NAME: - ANUPKUMAR JOGIBHAI PATEL

ADMISSION NUMBER: - 1412071 DATE: - 10/08/2020

INTERNET AND SOCIAL MEDIA MARKETING

ASSIGNMENT

SECTION-A

1.  “Internet revolution has given a new platform and direction to the Marketing world”. Comment giving the
advantages and limitations of Internet as a new media for Marketing. Also discuss some innovative strategies for
Internet Marketing with examples.

Ans :- The advent of internet technology has undoubtedly marked the beginning of a new era of infinite connectivity and
information. The conservative rules of marketing are being challenged by the generation which is more knowledgeable and is
always looking for new avenues to gain more of it. There is a new breed of internet users who are pushing all limits of
expectations and magnanimously accepting the digital changes. According to ComScore (2011), social networking is the most
popular online activity worldwide accounting for nearly 1 in every 5 minutes spent online in October 2011, and reaches 82
percent of the world’s Internet population, representing 1.2 billion users around the globe.  Coca cola has more than 49 mn
fans on Facebook. US consumers spent $50 bn in retail ecommerce in Q4 in 2011 which is a 145 increase than last year
(comScore, 2012). Social networking is beyond cultural and geographical differences. According to comScore (2011)
whitepaper, in 2011, Twitter was used as a central means of communication during events of worldwide and national
significance, ranging from political uprisings in the Middle East to disasters, such as the earthquake and tsunami in Japan.
Among the most tweeted moments in 2011 according to Twitter were political events such as the death of Osama bin Laden,
celebratory moments such as New Year, and news about Steve Jobs’ resignation from Apple and consequent passing. The use
of social media in Barack Obama’s presidential election campaign was widely accepted by the nation. Any organization
aspiring to survive in the current times cannot afford to ignore these statistics. And those planning to succeed must strive to
understand this new hybrid element of the promotion mix inside out.
Social media marketing usually means the use of internet based resources via broadband or mobile devices to promote,
advertize or communicate. Facebook, twitter, orkut, MySpace, youtube, linkedIn, pinterest and blogs are some very
prominent examples of social media. There are many factors contributing to the success of marketing through social media
such as unlimited accessibility and interactive mode of communication. Response and feedback about a product is almost
instantaneous and transparent and hence it helps companies to innovate and provide what is exactly in demand. Social
marketing defies the conventional marketing strategy of “pushing” the product in the market. Instead it has created
tremendous awareness amongst the consumers, thus “pulling” the desired product into the market. Websites and blogs
interacting with the consumers and propagating information not only about their products and services but also about the
organizations’ philanthropic efforts go a long way in creating a brand value and brand loyalty. Relatively small expenses
incurred in social marketing has made it a preferred choice for big and small businesses equally.

Advantages and disadvantages of social media marketing

           Like all other tools of promotion, social marketing also has some inherent advantages and disadvantages. Though the
success of some of the latest social campaigns is celebrated, one has to be cautious about the threats as this is a completely
new medium of communication in the marketing world. Some of the most lucrative advantages of social marketing that
makes it a very relevant marketing tool in contemporary businesses are listed below:-
Unlimited accessibility – Social media marketing surpasses all other promotion tools in terms of people it can reach. The
visibility of the product and the organization increases manifold on internet based resources. Google + took less than a month
to reach 25 million unique visitors.Cost effective and high return on investment – The cost of marketing digitally is apparently
negligible vis a vis any other marketing tactic such as a television or print commercial and translates into a higher ROI. This is
extremely lucrative for small companies with slim marketing budgets. The number of potential customers that can be tapped
using the same campaign in practically unlimited. Interactive communication- The impact of consumer to consumer and
consumer to marketer communication is phenomenal. Two-way communication gives a better understanding about the
customer’s perception about the brand. Also, the feedback and response in almost instant unlike traditional methods of
advertising where the marketers had to wait for a complete purchase cycle to receive the feedback about a new product.
Dynamic advertising – Since the cost of technology is not very high, the promotions can be customized and updated
frequently according to the changes in the market. In fact, it is highly important to keep the content relevant and updated to
maintain high interest about the campaign.
                     The world of social media is full of promises for the businesses but there are certain disadvantages lurking in the
background. However, these are perceived risks which can be handled tactfully to reap the full benefits.

Since the consumer-marketer communication happens on an open platform, the competitors know the “moves” and can plan
to counter-act.
Technological know is imperative to create and manage social marketing. Coupling creativity with technology is an important
challenge for the organizations working to enter the new zone.
Unreasonable customers’ demands and negative publicity are a part of the marketing game. Since social media platform is
open to all, there can be instances of unreasonable customers and negative publicity.

Pepsi- Refreshing the world of marketing

            Pepsico, a market leader in food and beverages industry, is present in more than 200 countries with 22 brands. With
annual revenues of more than US$65 bn, Pepsico is committed towards sustainable growth through its “Performance with
purpose” mission. High standards of ethics and integrity have made Pepsi a synonym for diverse and inclusive work culture
translating into quality productivity. Pepsico is committed to delivering sustained growth through empowered people acting
responsibly and building trust (Pepsico, 2012).
            Pepsi ads are globally applauded by the youth for energy and vigor. Pepsi spent almost $ 3.4 bn in advertising and
marketing in 2010.(Pepsico, 2011). On January 13, 2010, Pepsico launched their “Refresh project” with an aim to foster
innovation in social good. The main idea behind the campaign was to provide financial aid to those passionate about bringing
a positive change in the society. The campaign invited customers and organizations  to visit the website and submit their
constructive and refreshing ideas in  categories of  arts & Culture, health, food & shelter, environment, community and
Education that could make a positive impact on the society. The winners selected through online voting will be awarded
financial grants to the tune of US $20 mn in total. Being voted as one of the top five Best Ever Social Media Campaigns by
Forbes, Refresh project had more than 6.6 mn registered voters and 80 mn votes casted (Pepsico, 2011). Within 97 of the top
100 local media markets covering the campaign, there were 3.39 billion media impressions for the Pepsi Refresh Project
The unprecedented success of this campaign has proved the efficiency and response of a well-designed social media
campaign. Refresh project had a multidimensional effect on the image of the organization. It reiterated its commitment
towards sustainable growth and created a top of the mind recall for the brand. According to Shiv Singh, head of digital for
PepsiCo Beverage America (NY Times, 30 Jan 2011):

“This was not a corporate philanthropy effort. This was using brand dollars [in] the belief that when you use these brand
dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community
will win.”

