Internet and E-Technology and Its Case Study
- Length: 5 pages
- Sources: 4
- Subject: Business
- Type: Case Study
- Paper: #90460948
Excerpt from Case Study :
com. You are asked to briefly address each of the following issues. Be sure to substantiate your answers with reliable sources. See Module Six -- " Ethical Business Practices on the Web to assist in you with your answers.
a. Describe any customer concerns that may affect the use of a website to purchase customized cosmetics.
The greatest concern customers have is if they can trust the quality and validity of the personalized care products they buy online. Trust is the overriding and most critical issue there is when purchasing personal care product online (Lalisan, Rubio, et.al.). In conjunction with trust, many consumers want expert-level guidance when it comes to defining which ingredients to use on a cosmetic product (Groves, et.al.). A customized cosmetics website must also convince customers that the unique production processes used to produce their products is safe, secure and reliable. The aspect of product personalization and mass customization must center on transparency about product quality and openness about each step in the production for the product to be seen as authentic and worthy of trust (Pine, 2).
b. Reflect.com's target customers were people who were beauty involved, meaning they were willing to invest the extra time in designing their own beauty product solutions." Was this target consumer is realistic? Why or why not?
No, this is not a realistic customer because the prices P&G would have to charge to cover the unique production processes, supply chain and fulfillment strategies would force a high price point for these customized cosmetics (Pine, 23, 24). At the high price point needed to make a profit, P&G would have to focus on the more affluent segments of the market. The more affluence, the greater the time shortage, and as a result, it would be unusual to find someone with a high income who had so much leisure time to create their own beauty solution. Because of all these factors it would be unrealistic to assume that highly affluent women, the majority of which have executive level jobs, would have the time to design their own make-up online. These people have time shortages that are significant.
c. What are some of the key challenges of operating an online customized cosmetics business? Your answer must include comments on challenges arising from technology infrastructure, cost structure, and Internet issues, but you may address other issues.
There are a series of challenges from the technology infrastructure alone. The legacy it systems throughout P&G had been more designed for dual-tier or multi-tier distribution while the data integration and campaign optimization projects within the company took four years to complete after launch (Gaffney, 1). The data analysis and support functions were also incomplete from a store-reporting standpoint, which was completely different than the main lines of P&G's business, which had extensive in-store analysis capability. Finally there are the many issues with the value chain as mentioned before, specifically the lack of support for a supply chain capable of dealing with mass customization strategy smaller quantities and order fulfillment needs (Gaffney, 1). All of these factors contributed to reflect.com having a difficult time becoming and staying profitable.
d. What are the main lessons entrepreneurs can learn from the Reflect.com Internet venture?
First, it is critically important to design the entire value chain of a business to meet and exceed customer requirements (Porter, et.al.). Second, just concentrating on one aspect of the business that the consumers see, especially on a mass customization-based website, ignores the more important functional areas of managing one-off production and shipping in addition to customer data management (Gaffney, 1). Third, the demographics and psychographics of the customer base need to align with the purchasing process. In the case of Reflect.com, the ideal customer may be too busy with their job and life responsibilities to create designer make-up for himself or herself.
Question 3 in the summer of 2010 a company was formed to sell customized perfume online. The business targets primarily male gift givers and is designed to enable them to create a customized perfume based on the recipient's personality traits. They feel the business will be a huge success. The founder, Wendy Zhang has said, "This a one-of-a-kind gift. It will make the recipient feel special every time she puts it on. Because she will know that, it is perfectly formulated to accent her personality." In the…