Effects of the Internet Essay

Bagozzis alter paradigm has emerged as a framework for conceptualising marketing behaviour. (Bagozzi, 1975 pp. 32). This conjecture identifies the partitionies involved in e very exercise, and the intangible asset and tangible entities argon rallyd. By locateing the proles/parties, this theory acts as a valuable managerial tool, by helping to think what is be replacementd, and with whom. This theory has helped to see beyond the tangible products being exchanged, except to consider the intangible aspects of the transaction and entirely entities. The weakness of this being that it is ticklish to identify entirely intangible entities within the transaction.The theory also states the exchange is reciprocal and reciprocally beneficial (Bagozzi, 1975 pp. 32), i. e. that the entities being exchanged are perceived to be of fair to middling value. Furthermore, Bagozzi (1974) observed that mixed exchanges could allow both everyplacet and c open(a) coordination. Bagozzi de termine three different types of exchange restricted, verbalise and composite. Restricted exchange refers to two party reciprocal relationships, where both parties give and live from the other party, (Bagozzi, 1975 pp. 32). speak exchange includes at least three actors, who benefit indirectly, i.e. gives to one actor and receives from a nonher. Complex exchange is a system of mutual relationships between at least three parties, and is a web or interconnecting restricted and generalised exchanges (Bagozzi 1975 pp. 33). Bagozzis theory gave a theoretical framework that could be utilise to all situations to help identify the key actors within the exchange. A harm of Bagozzis theory being that, identifying the actors and what is being exchanged was always difficult, as this would be difficult for each transaction, and may be unforeseen.With each transaction apart from the overt exchange between the consumer and the merchandiser, there are a number of intangible entities being e xchanged, as people buy things non only for what they tolerate do, but also for what they mean (Bagozzi, 1975 pp. 36). The difficulty of identifying all parties and entities was made even more difficult after the advent of the net income. The egression of the Internet platform a phenomenon, and there is a correspondence with vocation on this platform (Swaminathan, Lepkowska-White & Rao, 1999 pp. 1-2).In 1999 it was estimated that the online shopping would grow from $11 billion to $41 billion in 2002 (National Retail Federation, 1999). Online Christmas shopping exceed all IMRGs expectations when $15 billion (i?? 7. 66 billion) was spent by British consumers alone in the ten week run up to Christmas, marking a 54% increase more than the i?? 5 billion spent over the aforesaid(prenominal) period in 2005 (IMRG, 2006). As this is such a growing method of commerce and is a monumental percentage of all transactions, it is important to assess Bagozzis theory of the exchange when a pplied to Internet transactions.The Internet was a portal to a orbiculate market, where firms could sell to customers anywhere in the world. Firms could operate entirely online with no cost from premises. This saving could be passed on the customer, as online prices are often less(prenominal) expensive than offline/in-store competitors. Customers also benefited from online shopping as it is more convenient and squeeze out buy a wider concatenation of products from around the world. When anyone uses the Internet, information on their activities is gathered, which can be used by firms to target consumers for their products.Personalisation is the ability to satisfy particularized needs of individual customers, and has tralatitiously been employed as a marketing strategy for luxury goods and niche markets, ascribable to the high costs (Mattila, 1999 pp. 40-46). Personalisation depends on the k nowledge on the individual, and the ability to satisfy their needs. The Internet has mad e personalisation a cheaper option, and this strategy can be used for a wider range of products. Firms now have to compete globally with other firms on the Internet, so personalisation has frame a competitive necessity (Chellappa & Sin, 2002).Personalisation allows a firm to identify individual consumer needs and inform them of products that will satisfy them. Historically this would be the role of a salesperson to a customer in a restricted exchange (Bagozzi, 1975 pp. 32). Bagozzis theory applied well to the face to face transactions of the 70s, however exchanges over the Internet are very different from the in-store transactions that Bagozzis theory of exchange applied to, and allege many challenges. Transactions over the Internet have more parties than traditional exchanges, as in order to approach shot the Internet a drug user must use an Internet service supplier.The Internet service provider gives access to the Internet, however it also logs the websites that the user has viewed. So here this could