Master Thesis
“Foreign Market Exploita5on with
E‐marke5ng Strategy of Thaiearthtone Company”
EFO705, 15 Credits
Final Seminar
Date May 28, 2009
Advisor: Daniel Tolstoy
Presented by:
Group 2223
Pharktanat PaQarariRsak 820930‐T2
Acknowledgement
This acknowledgement page is devoted to persons who contributed to this work. First of all, this dissertation could not have been completed without the help and suggestion of our thesis advisor. Therefore, we would like to express our gratitude to Daniel Tolstoy for constantly giving us encouragement. The gratefulness also goes to Tobias Elderbrant, our tutor during the whole International Marketing course at Mälardalen University, for teaching us and enhancing our knowledge. Moreover, we would also like to thanks Mr. Apisak and Mr. Thanarut, Thaiearthtone’s manager’s, for their cooperation and willingness to answer all the questions. Lastly, we really appreciate all the contributions we received during our Master Thesis course.
Abstract
Date: May 21, 2009
Program: International Marketing
Course name: EFO705 Master Thesis
Title: Foreign Market Exploitation with E-marketing Strategy of Thaiearthtone Company
Authors: Nicha Chienchiranai 851212-T107 Pharktanat Pattararittisak 820930-T251
Tutor: Daniel Tolstoy
Problem: How can Thaiearthtone exploit opportunity in foreign market by using e-marketing strategy?
Purpose: To develop an appropriate e-marketing strategy to increase satisfaction of existing customers and simultaneously attraction of new customers.
Method: This research is based on qualitative research, using exploratory research method. The theoretical framework used in the research is E-Marketing Strategy which is developed by the authors with some adaptation from E-marketing Mix Strategy. The findings were obtained from an in-dept interview as well as second hand sources including Thaiearthtone’s website and others.
Conclusion: With the increased number of e-commerce firm, to be stand out of the crowd is rather difficult for small company like Thaiearthtone especially that the target market are foreigners. To successfully exploit its opportunity in overseas market, Thaiearthtone could probably take the idea from the authors’ own developed E-marketing strategy into consideration, and adapt it to the current situation of the company.
Table of content
Page 1. Introduction 1 1.1 Background 1 1.2 Company background 2 1.3 Problem discussion 31.4 Objective of this study 4
1.5 The research question 4
1.6 Target group 4 1.7 Limitations 4 2 Literature review 5 3. Conceptual Framework 8 3.1 Relationship Marketing 9 3.1.1 Personalization 10
3.1.2 Customer Database Principle 12
3.1.3 Customer Service 15
3.1.4 E-Service 16
3.2 Site Usability 17
3.2.1 In Cyber Space, No One Can Hear You Shop 17
4. Method 20
4.1 Choice of topic 20
4.1.1 Chosen company 21
4.2 Choices of theories 22
4.3 Choice of Research Method 24
4.3.1 Qualitative method 24
4.4 Data Collection Method 24
4.4.1 Primary & Secondary Data 24
4.4.2 Interview 25
4.4.3 Interview guideline 25
4.4.4 Sample selection 26
4.4.5 In-depth Interview Structure 27
4.5 Information analysis 27
4.6 Reliability and Validity 28
4.7 Ethical considerations 28
4.8 Motivation behind Method Selection 29
5. Empirical Finding 30
5.1 Thaiearthtone’s Primary Data 30
5.1.1 General Information of Thaiearthtone 31
5.1.2 Issues Related to Relationship Marketing 32
5.1.3 Personalization 32
5.1.4 Customer Database Principle 33
5.1.6 Issues on Site Usability 35
5.2 Thaiearthtone.com Web Layout 36
5.2.1 Preset pattern 36
5.2.2 Page content 40
5.2.3 Text Size on Thaiearthtone’s webpage 50
5.3 Dot.com Failure Cases 51
5.3.2 ToysRus.com 51
5.4 The success of Amazon.com 52
6. Data Analysis 54
6.1 Relationship Marketing 55
6.2 Personalization 55
6.3 Customer Database Principle 57
6.3.1 Good People + Good System = Good Database 58
6.3.2 Who’s in Charge? 59
6.3.3 Universal Access 59
6.3.4 Capture Everyone 59
6.3.5 Tracking Information 60
6.3.6 Be Able to Sort Information 60
6.3.7 Frequently Update 61
6.3.8 Back Up Your Information 61
6.4 Customer Service 61
6.5 E-Service 62
6.6 Site Usability 63
6.6.1 Transitional Zone 63
6.6.2 Fonts, Signs and Displays 64
6.6.3 Well-organized store 65
6.6.4 Website Navigation 66
6.6.5 Simple and Up-to-Date 67
6.6.6 Quick Response 68
7. Conclusion 69
7.1 How can Thaiearthtone exploit opportunity in foreign market by an e-marketing
strategy? 70
7.1.1 Relationship Marketing Implication 70
7.1.2 Personalization and Database Implication 71
7.1.3 Customer service Implication 71
7.1.4 Site Usability Implication 72
8. Recommendation 75
8.1 Personalization and Database 75
8.2 Customer Service 77
8.3 Web Layout 78
Reference 80
Table of Figure Figure 2...7 Figure 3...8 Figure 3.1:...10 Figure 5...35 Figure 5.1...35 Figure 5.2...36 Figure 5.3...36 Figure 5.4...37 Figure 5.5...38 Figure 5.6...39 Figure 5.7...40 Figure 5.8...41 Figure 5.9...41 Figure 5.10...42 Table 1...43 Figure 5.11...44 Figure 5.12...45 Figure 5.13...45 Figure 5.14...46 Figure 5.15...46 Figure 5.16...47 Figure 5.17...47 Figure 8...74
1. Introduction
In this section, we will introduce the issue on internet marketing and the fact about the chosen company, Thaiearthtone. Also, we will provide the problem discussion and purpose of this study which lead to our research question.
