Marketing Essay: E-commerce & M-commerce; Mobile.com Case Study

E-commerce & M-commerce; Mobile.com Case Study

“As the Internet usage explodes, we are witnessing the biggest land grab since the settling of the Wild West. This time the settlers are the marketers and the real estate is the mind of the consumers” (Mittal & Sawhney 1998 ).

There is no question about e-business has had a major part to play in much of the Western economies in the past 10 years.

This can be reflected in the report by the US Commerce Department, according to the FT, the report found that US business-to-business e-commerce dominated online transaction in 2002 with 12 per cent of all manufacturing transaction taking place using the Internet. The report revealed that $485.28 bn originated in e-commerce.

Mobile.com is a business selling books on line and moving into the m-commerce. The company wanted to build on the success of the on-line business which and targeting younger mobile phone users. Having worked for on e-commerce projects as well as having untaken courses in the field of e-commerce, the Arthur of this paper has developed the mobile.com models based on this knowledge and experience.

Successful companies in e-commerce such as Amazon has been successful because they ask; are the right goods and services being offered, and are they being delivered in an efficient manner?

Is the organisation’s personal sufficiently sensitive to the consumer needs? Does the organisation have a marketing strategy, and is it appropriate to the changing market and competitive activities.

Therefore this paper seeks to ask these questions. The researcher has chosen to use a modified model of Lovelock and Weinberg (1994 ) marketing model to be outlined in the next section.

MOBILE.COM MODEL

Lovelock and Weinberg (1994) define the marketing audit as

“A systematic, critical, impartial review and appraisal of an organisation’s total marketing operation”

The modal goal of the mobile.com is not only to review and evaluate the current performance of the market of the service provider, but also to identify and suggest the future opportunities and threat in the mobile book market. That structure of the model is a four-step model as shown in the figure below.

EXTERNAL ENVIRONMENT

“External environment are those factors which not only are outside the system’s control, but which determine, in part how the system perform”. Because of ‘Uncertainty’ in the business environment, environment scanning is vital. This is key in allowing that mobile.com to adapt to the changing environment. As shown the figure 1, the following factors, which will determine the success of Mobile.com, need will be examined:

Microenvironment
Competitors
Technology

Microenvironment

At pointed out in the introduction, recently the e-commerce microenvironment has seen dynamic changes as well as raising concern. Dot.com failure such as Walt Disney’s Toysmart.con, Levis-Strauss’s online store, Citibank’s online banking service and Boo.com poses questions about the future of the industry.

However despite this, there is been an increase in the mobile market over the past 5 years within the UK market. This will play an important role is the success of the any mobile.com. However, benefits of this increase in mobile phone usage will depend on what service mobile.com provide. For a company using m-commerce and education services which as books for children is lively to be successful as parents are likely give money to the children to buy book.

The Internet through m-commerce might have levelled the business playing field for big and small like Mobile.com, however one could question this fact. It is likely that well know companies with well-known brand have a big advantage over smaller unknown companies such as Mobile.com.

Environmental scanning might also prove hard and costly to keep up with the changing dynamic m-commerce (Richard Lynch 1998) . The fact that m-commerce is ever changing, for a Mobile.com to keep up with the consumer needs could prove hard. Moreover, environmental scanning will prove hard and expensive for smaller companies.

Competitors

According to Brian Toyne & Peter Walter (1993), the more competitive the market is, the more rivalry will be within that industry. Therefore Mobile.com must be aware of this threat. Apart from dealing with the major competitors within the industry, the company also have to be aware if the threat of the possible entrant into the m-commerce industry. However one could argue that new entry into the market might involve major investment in technology and distribution channels. The ability to raise such finance could deter some companies. Branding customers’ knowledge, special level of service and many other aspect many create barriers by forcing new entrants to spend extra funds or take longer to become established in the market which is not easy in the Mobile industry.

Technology

“The technology is no longer an afterthought in forming business strategy but rather the cause and the driver” (King D, Chung H.M & Turban E. 2000) . There is no question that IT is one key factor that is the core of driving m-commerce. Furthermore technological development posses a significant challenge to the development of m-commerce. Technology will be vital in the developing of the strategy, target market, service provided and billing models and so on.

The Market

The target market is the 10-20 years old market segment who students mobile phone user. Mobile.com will target this market because is the student markets. Mobile.com will expand it service of selling books from the e-commerce to m-commerce. Due to the fact that most students will wish to purchase books and use mobile phone a great deal, this market is likely to be appeal to the young market. The increase in mobile phone usage coupled with the good consumer knowledge of the products usage makes this market more appealing for the mobile phone companies such as Mobile.com.