Bypassing conventional strategy of flashy celebrity studded advertisements for a new generation promotion campaign was a
decision based on the need to acknowledge the customer shift towards social media. Pepsi understood that engaging
customers especially the youth in a social media project will help creating a consumer friendly brand.  Though the success of
refresh project did not translate into increased revenues for Pepsi, but that is something which was not actually targeted by
the campaign. The company considered this an investment to recreate brand awareness and foster a strong and trustworthy
relationship with the customers.
Social Marketing at Evian and Dunkin Donuts
          Evian is a leading natural mineral water brand from France. Evian’s first global campaign “Live Young” in 2009 featured
96 animated babies dancing to the tune of “rapper’s delight” in a one-minute long video. The video was launched on TV and
internet almost simultaneously.. The video which showed animated babies perform various moves on roller skates rapping
along promotes the effects of Evian, naturally pure and balanced mineral water on your body. Though the video was criticized
for its graphical shortcomings, it went on to become the most viewed online ad ever with 42.5mn views till November 2009
(Guinnesswoldrecords, 2009). Researches show that over 80% of people in France or the US who saw the clip, considered
discussing it and two thirds were ready to share it with friends. Facebook, which had over 440,000 fans on Evian’s fan page
made this sharing easier along with Twitter, with the video being retweeted over 16,000 times. Though the ad was launched
simultaneously on TV and internet, 95% of the people who spotted the advertisement on internet were not directed from TV.
This fact substantiates the impact and visibility of marketing via social media.
Evian was looking to reestablish its image as a market leader in premium product of superior quality. And this campaign
highlighted the brand’s promise of youth and precise health benefit of superior value. The aim was to use creative and fun
filled spectacular content to make
the ad go viral on its own. Not only did this campaign create a buzz for the brand, it was boosted sales up by 11% versus an
average of 7% in the industry (Evian, 2011).
           
Evian’s “Lets baby dance” is another attempt at customer engagement and viral marketing. The campaign invites customers
to upload their funny dancing videos on the Evian website. The website also has a “live young community” which allows
customers to post their pictures. However, both these campaigns could not replicate the success of roller babies.
           
Dunkin’ Donuts is a leading brand in baked goods and coffee chains operating in 32 countries through its 10,000 shops and
franchisees. With its 32 types of donuts and a dozen coffee brands, Dunkin’ donuts serve more than 3 million customers per
day (Dunkin’ Donuts, 2012). The company has been using many loyalty programs and promotions such as membership cards,
“caught cold” giveaway. However, facebook fanpage strategy of Dunkin’ Donuts had tremendous success. “Keep It Coolatta”
launched in June 2009 to promote Coolatta beverages invited fans to upload a their photo with one of the Coolatta
beverages on the Fan Page wall, add the slogan “#CoolattaGiveaway”, and consequently update make the same picture their
own profile picture. This gave them a chance to be a part of a daily giveaway which was randomly selected by Dunkin’
Donuts. The company not only awarded the prizes to the winner but also updated their official profile page with the winning
image. The “grab it, snap it, post it, win it” campaign became a trending topic with the youth. With more than 7.1 million
“likes” on its facebook page, Dunkin’ donuts extensively and creatively uses social media especially Facebook and twitter
( @dunkindonuts has more than 43000 followers) to create a buzz about its products and brands. Facebook fan of the week
and creating your own donut write from the name to its ingredients are excellent ways of engaging customers with the
brand. These campaigns encashed tremendously on word of mouth publicity from friends of friends on social networking
sites.
            Procter & Gamble’s Old Spice campaign using Isaish Mustafa on web to answer questions from facebook and twitter
fans in real time, Burger King’s “subservient chicken” taking commands on the website and Ikea using facebook page as a
launchpad for new products are some other successful social marketing campaigns of contemporary market. They have
validated the effectiveness of the new age marketing tool as one of the best in terms of cost to returns equation.

Social Media – Preparing for Next-gen Marketing Tool

            Marketers agree that digital tools and technologies are valuable, though many of their companies struggle to measure
the financial impact and capture customer data. (Mckinsey, 2011). Similar to all other promotion tools in business, social
marketing promises infinite benefits but also poses tremendous challenges to marketers. There exist a set of marketers who
brush aside the social marketing as yet another bubble to be burst in a couple of years, the statistics suggest a promising
future for internet based marketing resources. According to Nielsen’s Social Media Report for Q3 2011, social networks and
blogs are still the main destinations online, accounting for a quarter of the time Americans spend on the Internet. Consumers
have a preference for advice of their peers over advertisements making social media a powerful platform to influence and
spread a word. Almost 60% of the social media users generate reviews of products, services or brands. Active users are found
recommending and talking about the “likes” offline also.
The extent of impact of social marketing may vary in future but it cannot be completely ruled out. There is a change in the
mindset of the customer and they are looking for new ways of communicating and aggregating in specialized niche online
communities making it imperative for the marketer to think on the same lines and connect with them. (Ryan, D and Jones,C
2009). Some of the challenges that need attention by the new and existing businesses to survive in the era of social marketing
as listed below:-

Micro relevancy- Information overflow on the social platforms make it important for the promotional content to be very
relevant. The target audience should connect with the content and find it effective enough to be pushed forward.
Technological know-how – Content on the web needs constant customization and updation and marketers need to engage
experts to handle social marketing.