1.1 Background
Before an introduction of e-commerce, a company who want to expand customer network to foreign market would have to spend more time and resources in contacting and negotiating with customers abroad. With the help of e-commerce, it has shortened the process of dealing a business in far distance. “Developments in information and communication technology since the late 1980s and early 1990s have made foreign market exploitation more efficient for most companies, and feasible for new ventures” Dean (2005). Hence, E-commerce has proved to become an essential channel and tool for firm internationalization. The trend of making a website to enhance the growth of the business has spread out widely from small to large enterprise. An existing business wants a website to be a new channel connected to more customers whereas a newcomer wants a website to create an opportunity to establish a business. According to Frank Bradley (2005)’s generic international marketing strategies, “Increasingly smaller firms have been able to establish a strong presence in international markets through innovation use of the Internet”. Internet became a key role enable the firm to have a global presence. Thaiearthtone is one of many newcomers who want to establish in an online business. The company started its business during 2006 in Bangkok, Thailand by three new graduates. The idea of the business is to buy goods from many suppliers in Thailand, and sell to international market online. However, e-commerce is not as simple as renting a shop and put stuffs on the shelf for pedestrians who are interested and buy. No one knows you until you know how to do marketing online. A new company without experience in the e-commerce field needs some times for trial and error, but how long they can remain in the business if they cannot spot into the right strategy.
percent of transactions. Around 74 percent of Thai e-commerce companies are small business with only five staff members or fewer. From this statistic, it shows that Thaiearthtone is among the majority of e-commerce business in Thailand. Though there are plenty of successful stories of e-commerce companies, a new-established and ill-performing company in this case would be very interesting to investigate and study as this could be a lesson for many new youngsters who want to start off a personal business with limited budget. In our opinion, it would be very useful to learn from mistakes and then find a solution and protection to avoid the same error. Starting a business might not be as difficult as managing it especially for international business. During international marketing course in Malardalen, we have learnt a lot of international marketing concepts, thereby; we would want to apply those concepts plus some other relevant concepts with the real life situation of Thaiearthtone which is currently managing an international e-marketing.
1.2 Company background
At the beginning, Thaiearthtone is an online wholesaler and also retailer of Thai handicraft products with the concept, earth-tone products, however after two years of being both retailer and wholesaler the company became solely a wholesaler. The reasons behind this transformation are complicated details of retail web function and the more amounts per one transaction and sale. The company act like a middleman who holds a contact with different suppliers that based in different provinces of Thailand while taking an order from its online store. Thai handicrafts are ranged from large wooden sculptures to small wooden candle holders. The catalogue also includes leather-made products like wallets and bags and other handicrafts from different raw materials. While the products have their own characteristic when they were shown internationally, they are common goods in Thailand thereby the target groups are positively in international market. Owing to the size and the budget of the company, a small company like Thaiearthtone has chose to trade with international customers through e-commerce. This channel is more economical for the new established company and requires less investment and resources in setting up a store and promote to international customers. (Thaiearthtone, 2009)
1.3 Problem discussion
Since Thaiearthtone still has not making profit after three years of operation, the company is having limited budget to eject into its operation in the upcoming years. The revenue has not been incurred regularly on the contrary with the expenditures that remain every month. To be able to succeed in international market, a company needs to have an effective e-marketing strategy as “The primary advantage of e-marketing is reducing costs and enhancing reach” (Jagdish and Arun, 2005).
There are many variables that could be the cause of e-commerce failure. A lot of dot-com dot-companies failed due to different reasons. One of the biggest dot-dot-com failures was the case of boo.com, which was a clothing online retailer. From the analyst point of view, Boo.com failed due to factors like poor web design and usability, bad marketing, bad planning, investor concern, and business model and brand failures (Edigitalretail 2008). Some of these reasons could be the cause of failure for other dot-com companies as well. The reasons for Thaiearthtone’s poor performance might have some similarities to those factors of failure. Therefore, it would be worthwhile for Thaiearthtone to learn not only from successful stories but also from those mistakes as to avoid falling into the same pitfall.
All in all, parts of most companies’ failures are resulted from unable to satisfy customers, therefore in this paper we would like to focus on improving a customer service aspect of the company. As for e-commerce business, customers cannot feel, touch or try the products before making a decision, thus, by providing a better customer service, a company can increase the level of trust which could influence customers’ decision-making process.
providing customers with an appropriate variety of services in addition to the core product, whether that is physical goods or services, is a way of outperforming competitors with the same quality and price of core products. Many Thai companies enter price war to attract buyers and it does work only if you reduce the price lower than your competitors. Therefore, to gain competitive advantage over competitors, a company should not competing on price but on quality of service in which differentiate one company from another.
1.4 Objective of this study
The objective of this research is to develop an appropriate e-marketing strategy to increase satisfaction of existing customers and simultaneously attraction to new customers. In addition, this paper could also be a guideline for e-business starter to learn from Thaiearthtone case.
1.5 The research question
How can Thaiearthtone exploit opportunities in foreign markets by an e-marketing strategy?
1.6 Target group
This paper would benefit first of all the company, Thaiearthtone, as we are researching for a possible improvement method to enhance organizational quality. The company will be able to optimally exploit opportunities in foreign markets by an e-marketing strategy. Moreover, anyone who is interested in entering e-commerce business would find this paper useful as well.
1.7 Limitations
Due to time constraints and the limited information of the company in public sources, the company’s data is acquired mainly from the interview with the managers of Thaiearthtone. This paper is lacking of customers’ point of view as we cannot get access to the company’s private data and the focus of this study is on how the
company exploit opportunity in foreign market by an e-marketing strategy. Due to limited time, we cannot accomplish the complete e-marketing strategy thereby the scope of study is on relationship marketing and site usability.
2 Literature review
In this part of the dissertation, we will briefly review each literature used along with our research. The chosen literatures are from various types of sources including books, journals and websites.
We started to search for appropriate literatures from International Marketing course at Mälardalen University in order to make use of the things we have learnt. Several books we found relevant have been selected to accompany our research. The first literature is “Why We Buy” of Paco Underhill (2000). Why We Buy highlights the effect of store layout towards consumers’ behaviors. Although most of the contents deal with the actual store, the author devoted one chapter to e-store in which he adapted the store layout strategies to webpage.
