E-comerce And Marketting Strategies

Term Paper

ECommerc e Topic: e – commerce and marketing strategies Date-of-Submission

:

10/12/2008

Submitted To

Submitted By

Miss. Aastha

Alok Ranjan 2

24 MCA-A 2010070036

Acknowledgement

The gratitude passes to Miss. Aastha (Lecturer), Department of Computer Science & Engineering, Lpu, for his special interest, guidance and moral boosting encouragement that motivated me to a higher level of performance. I want to thank him for his valuable & precious suggestions and support for this term paper. Heartiest gratitude is showered upon all those who have played an eminent role for the completion of this Term paper.

Alok Ranjan

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Index Contents

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Introduction & History Terminology used in E-commerce Models of E-commerce Affiliated Programs 5. Easy and Hard Aspect of Ecommerce 6. Building of an Ecommerce Site 7. Implementing and Ecommerce site 8. Marketing and older strategies 9. Characteristic of Modern Marketing 10. Managing Customer 11.Promotion 12.New Marketing Strategies 13. Other Marketing Strategies 14.Marketing management of eBiz 15.Marketing Strategies for eBay Selling 16.2 Marketing strategies from Amazon.com 1. 2. 3. 4.

Conclusion Reference

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5-6 7 8-9 10-11 12 13 14-15 16-17 17 18-19 20 21-22 23-24 25 26-27 28

Part of a series on

Electronic commerce

Online goods and services Streaming media Electronic books Software Retail services Banking · Food ordering Flower delivery · DVD rental Marketplace services Trading communities Auctions · Online wallet Advertising Price comparison service E-procurement

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Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

History Early development The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK. Online shopping was invented in the UK in 1979 and during the 1980s it was used extensively particularly by auto manufacturers such as Ford,Peugeot-Talbot, General Motors and Nissan. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing. Perhaps it is introduced from the Telephone Exchange Office, or maybe not.The earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.

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Although the Internet became popular worldwide in 1994, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. And by the end of 2000, a lot of European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

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Terminology used in E-Commerce • •

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Buyers - these are people with money who want to purchase a good or service. Sellers - these are the people who offer goods and services to buyers. Sellers are generally recognized in two different forms: retailers who sell directly to consumers and wholesalers or distributors who sell to retailers and other businesses. Producers - these are the people who create the products and services that sellers offer to buyers. A producer is always, by necessity, a seller as well. The producer sells the products produced to wholesalers, retailers or directly to the consumer.

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Models of E-Commerce running in India 1. 2. 3. 4. 5. 6. 7.

Business-to-business (B2B) Business-to-customer (B2C) Business-to-government (B2G) Consumer-to-consumer (C2C) Government-to-business (G2B) Government-to-citizen (G2C) Consumer-to-business (C2B)

B2B: Business-to-business (B2B) is a term commonly used to describe commerce transactions between businesses, as opposed to those between businesses and other groups, such as business-to-consumers (B2C) or business-to-government (B2G). More specifically, B2B is often used to describe an activity, such as B2B marketing, or B2B sales, that occurs between businesses and other businesses.

B2C: Business-to-consumer (B2C), sometimes also called Business-to-Customer describes activities of businesses serving end consumers with products and/or services. An example of a B2C transaction would be a person buying a pair of shoes from a retailer. The transactions that led to the shoes being available for purchase, that is the purchase of the leather, laces, rubber, etc. as well as the sale of the shoe from the shoemaker to the retailer would be considered (B2B) transactions.

C2C Consumer-to-consumer (C2C) websites enable the sale and purchase of products and services between individual customers. Individual customers frequently buy and sell products like automobiles (two and four wheelers), furniture and real estate from each other. They can find such products on a C2C site and conduct transactions online. The best example of a C2C E-Commerce model is an online auction site. In 1995, eBay.com pioneered C2C auctions. This site has become one

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of the Internet's most popular websites. Some of the other popular online auction sites are mortgage.com and bazee.com.

