Helping Small Businesses Succeed, Term Paper Example

Explain how web profiling is supposed to benefit both consumers and businesses.

Web profiling clearly provides advantages to both – consumers and businesses. One of the most significant benefits for businesses is the possibility to collect valuable information on consumers at a comparatively low price. As an alternative to cost-intensive primary market research, they can utilize available online data on consumers’ interests, preferences and transactions in order to improve their offer and communication. Data on individual consumers or consumer groups can be used to develop customized web content and at the same time to hide irrelevant content (Hupe, Riedel, Matthes, Schmidt, 2003, p. 47). Furthermore, it allows business to develop interactive content (e.g. consumer feedback forms, thank-you email) in order to increase consumers’ engagement with the company (Larsen, n.d., p. 5). Eventually, web profiling can help to save costs by sending the right message/offer only to relevant consumers and increases sales by offering customized, user-friendly and interactive content.

Accordingly, also consumers benefit from web profiling. Instead of having to view and evaluate a large amount of information, they are provided with information that is relevant to them. Consequently, it saves time and costs when looking for information or carrying out transactions. Customized and interactive content potentially also provides a more positive and entertaining online experience for consumers. Nevertheless, it needs to be remarked that there has been a great deal of discussion in regards to transfer and usage of personal data. The debate about Facebook’s handling of users’ privacy is just one example (Walls, Casper, Valdes, 2010). Therefore, businesses consistently need to comply with privacy regulations and users’ expectation for data protection (Walls, Casper, Valdes, 2010, p. 4).

How would you describe the top 10 online retailers as a group? Do they account for a small or a large percent of online business, for example?

The top ten US online retailers are a combination of large pure players and retailers that operate both in store and online. All top ten businesses offer a wide range of products, most of them specialize in IT, office and consumer electronics products (Internet Retailer, p. 2). In 2008, while the top 500 online retailers account for 69.1% of all online sales, the top ten businesses accumulate only 30% of online sales (Internet Retailer, p. 3). Therefore, it can be considered as a highly fragmented market in comparison to other markets where the top ten players reach considerably higher accumulated market shares. For example, in the three months up to November 2009 the largest player Tesco plc alone holds a market share of 30% in the UK grocery market (Finch, 2009).

What are the two major segments of travel? Which one is growing the fastest and why?

A number of different segmentations of the US travel market exist. For example, the U.S. Travel Association (2010) divides the market into ‘Business’ and ‘Leisure’ with the latter clearly being the dominant segment at a market share around 77% in 2009. Furthermore, industry research firm IBISWorld (2010) defines market segments by offered ‘Products & Services’ with ‘Domestic airline travel reservations’ and ‘Packaged tours reservations’ clearly being the two largest segments that account for more than one third of the market. However, the most significant segment growth becomes apparent when looking at the travel market from an online versus offline perspective.

According to market research company PhoCusWright Inc. (2009), “online travel agencies (OTAs) have taken share from traditional vacation packagers, or tour operators, over the past decade; their dynamic packaging business has generated a compound annual growth rate (CAGR) of more the 50%, while tour operators have languished at a CAGR of -5%”. With consumers becoming more Internet savvy and, considering the current difficult economic situation, more price sensitive, they prefer the flexibility and the seemingly unlimited choice of the Internet.

Explain the difference between a horizontal market and a vertical market.

In a horizontal market, certain goods or services are required by a wide range of different industries or customers (Kamel, 2007, p. 8). For example, Microsoft Office Software is used by a vast range of different business, public, and private users. On the contrary, in a vertical marketplace certain goods or services are required only by a particular industry or customer (Kamel, 2007 p. 8). For example, a manufacturer of a specific element for a customer’s particular production line would deliver the element exclusively to this customer. Players within a vertical market particularly benefit from e-commerce. Offline they can only reach a limited number of local/regional customers within their segment. Instead, when operating online they are able to reach a global customer base and can therefore clear possible production overruns (Kamel, 2007, p. 22).

How has the Internet impacted the content that newspaper can offer?

The Internet clearly has had an impact on newspaper’s content during the last years, even though the opinions on the significance of the impact are divided.

Some experts fear that the newspaper could even die (Dikeos, 2009), while others feel that the impact of the Internet is overstated (Brook, 2010). Either way, the Internet’s biggest impact on newspapers is the fact that it offers the same or similar content which is usually even more updated. Consequently, on the one hand, newspapers have to offer content that is not available online, as for example longer articles (that cannot be read conveniently online) or crosswords. On the other hand, newspapers have started to offer web content in order to reach the online community. By offering complementary services, but different ‘reading experiences’ via Internet and paper, newspapers can manage to reach both – the Internet audience and the, still existing, paper audience such as seniors without Internet access or commuters (Filistrucchi, 2005, p. 3)

References

Brook, S. (2010, May 21). Impact of Internet ‘overstated’, says Bailey. Retrieved from:http://newmediaskool.org/index.php?option=com_content&view=article&Id=48  9:impact-of-internet-overstated-says-bailey&catid=1:latest-news&Itemid=50

Dikeos, T. (2009, May 27). Internet age could pulp newspapers. Retrieved from: http://www.abc.net.au/news/stories/2009/05/27/2582387.htm

Finch, J. (2009, November 10). Tesco increases market share. The Guardian. Retrieved from: http://www.guardian.co.uk/business/2009/nov/10/tesco-waitrose-win-market-share

Filistrucchi, L. (2005). The Impact of Internet on the Market for Daily Newspapers in Italy. Retrieved from European University Institute. Database of EUI publications. (EUI ECO; 2005/12)

Hupe, Riedel, Matthes, Schmidt (2003). ECommerce5 [PDF document]. Retrieved from Lecture Notes Online Web site: http://www.sts.tu-harburg.de/~r.f.moeller/lectures/ec-ws-03-04/

IBISWorld (2010, June 10). Travel Agencies U.S. Industry Report. Retrieved from: http://www.ibisworld.com/industry/default.aspx?indid=1481

Internet Retailer (2009, May 14). Market America Debuts at 66 Among Internet Retailer’s Top 500 Companies [PDF document]. Retrieved from:    http://www.kosteffectives.com/market%20america%20debuts%20at%2066%2  0among%20internet%20retailer.pdf

Kamel, M. N. (2007, May 16). B2B Models for DoD Acquisitions [PDF document]. Retrieved from: http://acquisitionresearch.net/_files/FY2007/NPS-AM-07-090.pdf

Larsen, C. (n.d.). Helping Small Businesses Succeed Online [PDF document]. Retrieved from: http://www.pacificwebworks.com/Helping_Small_Biz.pdf

PhoCusWright Inc. (2009, July 22). Tour operators have steadily lost market share to online travel agencies | But do not count them out. Retrieved from:             http://www.hospitalitynet.org/news/4042583.html

U.S. Travel Association (2010). U.S Travel Forecasts [PDF document]. Retrieved from: http://www.ustravel.org/sites/default/files/page/2009/09/ ForecastSummary.pdf
Walls, A., Casper, C. & Valdes, R. (2010, June 4). Facebook Wins Skirmish in Ongoing Battle over Privacy Concerns [PDF document]. Retrieved from:             http://www.gartner.com/resources/201200/201289/facebook_wins_skirmish_in_on_201289.pdf