Additionally, to meet the purpose of our study, we also used the book “Consumer
Behaviors” (Evans, Jamal and Foxall, 2006) along with our research. We focused on
the chapter that emphasizes the advantages of Data-Based Consumer Behavior which can help the company to predict the action of the customers through the data base regarding the transaction history. To enhance our knowledge regarding Data-Based Consumer Behavior, we also gathered more information from other sources apart from our text books. We discovered the website called “Coyote Communication” which belongs to Cravens (2008). Although the website is created in particularly for mission-based organization such as not-for-profit organizations, non-governmental organizations/NGOs, civil society and public sector/government agencies,
Customer Database Principle in 1994 which covering definition, advice as well as suggestion. The principle was then revised with new information in August, 2008.
Due to the fact that Thaiearthtone targets mainly at international customers, the literature concerning international marketing is of important. As a consequence, we also made use of “International Marketing” book of Ghauri and Cateora (2006) from our International Marketing course since we are quite familiar with the book. What we focused here is the relationship marketing in an international context which will be used together with E-Marketing Mix to develop a successful solution for our chosen company.
Since we realized that the literature from the International Marketing course at Mälardalen University might not be enough for fulfilling our objective, we decided to search for other sources like electronic journals. Eventually, we discovered the journal regarding E-Marketing Mix in relation to our purpose. “The e-marketing mix:
A contribution of the e-tailing wars” (Kalyanam and McIntyre, 2002) journal
highlights the e-marketing techniques developed by the authors. Due to the increasing number of e-stores, effective e-marketing techniques are essential for the company to be able to survive in the battle field. Therefore, this journal is of our concentration since it could help us to accomplish our intention of developing a solution for Thaiearthtone Company by adapting such techniques into practice.
During our research, we have discovered a journal about successful strategies and approaches taken by a small retailer with internet storefront in an emerging market economy. The topic is relatively similar to our case study leading us to check on the result of the study. The case is about a Turkish book retailer who became the largest online bookstore in Turkey through successful e-commerce utilization. The benefit of this online bookstore case is to let us see what implementation the Turkish company has taken to overcome success barrier. It would push up our motivation if factors that lead to the Turkish company’s success are relevant with the concept we have chosen to study in this paper. According to Vichuda (2007), the Turkish bookstore, Pandora, offer more value and convenience for customers, anytime-anywhere connectivity,
form a community and long-term relationships with customers, shows extensive knowledge of the industry and partner with the most trusted banks addressing security and payment concerns of potential and existing customers. Customer service and customer relationship are parts of the success factors of the online company. Therefore, we believe the chosen concepts for improving the performance of Thaiearthtone would be effective to implement and worthwhile to study. (Vichuda, 2007)
Another useful journal we were suggested to read for this paper is “International e-marketing: opportunities and issues” by Jagdish and Arun (2005). The journal provides useful insight about implementation of e-marketing strategy in different countries. The authors differentiate countries into four different categories by the level of country’s infrastructure development and country’s marketing institutional development and draw a matrix (Figure 2). For each category, the authors have suggested feasible successful e-marketing strategies which depend on existing infrastructure and marketing institutions. The authors’ definition of e-marketing is to reduce costs and increase reach no matter in which country it is implemented. Moreover in each category, there are different expectation levels of profitability which depend on the existing infrastructure development and cost structures of existing distribution channels. Unfortunately, the authors mention in managerial implications that firms need to develop unique e-marketing strategies based on the countries where they operate. Due to the fact that our chosen company Thaiearthtone has an operation in Thailand, but targets only foreign customers thereby the method from this journal cannot be applied to our case.
Figure 2 International e-marketing journal
Source: Jagdish and Arun (2005).
3. Conceptual Framework
In this chapter, we will present our construction of framework which will be used throughout the report to analyze the empirical result as well as to answer our research question.
E‐marke5ng
Strategy
Rela5onship Marke5ng
(keeping exis5ng
Personaliza5on
+
Customer Database
Principle
Customer Service
+
E‐Service
Site Usability + Web page layout (AQrac5ng new customers)Figure 3 E-marketing Strategy Model Figure 2.1 International e-marketing journal
Source: Authors
3.1 Relationship Marketing
“Relationship marketing is the practice of building long-term satisfying relations with key parties – customers, suppliers, distributors – in order to retain their long-term preference and business” (Norton Paley, 2001).
Unlike traditional marketing, relationship marketing focuses more on managing and maintaining relationship in the long run rather than one-stop purchaser. In other words, traditional marketing tries to increase sales by what company wants to sell while relationship marketing concentrates on what customers actually want. Relationship marketing process consists of finding what customer wants, fulfilling such needs and keeping track to make sure customers are satisfied. It is also believed that relationship marketing is a basis of competitive advantage which differentiates a particular company from others. (Ghauri & Cateora, 2006)
Relationship marketing put an emphasis on a long-term relationship between firms and customers that takes into account the customer’s needs and value (Alina, 2007). In addition, Christian Grönroos (2000, p.30) also describe three tactical elements of a relationship strategy to create a competitive advantage over competitors, who
ample opportunities to develop ways of showing a customer that he is know and valued.”
• Creating a database containing essential information regarding customers and others – making it possible to pursue a relationship-oriented customer contact and a support for cross-sales and new product offerings.
• Forming a customer-centric service system – designing every part of the system from customer-oriented perspective. Time management is critical in managing a relationship; “Badly managed time creates extra costs for all parties in a relationship.”
These three elements are essential in managing relationship with customers (Grönroos 2000, p.30).
