MARKETING MANAGEMENT The Product Concept

The product concept holds that consumers will favor products that offer the most in
Meaning of marketing quality, performance and innovative features. This concept works on the assumption that
“Marketing is the activity, set of institutions, and processes for creating, communicating, customers prefer products of ‘greater quality’ and ‘price and availability’ doesn’t influence
delivering, and exchanging offerings that have value for customers, clients, partners, and their purchase decision. Management should focus on product improvements
society at large.” (American Marketing Association) continuously.
“The science and art of exploring, creating, and delivering value to satisfy the needs of a
target market at a profit.” (Dr. Philip Kotler) The Selling Concept
The selling concept holds that consumers will not buy enough of the organization’s
Marketing is traditionally the means by which an organization communicates to, connects products unless it undertakes a large-scale selling and promotion effort. Without
with, and engages its target audience to convey the value of and ultimately sell its products stimulation from the company, consumers will not be interested enough to buy the
and services. It is an ongoing communications exchange with customers in a way that company’s products. It must undertake aggressive selling and promotion effort.
educates, informs and builds a relationship over time. Useful in three situations: –
✓ With unsought goods
Importance of marketing
✓ Over-capacity
i. Helps business to keep pace with the changing tastes, fashions and
✓ Increasing competition
preferences of the customers.
ii. Helps the business in increasing its sales volume, generating revenue and The Marketing Concept
ensuring its success in the long run. The marketing concept holds that achieving organizational goals depends on determining
iii. Helps the business in meeting competition most effectively. the needs and wants of target markets and delivering the desired satisfaction more
iv. Promotes product awareness to the public. effectively and efficiently than competitors do. Focus is on making the right products for
v. Builds up company’s reputation. the customers (i.e., what the customer wants).
vi. Ensures the growth of the business. This concept works on an assumption that consumers buy products which fulfil their needs.
vii. It promotes customer engagement. Businesses following the marketing concept conduct research to know about customers’
needs and wants and come out with products to fulfil the same better than the
MARKETING MANAGEMENT PHILOSOPHIES
competitors.
(Also called marketing orientations or concepts)
The Societal Marketing Concept
A marketing philosophy is a fundamental idea that guides a company’s efforts to satisfy The societal marketing concept holds that organizations must follow the marketing concept
customers and achieve organizational goals. Each and every company has its own idea on in a way that maintains or improves the consumer’s and the society’s well-being. This
how the company will do production, how it will sell and do the marketing of its product concept stresses not only the customer satisfaction but also gives importance to societal
Marketing philosophies or concepts evolve over time in line with changes in the relative welfare. For example, if a company produces a vehicle which consumes less petrol but
weights between the organization’s interests, customers, and society. spreads pollution, it will result in only consumer satisfaction and not the social welfare.

The Production Concept THE MARKETING PROCESS

The production concept holds that consumers will favor products that are inexpensive and
widely available. This viewpoint was encapsulated in Says Law which states ‘Supply creates
its own demand’. It assumes that consumers are more interested in more accessible and
cheaper products than its features. Management should focus on improving production
and distribution efficiency. It is useful in two types of situations: –
✓ Basic necessity goods
✓ Unfulfilled demand (Demand ˃ Supply)
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The marketing process includes ways in which value can be created for the customers to
satisfy their requirements.
Principles of Marketing, Scandinavian Edition (2nd Ed.) defines the marketing process as:
“The process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.”
It is an endless series of actions and reactions between the customers and the companies
making attempt to create value for and satisfy the needs of customers.
It involves the following four steps: -
I. Situation Analysis
Situational and environmental analysis is done to identify the marketing options, the
customer needs, to understand the company’s own capabilities and to understand the
surroundings in which the company is operating.
II. Marketing Strategy
Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic
plan for pursuing the opportunity can be developed.
III. Marketing Mix Decisions
Detailed tactical decisions then are made for the controllable parameters of the marketing
mix. It includes decisions related to product development, product pricing, product
distribution and product promotion.
IV. Implementation and Control
The marketing plan is executed and the outputs of marketing efforts are monitored to
adjust the marketing mix according to the market changes.
MARKETING RESEARCH AND INTELLIGENCE
Marketing research is a systematic process of collecting and analyzing data relevant to a
specific marketing strategy. Market research involves research into the size, location, and
makeup of a product market.
