Channel Conflict
As millions of consumers flock online to
purchase just about anything and everything — new and used, large and small,
cheap and expensive, from near and afar — how will the interaction between
buyers and sellers change?
Buyers with access to the
Internet have certain opportunities that may affect what they purchase, when,
and where they take their business. Using sites like Google or Yahoo!, a buyer
has the ability to search for a product or service; to compare sellers on
important attributes such as price, quality, delivery and service; to read
product reviews and consider the opinions of other buyers; and to do all of
this quickly, cheaply, and with relatively little effort. This can be done
regardless of whether or not the buyer chooses to complete the purchase online.
Never before have buyers been able to know so much, so easily, about what they
purchase and from whom. Sellers can reach large numbers of consumers anytime
day or night and can extend their business beyond the limits of geographic
proximity more easily. Unconstrained by shelf space, sellers can list a large
catalog of items and can quickly adjust prices to reflect changes in demand. A
seller, like Dell Computer, can eliminate intermediaries and engage buyers
directly online to understand their consumption habits and track their
preferences, and then use this information to configure customized products and
provide personalized levels of service. Just like the buyer who can easily
search for the seller offering a product at the lowest price, sellers can search
for the one buyer who is willing to pay the most. This is exactly what happens
at the close of every auction on eBay (the highest bidder wins). Furthermore,
the immediacy of the data that flow from digital marketplaces allows sellers to
integrate the supply chain and better manage production, inventory and
distribution. Not only do sellers know more about buyers, they also know more
about their business partners and about their competitors
One of the key
questions to be considered is ‘who owns the customer relationship?’ i.e. the
retail outlet or the brand. Even ownership of communication with the customer
is an issue. If you purchase something from a retail outlet is it then ok for
you to get email promotions or is it SPAM?
Conflict then can be direct, internal or external (an
example of external would be a Chinese flat screen TV maker (for well known
brands) launching an online brand of their own. While this can certainly lead
to conflict (undercutting prices) external conflict is less threatening as it
is not a full on assault on the same brand name. Email campaign has always been
an excellent service and reliability while spam is a dubious message like a get
rich quick scheme.
Ultimately, when the Internet comes into the
mix, it causes conflict between the different channels. Should you buy key
words to protect your brand? Try some searches of well known words. Some
examples include – Qantas, Telstra, BHP, Nike, Coke – a couple of these brands
are obviously paying Google a fortune to just have their result showing, others
e.g. Nike and Coke return all sorts of searches.
Keyword is very
important to be purchased to protect the brand. Even if you have to pay google
to show you the results as a search or other more well known brands.
References:
http://digitalenterprise.org/markets/markets.html
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