B2G: Business to Government (B2G) is a derivative of B2B marketing and referred to as a market definition of "Public Sector Marketing" which encompasses marketing products and services to the U.S. Government through Integrated Marketing Communications techniques such as strategic public relations, branding, marcom, advertising, web-based communications. Examples of B2G Marketing Communications and Public Relations Agencies and Counselors that support Public Sector IT Marketers in the Multi-Billion dollar federal marketplace include: • • •

FEDERAL DIRECT THE BORENSTEIN GROUP PRESTOVIVACE

G2B: Government-to-Business (abbreviated G2B) is the online non-commercial interaction between local and central government and the commercial business sector, rather than private individuals (G2C). For example http://www.dti.gov.uk is a government web site where businesses can get information and advice on ebusiness 'best practice'.

G2C: Government-to-Citizen (abbreviated G2C) is the online non-commercial interaction between local and central Government and private individuals, rather than the commercial business sector G2B. For example Government sectors become visibly open to the public domain via a Web Portal. Thus making public services and information accessible to all. One such web portal is Government Gateway.

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Affiliate Programs A big part of today's e-commerce landscape is the affiliate program (also known as associate programs). This area was pioneered by Amazon. Amazon allows anyone to set up a specialty book store. When people buy books from the specialty store, the person who owns the specialty bookstore gets a commission (up to 10 percent of the book's list price) from Amazon. The affiliate program gives Amazon great exposure because it now has over 1,000,000 specialty bookstores all over the Web [ref]. Therefore this model is now copied by thousands of e-commerce sites. If we are setting up an e-commerce site we will want to consider an affiliate program as one way to get exposure. Link Share is a company that helps e-commerce sites set up affiliate programs. Another twist on affiliate programs is the CPC Link (CPC=Cost Per Click), also known as affiliate links or click-thru links. We put a link on your site and the company pays us when someone clicks on the link. A typical payment ranges from 5 cents to 20 cents per click. Affiliate links represent the middle ground between banner ads and commission-based affiliate programs. With banner ads, the advertiser takes all the risk -- if no one clicks on the banner then the advertiser wastes money. Commission-based affiliate programs place all the risk on the Web site. If the Web site sends a bunch of people to the affiliate e-commerce site but no one buys anything, then it has no value for the Web site. In CPC links, both sides share risks and rewards equally. We may want to consider setting up this sort of affiliate program to gain exposure for our e-commerce site.

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Unless we have been living under a rock for the last few years, we have probably heard about e-commerce. And we have heard about it from several different angles. We may have: • • • • •

heard about all of the companies that offer e-commerce because we have been bombarded by their TV and radio ads read all of the news stories about the shift to e-commerce and the hype that has developed around e-commerce companies seen the huge valuations that Web companies get in the stock market, even when they don't make a profit purchased something on the Web, so we have direct personal experience with e-commerce Still, we may feel like we don't understand e-commerce at all. What is all the hype about? Why the huge valuations? And most importantly, is there a way for we to participate? If we have an e-commerce idea, how might we get started implementing it? If we have had questions like these, then this article will help out by exposing we to the entire e-commerce space.

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Easy and Hard Aspects of E-commerce The things that are hard about e-commerce include: • • • •

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Getting traffic to come to your Web site Getting traffic to return to your Web site a second time Differentiating yourself from the competition Getting people to buy something from your Web site. Having people look at your site is one thing. Getting them to actually type in their credit card numbers is another. Integrating an e-commerce Web site with existing business data (if applicable)

There are so many Web sites, and it is so easy to create a new e-commerce web site, that getting people to look at yours is the biggest problem. The things that are easy about e-commerce, especially for small businesses and individuals, include: • • •

Creating the web site Taking the orders Accepting payment

There are innumerable companies that will help you build and put up your electronic store. We'll discuss some options in the next section

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Building an E-commerce Site The things you need to keep in mind when thinking about building an e-commerce site include: • •

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Suppliers - this is no different from the concern that any normal store or mail order company has. Without good suppliers you cannot offer products. Your price point - a big part of e-commerce is the fact that price comparisons are extremely easy for the consumer. Your price point is important in a transparent market. Customer relations - E-commerce offers a variety of different ways to relate to your customer. E-mail, FAQs, knowledge bases, forums, chat rooms... Integrating these features into your e-commerce offering helps you differentiate yourself from the competition. The back end: fulfillment, returns, customer service - These processes make or break any retail establishment. They define, in a big way, your relationship with your customer.

