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INTRODUCTION AND DESIGN OF THE STUDY

Revenue loss The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was bought from the manufacturer (also known as markup). The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself.

Loss of Communication Control Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.

Loss of Product Importance The importance given to a manufacturers product by the members of the distribution channel is not under the manufacturers control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a competitors product may enjoy greater importance as the channel members might be getting a higher promotional incentive.

This led the researcher to pursue a study in Effectiveness of online marketing/selling as a distributers channel

RESEARCH METHODOLOGY The researcher wants to find out the behavioral metrics and financial metrics of online marketing this is analysed under the topic EFFECTIVENESS OF ONLINE MARKETING/SELLING AS A DISTRIBUTERS CHANNEL NEED FOR THE STUDY Kotler formalized this evolution with his book "Marketing Management." His key stages are production, sales and brand management. Each of these is strongly motivated by technological opportunities, which permit new methods and new opportunities. A fourth stage, a focus on the individual customer, is also important. As the new technology of the Internet develops, it reinforces the new marketing emphasis - which in many ways is a return to business at the turn of the century. In todays technology driven world, a new fast paced digital economy is emerging. In the near future, it wouldnt be surprising to see that there are companies that exist only inside computer networks. Most business transactions will be made electronically, directly from the producer to the consumer, bypassing the supply chain. In the digital marketing environment, the consumer becomes an integral player in the development of the product. In fact, a consumer might build the product himself from a wide array of parts provided by the company. It is e-commerce that is changing the way products and services are conceived, manufactured, promoted, priced, distributed and sold. The reason being that it is much cheaper; it allows vast coverage and helps in serving the customer better. Customer Relationship Building companies can interact with customers to learn more about their needs and to build ustomer databases. Reduce Costs & Increase Efficiency avoid the expense of maintaining a physical store, costs of rent,insurance, and utilities. Digital catalogs cost less to produce than printing and ailing.

OVERALL OBJECTIVE The overall objective is to find out the behavioral metrics of consumer and financial metrics. SPECIFIC OBJECTIVES The specific objectives are As a distribution channel: physical exchange of products or services. - To eliminate huge inventories, storage costs, utilities, and space rental, etc. w4x. - To shorten supply chain and reduce commission and operating costs w12x. -TO form the strategy which influence the consumer to purchase the product through online. LIMITATIONS The following are some of the limitations of the study
1. The sample size of the research is medium. 2. The time given to the researcher to collect the samples is only seven days. 3. The study focus on only trichy.

SAMPLING AND DATA COLLECTION The researcher used a method called Area Sampling method to select the Area. The researcher collected the data with the help of a standard questionnaire and had a direct interview with all the 100 consumer. The researcher could receive completely filled in questionnaires through direct interview. The questionnaire contains factors that applies to online marketing.

REVIEW OF LITRATURE

Online -marketing In this modern age of internet almost every progressive business have web presence, some of people think that website is just a commercial requirement but others think that it is mandatory to run their company activities. These different theories about internet have been discussed a lot in recent marketing literature. In the past decade marketers have been arguing about the role of internet in marketing. In the start marketers used internet as communication tool but as time passed they realized the true potential of internet and the idea of e-marketing evolved. Smith and Chaffey (2005) give a short and basic definition of E-marketing as Achieving marketing objectives through use of electronic communication technology. According to Hoge (1993), Electronic marketing (EM) is the transfer of goods or services from seller to buyer that involves one or more electronic methods or media. E-Marketing began with the use of telegraphs in the nineteenth century. With the advent and mass acceptance of the telephone, radio, television, and then cable, electronic media have become the dominant marketing force. Hoges (1993) idea of E-marketing is simple but it does not touch the important aspect of customer relationship. Strauss and Ansary (2006) defined E-marketing in there latest book as the use of information technology in the process of creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stake holders. This explanation tells that e-marketing is not only about selling products or providing services through IT but it is lot more than that. It is not just traditional marketing using the information technology tools but its a strategic model to achieve brand value and provide customer satisfaction. On marketconscious.com (2006), the author simply stress on having a website URL in marketing effort, he recognize that even a conventional marketing effort like magazine or radio adverts are considered as e-marketing if they are promoting a website. (www.marketconscious.com/dict2.htm, 2006) this is a arguable description of e-marketing as internet is not the only medium for e-marketing. A very complete definition of e-marketing has been given on an educational website; it says Moving elements of marketing strategies and activities to a computerized, networked environment such as the Internet. It is the strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the Internet or through digital tools. (aede.osu.edu/programs/eagbiz/pageglossary/main.html, 2006) From above definitions, idea of E-marketing can be derived as type of marketing in which objectives are achieved through use of electronic communication tools like internet, interactive TV and mobile phones. Generally people do confuse e-marketing with online or internet marketing, where online marketing is just limited to the use of internet technology to attain marketing objectives.Dave Chaffey (2002) defines E-marketing as Applying Digital technologies which form online channels (Web, e-mail, databases, plus mobile/wireless & digital TV) to contribute to marketing activities aimed at achieving profitable acquisition and retention of customers (within a multi-channel buying process and customer lifecycle) through improving our customer knowledge (of their profiles, behavior, value and loyalty drivers), then delivering

