What is an electronic market?

Answered by Abhinash Jena on April 5, 2012 Leave a comment (0) Go to comments

According to Dholakia (2002, p 32) electronic methods of selling and buying have been around for a while. Electronic markets started emerging since the 1970s ranging from credit card transaction systems to airline reservation systems and store specific electronic shopping systems.

The electronic market system and electronic marketplace have permitted the participating sellers and buyers to transform information about product and price offerings all across the globe and within no time (Iyer and Bejou, 2003). Electronic markets have benefited businesses to a great extent. Electronic markets have made internet as a commercial medium for exchange of products and services (Picot, Reichwald and Wigand, 2008, p 285). As far as the marketing tasks are concerned the development of electronic market has opened up possibilities of extending different marketing related functions to customers situated at the farthest reach. For producers with emerging distribution channels electronic markets provides an exciting opportunity as well as a major risk of losing the support of their traditional channels (Mylonopoulos, 2004, p 96). This has prompted companies such as Compaq to search for business models that would capture the electronic commerce benefits while not alienating traditional channels. Despite its numerous benefits, electronic markets are not being adapted by all organizations completely. It will take several decades to set up particular modalities of transforming the necessary benefits of electronic commerce into practical benefits in terms of growing and strong profit margins (Barley and Kasabov, 2005). This is a challenge that requires to be addressed both by practitioners of strategic marketing and by researchers studying the operation and nature of electronic markets.

It must be noted that even though internet based commerce has paved way for alterations in marketing methods and systems, the alterations must not be based on the technological change but be based on the nature and rate of change in customer behavior (Graz and Nolke, 2008). From the marketing systems’ perspective electronic markets have a promising future since several organizations have started adapting marketing strategies that suit the electronic markets in order to gain competitive advantage and perform superior to that of their competitors.

References

Dholakia N, Fritz W, Dholakia R R and Mundorf N (2002), Global e-commerce and online marketing: watching the evolution, Greenwood Publishing, USA, p 32
Iyer G R and Bejou D (2003), Customer relationship management in electronic markets, Haworth press, USA
Picot A, Reichwald R and Wigand R (2008), Information, organization and management, Springer, Germany, p 285.
Mylonopoulos N (2004), Social and economic transformation in the digital era, Idea Group Publishing Inc., UK, p 96.
Barley M W and Kasabov N K (2005), intelligent agents and multi-agent systems, Springer, Germany
Graz J C and Nolke A (2008), Transnational private governance and its limits, Routledge, New York.