3.1.1 Personalization
The concept of personalization is to identify customers and gather information about them. The collected information will provide each customer a customized offer that suit with the need of customer. “Providing special treatment in the form of information and applications matched to a visitor's interests, roles, and needs is known as personalization”, stated Willy Chiu (2009). Willy also mentions that customer’s satisfaction would increase when less time required to locate account information and service is personalized to the customer’s needs. As stated by Willy Chiu (2009), personalization is a key technology in managing customer relationships and website content and many more. The basic elements of personalization that is the foundation for each application is:
A: Identify site visitor B: Retrieve visitor’s profile
C: Select content that matches visitor’s preferences
Figure 3.1:
Elements of Personalization System (Source: Chui, 2009)
The objective of personalization is to keep existing customers to keep using the service that is personalized for different users. The advertisement of products from each website would be more effective when the benefit of a product matches visitors’ interest. It is important that information we transfer to customer is direct and not overloaded. In some cases, personalization gives return on investment in this system within a year. The successful examples are website like Amazon.com and Garden.com who exploit greatly on customers’ information. Willy Chiu (2009)
The main activities of personalization are collecting and analyzing customers’ information. The collected information will be used to analyze customers’ interest, role in an organization, purchases, entitlements, and other data considered important for web owner. Willy Chiu (2009)
Willy Chiu (2009) suggests common techniques for collecting customers’ data:
1. Explicit profiling – when a web owner collects data from a customer by filling out information or questionnaire on the web.
2. Implicit profiling – a transparent way of collecting customers’ web-surfing behavior by using cookie to save visitor identification and behavior.
After a web owner collects information that is needed, it is time to analyze information and make the best use of it. Willy Chiu (2009)’s techniques of analysis are mainly Rule-based and filtering techniques.
1. Rule-based techniques – the administrator must set up appropriate rules to drive personalization. An example of Rule-based techniques is cross-selling where a web system would offer a candle to a customer who previously bought a candle holder. It is a corresponding offer or recommendation that would match with the interest of a customer.
2. Filtering techniques – is the process of dividing or filtering people with same interest or same classification into the same category. For each category, it will be responded differently in term of offering or product recommendation. “Generally speaking, different personalization techniques are most suitable for different variables, such as type of Web site, Web site component, or product/ services”, stated Willy Chiu (2009). “The buying pattern is generally available in the customer purchase database” thereby database is an important tool just like a human’s brain to store customers’ data on the website and keeps it organized for the administrator to make a use of.
On the other side, if personalization and customization are based on unreliable information or information collected without the knowledge of customers, customers could turn out to see it as tricks and lose trust from a website. (Rust, Roland T, 2002).
3.1.2 Customer Database Principle
"Relationship marketing has only recently become practical and cost-efficient on a large scale because of database technology and the internet", (Kalyanam and McIntyre, 2002).
In customer data base, the information including both personal information such as name and transactional data such as order history are kept since they are useful for the company. By keeping record of such information, not only can the company keep track of customers but also predict their purchasing behaviors in the future (Evans, Jamal & Foxall, 2006).
Today, organizations are using databases more and more to manage customer relationships so as to increase both sales and customer satisfaction. The advantages of managing customer database, for example, are boosting sales to new, potential and existing customers, identifying needs more effectively as well as developing new and improving products or services (Business Link, 2007). To gather information concerning customers and potential customers in order to build a population of buyers for the products is crucial for any company (Cravens, 2008).
According to Cravens (2008) the owner of Coyote Communications website, Customer Database Principle includes;
• Good People and Good Systems = Good Database
According to Cravens (2008), the real value of the database comes not from a computer program the company uses. Instead, it comes from the information that is tracked from the customers. In order to have a good database system, a company itself needs to understand the importance of gathering information and be able to keep the information up-to-date. More importantly, maintaining the database should be a priority job in which the company should not take for granted and thinks of as a “when-you-have-time” task. As a result, it is necessary to provide a support to persons who maintain the database and encourage them that this job is of the highest importance (Cravens, 2008).
• Who’s In Charge
For companies with fewer than ten staffs, only one employee is needed for this job. This is to avoid repeated or duplicated record, otherwise the company is risking to have information conflicts if more than one person is inputting the data. The person who is in charge will be responsible for filling, changing and deleting information to the central database. Nevertheless, that does not mean that other staff members have nothing to do with the customer database at all. Everyone in the company should
• Universal Access
Even if only one staff is in charge of the database, everyone in the company should have at least limited access to it as well in order to look for basic information like e-mail address and phone numbers (Cravens, 2008).
• Capture Everyone
Part of the purposes of customer database is that it should grow. Everyone who interacted with the company, for instance calling and asking for information, should be recorded in the database. The company should also keep information on how the customers learn about the company and what they are interested in. These will definitely be helpful for the company in expanding customer base (Cravens, 2008).
• Tracking Information
As mentioned before, the heart of the database is the information from customers. Knowing what kind of information the company wants to use is crucial. Therefore, deciding what information the company wants to track is of important. To illustrate, e-mail address is sometimes more important than telephone number if the company want to inform the customer about new promotion via e-mail address rather calling since it is cost-saving (Cravens, 2008).
• The Information Needed Most
The company should be able to decide what information they want from their customers. Some basics and general suggestions include;
• first name • last name
• postal mailing address fields • day phone
• evening phone • fax phone • e-mail address
• ethnicity (for statistical tracking purposes only) • birth year (for statistical tracking purposes only)
• date entered into system
• date information was last updated
• do not send mail/ do not contact category
These fields are adjustable depending on the objective of particular companies (Cravens, 2008).
• Be Able to Sort Information
The customer database should be categorized appropriately, allowing staff to be able to sort information. This can be done, for example, by alphabetical list of name, address as well as e-mail address (Cravens, 2008).
• Frequently Update
A regularly update is required once the customer information such as changing phone number or address happened. This is crucial especially for the company that interacts with its customers via calling and sending direct mail (Cravens, 2008).
• Backup Your Information
Since customer database is the company precious treasure. Backing up the information is crucial particularly if the database is computerized because the company is risking data-lost due to technical problems like viruses (Cravens, 2008).
3.1.3 Customer Service
“Customer service in e-marketing is primarily about supporting the customer at the access point.” (Kalyanam and McIntyre, 2002)
A good marketer must know how to support customers during pre-purchase process and also post-purchase period. A direct interaction is an essential point that has influence on customer’s decision. To get interact with customer, features like FAQ help desk, chat room, or automatic email response are a helpful addition to a website. Kalyanam and McIntyre, 2002 asserts that customer service is an overlapping function as its coverage can be from product availability to price and promotion.
marketing mix concept, relational marketing function includes site, personalization, security, privacy, and customer service. (Kalyanam and McIntyre, 2002)
3.1.4 E-Service
According to Rust, Roland T. (2002), E-Service is defined as the provision of service over electronic networks such as the Internet. The important key to success for E-Service companies is that they listen to customers.
