E-commerce Market Essay, Research Paper

The firm?s objectives can be met and a go?ahead is suggested subject to

addressing the recommendations. Macrosegmentation of the market identified

machinery, wood, base metals and plastics as target markets for the firm.

Revenue expectation based on a 0.4% market share is $329,000. Break even is

$259,000 and requires contributions from 17 customer projects at an average

billing of $15,000. The budget set for implementing the promotional mix is

$100,000. Target ROI = 15%. The following recommendations must be considered

before start-up: 1. Protect service names and marks. 2. Conduct a

microsegmentation analysis to refine market segment intelligence. 3. Develop

multisegment targeting strategies for the chosen markets. 4. Ensure that funds

are in place for first year?s operation. 5. Develop a decision support system

including customer details, candidates for networking and reciprocity. 6.

Complete 3 ? 4 assignments at cost to establish a credible portfolio. Use as a

source of referrals. 7. Obtain ISO 9000 certification ? ?walk the talk?.

Apply benchmarking standards. 8. Develop assessment and promotional tools using

the firm?s service. If the service is to work for the client it should work

for the firm. 9. Finalize details of the promotional plan. 10. Develop influence

as a trade mission co-ordinator. Organizational Mission The firm?s mission is

to provide innovative and effective global marketing services to British

Columbia industries. They focus on E-business as a primary means of achieving

client objectives and measure their effectiveness in terms of customer

satisfaction and referral business. Market Opportunity Analysis Analysis of the

size and sustainability of various market segments. The segmentation basis used

is demographic. Primary descriptors are geography, customer type, growth rate

and size. Demographics ? (BC Statistics)  There are 13,700 small and

medium exporters in BC ? 4.6% of all businesses in British Columbia. They

account for $3.7 billion or 13% of British Columbia?s total export value. The

average small and medium exporter typically exports $269,500 annually. 

Rising trend ? small and medium exporters  1000 per annum and export

 $200+ million per annum.  British Columbia?s small and medium

exporters typically ship ?value added? products ? less susceptible to

economic slowdowns. During a recent slowdown they actually increased their

exports by $12 million.  79% of small and medium exporters are dependent

on the United States as their primary export market. Environmental Scan

(Purchasing On-line) Social Forces  Increasing competition is forcing

higher standards in the global marketplace ? TQM, ISO 9000. 

Globalization of trade increasing competitive pressure on domestic producers due

to foreign competition ? simultaneously offering new opportunities for export.

 Small and mid-sized businesses often lack vision and resources to

develop world class enterprises ? need help. Political/Legal Forces 

Various Governments are attempting to stimulate business on the Internet ?

taxation moratorium, privacy protection, copyright protection and fewer

regulations. Technology  Dramatic increase in Internet use for business

? 73% of corporate buyers use the Internet.  Opinion leaders such as

IBM are shifting their entire purchasing systems onto the Internet. 

Vendor analysis is more efficient ? faster and more comprehensive comparison

of supplier alternatives.  Distribution improvement ? intermediaries

become redundant as suppliers and buyers connect directly.  Purchasing

cycle time reduced ? RFQ?s that used to take 20 days to process now take 20

minutes.  Shipping/Logistics ? tracking, price brokering,

inventory/shipping integration are streamlined.  Real-time

Supplier/Purchaser dialogue and co-operative design over the Internet eliminates

waste, reduces costs and speeds up new product development.  Internet

not expected to be significantly affected by Y2K problems in either North

America or Europe.  Perceptions of transaction security remain a

concern. (This perception is rapidly diminishing)  Suppliers are ill

equipped to provide E-commerce ? (Actually a plus for Global Reach Inc.)

 Heterogeneity of service is a concern as buyers are confronted with

numerous unfamiliar suppliers and engage in extensive, high-involvement

decision-making. ? (Actually a plus for Global Reach Inc.) Competitive

Analysis (Business in Vancouver, The AD Pages, telephone survey) There are 51

Marketing Consultants operating in the Lower Mainland. Average market share of

1.9% is inferred ? no data available. Web page development and media promotion

are standard. Larger firms have the capacity to develop E-commerce solutions but

are focusing on expensive EDP and Intranet strategies ? suitable for only the

larger exporting firms. Some are involved in E-commerce on the Internet ? no

significant impact on the market. Methods of charging for services are fixed

price quotations, cost plus arrangements, often with performance bonuses. Assume

average annual billing per client is $15,000. Fee range = $25 ? $200+ per

hour. Target Market Profile and Analysis  16% Machinery  11%

Wood  7% Base Metals  6% Plastics Total Firms = 5,500 We have

targeted the above market segments for the following reasons.  They

include four sectors that involve the greatest number of small and medium

exporters.  Their products are non-perishable, usually standardized and

can be transported with safety.  Their products are readily catalogued

and adaptable to the Internet.  They are value-added products and are

relatively immune to economic slowdowns.  The average size of firm lies

within the lower end of the small and medium exporter range thereby lessening

direct competition from large marketing consultant competitors, yet they are

sustainable as market segments and they show growth of more than 10% per annum.

