible to visit a local music store and walk out with
acompact disc, or a bookstore and leave with a book. E-commerce is often used to buy goods that are
not available locally from businesses all over the world, meaning that physical goods need to be deliv
ered which takes time and costs money. In some cases there are ways around this, for example, with
electronic files of the music or books being accessed across the Internet, but then these are not physical
goods.
Physical Product, Supplier and Delivery Uncertainty: In some respects, e-commerce purchases are
made on trust. The reasons are:
Ihis is because not having had physical access to the product, a purchase is made on an expecta
tion of what that product is and its condition.
264 International Business
This is also because supplying businesses can be conducted acroOSs the world, it can be
whether or not they are legitimate businesses and are not just going to take your uncertain
pretty hard to knock on their door to complain or seeklegal recourse. money. It's
Lastly, even if the item is sent, it is easy to start wondering whether or not it will ever arrive.
Perishable Goods: Though specialized or refrigerated transport canSurvive
be usedtheg0ods bought andsla
trip from the su
via the Internet tend to be durable and non-perishable, they need t0
and/or non-durable goods hei
to the purchasing business or consumer. This results in perishable e-commerce-hasek
through traditional supply-chain arrangements, or through relatively more local almost anyone to ale
purchases, sales and distribution. In contrast, durable goods can be traded from
cases this leads to disintermediation i
anyone else, leading to competition for lower prices. In some and by other businesses that are
which intermediary people and businesses are bypassed by consumers
seeking to purchase more directly from manufacturers.
an effective channel for visual and audi.
Limited and Selected Sensory Information: The Internet is
tory information such as, seeing pictures, hearing sounds and reading text. However, it does not allow
but not smell their fragrance, we can see
full scope for our senses. We can see pictures of the flowers,
we pick up and inspect some
pictures of a hammer, but not feel its weight or balance. Further, when If we were
This is not the case on the Internet,
thing,we choose what we look at and how we look at it.
pictures the seller had chosen for us to see
looking at buying a car on the Internet, we would see the
person. And, taking into account our
but not the things we might look for if we were able to see it in
it changes gears or take in the smel
other senses, we can't test the car to hear the sound of the engine as
does not convey the richness
and feel of the leather seats. There are many ways in which the Internet
means that people are often much more
of experiences of the world. This lack of sensory information experienced betore
comfortable buying generic goods via the Internet-things that they have seen or
and about which there is little ambiguity, rather than unique or complex things.
the uncertainties
Returning Goods: Returning goods online can be an area of difficulty. This increases
wiu u
surrounding the initial payment and delivery of goods. The various questions that come up are,how
postage?, will the refund be paid?, On
goods get back to their source?, who pays for the return
will it take?, etc.
Privacy, Security, Payment, Identity, Contract: E-commerce transactions involve issues suca
privacy and security of information and payment details, and problems of identity theft.
Feasibility of Transactions: E-commerce is most often conducted using credit card facilities The
payments, and as a result very small and veryy large transactions tend not to be conducted online
size of transactions is also impacted by the eco
nomics of transporting physical goods. For exam Bird's-eye View
ple, any benefitsor conveniences of buying a box
of pens online from a US based business tend to be
ar
The nmain aiSadvantages of ecommerce
eclipsed by the cost of having to pay for them to be concernsabout o0ds,
Custonerdis
delivered to a customer in Australia. The delivery SatistactionaL unable to physicalyx
purchase andproblems
from
costs also mean that buying individual items Ine the produet before
is signifi
arange of different overseas businesses of satety and security n vitia transactIOn
cantly greater.