What will be the Market in 21st Century?admin
Throughout history, markets have always recreated themselves, changing the economic conditions of those who were present at their creation.
The most common market concept is a physical place where sellers meet buyers to complete a transaction. However, in terms of economics and business, the market is defined differently.
What is a market?
The market is the sum of all buyers and sellers when considered within a particular plane. It can be global, regional or territorial, limited to a country, region, city or region. Sales, cost and product prices correspond to the forces of supply and demand .
The market can be physical and virtual, depending on how the company sells : offline or online. The market can be “accessible” and “inaccessible”. Within an accessible market, there is a “market minimum” or market size that allows you to sell goods and services products without any marketing effort . This is the lowest bar at which a company can earn revenue without any action on its part. In the modern world, this level falls lower and lower.
Each market has its own “market potential”. This is the maximum size of the market in which you can sell goods and services, making the greatest marketing efforts that the company can afford. A prerequisite is the ability to profit from sales, investment in marketing should pay off. Therefore, market potential is the upper limit for a particular market and level of sales.
21st Century Markets
Modern markets have changed and become largely dependent on the Internet. The pace of development of the trading platform is determined by the speed of information transmission over the network. Revolutionary changes are taking place. If earlier it took years to create a market, then in the age of e-commerce a few days are enough. The very concept of the market is changing day by day.
The Internet market ( I-Market ) is a virtual place of exchange between a buyer and a seller in cyberspace. This is a digital market space where buyers and sellers get together to exchange “money” for goods and services.
The “virtual” feature of the market eliminates market friction caused by time barriers (the customer can buy goods 24 hours a day, 365 days a year), geographical location (you can buy from anywhere in the world) and shape (physical properties of the products change to bits). Companies no longer need a physical presence to enter a new market. Customers are no longer required to visit the trading floor during normal business hours.
The main advantage of e-commerce is the ability to more effectively meet the needs of its customers . As a result, the number of new customers is growing, customer loyalty is increasing, and costs are being reduced. However, if mistakes are made in e-commerce, negative results are achieved “with the speed of the Internet.”
The Internet market is changing the business processes and infrastructure of the company. E-commerce is not just a website, it is a completely new platform for a different way of doing business. To understand the philosophy of the Internet market, companies need to change their business models, rethink working methods and change their algorithms for interacting with their suppliers, partners and customers.
How business infrastructure is changing
In any industry, each enterprise forms a value chain and creates a new value. Companies traditionally continue to buy goods and services, add new value and sell their products to customers.
In e-commerce , the value chain is changing . The company has new processes associated with customer experience, and include the management of electronic catalogs, order entry forms, customer support at each stage of the client journey and communication methods with consumers. For the buyer, the form of purchase and the supply chain (logistics) changes, supply management passes to the client, and customer experience acquires the features of entertainment. For new market relations, the joint planning of supply and demand is changing .
To be a successful e-commerce business, companies are required to redefine the interaction between customers and the enterprise and create new communication channels to attract customers, retain customers, quickly process orders and create an excellent level of service. The company’s business objectives are determined by the following list:
Continuous improvement of internal business processes
The entire structure of the company must be reliably managed and based on the assessment of their work from the position of customers. In e-commerce, we are talking about turning the enterprise and the entire value chain into a cohesive team that can control customer requests.
There are two main types of I-Markets: business to business (B2B) and business to consumer (B2C)
Types of Internet Markets
There are two main types of I-Markets: business for business (B2B) and business for consumer (B2C). At their core, these models are different, but they have many common functionalities. Regardless of whether the client is a company or a private individual, in each option it is necessary to manage the client profile information . This is necessary in order to set up personalized interaction with the client and provide him with only the necessary information. Service and marketing take on individualism. Customers need easy-to-use features:
for searching catalogs and viewing cards of goods and services,
for placing orders
to view the basket of orders,
to receive notifications of events.
The concept of “intermediary” pumped out of the traditional form of the market. They add value to the chain and connect sellers and buyers. Cyber intermediaries of Internet markets mainly function as aggregators, “absorbing” the offers of sellers and simplifying the search for profitable goods and services. In this situation, sellers delegate part of their functions to the intermediary (the task of attracting the attention of the buyer can be transferred to the intermediary in full).
The role of the cyber mediator is the ability to online to connect complex business processes. They must coordinate, integrate and automate the sale process and establish their own rules. In B2B markets, the focus is on supply chain management, where the most important tasks include forecasting and planning material requirements, planning the production process, logistics and accounting of current costs. Such systems become multidimensional matrices, pushing markets to ultra-efficient production.
Prospects for Internet Markets
New realities are transforming classic distribution channels. Due to the ubiquity of the Internet, companies may need to be able to work simultaneously in the B2B and B2C markets.
Successful companies in the information age will deploy their own stand-alone websites, participate on aggregator sites and be present in several markets. Marketing orientation will shift towards markets . Traditionally, in trading networks, interaction takes place directly between the parties to the transaction, and the open market plays the role of a global intermediary. Internet markets are acquiring the features of a closed market space typical of B2B. Trading partners are closely integrated and operate on the basis of contracts, pre-negotiated prices and participation rules.
Positioning and introducing innovations are necessary for success in the new realities. It’s not enough to create a transactional website. Business models will change with rapidly changing market spaces and new opportunities.
The benefits of online markets
Why are Internet markets so booming? They can simultaneously increase revenues and lower costs. This fact alone is enough to invest in a new reality.
What are the opportunities for profit growth:
this new distribution format that can attract new customers
Internet markets provide easy access to company products and services.
a business can get much more information about customers and their buying behavior
companies focus on the needs of their best customers, achieving higher profits
sales up and cross-selling: customers can be offered comprehensive solutions that combine support offers (in complex transactions, for example, buying real estate, you can add insurance and financing as an additional service provided by partners of the company)
individual marketing is a new frontier for competitive advantage: a client can easily and simply change his preferences, companies are forced to focus on client behavior and collect multidimensional statistics
thanks to the constant and instant access to information on supply and demand, marketers have new opportunities to manage pricing in real time (fixed prices will soon become an artifact of history)
the flexibility of pricing policy allows you to use the auction format for your sales (dynamic pricing mechanisms will allow you to create a new sales channel for surplus products)
increased customer loyalty through personalized service