EXECUTIVE SUMMARY
With the advancement in technology, many companies have changed from just mere conventional businesses to online selling. This is because many people can now access internet both in their homes and offices. The company is just required to develop its own website where customers can open and access company’s products and make an order. With this kind of selling as addressed by this paper, the company is not be required to employ customer attendants thus reducing its operational costs. Furthermore, its customer base becomes large due to worldwide customers access. The company is also able to remain competitive in the market due to equal footing with others.
Online selling may experience some problems, which range from difficulties in delivering goods to the customers, low internet connectivity, to wide separation between the seller and the customers due to absence of contact. However, these are not enough reasons of not becoming an online seller because benefits far outdo the disadvantages. Furthermore, the risks posed such as losing customers can be mitigated by constantly contacting them on new products and developments through e-mails and phone contacts. The following strategies are extremely crucial for company competitive: keeping the customers informed, product tracking, competition checking, lowering the prices, provision of feedback channel and website maintenance. This report advocates for online selling as a mean to global competition which significantly raise the company’s profit margin.
Introduction
New technology has enabled companies to sell their products over the internet. Online sales involve promotion and sales of products and services in the worldwide web (Grewal, Chakravarty, & Saini, 2010). Product marketing is also done through wireless media and emails to potential customers who are distributed in all parts of the world. In online sales customer data and relationship management is crucial in order to promote sales of the company. Many businesses have adopted online sales and marketing as a strategy to expand their sales. Sales and marketing departments are looking for potential customers over the internet. This study will present a report of a company that intends to expand its services over the internet. The company has been selling its products in its retail stores which are distributed in different regions in the United States but wishes to increase its sales by expanding its services through online sales and marketing. The paper looks at the opportunities that are there for the company to carry out retail sales over the internet. The study will also analyze the merits and demerits of online services to the company, and more importantly the effects of these services to the overall sales and profitability of the company. A recommendation would also be made as to how to make the service even more better before concluding the paper.
Online sale opportunities
Advanced technology continues to offer more opportunities where the company can reach more potential customers with their products over the internet (Lindsay, Byrd, & Pan, 2008). Online sales include the whole process of designing, marketing, selling, paying and servicing of the products and different services. Many people all over the world can now access the internet as a result of improved technology thus enabling the company record increased income. Initially the company has been selling its products through its retail stores which are distributed in different regions of the United States. This sale strategy was not exhaustive since it could only reach only limited regions and it could not reach potential customers in other parts of the world. Adopting online sales will enable the company also to expand its market share in the retail business (Manjunatha, 2011).
Online retail or e-tail will enable the company to reach its retail customers more conveniently with their products or services which will automatically raise the level of sales of the company. Customers will be able to place their orders over the internet which will then be processed and sent to the customers physically or over the internet depending with the nature of the products or services. Through online services, the company will be in a position to place its products and services over the internet where they can be accessed by the potential customers. Customers can go to the internet and purchase what they want even without being attended by the staffs of the company.
Online marketing Strategies
Adoption of online sales will take the marketing of the company into another level where products and services of the company will be marketed through the company website. ICT has continued to create expansion opportunities in all the industries thus promoting the sales of the company (Te Fu, 2009). The company needs just to come up with a good plan for web promotion to present all the goods and services that are offered. Online marketing company will help the company to reach millions of potential customers over the world who can access the website of the company. In the product promotion page, the company may present all their products, services, prices of each product, information about each and every product, discount rates offered and any other information that the potential customers may require to know before purchasing the products or services (Falk, 2009). The company may also place convincing information of why potential customers need to buy their products and not from other companies. This information will not only persuade online customers, but also convince them to buy the products and services of the company.
Adoption of online services will also enable the customer care department of the company to communicate with their customers over the internet (Ščeulovs, & Gaile-Sarkane, 2010). Customer’s assistance and feedback will be provided over the internet to serve the customers better. Sales department will also be sending emails to all the potential customers to inform them about the products of the company or any promotional discount that is being offered by the company at any given time. All these sales strategies will help to increase the sales of the company and hence its profitability.
Advantages of online sales
The first advantage is that, the company will be able to reduce the operational costs because it will not need to rent business premises on the streets. Also the company will not be required to employ shop assistants thus no costs on their salaries. In line with operations, it is also true that the company will be saved from answering so many pre-sales questions by the customers therefore not required to employ people to answer them .This will in turn enable the company to reduce operating expenses .Secondly, online sales will enable the company to reduce orders related costs since order processing is simple attributed to the fact that customers orders will come directly into the company’s database once posted on the website. The company will also enjoy the benefits of globalization enabling it to reach the global audience which significantly would increase the company’s sales since it will access all the potential customers in the world (Dazhong, Ray, & Whinston, 2008).
Anyone can buy the company’s products as long as one has a computer connected to the internet. The company competitiveness would also be enhanced because it will be in a position to operate 24 hours in a day for seven days .Chances of being wiped out of the market are therefore minimized since it will be able to operate like any other big company. The company will also be able to eliminate chances of having bad debts and outstanding receivables because payments in online sales are immediate and no credit transactions. The company can therefore not collapse as a result of unpaid debts. The company will also be able to attract customers who would not have investigated the company’s street outlet out of the company’s online advertisements which any internet user will access unconsciously. The company will also be able to improve its product base by tracking the purchases made by customers. It is able to know what selling first and what is not selling quickly and therefore initiate appropriate measures. Lastly, the company will be in a position to use its online shop to act as pricelist as well as a catalogue. This will save the company from additional task of preparing these documents as is the case for conventional businesses.