integrated targeted communications and online services that match their individual needs. (http://www.wnim.com/archive/issue2904/emarketing.htm, 2006). Chaffey's definition reflects the relationship marketing concept, it emphasis that it should not be technology that drives emarketing, but the business model. It also stresses that E-marketing is most effective when used with other conventional communication channels. He also reckons that any communication or messages to the customer must be personalized and each buyer must treat distinctly. (http://en.wikipedia.org/wiki/E-Marketing, 2006) 2.3: The e-Prefix There is so many Es circulating in the text that it is quite a confusing matter, E-commerce, Emarketing, and E-business etc. Smith and Chaffey (2002) say that there are many terms with eprefix and many different interpretations. Within any organization, developing a common understanding for terms such as e-commerce, e-business and e-marketing, and how they interrelate is important to enable development of a consistent, coherent strategy. E-commerce is commonly thought to include e-tailing, online banking and shopping - it involves transactions where buyers actually buy and shoppers actually shop (Smith, 2002). Others suggest e-commerce is any transaction such as a support enquiry or an online catalogue search. Hanson (2000) explains that different activities over the internet can be grouped according to their type. He says, Specific benefits are put forward for business use of the Web. These may be grouped as productivity based and revenue-growth based. (Hanson, 2000) Most scholars perceive e-commerce as trade over the internet. A definition, available at merchantseek.com says E-commerce is the processing of buying and selling via the Internet. (http://www.merchantseek.com/glossary.htm, 2006) .Powernet.co.uk also recognize internet as the medium used in e-commerce, E-commerce (electronic commerce) is the buying and selling of goods and services on the Internet, especially the World Wide Web. (http://www.powernet.co.uk/client/general/glossary.shtml). Another common misconception is that e-business is part of e-commerce, which is not true. Smith and Chaffey (2002) quoted David Siegel in their book as It has been said that 'the days of e-commerce are numbered as companies realize the advantages of e-business (David Siegel). It reflects the true potential of e-business, Strauss and Ansary (2006) finds e-business far bigger than e-commerce. They reckon e-commerce as subset of e-business (Strauss and Ansary, 2006, P3). They also quote Gartner group defining e-business as continuous optimization of a firms business activities through digital technology. The thought of e-business emerge as the conducting of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. Either the transaction of business over an electronic medium or any that conducts its business over an electronic medium such as the Internet. The literature makes us think about the difference between e-business and e-marketing. Lets put it straight, e-marketing is not just internet marketing. Internet marketing is subset of e-marketing, Imber and Betsy-Ann (2000), defined Internet Marketing as the process of building and maintaining customer relationships through online activities to facilitate the exchange of ideas, products, and services that satisfy the goals of both buyers and sellers.