Measuring performance- Driving traffic to the desired website and translating the traffic to participate is an important aspect
of social media and needs regular monitoring. Certain tools such as google analytics and SEOs solutions enable marketers to
measure the performance and effectiveness of their campaigns. Collecting and interpreting data collected through such tools
should be strategically used to produce more relevant and effective content.
Tackling negative publicity- Being “open to all” can be exploited negatively by those looking for a moment of fame or
compensation or running fraudulent campaigns. Such incidents are inherent to social media and should be handled delicately.
Information security- Connecting with the consumers through internet can be harmful and makes the sensitive data prone to
phishing attacks or data leakage.
           
Internet is transforming the economics of marketing and challenging the conventional marketing tactics. Owing to the
information flowing in the virtual world, the consumers are becoming extremely specific of their demands and critical of the
options available. At the same time, the net consumer is not hesitant of telling what he likes and influencing the decision of
the peers. This new paradigm of marketing, though building anxiety about the challenges of implementation, is creating
excitement about the potential of driving value for businesses. And those planning to overcome the challenges and realize
the potential are bound to see a steep upward curve in the revenue graphs.

2. “Business Models have been redefined by the emergence of Web Models”. Comment, justifying your answer
with appropriate examples and also discuss some of the prominent Web Business Models. 
Ans:- The term “business model” became popular in the late 1990s, during the Internet boom, in part because many website
businesses seemed to plan for generating traffic without a clear view of how or when traffic would generate revenue and
profits.
The term itself is a bit too trendy, in our opinion. Talk of the business model ought to be recast in more standard business
terms, such as sales, costs, expenses, and profits. As you develop your strategy, focus on how your website will benefit your
business. What is its payoff for your business?
The easiest payoff to understand is sales and profits, but there could be many others. Some websites exist just to support
sales by making a buyer’s decision easier, some reduce costs, some improve customer satisfaction, some substitute for
telephone communication or sales collateral.
While the classics below are fairly obvious, in reality there are infinite numbers of possible business models for websites. You
might have a commerce site, content site, community site, portfolio site, or something else entirely. The main point is that
there should be a payoff for your business. You don’t develop a website just because somebody says you should. You develop
it because it has a business or organizational purpose.
The portfolio site: like a business card on the Web
These sites offer information. Their target users go to them to find out more about a business. The sites don’t specifically sell
anything, but they do support sales by generating leads or making the viewer’s buying decision easier.
What we call portfolio sites are the millions of websites that don’t really sell anything but present the equivalent of sales
literature on the Web. The restaurant sites that post their menus, the legal and accounting practices that post professional
biographies and related information are just a couple of examples. The Web started with these kind of sites because they are
relatively inexpensive to produce and provide significant benefits.
The basic commerce model: sales and profits
The simplest website business model is based on making sales and profits. A classic commerce website like Amazon.com or
Buy.com sells products, takes orders, charges credit cards, and ships goods. Software and some information sites have the
advantage of being able to deliver what they sell online, at the time of the transaction.
These sites normally offer their target customers the benefit of ease of use and selection. Amazon.com, for example, set the
standard for commerce sites by offering a huge selection and a wealth of additional information on the products it sells.
The content model: based on advertising
The content sites work economically like mainstream network television in the United States, free content to users paid for
by advertisements that users put up with. This is also a lot like the classic newspaper and magazine business, content paid for
mainly by advertisers, with the exception that most magazines and newspapers sell for a small price while getting most of
their revenue from advertisers. The “business model” isn’t really new, just the fact that it is offered over the Internet.
Consider Yahoo! And competing Internet portals, newspaper and magazine sites, entertainment sites, and other types of sites
that are free to browsers and make money by charging advertisers or sponsors for banner advertising and sponsorships.
These are content sites that depend on Internet advertising for their revenue.
Community sites
Consider the business value of the bulletin board in a local supermarket. The market doesn’t charge for posting notices on the
board, nobody pays to read them, but the business takes the trouble to manage the board. The underlying business benefit,
we guess, is that the sense of community builds traffic and loyalty.
This value is similar in the Internet community site. A typical community site offers email, bulletin boards and forums, a
common focus for some group that has a common interest. Community sites are often started by groups, clubs, and
government organizations. Some of the best of them, however, are sponsored by businesses that want to take advantage of
the common interest. For example, a rock climbing community site might be sponsored by a local store.
Most sites are really hybrids, combinations
In truth most sites offer a combination of target user benefits. This site, bplans.com, for example, combines content and
community with a touch of portfolio and commerce. Amazon.com combines commerce with content and community;
Yahoo.com also combines content, community, and commerce.
Business model summary
How will you turn users of your website into money? Is there a plan for it? How will you measure it? For a hybrid site you
need to make sure you explain how the hybrid will make revenue. Will you have a commerce portion? Will you be depending
on sponsorships and advertising? Will you be selling services to your users? Make sure that you think about how you will
ultimately make your website venture bring in real money.
Try to think of your website benefits in monetary terms. This is a good time to your sales forecast. The sales projected might
actually be business benefits instead of sales: increased closing percentage, increased customer satisfaction, or increased
retail traffic. Think about how those benefits might fit into a sales forecast, because then you’ll be able to compare monetary
benefits to expenses.
As the Internet becomes more of a fixture in peoples' everyday lives, it offers everyone the chance to become a small
business owner with more ease and less capital investment than ever before. For example, if your friends all tell you that you
make the most amazing spaghetti sauce and that you should turn it into a business, you can start right away by building an
online presence for your business and its products, before you've even actually produced one jar of sauce.
One question remains, though, after you decide to create your business online. What online business model is the best for
your internet business? While you might decide that it's best to make a product, such as your winning spaghetti sauce, this is
one option, though certainly not the only one. 
Take the time to consider the best internet business model for your new idea and you will dramatically increase your odds of
success.
Which Online Business Model Fits?
There are three basic business models for online businesses, and you can choose the one that best fits your vision. You can:
Sell a physical product.
Sell a service.
Sell a digital information product.
If you don't want to deal with the manufacturing, storage or shipping of a physical product, and you don't want to provide a
service, you can try another form of business that has become very popular online, which is affiliate marketing. Affiliate