Rust, Roland T. (2002) notes that E-Service is a form of self-service as customers have to learn web page functions themselves to gain web benefits. Customers have full control over the website without having to face with shop employees. As a consequence, a web designer should design a web to be customer-focused. The designers should put themselves into customer’s shoes to see if the service is user-friendly and require minimal time to learn. Rust, Roland T. (2002) has suggested some points to consider when evaluating E-Services:
1. The service should be intuitive meaning that the labels and links should lead to the functions or contents that are consistent with the meaning to the users. 2. The service functions should be easy to use as to avoid interrupting new users. 3. The system of the website should work effectively to avoid server slowdown
or download errors.
4. The service should be assuring, for example provide a printable receipt or confirmation email after transaction or purchase.
5. The service should be reliable to the customers.
A web owner can test on whether an E-Service of a website qualifies the above customer focus points or not by asking users to test a usability of web functions and give feedback to a web designer. A test can also be done in other forms such as open-ended methods like navigational focus groups or structured methods like tracking survey of user satisfaction. In any case, the point of the test is to identify weaknesses of the web and to make changes that would increase the service level. The process should be a continuous activity to see how customers’ experiences improve as the changes are made. (Rust, Roland T., 2002)
Customer support in the website is as important as the design. There are users with different level of technology ability, thus for some users an option like “help”, written documentation, e-mail, online chat, telephone support, and in-person customer support would be helpful. According to Rust, Roland T. (2002), telephone customer support is a very important feature on an e-commerce site for e-shoppers. As there is no employee on a website who you can make a direct query with, telephone service is perhaps the fastest channel to get in contact with a web personnel. Rust, Roland T. (2002)
3.2 Site Usability
In term of “Site” from e-marketing mix concept, site means an anytime, anywhere digital access point. According to Ghauri & Cateora (2006), “The access point can be used to interact about any aspect of a relational exchange.” Site is a place where customers find a showroom of seller’s products, the quote of price, the latest sales promotion and other customer support. For e-commerce, website represents the term site as it is a meeting point between users and sellers. In the next section, “In Cyber Space, No One Can Hear You Shop” will advise us appropriate methods to design website layout.
3.2.1 In Cyber Space, No One Can Hear You Shop
As our purpose is to develop an appropriate e-marketing strategy to promote Thaiearthtone, it is necessary that we take consumer behavior into consideration. Our first chosen framework was taken from chapter seventeen of “Why We Buy” which is “In Cyber Space No One Can Hear You Shop”. We take the store layout strategy of Underhill (2000) to analyze whether Thaiearthtone webpage was organized in accordance with Underhill (2000) in order to attract more customers. The chapter basically discusses about what a good webpage should be like regarding transitional
• Transitional Zone
One of the most important things that should not be taken for granted is the transitional zone before shoppers actually begin to shop. Once entering the webpage, the customers will need a little time and space to adjust themselves before bombarded by information and products. By putting tons of information on the homepage, the customers would probably miss a lot of them and might feel overwhelmed. Therefore, it is better to simply inform the customers on the first page where they are. What’s more, the first page must enable customers to navigate to the shopping page (Underhill 2000, p.221).
• Font, Signs and Displays
The next important things the store’s owner should never overlook are the design of the shop including font, signs and displays. This strategy applied to a webpage as well. According to Underhill (2000), it is crucial that the site is attractively designed, with enough blank space for the type to be readable, and the type must also be large enough to be seen. In addition to font, signs and displays should be patent and apparent enough to allow shoppers to notice all of them. This is to avoid information overlooked (Underhill 2000, p.221).
• Well-organized store
The well-categorized shelves in a store, for example supermarket, are of important since they will have an effect on consumer purchasing behavior. Referring to Underhill (2000), store layout should allow customers to easily find stuff they are looking for. In other words, each product must be placed in the right category.
• Website navigation
Apart from the nicely-organized page, successful shopping site should allow web-shoppers to go back and forth through the website by using its directional tools, instead of the “back” and “forward” button on their internet explorer. These will create more convenient for customers during their shopping time (Underhill 2000, p. 221).
• Simple and up-to-date
For e-store, it is crucial to keep the site up-to-date especially when a particular product is out of stock. Unlike brick-and-mortar stores where customers can see all products for real, customers usually assume that the products available on the website are always in stock unless you inform them. Sometimes, keeping the page simple could be beneficial for the company as well, especially when there is not enough staff to keep the site updated. To illustrate, when clicking on “detail” button, the shoppers expected to get some details about the product. If the company is unable to add details, Underhill suggests not to have such section at all (Underhill 2000, p.221).
• Quick response
In case that the information given on the website such as Q&A is not enough, to have “contact” section where shoppers can reach the company via both e-mail and hot-line. In addition to that, a quick response from the company is considered as one of the crucial factors in which every e-store owners should take into account. Underhill (2000) also stressed that a response from the company is as important as other elements.
4. Method
In this section we would provide the reason behind the selected topic, theories and research method. Moreover, we would describe the method of collecting and analyzing data and how we would summarize it.
Fisher (2007) asserts that this part is to having a general familiarity with some of the philosophical issues and arguments about the process of research.
4.1 Choice of topic
Fisher (2007) states that you should choose a topic with interests and even possibly excites you. The reason we are interested in studying about e-commerce marketing is that today a lot of new businesses are more or less adopting internet as either an additional or main channel for trading. Dot com businesses are arising everyday around the world and likely to continuously increasing in the future. Though our course is international marketing, it would be challenging to adapt some concepts from what we have leant in the course to apply with internet marketing. In our opinion, the similarity between e-marketing and international marketing is that a lot of e-commerce companies target international customers which is similar to the objective of international marketing. During this research, we expect to see the similarity between the concepts of traditional marketing and e-marketing and how to practice those concepts in a real context.
