Executive Summary
This paper explores and analyzes the case of Maritime Trading Company with its desire to utilize the Internet to generate more revenue for the company. The plan is to have a Web site that will be truly responsive to the customers through the fostering of closer buyer-seller relationships. In order to explore the existing business scenario, analysis will be conducted through: 1) a summary of the situation; 2) an examination of material exhibits; 3) strengths of the business situation, and; 4) weaknesses of the business situation. In this manner, alternative approaches can be identified and recommended courses of action can be provided. Finally, implications of the presented recommendations will be the concluding section of this paper.
Weaknesses of the Business Situation. 4
Alternative Available. 5
Recommended Courses of Action 5
Implications. 7
Work Cited 8
6/2/16
Problem Statement
The key problem of Kent Groves for his company, Maritime Trading Company [MTC], is how he could utilize the Internet to generate more revenue for his business. Although he has used the Internet since 1995 to complement his business operations, he wants to explore other possible avenues that would allow him to build and encourage closer relationships with his clients using Information Technology. In this manner, he hopes to boost his existing retail, wholesale, and mail-order operations across Canada and the United States and even further expand his business on a global scale. Major issues associated with this problem pertain to: 1) his distrust of search engines as a long-term revenue generator; 2) his aversion to incorporating too many links with other online sites, and; 3) how the new Web site of his company can be designed in such a way that it would attract more customers, retain them, and encourage repeat purchases.
Situation Analysis
Summary of the Situation
Kent Groves fears that without a sufficient or appropriate presence on the Web, customers of the company would be dissuaded from making a purchase. In regard to this, it should be noted that this is equally true of customers who would be discouraged from buying goods in online stores without a retail outlet, although Groves does not have a problem in this aspect because he has a successful retail store in contrast to his competitors. However, it appears to Kent that further success of his three-step marketing strategy of Acquisition, Retention, and Extension was dependent on how well he could build and maintain closer relationships with his customers. As such, he is thinking of better yet inexpensive ways to reach out to his clients.
Examination of Material in Exhibits
It can be observed from Exhibit 1 that at the start of operations for MTC in 1993, a catalogue was immediately published. By 1994 when MTC opened a retail store in Halifax, Kent continued to recognize the relevance of capturing the attention of the market by publishing a second catalogue. In order for the business to attract customers and prosper, the traditional “brick-and-mortar” retail outlet needed an effective marketing tool. For Kent, the attention of the market continuously became a priority in the succeeding years, leading to his eventual use of the Internet as a platform for customer support. True enough in 1995, it dawned on Groves that the catalogue alone was no longer a sufficient marketing tool for the modern market and so he started to explore the advantages of the Internet. In testing the waters, so to speak, the hiring of a co-op student in 1996 to design the company Web site was a practical business move for Groves because the younger generation understands the Web. Because of this, the younger generation has a substantial impact on online media trends, whether in ecommerce or otherwise. After only a year of using Internet marketing, it was already evident to Kent in 1997 that the approach was a new and effective platform for the modern business landscape, even capturing the broader playing field of wholesale marketing. This is the reason why, in 1998, he sought the services of a professional/reputable service provider that can provide a suitable tool for electronic commerce. With the provider’s knowledge in current trends and technologies, Kent was able to further enhance the business outcome for MTC.
The Web site of MTC continuously evolves, as evident in the screenshots in Exhibit 2 and Exhibit 3. It can be observed that in Exhibit 1, the image dominated and consumed a very large portion of the home page for the company Web site. Although it suggests a person-to-person relationship with customers, it is the offered products that should be the main focus because, after all, it is the main concern of the buyers. This was corrected in the company home page presented in Exhibit 3 where the image was discarded in exchange for links to information about products that were offered and other promotional materials.
When Kent was still unaware of the true power of electronic commerce and what the future held for the field of marketing, it was fortunate that in 1995, some of his friends suggested the use of the Internet in creating an on-line extension of his catalogue. Today, it is now evident that the Internet provides an excellent platform for creating and maintaining good relationships with existing customers and people who can become future customers as well.
It can further be observed that from 1993 until 1998, it was the goal of MTC to bring Atlantic Canada closer to its visitors by providing foods and consumables which were unique to Nova Scotia. By 1998, its new slogan, “Delivering Atlantic Canada to the Rest of the World”, represented the success that MTC had achieved in the local market, thus expanding to the broader global playing field. In this context, it should be recognized that today, none can surpass the capacity of social media to promote companies like MTC on a daily basis and to as many people in the world as possible, bringing the company with its new slogan closer to success.
Strengths of the Business Situation
There are several considerable strengths that the company enjoys. One is the fact that MTC dominates the business over other competitors despite their efforts to sell Atlantic Canadian products to the market. The weakness of the competitors in terms of capital is, in fact, an advantage [or strength] that MTC should exploit without delay while there are no serious competitors. As of the moment, Groves does not view other similar companies as threats to his business.