marketing is the concept of promoting other people's products (physical or digital) or services and simply receiving a
commission when a sale is made.
The following walks through each of these models in more detail.
Selling Physical Products Online
This is often the first model that comes to mind for many people. Create a shippable, physical product and market it online. It
could be sold via your own e-commerce storefront, an auction site, or you can sell your products on a third-party site, like
Amazon.com.
Benefits of selling physical products online.
Compared to selling from a physical location, there are several benefits to selling your goods online. First of all, customers can
check out your product offering without having to go to your physical location (if you even have one).
Customers get to see all of your options including things like customer reviews, ingredient lists, and related recipes or uses.
Videos and photos of your product in use and FAQ sections can give customers more information than they would ever have
in a brick and mortar store.
Finally, as more and more consumers are switching their buying habits to online, you'll be able to reach more people and
increase sales from an online presence.
Drawbacks to selling physical products online.
You have to actually make something. And warehouse it. Then ship it. Physical goods can spoil and are time-consuming to
produce, inventory and ship.
And then there are the returns. With physical goods, inventory control is a challenge. If you make too much and it spoils, you
lose. If you make too little and you run out of stock, you lose potential sales and maybe clients who will look elsewhere for a
more reliable supply.
Note: Another way to sell physical products online without the hassles of having to create products, handle shipping, etc. is
to start an online drop shipping business.
Selling Services Online
Services are ideally suited for online sales. There are two basic ways services are sold online.
You can use a website as your sales tool. Many offline businesses use their website as a sales tool for services delivered in
person. Their site serves as more of a company brochure than a storefront.
You can find (and qualify) a carpenter, dentist or massage therapist all through their online presence. The one thing they have
in common is that you physically receive all of these services. This is a great method for generating and qualifying leads for a
service-based business.
You can also choose to provide services that are sold (and delivered) online: Examples of these services include web
marketing, travel, and entertainment. All of these items are sold and delivered via the vendor's computer. Customers can get
instant gratification by completing their purchase directly online rather than having to wait to speak with someone or make
an appointment.
Benefits of selling a service online.
It can be much less expensive to capture leads and customers via a well built and marketed website than through traditional,
offline methods. Customers receive lots of information about your product and don’t have to travel to check out their
options.
Well-built sites with lots of content will outperform weaker competitors every time. Regardless of whether you use a
brochure or storefront platform, this business model is faster and easier to set up than one selling physical goods.
Drawbacks to selling a service online.
There are high levels of competition, especially for specific keywords. If you are a plumber in Seattle, you might have a hard
time ranking for the keyword “Seattle plumber”.  
A typical Google search on these keywords returns over 2.5 million results. Because of this, you’ll have to consider an
aggressive content marketing plan. Because you generally don’t get the chance to establish an in-person relationship with
your customer, an engaging blog with videos plays an important role in this business model.
One of the most effective ways to promote a service-based business is by using Facebook advertising. You can target your
audience by geographic location, demographic information, and targeted interests as well. And the good news is that
compared to other advertising mediums, Facebook is still relatively inexpensive and cost-effective for small businesses.
Selling Information Products Online
Making money online by selling information products is the business model of choice for lifestyle entrepreneurs and internet
marketers. When you sell products or services a bottleneck often develops. Business owners frequently hit a level of sales
that they can’t grow beyond without changing their business - hiring more staff, buying more equipment, etc.
With information products, you don't have the hassles of traditional businesses like overhead, inventory, employees, being
confined to a single location, etc.
Products are almost exclusively delivered electronically and automatically. Payments and invoicing are automatically handled
by your shopping cart and payment gateway. You can process one order per day just as easily as one thousand transactions.
Basically, you create the product once then only have to focus on marketing and driving website traffic. Every other part of
the business is completely automated.
Information product sales can be broken into two categories.
Downloadable Material: The most common downloadable material is an ebook. They range in price anywhere from $3.99 to
$49.00 and up ($3.99 is a common price for an ebook on Amazon while an ebook sold directly on your website that covers a
very specialized topic could sell for a much higher price point). Other downloadable material can include audio (MP3), video
(MP4) and worksheets. The higher priced courses often include a combination of pdf and audio/video files. Because these
products are delivered digitally and there are no costs involved you get very high-profit margins on these types of products.
Membership Sites: These range from online access to newspapers/magazine to full-blown training sites with video, audio,
and interactive forums all behind a membership gateway. These often bill monthly or annual membership fees. Sometimes
they are set to automatically deliver a set amount of content to each new member - like course lessons - over a set period of
time. The goal of this “drip” method is to avoid overwhelming new subscribers with too much content and to keep them
paying for a longer period of time. Having a membership site where members are charged monthly is a good way to get
stable, recurring revenue into your online business.
Benefits of selling information products online.
Many of these online service vendors provide ongoing information which means a recurring billing model. With monthly or
annual billing, you’ll require a much lower number of clients to be successful.
This business model requires very little maintenance time, once the product is actually created. Because of the scalable
model, you can easily handle large numbers of buying clients without hitting the typical bottleneck that is common in product
and service businesses.
Drawbacks to selling information products online.
Information vendors struggle with conveying the real value of their material. With so much free information available online,
it is a challenge to convince someone to pay you for your content. Also, digital content is easy to copy and steal. You will need
to think about how to protect your content - and how to handle the theft of it.A key skill you will want to develop especially
when it comes to marketing and selling information products is copywriting.
Selling Information Online
People aren't willing to pay for just any old information. Most frequently the material needs to solve a current, pending
problem. Think along the “how to” line.
If you know how to accomplish a difficult or confusing task, maybe this would be a good basis for an information product.
Don't think that people will pay for information that resembles a typical blog post. Make sure that it is comprehensive and
that it solves a real problem.
The real key to being successful with selling information products online is being able to write very good, compelling website
copy. Mastering copywriting is the number one thing you need to be successful selling information products online (of course
it can help with any type of business and marketing as well).
4. “Every now and then new technologies emerge, which are so profound, so powerful and so universal that
their impact changes the way the world works. E-Commerce is one such technology”. Comment, giving the
concept of E-Commerce and its applications.