E-commerce became a popular choice for new business investors because it takes less capital of investment and resources like humans and time to establish an international company. Due to the fact that e-commerce provides people more opportunity to initiate their own businesses, at the same time more competitors emerge regularly. Nowadays, there are a lot of e-commerce websites throughout the world for people to choose from. Each of them has its own strategy to approach customers such as advertising e-mail or pop-up banner. As a result, sometimes it causes an information overload for consumers which they may reject to accept the message we are trying to convey. To illustrate, most of the time we consider those advertising e-mail as junk and probably get rid of them before we actually read the message. “E-marketing isn't
experience.” (InformIT, 2001) Therefore, in order to save time and resources to
attract more customers to a website, the study of e-marketing management would be helpful to guide us to an effective and efficient strategy.
Although we wanted to create a complete e-marketing strategy for the company, we have noticed that it would take longer time as it seems like a larger project, thus we put our attention to the customer service aspect of e-marketing strategy. Kalyanam and McIntyre (2002) noted that "Transaction marketing is part of a larger idea called relationship marketing. This larger perspective views marketing as a relationship made up of a continuing series of collaborative interactions with each customer individually”. From the statement, it gives us another view of marketing, which is to build and maintain customers’ relationships, interest in focusing on customer service of the website and belief that it is an important tool to drive the company forward to success.
4.1.1 Chosen company
Rooting from the desire to produce a useful piece of work, the idea of helping an ill-performing company appears in our mind. Moreover, we believe that our study would be more helpful to a small company with few personnel due to the limited availability of research budget. In this paper, we have chosen to investigate the company, Thaiearthtone, because we believe that our study would be an additional jigsaw to fit into the company future operational improvement as Thaiearthtone is still not performing at a satisfactory level although it has been three years since the company entered the business. Fisher (2007) states that the project will be a non-starter unless you can get access to the people who can answer your research question. Fortunately that the authors of this project know the managers of the company very well, therefore it eases the process of gaining primary data of the company. Though the company does not have high profile, still there are many things to study.
4.2 Choices of theories
To be able to answer our purpose and research question powerfully, relevant theories were chosen from the literature reviewed above. The chosen theories consist of Relationship marketing, Personalization, Data-based consumer behavior, Customer Service, Site and Webpage layout. We believe that the author of the selected theories had been studied and researched with numerous trial and errors on this subject thereby the theories derived from his attempt are valid to adopt. The relevant connection of these theories will lead us to a solid analysis.
In the beginning, we have selected E-Marketing Mix, which is developed from the traditional marketing mix as our main theoretical framework. We decided on this theory because it plays a key role in helping us to develop an effective e-marketing solution for Thaiearthtone by integrating other concepts mentioned above. Also with the aim of creating a complete E-marketing strategy for Thaiearthtone, we believe that this framework will help to direct us throughout the research. However, for this research, the goal has changed to aim for satisfying existing customers and attract new customers, thus we happened to pick only three most related elements, which are Personalization, Customer service and Site, from e-marketing mix concept (Kalyanam and McIntyre, 2002). In addition with the additional theories, it would render a more descriptive content and impact the tendency of our analysis leading to our own fruitful e-marketing strategy that answer our purpose and research question.
After we finished with theories selection, we consider Personalization, Data-based Consumer Behavior and Customer Service are elements leading to a development of Relationship Marketing (Ghauri and Cateora, 2006). Relationship marketing is important for this case since our purpose is to increase the satisfaction of customers and especially in a long run. By forming bonds with customers, we would be able to learn the need of customers and develop the most suitable offer. Referring to the concept of Personalization, in order to serve individual’s need, customers’ information must be effectively collected and exploited. We believe that to maintain relationship with existing customers is as necessary as to attract new customers.
In accordance with Personalization, we also decided on Customer Database Principle of Cravens (2008). The reasons we chose Customer Database Principle is simply because it supports Personalization and was developed especially for a small organization or company. We believe that the principle will be helpful for us to make a better analysis and create a more powerful e-marketing strategy for Thaiearthtone. Although the principle was intentionally created as a suggestion for non-profit organization, it still can be adapted to our chosen company as the author claimed that this principle is appropriate especially for “small mission-based organizations with
very limited staffing and funds” (Cravens, 2008) which matched quite well with our
chosen company, Thaiearthtone. From this Customer Database Principle, we will not use every theory the author has given. Instead, we selected only the ones that best suit our research in order to meet our purpose and research question.
Besides creating a personalized offering, the service on the website is essential in impressing customers. During the first website tour, customers are likely unfamiliar with the functions on the website thereby services provided on the website would support customers during shopping period similar to a service in brick-and-mortar store. We can say that customer service is indispensable in managing relationship marketing and if the company would like to increase customers’ satisfaction level, customer service is one of the main functions that need to be improved.
“The point is that a Web site is a tool for getting more in touch with customers and building a stronger communications link with every customer who visits your site.”(InformIT, 2001) The store layout theory from “Why we buy” is inserted into Site part because the appearance of the store including, displays, signs, information given or even sound plays a key role in drawing customers’ attentions. As same as the webpage, well-organized and attractively-designed page would definitely catch the attention of internet users to click on and browse. Hence, we believe that this theory will help us to identify what went wrong with the webpage of Thaiearthtone so that
4.3 Choice of Research Method
According to Fisher (2007), it is possible to use any of the research methods to produce either quantitative material or qualitative material. In this study, although we have many options for our research methods, we decided to focus mainly on conducting an in-depth interview with people from Thaiearthtone as it is the most effective way to gain primary data. According to Fisher (2007), an interview with small samples and open-ended and unstructured questions will be in a form of interpretative research.
4.3.1 Qualitative method
By conducting an interview, it is in a form of qualitative research method in which a sample size is smaller than in quantitative research. The respondents are selected purposively not randomly like in the questionnaire style. The key advantage of qualitative research is a more diversity and flexibility data derived from respondent opinion. A qualitative research is natural, straightforward, and easy to accomplish (Harry F. Wolcott, 2001). In order to investigate Thaiearthtone profoundly, we consider qualitative method as the right tool to apply with this research.