When you think about e-commerce, you may also want to consider these other desirable capabilities: • • • • •

Gift-sending Affiliate programs Special discounts Repeat buyer programs Seasonal or periodic sales

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The reason why you want to keep these things in mind is because they are all difficult unless your e-commerce software supports them. If the software does support them, they are trivial.

Implementing an E-commerce Site Let's say that you would like to create an e-commerce site. There are three general ways to implement the site with all sorts of variations in between. The three general ways are: • • •

Enterprise computing Virtual hosting services Simplified e-commerce

These are in order of decreasing flexibility and increasing simplicity. Enterprise computing means that you purchase hardware and software and hire a staff of developers to create your e-commerce web site. Amazon, Dell and all of the other big players participate in e-commerce at the enterprise level. You might need to consider enterprise computing solutions if: • • • •

You have immensely high traffic - millions of visitors per month You have a large database that holds your catalog of products (especially if the catalog is changing constantly) You have a complicated sales cycle that requires lots of customized forms, pricing tables, et cetera You have other business processes already in place and you want your ecommerce offering to integrate into them.

Virtual hosting services give you some of the flexibility of enterprise computing, but what you get depends on the vendor. In general the vendor maintains the

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equipment and software and sells them in standardized packages. Part of the package includes security, and almost always a merchant account is also an option. Database access is sometimes a part of the package. You provide the web designers and developers to create and maintain your site. Simplified e-commerce is what most small businesses and individuals are using to get into e-commerce. In this option the vendor provides a simplified system for creating your store. The system usually involves a set of forms that you fill out online. The vendor's software then generates all of the web pages for the store for you. Two good examples of this sort of offering include Yahoo Stores and Verio Stores. You pay by the month for these services. For lots more information on e-commerce and related topics, check out the links on the next page.

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Marketing and older strategies of marketing of e commerce Definition of Marketing

Marketing consists of the strategies and tactics used to identify, create and maintain satisfying relationships with customers that result in value for both the customer and the marketer. It is the key functional area for generating revenue, while other definitions lean more toward defining marketing in terms of its most visible tasks, such as advertising and creating new products. The Role of Marketing At the organizational level, marketing is a vital business function that is necessary in nearly all industries whether the organization operates as a for-profit or as a notfor-profit. For the for-profit organization, marketing is responsible for most tasks that bring revenue and, hopefully, profits to an organization. For the not-for-profit organization, marketing is responsible for attracting customers needed to support the not-for-profit’s mission, such as raising donations or supporting a cause. At a broader level marketing offers significant benefits to society. These benefits include:

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• • • • •

Developing products that satisfy needs, including products that enhance society’s quality of life Creating a competitive environment that helps lower product prices Developing product distribution systems that offer access to products to a large number of customers and many geographic regions Building demand for products that require organizations to expand their labor force Offering techniques that have the ability to convey messages that change societal behavior in a positive way (e.g., anti-smoking advertising)

Social Responsibility in Marketing Marketing often operates as the “public face” of an organization, when issues arise between the public and the organization marketing is often at the center. In recent years the number and variety of issues raised by the public has increased. One reason for the increase is the growing perception that marketing organizations are not just sellers of product but also have an inherent responsibility to be more socially responsible, including being more responsible for its actions and more responsive in addressing social concerns. Being socially responsible means an organization shows concern for the people and environment in which it transacts business. It also means that these values are communicated and enforced by everyone in the organization and, in some cases, with business partners, such as those who sell products to the company (e.g., supplier of raw material for product production) and those who help the company distribute and sell to other customers (e.g., retail stores). Characteristics of Modern Marketers Today’s marketers undertake a variety of tasks as they attempt to build customer relationships and the knowledge and skill sets needed to perform these tasks successfully are also varied. Basic Business Skills These basic skills include problem analysis and decision-making, oral and written communication, basic quantitative skills, and working well with others. Understanding Marketing’s Impact They must realize that marketing decisions are not made in isolation and that decisions made by the marketing team could lead to problems for others.

