Gap model The Gap model of service quality was developed by Parasuraman, Berry and Zeithaml (1985), and

more recently described in Zeithaml and Bitner (2003). It has served as a framework for research in services marketing, including hospitality marketing, for over two decades. The model identifies four specific gaps leading to a fifth overall gap between customers expectations and perceived service. The five gaps

Customers have expectations for service experiences and they use them to measure against the perceived service performance in their judgment of service quality. It is essential, then, that managers determine what those expectations are when designing the service. The first gap in service quality occurs when management fails to accurately identify customer expectations. It is referred to as the knowledge gap. Specifically, it is the difference in customer expectations and managements perception of customer expectations. Hotel managers, for instance, must know and understand what their guests expect from their stay, including all tangibles (the room, amenities, lobby features) and intangible components (availability of additional services, ease of check-in and check-out procedures). The size of the gap is dependent on the extent of upward communication (from customers to top management), the number of layers of management, the size of the organization, and most importantly, the extent of marketing research to identify customer expectations. The second gap is referred to as the design gap. It is measured by how well the service design specifications match up to managements perception of customer expectations. The extent of this gap is dependent on managements belief that service quality is important and that it is possible, as well as the resources that are available for the provision of the service. A restaurant manager may understand customer expectations for being served within 20 minutes of ordering, but may not have the resources or the appropriate number of staff to insure that speed of service. Gap 3 represents the variation in service design and service delivery. Known as the performance gap, its extent is a function of many variables involved in the provision of service. Since individuals perform the service, thequality may be affected by such factors as skill level, type of training received, degree of role congruity or conflict, and job fit. Some service providers do not have a high service inclination, despite training. Service recovery efforts along with extent of responsibility and empowerment also affect the size of this gap. The process is further complicated by the customers participation in the service encounter. A customer may make a special request for a room type different from the one originally reserved, or request a menu item after the initial order has been completed, making it more difficult to perform the service as intended. The fourth gap is called the communications gap. It is the difference between what is promised to customers, either explicitly or implicitly, and what is being delivered. Hospitality companies use advertising, personal selling, and sales promotion to inform, persuade, and remind guests about its products and services. Showing beautifully appointed hotel rooms, refreshing swimming pools, and luxurious lobby areas in an advertisement communicates to the target customers. The extent of communications between the company and the advertising agencies will affect the size of the gap. Over-promising is commonly responsible for the communication gap. Each gap has a cumulative effect from the preceding gaps. Gap 5 is the total accumulation of variation in Gaps 1 through 4 and represents the difference between expectations and perceived service. Furthermore, consumers evaluate perceived service along five quality dimensions.

DEFINITION OF ELECTRONIC COMMERCE Besides the earlier definition by Yonah (1997) in the paper, National Office forthe Information Economy defines e-commerce as type of business transaction orinteraction in which the participants prepare or conduct business electronically.This covers a wide range of activities, ranging from use of electronic mail (e-mail), through to Internet based sales and transactions and web basedmarketing. Dr. Roger Clarke, Principal Xamas Consultancy Pt Ltd., Canberrasaid that electronic business (ebusiness) is defined as the conduct of businesswith the assistance of electronic devices and telecommunications tools, whereaselectronic commerce (e-commerce) is defined as the conduct of