4.4 Data Collection Method
We decided to conduct an exploratory research method to analyze the situation of Thaiearthtone. Our topic focuses on small to medium e-business so we have already prepared to handle with limited available data of the company. The information of the company is not available in public sources like online journal or news and articles aside from company website. As the company is relatively small with only few employees, the way we would collect data is through an interaction with the company personnel either by words or talk. Luckily, we know someone in the chosen company who could provide us the organizational information and internal problems.
4.4.1 Primary & Secondary Data
Primary data is the first handed information we are able to gather by ourselves while secondary data is what we obtain from other researchers. In this study, most of the company information will be primary data which we would collect first-handed by an
in-depth interview with the managers of Thaiearthtone. For other information aside from the company, it will mostly be secondary data. We would collect secondary data from searching on the internet, literatures from the course, and other relevant journals about e-marketing and e-commerce. Those secondary resources might not be written for the same purpose as ours, nevertheless we select only a part that considerably could be develop into our study and useful for our analysis. Most of our secondary data are from literatures in the literature review section and also from the website Thaiearthtone.com.
4.4.2 Interview
Our interview would be in various forms from a list of questions in the paper to a telephone interview if needed. The content of an interview will be in the form of semi-structured interviews which is in between open interview and pre-coded interviews, Fisher (2007) also indicates about the critical incident approach which is in the form of semi-structured interview. The critical incident approach is when an interviewer asks a respondent about an incident from working experience and expects a full explanation of it.
4.4.3 Interview guideline
Fisher (2007) states that to complete a successful research interview, a researcher must plan carefully ahead before conduct an interview. In this study we possibly have more than one interview. We will make a list of questions and mix open and pre-coded questions in the same interview. The questions must be well structured as to not wasting time of a respondent and obtain productive answers. Due to the long distance between Sweden and Thailand, it is difficult to conduct a face-to-face interview. Therefore we plan to send the first interview in words through an email whereas other upcoming questions could be asked informally through MSN or telephone.
4.4.4 Sample selection
Due to the size of the company, there are a few employees available for an interview. The best persons for the interview are the managers of Thaiearthtone due to the fact that they are the founder of the company so they know all the information regarding Thaiearthtone and fortunately that we know both of them personally. We have prior informed the mangers of Thaiearthtone about an interview some times before actually conducting. Both the managers agree to cooperate and are pleased to share company information as we told them the result of this study could benefit the company as well. After we finished with the interview questions, we decided to send these questions to both the managers’ email addresses.
The first interview
The interview was fairly in detail because we need a lot of company’s information for our primary data. The first interview was sent through email on May 3, 2009 and received a reply on the next day from Mr. Apisak. After a couple of days we met Mr. Thanarut on MSN and reminded him about the first interview email. Mr. Thanarut took around 20 minutes to finish the interview and replied back to us. For the first interview, we successfully received the answers from both the mangers. It was not the only interview we conduct as after a few days later we also created another interview questions.
2nd Interview with additional questions
During the work process, more questions arose and led us to the second interview with the managers. We mentioned to both managers on MSN that we would like to ask some more questions and the managers kindly replied, “Sure, it is okay”. Since it is during the weekday and both the managers are somehow busy so they responded a little late this time. The second version of interview was sent through email on May 5, 2009 and received a reply on May 9, 2009. On the second interview, only Mr. Thanarut replied back to us, however we understand that Mr. Apisak is very busy with launching a new website. The company has just created a new trading website, which this time target domestic market. After both interview finished, we decided that if
there are more questions later on, we would asked them through MSN since it is costless and any of them can reply whenever they are free.
4.4.5 In-depth Interview Structure
We divided our interview into three sections including; 1.general questions, 2.questions regarding Relationship Marketing, and 3.questions regarding Site Usability.
The purpose of each part consists of the followings;
Referring to appendix 1
The first section is General questions
The reason we asked general questions is because there are limited information of Thaiearthtone available on the public sources such as online article thereby it is important to provide more information of the company to the readers. Information gained from general questions will also include issue related to how the company exploits opportunity in foreign market by an e-commerce.
The second section is related to Relationship Marketing
In this section, the objective is to learn how Thaiearthtone interact, maintain and manage relationships with customers and has Thaiearthtone optimize its website performance to assist relationship marketing? We would also like to measure to what extent does Thaiearthtone concern about its relationship with customers.
The last section consists of questions relevant to Site Usability
In this part of the interview, we are going to investigate how Thaiearthtone design web layout to attract foreign customers and how much the company pays attention into website layout.
4.5 Information analysis
First of all we will categorize collected finding into each concept in our conceptual framework. As some concepts are overlapping in the e-marketing mix, there could be a disagreement in some classification. The content analysis will be the company
management. Each point will be referred to the theories we believe is reliable and useful for implementation.
We would like to see whether the company has given attention to consumer’s database and personalization or not. If the company does, then it is a question of how the company has made a use of the information. By knowing how to effectively exploit customer database, it would create an opportunity to make a better offer to satisfy the customers. In this case, a better offer means a more personalized product and service from the company to customers similar to the concept of “Personalization”. Then we would examine what customer service is provided on the website of Thaiearthtone by acting as a customer and test web functions. We would apply the concept of customer service to check what service the website is missing. Finally, we would check on the web page and see if it is attractive and user friendly by based on the concept of “Why we buy”.
4.6 Reliability and Validity
The information we collect from the company mostly direct from an interaction with the company personnel. We consider most of the information from the company would not have been falsified to attract customers like some messages on a webpage. It is important for Thaiearthtone to provide us valid information as we intend to learn their problems and help brainstorming ideas for the further improvement.
4.7 Ethical considerations
Fisher (2007) advises that when you are doing a research you should not treat people unfairly or badly. For ethical issues, we would definitely not expose privacy data of Thaiearthtone to their competitors and would use their information only for our paper. The agreement to share information between Thaiearthtone and us is relying on mutual trust.
4.8 Motivation behind Method Selection
This paper started with our interest on e-commerce and how to apply the concepts from international marketing course to e-marketing. One of our friends suggested us to contact a company and ask if we could help them doing a research on any area of an organization. The point is to solve a company’s problem or help improving a structure of an organization. Thereafter we figured out the topic and company for this study and began searching for relevant theories.