Ans:- Think back to how you shopped five years ago. Better yet, ten years ago.
Where did you go to buy clothes? How did you get your groceries? What did you do when it was time to buy a new mattress?
Our mattresses come in boxes, meals are shipped to our doors, and we try on clothing and mail it back at no cost.
Over the past ten years, the percentage of retail sales in the U.S. that have come from ecommerce has increased by nearly 300%, from
3.3% to 9.7%.Now read that again. Even with all this growth, ecommerce represents less than 10% of all retail sales.
There’s plenty of opportunity ahead for those who choose to innovate.Today, it’s easier than ever for creative founders to
make their ideas a reality. Each year, we see new businesses dethroning “the way we’ve always done it” monoliths.
While many of the tools are new and rapidly improving, the rules have stayed the same. If you want to innovate and defy
expectations, you’ll need to know your business model and define how you’ll innovate.And who knows? Maybe the next
thing we can’t live without is yours.This blog is a primer for considering what your next move will be. We’ll talk about the
central business models of ecommerce, some examples of innovators, and the principles of innovation in ecommerce.
If you have a new idea but don’t know how to put it together logistically, this is the read for you.

Four Traditional Ecommerce Business Models

If you’re starting an ecommerce business, odds are you’ll fall into at least one of these four general categories.
Each has its benefits and challenges, and many companies operate in several of these categories simultaneously.
Knowing what bucket your big idea fits in will help you think creatively about how what your opportunities and threats might
be.
1. B2C – Business to consumer.
B2C businesses sell to their end user. B2C is the most common business model, so there are many unique approaches
under this umbrella.
Anything you buy online as a consumer — think wardrobe, household supplies, entertainment — is done as part of a B2C
transaction.
The decision-making process for a B2C purchase is a much shorter than a business-to-business (B2B) purchase,
especially for items that have a lower value.Think about it: it’s much easier for you to decide on a new pair of tennis
shoes than for your company to vet and purchase a new email service provider or food caterer.Because of this
shorter sales cycle, B2C businesses typically spend less marketing dollars to make a sale, but also have a lower
average order value and less recurring orders than their B2B counterparts.And B2C doesn’t only include products, but
services as well.
B2C innovators have leveraged technology like mobile apps, native advertising and remarketing to market directly to
their customers and make their lives easier in the process.For example, using an app like Lawn Guru allows
consumers to easily connect with local lawn mowing services, garden and patio specialists, or snow removal
experts.Additionally, home service businesses can use Housecall Pro’s plumbing software app to track employee
routes, text customers, and process payments on the go, benefitting both the consumer and business alike.
2. B2B – Business to business.
In a B2B business model, a business sells its product or service to another business. Sometimes the buyer is the end
user, but often the buyer resells to the consumer.The B2B model generally means a longer sales cycle, but higher
order value and more recurring purchases.Recent B2B innovators have made a place for themselves by replacing catalogs
and order sheets with ecommerce storefronts and improved targeting in niche markets.In 2015, Google found that close to
half of B2B buyers are millennials — nearly double the amount from 2012. As younger generations enter the age of
making business decisions, B2B selling in the online space is becoming more important.
3. C2B – Consumer to business.
C2B businesses allow individuals to sell goods and services to companies.In this ecommerce model, a site might allow
customers to post the work they want to be completed and have businesses bid for the opportunity. Affiliate marketing
services would also be considered C2B.Elance (now Up work) was an early innovator in this model by helping businesses
hire freelancers.
 The C2B ecommerce model’s competitive edge is in pricing for goods and services.This approach gives consumers the
power to name their price or have businesses directly compete to meet their needs.
Recent innovators have creatively used this model to connect companies to social influencers to market their
products.
4. C2C – Consumer to consumer.
A C2C business connects consumers to exchange goods and services and typically make their money by charging
transaction or listing fees.Companies like Craigslist and eBay pioneered this model in the early days of the internet.
C2C businesses benefit from self-propelled growth by motivated buyers and sellers, but face a key challenge in
quality control and technology maintenance.Innovators like GOAT have created novel solutions for quality control,
and Depop has leveraged social media for rapid C2C growth.

Five Value Delivery Methods for Ecommerce Innovation

If your business model is the car, then your value delivery method is the engine.This is the fun part – where you find your
edge. How will you compete and create an ecommerce business worth sharing?

Here are a few of the popular approaches taken by industry-leaders and market disrptors.

