E-Business E-Marketing Models the Intent

E-Business

E-Marketing Models

The intent of this document is to illustrate two of the more prevalent e-Marketing Models, which are Merchant Model and the Manufacturer Model. In the Merchant model, a retailer of goods and/or services resells what has been created by manufactures, publishers or other product creators. In the Manufacturer Model a company sells goods and services it creates directly to the consumer. For both of these models the various e-marketing technologies needed for supporting the 4 Ps of marketing are analyzed and recommended which specific focus on the challenge of competing globally with each of these strategies.

Starting with the Merchant Model, the continual growth of Amazon.com as the world's leading online bookstore with continued growth in other products as well is the company used for purposes of showing how online initiatives can be used for managing the four primary components of marketing which include product, price, promotion, and place. For Amazon.com, their products are sourced from over 20,000 suppliers globally. What's critical for them from a marketing perspective is the managing of cross-sell and up-sell strategies handled online, one of the more effective strategies according to AMR Research (2003). The focus on bringing price and product together in the context of any given prospects' online shopping experience is critical for the success of any online merchant, according to Djevizova and Atanassova (2004). In terms of promotion for Amazon.com, the continual use of banner ads, Search Engine Optimization (SEO) strategies, and the combining of off-line advertising also shows great potential for the company. For all these strategies to be successful, Amazon.com needs to integrate all their promotional planning systems together for maximum ROI, Columbus (2002). From a pricing perspective, Amazon.com relies on a series of contracts with suppliers that give the online merchant control over the price charged. Amazon.com does however grant a series of special pricing requests, which are delivering higher levels of margin that was possible before. Columbus (2003) highlights the need for better control of special pricing requests to manage profits. For Amazon.com, the managing of products, promotion, and price from the standpoint of the merchant model is considered best-in-class. Their "place" variable in the equation is the web browser prospects arrive at, it is the user experience of visiting their site.

From the manufacturing model perspective, no company exemplifies best practices better than Dell Computer. In terms of their online strategies and their synchronization with major off-line efforts, Dell has been able to revolutionize the approach companies take to creating standardized and custom products. What is critical for Dell however is the ability to create product configuration systems that have tight integration to production planning, pricing, and manufacturing systems, according to AMR Research (2003). In a sense, Dell's manufacturing processes are their primary competitive advantage.

In terms of making promotional efforts a competitive advantage, Dell uses a series of banner ads, and promotes pricing discounts through automated Alerts sent online to the many prospects for its computers and systems. Dell uses a technique of promoting leads up to resellers who have a history of following up on them, using a lead escalation program defined by AMR Research in Making Leads Pay (2002).

Pricing is the largest competitive advantage Dell has, specifically their ability to quickly respond to changes in prices from their own suppliers. Dell's website is tailored to allow for rapid price changes, and together with the custom configuration capability, pricing is the reason why Dell excels against so many competitors.

Columbus (2003) discusses the role of special pricing requests being critical for the long-term profitability of companies that have high inventory turn items and rapid product lifecycles, as Dell does.