There are many challenges that organizations face in the effective transition between selling products traditionally and selling channels online. First off when selling products the traditional way, they go through a variety of channels called indirect channels. These channels include intervening resellers that include agents, most wholesalers, and retailers (Finch 2012, chap 12.3). Direct channels go directly to the consumer.
Many challenges that lie ahead from using the traditional approach than online are a direct loss of sales, giving up control of the brand, and resellers have too many products to sell. The first is a direct loss of sales, resellers need to be compensated for their efforts, and they extract their efforts by charging their customers more than they paid to purchase. The next is giving up control of the brand, at the point of sale, channel partners may opt to sacrifice the integrity of brand positioning for the sake of making a sale. Finally, resellers have too many products to sell, some brands will not receive the same level of attention form sales people, or customer service like others do, and is much more of a concern for smaller brands (Finch, 2012, chap 12.2).
Wal-Mart and Zares are companies that are having a difficult time implementing the traditional and online channels, some ways to improve on this is by developing an Onmi-Channel Platform, this reaches out to customers, and the service also increases the overall basket size since customers who visit stores to pick up their online purchase end up buying more. Another way is to ass groceries online, last October, the retailer expanded its online grocery sales in Denver and received compelling customer response. More than 90% of the customers rated the service between average and outstanding ( Trefis Team ,2014, para 4).
Selling through a store front creates a more personal experience for the customer. The focus is more on customer service, and it allows the customer to see what they are purchasing. On line is completely different, first off you don’t see the product, so you do not know what you are getting. Secondly, there is a lack of customer service, you do not have the luxury of speaking to a clerk for help with a product. Some may like this and others may not. The online experience isn’t for everyone, but for me this would make life easier, and will also work with people with disabilities of people who don’t like the hassle of dealing with THE LINES AT WAL-MART!
Finch, J. (2012) Managerial Marketing, San Diego, CA: Bridge point, INC,
Trefis Team, (2014). What is Wal-Mart doing to ramp up its e-commerce business, Forbes/
Retrived by www.forbes.com
2. The primary challenge that organizations have to face while making a shift from their regular brick and mortar retailing to the online selling of products is the setting up of technological support systems to back up the sales, order placement and inventory. also it has to be centrally placed supply networks to enable swift supply of the products to the end users. It's the technological support systems that ensure that the products are at the right place and at the right volumes. In example; Amazon took a long period of time to create their distribution channel and operate it at the optimal level. I would never forget my first experience of placing an order for my children for Christmas. I was informed that the items were available and that I would receive the shipment well before Christmas Eve. But just a few days before Christmas, they called me and told me that the items were out of stock and I would not receive them before January. This was appalling for me and I was totally frustrated. This incident prevented me from placing an order with them for a few years. The second experience was much more satisfactory.
Zara and Wal-Mart are having a tough time switching their mode of operations from the traditional approach to the direct online selling of their products. A possible reason for this hassle could be in the nature of products being promoted. “There are goods that are purchased impulsively by the consumers and they ought to be made available in maximum possible locations to attract customers.” (Finch, 2012). The tendency of most of the Americans is to seek immediate satisfaction. It would deter them from placing an order online and waiting for the delivery for days together. There is a need to get the product immediately after making the payment. This issue however seems less relevant for a company like Zara which is a Spanish clothing company. They may find the road of establishing their stores in the US hard, but that is a not a reason for them to refrain from entering the online market segment. Consumers would think twice before buying clothes online as they do not get to have a trial before the purchase. A solution to this problem would be for Zara to have a strong and simple return policy with a pre-paid return package option if the customer does not find the clothe fitting. Wal-Mart could nurture interest in the buyers by giving special offers and incentives to their loyal customers by means of giving credit points to purchases. This would give them a reason to come back again and make purchases. Examples for this are first time user discounts, online shopping offers etc.). There are advantages in making purchases in the traditional means as compared to online selling and vice versa. You don’t have to move out of your house to find out where you can get the best deals from the total set of retailers. This is not the case with conventional process where you would have to physically go to various retail stores, ask for the best price, weigh the options, spend time in doing so, wasting money on fuel etc. There is however immediate satisfaction of getting the product in hand soon after paying.
Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint Education, Inc.
3. Hello Everyone,
Analyze the challenges that organizations face in the effective transition between selling products using the traditional brick and mortar marketing channel and selling products online.
Traditional channels of distribution are sustained by combining and collaborating with the institutions, bringing them together so that the products are moved from the seller to the consumer. Keeping the traditional channels open depends on their ability to perform their economic functions effectively and at a lower cost than the other independent producers are offering. Online sales have shortened the traditional means of the distribution channels. They do not rely on the resellers between themselves and the final consumers. For effective transitions between selling the products the traditional way and the new model of online sales is figuring out whether it adds value by participating in the existing distribution channels cost savings, time savings, customer convenience, promotional support and facilitation of the transactions. (Finch, 2012).
Synthesize the strategies that organizations like Zara and Wal-Mart- two companies that are having difficulty developing eCommerce capability can implement to increase the effortless movement of customers between the traditional and online channels.
When organizations try to implement online capability they run into a problem of running short of product. They would need to promote sales so that they are assured of continued distribution for both B2B and e-commerce. They should also take into consideration their market coverage for e-commerce and just how many consumers are shopping online versus in store. Utilizing both the push and pull strategies would be wise for implementing a continued growth of B2B and e-commerce. One wants to continue targeting the consumer as well as making sure the manufacture’s product is still being offered in the needed supply. (Finch, 2012).
What are the benefits and limitations of selling through a store front and online?
The benefit of selling through online sources is that it increases sales and profits faster than traditional methods. They can have 24/7 operational hours which can be convenient to the consumer. They can advertise products globally without the additional expense being used. Security issues and concerns may keep the consumers from shopping online. Some of the limitations of selling through online sources versus a store front is that the personal relations is limited online and this may prevent repeat business due to the lack of one-on-one personal interactions unless they utilize Skype. With global expansion there is a risk of delay of product to the consumer in other states or countries. (Waters, 2014). A personal note is that I have shopped with Amazon.com for years and have found the interaction is just enough. If you have problems they are more than willing to chat live with you. So I receive the personal interaction when it is most needed in my opinion.
Finch, J. (2012). Managerial marketing. San Diego, CA: Bridgepoint Education, Inc.
Waters, S. (2014). Selling online - retailing storefront alternatives. Retrieved from http://retail.about.com/od/location/p/online-sales.htm
4IDENTIFY THE STRATEGIES FOR ENTERING INTO THE GLOBAL MAKET
INDIRECT EXPORTING- A description of sales to export intermediaries who in turn sell to overseas customers. This relies on the use of independent export agents and trading companies within one’s home country to identify potential customers and negotiate sales.
Strengths- Minimizes risk and investment/ Disadvantage- Higher transport costs than manufacturing abroad. (Indirect/ Direct)
DIRECT EXPORTING- The type of exporting in which firms enter foreign markets directly and do their own export marketing, they include the identification of attractive foreign markets, managing the elements of marketing mix
LICENSING- A relative low risk that allows a manufacturer to enter new markets. Strengths- Profitability with little investment/ Disadvantage- Lack of control over marketing programs.
JOINT VENTURE- Form of participation in foreign markets by means of alliance with a local partner. Strengths- Benefits from partner’s knowledge of home markets/ Disadvantages- Significance investment required
FOREIGN DIERECT INVESTMENT- This is a term used to describe a market entry strategy where a domestic firm expands its operations to a foreign nation either by constructing new operational facilities from the ground up or through the acquisition of existing business and operations in the country of interest. Advantages- can improve domestic sales in new markets/ Disadvantage- investing in foreign countries is more expensive than exporting (Finch 20112, chap 14.3).
