Task 1: identify and describe an emerging theme related to one of the following areas (course pathways):
- Marketing Communications (Advertising and Public Relations)
- Sustainable Marketing
- Digital Marketing
- Global Marketing
Task 2: Undertake research into your chosen theme to provide a critical evaluation of the alternate perspectives.
Task 3: Evaluate the potential impact on the chosen sector/industry in relation to one of the following specific aspects.
- Consumer behavior Or
- nature/structure of competition attached the guidelines for the assignment
In task 2 you are critiquing YOUR chosen theme using different perspectives that exist in the research world about it. You can use Models and theories to critique the Theme. Force Field Analysis ( Drivers and resistors) /Five Forces( each force on the perspective towards the theme ) Scenario planning ( what if the new theme is to be implemented the possible outcomes ) Triple Bottom Line ( if the theme is towards sustainability ) Strategic map ( to show if the theme is adopted how will fit industry practices) consumer decision making ( which can link with the Force Field). Strategic wear out( should theme not adopted what is the consequence) /Porter’s competitive strategies can be considered ( differentiation, cost leadership, etc )
[This paragraph will cover the advantage and disadvantages of adopting such a theme and its implications. Thus you need to get different points of view from various authors]
Due to the nature of technological advancement, it is important to start with the risk involved with this platform, which can prevent the emergence of markets. Security risk, especially online, is a key focus to a consumer (Rakuten, 2019), and therefore a method involving online transactions including personal and financial details can be perceived initially as a high-risk action in which consumers would stay clear.
Despite initial thoughts, research undertaken into consumers’ views on perceived risks varied. To understand best methods to mitigate risks in eCommerce, a nationally represented survey found that “49% use the internet for buying information” and as an informational source “internet was trusted more than other sources” (Flanigan, 2014). A conclusion showed an underlying trust on the internet over other sources, to improve trust and mitigate perceived risk, ratings and reviews were fundamental in shifting negative views.
This supports a word-of-mouth method (Arndt, 1968) in which showed how positive and negative word of mouth influences users accordingly, in which has never been stronger in relation to trusting internet sources. Therefore, this is vital when considering e-commerce as a transactional technology as tackling negative consumer attitudes will maintain the vast adoption of this new advancement.
[This paragraph should state even with the new emerging theme shows potential and a possible threat in the future, why companies(give example) are still embracing traditional ways and see growth in their business which focuses on resistors in the force field analysis ]
As discussed, online sales currently are growing in market share across all industries and are an emerging theme and threat to businesses. However, even with the emergence of new technology, offline, some businesses have been thriving despite the threat. Case studies such as Marks and Spencer have shown how a business can sustainably react to e-commerce by creating an offline experience instead.
Using consumer insight, Marks and Spencer focused on true consumer needs and replicated this in a revitalized relaunch of their food halls, creating additional experiences such as live cooking demonstrations to entice shoppers in-store rather than online. The relaunch achieved successful sales growth in a declining market (Hoad, 2016) creating a great incline in overall market share. Similarly, Holland and Barratt achieved similar success by focusing on customer needs and creating staff expertise instore unique compared to any online experience (Hoad, 2016).
Rather than a spike in growth, both brands made the relaunches sustainable, overall their focus on consumer needs allowed them to create a unique experience in-store that cannot be replicated in online transactions. This market reaction is a perfect example of e-commerce’s fiercest resisters as other businesses build on their strengths to offer unrivaled experiences. Overall, eCommerce technology meets consumers’ needs of convenience however this is clearly not their only need, businesses are recognizing this and are sustainably revitalizing their offering into experiences both on and offline.
[This paragraph identifies the opportunity to embrace such a theme and success by focusing on examples using Porter’s forces of barriers to the entry-provide example of successful companies]
Analyzing growth in brick and mortar solutions despite the competition of rising e-commerce is interesting as it has shifted barriers to entry (Porter, 2008:78) drastically in most markets. With emerging themes such as this, it is important to recognize the opportunity of early mover advantage (EMA). Adopting new technology can acquire advantages of other competitors and entrants in which can achieve a “strong competitive advantage in the form of higher market share or returns” (Fawley et al, 2005:273).
An eCommerce study based on low entry industries demonstrated key execution and importance of EMA and its benefit of case studies that have gained this. Across the World, the early mover e-tailers have been the main beneficiaries so far of this emerging theme, firms such as Taobao, eBay and Amazon took advantage of “network effects and advanced IT infrastructure” (Lieberman, 2007).