commerce ingoods and services via electronic devices and telecommunications tools.Different people use different terminology such as 'electronic trading' 'electronicprocurement' 'electronic purchasing' or 'electronic marketing'. From the abovedefinition, we can conclude that electronic commerce is often used in a muchbroader sense, to mean essentially the same as 'electronic business'. In otherwords ecommerce includes purchases of goods, services and other financialtransactions in which the interactive process is mediated by information or digitaltechnology at both locationally separate, ends of the interchange. Here'transactions' include both specification of goods and service required andcommitment to buy. E-commerce transaction model can be in terms of businessto business (B2B), business to customer (B2C) or customer to customer (C2C). OBJECTIVE OF THE STUDY The main obstacle now faced by the policy makers and others is lack ofcomprehensive indicators about the electronic commerce and clear guidelinesand consensus on the definition of e-commerce. Thus, several considerableefforts at the international level like Asia-Pacific Economic Cooperation (APEC)and European Union (EU) members to work towards globally acceptedguidelines and methodologies for measuring the electronic commerce. Theyhave realized the potential social and economic benefits that could derive from e-commerce as well as the importance of having readily available data, whichwould highlight the role of e-commerce in their economies.With the preceding arguments, the paper conceptualizes the role of e-commerceand it sub activities in creating business success. The paper highlights e-commerce milestones in selected countries. The paper further highlights somesuggestions and future strategies of e-commerce in specialized industries inyears to come. As an explanatory, conceptual, theoretical and descriptiveanalysis, the paper is expected to benefit large group of users and instigatefurther study in the area of electronic commerce. AN OVERVIEW OF E-COMMERCE E-commerce is the most important application of the new communicationtechnology. Manufacturers, traders and consumers can now reach the marketmore quickly and get more information than they could ever before. Theelectronic commerce has penetrated the businesses in many ways. Ecommercehas tremendously reduced the transaction costs allied with purchase, sales,operating, holding inventory and financial cost. The application of e-commercethrough development of web site enhances the potential global market and salesrevenue, product, potential new customers, services and geographical areas. Interm of non-financial benefits, e-commerce has significantly helped improvinghuman resources and timeliness, quality of services, customers' satisfaction and some other indirect effects.The imperative of electronic commerce depends on the evaluation andassessment. To evaluate related data on e-commerce is necessary, since it isnot readily available. The available data are collected by different agencies usingnumerous definitions and methodologies used by the collecting group. In theabsence of reliable data, policy makers, governing bodies and businesscommunities are unable to take decisions that reflect the changes brought aboutby the ecommerce. By employing relevant and accurate data on e-commerce,the policy makers and researchers would be able critically analyze the impact ofe-commerce on labor market, market structures and functioning, changes indistribution of goods and services, customers preferences changes in globalcompetition. It permits them to take well-framed decisions about the policies andinvestments in e-commerce related sector.Research forecasts that e-commerce will account for 86% of worldwide sales ofgoods and services by the year 2004. The potential for e-commerce is bright,specifically in those markets where buyers and sellers are motivated to reducecosts, increase efficiency and cut delivery time. By 2003, estimated revenuesfrom e-commerce across the globe will be approximately 1.5 trillion dollars. Therate of growth varies due to the development of infrastructure especially indeveloping countries. Projected Internet users by the end of 2000 areapproximately 48% (North America), 22% (Western Europe), 17% (Asia Pacific)and 7% (Middle East/Africa), which of course stimulate further growth of e-commerce (Sussan and Kassira, 2003). E-PROCUREMENT E-procurement or e-purchasing is a user-friendly, Internet-based purchasing systemthat offers electronic buying order processing and enhanced administrative functionsto buyers that results in operational efficiencies and potential cost savings. Businessenterprise can place orders with suppliers on the website. E-marketplace is an onlineexchange where multiple vendors and buyers meet at one site for dealing in goods,materials and services. A number of websites have been set up in various industries,but they are going under a process of selection with some business withdrawingfrom e-

