BUSINESS MODELS - Free Essay Example

INTRODUCTION Every organization wants to make their organization in more refine form and more updated technology. One of these companies has planned to upgrade and implement technology. For that purpose we need to analyze the market of what market is focusing on the newest technology. Horizon Solution is also looking ahead to make all the systems by adopting Ecommerce so that they can generate their business as per target per year. It is an organisation that deals with whole selling mobile phones, calling cards and Computer accessories. The company deals with B2B along with B2C. Firstly, all parts of the work were done on the basis of document or paper work. There was no proof of work that was use to be done electronically. Now E-marketing solution is going to convert its business into E-business. They are offering innovative online feature at present that is Selling Calling cards. Selling and purchasing mobile phones. Selling SIM Cards, Selling Headsets, Headphones, Earphones and accessories, Providing internet services, Dealing with computer installation and hardware maintenance. CURRENT BUSINESS MODELS Recently Horizon is making a profit from B2C for more than  £5 million pounds per annum and making a less profit margin from B2B business that is about  £1 million pounds per annum. Now they are targeting towards more sales in B2C and B2B as they are concentrating with B2B especially because of less revenue in B2B. With this suggestion of adopting E-Commerce they are planning to advertise their products through internet and the advertising is given as below for this purpose. Before going on making the suggestion more to the company we should also analyze the marketing of what marketing strategy is used to adopt using E-Business. TRANSACTIONS IN THE COMPANY IN YEAR 2008 CURRENT MARKET PRACTICE OF HORIZON Currently you can analyze the market by using through internet as various search tools are available for this purpose. For Example you can use Google, yahoo, AltaVista, Lycos, hotbot etc. The strategy and actions takes to establish a trust relation with a consumer and encourage purchase of its products or services. Marketing analysis can also take care by going place to place publically and taking some public opinions and also taking public through internet. We can also use the analysis by making through flow chart of what procedures is to adopt during analysis. In Horizon they doing two types of marketing Direct Marketing and indirect Marketing. Direct Marketing: In direct marketing Horizon contact directly to the costumer through Telephone, email, Fax and meet to client by self. Indirect Marketing: In indirect marketing Horizon contact computer through brochure, pamphlet, and visiting cards. Elements that company considers included price, place, promotion and product Price – Horizon fixes their prices just appropriately to the customers, prices vary with the items and the difficulty involved in getting them. Items normally are obtained from fixed suppliers one of them is UNIK source which offers high quality products at a fixed price Product – A wide range of products are sold by the company. The company sells Calling Cards, computer accessories, phone accessories, international calling setup etc. Place – The Company has shops at three locations, all of them are located at busy places like Barking station parade, Water lane and Edge-ware road station. Thus most of the customers are passengers. Promotion – company provides discount on their service to students, they put ads on TV, the company also believes in customer retention. New i tems are offered to the customers for free who give the suitable feedback. TRANSACTION THROUGH INTERNET E-MARKETING STRATEGY AND E-MARKETING PLAN FOR HORIZON UK LTD Our business model will be B2C which is business-to-consumer and B2B which is business-to-business. We will reach the customers and business though internet with our new marketing strategy. Since the company is small it responds well only to the needs of customers. Our target customers will be general public who provides the maximum share to the company. MARKET ENTRY STRATEGIES: GENERIC MARKET ENTRY STRATEGY NEW FIRM EXISTING FIRM â€Å"CLICKS† PURE PLAY â€Å"CLICKS AND BRICKS† MIXED PLAY Horizon have an issue how to enter the market, and stabling the objectives of their online presence. They are focused four basic market entry strategies. Which are mention in the Generic Market Entry Strategies Chart. First mover Amazon.com eBay.com Fast Follower Carphone warehouse.com Brand extender REI LL Bean WAL-Mart Alliances KBkids.com (Brainplay.com/kb Toys Ref: Laudon ,C Kenneth Cover image 2001 by eyewire Chapter 7 E-Commerce Marketing Concepts page No 378. ESTABLISHING THE CUSTOMER RELATIONSHIP: Once horizon chooses a market entry strategy, there next target to create trust relationship or establishing a relationship between Horizon and Customer. They start advertising through media (newspaper, direct mail, magazines, television, and even radio. Horizon need to follow three new techniques. Permission Marketing Affiliate Marketing Viral Marketing Permission Marketing: Horizon need permission marketing the strategy of obtaining permission from consumers before sending them information or promotional messages. Affiliate Marketing : Horizon focused on Affiliate marketing. Affiliate marketing is the online application of this marketing method where one Website