Marketing intelligence includes the procedures and data sources used to obtain
information from the business environment for decision making.
iii.Psychographic Segmentation: sometimes called psychometric or lifestyle segmentation, it
Market intelligence is company-focused, while market research is done to learn more
about customer preferences. Market intelligence is wider in scope and gives the firm a view
of current trends and opportunities in the market place. Both are used to help businesses
understand and develop marketing strategies.
MARKETING STRATEGY
iv.Behavioral Segmentation: divides consumers into groups according to their observed
Marketing strategy is a long-term, comprehensive plan formulated particularly for
achieving the marketing objectives of the organization. It is thus a firm's overall game plan
for reaching prospective consumers and turning them into customers of their products or
services.
Marketing strategy involves segmenting the market and selecting a target market, making
differentiation and positioning decisions, and designing the marketing mix.
NB: It is designed after detailed marketing research.
(a) Market segmentation
Market segmentation is the process of dividing a broad consumer or business market, into
sub-groups of consumers (known as segments) based on some type of shared
characteristics. Market segmentation assumes that different market segments require
different marketing programs – that is, different offers, prices, promotion, distribution, or
some combination of marketing variables.
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The Need for Market Segmentation
The marketing concept calls for understanding customers and satisfying their needs better
than the competition. But different customers have different needs, and it rarely is possible
to satisfy all customers by treating them alike.
Mass marketing refers to treatment of the market as a homogenous group and offering
the same marketing mix to all customers. Mass marketing allows economies of scale to be
realized through mass production, mass distribution, and mass communication. The
drawback of mass marketing is that customer needs and preferences differ and the same
offering is unlikely to be viewed as optimal by all customers.
Target marketing on the other hand recognizes the diversity of customers and does not try
to please all of them with the same offering. The first step in target marketing is to identify
different market segments and their needs.
BASES OF MARKET SEGMENTATION
There are 4 main criteria for segmenting the market: -
i.Geographical Segmentation: segmentation/grouping customers with regards to their
physical location. It is based on the premise (assumption) that people living in one area
have different purchasing or buying habits than those living in other areas.
Typical geographic variables include: Continent, City, Country, Climatic zone, Urban.
ii.Demographic Segmentation: grouping customers with regards to their population
characteristics. It refers to statistical data about a group of people.
Typical demographic variables include: Age, Gender, Ethnicity, Income, education, religion.
categorizes audiences and customers by factors that relate to their unique personalities
and characteristics.
Psychographic factors are slightly more difficult to identify than demographics because
they are subjective and they include: Personality traits, Values, Attitudes, Interests,
Lifestyles, Subconscious and conscious beliefs.
purchase behaviors. While demographic and psychographic segmentation focus on who a
customer is, behavioral segmentation focuses on how the customer acts (their knowledge
about the product and attitude towards the usage of the product).
Behavioral variables include: Benefits sought, user status, usage rate/purchase frequency,
loyalty status, Purchasing habits, Spending habits.
Requirements of Market Segments
In addition to having different needs, for segments to be practical and effective they should
be evaluated against the following criteria:
1) Identifiable/Measurable: The size and purchasing power profiles of the segment
should be measurable, meaning there is quantifiable data available about it.
2) Accessible: the segments must be reachable through communication and distribution
channels. It means that customers are easily reached at an affordable cost.
3) Substantial: the segments should be sufficiently large to justify the resources required
to target them. It’s usually not cost-effective to target small segments - a segment,
therefore, must be large enough to be potentially profitable.
4) Unique needs/Differentiable: to justify separate offerings, the segments must respond
differently to the different marketing mixes. The people in a segment should have
similar needs that are clearly different from the needs of other people in other
segments.
5) Durable: the segments should be relatively stable to minimize the cost of frequent
changes.
Importance/Benefits of market segmentation
a) Better understanding of customer needs. Which will lead to betterment in serving
customer’s needs and wants.
b) Increased market share & sales volume. If buyers’ respective preferences are
accurately defined, and if all segments are properly served, new customers will be
attracted.
c) Customized marketing mixes. Helps a company design appropriate marketing mixes for
the specific needs of the segment.
d) Market competitiveness. The company positions itself better in the market place.
e) Targeted communication. Marketing programs can be tailored to the needs of
individual market segments.
f) Flexibility. Sellers can make best possible adjustments of their product and marketing
appeals.
g) Increase in market opportunities. When marketers become close to a group of
customers, they can easily discover new opportunities.