1. D2C – Direct to consumer.

By cutting out the middleman, a new generation of consumer brands have built loyal followings with rapid growth.
Companies like Warby Parker and Casper set the standard for vertical disruption, but up and coming brands like Native
Union and LARQ are showing us how D2C can continue to be an area for innovation and growth.
2. White label and private label.
To “white label” is to apply your name and brand to a generic product purchased from a distributor.In private
labeling, a retailer hires a manufacturer to create a unique product for them to sell exclusively. With both, you can
stay lean on your investments in design and production and look for an edge in technology and marketing.
3. Wholesaling.
In a wholesaling approach, a retailer offers its product in bulk at a discount.Wholesaling is traditionally a B2B practice,
but many retailers have offered it to budget-conscious consumers in a B2C context.
4. Dropshipping.
One of the fastest growing methods of ecommerce is dropshipping.Typically, dropshippers market and sell items
fulfilled by a third party supplier, like AliExpress or Printful. Dropshippers act as a middle man by connecting buyers to
anufacturers. Easy-to-use tools allow BigCommerce users to integrate inventory from suppliers around the world for
their storefronts.
5. Subscription service.
As early as the 1600s, publishing companies in England used a subscription model to deliver books monthly to their
loyal customers. With ecommerce, businesses are going beyond periodicals and fruit of the month clubs. Today,
virtually every industry has seen the arrival of subscription services to bring convenience and savings to customers.

Five Examples of Innovative Ecommerce Business Plans:-

Many companies have flourished with the freedom ecommerce gives them. These brands have combined classic business
models with something new, making them innovative leaders in the field.

1. Wone – D2C. When Kristin Hildebrand founded Wone, she didn’t set out to make the cheapest or the trendiest
activewear.
She didn’t set her sights on being the more famous or talked about. She simply aimed to create the world’s best
performance apparel.
Wone rejects the typical marketing plan and instead focuses on building deep relationships with customers and designing products that
perfectly serve their niche.
This niche is women who want the highest performing activewear, period.Wone items are not a fashion statement, not in the
traditional sense, but make a statement with their quality and exclusivity.Hildebrand seeks out the very best materials and
production methods for every piece, no matter the cost, a bold move that separates her from mainstream activewear brands.
Wone produces collections in limited, numbered runs and customers must be members to shop the site.
Relying on word of mouth, Wone has grown substantially since its launch in 2018 and continues to build a loyal following as it
releases new collections.

2. Beer Cartel – Subscription service.

Expert-selected craft beers from around the globe delivered to your door each month.
Some ideas sell themselves.Beer Cartel offers Australia’s longest running beer subscription service.
Each month, thousands of Australians come home to a package full of top-rated beers at their doorstep.

They’ve attracted the curious and the connoisseurs by giving their customers a unique selection at a price better than what
they could get in stores.Beer Cartel has also done a great job of offering several different subscription options to serve
customers of all appetites and budgets.

3. Berlin Packaging – B2B.

Fortune 500 companies and family-owned startups alike trust Berlin Packaging for sourcing, designing, and
distributing their containers and closures. As a hybrid supplier, Berlin Packaging brings their expertise to every level of
the supply chain to increase efficiency and lower cost for their customers.
Berlin Packaging is over 80 years old but has kept their advantage by innovating every step of the way. By adopting an
ecommerce business model, they stayed competitive by making it easy for their customers to shop from their large selection
of containers sourced from more than 200 different partner vendors. Berlin Packaging also prioritized a strong connection
between their site and ERP, making it easier for customers to see their credit limits, balances, and past due balances.

4. Atlanta Light Bulbs – B2B.

Atlanta Light Bulbs is no stranger to innovative ecommerce. While other B2B companies lagged behind, ALB launched
their first ecommerce site in 1999.This gave them a huge head start on creating a unique site experience for their customers.

As their market has shifted to the millennial

generation, Atlanta Light Bulbs has focused
on adding more to their online platform that will set them apart from their competition. Part of their strategy has been using
apps for their BigCommerce storefront.
These pre-built and easy-to-install tools have helped them to try new tactics without over-investing in custom technology.
One of their most successful features has been their mobile shopping app.
This app has primarily helped grow Atlanta Light Bulbs’ B2C sales, but even their commercial clients have come to enjoy the
convenience of ordering from their mobile devices.
Another creative tactic from ALB is their make an offer feature.
On their product pages, they allow buyers to name a quantity and price and submit an offer. On the backend, pricing rules are
used to auto-calculate the lowest price Atlanta Light Bulbs can give. Customers receive a message letting them know their
proposal has been accepted, or, if the price is too low, a different deal is offered.

5. Grace and Lace – Wholesaling

Melissa Hinnant discovered her love for knitting while on bed rest during a high-risk pregnancy.
When she began knitting lacey leg warmers, her friends and family couldn’t get enough of them.
In 2011, she launched Grace and Lace with an online shop and was immediately overrun with orders.
Things only got busier when Melissa and her husband presented on The Shark Tank in 2013.
Since then, they’ve expanded to have a full studio, warehouse, and a full line of original women’s clothing designs.
Part of their success has been a result of their strategic decisions to include affiliate sales and wholesaling on their
ecommerce site.
While much of their growth has come from their active social media accounts and extensive media coverage, these additions to
their ecommerce model have helped them effectively scale and expand their product line to more and more categories.

Conclusion:-
We’ve covered the most common ecommerce business models, several tactics for ecommerce innovation, and examples of
ecommerce businesses that have blazed their own path.
We’ve talked about the questions you’ll need to answer to find a niche where your new endeavor can thrive.
Planning is important, but innovation doesn’t happen in a vacuum. It’s time to get your solution out into the world and begin
to refine your business based on the feedback you receive.

SECTION-B
6. Case Study:
Internet Marketing and E-Commerce: Issues and Challenges

Assume that you are a Marketing Manager of a firm which is planning to launch its Internet Marketing Program in
India.

A) Based on the case above, give some innovative marketing strategies which can bring the success to the
Internet Marketing. 

 Rural retail scenario for the marketer of consumer products.

 Rural India is characterized by low per capita income, low productivity, low literacy and low rate of industrialization
along with absence of basic amenities.

 India is basically a rural society as 2/3 rd of is population resides in villages which offers vast market opportunities.

o The following are the main features of rural retail:

 The rural retail market is dominated by Kirana stores, haats & melas.

 It is culturally diverse & highly fragmented – spread over more than 6 Lakh villages.

