B2B and B2C E-Commerce
E-commerce is short for electronic commerce. It has become synonymous with buying and selling over the Internet. However, it is more than that. It covers all business transactions that use electronic communications and digital information processing technology (Magsaysay, p. 2) There are two types of e-commerce, the Business-to-Business (B2B) and the Business-to-Consumer (B2C) e-commerce (Toral, 2000, p. 7). B2B transactions involved companies buying from and selling to each other online.
From a simple purchasing act, it has evolved to encompass supply chain management since more companies outsource parts of their supply chain to their trading partners (http://www. cio. com. research/ec. edit/b2babc. html). The stark difference in the two types are the customers or clients, for B2B they are the companies and for the B2C, the individuals. Aside from this basic difference, there are two big distinctions as cited at <(http://www. cio. com. research/ec. edit/b2babc. html>. These differences are negotiation and integration. B2B transactions require negotiations over prices, delivery and product specifications.
They also need to integrate because their systems should be able to communicate with their customers without human intervention. B2C transactions do not require negotiations. The company posts catalog online, and the customer choose from the array of products. The company also does not integrate with the consumer customer’s systems. B2B e-commerce can save or make a company money by managing inventory more efficiently, adjusting more quickly to customer demand, getting products to market faster, cutting the costs of paperwork, reigning in rogue purchases and obtaining lower prices on some supplies (http://www.cio. com. research/ec. edit/b2babc. html).
To engage in B2B transactions, a B2B exchange should be established. A B2B exchange, also called marketplace or hub, is a Webster where companies can buy from and sell to each other using a common technology platform. It also offers additional services such as payment arrangements to complete the transaction, news. research updates, and other related information on the industry. Placing the MAX on the web, for B2B and B2C transactions, would mean 24-hour visibility to prospective client worldwide, easier access for placement of orders and reduced costs of doing business.
Magsaysay (p. 5) reported that IBM estimated that it will reduce costs of selling by $340 million if done over the web, and that was in 1999. The company figures that online transaction costs are 70-90% less than when human mediation is involved. It was also pointed out in the same primer that in the United States, it costs banks only 5 cents to process a Net-based transaction, compared to $1. 07 if the same is done in the branch, and 27 cents for an ATM transaction. There are more advantages than disadvantage in targeting B2B for UK Electronics.
The coverage is worldwide; thus the repositioning of MAX to the gray market would cover wider areas for sales. It would no longer be only the UK, but the whole world as its marketplace. With one web site, it can reach so many companies in a very short time. What is needed then, is to develop a user-friendly, informative and easy to navigate web site, that is, if UK Electronics does not have one. Everything in the site should be well thought of, and planned since this will be the window of the company to the world.
An expert web designer should be hired to make the web design in close consultation with the people in the field to be able to present a product in the Net as close to the physical product as possible. The characteristics of the gray or older population should be taken in consideration the design. The profile of this target group should be well studied, and their preferences incorporated in the content. Who would likely be the target companies for the B2B transactions? As many as there are organizations and places where older people are situated.
For example, the 40-60 year old age bracket is still working, thus can be found in companies, organizations, academic institutions and the like. Promotional materials such as flyers and short TV ads can be made initially to promote the product and the web site. The 60 year olds and above belong to the retirees, and they can be located in their respective homes, retirement homes, hospitals and the like. The availability of various forms of media in the market poses a problem as to what should be used in the promotion of the MAX to the intended clientele, that is, the gray population.
The company can choose from the array of available media for promotion such as print, TV, radio, audio-visual materials such as CDs and cassettes, and the most recent of them all is the web. The choice of the media would depend on how best it can motivate the older people to use MAX. The management can use a multi-media approach, that is, a combination of media to promote the product. It can also decide to venture into the web to market the product globally. Whichever way the management goes, the point that would be raised here is creating a brand, making MAX a household name among the older people and the elderly.
At the mention of MP3 player, MAX will be topmost in their minds. How do you create a winning brand? For this, I have opted to present here the six cardinal rules for building a winning brand on the Web by Scott Kirsner (1998). These are as follows: a. Leverage real-world brand equity. The web users want to do business with brands that they trust. The physical product should be what it is in the web. IF it stands for a reliable player with wide selection of music, it should also be portrayed in the web as such.
If the brand is hip, intended for the hip generation, the projection in the web should also be hip. But in this case, the population is the older people, it should be more refined, mature yet entertaining and can catch the attention of even the choosy individuals. b. Offer utility ber alles. Web brands are all about utility. Is the MAX useful? How useful it is to the older people? It can be argued here that aside from providing entertainment vis-a-vis music, it can also help in promoting sound sleep, relieve tensions and anxieties, and the like. (Massie, L 2005).
“Building a brand in this medium is all about substance”, says Jason Roberts, president and CEO of Sausalito, a California-based Panmedia Corp. “People want web sites to be useful. If you are fulfilling a real need, and you have an honest connection to the receivers or audience, then you are bound to do something good” (Kirsner, 1998). c. Harness digital word-of-mouth. Promote the brand by word-of-mouth, both online and offline. Invent strategies that will bring MAX to the person in the bus, school, nursing homes, golf clubs, entertainment venues and the like by word of mouth.
Partner relentlessly. Promote MAX in partnership with other companies. Choose companies that would also be in the gray markets. These could be sports and fitness companies that promote good health across the populace, fashion firms making MAX an accessory in their designs and the like, or among hotels for older people that are caught by the travel bug. MAX can be prominently displayed in their hotels. In short, never underestimate the impact of sharing content, swapping links, bartering for ad space, entering into co-marketing agreements or partnering in other creative ways (Kirsner, 1998).
Protect your brand. In the web, the brand MAX and domain name are inextricably linked. Register domains for every possible permutation of MAX, that would be buyers would not find another MAX in the web, hopefully, but only the MAX being promoted by the company. If someone else has grabbed a domain that you want, consider bartering for it, buying it, suing or waiting until the registration expires to grab it. f. Listen to the customer. A brand cannot maintain its usefulness if it is not constantly in its toes.
The company should regularly ask for feedback from its customer base. “At Borders.com, users of the ‘preview’ site that launched in May have been very vocal in telling Scott Wilder, Borders Online Inc. Director of Internet services, what they like and don’t like. ‘We’re very focused on how we can listen to their concerns and address them in features and functionality. ’ Wilder says. Panmedia’s Roberts estimates that users ‘suggest 90 percent of our tutorial topics nowadays. ’ And at UPS, Hayes regularly enlists a research firm to survey customers: How does his site stack up against competitors like FedEx? What do consumers think about its performance, visual appeal, ease-of-use? “ (Kirsner, 1998).