Another considerable strength of MTC is its location. It should be stated that it is of utmost importance to establish and build relationships with people, regardless of whether they are existing clients or not. Social media is the modern tool today, and the millions of Facebook users in US and Canada alone can sufficiently sustain the needs of the company. A third strength of the company is its effective utilization of its distribution channels, specifically its retail outlet, catalogue, and Web site. All of these channels complement each other on a retail and wholesale basis, giving strength to the company. Even from the early years of business operation, Groves effectively used the retail store to drive mail-order sales forward and vice-versa, as customers coming into the store were encouraged to register and receive a catalogue. It was mentioned that the peak season for sales was the tourist season from August to September, with seventy-five percent of the revenues generated from visitors to the area. This period is undoubtedly a strength that should always be capitalized upon; yet if the company is to grow, MTC should definitely identify ways to further increase sales during this lucrative season.
Weaknesses of the Business Situation
One major weakness of the Maritime Trading Company is that although it has had customers from all walks of life, it has never explored and delved into the potential of new markets. For the last two years, as much as eighty percent of its revenue came from repeat purchases, with rich women in their late 30s to 50s representing the largest portion of the market. It is therefore a niche market and, if optimum success in the global economy is to be achieved, this requires expansion to a broader customer base.
Although it is not yet in effect, the intention of Kent to promote the website entirely through the traditional means of attaching the URL of the new Web site to the products and in the catalogues can be considered a weakness for the company. This is because promotion of the company would be limited in scope, reaching fewer people in the process, as compared to utilizing the power of the Internet to help in promoting the company’s URL. In the same manner, contests are conducted to encourage regular purchases and attract more customers. However, it should be recognized that promotional contests cannot guarantee customer loyalty in the way that relationships can be built and strengthened through the Internet, an approach that is arguably the most practical and inexpensive way to retain customers effectively.
Alternative Available
Through social media and effective marketing, particularly through Facebook, the limited potential of the niche market [rich women in their late 30s to 50s] can be resolved because more sectors of society can be influenced to make purchases. Moreover, it was mentioned by Kent that he was constantly searching for viable goods to sell wholesale. A social media platform can be an indispensable tool for constant communication between company and clients and Kent can immediately get valuable input on what the market wants. The only downside in using social media to generate more business for the company is that it requires round-the-clock monitoring to be fully effective.
Recommended Courses of Action
The company must design and develop a social media platform, particularly on Facebook, with the purpose of: 1) maintaining good customer-seller relationships with existing clients; 2) establishing new relationships with people from different social sectors; 3) developing closer relationships with social media followers through the posting of informational and inspirational articles – as well as sales promotional materials from time to time – which should entertain, educate, and encourage a healthy exchange of ideas within the social media community, and; 4) directing the said community to the official MTC Web site.
The current dominance of MTC over its competitors in the market should also be used as a selling point in marketing the company to the consumers because common sense dictates that online buyers would be naturally inclined to make purchases from the most reputable yet reasonably-priced stores. In order to make the most out of the situation, MTC should foster close relationships and trust among clients in the same manner that Groves felt comfortable in doing business with Icom Alliance for the design of his Web site because he personally knew the managers.
It was stated that sales, especially for the peak season, is driven by the complementing effect of the distribution channels [retail outlet, catalogue, and company Web site]. The same is true for e-commerce complemented by the effective use of social media. Online buyers prefer to buy products from sellers with brick-and-mortar establishments (or retail outlets) because it gives a sense of greater confidence that the online seller can deliver. It should be recognized that better company presence on the Web should potentially boost sales even higher throughout the year and during the lucrative tourist season in Halifax, Canada. One can only imagine how many thousands of people Kent can reach every day by using Facebook to promote his URL. He feared that search engines may not last for long; in any case, even though registration with search engines was free, he did not want to see customers get lost in the sea of search engine results. Apparently, there is no basis for this fear because there are numerous ways to resolve this problem through Search Engine Optimization [SEO]. Nonetheless, creating a community of loyal customers in social media and linking it with the company Web site is undoubtedly the best way to make one’s presence felt in the Web while making good profit.
Implications
It takes considerably less capitalization for the maintenance of a social media site like Facebook. Instead, what it requires is constant posting of articles not necessarily related to sales but focuses more on the building of personal relationships. This means that posted articles should relate to the concerns and interests of the followers such as inspirational materials about work or family, for instance. Constant monitoring of both positive and negative feedback from followers is equally important in this regard. Negative feedback potentially reveals weaknesses in areas that must be improved while positive feedback shows if the company is on track, so to speak. All of this does not cost a lot of money, only a lot of time. For this purpose, the services of one or two good PR staff would be sufficient. Sales articles should not be disregarded, however, because social media is a perfect platform for sales promotion. Ideally, only one in every three to five posts may be allocated for sales articles although the frequency should really depend on the existing level of intimacy between the customers and the company. Thus, the lesser the intimacy, the lesser the number of sales articles because the company should first build upon the relationships. Kent realizes that he has to offer the customers something of value so that they may be encouraged to keep coming back. In this aspect, the “value” that Kent should be focusing on is the value of friendship with customers, including potential ones. Once this value is created and loyalty is earned, customers will keep coming back even with little effort on the part of the company.
