Business Through e-Marketing

Published Date: 23 Mar 2015

1.0        Introduction

We, Xerxes Consultancy Firm, are the marketing consultants of Spartan Bookstore and have been hired to advise and help in expanding their business opportunities through e-marketing initiatives.

Spartan Bookstore is currently a brick-only business. It operates primarily in the Kuching area and has an established customer base/clientele.

The bookstore would like to explore an Internet based marketing strategy that can help improve its market position and create opportunities.

Since the bookstore has no prior experience with e-business, the company has contracted Xerxes Consultancy Firm to help develop a viable e-marketing strategy to exploit market opportunities.

1.1        Company's Background

Spartan Bookstore is a local bookstore based in Kuching. They have been operating for more than 10 years and are well known of their Spear logo trademark which is popular to everyone. Spartan Bookstore has three branches with their headquarters situated in The Spring shopping mall while the other two are situated at Boulevard shopping mall and Tun Jugah Centre.

Spartan Bookstore is popular and successful for its value, good customer services, and competitive advantage. They sell a wide variety of fiction, non-fiction and general interest books, school textbooks and revision books, magazines, stationery, multi-media products, gift items, and CDs. Their vision is to serve people and grow in the entire society. With the mission of becoming a leader and dynamic company, they ought to provide value-for-money products and derive the best quality services to their customers.

It is a good opportunity for Spartan Bookstore to expand their business on the internet through an e-marketing initiative. As a pure brick and mortar bookstore chain, they are already achieving a great amount of profits. They are planning to expand its chain throughout the whole Malaysia. Their target market would be ranging from low to high end customers as the prices of their products are standardized. Spartan Bookstore will benefit from gaining popularity and an outstanding achievement with the idea of potential expansion.

2.0        Environmental Analysis

Spartan Bookstore has to identify and understand all the factors affecting people in using internet such as value propositions, ease of use, cost of access, security and fear of unknown. It is crucial for Spartan Bookstore to fully utilize Internet usage statistics which are customer characteristics and preferences, customer buying behavior and demographic characteristics to segment and target groups in the market. Some of the major factors that would affect the e-marketing of Spartan Bookstore are the frequency of customers' accessing the internet, online purchasing, and the usage of internet.

Spartan Bookstore's current local competitors are MPH Bookstore, Popular Bookstore, Sky Bookstore, and other small retail bookstores. As for Internet companies there are Amazon.com, Barnes & Noble, Kinokuniya, MPH Online, Star Online, Dymocks Online and more. Amazon.com is used as the basis of the study on Internet strategy due to its well establishment recognition and it is the most well known bookstore on the internet. Below are some of the measurements of Amazon.com:

• Focus on selection, price, and convenience
• Offer the lowest price possible through low everyday product pricing and free shipping
• Improve on operating efficiencies to lower prices for their customers
• Provide easy-to-use functionality, fast and reliable fulfillment, timely consumer service, and a trusted transaction environment
• Offer programs for "Seller Customers" to sell products on Amazon.com and on their branded websites

(Thomson Reuters, 2009)

Furthermore, Porter's five forces have to be analyzed by Spartan Bookstore so that they would know the consumer behavior towards the Internet on market competition.

Online bookstores such as Amazon.com gain a strong brand name and a good reputation among customers through online intermediaries. Therefore, Spartan Bookstore has to take Amazon.com as their model to develop a competitive advantage. They need online intermediaries to promote and link their website to customers such as Internet users will get a range of related websites result that includes Spartan Bookstore if they type for "bookstores in kuching" in a search engine. They have to get well known intermediaries to provide results link to their website such as search engines like Google and portals like Yahoo!. Not only results link are provided, but also makes their website to be more accessible and available. Social networks such as Friendster and Facebook are additional promotional tools to promote their company. Ad-serving applications such as Google AdSense would be another promotional tool where advertisement is searched via Internet search technology based on the relevant content of website, user's graphical location, and other factors (Google Inc, 2009).

