Impact of Virtual World on Marketing Strategy of Major Corporations - Term Paper Example

Impact of Virtual World on Marketing Strategy of Major Corporations Virtual world is a one of the many online communities present in the internet. It takes the environment which is computer based. Thus, it is a computer based online community. The community enables different users to interact with one another. The interactions allow them to both create and use objects. As put by Cherbakov (2009), the computer enables the user to access the virtual world, and then creates a stimuli to the user which will make the user feel like he or she is interacting with the other people in the real life situation although it is only virtual. Thus, the computer makes the user experience some degree of tele-presence. The virtual worlds created by the computer may mimic the real world or may be made to form some fantasy in the world. Virtual worlds have become an important part of commerce (Cherbakov, 35). Electronic commerce is a legal form of business in which the virtual world provides an opportunity for participants to buy and sell the goods they need or they have respectively. This is termed as online shopping or internet shopping. Any type of good can be sold or bought in the virtual world except money. The virtual world respects all the consumer rights which have been legislated and thus is a legal form of marketing of goods and services. The customer will access the virtual world through the computer. He will then access a shop in the virtual world using the computer and the internet. The process of accessing a shop in the internet is called electronic commerce. The customer does not need to travel to a different place to get the goods and the services he or she needs. In the shop (found as a website), there is enough information regarding the physical address of the seller of the goods or services, its geographical location, and information on how the customer can be able to contact the seller directly, either through the phone or postal address. This type of commerce has the potential of changing drastically the marketing strategies of the major corporations. These include such departments as advertisements, sales department, and delivery department among others. 1) Advertisements The introduction of the electronic business, facilitated by the virtual world has caused a lot of changes in the advertisement modalities of major corporations. Previously, organizations needed only to advertise their goods and services in the televisions or other hard prints. However, currently, such advertisements are likely to undergo extinction since the organizations need to concentrate on attracting online customers. The organizations are trying to establish the most visited websites and place their advertisements there. As a result, customers who enter the virtual world are likely to be convinced by the advert to buy such goods or services as advertised. Some organizations will opt to buy some space in the major web engines such as the Google or yahoo search engines in which any person who tries to search anything will come across those goods being advertised (Castronova, 876). If the organizations concentrate on the old strategy of advertising, there will be fewer people who are watching the televisions or who read the hard print news. Most people have turned to the virtual world where they can get a lot of information concerning something. Such people will not waste their time watching the televisions and thus will not get to know that there is a certain product from a certain organization. If the organization places its adverts in the internet, it will be possible to pass the massage to more potential buyers. These advertisements are very useful in several ways. First, the organization is able to inform the consumers that it has a certain product. It will inform such a person of the quality, type and the manufacture of the commodity. It will also tell the potential customer of the possible advantages of using such a commodity (Cherbakov, 64). Placing the advertisements in the internet is also useful in directing the potential customer to the site where the organization’s website can be found. Most of the adverts in the internet usually provide a link which will make the potential customer access the goods. Some customers may find it very hard to look for the organizations website so as to buy the goods and services they need. Such a link will save the time for the potential customer which he would have used in the looking for the site. The link is usually direct and takes the customer to the exact location where the customer can get to buy these goods and services (Kaplan, et al 76). Advertisements in the internet also make it cheaper for the organization to increase the awareness of their goods among the people. The rates charged by the internet advertisements cannot be equated with the amount charged in the normal advertisements in televisions and in Radios. It is for this reason that most of the people will prefer to advertise in such virtual worlds. It also reaches more people. The virtual worlds are sites which are visited frequently by the internet users. This makes it highly advantaged than the rest of the methods of advertisements. Such a site will be accessed by people from all over the world and thus create the awareness of the public towards that product. The internet can be accessed from ay part of the world and it has no limitations to the user. The user uses the internet at his or her time and thus makes it very convenient. This is as opposed to the other modes of advertisements where by the customers must carefully listen to the adverts otherwise they will miss some of the details. However, in the internet, some of the customers are able easily access information from the internet if they have the time. This makes it convenient for the customer and also very convenient for the organization (Kaplan, et al 77). 2) Sales The selling of the goods is done in the internet. The potential customer usually reads the description of the goods or services they are willing to buy. When the customer is satisfied that the goods are as per his or her demand, then he orders for them. However, the customer must comply with the rules and regulations which have been set by the seller. The customer will usually find the various rules which the organizations go by and they are very important for the transactions. These include the mode of payment, the delivery of the goods and services and how the organization will behave in case of damage to the goods. Such rules and terms of sale are very important and reading them makes it possible for the customer to understand which organization is better than the other. However, some organizations have become untrustworthy and do not observe the good business ethics. Such organizations will give the wrong information on the type of goods and thus mislead the customers. It is only after the delivery of the goods that the customer realizes that he or she was misled (Mennecke, 119). There however laws and regulations which govern the online selling and buying of goods and services. However, in some of the virtual environments such as the second life, the people involved in the trade have no obligation to abide by the laws. This therefore gives the users an absolute freedom for them to carry out their business or leisure activities without disturbance. In the normal buying and selling, the organizations have to go through a long process and through many legal processes. The online trading eliminates these legal process which make the buying and selling of goods and services very expensive. Organizations thus can go through the process of selling goods to their customers without any legal obstacles (Mennecke, 120). Cost The cost of marketing the goods by the corporations has decreased with the use of the virtual world and the electronic commerce. As opposed to the traditional ways of marketing the goods and services, the organization does not need to travel to the area where the customer