(b) Target Market Selection
Target Market selection is an activity that comes right after the business has segmented its
market, has already analyzed the consumer, and divided them into broad categories.
Target marketing tailors a marketing mix for one or more segments identified by market
segmentation. Target marketing contrasts with mass marketing, which offers a single
product to the entire market.
Market segmentation involves the entire market that is to be divided into groups based on
similar characteristics. In contrast, target marketing involves a more defined specific group
of individuals at micro level (i.e., the chosen market segment) to whom the products will be
marketed and sold.
Two important factors to consider when selecting a target market segment are the
attractiveness of the segment and the fit between the segment and the firm's objectives,
resources, and capabilities.
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Considerations in selecting a target market
When evaluating the attractiveness of a market segment, the following aspects should be
considered:
✓ Size of the segment (number of customers and/or number of units)
✓ Growth rate of the segment
✓ Competition in the segment
✓ Brand loyalty of existing customers in the segment
✓ Attainable market share given promotional budget and competitors'
expenditures
✓ Required market share to break even
✓ Sales potential for the firm in the segment
✓ Expected profit margins in the segment
STRATEGIES FOR TARGET MARKET SELECTION
There are several different target-market strategies that may be followed: -
Single-segment strategy - also known as a concentrated strategy. One market segment
(not the entire market) is served with one marketing mix. A single-segment approach often
is the strategy of choice for smaller companies with limited resources.
Selective specialization - this is a multiple-segment strategy, also known as a differentiated
strategy. Different marketing mixes are offered to different segments. The product itself
may or may not be different - in many cases only the promotional message or distribution
channels vary.
Product specialization - the firm specializes in a particular product and tailors it to different
market segments.
Market specialization - the firm specializes in serving a particular market segment and
offers that segment an array of different products.
Full market coverage - the firm attempts to serve the entire market. This coverage can be
achieved by means of either a mass market strategy in which a single undifferentiated
marketing mix is offered to the entire market, or by a differentiated strategy in which a
separate marketing mix is offered to each segment.
(c) Product positioning & differentiation
Market/Product positioning is a strategic exercise that showcases a product’s unique
benefits to a specific target audience in such a way that makes it better than alternative
solutions. It encompasses how consumers see a firm’s brand or product compared to the
competing ones. It refers to establishing the identity or image of a product or brand so that
the customers perceive it in a particular way.
Differentiation refers to a company’s efforts to set its product or service apart from the
competition, and positioning is placing the brand in the consumer’s mind in relation to
other competing products based on product traits and benefits that are relevant to the
consumer.
MARKETING MIX
The marketing mix is the "set of marketing tools that the firm uses to pursue its marketing
objectives in the target market". A marketing mix includes multiple areas of focus as part of
a comprehensive marketing plan.
The traditional marketing mix comprises of four controllable elements: -
P – PRODUCT
A product is bundle physical attributes or symbolical particulars expected to yield
satisfaction or benefits to the buyer. The product means anything offered to a market for
its use or consumption. The product can be a physical object or a service of some kind.
“Products lie at the heart of a firm’s marketing strategy”: they are the “starting point in
designing a firm’s marketing mix”.
PRODUCT DECISIONS
In relation to the P for Product, decisions will be made on: -
✓ New product development
✓ Product attributes
✓ The product life cycle
✓ Branding
✓ Packaging
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(a) New product development
In business and engineering, new product development is the term used to describe the
complete process of bringing a new product or service to the market.
The scientific process of developing a new product includes the following stages: -
i. Idea generation/Exploration: The search/gathering of potential product options.
ii. Idea screening: A critical evaluation of the ideas generated to isolate the most
attractive options.
iii. Concept development and testing: involves seeking information from customers about
the likes and dislikes of the new product. The product ideas are presented as concepts
to obtain feedback as assess customer reaction to the proposed product.
iv. Business Analysis: An analysis to establish the viability of the product ideas and
determine if the product will fit within the company’s overall strategy.
v. Product development: the construction of an initial design or prototype of the idea.
The customer gets to experience the real product as well as other aspects of the
marketing mix e.g. Place, price, promotion and product. Favorable customer reactions
help solidify the marketer’s decision to introduce the product.
vi. Market testing: the product is tested as real a product and is made available to a
selective small segment of the target market.
vii. Commercialization: This step involves full-scale production and extensive advertising
and selling.
New product development methods
A product may be developed by the following three methods: -
1) Product invention: This is the introduction of an altogether new product which is
based on research and which has been unknown so far.