Strauss and Frost (2003) explain in their book that e-business has a broader prospective, It involves automation of all the business process in the value chain - from procurement or purchasing of raw materials, to production, to stock holding, distribution and logistics, to sales and marketing, after sales, invoicing, debt collection and more. It includes e-marketing and ecommerce. And e-marketing is at the heart of e-business...adding value to products, widening distribution channels, boosting sales and after sales service, while getting closer to customers and understanding them better. There could be three alternative relationships between e-banking, ecommerce and e-business. (i) E-marketing has some overlap with e-commerce and e-business. (ii) E-marketing is broadly equivalent to e-commerce and e-business. (iii) E- marketing encompasses e-marketing and e-commerce, but e-marketing involves more processes then e-commerce. (Strauss and Frost, 2003) 2.5: The scope of E-marketing: As Smith and Chaffey (2002) describes in his book (E-marketing excellence: The heart of business), e-marketing invites marketing online whether via web sites, banner ads, opt-in email, interactive kiosks, interactive TV, mobiles or m-commerce, e-tools, It involves getting close to customers, understanding them better and maintaining a dialogue with them. It is broader than ecommerce since it is not limited to transactions between an organization and its stakeholders, but includes all process related to the marketing concept. Dynamic dialogue is at the heart of good marketing and is easily facilitated by e-marketing as it builds on the database (of customer and prospects) and creates a constant flow of communications between customers and suppliers and between customers themselves. Dynamic means what it says, dynamic does not mean static web pages. Its a two-way flow of communication - an ongoing discussion between customer and supplier. Remember that e-marketing also involve using electronic communications to manage the internal marketing process and better understand customers including marketing research and analysis. David Siegel says E-marketing is not about building a website, but building a web business.... harmonizing the power of customers ' Siegel (2000) Europeans are spending more money online as well. For instance, Europe's largest discount carrier, easyJet Airline Co., sold $80 million more tickets online in the six months ended March 31, 2002 than it did a year earlier (Reinhardt and Passariello, 2002). The key to success is to develop e-marketing strategy beyond the basic website interface as a "brochure on-line", to a much more integrated philosophy throughout the organization. This success can be achieved by developing a set of e-commerce competencies relating to factors such as innovation, finance, productivity, human resource management and quality. Investigation of ebusiness decision making should uncover factors such as inertia and lack of interest, together with resource-based issues such as the perceived lack of time available to develop these new sets of competencies these are the words of Chaston (2001) who stresses on importance of emarketing as a complete business strategy.

In marketing the e-Business, authors Lisa Harris and Charles Dennis (2002) clearly recognize that most businesses need to run both brick and click operations in the foreseeable future and those significant problems exist in organizing, implementing, integrating and measuring such dual operations. The authors' stated goal is demonstrating "the benefits of e-marketing as a tool for improving efficiency and effectiveness rather than for business revolution. Different authors have different views about the implementation of e-marketing and there are many different schools of thought about the way e-marketing should be intergraded within the traditional business model, but one thing has everyones consent that e-marketing can help create a business which is customer led...where the customer participates through a constant dialogue, expressing interests, requesting products and services, suggesting improvements, giving feedback...where ultimately, the customer drives the business.

Sales and Delivery Planning Issues Traditional sales-related supply chain planning tasks include long-term product program planning, medium-term pricing and forecasting, and short-term order promising (see e.g. Fleischmann and Meyr, 2003). Particular features of these tasks in an e-fulfillment environment notably arise from the fact that the delivery service makes part of the product offering. Embedding in a multi-channel structure gives rise to additional tradeoffs. In what follows, we discuss the impact of these factors by planning task. Delivery Service Design As any company, Internet sellers need to design their product offering. In their case, this includes the choice of the offered delivery service, which is an important determinant of customer satisfaction (Boyer and Hult, 2005). The quality of the fulfillment service is addressed in a growing body of literature on Physical Distribution Services (Rabinovich and Bailey, 2004). From a customer service perspective, concepts for bridging the last mile to the customer can be divided into customer pick-up versus (home) delivery (Daduna and Lenz, 2005). The latter can be further subdivided into attended and unattended delivery (Kamarainen and Punakivi, 2002). While unattended delivery increases delivery flexibility, this concept is only applicable for products that can be safely deposited, e.g., in the customers mailbox. The well-known example of U.S. online grocer Streamline illustrates the difficulty of extending unattended delivery to more sensitive product categories. Streamline went bankrupt after being unable to earn back its investments of providing customers with refrigerated reception boxes. For attended home delivery, a company and its customer need to agree on a delivery time window. The length of this window and its timing during the day are important aspects of the customers perceived service. The same goes for the delivery lead time, i.e. order placement and delivery. At the same time, all of these factors have an immediate impact on the sellers delivery costs. Striking the right balance between cost and service is challenging, in particular in highly competitive environments, such as the grocery market (see Boyer et al., 2003).