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Technology Savvy Today’s marketers must have a strong understanding of technology on two fronts. First, marketers must be skilled in using technology as part of their everyday activities. The Need for a Global Perspective

Marketers selling internationally must understand the nuances of international trade and cultural differences that exist between markets. Information Seeker

Marketers must maintain close contact with these changes through a steady diet of information.

Managing Customer A customer is a person or organization that a marketer believes will benefit from the goods and services offered by the marketer’s organization. As this definition suggests, a customer is not necessarily someone who is currently purchasing from the marketer. In fact, customers may fall into one of three customer groups

Types of Customer Existing Customers – Consists of customers who have purchased or otherwise used an organization’s goods or services Former Customers – This group consists of those who have formerly had relations with the marketing organization typically through a previous purchase. Potential Customers – The third category of customers includes those who have yet to purchase but possess what the marketer believes are the requirements to eventually become Existing Customers. Types of Consumer Purchase Decisions Consumers are faced with purchase decisions nearly every day. But not all decisions are treated the same. Some decisions are more complex than others and thus require more effort by the consumer. Minor New Purchase Minor Re-Purchase

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Major New Purchase Major Re-Purchase

Customer Service and Marketing An important non-product benefit that affects customers’ feelings about a company is customer service, which is defined as activities used by the marketer to support the purchaser’s experience with a product. Customer service includes several activities • • • •

Training - services needed to assist the customer in learning how to use a product Repair – services needed to handle damaged or malfunctioning products Financial Assistance – services needed to help customers with the financial commitment in purchases or using the product Complaint Resolution - services needed to address other problems that have arisen with customers’ use of a product

Marketing Research Research, as a general concept, is the process of gathering information to learn about something that is not fully known. Research is not only used for the purpose of learning, it is also a critical component needed to make good decisions. Market research does this by giving marketers a picture of what is occurring (or likely to occur) and, when done well, offers alternative choices that can be made Marketing Decision

Types of Research

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Target Markets Distribution Promotion Pricing

Sales, market size; demand for product, customer characteristics, purchase behavior, customer satisfaction, website traffic Distributor interest; assessing shipping options; online shopping, retail store site selection Advertising recall; advertising copy testing, sales promotion response rates, sales force compensation, traffic studies (outdoor advertising), public relations media placement Price elasticity analysis, optimal price setting, discount options

Promotion

Advertising Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people.

Types of Advertising Product Oriented

Most advertising spending is directed toward the promotion of a specific good, service or idea, what we have collectively labeled as an organization’s product. Image Oriented

Image advertising is undertaken primarily to enhance an organization’s perceived importance to a target market. Advocacy Advertising

Organizations also use advertising to send a message intended to influence a targeted audience. Public Service Advertising

In some countries, not-for-profit organizations are permitted to run advertisements through certain media outlets free-of-charge

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if the message contained in the ad concerns an issue viewed as for the “greater good” of society

Sales Promotion Public Relations

New Marketing Strategies of ecommerce

• Competitive Intelligence • Viral Marketing • Search Engine Placement

Competitive intelligence A broad definition of Competitive Intelligence is the action of gathering, analyzing, and applying information about products, domain constituents, customers, and competitors for the short term and long term planning needs of an organization. Competitive Intelligence (CI) is both a process and a product. The process of collecting, storing and analyzing information about the competitive arena results in the actionable output of intelligence ascertained by the needs prescribed by an organization. Key points of this definition:

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Competitive Intelligence is an ethical and legal business practice. (This is important as CI professionals emphasize that the discipline is not the same as industrial espionage which is both unethical and usually illegal). 2. The focus is on the external business environment. 3. There is a process involved in gathering information, converting it into intelligence and then utilizing this in business decision making. CI professionals emphasize that if the intelligence gathered is not usable (or actionable) then it is not intelligence. 1.