2) Imitation: This involves copying the other popular or best-selling products already
existing in the market.
3) Adaptation/Improvement: This is a modification and improvement in the existing
quality, size, form or design of the existing product so that it may look almost like a new
product. Improvements could be in quality, features, style, packaging etc.
(b) Product composition (attributes)
A product is said to have three components: -
Core Benefit
The core benefit is the fundamental need that the customer satisfies when they buy the
product. For example, the core benefit of a mobile phone is to provide a mechanism to
make telephone calls.
Actual Product
The actual product is the product features and its design. Products typically have lots of
features but very few actual benefits (core benefits) to the customer.
Using the mobile phone example, then the actual product consists of the design and
features of the phone, including: color, Screen size, Bluetooth compatibility, make, etc.
Augmented Product
The augmented product is any non-physical parts of the product. Typically, the augmented
product includes such things as warranty and customer service.
(c) The product life cycle
A product's life cycle (PLC) is a concept that, just like humans, every product has a lifetime -
it has a launching time and a time it will be withdrawn from the market.
However, products may never go full cycle like humans hence, they may never die or may
be withdrawn early. The stage of a product in the PLC, influences the marketing mix
decisions.
Introduction Stage – When the product is launched. Sales will be low until customers
become aware of the product and its benefits. Prices are relatively high as the firm seeks to
recover R & D costs, and there are few competitors.
Growth Stage – a period of rapid revenue growth. More customers become aware of the
product and its benefits and additional market segments are targeted. The price softens
due to a decline in unit costs as the firm enjoys economies of scale.
Maturity Stage – a time when the product has a commanding presence in the market
place. Sales and profitability are at the peak, but competition intensifies as new entrants
are attracted by the good profits.
Decline Stage – a time when sales begin to decline as the market becomes saturated, the
product becomes technologically obsolete, or customer tastes change. It then may be
necessary to withdraw the product from the market, however re-designing some of the
product features may extend the life cycle.
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(d) Branding
Branding refers to product differentiation. It is applying the organizations signature to its
products by the use of special names, signs, trademarks or symbols.
A brand is a name, term, design, symbol, or any other feature that identifies one seller’s
good or service as distinct from those of other sellers” (American Marketing Association).
A successful brand can create and sustain a strong, positive, and lasting impression in the
mind of a consumer. Brands provide external cues to taste, design, performance, quality,
value and prestige if they are developed and managed properly.
(e) Packaging
Packaging is the art, science and technology of preparing goods for transportation and sale
i.e., designing the “package”. The company should make decisions to exploit the strategic
advantage of packaging.
BENEFITS OF PACKAGING
1) Physical protection: Protecting the product from damage.
2) Differentiation: Distinction and ease of product identification.
3) Information transmission: Packages and labels communicate how to use, transport,
recycle, or dispose of the package or product.
4) Marketing: Reinforcing the brand image and to encourage potential buyers to purchase
the product.
5) Appeal: Drawing/attracting the buyer to the product.
6) Convenience: Packages can have features that add convenience in distribution,
handling, stacking, display, sale, opening, use, etc.
7) Security: Packages can be engineered to help reduce the risks of package pilferage e.g.,
tamper proof seals.
P – PRICE
Refers to the monetary or economic value of the product or service that the consumer will
pay. Price is a vital element of the marketing mix because it is the only element that
produces revenue; the others produce costs for the firm, hence dictates a company’s
survival and profit.
Price mix includes the decisions as to: Price level to be adopted; discount to be offered;
and, terms of credit to be allowed to customers.
Pricing Objectives
Pricing objectives refer to the goals that drive how a business sets prices for its product or
service. A company’s pricing decision is based on objectives to be attained in the future.
Common objectives include: -
1) Survival: in situations such as market decline and overcapacity, the goal may be to
select a price that will cover costs and permit the firm to remain in the market.
2) Profit maximization: the need to maximize returns.
 3) Sales growth: the need to increase the revenue generated by the firm.
4) Maximize quantity: seeks to maximize the number of units sold or the number of
customers served in order to decrease long-term costs.
5) Market share: the need to attract new customers.
6) Status quo: the firm may seek price stabilization in order to avoid price wars and
maintain a moderate but stable level of profit.
7) Quality leadership: signal high quality in an attempt to position the product as the
quality leader.