These sites host online transactions, allowing small firms to join their platform to sell goods to a larger audience, platforms such as Taobao is now the third-largest eCommerce platform in the world (Wang et al, 2016) and is now offering extremely low barriers to entries to millions of small retailers and entrepreneurs that do not have a large physical presence.
The opportunity eCommerce platforms have offered businesses is industry-defining, however, the key is to be one of the first movers. A key insight from this research showed that industries with low barriers to entry are now being dominated by eCommerce however, industries rivaling with more unique competencies are yet to be as shifted.
In the conclusion, businesses focusing on cost leadership focuses (Porter, 2004) need to take the opportunity of e-commerce as early as possible to maintain their advantage. If focussing on more unique competencies, businesses can still strive without e-commerce as its main threat is price-based rather than quality or experience however this will be interesting to see how sustainable this will be in the future.
The emergence of eCommerce depends on the industry, with early adopters such as Amazon to newcomers in 2019 and 2020. Industries with higher barriers to entry are yet to embrace this new technology such as automotive and real estate and are the focus of the emerging theme in recent years with brands such as Tesla trying to gain EMA. A key reason for businesses adopting new technology as early as possible to gain the competitive advantage to improve profitability as best as possible.
Introducing eCommerce solutions allows businesses to use resources more efficiently and can free up more capital than traditional brick and mortar businesses. Ecommerce can allow businesses to overall “cut unprofitable product lines” (Khurana, 2018) and focus more on services with eCommerce such as providing faster deliveries, higher quality websites or effectively functioning apps. This can be a key pull for businesses that are heavily pressured by shareholders focused on profitability, compromising on areas of the business to focus more on eCommerce can be advantageous.
The execution of platforms such as e-commerce provides a key “challenge on connecting an online and offline journey” (Hilde et al, 2016) in which consumers experience consistent qualities and branding whether online or in-store. A key driver for businesses adopting e-commerce is the “logistical advancement” (Christopher, 2011) as a response to demand and supply shifts in various markets.
Amazon now offers “same-day delivery” (Amazon, 2019) opportunities, proving the logistical capabilities if supply and demand are managed efficiently therefore consumers are becoming accustomed to such conditions. Overall, this forces expectations onto every brand to meet the same service quality experienced elsewhere.
[This paragraph emphasizes competitive advantage and shows this through strategic maps or any other strategic models ]
The emergence of eCommerce clearly impacts all corners of the business environment and its future impact is still unpredictable despite current case studies, predictions, and trends. The fast-paced adoption of eCommerce was a key example of businesses looking to gain early mover advantage to earn that competitive edge over rivals. Using forces field analysis (Lewin, 1951), we are able to understand the change this theme is creating through analyzing alternative perspectives that are both drivers and resisters to the platform’s emergence into new markets.
[This paragraph shows Five forces emphasis]
In conclusion, industries with low barriers were most affected, in which businesses that rival on price were the most impacted due to the winners and losers in the rise of the “e-tailer” environment. Despite early assumptions, risks over online security seem to be a little resistant to this emerging theme.
Accompanied with all emerging technology, consumers are wary and slow to adopt as they are less trusting, however, if countered effectively with ratings and reviews, effective word of mouth has seemed to shift this barrier. Another key resister to online sales comes from the need for quality or experience.
Businesses looked to gain their competitive advantage by offering tailored experiences in-store which cannot be replicated by any upcoming technology. Taking key consumer insights and building on existing strengths to create this experience looked to provide a very sustainable method of business for brands in which we are seeing more and more with rebranding and relaunches of products.
The limitations of experience from eCommerce is clear, and therefore provides a clear contradiction in consumer needs between convenience and experience. Both needs derive from the importance of time to a consumer, both wanting to spend the least amount of time buying products to consumers spending more time buying products and enjoying their experience in the process.
The polarised needs provide both key drivers and resisters (Lewin, 1951) to eCommerce, in which moving forward it is interesting to assess its adoption and success as it moves into industries with higher barriers to entry. Overall drivers of convenience outweigh resisters concluding how industries are forced to adapt e-commerce as consumers now view this technology as a must-have.
This section will identify the impact of the theme on the industry or sector with changes to consumer behavior. Thus here it will focus on the types of consumers available in the industry, how will it affect their change in usage, adoption of the product or service, choices, etc. [Look at various consumer behavior models, AIDA models -FOCUS IN PURCHASING specifics to the industry.