marketplace operation or merging with other businesses. E-procurementperforms all procurement activities such as requisitioning, purchase ordertransmission, notification of electronic query, request, response to pre-bidding andreceipt of goods and processing thereon. Virtually, all types of products, includingbooks, music CDs, toys, household appliances, clothing, foods and other groceries, jewelries are available for sale on the Internet. The founder and Chief ExecutiveOfficers (CEO) of amazon.com estimated that the books sold on the Internetaccounted for around 15% of the total books market.Many people believe that e-purchase benefits only certain quarters like largeenterprises and multinational companies with very huge investments can afford tomeet such expenses. That assumption is untrue. It can be applied to any enterprisesof varied size. Quoting from the technology research firm, AMR Research, amongbusinesses with more than 10,000 employees, 40% participate is some form ofpublic B2B exchange while among companies with 1,000 to 2,500 employees morethan 80% are expected to be doing so within a year or more. E-purchase benefits enterprises by cutting a labor costs and improves efficiency byreducing human errors. To reduce errors further, enterprises must not allowpurchasing by a single person every time. The benefits obtained by the e-procurement system should not be lost due to maverick purchasing. Since in e-purchase, the transactions conducted are more transparent both within theenterprise and with the suppliers. However, some of the suppliers are not very wellequipped with it. E-procurement involves displaying the catalog and otherinformation such as inventory and supplier mark up, are shared with others, whichfew suppliers are reluctant to do so.The benefits should not only be to the buyers. It should be balanced with the buyerand the supplier. The purchasing should not be shifted from old to new suppliers.Reliability and the level of service must be enhanced. The relationship and trust thathas been developed over a period of time cannot be ignored. The Canadian NationalRailway Company once had more than 75 000 items in its online catalogs that savedit $10 million in procurement costs. For smaller purchases, the staff used to searchpaper catalog which did not have the required information and moreover otherprocesses were done through phone, fax and mail services before. The initialteething problems such as issuing multiple requisition orders were resolved andsoon the system went live for all suppliers. E-procurement helped in getting betterprices from suppliers.After a trial of six months, the railroad company was able to reduce the cost ofprocessing from an average $50 per order to $4 electronically. The company gotlarger discounts for bulk-buying and other purchases. The usage of online catalogcan help the employees to check the items, which are purchased often. E-procurement focuses on the increasing integration of suppliers' procurementnetwork. It supports all business partners in shortening process chains, speeding upthe flow of information and exploiting potential for innovation. Procurement marketsare already networked worldwide. A successful procurement system will depend onhow well the network functions across the boundaries. E-SALES One of the ways to measure the companies' performance is by comparing the totalrevenue with that of previous period, with same industry, with competitors and withother economic resources, which produces the cash flows. A sale is importantcomponent of any trading. Performance is always measured with what you put inand what you get back. According to survey of executives, conducted in USA, 46%of retailers cite sales as the primary metric the use to measure a web sitesperformance and about one in four said they focus on profits. To e-business, theenterprise should always monitor the customer demand and changes in the marketand global developments. Internet is as an avenue for tracking customer demandand customers inventories as well as for sourcing materials, knowing the customersdemand for inventory on a real time basis is very difficult. Integrating online andoffline systems will become increasingly important for retailers who are focused ondriving consumers into their stores with purchase intent. The above survey revealedthat while only 31% of retailers already provide visibility of store inventory on theirweb sites, another 23% expect to offer this capability within the next two years.