agrees to pay another website a commission for new business e.g. Google ads. Viral Marketing : Horizon use Viral marketing because Viral marketing is same like affiliate marketing involves using a trusted website like google,yahoo, AltaVista .Viral marketing is the process of getting customers to pass company’s marketing message etc. friends, family, and colleagues. IMPLEMENTATION OF THE E-MARKETING STRATEGIC PLAN The implementation of the E-Marketing strategic plan will have 3 parts, E-Promotion, E-Pricing and E-Distribution E-coupon For years, many retailer and brand have made use of money-off or discount coupon to boost the purchase rates. Traditionally it can deliver though mail, or placed in the leaflet, newspaper, magazine or even the pack of the products. As the Internet shopping become popular, some entrepreneurs realized that this could be apply to the world of internet shopping as well, this is the beginning of the e-couponing. To distribute coupon though the Internet, we can setup a coupon code and send it together with our promotion letter (See appendix c for the sample). Alternatively, we can upload the coupon to our website and let the customer download and use it (See appendix a for the sample).Internet provides a larger platform for distribution coupon to consumer, when compare to the traditional distribution network included leaflet, newspaper, magazine, etc. However, online user may gain repeat discount by using the code more than once and introduction of technology to reduce e-coupon abuse is a must for many company which give e-coupon to customer like us as well. Banner advertisement – one of our objectives is to increase the awareness of our brand, one of the possible method is to place a banner ad in some well-know photography forum, search engine, etc. As more people start to look up information though Internet, putting ads on website will gain awareness to our customer (or potential customer). Another possible promotion method is setup a membership referral program, which let existing member to refer more members to gain more awareness and thus secure more potential customer. (See appendix b for the sample) e-pricing and e-distribution A policy of low price but acceptable value at highly competitive price to customers who are price sensitive is usually a reflection of limited financial means. It can be extremely successful marketing position, however, as the margin / unit is low; this means the supplier has to sustain a very high level of tra nsaction for enough profit. We will price our service slightly lower than the average market price to encourage our customer to try our service and we will set up more outlets in the new development area like Tin Shui Wai or Yuen Long. STRENGTH OF E-MARKETING The following strength of E-MARKETING is stated as below. 1- Global Acceptability and Sales Reach Businesses can expand their customer base, and even expand their product line. 2- Closer Relationship Business-to-Business (B2B) sellers can grow closer relationship 3- Free Samples The products can be shown as a sample through the Web fast which is not only easily but at least it is free of charge. 4- Reduced Costs We can boost the Businesses by reducing their cost production which we can dynamically adjust the prices. 5- Media Breaks Media breaks can perform an important role which is necessary to transport information. 6- Time to Market Shorter time to market and faster response time to changing market demands. 7- Customer Loyalty We can improve customer loyalty and service by using an easier access to latest information and a never closing site. AREAS FOR DEVELOPMENT According to the description of the company and their practice, following are the suggestions for the future improvement. Since all the transactions are being done on the internet owing to the ever-increasing usage, the increase in sale and the objective is retention of customers. To achieve this, a suitable pricing strategy should be formulated to increase market penetration. Promotion should able to expand the awareness about the products and stimulate repeat purchase. And Distribution strategy will enable entry of the products into new outlets for expansion of the market The Internet has become the fourth channel for trade. The Internet allows businesses to sell more and at a lower cost. Information can be exchanged on a worldwide basis without the need to respect time zones and holidays. Before launching the new channel it is important to find a way to resolve the channel conflict. If online sales reduce the sales volumes in the existing channels then it need to be determined which impact it will have and what can be done against it. One way would be to redefine the role of all channels by splitting up the market into four segments. New business should be distributed over the Internet. The Internet can support the ordering process between producers, distributors, resellers and end-customers and they become a value chain by working jointly for the business. The value chain is also used to give customers access to products regardless of the location of the manufacturer. Without the value chain, a car could only be bought directly at the factory, which would require everyone to go to a single location, which would be too much for the car manufacturer and too much for the customers. With the Internet, the things are changing rapidly. Customers are able to choose their preferred company; no matter how