8) Nonprice competition: the desire to use strategies other than price to attract
customers. Advertising, credit, delivery, displays, private brands, and convenience are
all example of tools used in nonprice competition.
Pricing strategies
i. Penetration pricing - the strategy of employing a low price that is competitive and
designed both to stimulate demand and to discourage competition.
ii. Skimming pricing: This involves setting a relatively high price during the initial stage of a
product’s life. A premium product generally supports a skimming strategy. In this case,
“premium” does not just denote high cost of production and materials; it also suggests
that the product may be rare or that the demand is unusually high.
iii. Competitive pricing: A strategy where price is set based on the prevailing market prices;
similar, above or below.
iv. Price flexibility: A strategy for charging different prices for different customers and/or
under different situations.
v. Price bundling: groups similar or complementary products and charges a total price that
is lower than if they were sold separately.
vi. Psychological pricing: a strategy that utilizes specific techniques to form a psychological
or subconscious impact on consumers. It aims to influence the buyers to buy products
based on their emotions rather than logic sense. It can also be described as setting prices
lower than a whole number.
P – PROMOTION
Refers to the means by which firms attempt to inform, persuade and remind consumers,
directly or indirectly about their products and brands. It is the means by which a firm can
establish a dialogue and build relationships with consumers.
Elements of the Promotional Mix
This refers to the blend of several promotional tools used by the business to create,
maintain and increase the demand for goods and services.
a) Advertising: any paid form of non-personal presentation and promotion of goods and
services by an identified sponsor.
b) Personal Selling: A face to face interaction between the company representative and
the customer with the objective to influence the customer to purchase the product or
services i.e., wherein the salesman interacts with the customer directly.
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c) Sales promotion: Marketing activities that stimulate consumer buying. They are usually
short-term strategic activities which aim to encourage a surge in sales.
d) Direct marketing: Where companies reach customers directly without any
intermediaries or any paid medium. It is a promotional method that involves presenting
information about a product to the target customer without the use of an advertising
middleman. The main direct marketing channels are: e-mail, Internet, telemarketing,
mail, etc.
e) Public relations: The linking of organizational goals with key aspects of the public
interest and the development of programs designed to earn public understanding and
acceptance. PR can include lobbying, publicity, special events, etc.
P – PLACE (DISTRIBUTION)
Place refers to the geographical location in which the company sells its products and
provides its services. A distribution channel can be defined as the activities and processes
required to move a product from the producer to the consumer.
place is the element of the marketing mix that ensures that the product is distributed and
made conveniently available for the consumer - at the right location at the right time.
Whenever consumers are faced with issues involving the availability of a product, it's
almost certain that they will take their business somewhere else.
DISTRIBUTION STRATEGIES
A distribution strategy is the plan a firm uses to make available the product to the
customer. It influences how wide or varied a firm wants its products to be distributed or
the product’s intensity of distribution. There are three effective distribution strategies: -
I.Intensive distribution - a strategy where the firm sells its products through as many outlets
as possible. It is often used for convenience offerings (products customers purchase on the
spot without much shopping around such as soft drinks, candy and newspapers.
The focus of intensive distribution is to make the product available anywhere it can
possibly be sold.
II.Selective distribution - involves selling products at select outlets in specific locations. It
enables the firm to establish a good working relationship with channel members and gain
more control of the channel.
It works best when consumers are prepared to “shop around” i.e., they have a preference
for a particular brand or price and will search out the outlets that supply.
III.Exclusive distribution - An extreme form of selective distribution in which only one outlet is
used in a specific geographical area. Exclusive simply means limiting distribution to only
one reseller in an area. This method is generally used for high-end brands that focus on
brand standards with a small, specific ideal customer base.
INTERNATIONAL MARKETING AND E-COMMERCE
INTERNATIONAL MARKETING: International marketing (also known as global marketing)
refers to any marketing activity that occurs across borders.
According to the American Marketing Association (AMA) “international marketing is the
multinational process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives.”
International marketing is the application of marketing principles in more than one
country, by companies overseas or across national borders. It is based on an extension of a
company’s local marketing strategy, with special attention paid to marketing identification,
targeting, and decisions internationally.
As technology creates leaps in communication, transportation, and financial flows, the
world has become a global village which has made it possible for companies and consumers
to conduct business in almost any country around the world, thanks to advances in
international trade.
