E-Marketing Models

The models for e-business have been separated into generic categories; two of those categories include the brokerage model and the merchant model. Each model can be more applicable to different business types and are designed to provide a company with the tools to support the essential elements of marketing, price, promotion, product and place.

A report from North Carolina State University goes into some depth explaining each model. For example, "Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary. Brokerage models include:

Marketplace Exchange - Offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment. Exchanges operate independently or are backed by an industry consortium. [Orbitz, ChemConnect]
Buy/Sell Fulfillment - Takes customer orders to buy or sell a product or service, including terms like price and delivery. [CarsDirect, Respond.com]

Demand Collection System - the patented "name-your-price" model pioneered by Priceline.com. Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges fulfillment. [Priceline.com]

Auction Broker - Conducts auctions for sellers (individuals or merchants). Broker charges the seller a listing fee and commission scaled with the value of the transaction. Auctions vary widely in terms of the offering and bidding rules. [eBay]

Transaction Broker - A third-party payment mechanism for buyers and sellers to settle a transaction. [PayPal, Escrow.com]

Distributor - A catalog operation that connects a large number of product manufacturers with volume and retail buyers. Broker facilitates business transactions between franchised distributors and their trading partners.

Search Agent - A software agent or "robot" used to search-out the price and availability for a good or service specified by the buyer, or to locate hard to find information.

Virtual Marketplace - or virtual mall, a hosting service for online merchants that charges setup, monthly listing, and/or transaction fees. May also provide automated transaction and relationship marketing services. [zShops and Merchant Services at Amazon.com]

Whereas the merchant model includes, "Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction.

Virtual Merchant -or an e-tailer, is a retail merchant that operates solely over the web. [Amazon.com]
Catalog Merchant - A mail-order business with a web-based catalog. Combines mail, telephone and online ordering. [Lands' End]

Click and Mortar - A traditional brick-and-mortar retail establishment with web storefront. [Barnes & Noble]

Bit Vendor - A merchant that deals strictly in digital products and services and, in its purest form, conducts both sales and distribution over the web. [Apple iTunes Music Store]

(Business models on the Web, 2006)

The four Ps of marketing is as crucial in e-marketing as they are in the traditional world of marketing. In fact e-marketing is a great benefit to companies that are trying to meet the right marketing mix for their organization.

Businesslink.gov provides some wonderful insight into the strengths afforded a company looking to the e-marketing world. Including the following:

Global Reach - a website can reach anyone in the world who has Internet access. This allows you to find new markets and compete globally for only a small investment.

Lower Cost - a properly planned and effectively targeted e-marketing campaign can reach the right customers at a much lower cost than traditional marketing methods.

Trackable, Measurable Results - marketing by email or banner advertising makes it easier to establish how effective your campaign has been. You can obtain detailed information about customers' responses to your advertising.

24-Hour Marketing - With a website your customers can find out about your products even if your office is closed.

Personalization - if your customer database is linked to your website, then whenever someone visits the site, you can greet them with targeted offers. The more they buy from you, the more you can refine your customer profile and market effectively to them.

One-to-One Marketing - e-marketing lets you reach people who want to know about your products and services instantly. For example, many people take mobile phones and PDAs wherever they go. Combine this with the personalized aspect of e-marketing, and you can create very powerful and targeted campaigns.

Better Conversion Rate - if you have a website, then your customers are only ever a few clicks away from completing a purchase. Unlike other media which require people to get up and make a phone call, post a letter or go to a shop, e-marketing is seamless.

(Develop an e-marketing plan, 2006)

Arguments abound over additional factors that can influence e-marketing, but the traditional four elements of the marketing mix continue to be the primary influences over successful marketing practices. Technology has just offered more opportunities for more companies to reach a broader audience and be able to communicate directly with the consumers more effectively.