Due to the fact that we decided to help doing a research for a small and ill-performing company, the primary data seemingly must be obtain directly from the company’s persons. It is obvious that by interacting with a person of the company would be the best choice to gain company’s profile. As a result, interview is selected to be the information collecting method for this study. The interview structure is very detail which is the reason we cannot conduct in a large sample. Also, the best persons who can give the best answer are the two managers of the company. For secondary data, since we would want to practice what we have studied in the past eight months in International Marketing course so half of the chosen theories are selected from the textbooks. Store design and layout is very important in attracting customers. Our chosen company’s store is online which enable us to conveniently visit the store as many times as we want which means another part of our secondary data is mainly acquired from Thaiearthtone.com website.
There are many online retailers that fail to survive in E-commerce business. The case of failure is valuable to study for upcoming generation of online retailers. For this paper, we have pick the cases of the clothing e-tailer Boo.com and ToysRus.com to be a lesson for Thaiearthtone to see how a mismanagement in customer service and web layout can lead to opportunity loss in foreign market. After we have learnt from failure cases, it is time to see the successor in e-commerce business like Amazon.com. It took almost a decade for Amazon.com to make profit so this is a great example
5. Empirical Finding
In this part, we would like to present both primary and secondary data we have collected. The primary data will be from the interview with the managers of the company while the secondary data will be acquired from sources like internet and online articles.
5.1 Thaiearthtone’s Primary Data
The content of this section is obtained from the interview with Mr. Apisak Komalachun and Mr. Thanarut Purksamatanun, the manager and co-owner of Thaiearthtone, therefore it is the first-handed data of the company.
5.1.1 General Information of Thaiearthtone
Thaiearthtone established its online business two to three years ago in Bangkok, Thailand by receiving a motivation from the E-commerce class during master degree study. The two inventors invited another companion to join the team and cooperate together. The reasons for entering an online business not long after graduated are mainly due to four factors. Firstly, online shop does not need to stock so it reduces cost of hiring labor, setting up store and renting space or land. Secondly, a number of internet users increase every year as well as 3G internet mobile. Next, they have more confidence of people beginning to consider buying things online instead of go shopping outside during really hot or cold weather. Lastly, Thailand has an advantage in cost of labor which makes it possible for foreign buyers to import products and sell in higher price. (Interview, 2009)
After a couple of years in running the business, it is unavoidable for Thaiearthtone to escape from facing difficulties. Since the inventors have not owned any other business before starting this project, the start-up budget is quite limited. The budget also has been wasted on many trials and errors during the beginning stage as this business is still new in Thailand. Due to low cost of investment that leads to the ease of entrance, there are a lot of competitors popping up doing similar type of business. Mr. Apisak also mentions about difficulty in finding trustworthy suppliers, for example web programmer and product suppliers. Last but not least, creating trust to customers is somewhat a difficult task for the company. (Interview, 2009) Since Thaiearthtone sells Thai local products through an English webpage, the target customers are foreign buyers who could be an end customer or a wholesaler. The pricing method of Thaiearthtone is to set competitive price not to be higher than the market price, especially for the wholesales price it would be even cheaper depending on the volume. Since the company is just a distributor, there is no manufacturing cost. The methods in promoting its products to foreign market have been carried through Search Engine Optimizer (SEO). The first step is to register the company
In this year 2009, Thaiearthtone’s short term goal within 1-2 years is to be the first page for SEO under 3-5 specific keywords and to penetrate Europe and America market. For a long term goal (3-5 years), Thaiearthtone wants to be well known globally and plan to earn 300,000 baht per month. Aside from future goals, Thaiearthtone needs more working hours to be able to find potential suppliers as to improve its business. At the present time, the company accomplishes around three to four sales per month. Most of the sales are from USA and mostly in Europe (e.g. Spain) which Mr. Thanarut thinks that both markets have high interest in Thai products. (Interview, 2009)
Mr. Apisak and Mr. Thanarut have shared an insight on important issues for Thai company to take into consideration when going internationally through e-commerce. They mentioned about the level of trust of customers to website, the level of satisfaction from the existing customers, frequency of communication with and promoting website to customers, and government support. (Interview, 2009)
5.1.2 Issues Related to Relationship Marketing
As Thaiearthtone is exploiting internet technology to connect with international customers worldwide, this part is to see how the company optimize the use of internet to develop its relationships with foreign customers.
5.1.3 Personalization
Thaiearthtone requires buyers to become a member before making first-time purchase. The information that Thaiearthtone collects from customers basically are name, age, birth date, gender, and address. The company would use customers profile and information to send them new collection of products. After Thaiearthtone members log in the website with username and password, the member will see images of products randomly like every member does. About question regarding how useful “Made to Order” feature on the website is, Mr. Thanarut answered that it is useful since the company get to contact with more customers. There was a case when a
customer sent some samples of products and asked Thaiearthtone to manufacture the same products and ask for quotation. However the company can not accomplish that order because it was difficult to find the exact raw material to produce in Thailand. (Interview, 2009)
5.1.4 Customer Database Principle
Thaiearthtone gives a lot of important to the database system. There are two personnel responsible for database collection where the customers’ data is saved in the back office of the website as well as on Microsoft Excels and save in thumb drive and on the computers just in case the internet has problem. Mr. Thanarut told us even though two people are looking after the database, there is no information conflict occurs since the company plans it well ahead. Customers’ order history is also recorded by using Microsoft Office tools (Word and Excel) and would be used to analyze customer purchasing behavior. The customers of Thaiearthtone are categorized by the continent they are from. The company collects information of all customers who get in contact with them not only from the website but also from the telephone call and arranged in alphabet order in the database. (Interview, 2009)
5.1.5 Customer Service
Other than during transactional period, Thaiearthtone contacts its customers around 2-3 times per week. The company keeps informing customers when there is a new collection of products through its website or else the customers ask themselves if the company could get other products for them. There are two main channels of how customers can contact with the company, by email and telephone. The response to any query will be within 24 hours in case of email and immediately latter. Undoubtedly, we have tried purchasing product on the website and clicked on the last button “Request for quotation”. After a few minutes the company’s email was delivered to our mailbox with the following message:
