Industry Analysis Paper

Introduction

E-marketing is defined as "a type of e-commerce that achieves marketing objectives through the use of electronic communications technology such as the internet, mobile phone, e-mail, and databases" (Smith & Chaffey, 2005). Smith and Chaffey (2005) emphasizes the following points:

1. It should not be the technology that drives e-marketing, but the business returns from gaining new customers and maintaining relationships with existing customers.

2. E-marketing does not occur in isolation, but is most effective when it is integrated with other communications channels such as telemarketing, direct-mail, personal selling, advertising, publicity, sales promotion, and other promotional techniques

3. E-marketing should be based on knowledge of customer needs developed by researching their characteristics, behaviour, what they value, and what keeps them loyal.

4. Online channels should also be used to support the whole buying process from pre-sale to sale to post-sale and further development of customer relationships where this is appropriate.

5. The web and e-mail communications should be personally tailored to individual buyers based on the infomation obtained in the research

This paper will explore the evolution of market research and intelligence, evaluate the key external factors that have spurred or inhibited the development of e-Marketing, show the growth, and access the level of commitment to e-Marketing in the retail industry.

Market Research and Intelligence

Market research is a systematic approach to collecting, analyzing, and reporting data relevant to a business' specific marketing situation. There are many sources in which to collect this data including but not limited to internal sources, periodicals, commercial data, and government publications. A company may also hire a market research firm to conduct a custom marketing of specialty-line research strategy. Market research information is then used to discover market opportunities, estimate future demand, or survey buyers' intentions.

Market intelligence supports the business goal of identifying trends, government regulation that affects that industry or analyzing market segments. Retailers use market intelligence by sending out shoppers to their establishment in order to access how employees are treating customers and to access overall customer service. This information is then used to make improvements or access market opportunities.

Growth and Development of e-Marketing in the Retail Industry

In the past retailers used commercials, print advertising, and Sunday sale circulars to market to customers. In today's age of technology, those medias alone simply will not work. Today's retailers are "focused on driving site traffic, commerce, or both. Tactics primarily revolve around affiliate and search marketing, focused cost-per-click, and cost-per-sale display advertising. From a site perspective, advertisers have worked improve site usability and design. These site improvements are beginning to pay off. According to comScore Media Metrix, the pace of unique visitor consumer traffic to retail sites is increasing at a faster rate than that of traffic to total Internet sites. In addition, the raw number of retail sites with measurable traffic increased significantly more than the number of overall Internet sites with measurable traffic" (Cohen, 2005).

According to Gatti (2004), "Jupiter Research reports business-to-consumer e-commerce will keep it's a positive momentum, growing an estimated 17 percent annually to over $117 billion by 2008. Jupiter believes that U.S. online retail sales will be fueled by, growth in the number of online buyers and an increase in average spending per buyer. Jupiter expects the growth in new Internet shoppers to gradually slow--finally reaching a penetration rate of 67 percent of all online users by 2008. During this time, however, Jupiter projects that the average dollar amount spent by Web shoppers will increase steadily, nearing $780 per buyer in five years."

External Factors

There are several external factors that have that have spurred or inhibited the development of e-Marketing. They include the following:

1. Technological - Computer technology advances very quickly. Companies need to have the hardware as well as software to keep up with these changes. This may include to ability to analyze site traffic, development of online surveys, customer personalization, and coupon promotion management. Sites also need to be available 24/7, updated frequently and capture the attention of the customer immediately.

2. Competitive - With the use of the internet, customers have many options to purchase a like product. Customers frequently use sites such as MySimon to search for the best deal. In order to remain competitive, retailers must offer a good price along with other incentives such as free shipping or have an easy return policy.

3. Social, Cultural, and Environmental - These factors influence products and services. They deal with the way people live, what they value, and their unique situations. Some customers may not purchase products from a certain companies such as the America Girl Doll Company. It was recently reported in the news that the American Girl Doll Company gave donations to a company called Girls Inc. Girls Inc, endorses Roe v. Wade, which dealt with the

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