 It mainly dependent on agriculture which generate seasonal income, mostly twice in a year. Thus, purchasing powers
of rural consumers are not uniform.

 Generally, the standard of living of consumer is not very high and their outlook is very conservative due to low
penetration level of refrigerators, storage of food products.so, rural consumers prefer purchasing in low volumes and
their purchase frequency is high.
 Inadequate infrastructure in terms of roads, warehouses, communication, consumer finance etc.

 The unprivileged class is set back by a lack of educational opportunities that could empower them to
confidently pursue economic progress and overcome the debilitating effects of low literacy and rigid social
hierarchies.

 The Indian rural retail opportunity is currently estimated to be in excess of Rs. 1400 billion (approximately
US$34 billion).

 The figure is likely to touch Rs. 1800 billion (approximately US$ 43 billion) in 2010 and go up to Rs. 2400 billion
(approximately US$ 58 billion).

 India’s rural markets are growing at double the rate of urban markets.

 The retail revolution is going to act as a catalyst. So, the new concept that is hitting the market today is the "Rural
Retailing".

 Led by the rising purchase power, changing consumption pattern, increased access to information & technology
and improving infrastructure, rural retail market holds great potential for retailers.

 Many corporate houses in India as well as foreign players are firming up concrete plans to tap the rural retail market.

 The following points reflect the growth potential of rural retail market in India:

 Rural per capita consumption of FMCGs will catch up with the current urban levels by 2017. As per expert report, The
FMCG sector in rural area grow 40 % in comparison to 25 % in urban market.

 Right now, one out of six rural customers has access to organized retailing or distribution. So, rural retailing has
tremendous potential for growth.

 A major part of “Bottom of Pyramid” consumer class resides in rural areas.

 There is paradigm shift towards higher value consumption among rural consumers like from tooth power towards
tooth paste, from local brands towards national brands.

 Though internet penetration in rural areas is very low, but concepts like m-cash by ICICI bank provide an impetus to
rural retailing as mobile telephony has made rapids into rural market.
 Rural areas account for half the total market for television, tooth powder, fans, pressure cookers, washing soaps, tea,
salt etc.

 Currently, the presences of modern retail formats in rural areas are negligible. Rural retail market at its nascent stage
and it seems logical to take early mover advantage. The potential is immense, but right now, investment in rural retail
market is very low as is focus is to grab urban market.

 Retail, one of India’s largest industries, has emerged as one of the most dynamic and fast paced industries with
several players entering the market.

 Accounting for over 10% of the country’s GDP and around 8% of the employment, retailing in India is gradually
inching its way toward becoming the next boom industry. It is on the threshold of a big revolution after the IT sector.

 Although organized retail market is not so strong as of now, but it is expected to grow manifolds by the year 2010.

 The sector contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end of the decade.

 The current growth rate is estimated to be 8.5%, but CRISIL report says that the retail market is most fragmented in
the world and only 2% of the entire retailing business is in the organized sector.

 There are about 300 new malls, 1500 supermarkets and 325 departmental stores being built in the cities very soon.

 The rural consumer market, which grew 25 per cent in 2008, is expected to reach US$ 425 billion in 2010-11 with
720-790 million customers,

 The rural market is no longer a non-player in the retail game. It is now accounting for over one-third of the market for
most durable and non-durable products.

 Even manufacturers are developing new products with the rural consumer in mind besides using village-
oriented marketing strategies for brand promotions.

 Whether it is Rani Mukherjee promoting the chocolate Munch or master batsmen Sachin wowing village lads
with a soft drink, both ad makers as well as top company honchos know where to put their money and how.

 The rural market is no longer of hypothetical empirical value but is well researched and reached by most companies
looking to tap India's vast and abundant bounty.

 Moreover lack of infrastructure and logistics together with multiple tax rates, restrictions on goods movement,
among others increase inventories and, therefore, costs.

 Due to lack of scale and diversity in buying behaviour, marketers are also forced to not only create multi-layered
distribution networks but also develop new packaging and price points.
  However increasing penetration of TV, rebirth of radio, through FM, availability of broadband internet, fast spread of
mobile phones, and rural road development programmes could in a short span of time may apart from improving
infrastructure, bridge gaps in behavioural patterns across the country.

 For a retailer it is essential to see in which segment it is catering in the above division of villages.

For example Shakti caters to villages with a population of 500or above. Where in Eveready considers even the
remotest of village as its target customer.

Answer: (b) What implications does the above scenario have for the long – term distribution system design of a
multi–product necessity Goods Company wanting to make a foray into the rural markets?   

 Implications does the above scenario have for the long – term distribution system design of a multi–product
necessity Goods Company wanting to make a foray into the rural markets.

 An effective distribution channel can be a source of strategic advantage for companies. However, little research exists
about the distribution channel structure in India, which is largely traditional and quite unique.

 The first part of this round table article provides an overview of distribution channels, particularly their constituents
and structure, with a special focus on distribution channels in India.

 The second part of the article reports on a panel discussion with eminent academic and industry experts on the
challenges that companies in India face in designing, constructing, and managing distribution channels on the ground.
 Distribution channels are pathways along which products travel from producers and manufacturers to ultimate
consumers.

 They are routes along which products, information, and finance flow. While some manufacturers deal directly with
their customers, most manufacturers use a distribution channel to take products to consumers.

 Considerable thought, effort, and investment are required to create and maintain a distribution channel. Channel
margins and the expense of sales efforts in managing channels can form a substantial proportion of total marketing
costs.

 An effective channel can be a source of strategic advantage for companies. Channel design and channel management
are therefore important elements in a company's competitiveness.

 Channels are also important from a public policy perspective since they employ a large number of people and are
critical to the unhindered availability of food items and other products to customers across the socio-economic
spectrum.