Disadvantages of online selling
The first disadvantage is the illegal business transactions where it is difficult to ascertain their legitimacy (Batagan, Maraşescu & Pocovnicu, 2010). This is occasioned by internet credit frauds which include using of some stolen credit cards. With this in mind, the company may be compelled to initiate some security measures which would definitely add to its costs. Another disadvantage is the isolation that exists between the customers and the sellers prior and after the closure of the sales (Ansari, Mela, & Neslin, 2008). This can diminish the possibility of another sale thus compelling the company to start some marketing strategies to lure the buyer back to its website. Low internet speed can affect the online sales because it also make the website slow thus discouraging buyers (Bauer, Němcová, & Dvořák ,2010).This means that in times of prolonged internet delays the company’s sales may be significantly affected. Another disadvantage of on line selling is the difficulty in delivery of goods because customers come from all over the world within and across the continents. This can make the process of goods delivery cumbersome and time consuming and at times customers do not get their goods in time thus inconveniencing them especially when goods are required urgently.
The other disadvantage is that the company existence may not be known thus both online and offline marketing is highly required which may involve costly site promotion and posting advertisements in newspapers and in the international press. It would also prove hard for the company to convince some customers since they may be afraid to buy online as they are afraid of disclosing their credit cards details. The company may thus be forced to adopt some other modes of payments to the convenience of such customers. Lastly, putting into consideration that there could be so many companies dealing with the similar products, the company may be required to do a lot of research for it to remain ahead. This may constitutes additional costs for comprehensive market research and product promotion.
Impacts of online sales to the company
The first impact is the increased sales of the company products. This may be attributed to the fact that the company would have many customers all over the world and therefore not restricted in a single geographical location. The company’s profit margin would also significantly increase because of the fact that employment of customers attendants would not be there since the products are well displayed in the company’s website thus minimizing the operational costs. The company would therefore be in a position to pay higher dividends to the shareholders. Due to website maintenance, the company would also be compelled to hire computer engineers and website developers for technical support. This is so because the already existing company staff may not be adequately knowledgeable on computer and website operations. For distribution purposes, the company would be compelled to hire international distributors and destinations where they can collect their products for instance it can use international shipping companies, international airlines or even appoint distributors in various regions of the world. Lastly, the company would be forced to carry out massive advertisements so as to make its existence known internationally. It would use both local and international advertising agents so as to reach the potential customers.
Requirement for a successful marketing campaign
A) Keeping the customers informed-the company should ensure that it has the contacts of the customers so as to always get in touch with them. E-mail addresses and phone contacts can be used to inform the customers on new services and also encouraging them to use the company’s products.
B) Researching competitors- the company may visit the competitors’ websites so as to know how well it can improve its own website such that it may be more appealing to the customers.
C) Following the legal aspects- the company is supposed to put into consideration the rules and regulations governing the type of the business and therefore conform to the terms set for online selling.
D) Website maintenance- this should be done regularly by updating the range of the products, the prices and even the company contents.
E) Product tracking- the website should be set in such a way that it can show the summary of all the goods requested and bought so as to have the information on the actual sales .This can enable the company to know what is highly selling and therefore management of production is possible.
F) Provision of feedback channels- the company is supposed to provide avenues where the customers may give their views thus knowing areas not satisfying the customers for improvement purposes. The company should ensure that it does the analysis of the customer feedbacks and acts on them accordingly.
G) Making the site simple- the company’s site should be such that it is easily accessible by any person with computer basics. It should not be so sophisticated and products should be well displayed.
H) Non exaggerated prices- by the fact that, there are many companies selling similar product online, one should ensure that the prices of his products is considerably low compared to others as to attract more customers.
Recommendations
Once the website has been set up and operations ready for online selling, there are various recommendations that would enhance the operations of the company. They are as follows:
- Installation of up to date antivirus software and fire walls to prevent fraud and theft.
- Making sure that interstate and international legal requirements are fulfilled for E-commerce
- Partnering with certain websites so that sales can be increased and improve the global presence of the company.
- Investing in latest technology so that transactions could be faster and safer.
- Provision of online guides and demo videos that would provide customers with an opportunity to learn more about a product.
Conclusion
With advancement in technology and widespread use of internet at homes and offices carrying out of business transactions has also been revolutionalized where buying and selling is taking place via the internet. This phenomenon has made it possible for people to buy and sell anything in any part of the world without having to travel. Though with some disadvantages, it has proved an advisable undertaking because it greatly minimizes the problems associated with conventional businesses. Furthermore, the risks associated with online selling can easily be mitigated by adoption of appropriate measures. With the level of globalization, experiencing an upward trend, businesses have no option rather than to embrace technology so that they compete on an equal footing. Companies with such intentions should therefore go on since the advantages far outweigh the disadvantages. Therefore, the company is just required to develop its own website where they can login with this kind of selling as addressed by this paper.
References
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