Customers are concerned with the theft of personal information such as confidential identities, purchasing behaviors and preferences, and stolen personal banking details that cause them to be uncomfortable towards adoption of Internet that could relate to online financial transactions and fear of personal identities from being abused. They are afraid that they would be invaded where personal information such as credit card details that might possess risks if information were to leak to third parties for illegal use, creating privacy issues to customer.

Current technology infrastructures that support e-marketing activities enable customers to purchase online easily. Payment systems like PayPal would be the best as it can be used worldwide. However, there are limitations. There is a possible chance of creating dispute between buyers and sellers and it takes a long duration to solve it. In some cases, PayPal will hold their funds for 180 days if they are found to be involving in an unusual or potentially high risk activity (PayPal, 2009). It is quite complex and not really convenient for customers if problems as such are created.

3.0        Background Research

Making sales on the internet is truly suitable for bookstore as customers will be provided with information in terms of the price, quality, and value about the goods. Besides, dealing on the internet is easy and they can be benefited a lot from it.

Based on a real bookstore case study on Amazon.com (Bladeknight, 2008), the secrets to their successful internet marketing campaign are:

1. Mass advertising on the internet

   The most efficient method of advertising on the internet as people can easily browse the advertisement with the banners available on a lot of sites to establish the venture.

2. Building a strong brand name in the online-retail market

   Achieved through successful exploitation, allowing brand leveraging for business expansion in the future.

3. Elegant web-designed

   Enables customers to navigate easily and load quickly the website. Additional proprietary inventions such as click shopping, personalized recommendations, and user rating enhance customers to shop leisurely and with pleasure.

4. Knowledge of customers and merchandise from historical purchase information and feedback

   Increase the confidence and trust of Internet users in dealing with them while improving customer experience to create brand loyalty.

However, there are some possible failure factors that need to be taken into consideration so that Spartan Bookstore will not fall into the same traps like many other beginner stores did. Below are the reasons of why most online store fails (2CreateAWebSite.com, 2009):

1. Getting insufficient traffic

   There is no return of investment after so much of effort and money spent into building a store due to being clueless in bringing traffic from the internet. In other words, they are unable to attract people's attention visiting their websites.

2. Spent a big amount of money

   An enormous amount of money is needed to be spent on advertisements to build brand awareness and it is hard for beginners to access into a market.

3. People shop at their favorite stores

   Most of the time, people prefer shopping at their favorite stores because they ever purchased online from the websites and were satisfied with their services. Even if it is a generic product which is available at many other online stores, they still would prefer to shop at their favorite retailer websites unless it is a specific product where it is nowhere to be found at their favorite stores.

4.0        Suitable E-commerce Strategy

Spartan Bookstore is recommended to use the brick-and-click model, implementing both online and offline sales. With a wide customer base in Kuching, pursuing the pure-click business model will not be suitable, as it does not appeal to the geographic and demographic traits of the locals, which relates to the customers' buying behavior. To support the business, Spartan Bookstore branches are all located at areas with dense population and guarantees constant revenue. The presence of e-commerce activities are combined with the offline resources of the bookstore to allow economical business activities. At the offline bookstore, customers are exposed to the reading material in person, where they can try-before-buy, and they may even come across books that they never knew they would like and thus encouraging higher purchase rates from the bookstore.

The internet assists the bookstore in providing customers with the range of information about the bookstore. This may include promotional deals, product range, contact details, locality map, and corporate and franchise news. This information caters to the customers' benefits and can help shorten their purchasing decisions, at the same time promoting a higher profit margin to the bookstore.

In order to gain competitive advantage, a well designed Web 2.0 website can promote a change in customer behavior, where customers are encouraged to visit the website to gain value-added services for their purchases. Registered customers may opt to receive promotional news and updates delivered through a variety of methods such as traditional mail, email, or SMS. Interaction between sales support and customers may be promoted online, with feedback forms available through the website.