is. The organization in addition does not need to establish an outlet in the area where customer is. The customer is able to order for the goods through the virtual world and then the organization organizes for the delivery of such goods without the customer and the seller meeting physically. Thus, organizations need not to have many outlets in the world for them to serve their customers. However, these organizations need to build many stores which will be dispersed in many parts of the world. The importance of these stores is the provision of the goods to the customers within that locality to ensure that the customers do not wait for a long time before they receive their goods which they ordered (Mennecke, 121). There is also reduction in the cost since the organizations do not need to employ sales people or field men. All the work of a field man is carried out by the computer. The computer brings together the two people who are in far and different locations together. Through the virtual world, the buyer is able to communicate with the seller and specify the goods which the buyer wants. This cuts the cost of the buyer travelling all the way from the area he or she lives to the place where the goods are sold. Ordering can be done at home and the customers wait for the goods to be delivered to them at home. In addition, it also saves a lot of time for the customer. The seller will also save his time because he or she can attend to very many customers at once. In addition, because it is not physical, the seller will spent very little time on one customer. In some other outlet, the customers who go to buy goods from a certain seller sometimes have to queue and wait for their time to be served. Virtual world has eliminated the need for waiting. Serving of the customers is usually very fast and thus ensure that the customers do not waste any of their time. It will also save the organizations time and this will increase their amount of production (Mennecke, 121). Since the customers just book for the goods they need, the organization will be able to know exactly how many goods are needed for production. The corporation will produce goods which have been booked and thus produce exact amount of good. This means that there will neither be under-production nor overproduction. The organization produces the requested goods before delivery. This will eliminate the need for market researches and analysis which are needed for the budgeting and decision on the amount of the goods to be produced. In the normal trading, the organization just produces or buys goods without knowing exactly how much they can sell. This creates a problem when there is extra goods bought or produced or when there are less goods produced or bought. The online commerce prevents these problems by ensuring that the manufacturer or the seller is fully aware of how much goods he or she needs to produce. This guides him in the decision of how much goods and service to make ready for sale after the customers send their orders (Mennecke, 122). Risk of Fraud Online commerce and trading puts both the seller and the buyer at risk of losing their money to corn men. Mostly affected are the buyers. Some non-existing organizations will pretend to be offering some services or selling some goods. The unsuspecting buyer will then send the money for goods and the transportation of the goods to the seller. However, instead of delivering the goods, the person just disappears and the buyer cannot get him anymore. This makes the customers suffer from unexpected losses. Organizations need to establish themselves and ensure that they create a good name so that the people will be able to trust them and buy goods from them. In such setting, that is, in the electronic commerce, trust is a very important component of the business. Without trust, the customers will not be able to buy goods and services from that organization. The customers might fear buying goods and services from the unknown organizations since they do not want to lose their money. The result will be that the organizations which will be able to win the trust of their customers will benefit more and will have more customers (Cherbakov, 24). Marketing to Involve More Technology According to Cherbakov (2009), the organization will not depend on the broadcasters to advertise or sell their goods and services. They will need to use the computers and the internet for the advertisements. These will mean that the organizations will have to invest more in information technology and other related technologies. The marketing will be more technological that it has ever been. There will be fewer sales agents needed since the ordering of the goods and services is done in the virtual world. As a result, there will be decrease in the number of the sales persons with an increase in the number of technology personnel. There is a higher demand for increase in people who are able to understand online marketing and those who design proper software for the marketing. The organization needs to ensure that it designs its web page in a very attractive manner. This will attract the various potential customers. The customers need to be attracted to the webpage so that they can see the goods and services being sold. In addition, it should be easy to open and access the webpage so that the customers do not waste a lot of time looking for that particular webpage. If the organization uses bad WebPages which are not attractive to the customers, there is a high likelihood that many customers will not get to that webpage and thus they will not see the contents of the webpage (Mennecke, 121). Payment Terms As put by Cherbakov (2009), the use of the virtual world in trading dictates that the organizations use a different form of payment other than hard cash. Normally, there is no way the seller and the buyer will meet physically. The seller does not meet the buyer at any time for him or her to give him the cash. Thus, electronic money is the most suitable in this case. Both of the two must embrace the use of electronic money for the effectiveness of the transaction. Without electronic money, the organization will not be able to receive money from the customers. Some examples of electronic money include the use of Visa cards or Master cards. The customer usually uses his Visa or Master card to make payment of goods or services received. The money in the account of the customer is deducted and added to the manufacturer’s account thus leading to a complete transaction. The leading corporations need to embrace more of electronic money since this is where the commerce is moving towards. Most of the businesses in the future will use the electronic money and thus the organizations must embrace such technology for effective operations. Conclusions Virtual world is an online interactive forum where various people can meet virtually and interact. Although the people are not in close proximity with each other, the computer creates a simulated environment which enables one user to interact with another use without them meeting. The users will be able to interact on many issues without the need to meet physically and thus save time and money. Organizations need to design their marketing strategies to fit this market. If the organizations are left behind, then they will not be able to move with the rest of the organizations. There is less cost of operations, less employees and increased prediction of movement of stock among other advantages. Works Cited Cherbakov, Luba, Virtual Spaces: Enabling Immersive Collaborative Enterprise, Part Introduction to the opportunities and technologies. USA: developer Works, 2009 Castronova, Edward. Synthetic Worlds: The Business and Culture of Online Games. University of Chicago Press, 2005. Kaplan, Andreas M.; Haenlein, Michael. Consumer use and business potential of virtual worlds: The case of Second Life. International Journal on Media Management , 2009, 11 (3) Mennecke, Brian E."Second Life and other Virtual Worlds: A Roadmap for Research". Communications of the AIS 2008, 20 (20). Read More