IGCSEBusinessCambridge (CIE)Revision Notes3. Marketing3.3 The Marketing MixTechnology and the Marketing Mix

Technology and the Marketing Mix (Cambridge (CIE) IGCSE Business): Revision Note

Exam code: 0450 & 0986

Danielle Maguire

Written by: Danielle Maguire

Reviewed by: Steve Vorster

Updated on

Introduction to e-commerce

  • E-Commerce is the trade of goods and services over the internet

    • Businesses can trade through their own websites

    • Alternatively, platforms such as Amazon, Ebay and Etsy offer the chance for small businesses to sell their products online

  • The rise of e-commerce means customers increasingly pay online using credit/debit cards with the result that contactless payment systems (such as Apple Pay and Paypal) are growing in popularity

Opportunities and threats of e-commerce

  • E-commerce can make life more convenient for customers and is a source of competitive advantage

    • It also provides the potential for small businesses to reach large audiences

  • However, setting up an e-store can be costly and some consumers may be concerned about security risks of purchasing online

  • The opportunities and threats of e-commerce can be considered for both the business and the consumer

Opportunities and threats of e-commerce for business

Opportunities for business

Threats to business

  • Websites offer a direct and cheap promotional method for businesses

  • Businesses can easily make online purchases of supplies and materials from other businesses

  • An easy-to-use and well thought out website can encourage customers to buy more

  • Dynamic pricing techniques can easily be implemented so profit can be maximised during periods of high demand

  • Competition comes from many businesses around the world, allowing customers to easily switch brands

  • Large warehouses and efficient stock control systems are essential to fulfilling online orders 

  • E-commerce is not suitable for businesses selling personal services such as beauty services or home improvements

  • The lack of face-to-face contact with consumers means businesses miss out on instant and useful market research feedback

Opportunities and threats of e-commerce for customers

Opportunities for customers

Threats to customers

  • Competition drives prices down and allows customers to easily shop around and compare prices

  • Electronic payment using credit and debit cards is relatively easy

  • E-commerce is convenient as it allows customers to shop from anywhere in the world

  • Customers can buy from worldwide retailers, so have increased choice

  • Poor connections or technical difficulties can sometimes deter or stop customers from using the website to make purchases

  • Customers in low income countries may not be able to access the products due to poor infrastructure, limiting potential market size

  • Many consumers are concerned about identity theft or fraudulent use of credit cards if they buy goods online

  • Products cannot be handled or tried out before purchase, which means customers frequently return them because they are unsuitable

Using the internet and social media for promotion

  • Social media marketing targets promotional activity at users of online communities such as Facebook, Twitter Instagram and YouTube 

    • Businesses share interactive posts containing images, sound and video at very low cost

  • Viral marketing Is a strategy where businesses use online platforms to promote their products by creating content at specific times, which can easily be shared and commented on by social media users

    • E.g., During the COVID-19 pandemic, Coca-Cola and McDonald's ran campaigns that emphasised community, which aligned with the public's need for social support

Examples of social media communities

Diagram of types of social media communities
Examples of social media platforms

  • Interacting with customers on social media builds relationships, drives repeat business from existing customers and attracts new customers as content is shared with other users

Evaluating the use of social media promotion

Advantages

Disadvantages

  • Billions of active users on platforms allows businesses to reach a vast audience 

  • Deliver promotional content to specific groups based on demographics, interests and behaviours, which increases the chances of reaching the target audience

  • Regularly and easily create and share content, which increases brand visibility and exposure 

  • Social media marketing does not generally require a large budget

  • Effort and time is needed to create quality content, manage multiple platforms and engage with the audience 

  • Public feedback and reviews, which can include negative comments or complaints, can be viewed by all social media users

  • Social media platforms frequently update their algorithms, which may affect the visibility and reach of content

  • Capturing users' attention amidst the large volume of competing content is challenging

  • As social media platforms evolve, businesses must also adapt their social media strategies to keep up with the latest trends

    • E.g., Instagram has been a popular platform for businesses to promote their products through influencer partnerships.

    • More recently many businesses have shifted their focus to promoting their brands through short video content on platforms like TikTok

The influence of technology on sales, costs and the marketing mix

E-commerce

  • Influence on sales:

    • A powerful tool for expanding the customer base and increasing sales

    • Amazon has enabled many businesses to sell their products online and reach a global market

  • Influence on costs:

    • Has helped businesses reduce overhead costs by eliminating the need for physical storefronts 

    • Zappos saved $10 million in operating expenses by closing its call centre and focusing on online customer service

  • Influence on the marketing mix:

    • Offers businesses new channels for advertising and promotion

    • Shopify has customisable storefronts, email marketing tools, and search engine optimisation (SEO) capabilities

Social Media

  • Influence on sales:

    • Powerful tool to increase sales by building relationships with customers and generating leads

    • Glossier has leveraged social media to build a loyal customer base on Instagram with 1.5 million monthly visitors

  • Influence on costs:

    • Cost-effective alternative to traditional advertising channels

    • Fast-food chain Wendy's has increased advertising on their Twitter account, while reducing advertising expenditure in the national press

  • Influence on the marketing mix:

    • New channels for building brand awareness and engaging with customers has transformed promotion for many businesses

    • Instagram allows businesses to share  and live stream content 

Digital communications

  • Influence on sales:

    • New channels for reaching customers and closing deals  include the use of email marketing

  • Influence on costs:

    • A cost-effective alternative to traditional communication channels

    • Increasingly WhatsApp is used to support customer service allowing employees to work from anywhere, reducing the need for call centres

  • Influence on the marketing mix:

    • The product element of the marketing mix has been enhanced as product information and customer service can be communicated online

    • Mailchimp provides businesses with customisable email templates and sales tools

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Author
Reviewer
Danielle Maguire

Author: Danielle Maguire

Expertise: Business Content Creator

Danielle is an experienced Business and Economics teacher who has taught GCSE, A-Level, BTEC and IB for 15 years. Danielle's career has taken her from across various parts of the UK including Liverpool and Yorkshire, along with teaching at a renowned international school in Dubai for 3 years. Danielle loves to engage students with real life examples and creative resources which allow students to put topics in a context they understand.

Steve Vorster

Reviewer: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

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