 Although channels are very important, little research exists about Indian distribution channels. This note and the
accompanying round table presentations therefore attempt to focus on distribution channels in India, especially on
the challenges that companies in India face in designing, constructing, and managing distribution channels.
 The aim is to identify important challenges, examine the relevance of research findings, and develop an agenda for
future channel related research in India.

 Distribution channels can be understood by analysing their constituents, structure, functions, and contributions.

 Channels consist of networks of different types of independent businesses which need to be aligned to assist
manufacturers in fulfilling and creating consumer demand for products and services.

 Channels consist of three categories of entities: agents, merchants, and facilitators. Agents promote products and
generate sales but do not themselves buy and stock products. Agents can be independent or they may be employees
of the company.

 Merchants such as retailers, wholesalers, and distributors buy, stock, and sell goods to others in the chain or to
ultimate consumers. Merchants are usually independent but some companies may have their own wholesale trading
units or retail outlets. Facilitators such as logistics service providers, independent warehouses, carrying and
forwarding agents, and transporters facilitate movement, storage, and delivery of products but are not involved in
promoting or trading.

 Distribution channels are configured by putting together agents, merchants, and facilitators in specific ways
depending on the market, product, and competitive context.

 A major challenge in channel management is keeping channel members motivated to support the principal, especially
when markets are tough.

 Channel member profitability is a major driver but not the only factor affecting channel member satisfaction and
motivation.
 Skilled channel managers make concerted efforts to measure and monitor channel profitability and channel
members' return on investment (ROI). In addition to ensuring healthy ROI, firms utilise a variety of financial and non-
financial incentives to motivate channel members.

 Channel incentives can range from credible channel policies, market development support, supplemental contact,
high powered incentives and Research is required in the Indian context about the motivational effectiveness of
various types of channel incentives. Conjoint studies of channel member margin and incentive packages may be
useful.

 The distribution channel structure in India is largely traditional and quite unique. The major channel components are
the retail network, wholesale network, and the logistics infrastructure.

 The retail network in India consists of over nine million outlets. These include traditional outlets like pan shops;
grocers or kirana stores; general stores; specialised shops for footwear, clothing, jewellery, watches, mobile phones,
and consumer durables; newer formats like supermarkets, hypermarkets, and online stores; and service outlets like
fast food outlets, beauty parlours, fitness centres, coaching centres, and so on.

 Traditional outlets are spread across urban and rural India but the newer formats are mostly located in urban areas.

 Dynamics are playing out through the emergence of chain stores at city/state/region levels. This would mean the
distributor's role of feeding these stores may become redundant. There could be big players who would start feeding
them directly. 

 Large format retailers (LFRs) are becoming much larger in terms of size and scale and there may be a need to engage
directly with them. Specialist stores would continue to be in business and e-tailing is an emerging trend.

 Right now there are some vendors who are engaging the Tier 1s to feed the e-tailer, like Flipkart but I am not too sure
whether the margin structure can sustain so many levels.

 My presentation is from the point of view of the much neglected customer but a few pointers might emerge for
companies as well. In a sense I am talking from a strategic perspective, from a demand side view of distribution
rather than the supply side. I will touch upon different types of industries, FMCG, durables, B2B, and services
marketing.

 The urban face of the Indian retail sector has been steadily evolving over the last decade. While the speed and
amount of change have been debatable, the indications have been positive.

 The indicators are: the growth of organised retail (modern retail); evolution of retail consumers; and changes in
policy and guidelines. When we talk about organised retail , While it is difficult to give a precise definition, to put it in
context, we could say that modern retailers are those who have registered for sales tax, income tax etc,
 Employed staff legally in the sense that they get paid a monthly salary, have provident fund and so on, and those with
exposure to best practices in the industry, including the use of technology in the various facets of retail operations
such as billing, credit card acceptance, superior management practices, and technology at back end operations.

 They make efforts towards building the store as a brand through appropriate product display, store layout, design
and ambience, and visual merchandising. Their store concept should be replicable and scalable.

 While incomes in rural India have been rising over the past few years, they are still not comparable with those in
urban India. Low income levels and a conservative attitude make consumers resist expensive purchases.

 In 2002, Coca-Cola India Pvt. Ltd launched 200ml bottles priced at Rs5 to push consumption in price-sensitive rural
markets.

 The experiment prompted many other companies to adopt a low unit price strategy. LG introduced low-priced
television sets Sampoorna and CinePlus for rural markets. It also has refrigerators, washing machines and microwave
ovens targeted at price-sensitive consumers.

Examples :

 ICICI Lombard General Insurance Co. Ltd’s head of rural and agricultural business group, Pranav Prashad, says that
companies need to bear in mind that the rural consumer seeks better value for money and is interested in tangible
benefits compared with an urban consumer.

 Take, for instance, the greater market share of Hindustan Unilever Ltd’s (HUL) Clinic Plus shampoo over CavinKare
Pvt. Ltd’s Chik shampoo, though CavinKare set the sachet trend popular in rural India, and Britannia Industries Ltd’s
Tiger brand of biscuits over Parle Products Pvt. Ltd Parle G.

 Companies like Nestle and GlaxoSmithkline Consumer Healthcare (GSK) are now taking a different route and
launching products specifically for rural markets. GSK (maker of Horlicks), for instance, has launched Asha -- a low-
cost variant (40 per cent cheaper than Horlicks) for rural markets only.

 Asha tastes slightly different and is priced at Rs 85 for a 500-gram pouch pack -– close to half the price of the original .

 Recently launched Rs 2 and Rs 4 products -- Maggi Masala-ae-Magic and Maggi Rasile Chow, products which be first
marketed in areas with low purchasing power.

 Maggie Rasile Chow has been developed especially for the rural/semi urban markets to provide low-cost, light meal
fortified with iron. Masala-ae-Magic is a taste enhancer containing iron, iodine and vitamin A.