A well-developed and integrated web sites connected to their back offices is arequirement to improve the revenue. As the web site has not been properly linked,an order placed by customer could not be attended to and after a considerable delaysold out information was passed on to the customer. Certainly this affects thecustomer relations. But this system involves some cost, but the benefit is more thanthe cost spent. An order management and fulfillment software suited for business tobusiness as well as business to customer transactions. The software can doallocation of inventory as an order is being taken online, or inform a customer aboutan item much be back-ordered and give the customer an estimated shipping date forthe back-order. It also confirms the order placed and shipping details to thecustomer.The web customers are increasing year after year in spite of uncertainties in globaleconomy. Recent reports say that Internet sales were up is USA by 18% for thequarter ending in July. Some stores improved its Internet sales but stores saleshowever down by 14%. Even 1-800 flowers.com reported an increase of 33% inrevenues compared to the immediate previous period. The results say even thoughthere is an increase in Internet business, it is certainly to some extent at the cost oforders place through other sources such as telephone, stores and by e-mail. CRITICAL ISSUES IN E-COMMERCE The two critical issues hampering e-commerce growth are securities and taxenvironment. As we discussed above, there are two kinds of goods delivery methodsafter customers put an order via electronic commerce transaction. One through mailor courier and another one is through online itself. The main concern to tax authorityis through online. For instance, Mr. X resides in Mumbai bought a Zorro X Playstation Software version 5.0 from United States by downloading online from theparticular software company. All payments and delivery made through online. In thiscase, there is no intermediary such as courier officers or customs department at thepoint of entry (etc airport, port).On the other hand, Miss Y also resides in Mumbai purchased the same software, butshe wishes to get the software in compact disc (CD) form through courier. If thissituation occurs, the Indian tax authority will go for Miss Y but not Mr. X. It meansthat if someone buys a digital product from other countries and full settlement donethrough Internet inclusive the payment and delivery, he or she will not be taxed.Traditional tax principle in most of the countries were developed when a transactionsinvolves an identifiable party established in a physical location which delivers goodsor services to an identifiable customers. The concept of 'permanent establishment(PE) is used in many tax regulations will typically determine whether or not thetransactions or operation constitute a taxable presence in the country concerned.In the era of e-commerce, there are often no face-to-face customer contacts; theremay be no employees or human intervention and no identifiable physical location foreither the seller or the customer. Thus, in e-commerce transaction, the analysis ofPE becomes less clear. Other examples of e-commerce which could possible erodethe tax base are computer software which can be purchased and transferredelectronically to the user's personal computer, magazines and postcards which can

be transferred digitally and securities trading, which is currently offered by somestocks brokerage firms through the web sites that permit customers to trade share.The study by Grayson (1998) indicated that if there were no tax in e-commerce, thehigher income group of customers who always transact via e-commerce would enjoyhigh tax saving in long run. As a result, fairness and equity will not be achieved. Inaddition, a statistic published by Wall Street Journal in 1998 evidenced that in UnitedStates of America, 80% of households which annual income exceed USD 100,000posses personal computer, whereas only 25% of households with annual incomeless than USD 30,000 posses personal computer. Web Week Magazine (1998)revealed that the most popular group transact through Internet come from at leastUSD 60,000 annual income earners (Palil and Abdul Rahman, 2003). These twopublications in other way support the findings from Grayson (1998).The second critical aspect of e-commerce is security. Lack of security is the leadingbarrier to widespread commerce on the Internet due to the inherent openness of theweb (Wen, 2001). The lack of security is experienced in several ways such asunauthorized use of corporate network, packet sniffing, data modification,unregistered transactions, eavesdropping, repudiation and spoofing. The threats andattacks to Internet based enterprises have included such Yahoo, E-trade andAmazon.com (Sussan and Kassira, 2003). These threats and attacks deterioratedthe three main aspects of security that are

confidentiality, integrity and availability ofdata. The absence of these three elements causes lack of confidence for widercustomers doing business electronically.However, some necessary actions have been taken to cushion the lack of security ine-commerce like the introduction of new protocol version 6 (Ipv6), a $100 millioninitiative by USA government. The new protocol will address the areas ofconfidentiality, data integrity, non-repudiation and selective application of services. Anumber of multinational companies like NTT (Japan), Sun, Nortel, 3Com havealready got the new version of Ipv6, where as Cisco and Microsoft have it inprototype. The limitations of the new protocol vary from the need of higher bandwidthand some current wireless providers do not support Ipv6. In addition, the newprotocol is too costly and the return is expected to yield after three to five years(Wen, 2001). SUGGESTIONS FOR IMPROVEMENT The know how of logistic e-commerce enterprises provide new competencies fromwhich to develop future sustainable competitive disadvantage. The greatest driversfor the future will be duration of relationships, type of contracts conducted and thegeographic distribution of customers and vendors (Delfman, 2002). To achieve moreefficient e-logistics and e-fulfillment, it is desirable to have a trading environment inwhich there is perfect information about goods and services as regards theirdescription, origins and destinations, and cost for different origins and destinations.Sellers and buyers should be able to monitor and track goods at every point alongthe way from the supplier to the consumer. All stakeholders should be able to checkon the Internet the availability and status or orders. All this can be achieved if tradeinformation is simplified, automated and fully harmonized in all countries and allrestrictive government export/import regulations and practices are eliminated. It is