near or far it is located. The Internet allows a more direct communication all levels along the value-chain. The traditional value chain is linear. T he manufacturer build the products, distributors buy products from multiple manufacturers and bring them through several levels of distribution in small lots to resellers who deal directly with consumers. Some channel partners are not prepared for the Internet and can create channel conflicts. Channel conflicts, arise, for example, if manufacturer sell goods on their web sites, although they have a network of resellers in the value chain to contact the customers. With the Internet, every partner in the value chain is able to contact the end-customers. If channel conflicts are not resolved, partners in the value chain may decide to leave the chain. The most important thing is to contact all partners in the value chain and decide who sells what to whom. If everybody targets the end-customers, nobody can win because all partners try to have the lowest prices for one and the same product. By adopting of E-Commerce through internet we can purchase products and provide online services whether if the store is closed it will be delivered on the next working day. Due to avaiblilty of internet all over the world 24 hours a day. It is easy to use and also the transaction costs for the end user is cheaper and easier to excess along with securable. The costs are also cheap for the vendors on the Internet, in comparison to traditional distributions channels. The two- way communication on the internet allows for direct feedback of the customers and the open standards means which had the capability of changing between companies, services and websites. Along with that if there exist any new features and other promotions then we can advertise in internet. There is also another form of advertising internet business and the other way is marketing. RECOMMENDATIONS ONLINE TRACKING SYSTEMS With the help of E-Business we can also track the online order system. For Example, a customer has placed an order and the next working day is Monday and the customer has ordered on Saturday. Therefore if he can’t get the order on Monday he can track the order through Internet. Perhaps this is one of the good features of E-commerce by using E-Business in it. EXAMPLE OF ONLINE TRACKING(FedEx) 3022830 https://www.danzfamily.com/archives/2004/09/fedex_sucks DIRECT MARKETING TECHNIQUE USING E-COMMERCE Direct marketing on the Internet is very powerful, but one has to be very careful not to misuse the power, Sending out an email to millions of people has become very simple. If you send out 5 million e-mails, you may have 10,000 people who may be interested, which is more than you could reach with traditional methods, but you will have 4.99 million angry users. May be just 5% of the 4.99 million users start to complain back to your company that they did not want to receive information from you. we kept the following points in mind. Audience: On the Internet the audience targets you and not the other way around Clarification: Question and confirm any message that appears to contain a critical mistake in typing. Cross-Borders: The Internet is open to any culture and nation. Be sure not to offend your target audience. Customers: Use one-to-one marketing technologies to gain information on your customers. Lists: Don’t rent or sell customer lists without written perm issions. Log Files: Don’t rely on web server log files. Try to find more meaningful data. Privacy: Privacy is important. Treat any personal information as confidential. Spam: Never misuse email to spam; it provokes more anger than response. SECURITY ISSUES Security is very important by using E-Commerce. As there are many hackers that can hack up the accounts of the customer nowadays. In order to avoid that we must take some important steps towards security side. Even though many people are scared of security rupture by using internet technology. Through the process of internet, it can be made very secure transaction through data security, digital signatures and firewall software’s and secure methods. For example, Banks allow customers to look at their own personal account balance in real time environment without worrying that a hacker can break in to bank’s Computer system. Horizon is also planning to look into the security as they are also opening a secure and online transaction for the customers so that customer can have a safe and secure online transaction through internet website. Website is also used for the questionnaires of customers, one is able to cut the number of calls to your service number and one is able t o give 24 hours of assistance. Nowadays the communication and work is doing by focusing on media breaks which costs a lot of time. Online tracking has become quite successful and is becoming more popular in the society. CONCLUSION We have used E-Marketing to increase the turnover of Horizon uk ltd, the projected sales can be reached only by reaching to more customers. Internet is a very important and the best way now a days where almost everyone uses them. We have used E-Marketing here for both B2C and B2B. By putting some suggestions and solution to the company I hope by adopting the e commerce the company can achieve the sales target and whatever the problems company is facing during the transaction and managing business will handle in an easy way. 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