 They are already involved in export and have strong unfilled needs and

wants in this area. They are often early adopters of technology and are

customers with a strong tendency to rebuy. Target market Strategy  To

stimulate recognition of Global Reach Inc. as an innovative and credible

enterprise from the target markets and to stimulate learning and acceptance of

the marketing methodology used by the firm.  To build strong client

loyalty by branding the firm?s services and providing verifiable assurance

through ISO 9000 certification. Marketing Objectives (1st year ? build

awareness and market share)  Develop strategic alliances and reciprocal

agreements with key reference groups, opinion leaders, suppliers and buyers.

 Achieve a 0.4% market share and gain name recognition as a premium

service by 30% of the target markets.  Develop a viable

micro?marketing database.  Build a credible project portfolio 

Exploit differential advantages of unique attributes  Cover costs of

operation. Marketing Mix Product A comprehensive marketing service offering

effective strategies for global trade. Unique attributes are:  ISO 9000

certification  E-business specialists  Global marketing focus

Distribution  The distribution channel is direct to the consumer. The

core service of the business is information processing using high technology.

Service delivery involves high-tech media such as video conferencing and

real-time consultation over the Internet. High-tech distribution is balanced

with personalized, pre and post-sale services conveying tangible cues affirming

the firm?s positioning as a premium service. Seminars, workshops and video

conferencing provide much of the education and assurance components. Pricing

strategy Pricing includes fixed price and cost plus contracts and may

accommodate performance bonuses where practical. Pricing is based on an hourly

rate of $79. Fixed price contracts to include a 15% contingency reserve. Pricing

is significantly below larger consulting firms ($100?200+) but above smaller

limited service firms? ($25?$50) establishing an aggressive, yet

prestigious, pricing strategy for Global Reach Inc. as a new premium service

company. Revenue/expense & breakeven analysis Assumptions are: * market

share of 0.4%. * 80 billable hours per week (net of sales and administration

time) * contingency = 15% * No variable costs. * Avg. Project = $15,000 Market

size Market share Billable hours Billing rate per hour Expected revenue No. of

projects Avg. hours per project Fixed cost contribution 5,500 0.4% 4,160 $79

$329,000 22 projects 189 $15,000 Fixed cost Office expense Promotion budget

Partnership draws ISO 9000 certificate 15% contingency Total costs $25,000

$100,000 $80,000 $20,000 $34,000 $259,000 Breakeven point 17 projects Desired

profit @ 15% $39,000 Breakeven point ROI 20 projects Promotion  Image

development as a progressive high quality firm offering premium customer

services.  Relationship marketing is emphasized and education services

provide the opportunity to heighten learning and awareness of the firm?s

credibility, customer focus and methodology.  Trade missions and

Internet trade portals demonstrate the firm?s ability to connect with the

global community.  Use AIDA concept to stimulate attention, interest,

desire and action for the firm?s services. Promotional Mix Est$ Media

Purpose/Expected Result 30K Advertising Trade journals ? frequency ?

pulsating ? coincide with seminars, workshops and trade missions. Build

awareness and generate interest/leads. 10K Direct Mail Interactive CD-ROM

technology ? stimulate preference, conviction, lead generation. 5K

Telemarketing Follow-up, reinforcement and post-sale assurance and empathy. 5K

Invitations To solicit response to trade missions and special events. Build

brand loyalty. 5K Web Site Rich content with useful application aids, trading

portals. Lead generation. 10K Workshops Learning and acceptance of new

technologies. Develop preference, conviction. 5K Video Conferencing Educate and

provide better diffusion throughout target markets. Follow-up and post sale

support. Build customer loyalty. Generate referrals. 10K Sales Promotion Free

seminars. Stimulate need recognition and develop preferences for the Firm?s

services. Lead generation. Qualify prospective customers. Build commitment. 15K

Personal selling Consultative and need satisfaction approaches. Strong

relationship sales focus. 5K Public Relations Computer camp for disadvantaged

children ? Network for a good cause. Suggests a caring, progressive

orientation. Strong relationship builder. Recommendations 1. Protect service

names and marks ?Global Reach?, ?Compete With Big Business By Building

Community?. 2. Conduct microsegmentation analysis. Determine customer

purchasing strategies, criteria importance and unfilled needs and wants. 3.

Develop multisegment targeting strategies for chosen markets. 4. Ensure that

funds are in place for first year?s operation. Capital obtained from family

connections. 5. Develop a decision support system including customer details,

candidates for networking and reciprocity. 6. Complete 3 ? 4 projects at cost

to establish a credible portfolio. Use as a source of referrals. 7. Obtain ISO

9000 certification ? ?walk the talk?. Apply international benchmarking

standards. 8. Develop assessment and promotional tools using the firm?s

service. If the service is to work for the customer then it should work for

Global Reach Inc. 9. Finalize details of the promotional plan. Use results of

microsegmentation analysis. 10. Develop influence as a trade mission co-ordinator

for small and medium exporters.