Another e-fulfillment service element concerns the handling of customer returns. Internet sales are facing particularly high return rates since customers cannot try and feel the product beforehand. For example, online apparel retailers are experiencing return rates amounting to up to 45% of their orders (Tarn et al., 2003; de Koster, 2002a). Costs of return handling, which include bridging the expensive last mile for a second time, can easily eradicate the economic viability of an online channel. Therefore, designing efficient return processes is of prime importance (Min et al. 2006). At the same time, one observes again a trade-off between customer service, i.e. the return policy, and operational costs (Yalabik et al., 2005). One way, in which companies are trying to shift this balance is by offering support services, such as installation support for electronic products, aiming to reduce product returns. Traditional sales channels offer many potential synergies for the marketing of an Internet channel. In particular, a well-established brand name helps build trust with the customer, which is essential for online sales (Chen and Dhillon, 2003). The presence of a traditional distribution structure also yields additional options for the delivery service design in e-fulfillment. Physical store pick-up points are a fairly common alternative to customer home delivery. Online orders are picked and packed in a store where the customers can then pick them up (www.bestbuy.com, www.freerecordshop.nl), possibly via a dedicated pick-up lane (www.lowesfoods.com, ww.foodfactory.nl). In this approach it is the customer who bridges the crucial last mile. Other advantages of a pick-up structure include low capital investments and possible carry-over effects on in-store sales (Boyer et al. 2005, Johnson and Whang, 2002). The presence of a physical distribution structure can be particularly beneficial for return handling. Most multi-channel retailers offer online consumers the option to return products via offline stores. This approach not only helps reduce return handling costs but it is also greatly valued by the customers (Forrester, 2005). Pricing and Forecasting Pricing decisions play a key role in any business. Service components, notably delivery, add an extra dimension to this issue in e-fulfillment. Companies need to set prices both for the physical products and for the delivery service. Common policies often combine both price elements, e.g. in the form of free delivery of sufficiently large orders. Two factors render pricing a particularly powerful lever in online sales, namely significant pricing flexibility and extensive data availability. Typically, online sellers can change prices much more easily than traditional stores. Consequently, they can use pricing for short-term demand management (Baker et al., 2001). Besides dynamic posted prices, common online pricing policies include various types of auctions (Kambil and van Heck, 2002). Interestingly, many firms are selling almost identical products online through auctions and fixed prices simultaneously (Etzion et al. 2006). What complicates e-fulfillment pricing decisions is the need to anticipate on the ensuing cost consequences in the delivery operation. In addition, overly complex pricing policies may leave customers confused and distrustful (Garbarino and Lee, 2003). The second major factor that increases pricing power in e-fulfillment is data availability. What is a major challenge for operations, namely dealing with individual customer orders, is a treasure for marketers. Availability of transaction data of individually identified customers not only provides a rich basis for forecasting but, more