be seen as a middle man, who receives information on the websites visited as well as a premium, and in return allows access to the Internet. This is part of all Internet exchanges, and so it needs to be identified as a party, as the information that they receive is used to target products and services. strain 1 Note Adapted and altered from Bagozzi Marketing as change over (1975)This is a very basic diagram of a transaction over the Internet, and as you can see it involves more parties than an offline transaction, making it more difficult to apply Bagozzis theory. Identifying all parties involved in a adept transaction is very difficult, as there are more entities being exchanged with more parties. This diagram shows a complex exchange (Bagozzi, 1975 pp. 33). Nonetheless, the exchange is quite straightforward, as a consumer pays the merchant and expects the product/service. Due to the blank space the product must be delivered involving another par ty, which threads the exchange a complex one (Bagozzi, 1975 pp.33).With any exchange over the Internet, information will be given to the ISP, and if there are tangible entities then a livery service must also be a part of the exchange. This would make every exchange over the Internet a complex one, (Bagozzi, 1975 pp. 33), which makes the authorized types of exchange redundant, as they will all be complex. For this reason, I ascertain that Bagozzis theory of the exchange types must be updated to not include the ISP or delivery service, or to view the delivery service and merchant as a single entity. Historically a restricted exchange (Bagozzi, 1975 pp.32), could take place between a customer and a salesperson. over the Internet more parties are involved in a transaction, so it is difficult to distinguish between the traditional complex exchanges. Bagozzis theory must take delivery into account when distinguishing the exchange types. The Internet is the same market is fundamentall y the same market, however advances have bridges geographic gaps and have joined the individual markets. For this reason, Bagozzis theory can electrostatic be applied when considering what is being exchanged between key parties, and what other parties are involved in the exchange.Nonetheless, Bagozzis theory has always had its flaws. The briny disadvantage was it was difficult to apply to the diverse range of exchanges that take place. The Internet has made it possible to trade almost product to anyone we can access the internet, and because of this there are now more diverse transactions. For example buy a house abroad can now be do over the internet, but involves a large number of parties and is an interconnecting web of relationships (Bagozzi, 1975 pp. 33).With big exchanges such as this, it is very difficult to identify all entities and parties within, and complex exchanges such as this are taking places more and more due to the internet. There has always been a difficulty i n identifying parties and entities within an exchange, and if this cannot be done then any judgements made will be incorrect. Bagozzis theory is valuable as a managerial tool as I promotes thinking near the exchange, however with exchanges involving more and more parties, not only is Bagozzis theory going to take longer, but is apt(p) to have more mistakes making it worthless.For small exchanges or exchanges were the parties and entities within are clear, I feel Bagozzis theory is assuage very important, but I feel it is not easily applied to the diverse range of exchanges brought about by the internet. The Internet was an unforeseen phenomenon that has influenced the exchange (Bagozzi, 1975 pp. 39). The theory still fits the exchange process, as it hasnt changed dramatically, however there are third gear parties that must be identified, such as the ISP, delivery firms, and other parties that receive information.Delivery is part of the exchange process, however this is part of t he service offered by the merchant. If these were identified, it would be possible to differentiate the types of exchange as being restricted, generalised or complex. If this were done, then Figure 1 would be identified as a restricted exchange (Bagozzi, 1975 pp. 32). Within the exchange there is overt and covert coordination (Bagozzi, 1974 pp. 77-81), and think that majority of the third parties that collect information about the consumers website habits is collected covertly, however it is still part of the process.For example, the ISPs appealingness of viewed websites is used for marketing purposes. Although it is not a party to the exchange, it should be recognize as a third party.References Bagozzi, R P (1974) Marketing as an Organized Behavioural System of Exchange. Journal of Marketing, 38 (October), 77-81. Bagozzi R. P. (1975) Marketing as Exchange, Journal of Marketing, Vol. 39, p32-39. Chellappa, R K and Sin, P (2002) Personalization versus privacy An empirical trial ru n of the online consumers dilemma. In 2002 Informs Meeting.