Impact of E-Commerce has been seen in every of the 4Ps in Marketing Mix: Product, Price, Place and Promotion. Traditionally, the Marketing Mix is a combination of 4P’s and is more business oriented rather than focused on the customer.
Recap of 4Cs of Marketing Mix
However, another version of this Marketing Mix exists and is known as the 4C’s model of Marketing Mix. This model is more consumer-oriented rather than product-oriented.
This alternate Marketing Mix is made up of four key variables:
1. Customer
2. Cost
3. Communication
4. Convenience
This strong consumer-focus has led to a primary use in Niche Marketing where the business has only few clients. But, this of course does not exclude it for use in products serving customers in a mass market.
How does E-Commerce impact 4Cs of Marketing Mix?
Marketing products over the Internet can involve several different marketing functions which impact on the 4Cs of Marketing Mix. Let’s see now how E-Commerce impacts not only products, but also customers.
1. Impact of E-Commerce on Customer
Thanks to the widespread use of the Internet, customers are able to read the company website about the goods and services available for purchase. They can also access reviews from consumers who have already bought products from businesses.
Availability of E-Commerce also allows customers to shop from the comfort of their home or office. Online transactions are fast and products can be delivered within a few days or even hours. Thanks to that. E-commerce can therefore help a firm to increase its customer base selling to customers who were not business’s target market before.
Additionally, businesses collect market research information by encouraging customers to answer questions on the websites or in phone apps. This can provide the business with important consumer data. When companies have better information about customers, this can help them to develop new products and offer better customer solutions.
2. Impact of E-Commerce on Cost
Selling products on the Internet can help the business to reduce costs comparing with running traditional retail stores. Additionally, companies, even relatively small businesses, can reach a global audience for a small proportion of their traditional promotion budgets.
VARIABLE COSTS: Firstly, E-Commerce can help to reduce several Variable Costs (VC) including the cost of packaging, transportation, transactions, production workers, etc.
Example 1: Many newspapers such as Wall Street Journal and New York Times offer online subscriptions to their newspapers for a tiny fraction of the costs of their paper-based publications. Additionally, customers can purchase single articles as well as packages of archived articles.
FIXED COSTS: Secondly, E-Commerce can help to reduce Fixed Costs (FC) including the cost of premises, administration staff, other operating costs, etc.
Example 2: These days, banks and utility companies use bank statements and online bills to save costs of printing out hard copies of documents.
All these cost reductions make selling products online relatively inexpensive when considering the total size of the potential market – the number of potential consumers reached). This can help firms to offer much lower prices than those charged by traditional retailers.
3. Impact of E-Commerce on Communication
With developments in information technologies, there are huge opportunities for businesses to interact with clients on both a local, national and international levels.
Communication between a business and a customer can take place from anywhere in the world via company websites, telephones, social networking, video-conferencing, etc.
Thanks to E-Commerce, businesses can use their websites to provide potential consumers with all the information they need about the goods and services available.
Online advertising uses the company’s own website to place ad banners or social media to write promotional posts. Adverts can be targeted at all potential consumers. Accurate records can be kept on the number of visitors, clicks and the success rate of different web promotions. All these customer activities are recorded. In addition, many companies have set up Frequently Asked Questions section on their website to communicate important information to clients.
After consumers interact with the websites and make purchases, then the business can collect and analyze important data about the customers. Big data allows companies to gain more insight on consumer habits in making purchases and customer behaviors during the purchasing process.
Additionally, when visitors leave their contact details, sales people can establish sales contacts when then the company emails them or calls on them to attempt to make a sale.
4. Impact of E-Commerce on Convenience
E-Commerce has made buying products extremely convenient and accessible for consumers to use. Customers can order their products from the comfort of their own homes at any time of day, only if they have access to a computer, smartphone or tablet.
This convenience applies both to good and services. Search functions on company websites also make it faster and easier to find products. While online payments allow to paying for the placed orders with relative ease.
GOODS: When it comes to goods, E-Commerce offer customers wider choice. They are now able to buy goods which were not accessible to, if they were only able to use their local shops. Selling of goods directly to consumers and other businesses is easier than ever as orders are placed online through the company website or through an online retailer such as Amazon.com. Digital products such as E-Books or songs can arrive instantaneously after downloading. E-Commerce also creates opportunities for re-selling used products on web portals offering second-hand items such as eBay.
Example 3: Amazon.com revolutionized the way how books are sold.
SERVICES: When it comes to services, E-Commerce offers customers better accessibility. Customers can book tickets for the cinema, theater, concert or amusement park at any time of the day from the comfort of their home or office. Booking flight tickets, buying health insurance or life insurance and purchasing overseas holiday is also fairly convenient as customers can compare hundreds or holiday resorts basically scrolling down the single web page.
Thanks to trading using electronic means, customers have more choice and better accessibility as E-Commerce reduces many barriers to entry allowing even small unknown firms to compete with established businesses.
4Ps of Marketing Mix show the approach to marketing from the business’s perspective – the seller’s perspective. While 4Cs of Marketing Mix show a different approach from the customer’s perspective – the buyer’s perspective.
These two different approaches show different mindsets which both marketers and business executives need to be aware of to view their entire marketing process and value chain from both the firm’s point of view as well as from the customer’s point of view.