importantly, allows targeted communication with the customer. This explains the particular relevance of customer relationship management (CRM) in online retailing. Detailed data provides a basis for segment-specific pricing and promotion. In particular, firms can effectively cross-sell products and services that closely match a particular customers preferences, as in the example of Amazon.com suggesting additional book titles, based on the customers browsing behavior (Akcura and Srinivasan, 2005). Effective cross-selling requires a firm to select appropriate product bundles and to design a corresponding pricing strategy. In conclusion, we see a shift from reactive forecasting to a much more active demand management in e-fulfillment. The presence of a traditional sales channel adds further dimensions to the pricing decision. In particular, retailers need to choose whether to offer the same prices and price changes, such as promotions across all channels or whether to price-differentiate. Some retailers choose identical prices for the physical products and use additional delivery fees as the main steering element of the online channel (see e.g. www.albert.nl). In addition, traditional sales channels benefit from the rich data collected in the online channel. Forrester (2005) argues that advanced multi-channel tactics include CRM across multiple channels. Order Promising and Revenue Management Traditionally, short-term sales planning centers around order promising, roughly speaking the sellers response to an incoming customer request. Order promising plays an important role in manufacturing. Planning systems use available-to-promise (ATP) quantities indicating the number of products that can be committed to a given delivery date (Fleischmann and Meyr, 2003). In traditional retailing, order promising is more straightforward since products are typically sold from stock. It is again the service component that adds to the complexity of order promising in e-fulfillment. In order to satisfy a customer order not only the requested product has to be available but also sufficient delivery capacity. Based on these factors, the Internet retailer has to commit to a certain lead-time or estimateto-ship date. Flexibility in the quoted lead-times can help increase e-fulfillment efficiency (Xu et al., 2006). In addition, the retailer may have some flexibility regarding where to retrieve the product as opposed to physical stock in a traditional retail store (see Section 4 for a detailed discussion of inventory considerations in e-fulfillment.). In general, customer orders differ with respect to their contribution margins and their delivery costs. This gives rise to revenue-management issues in e-fulfillment, similar to those well known in the airline and hospitality industry (McGill and Van Ryzin, 1999). E-tailers have an incentive to use their delivery capacity for the most profitable orders. In the case of high utilization it may not be optimal to simply accept all orders first-come-first-serve until capacity is exhausted. The benefits of a more selective approach increase with increasing order heterogeneity and with decreasing capacity. What distinguishes this situation from classical revenue management is the cost impact. In contrast with the prototypical airline setting, marginal costs of an order are nonnegligible in e-fulfillment and, what is more, delivery costs for different orders may be interdependent. E-tailers have different revenue management levers at their disposal, including

dynamic pricing and a dynamic adjustment of the offered delivery options (e.g. time slots). This links order promising to the short-term pricing decisions discussed above. In all of these cases, revenue management benefits from the real-time availability of rich customer data. Again, maintaining a certain level of transparency may be important for customer satisfaction. In a multi-channel setting, order promising may cross the boundaries of individual channels. For example, in-store inventories may be available to online buyers. In this case, customer segmentation based on channel type, and a corresponding prioritization in order promising, may be beneficial since opportunity costs of missed sales tend to differ by channel. Transportation Planning On the delivery side, short-term planning concerns the actual transportation of the goods to the customer. The scope of this operation closely depends on the chosen delivery concept, as indicated earlier. In the case of in-store pick-up, transportation may be limited to moving the goods to a check-out counter. Combining shipments with regular store replenishments may yield economies of scale. Home-delivery implies a more extensive operation. Cost-efficient processing of small transaction sizes is a major challenge. Especially in the case of low-value items, such as groceries, transportation costs are a key determinant of the business viability. Hub-and-spoke networks provide a common way to create economies of scale while expanding geographical coverage (see e.g. www.ocado.com). Dedicated home delivery, as opposed to e.g. delivery by mail, requires the planning of appropriate transportation routes. The degree of routing flexibility and thus transportation efficiency closely depends on the delivery service design, notably on the offered delivery time-windows. In B2C Internet retailing new routing schedules have to be planned more frequently (usually daily or twice a day) than in a traditional B2B delivery environment because many B2C orders are impulse buys whereas B2B purchases are often repetitive (Buck Consultants, 2006). This leads Du and Chou (2005) to argue that B2C environments exhibit a greater need for quick-response dynamic vehicle dispatching systems than B2B environments.