The world has changed a lot for the past few decades with the dot-com era being the turning point. People are more responsive to e-commerce websites and transactions conducted over the online medium. There are claims that first movers have the capability and greater success levels to gain a sizeable market share. Conversely, others believe that all the hard work put by first movers to develop a framework and infrastructure for e-commerce is eroded with imitations by the followers. Obviously, one of them has proved to be a successful strategy for e-commerce. The paper will expound on the best strategy either a first mover approach or market follower approach. The second part of the paper lays an internet marketing strategy for www.coach.com website. The strategy will look into one-to-one marketing, affiliate marketing, blog marketing, viral marketing and social network marketing and describe how each can apply to the present scenario.
- Introduction to first mover and market follower
The first mover typically refers to the first significant company to move to an online market. It does not necessarily mean the first company, but refers to the first significant entrant into the online market. The first mover will ultimately built a sizeable market share before competition sets in. Most start-ups embarking on an entirely new business setup on a new market mostly face the challenge of creating a market. First movers attempt to create the market out of nowhere and nurture it into maturity. Usually, the product-market fit is not attainable, not because of the quality of the products, but rather because the market is not established no matter how good the product is. First mover is primarily categorized by three important features. First, they establish a highly desirable and sustainable business value proposition. Second, they develop a scalable information technology medium that accommodates subsequent changes. Finally, they establish a strong emotional relationship with their adopters and innovators.
Market followers, on the other hand, are the late entrants who benefit from the infrastructure laid by the market leaders. Internet commerce in the late 90’s was characterized by land grab attitudes where firms rushed to acquire sizeable market share before competitors would. In the contrary to market movers, market followers are characterized by their ability to evade Prisoners Dilemma trap and focus on developing primary demand for the market or the product category.
2. Explain about first mover and market follower with relevant examples
The pioneering entrants such as Amazon, eBay and Yahoo amassed enormous market share and capitalization which they anticipate to translate to huge financial returns. High market valuation and the dependence on first-mover advantages lead to a gold rush mentality among the internet community. However, after the bubble burst in the 2000s, few held the belief of first-mover mentality. It is where market follower trends come. Within a few years, many internet pioneering firms had closed shop and a comparatively late player, Google, leveraged the infrastructure developed by the earlier entrants to acquire a huge market share and eclipse all others on the Internet sector.While there are claims that first mover advantages might have been an illusion as Michael Porter stated, other have claimed that first mover advantages only existed during the rise of the commercial internet. The sudden rise of the commercial internet became a catalyst for the creation of numerous markets. A large proportion of the internet entrants pursued their transactions online within a year or two of their formation. It resulted in extensive market information such as stock value, revenue and other attributes.
3. Justifications with relevant theories for market follower/ first move
Some companies derive significant advantages by entering into the market as the first one and deriving monopoly. Amazon, for instance, was the first to enter into online bookselling market. In spite the fact that it derived and enjoyed greater monopoly, the fact that it builds a good market share does not translate to better business success. First-mover advantage was once touted as important on the internet community and economy. However, things have changed, and critics of the theory claim that it only makes sense if the rewards justify the risks. Some industry's reward first entrants with near-monopoly dominance while others do not offer the same rewards. They, for instance, allow rivals to compete more effectively and efficiently against market movers.
In the e-commerce industry, being the first mover is challenging as it involves creating the market and the product to offer on the market. The product offering might be excellent except that the market is not ready. These results in a poor product-market fit which ultimately drive the firm, specifically start-ups, into a dead zone. First movers have to invest in one or multiple market creation strategies. Udemy as one of the pioneers of online education endured a lot to get instructors on board and accept online teaching for money. At the same time, paying to learn online was an alien concept which required considerable sensitization to the masses. Udemy had to invest on both sides of the market; creating a product and educating masses to accept the concept, mainly basing on instructor success, to create interest among other instructors.
The first mover also requires substantial investment in removing barriers and friction to online dominance. First, the market mover has to invest heavily in solving the fundamental infrastructural issues that concern a new market. Start-ups such as Flipkart dedicated many resources to creating alternative cash-collection mechanisms to facilitate per transaction economics for the late market entrants to enjoy them without spending a dime. In the same way, Tesla has to invest heavily in creating supportive infrastructure for its electric cars al over the world. The difficult part of it is creating the infrastructure that can be owned and licensed so as not to lose the first-mover advantage to slow but strategic late market entrants.
There are also the issues of regulation in the e-commerce industry as well as other sectors such as education and transportation. The situation is dire when start-ups have to compete with incumbents, who traditionally liaise with regulators to protect their interests. The reason most first-movers in the e-commerce sector could not sustain for long was due to strict regulations that favour the incumbents. Even if the market is ready for disruption, legal services and regulations inhibits the disruption and consequently face out the market movers. For instance, e-commerce industry was faced with the dilemma of differing online transaction laws and regulations. This is the greatest pushback that held back innovation for long, always realigning the industry back to how it traditionally worked. 4. Analysis for two e-commerce companies
The importance of the market follower over the market mover, the paper will analyze two e-commerce companies; Facebook and Orkut. The two are social network sites, and while one is a first-mover (Orkut), the other is a market-follower (Facebook).
Orkut had launched itself way before Facebook did in early 2004 as a social networking site. Facebook jumped to the bandwagon later in April. Although the time difference is small, it matter a lot to the social networking users at a time. More and more marketers switched over to Facebook, after it had been launched, because of many reasons.
