Benefits of e-commerce

Lower Cost

Doing e-business is cost effective; it reduces logistical problems and puts a small business on a par with giants such as Amazon.com or General Motors. In a commercial bank, for example. a basic over-the-counter transaction costs £0.50 to process; over the Internet, the same transaction costs about £0.01. Every financial transaction eventually turns into an electronic process. The sooner it makes the conversion, the more cost-effective the transaction becomes.

Economy

Unlike the brick–and–mortar environment, in e–commerce there is no physical store space, insurance, or infrastructure investment. All you need is an idea, a unique product, and a well–designed web storefront to reach your customers, plus a partner to do fulfillment. This makes e–commerce a lot more economical.

Higher Margins

E–commerce means higher margins. For example, the cost of processing an airline ticket is £5. According to one travel agency, processing the same ticket online costs £1. Along with higher margins, businesses can gain more control and flexibility and are able to save time when manual transactions are done electronically.

Better Customer Service

E–commerce means better and quicker customer service. Online customer service makes customers happier. Instead of calling your company on the phone, the web merchant gives customers direct to their personal account online. This saves time and money. For companies that do business with other companies, adding customer service online is a competitive advantage. The overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online, is one good example.

Quick Comparison Shopping

E–commerce helps consumers to comparison shop. Automated online shopping assistants called hopbots scour online stores and find deals on everything from apples ro printer ribbons.

Productivity Gains

Weaving the web throughout an organization means improved productivity. For example IBM incorporated the web into every corner of the firm – products, marketing, and practices. The company figured it would save $750 million by letting customers find answers to technical questions via its website. The total cost savings in 1999 alone was close to $1 billion.

Teamwork

E–mail is one example of how people collaborate to exchange information and work on solutions. It has transformed the way organizations interact with suppliers, vendors, business partners, and customers. More interactions means better results.

Knowledge Markets

E–commerce helps create knowledge markets. Small groups inside big firms can be funded with seed money to develop new ideas. For example, DaimlerChrysler has created small teams to look for new trends and products. A Silicon Valley team is doing consumer research on electric cars and advising car designers.

Information Sharing, Convenience, And Control

Electronic marketplaces improve information sharing between merchants and customers and promote quick, just–in–time deliveries. Convenience for the consumer is a major driver for changes in various industries. Customers and merchants save money; are online 24 hours a day, 7 days a week; experience no traffic jams, no crowds, and do not have to carry heavy shopping bags.

advantages of online shopping

Incredible convenience: In comparison to a brick and mortar store with fixed hours, online shoppers can choose any time of the day or night to get on the Web and shop. This is especially useful for moms with small children, people that are home-bound, or simply in times of inclement weather.

Price comparisons: When you visit a store, you most likely have to settle for whatever price the vendor has placed on a particular item. Not so with online shopping - you have the ability to compare prices from hundreds of different vendors.

Infinite choice: Shelf space in a brick and mortar store is limited, which means that your variety of goods is limited. Not so with an online store. Plus, if you don't see what you want in one store online, you can simply move on to the next one - you've got the power to do that.

Easy access to consumer reviews: It's easy to access consumer reviews for pretty much any product you can think of online, which makes for more informed purchases.

No pressure sales: We've all been awkwardly propositioned by eager salespeople. You don't have to put up with that online.

Promotional schemes for cosmetic products

Many studies have focused on the effects of promotion on brand switching, purchase quantity, and stockpiling and have documented that promotion makes consumers switch brands and purchase earlier or more. Promotional schemes can actually stimulate consumption in addition to causing brand switching and stockpiling. Thus, for product categories with a varying consumption rate, it is critical to recognize the responsiveness of consumption to promotion in order to measure the effectiveness of promotion on sales more precisely. Throughout the world, consumer sales promotions are an integral part of the marketing mix for many consumer products.

Marketing managers use price-oriented promotions through TV advertisements such as coupons, rebates, and price discounts to increase sales and market share, entice trial, and encourage brand switching. In addition, consumers like promotions. They provide utilitarian benefits such as monetary savings, added value, increased quality, and convenience, as well as hedonic benefits such as entertainment, exploration, and self expression (Chandon, Laurent, and Wansink, 1997).Various kinds of tools used by advertisers to attract the consumers toward their products through television advertisements are:

·         Discount or price off: In order to increase sale, many producers introduce price offer to customers. Under this, the product is offered at a price lower than the normal price. For e.g. dining off season (winter), ceiling Fans, Coolers and refrigerators may be offered at 20% or 30% off price.

·         Price Packs: Price packs (also called cents-off deals) are offers to consumers of savings off the regular price of a product, flagged on the label or package. They can take the form of a reduced- price pack, which is single packages sold at a reduced price (such as two for the price of one) or banded pack, which is two related products banded together (such as a toothbrush and toothpaste). Price packs are very effective in stimulating short-term sales, even more than coupons.

·         Premiums or Gift Offer: Premiums (or gifts) are merchandise offered at a relatively low cost or free as an incentive to purchase a particular product. For instance, a few of emami schemes included Emami pure skin cream free with Boroplus Advanced moisturizing lotion and ITC is offering Vivel di wills shampoo free with bathing soap.