Modern technology allows Spartan Bookstore to carry out business on the internet efficiently. It is possible to offer more value-added services to their customers to promote brand loyalty, as well as developing a larger market share from Kuching, and even to the whole country.

5.0        Strategic Roles

Spartan Bookstore is recommended to carry out e-commerce strategies based on the brick-and-click business model in order to attract both the offline and the online market segments. This business model is able to retain offline distribution channels to keep existing customers, as well as building trust in customers who do not trust pure-click organizations in handling transactions. With the internet, there is a large opportunity to penetrate the foreign market without risking the existing market share. All these directly support the marketing objectives of:

1. Building brand image

   Using a Web 2.0 website builds the bookstores brand image as a technologically advanced and sophisticated organization.

2. Enhancing customer service

   With the help of feedback forms and interaction on the website, customers are able to give opinions and complaints easily. Customers will also be able to receive promotional updates and news directly from the bookstore.

3. Expansion of customer base

   With an online web presence, it's undoubted that there the whole world will be exposed to the services offered by the bookstore, and with that, visitors to Kuching will definitely want to make a visit to the modernized bookstore.

6.0        Online Value Proposition(s)

Spartan Bookstore offers online services which are not commonly implemented by many local bookstores. Most competing bookstores own a static website that is meant for providing information and does not interact with customers. Web 2.0 encourages interaction between customers and the website, such as search engine features are critical to attract and retain users. Customers no longer have to be present at the bookstore to browse the collection of books and availability. Besides, user reviews can also be setup on the website, allowing owners to post reviews of their purchases and share their opinions with other potential buyers.

By keeping an online customer database, customers can access their benefits from the bookstore's website and gain value-added services such as profile customization and personalization for marketing purposes. They can choose which information to be shown and which to be hidden, based on their preferences. Really Simple Syndication (RSS) feeds can further improve their browsing experience by updating them based on their preferred topics and genres. Latest arrivals, highlights, e-newsletters and promotion alerts can also be fed to customers who subscribe to the service.

Sample previews, or e-samples can also be provided on the website, allowing customers to read through a portion of a book to evaluate, therefore affecting their purchase decision. Similar to browsing through books at the bookstore, a chapter can be read online with approval from publishers and abiding the copyright laws. Book rating, awards and testimonials are factors that influence customer purchase decisions and should be focused to making them visible to customers.

Customers have their freedom to customize to their pleasure while spending their time at the website, which their interests are given the utmost priority. The bookstore will be able to target correct advertisements and recommendations with ease and build up their brand name.

7.0        Target Customer Groups

The targeted customer groups are as follow:

1. Single, young adults

   Generation-Y teenagers and young adults aged from 12-30 years old who are net-savvy and always keen to research and understand more about products that they will be purchasing. They are aware of promotional deals, discounts and member benefits and are always ready to take each opportunity as long as they are worth it. This group always wants to get hold of products that are value for money and they depend a lot on the internet and circulating information to determine their options.

2. Married, with no children

   This group is mainly dual-income, with no children expenses due to hectic work life. Being technologically educated, they seek convenience over budget and are willing to pay more for quality products that perform up to expectations. They are the ones who want things to be done with as little effort as possible because they don't have much time to do shopping at physical stores.

3. Married, with young children

   Consists of adults aged from 30-50 years old with children as young as 5 years old, this group is also made up of single parents and dual-income families. They focus on goods those values to save time, hassle and increased convenience. They focus more on children's education and would spend more on child-care, education and time management reading materials.

8.0        Mixed-mode Buying Implications

As Spartan Bookstore is using brick-and click model strategy, there are many advantages for the company to use mixed-mode buying. Mixed-mode buying allows the customers to choose between online and offline channels for the buying process. Mixed-mode buying offers a lot of benefits to the customers who do not have time to go to the physical store to buy a book. They can just browse through the internet and make a purchase from the Spartan Bookstore website. Besides, mixed-mode buying allows the customers to review a book on the internet before they make a purchase, so this will help customers to make a better decision. This is a good method to increase the probability of the customer purchasing the product since the internet can change the shopping behavior of the customers.