After the digital revolution, automotive remains one of two industries yet to adopt this platform (Automotive Marketing Online, 2019). Due to the purchase value, the barriers to entry to new car sales remain very high leaving an “oligopolistic…market” (Tutor2u, 2019) structure in the UK. The size of a new car purchase to a consumer makes the journey and purchasing behavior incredibly “complex” (Autotrader, 2019), introducing this new technology can make a huge disruption to the current landscape.
In the car purchasing process, online experiences currently dominate the journey, from identifying, researching, and comparing car models (Mintel, 2019). Despite this, according to the same report, “Finalising your choice” was heavily dominated by dealers rather than online measuring at 68% vs 25% (Mintel, 2019) indicting the main area of impact from this emerging technology. Due to the size of the purchase, the response to e-commerce has yet to be properly adopted by automotive brands as quickly as brands in lower-valued consumer goods. Using the AIDA model (Lewis, 1899:66), e-commerce is now an emerging theme within “Action” for all automotive brands, taking existing technology into their own industry. The impact on “purchasing decision” (Solomon et al, 2010) for a consumer journey creates an end-to-end online experience for the first time in automotive therefore experience focus for brands moves online. Brands now use user experience design to create an online brand value through interactions online, challenging businesses to replicate their product quality to online experiences. The Fogg Behaviour Model (2003) discusses how behavior is caused when all three “motivation, ability and prompt” (Ternay, 2018) converge to create the feeling of you can and want to do this now. From page journeys, device optimization, and loading speeds brands now have a new focus on generating these three components and overall are effective in converting web traffic into sales, creating a hugely competitive environment from the few leading brands currently and brand-new online dealerships.
To understand the effect on social conditions from eCommerce, an empirical investigation built on interviews from both dealers and new car buyers measured the impact from both sides of the business. Findings showed how “eCommerce emancipates and empowers” consumers (Janson et al, 2005:311), the technology provided access and availability to information and purchase never experienced in which actively shifted the power from dealer to buyers (Porter, 2008:78). The importance of perception of power to a consumer can shift purchasing behavior, allowing the customer to access information at their own leisure. The pressure of a salesman can ironically be a resister purchase therefore having more power as a consumer can improve experiences with brands and encourage sales. If eCommerce is fully adopted in the automotive industry, the power will be with the buyer, in which can impact entire marketing mixes for brands. The need for brick and mortar dealers reduced, the need for more online engagement increases, the method of customer care digitalizes, and therefore all areas of marketing is shifted due to the ever-changing social conditions.
To evaluate the impact on consumers effectively it is important to understand the target audience through segmentation. The current landscape of new car buyers is dominated by Generation X, within a two-year period 36% of 45-year-old+ had purchased a new car compared to 18% 44 or under (Statista, 2019). This marketing communication platform designed to impact the “purchasing decision” (Solomon et al, 2010) for new car buyers and therefore is predominantly looking to exploit this market.
The introduction of new technology through the digital revolution has not impacted this generation as much as millennial and generation z and often are the late majority through the diffusion of innovation (Rogers, 1971). This can be a contributing factor to this technology still emerging in the market as the segmented market are less embracing, however, the market is slightly shifting in favor. Millennials, “the largest generation” (Fry, 2018), are now becoming new car buyers, with older age, higher domestic income, and stability (Fry, 2018), the earlier adopting generation are entering the market, complementing the digital push in the automotive industry purchasing journey. Moving forward, the target segment will be more embracing of technology and therefore creates a great opportunity for eCommerce to shift the balance between online and offline sales due to impacting the purchasing journey
Ecommerce is not only responsible for transactions but shifts consumers’ behavior on how they communicate and engage with the brand, therefore, creates a huge demand for online customer care and relationships (Forbes, 2016). The importance of customer care to consumers is vital (Amaresan, 2018), and therefore introducing this digitally through the transaction process from start to finish is important to create a long-term relationship.
The relationship strategy (Mukit, 2017) focuses on three core elements, pre-transaction – post, and therefore eCommerce is more impactful through the transaction. Transaction elements such as managing demands, timing, and service levels are all impacted through this upcoming technology and forces focuses online to create this relationship. The impact of this extends further, as it now offers the consumer a digital relationship strategy pre-transaction through to post-transaction and therefore the reliance on a digital presence is more important and demanded to create convenience and efficiency for both business and consumer.