EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review 1
Effects of the Internet on
Consumers and Bu...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review2
Order Fulfillment:
 In the relationship bet...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review3
Response Time
 This refers to the amount of...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review4
Inventory Management
 Much of the determina...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review5
Stock-On-Hand
 Too small-
decreases respons...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review6
Just-in-Time Inventory
 Products
manufactur...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review7
Tracking Inventory
 Determines ability to
r...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review8
Inventory Controls
 The management of inven...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review9
Manual Inventory Controls
 Counting and col...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review10
Continuous Inventory Controls
 managed wit...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review11
Distribution Channels
 Distribution Channe...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review12
Indirect Distribution Channels
 Require an...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review13
Direct Distribution Channels
 Company prod...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review14
Intermediation
 An Intermediary is somewha...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review15
Disintermediation
 The process of losing d...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review16
Re-Intermediation
 the process of adding a...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review17
Disintermediation & Re-
Intermediation Exam...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review18
Profitability and Productivity
 What is th...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review19
Profitability & Productivity
 Profitabilit...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review20
Productivity
 Productivity--the amount of ...
EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review21
Resources
 Inventory Management
http://www...
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Effects of the_internet_on_consumers_and_businesses

  1. 1. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review 1 Effects of the Internet on Consumers and Businesses--A Marketing Review Before we can consider the present and future... We must first understand our past...
  2. 2. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review2 Order Fulfillment:  In the relationship between buyer and seller, there are many activities that transpire between the buyer's selection of the product and the shipment of the selected product to the buyer.  Selecting the merchandise  Responding to the order  Checking to make sure the order has been fulfilled  Packing  Shipping  Billing for the merchandise Note: the above steps do not necessarily follow in that order
  3. 3. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review3 Response Time  This refers to the amount of time it takes a seller to respond to a customer's inquiry for purchase or service. It also applies to any post-purchasing responses such as customer service.  The success of many businesses is determined by this factor. Customers do not like to wait nor do they want to be ignored!
  4. 4. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review4 Inventory Management  Much of the determination of a good response time relies on how well a seller manages the product inventory. It also has a major bearing on a business's profitability. Some of the factors to consider in inventory management are:  Cost of Storage  Stock on hand  Just in Time Inventory  Tracking Inventory
  5. 5. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review5 Stock-On-Hand  Too small- decreases response time  Too large-increases storage cost  Too large-increases cost of inventory
  6. 6. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review6 Just-in-Time Inventory  Products manufactured "as needed"  Reduces inventory costs  May reduce response time
  7. 7. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review7 Tracking Inventory  Determines ability to respond to customer inquiry  Determines ability to anticipate and respond to inventory needs/updates
  8. 8. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review8 Inventory Controls  The management of inventory requires that a business maintain up-to-date data on the product stock. In the case of manufacturing, this may mean keeping track of materials in addition to product.  This process is called "inventory control." The inventory controls used are determined by the type of inventory and the demand for that inventory. Two types of inventory control frequently used are: Manual and Continuous
  9. 9. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review9 Manual Inventory Controls  Counting and collecting information manually or by hand.  Is done periodically due to expense  Status of stock-on-hand may not be up-to- date.  NOT well-suited to online selling
  10. 10. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review10 Continuous Inventory Controls  managed with electronic database  is updated INSTANTANEOUSLY  status of stock-on-hand is current  is best choice for online selling! Many Retail Stores Use a Continuous System that is updated automatically at the checkout
  11. 11. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review11 Distribution Channels  Distribution Channels The product has been manufactured. What's next? How does it reach the consumer? This is where Product Distribution Channels are important. Product Distribution Channels refer to all of the steps in the movement of products or services to the consumer. Two primary methods of accomplishing this are:  Indirect Distributions Channels  Direct Distributions Channels
  12. 12. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review12 Indirect Distribution Channels  Require an intermediary such as a retail distributor to add value  Product cost is increased-"markup"  Travel Agents are just one type of Intermediary
  13. 13. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review13 Direct Distribution Channels  Company produces goods or services  Delivers directly to consumer  Does not use intermediary  No added cost--product better value
  14. 14. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review14 Intermediation  An Intermediary is somewhat like a "middleman" in the process of Product Distribution. An intermediary is a business person such as a broker, or sales representative, who negotiate transactions between the seller and the buyer. There are two events that can effect the distribution channels for a business:  Disintermediation  Re-Intermediation
  15. 15. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review15 Disintermediation  The process of losing distribution channels when they are no longer needed  Are a response to buying trends such as online shopping.  Can cause decrease in cost of product.
  16. 16. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review16 Re-Intermediation  the process of adding a level of the distribution system.  response to trends in consumption, technology, pop-culture, etc.  an entrepreneur's "dream"--many are exploiting new markets made possible by the Internet  E-Check is an example.
  17. 17. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review17 Disintermediation & Re- Intermediation Examples  Stock markets have experienced disintermediation by eliminating the need for the traditional brokerage.  Stock Markets have experienced re- intermediation with the advent of online trading.
  18. 18. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review18 Profitability and Productivity  What is the number one goal of any business?  Make money! In the world of marketing there is a direct relationship between productivity and earning profit. Economists say that we are more productive now than ever due to our advances in technology.
  19. 19. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review19 Profitability & Productivity  Profitability--the ability to make a profit after expenses are deducted from sales. Expense variables include  facilities & utilities  equipment  inventory  distribution  wages
  20. 20. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review20 Productivity  Productivity--the amount of output for each hour of work. Increased productivity:  Deters inflation of prices and wages  Is achieved through elimination of unnecessary steps in the supply chain  Is often attributed to increases in technology and the growth of the Internet.
  21. 21. EC02.01 Explain the Effects of the Internet on Businesses-A Marketing Review21 Resources  Inventory Management http://www.inventoryops.com/articles.htm  Inventory Controls http://www.small-business-stock- control.com/stocktheories.htm  An e-Commerce and Marketing Dictionary of Terms http://www.udel.edu/alex/dictionary.html  Facts for Consumers—Electronic Check Conversion http://www.ftc.gov/bcp/conline/pubs/credit/echeck.ht m

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