However, very few young market of under 18 are unlikely to have bank cards to be able to pay for the service offered by m-commerce companies. Therefore mobile.com should come up with a way to overcome this problem.

INTERNAL ENVIRONMENT

“Knowing your market is the second rule of marketing. Knowing your organisation is perhaps the most important of all” (P. Kolter, G. Armstrong, J.Saunders & V. Wang 1998). Successful marketing is based on the firm’s ability to meet the needs of the consumers. More so in m-commerce where the relationship marketing is vital. By analysing the internal organisation, the Mobile.com will be in a position to tell if the mission and objectives can me met with the amount of resources at hand.

Internal analysis as well as external analysis discussed in the external analysis will help a Mobile.com in “identify, anticipate, and satisfy consumer needs. Mission, objectives as well as resources are key to the strategy formulation as shown in the figure below and key to the success of the Mobile.com in m-commerce.

EXTERNAL ENVIRONMENT

Microenvironment
Competitors
Technology

Microenvironment

Competitors

According to Brian Toyne & Peter Walter (1993) , the more competitive the market is, the more rivalry will be within that industry. Therefore Mobile.com must be aware of this threat. Apart from dealing with the major competitors within the industry, the company also have to be aware if the threat of the possible entrant into the m-commerce industry. However one could argue that new entry into the market might involve major investment in technology and distribution channels. The ability to raise such finance could deter some companies. Branding customers’ knowledge, special level of service and many other aspect many create barriers by forcing new entrants to spend extra funds or take longer to become established in the market which is not easy in the Mobile industry.

Technology

The Market

INTERNAL ENVIRONMENT

“Knowing your market is the second rule of marketing. Knowing your organisation is perhaps the most important of all” (P. Kolter, G. Armstrong, J.Saunders & V. Wang 1998) . Successful marketing is based on the firm’s ability to meet the needs of the consumers. More so in m-commerce where the relationship marketing is vital. By analysing the internal organisation, the Mobile.com will be in a position to tell if the mission and objectives can me met with the amount of resources at hand.

The mission or purpose of Mobile.com is of central importance to the management of an organisation. Indeed an organisation can be defined as “Human collectivist that is structured to perform the mission through the use of largely rational means”. (Richard Lynch 1998).

According to Lovelock and Weinberg (1994), it is one thing to have lofty goals, objectives, and having a mission, but it is another to achieve the, it is therefore vital to have the resources to execute the strategy in order to meet the mission.

STRATEGY

Strategy is the way and the means by which mobile.com seek to reach and meet it’s objective. It is therefore important for Mobile.com to have written objectives and the employees within the organisation are aware of these objectives. In order to be successful and to compete within m-commerce, Mobile must incorporate the following elements of the marketing system.

A good promotional mix
Information planning & control systems
Better website design
Data management
Security systems

All the above factors are can be easily extended to reach consumer, which the company currently provide.

Promotional mix

“Promotional mix is the specific mean of advertising, personal selling sales promotional and public relation that a company use to pursue it’s advertising and marketing objectives. According to King D, Chung HM and Turdan E (2000), one of the major reasons why companies advertise on the Internet is that fact that television viewers are migrating to the Internet. Research conducted in 1999 found that three-quarters of PC users were willing to give up TV to spend times on their computers.

Furthermore the research found out that the migration of so many television seem impressive more due to the fact that the users are highly educated with high income. This is very important for Mobile.com if they can build on this increase in Internet usage as well as the increase in the number of people using mobiles.

Information planning & control systems

Information planning and control is vital element of Mobile.com as it is used to create relationship with consumers. According to Mittal V and Dawhney M (1998), “loyal customers are valuable asset to a company. Practically so in a competitive market such as m-commerce industry where the source of competitive advantage can be quickly eroded. Therefore it is not surprising that many companies are adopting consumer-responsive strategy, which sells information about consumers to build strong relationship. Companies in the m-commerce such as mobile.com have to shown the willingness to serve differently, with the best consumers getting good treatment”.

Mobile.com could add values to customer by creating some form of personalised interaction. This must be building on the recognition that every consumers is different, that it is based on two way communication and that it could continue to develop over time. Furthermore loyal buyers are likely to pass on favourable recommendation to other who also will tend to be better prospect. “ A happy consumers will tell 8 people about the product and an unhappy consumers will tell 22”.

Despite the intense competition of consumer attention, consumer is willing to invest time to learn about new offering. Most of the consumer will try to the new information products once but very few products they try will become part of their daily lives. Consumers can surf and bookmark hundreds of websites to which they will never return. Marketers of information products such as m-commerce and e commerce are finding it hard to attract consumer attention, which is hard enough. Moblie.com must be aware of this and must try to make the learning process easy.