Viral Marketing Virtual Marketing Communications provides professional Internet marketing, web design and development, and search engine optimization to clients ranging from small businesses to divisions of major corporations. We help our clients understand the unique nature of online marketing and achieve their marketing goals through clean, effective website architecture and design. You can find out about our experience, services and clients by exploring our website. Search Engine Placement • Have a unique product • Offer good content and features • Get listed in regional and industry directories • Include address / phone # • Buy traffic

Top 3 Search Engine •

Google

• Yahoo • MSN

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How Search Engine finds any website 1. Search engine ‘Spider’ or ‘Crawler’ visits your site 2. Or you can register at search engines 3. Your site information is added to the search engine index 4. Search engine software finds your site in their index

Other marketing strategies of e-Commerce  Linking business leads and customers to the company through its presence on the internet: - Website, - Directories, - Industry portals.  Advertising online: - e-mail marketing, - Newsletters, - Online polls.  Gaining visibility.

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Online Advertising • Offer based e-mails • Newsletters • Opinion Polls

• Catalog requests • Dynamic, interactive and inexpensive!

• Customer service tool

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Marketing Management of eBiz eBiz can help virtually any business increase revenues and profits using the Internet, including: Retail stores and professionals: Doctors, dentists, chiropractors, podiatrists, personal trainers, attorneys, accountants, and most any retail store that wants to attract more customers... Consultants, managers and specialists in the following fields: Business, management, technical, engineering, human resources, process improvement, productivity, energy, organizational development, communications, employment, proposal and grant writing, financial, Internet, software, computer, health care, fitness, insurance, security, non-profit fund raising, retail store management, building/construction, politics, image enhancement, private investigation, forensic analysis... Trainers, coaches, consultants and specialists who teach, train or motivate people, including workshop and seminar leaders in:

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Career advancement, personal growth and development, telephone sales, in-person sales, communication and presentation skills, public speaking, team building, writing and editing, marketing and promotion, retail sales, customer service, employee relations and management, holistic healing... Product and service providers in virtually any category, including: Accounting and tax, legal and paralegal, financial planning and investments, insurance, residential and commercial real estate, mortgage loans, security, investigations, secretarial services, word processing, medical billing, medical and legal transcription, notary public, résumé preparation, job placement, software programming, computer installation, repair and networking, computer and Internet security, event/meeting planning and marketing, promotion, advertising, photography... Non-profit and for-profit groups and associations, trade and industry groups, and membership organizations, including: Charities, education-related fundraisers, public awareness groups, civic and community groups, social services and humanitarian groups, philanthropic organizations, museums, exhibits, advocates for the homeless, advocates for distressed children, orchestras, choirs, religious groups, private foundations, professional and trade associations... Manufacturers, wholesalers and distributors of just about any product Marketing Strategies for eBay Selling

If we sell on eBay, we know the importance of getting your products viewed. This is as true on eBay as it is anywhere else in the business world. I have been selling here on eBay for a little over two years. While I do not know all of the tricks, I have stumbled upon many helpful ideas. The great part is that most are FREE! So, what can you do to market your eBay items? we definitely want to maximize your exposure. Here are some great ways to do this. •

Utilize eBay's Community Links- If we click on the Community link at the top of any eBay page, it will open up a whole new eBay world to we. Here we can find:

- Groups - There are groups for EVERYTHING on eBay! We can join groups for hobbies, selling, or local interests. In these groups we can find invaluable information, great friends, and threads where we can showcase were items. 2

- Discussion Boards - Again, there is a discussion board for everything eBay related. Have a question? Someone there can answer. They share tips for marketing as well. Not only that, but your ID gets known! Perhaps a few sales will ensue! •

Utilize our E-Mail- Add a signature line to your outgoing e-mail. All we need to include is a hyper link to were eBay listings with a line such as "Check Out My EBay Listings!"

