SALES AND MARKETING

Sales and Marketing With Todays Technological Advances

Sales and Marketing With Todays Technological Advances

Introduction

Electronic commerce, also known as “e-commerce,” refers to the marketing, distribution, sale, and exchange of products and services via the Internet and encompasses a multitude of Web-based (often called “virtual”) commercial transactions. Through e-commerce, funds are transferred, supply chains are managed, and data are collected. E-commerce depends on and is the result of the application of new technologies to traditional forms of business. The commercial transactions that result are considered virtual or simulated—in contrast with traditional, or “real,” brick-and-mortar transactions—because they take place invisibly. The e, for “electronic,” reflects the technological systems that facilitate commerce, and e-commerce thus entails the complete network of systems and processes that enable commercial transactions to take place electronically via the Internet.

The Dot-Com Bubble

Stock values of Internet-based companies soared on the crest of a tremendous wave of opportunity and enthusiasm. Triggered by the shocking rise in value of Netscape's initial public offering (IPO) and allegedly manipulated by some of the world's leading investment banks and venture capitalists (CS First Boston, Goldman Sachs, Morgan Stanley, Merrill Lynch, and others), speculators hoping to get rich quick drove up the stock values of Internet-related businesses. Millionaires were born overnight as venture capitalists invested billions of dollars to fund incipient ideas, while traditional business models seemed to be largely set aside if not altogether abandoned. Low interest rates in 1998 and 1999 increased the availability of capital for entrepreneurial, Internet-based ventures. It was during this time that a number of today's Internetbased leaders emerged, including Amazon.com, eBay, Google, and Yahoo!

The Dot-Com Crash

The ethereal and fragile nature of the bubble quickly became apparent, however, as the bubble burst almost as quickly as it had grown. Between 1999 and 2000, the economy began to slow as the Federal Reserve increased interest rates six times. The failure of these businesses had a cascading effect such that, by 2001, the dot-com boom was over and many of the enterprises viewed so promisingly just a year before were now considered “dot-bombs.”

The dot-com crash put hundreds of companies out of business almost overnight and cost thousands of people their jobs. Investors lost millions of dollars. In 1999 alone, there were 457 IPOs of stock of private companies—most of them linked to the Internet and technology. Of those IPOs, 25% doubled in price the first day their stock was traded. By 2001, there were only 76 IPOs, none of which doubled in price the first day of trading. Between March 11, 2000, and October 9, 2002, the NASDAQ fell 78%. The lesson of e-commerce was clear: It holds the potential for tremendous opportunity, but the path toward realizing that potential is fraught with challenges and not that far removed from traditional good business practices.

Distinguishing Features

While the fundamental difference or sameness of e-commerce is disputed, virtuality—a defining characteristic of e-commerce—certainly alters the dynamics of commercial transactions. While being online might not render it necessary to create a distinct code of ethics for e-commerce, ...