When consumers are exposed to new information products such as m-commerce. They need to learn about how to use it as well as about the content of the offer. If the learning experience is not carefully designed. Consumer will tend to experience haphazardly and learn little about how the products work. Therefore it is vital for Mobile.com to make the consumer learning experience through better Mobile navigation, easier so as to improve consumers coming back to the site.

Better mobile navigation

“A badly designed website does more than just cost you money, it is a reflection on your company” M. Robinson (2000 ). In order to be competitive in m-commerce. It is vital to have a good Mobile navigation, which is user friendly. A good navigation, design must take into account the elements of “AIDA” in a form of catching the Attention, making buyer Interested, give the buyer the Desire to make the Action of Buying.

According to a recent research paper “39 percent of test shoppers failed in their buying attempts because sites wee too difficult to navigate. Imagine what would happen if your bricks and mortar business lost almost 40 pent of its potential customer because they walked in your store and could not find what they were looking for because your aisles were built in the shape of a maze? (Robinson M 2000).

From this example, it is clear that not only is it important to design a web site which will attract consumers by techniques such as signposts, banners, adverts, search engine as well as memorable unique, and hard to misspell domain name, but also to make the consumers find what they are looking for when the visited the site.

Security systems

Security is one of the most complex issue that will affect and that affect e-commerce and m-commerce. Security and confidentiality are essential before Mobile.com can conduct financial transaction on the mobile, as widespread security measures remain a concern. Credit card number, financial records and other information can be high profile problem dues to increase in the number of hanker.

STRATEIC ISSUE OF MODEL

For the company to be successful mobile.com need a powerful promotional tool, which will attract consumers to their respective web site, and some of the tool are:

Signposting
Banner adverts
Search engine positioning
Reciprocal links
Incentives

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Other than depending on loyal consumers, the mobile.com can implement some of these tools as to attract more consumers. One way in which mobile.com can promote its offering and products would be to advertise in the schools, colleges and university. They can do this my advertising on college websites, therefore increasing consumer’s awareness of the books on offer.

Information planning and control system

Getting feedback from consumers is very vital in any business, as this will allow the come to produce what the consumer want. Mobile tracking software could provide feedbacks from consumers. Furthermore, this will notify the mobile.com which feature people are not using the site, by whether or not the user is aware the feature. For example, a little used feature on the mobile raise awareness to the company. This allows the company to improve on the features. This information is very likely to be invaluable in the decision-making processes and more vital is that it is coming from consumers.

Prices and billing

Due to the fact that the mobile.com will be targeting student between the ages of 10-20 who known mobile phone to sale their books, the pricing strategy must take this into account. Students are low-income earner therefore the pricing for the books sold by mobile.com must be within the accepted price by students. Mobile.com could work with schools and college to make sure that they stock the books, which are recommended by the school. This will ensure that the students will buy the books.

In terms of billing, mobile.com can work with school, university and college so that they can be able to sell the top up cards within these organisations. This will be important as students without access to bankcards can buy top up cards and therefore buy books.

Distribution channels

Perhaps most important of all is to ensure that Mobile.com ensure that they have a very effective distribution channels to make sure that they consumers get the books they have buy as soon as possible. This is vital in m-commerce as consumers are more demanding.

Evolution of the Mobile.com Model

There is no question about the importance of e-commerce for a business. M-commerce is also the way forward in particular for mobile business. The business model of mobile.com is appealing to phone companies because they will be able to provide another service to their consumers. More important to those consumers who already exist. By using e-commerce methods mobile.com can move the he service from e-commerce to mobile phone.

The fact that the number of students who own mobile phone has increased will benefit m-commerce companies. Also the fact that education always there, students will need to buy books. By working with school, colleges and universities, mobile.com can benefit from this business strategy. However, it is vitally important that other forms of billing and payment forms such as top-up cards are introduced as well as having an effective distribution channel and goof security systems in place.

Good navigation system, promotion tools, information management are all vital for the model to work effectively. At the heart of the organisation it is also important for the employees within the company to understand what the objectives of the company are and what the mission of the whole organisation is. Moreover the competition and the threat from competitive are also vital.

From the consumer point of view, the product offering would be appealing depending on he pricing. In terms of using m-commerce as a customer relationship tool from a philosophical point of view, it means sense to be a consumer place the consumer at the core of the company’s marketing strategy.

Therefore, it is true that m-commerce can be used as a strategic or tactical tool, but the scope of it can also be limited. Some of this limitation is, clearly seen. Examples of the people who lost large sums of money for using their card to buy products from the e-commerce could put off people using mobile.com.

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