Internet as a sales channel: a marketing point of view

The peculiarities of the Internet as a distribution and marketing communications channel are characterised as follows: on the one hand, the power of the Internet enables buyers and sellers to directly come in contact, leading to so-called disintermediation (elimination of intermediaries). Not only companies and organisations can work directly with their partners, suppliers or customers: even consumers can directly communicate with other users. On the other hand, there is the emergence of new types of intermediaries that are specific to the electronic market. These include information intermediaries (infomediaries), organisations involved in the collection, compilation and dissemination of information on the web, meta-mediators (metamediaries), agents representing a group of producers and traders, united specific situation of purchase (purchase of real estate, cars, organisation of weddings other celebrations, and so on) search agents representing both the seller and the buyer and provides web search necessary information, product or service.

Mediators eradicated, but reborn

The emergence and growth of these new parties allowed to create a new system of marketing relationships. For example, authorising marketing (generally known as permission marketing) allows you to display a specific consumer advertising of goods and services at zillions of online resources, and advertising can be placed even on the sites of competitors. The role of the Internet as a resource the channel strategy is determined by the enterprise itself. The company authorities must decide for itself, how can the Internet change the channel in comparison with other elements of the marketing mix and increase the competitiveness of the company. Development of local and global information networks enables suppliers, manufacturers and distributors to establish direct communication. The mediators, concerned by the prospect of disintermediation, seek to maintain their position in the chain of creation of customer value. The restructuring of distribution channels has affected different industries such as car sales and distribution of recorded music, the grocery trade and the sale of real estate. The traditional structure of the distribution channel intermediaries smash large consignment of goods coming from the manufacturer, and sell their parts, providing storage,transportation, preparation of a certain range, a system of order, payment and other functions.

E-business has changed the traditional structure of the channel. From a direct distribution channel standpoint using the web implies sales of goods produced by the business and sold directly to clients, eliminating any intermediaries. According to HTP Digital, a digital marketing Manchester agency focusing on online promotion and strategic approaches implementation, the share of such companies in UK is estimated at 47%. The decision to use the direct channel is made if the benefits outweigh the benefits of direct sales provided by intermediaries. Electronic inventory system allows the manufacturer to consolidate several suppliers. Electronic Support System range enables the company to aggregate a wider range than that which is possible in a physical point of sale. Internet can also be used as an indirect distribution channel: the indirect channel always involves the use of intermediaries. As a rule, there is a combination of indirect channels using the Internet with traditional channels.

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