Coca Cola is an example of a company that has had success in globalization. Coca Cola is global and in known throughout the world. Commercials are done in many different languages.
McDonald’s marketing has been successful by adaptation and innovation, coming up with fresh products and services to address the needs of a diverse consumer market – as shaped by demographic, economic and local factors around the world ( Mourdoukoutas, 2012 para 1).
Finch, J. (2012). Managerial Marketing, San Diego, CA: Bridge point Education, Inc.
Mourdoukoutas, P (2012). McDonald’s winning strategy, at home and abroad, Forbes.
5. Identify the strategies for entering into the global market. Assess the strengths and limitations of each. Give an example of a company that has made a success of doing business in the global economy. What lessons from McDonald’s success in the global marketplace are transferable across industries?
Companies have to have a strategic plan in order to become successful global market. Companies can merger with other companies to do business overseas and on the global stage. Finch stated that globalization refers to the process by which world economies have become increasingly interrelated integrated and interdependent in recent decades” (Finch, 2012, Sec 13.1). Companies have to reach global status by having everything in place and having the proper planning to reach that stage. Finch stated that “most companies are directly or indirectly impacted by the phenomenon of globalization” (Finch, 2012, Sec, 13.1). The strategies that will allow companies to enter in the global market are direct exporting, indirect exporting, joint venture, and licensing. Those factors are important to have and implement when trying to go global market. Indirect exporting is when companies need other companies to help get things with the global market. Direct exporting is when companies is doing all the marketing and getting goods in the international market themselves. Joint ventures can help company’s merger together to help get products sold across the world. Licensing helps get the products and have the right to sell products all over the world. Foreign direct investment helps expand business all over and helps them to build their organization from the ground up. Nike would be the company that reached global status. Nike reaches a lot of countries and their brand is promoted everywhere. Nike Sponsors worldwide sports and other things to market their brand worldwide. McDonald’s laid the blueprint to how to have success global. The impacted the world with their promotion strategies and have the innovation that took their brand to the next level. Companies have to model their business and follow the best to be the best within the global market. McDonald’s started the tread for others to follow and model their business after to have success global market.
6Any organization that seeks global success must be ready for the magnitude of change that it will undergo to accommodate the scale of operations needed; organizations must understand the different cultural and economic factors that may impact success through many different evolving marketplaces (Finch, 2012). McDonald’s is a company that’s experienced both great success and failure in its global expansion.
In approaching the global marketplace, McDonald’s leadership implemented core HR practices that apply broadly to accommodate the many different cultural settings that the brand markets to (Solomon, 1997). By building flexibility and sensitivity to local cultural mores, McDonald’s maintains a solid strategy for driving success, no matter the environment; McDonald’s HR fully embodies this core ideal and actively seeks local staff around the world to drive best practice (Solomon, 1997). As important as technical ability might be, McDonald’s places heavy influence on behavior and attitude; leadership’s careful planning of overseas locations ensures that the brand develops trust in consumers and builds lasting relationship with all the communities they serve (Solomon, 1997).
McDonald’s strategy to maintain a core of cultural awareness and flexibility lends itself to the brand’s global success. This approach gives the company the ability to fine tune and tailor its products to meet the different demands of different communities. This entire strategy is largely possible because HR actively drives growth by attracting friendly, local staff for their organization. HR maintains a set core of values that defines the global brand. This concrete foundations gives the brand ability to diversify and maintain resilience, while also not losing touch with the company as a whole. There are clear purpose and value that supersede cultural differences. This makes me wonder, as more and more companies utilize the electronic, online, marketplace to reach new consumer populations, how can they develop culturally aware points of contact while also addressing the risk of fragmentation?
Finch, J. (2012) Managerial Marketing, San Diego, CA: Bridge point, INC.
Solomon, C. (1997). McDonald’s Serves Up HR Success… in 91 Countries Across the World. Industrial & Commercial Training, 29(4), 139.
Finch, J. (2012). Managerial Marketing San Diego, CA: Bridgepoint Education, Inc.