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Factors Affecting Online Retailers Pricing Power And Channel Study

Posted on:2007-05-14Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y D WangFull Text:PDF
GTID:1119360278472028Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
The development of Internet marketing has great impact on the traditional business. It not only changes our daily living habitual, but also brings boundless business chances. A successful marketing strategy must include four key factors, that is, product, promotion, channel and price. As one of the main tools of business competition, price is also the crucial source of income and profits for the enterprises. Nowadays, how to improve their pricing ability so as to create the maximum performance have become the goals for the vast majority of e-tailers. Marketing channel is the indispensable key factor for the success of marketing mix strategy. With the prosperity of Internet, electronic has become a whole new marketing channel whose effective usage will lead to the success as well as the failure of the Internet retailing market. In order to occupy one of the marketing channels, e-tailers must consider the channel usages characteristics of the Internet consumers, which assure the efficiency of the marketing channel. Thus, a friendly buying environment can be built. Therefore, how to improve their pricing ability in order to make good use of the online and offline channel has important theory and practical significance for the increasingly arisen e-tailers. This paper is centered on the two core issues of the Internet marketing-price and channel, which have great importance and correlation.The academic studies of e-tailers' pricing and channel are mostly done in America, where the EC there is developing rapidly. Whether its concept and theory still work in other countries and cultures or not remains uncertain. Most studies of pricing ability are limited to the traditional economic field in Mainland China while the empirical studies under the Internet environment are few. So, for the sake of e-tailers establishing correct marketing strategies and maintaining competition advantage, it is of great significance to, based on foreign studies, study the driving factors of e-tailer's pricing ability and channel usage under the circumstances of Chinese culture.Based on the foundation of summarizing the domestic and international results on e-tailer's pricing ability and channel usage, this paper proposes the investigation frame of theory hypothesis for the potential affecting factors of e-tailer's pricing ability and channel usage. This paper proposes two models, one is affecting factors model of e-tailer's pricing ability and the other is Internet consumer's channel usage and attribute model. This paper carries on enterprise's questionnaires investigation through the random sampling and selective sampling methods, executes the statistical analysis to the sample data adopting structural equation modeling and classical statistical software (SPSS), testify the reliability and validity of measuring models. The correlation analysis, ANOVA and regression analysis were used to test the main effect hypothesis of the models. The contribution or innovation of this research may be: 1 .The affect factors of e-tailers' pricing ability may be divided into four main categories, they are "e-tailers' Characteristics" factor, "Market Characteristics" factor, "E-Consumers' Characteristics" factor and "Environment Characteristics" factor.In the factor of e-tailers' characteristics, this paper shows that reference group, credit standing, delivery service and business cost these factors have positive significant influence on e-tailers' pricing ability. Contrary to the previous study and intuitionistic judgment, convenience and e-tailers' pricing strategy don't have too much influence on the e-tailers' pricing ability, which indicates that shopping convenience, speed themselves don't help to improve e-tailers' pricing ability. E -tailers' should pay more attention to the influence of reference groups in order to enhance their pricing ability (for example, open Internet visual community and Internet consumer clubs, etc.) Meanwhile, they need to buildup their reliability of credit and promise, ability to make delivery in good time and reduce their dealing cost constantly.In the factor of "Marketing Characteristics", consumer involvement has positive significant to the e-tailers' pricing ability while "market competition" has less significance, which shows that in the factors of e-tailers' pricing ability, market competition has less influence on e-tailers' pricing ability. It is more important for the e-tailers to improve their website's browser rate and products' popularization rate to attract more consumers' involvement.In the factor of "E-Consumers' Characteristics", privacy, security and fad have positive significant to e-tailers' pricing ability. The result shows that Chinese Internet consumers value privacy and security of payment under the digital environment very much, e-tailer's can make use of the way of protecting the online privacy and security issues to pull E-consumers' attraction. Privacy and security should become the chief issue considered by the e-tailers when they design the online shopping environment. Online users' should be aware of their privacy being protected and their dealing secure. Because