As indicated on Figure 2 above, the customers can buy the book 'True Compass' both offline or online. There are many methods that a customer could use to purchase the book and receive the fulfillment. First of all, the customer can buy the book by visiting Spartan Bookstore, making payment and receiving the book on the spot. Secondly, the customer can order it online, make the payment, and the book will be delivered to the customer's address. Lastly, the customers may buy the book online, make the payment, and the digital book or audio book can be downloaded when the payment has been made. Finally, the customer receives the fulfillment and satisfaction as they successfully made the purchase in their preferred way.

9.0        Products

Spartan Bookstore's core and extended products are:

1. Core Products

   Textbooks for primary, secondary and tertiary education, magazines, dictionaries, novels and story books (in digital and audio book), guides, and more.

2. Extended Products

   Gift wrappers and gift wrapping services, cards, e-learning CDs, bookmarks, maps, and more.

The internet allows Spartan Bookstore to research what are the customers' needs and wants. Spartan Bookstore uses the internet to enhance the core products by delivering interactive and detailed information about its products such as provide author, synopsis, and reviews of the book. Besides, Spartan Bookstore also provides feedback forms to the customers so the bookstore will know more about the customers' preferences.

Spartan Bookstore also uses product bundling as their marketing strategy. Product bundling is a very convincing strategy by combine usually two or three products into one product in sales. This strategy will increase the range of the products that could be sold, since when selling the core product, the bookstore also bundles extended products to the core product. Besides, it also increases the range of product lines which can be offered since they can increase sales of the extended product by bundling it with the core product. Selling the bundled product with discounts and coupons will also encourage the customers to buy the products since it is offered at lower price and bundled with other products. Customers will feel satisfied to have bought two or more products at one low price. The bookstore also allows customers to customize the products since the customer are allowed to choose whether they want to buy a book in physical form or in digital form. In digital form, the products will be offered in PDF format, or audio books.

10.0        Customer Relationship Management (eCRM)

Spartan Bookstore uses the systematic approach to gathering, consolidating and processing of the customers information which is kept in the company database. Both relationship marketing and database marketing are used. In relationship marketing, the bookstore emphasizes more on customer retention and satisfaction, rather than a dominant focus on point-of-sales transactions. When a customer is satisfied with the product/service, it builds product loyalty which will help to maintain customer relationship. Besides, the increasing products and services which are offered in the market cause the rise in consumers' expectations and demands. So, emphasizing on customer retention and satisfaction are significant points to build relationship and get new customers. The bookstore uses database marketing to learn more about their customers, select target markets for specific campaigns through customer segmentation, and to provide more special offers for customers. The database usually contains customer names, addresses and transaction histories from the sales department. By using statistical techniques to develop customer behaviors, Spartan Bookstore has accurate data on customer needs, which will then be used to select customers for communication and open new directions to the customer distribution channels. This can enhance the customer relationships.

Spartan Bookstore is using demographic segmentation such as age, gender and education to segment the target market. The bookstore has a personalized website to attract and retain the target audience and to build sales since it allows the customers to customize the product to personal requirements. When the company retains customers, they accept customers' feedback in order to make a better service. The website may provide real time chat rooms which allow customers to talk to the staff about enquiries and feedbacks. This interaction between the bookstore and the customers will promote trust and loyalty to the company. Besides, forums are also one of the best methods to interact with the customers, except not in real time. In a forum, members can discuss about the product that they want to buy and ask other members for opinions so they can get more information about the book that they want to buy.

11.0        Conclusion

A web presence for Spartan Bookstore is realistic, with countless benefits of implementing the internet in the business. Once complete, all benefits can be enjoyed by the customers and they will experience the value-added services, at the same time assures high returns to the bookstore. There is still room for improvement in designing the website to attract customers, and focus on the proper methods of implementation and exposure to the public.

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