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Utilize a Business Card- There are sites where we can order these for next to nothing. Google search a company called Vista Print. - Put one in every package we ship out - Post them at area businesses. The Laundry Mat, Library, etc. - Give them to friends - Post them to the bulletin board at work

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Utilize a Coupon- We can design these yourself or order them made for you. Obviously designing your own saves you even more money. There are also online services such as Pay codes that will incorporate them into your PayPal payments. These do cost money as well. Check out some FREE websites - There are plenty out there that allow we to design your own website to direct people to your EBay listings. Some to try include Yahoo's Geocities, Angel Fire, Lycos, Brave Net and Tripod. EBay Store Owners - There are store malls that have formed to help we gain exposure as well. Two such malls are Avid Cat and List My Store. These are exclusively designed for EBay stores. Get Yourself a My Space Account- It's not just for teenagers anymore! There are thousands of business owners on MySpace for the sole purpose of marketting their industry. Get on board! A few clicks in your profile set up can protect your account, so all friends must be approved by we. Try it out. I have found that MySpace has risen to the 4th ranking site directing traffic to my store.

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Include the unexpected - When packaging your items, include a little something extra. This could be something as simple as a craft project printed out for a craft seller to care instructions for jewelry if we sell jewelry. Customers love the extra touch!

2 Marketing Strategies from Amazon.com While out at Amazon.com, I gathered lots of stuff into my shopping cart. Right before checking out, I noticed a box labeled “Important Message” at the top of the page. The box said that an item in my shopping cart had come down in price. There are two marketing strategies to recognize here: Communicate & re-enforce we PPODs (positive points of difference) before, during and after the sale. 2. Use newsworthy info as an opportunity to get back in front of prospects & clients… and to ask for the sale, again. 1.

Communicate & re-enforce your PPODs I was already going to be buying what I had in my cart. By showing me that the

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price had reduced, Amazon pointed out a value they added to me… helping me further build the association that “I am smart for using Amazon.com.” This type of behavior helps build meaningful brands. Use Newsworthy Info to Get Back In Front The item in question had been sitting in my cart for a few weeks now. In fact, I had even forgotten about it. Using the price change as a good reason, they were able to bring the product to the top of mind. This got me to remember the reasons why I wanted the product in the first place. Amazon may even at some point become more aggressive with this strategy… email me when a price change happens or a newer version of the product is released so I don’t buy the older version. PS: The comedy of the situation was that the price change was from $106.84 to $106.82. PS2: Volcanic is an Internet marketing agency that can help you plan & execute the above 2 marketing strategies using email and more.

Conclusion Electronic Commerce (EC) is the paperless exchange of business information using Electronic Data Interchange (EDI) and related technologies. If we are familiar with Electronic Mail (E-Mail), computer bulletin boards, facsimile machines (faxes), Electronic Funds Transfer (EFT) You can very well understand what is e-commerce. These are all forms of EC. All EC systems replace all or key parts of paper-based work flow with faster, cheaper, more efficient, and more reliable communications between machines. In today's Defense Department procurement arena, however the most important EC technology to know about is Electronic Data Interchange, or EDI.

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It is very beneficial in case of time and money and any one can reach to the global market 24X7.

Reference •

www.ArtSuppliesOnline.com

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www.OldWorldVenison.com

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www.LenasLefse.com

• http://www.virtualmarcom.com/ • http://srdc.msstate.edu/e2/ppts/montgomery_search_engine s.htm

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http://eBay.com/Marketing-Strategies-For-EBaySelling_W0QQugidZ10000000003266845

• http://www.volcanicmarketing.com/blog/2006/06/22/2marketing-strategies-from-amazon/

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