Chapter 15 Direct marketing

15.1 This chapter is concerned with the regulation of direct marketing from the perspective of protecting privacy, and with whether current controls on direct marketing are adequate or whether additional controls are needed. It also looks at the issue of targeted internet advertising based on peoples online behaviour. 15.2 Direct marketing is the making of marketing approaches to individuals by commercial marketers or businesses, whether New Zealand or overseas based, 1329 by various methods including mail, telephone calls, email (or spam), door-to-door approaches in person, automated dialling machines and, more recently, automated SMS messages. Direct marketing also includes requests for donations to charities, political parties and other groups. Approaches may be made using information obtained from marketing lists, public information (such as phone books or public registers) or information compiled based on previous transactions with the individual.

15.3 The Privacy Act defines direct marketing as: 1330 (a) (b) (c) the offering of goods or services; or the advertising of the availability of goods or services; or the solicitation of donations or contributions for charitable, cultural, philanthropic,

recreational, political, or other purposes, by means of (d) information or goods sent to any person by mail, facsimile transmission, electronic

mail, or other similar means of communication, where the information or goods are addressed to a specific person or specific persons by name; or (e) telephone calls made to specific persons by name.

Marketing mix
From Wikipedia, the free encyclopedia

"4 P's" redirects here. For other uses, see 4P (disambiguation). The marketing mix is a business tool used in marketing products. The marketing mix is often crucial when determining a product or brand's unique selling point (the unique quality that differentiates a product from its competitors), and is often synonymous with the four Ps: price, product, promotion, and place; in recent times, however, the four Ps have been expanded to theseven Ps or replaced by the four Cs.[1]

[edit]History
The term marketing mix was coined in an article written by Neil Borden called The Concept of the Marketing Mix. He started teaching the term after he learned about it from an associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients"; one who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried.[2]

[edit]Four

Ps: the producer-oriented model

The marketer, E. Jerome McCarthy, proposed a four Ps classification in 1960, which has since been used by marketers throughout the world.[1]

Product - A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel

industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are themotor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system.[1] Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage.[1] The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies.[1]

Price The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.[1]

When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account.[1]

Promotion - represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as:advertising, public relations, personal selling and sales promotion.[1]

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see 'product' above).[1]

Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as

intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix. [1][3] The 'seven Ps' refers to the already mentioned four Ps, plus 'physical evidence', 'people', and 'process'. 'Physical evidence' refers to elements within the store -- the store front, the uniforms employees wear, signboards, etc. 'People' refers to the employees of the organisation with whom customers come into contact with. 'Process' refers to the processes
[4]

and

systems

within

the

organization

that

affects

its

marketing

process. These later three factors are not cited nearly as often as the first four outlined in depth above.

The two major factors that affect the marketing mix are: 1) Does the business sell products or services? For businesses selling products, they need to take into account that they are providing the service of offering their products, as well as the services that support the product. For businesses selling services, they need to put their menu of services into product formats. They, too, have services that go along with the outputs (nee products) of their services. 2) Is the business the distributor of their or other's products and services? Is one selling to the end-users/customers? Is one selling to businesses that either buy and pass on what they bought? Or, does their business sell to someone who will convert it into something else that they sell? The choices of what go into the marketing mix are different even though many of the ingredients from one may be right for the other. The two viewpoints are not exclusive of the other . . . they are mutually inclusive.