Facebook upon its launch sought to create value to its customers through its business and revenue model. Facebook offers a number of features which include posts and status, picture sharing, location of lost friends, multi-line comment text box, games and quizzes, friend requests and the functionality to revert, ability to clear profile requests and privacy settings. Its revenue model gathers for advertisements on the right side of the page, applications such as Farm ville and Anita, search partnerships and Facebook gifts.
Unlike Facebook, Orkut was the pioneer of social networking sites but failed to live up to the expectations of the user. Orkut lacked most of the features that Facebook had including multi-line text box and privacy settings. Its revenue model lagged behind and failed to include any of the features that could have increased their revenue.
Facebook markets itself worldwide and its penetration is undoubtedly double or thrice that of Orkut. Most of the Orkut fans reverted to Facebook due to privacy concerns. Their privacy was in jeopardy since Orkut offered an open framework that allowed anyone visiting to view everyone’s profile. Facebook noted the gap and took advantage by introducing privacy settings. Likewise, the nude images at Orkut discouraged many people to use it and otherwise opted for Facebook.
The trick to success at being a first-mover or a market follower is industry specific. In the e-commerce sector, it is unquestionable that being a late mover can be rewarding. The assertion that first-mover advantage is everything has been wronged several times already. The first mover advantage might derive an important market share but without a sustainable business model that will keep customers coming when competition sets in, it will not hold for long. That is why slow but strategic late entrants have a chance of success on internet based product and service offerings. The value proposition created by the market followers’ focus on the aspect of satisfying the needs of the consumers in an optimal manner.
- Introduction to the website and e-commerce marketing plan
Coach is an American company dealing with luxury leather accessories such as handbag's shoes and jewellery for both men and women. The company has its headquarters in New York. It was founded in 1941. Its international branches are found in many locations, and one of them is in Singapore. This part of the paper will analyze e-marketing strategies that work for the company.
Couch is a leather accessory online store for both men and women. There are different products that the company specialises. They include Handbags, shoes, wallets, clothing, accessories, sunglasses, fragrance, watches and jewellery for women and bags, wallets and card cases and belts for men. All these products offered are tailored to suit different occasions and sizes. For instance, clothing and shoes are subdivided into sporting, casual, outerwear among others to suit the needs of a wide variety of population. Apart from the leather products and accessories, the site offers featured and new collection information for different seasons. Currently, the featured products are the summer outfit tagged “Summer in the City” among other “Our Looks” selections.
2. Explain about different types of e-marketing strategies with relevant examples
The internet has drastically changed the way information is relayed and shared. The biggest beneficiary of this internet revolution is marketing platforms. More businesses such as Couch will find success if they adopt new ways of marketing such as publishing original content rather than embedding ads within external content to create more of branding and increase target audience.
Coach already has a database of customers it has been serving in the past. One-to-one strategies are applied to win back all those customers to the store. For instance, Coach will see through the list of transactions for the previous summer period. Analysis will reveal customer preferences upon which it is used to conduct and update them on the present offerings. Potential customers will be wooed by discounts and promotions while new customers will be allowed to return any item they bought which is defective or doesn’t fit well for a replacement.
Coach has a wide collection of products it offers. In order to improve sales, it is advisable that it seek affiliates to promote its products on different niches. For instance, on its sporting products, it can use the services of sports enthusiasts who have used their products such as riding jackets and offer commission for sales made. Likewise, with a variety of accessories, fragrances and jewellery, the services of beauty therapists, beauty blogs, magazines and salons will come in handy.
Coach can take an extra step and create a blog to promote its products. Blogging is a great way to market the different products on its line. To create and manage a successful blog, Coach will require an informed and dynamic social network manager.
Social network marketing
Social network marketing is the greatest platform for reaching a large audience in the shortest time possible. The biggest social sites that can be utilized by Coach include Facebook, Twitter, LinkIn, Tumbler among others. These social platforms have increased in popularity over time and provide online retailers such as Coach a plethora of new options to engage more successfully and effectively with their audiences.
Viral marketing involves the creation of buzz about the Coach brand with the intention of reaching a wider audience. In this case, viral marketing will be effected through the use of the word of mouth – where present customers, sales representatives and agents creates awareness about Coach offerings especially in the summer period or use of internet network effects. An effective network effect may involve the use of video clips depicting a variety of Coach product, interactive flash games, e-books, brandable software, messages and web pages. Viral messages are drafted and passed via this media to individuals with high social networking potential so as to reach a larger audience in a short period. In the viral messages, for instance, users will be offered free things if they purchase online or conduct the store with a given coupon. Once the message spreads, it propagates and spreads to dozen others who spread it to others, and the exponential trend continues. 3. Justifications with relevant theories for e-marketing
One-to-One marketing approaches are an effective way of cultivating and nurturing customer loyalty. Every customer is treated in a personalized and special manner, factoring in their preferences, likes and dislikes and other defining characteristics.
Diversification of social network marketing tools is a good thing for Coach since they can reach a greater audience in a short time using least resources. Likewise, it creates a platform to build on the company’s brand equity by making it easy for consumers to recognize the product.
Blogging is an essential ingredient for Coach. For a wide variety of sporting and vacation products, very informative and up to date content backed up with infographics is required. Pictures and videos reveal much information about the brand and pull the customers more easily than plain text.
4. Analysis of different types of e-marketing strategies and comparisons of different types of strategies
In conclusion, this paper has sufficiently explored the field of marketing. The first section has dealt with first mover and market mover approaches. Market mover approach is touted as the best so far due to far-reaching first mover disadvantages. In the paper, an analysis of Facebook as the market mover and Orkut as the first mover depicts it. The second part of the paper explores e-marketing strategies for Coach; a pure leather online store. Social media marketing is the best strategy recommended for the company with supportive strategies for maximum customer response.
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