·          Packaged Premium: In this type of sales promotion marketers pack some gifts inside the product package. The gifts create desire to buy the product. One such scheme is launched by Lux Beauty Soap in which the lucky consumers could get a gold pendant inside the soap.

·         Free in mail premium: In these types of sales promotion the customers do not get immediate benefit promotion the customers do not get immediate benefit at the time of making a purchase. Rather the customers are required to correspond with the marketer by sending, for e.g. a wrapper or some proof of purchase or multiple purchases to claim the benefit. For instance, a company making chocolate required the kids to send specially marked wrappers to claim gifts.

·         Prizes (Contests, Sweepstakes, and Games): Prizes are offers of the chance to win cash, trips, or merchandise as a result of purchasing something. A contest calls for consumers to submit an entry – a jingle, estimate, suggestion - to be examined by a panel of judges who will select the best entries. A sweepstake calls for consumers to submit their names in a drawing. A game presents consumers with something every time they buy - bingo numbers, missing letters - which might or might not help them win a prize.

·         Quantity Deals: Sometimes, sellers devise special package which gives extra quality of the product to the buyer at the same price. These deals came in the form of "Buy three, get one free" offer for beauty soaps like Nirma, Lux.

Cosmetic products

Cosmetic products are used for beautifying purposes and cover a wide range of products including; cleaning body parts, enhancing features, and changing skin tones and colors such as, makeup, perfume, toothpaste, shampoo and deodorant (Kumar et al., 2006). Cosmetic products are applied to enhance one’s appearance and used to communicate one’s style or aesthetic preference (Guthrie et al., 2008).

The history of cosmetics spans at least 6,000 years of human history, and almost every society on earth. In the Western world, the use of cosmetics became prominent in the middle ages, typically among members of the upper classes. Although it is generally believed that cosmetics as they are now known originated in the Far East, the study of non-industrial cultures indicates the use of cosmetics in every part of the world. The war paint of native Americans, the tattooing and scarification (making of superficial incisions of the skin) practiced by many people (the Maori of New Zealand and numerous African cultures, for instance), and the use of woad (a plant dye used by ancient Britons to paint their bodies blue) are all forms of cosmetic used for psychological intimidation of the enemy as well as adornment (Draelos, 2007). The general term cosmetics is applied to all preparations used externally to condition and beautify the body, by cleaning, coloring, softening, or protecting the skin, hair, nails, lips, or eyes. 

Types of advertising

Advertisements can be divided into two broad categories (a) consumer promotion advertising and (b) dealer promotion. In addition to these two types of advertising there can also be other types of advertising as product advertising ,institutional advertising, primary demand advertising, secondary demand advertising, indoor advertising, outdoor advertising, press advertising, electronic advertising and so on. Consumers advertising is the type of advertising which is directed at the public whereas trade advertising is directed at the wholesale or distributors who resell to the public. Consumers advertising can be further divided into national advertising and local advertising. National advertising is directed at consumers throughout the entire country. This type of advertisements usually aims to create awareness among the public of a product or service or it tries to build loyalty to a product or service. Local advertising aims to inform public in a particular area where they can purchase a product or service. Advertising to the public also take the form of institutional advertising, image advertising, cooperative advertising or informational advertising. Rather than trying to sell a specific product, institutional advertising seeks to create a favorable impression of a business or institution. It is designed solely to build the prestige and public respect. For the non-profit institutions, such advertising helps support the institution’s activities, i.e. by encouraging blood donations or cash contributions or the work of an organization like the Red Cross.

Brand switching

Sometimes known as brand jumping, brand switching is the process of choosing to switch from routine use of one product or brand to steady usage of a different but similar product. Much of the advertising process is aimed at encouraging brand switching among consumers, thus helping to grow market share for a given brand or set of brands. Switching behavior is defined as defection or customer exit (Stewart, 1994; Hirschman, 1970). According to Boote (1998) and Bolton & Bronkhurst (1995), switching behavior reflects the decision that a customer makes to stop purchasing a particular service or patronising the service firm completely. Brand switching is when a consumer or group of consumers switches their allegiance from one brand of a certain type of product to another. This brand switching may be temporary, (example: if Pantene is not available at the shop a consumer may buy Dove as their next preference) or it may be longer lasting, perhaps for example in the case of products that last longer or from which switching away is harder.

Brand name

The brand name is regarded as an essential part of the brand and the foundation for marketing communication efforts. Brand names not only helps identify the product but also acquire a rich set of symbols and meanings embodied by products. For successfully developed and managed brand names, the associations that consumers make with the brand name creates value, or brand equity, that can be a highly valued asset to the company that owns the brand. A meaningful name is one that conveys relevant information about the product, or an important product attribute, or establishes a connection between the product and the product category. Marketing practice, as well as theoretical and empirical research, has suggested that meaningful brand names are easier to remember and recall than non-meaningful brand names, and also that meaningful brand names are generally preferred over non-meaningful brand names. Brand awareness and brand name plays an important role on purchase intention because consumers tend to buy a familiar and well known product.