Objectives of international marketing
a) To enhance free trade at global level and attempt to bring all the countries together for
the purpose of trading.
b) To increase globalization by integrating the economies of different countries.
c) To achieve world peace by building trade relations among different nations.
d) To promote social and cultural exchange among the nations.
e) To assist developing countries in their economic and industrial growth by inviting them
to the international market thus eliminating the gap between the developed and the
developing countries.
f) To assure sustainable management of resources globally.
g) To propel export and import of goods globally and distribute the profit among all
participating countries.
h) To maintain free and fair trade.
Characteristics of Global Marketing
1) Large Scale Operations: global marketing transactions are held in large or bulk quantity,
which helps the manufacturer to reap the benefits of economics of scale.
2) The dominance of multinationals: it is mainly dominated by various multinational
corporations which have worldwide contacts and connections, which help them to
expand their business globally.
3) Broader market is available: A wide platform is available for marketing and advertising
products and services.
4) Competition is intense: Competition is very tough in international market.
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5) Involves high risk and challenges: The nature of international marketing is dependent
on various factors and conditions.
6) International restrictions: The international market needs to abide by different tariff
and non-tariff constraints.
7) Advanced Technology: It is very dynamic and competitive and uses advanced or
sophisticated technology in production and marketing of goods.
Types of International Marketing
1) Exporting: Exporting refers to the practice of shipping goods directly to a foreign
country.
2) Licensing: Licensing is an agreement whereby a company, known as the licensor, grants
a foreign firm the right to use its intellectual property.
3) Franchising: Like licensing, franchising involves a parent company granting a foreign
firm the right to do business in its name.
4) Joint Venture: A joint venture describes the combined effort of two businesses from
different countries to their mutual benefit. It is a business agreement in which parties
agree to develop a new entity and new assets by contributing equity. They exercise
control over the enterprise and consequently share revenues, expenses and assets.
5) Foreign Direct Investment (FDI): In FDI, a company places a fixed asset in a foreign
country to manufacture a product abroad. It is investment into production in a country
by a company located in another country, either by buying a company in the target
country or by expanding operations of an existing business in that country.
E-COMMERCE
“Electronic commerce is the sharing of business information, maintaining business
relationships, and conducting business transactions by means of telecommunication
networks’’. This means that e-commerce includes buyer and seller relationships and
transactions between businesses.
Electronic markets are “market-spaces” in which sellers offer their products and services
electronically, and buyers search for information, identify what they want, and place orders
using a credit card or other means of electronic payment. In recent years, e-commerce has
grown at an exceptional rate and changed existing business boundaries. Nations, people
and organizations are all linked by global e-commerce network.
It has been argued that to meet increased demands of customers and the ever-changing
competitive business environment, traditional concept of marketing is no longer adequate.
Companies, therefore, need to adopt new strategies to achieve competitive advantage, and
one way of doing this is by exploiting the opportunities that the internet and e-commerce
has to offer.
The Internet and new technologies have allowed companies to easily expand to overseas
markets. However, international marketers need to understand the challenges that they
will face in a global environment selling through the internet.
 What Is International e-commerce?
International e-commerce refers to the business of selling a product over the internet to
buyers who live in foreign countries.

Benefits of International e-commerce

1) Expanded customer base: Entering more markets and increasing brand visibility drives
the potential customer base of businesses.
2) Inexpensive: The cost of promoting and marketing on the internet are low compared
to the traditional methods.
3) Convenience: Customers can compare products, prices and make orders with ease.
4) Extended hours of business: Firms can sell and customers can access products round
the clock.
5) Fair pricing: Elimination of intermediaries or disintermediation will therefore benefit
producers and customers.
6) Personalization: helps firms develop close relationships with customers around the
world which is key in gaining customer loyalty.
7) Customized products: Based on the close relationship and interaction with customers,
the firm can learn more about customers’ needs and wants. This could help them
increase customer value and satisfaction through product or services refinements.
8) Promotion: Well-designed websites provide an organization with a leading edge in the
global market.

Challenges of International e-commerce

1) Cultural Barriers: Cultural norms may impede the spread of e-commerce.

2) Language Barriers: websites may need to be localized.
3) Information technology and telecommunications: In developing countries,
information technology and telecommunication infrastructure are inadequate, thus
limiting their involvement in e-commerce.
4) Legal Constraints and Government Regulations: Different countries have different
regulations on issues such as privacy, intellectual property rights, taxation, security,
customs and import duties.
5) Competition: small companies may not have the money to buy the latest technology
and to hire the best talent.

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