most E-consumers are young and pursuing fashion, it is easy for them to have higher loyalty to a certain brand, e-tailers should apply themselves to catalogue and magazine /Internet advertisements to attract these consumers. Once they admit and accept one e-tailer, they may have more price tolerance than other consumers. At the same time, e-tailers may establish high quality and high price strategy for them.The factor of "Environment Characteristics" includes "inner environment affecting factor" and "outer environment affecting factor". The analysis result shows that "outer environment affecting factor" can't explain e-tailers' pricing ability while "inner environment affecting factor" has positive significance to e-tailers' pricing ability, which means the more the e-tailers attach importance to their inner-enterprise culture, the faster their employees' ability to grasp the information technology, the better their inside finances condition and Internet marketing facilities, the stronger the e-tailers' pricing ability.2. Construct a model of consumer online/offline channel perception. This paper applies the consumer buying decision-making behavior theory to the study of consumer online/offline channel usage. How can consumers' online and offline perception affect their channel usage are investigated. Online and offline channel distribution includes shopping convenience, information, delivery, price perception, security and payment these seven factors. Comparing to the previous study, this paper adds more latitudes to measure service, security and payment. The empirical result shows that most consumers consider information, service, price perception and payment flexibility of online channel have stronger advantage than offline channel. These four factors include the following variables, they are website production information, production and related information search, production recommendation, deal with problems after buying the products, security of payment, payment flexibility and procedure convenience. Further analysis shows that consumers regard convenience, delivery and security of online channel has no advantage. And have less confidence in the variables of these three factors—convenience of order signing, convenience of order, dealing speed, confidence in winning and performing the order, the frequency of product miscarriage, time period of getting delivery, security during the dealing process, protection of private material, products and mistake rate of the related information, etc. All these factors can't attract consumers' buying decision from offline to online.3. Consumers' online consumption status are studied by the way of group division. According to their differences of Internet consumption proportion, these consumers are divided into four sections (l)Mainly use offline channel while shopping and less online channel; (2)Use much of the offline channel and less proportion of online channel; (3) Mainly use online channel while shopping and less offline channel; (4) Use much of online channel and less offline channel. This paper compares the convenience, information, service, delivery, price perception, security and payment perception of consumers' channel attribute. The consumers in these four sections have more advantages in information, service, price perception and payment, however, the perception of convenience, payment and security shows negative. In other words, consumers think there is no advantage for the online channel in shopping convenience, goods delivery and Internet shopping security. The most interesting thing is price perception whose mean value is the lower in the section 1 but higher in the other 3. This means that consumers having offline preference can't perceive the profit bring by the Internet promotion and discount.This results lead to great significance to the e-tailers. In order to attract more consumers to use the Internet shopping, e-tailers should strengthen their advantages on information, service and payment and consumers' price perception. And at the same time, overcome the disadvantage on delivery and security.4. Consumers' real Internet consumption's proportion in each division is measured. According to this proportion, consumers' online shopping is divided into four periods. They are early Internet consumption period, growth period, expanding period and the mature period. After measuring the their future Internet consumption trend of these four periods' consumers, I find that consumers in the early stage has few proportion to extend their Internet channel usage in the very near future, while those in growth stage may improve their online usage portion in the near future. The portion of consumers in expanding stage is the highest in the total consumption expense. When consumer move to the mature stage, they will focus on shopping by Internet channel. So e-tailers should attract consumers' in the early period by information and exchange; for those who are in the growth period, e-tailers should enlarge their investment, improve their service quality, fasten the delivery and secure the business security and for the consumers in expanding and mature periods, they should improve the Internet markets' portion's quality and quantity as the main strategy.
Keywords/Search Tags:E-tailer, pricing ability, online/offline attribute, channel usage, E-consumer
PDF Full Text Request
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