Information technology has become a valuable asset in the world of business in a span of less than 2 decades. A recent trend of marketing towards direct marketing that manufacturers and suppliers exclude subsequent channel members of the distribution chain and provide physical marketing materials directly to the target consumers. Marketing communications activity as a direct marketing is focused on ingredients of promotional mix that directly contact targeted consumers to communicate information about a product or service (Dibb, 2012). The marketing communications activity works in synergy with distribution, because it effects on the distribution decision and is influenced by the distribution decision. The manufacturer can push the product through the distribution channel by using of marketing communication (Strydom, 2005). Now, e-marketing is an important options for selecting a channel for distribution and playing a significant role in expanding the business performance.
Without exception, utilization and optimization of e-marketing techniques in upmarket cosmetics brands have proved to be a challenge. Advancements in technology have popularized e-marketing. More people switching from the old fashion stores to online solutions as they offer flexibility and save a lot of time. Clearly, adopting and integrating e-marketing into a business will ultimately determine its success in the future (Chaffey et al. 2009).
For instance, Estee Lauder stepped up its digital initiatives to maintain and update its present customers while attracting new customers. According to Bloomberg L.P. (2014), Jenner Kendall, the company called the ultimate Instagirl, assembled 30 million followers as the new face of Estee Lauder. Bobbi Brown Cosmetics, a subsidiary of Estee Lauder is a global brand with global reach. The global marketing strategy of Bobbi Brown cosmetics, including all its subsidiaries globally e.g. Bobbi Brown Japan, is spearheaded by its marketing team based in New York. Their main marketing objective (of the strategy) is to uphold and fortify their brand image. This strategy is very general and ineffective because it fails to adjust to the needs of their consumers locally. Due to lack of flexibility in their marketing strategy, the company cannot fully capitalize on its consumers (Katsuki 2010). However, E-marketing is very effective on a local platform because it incorporates the needs and culture of the local people to maximize profits (Shindo 2009)
1.2. Research problem
Use situation of e-marketing utilization varies from one country to another. The EC rate of the cosmetics industry in Japan in 2016 was about 5%, and there is no significant difference between the EC conversion rates in the field of merchandise sales of 5.43%. However, the rate of EC conversion in the United States is about 7%, and the EC market rate of the EC is over 15% in China (Ministry of Economy, Trade, and Industry, 2017).
Since there are no study reports about the e-marketing as a distribution channel on business performance on the upmarket cosmetics market in Japan, its necessary to create a marketing strategy after grasping Japans current situation.1.3 Research aim
This aim of this study is to create a lucrative and efficient e-marketing strategy for Bobbi Brown Japan.the strategy is created by conducting a consumer behavior survey and carrying out a market audit in Japan and aimed at creating effective pathways to capitalize on the Japanese cosmetics market.
1.4 Research objectives
To identify the determinants of an effective e-marketing channel as a distribution strategy.
Details of the research objectives are explained as follows.
To identify the determinants of business performance
To assess the effect of an effective e-marketing channel as a distribution strategy to achieve business performance
To make suitable recommendations
The research questions of this study are outlined below.
Main Research Question
How can e-marketing leverage its features to ensure effective utilization of distribution channels?
- In what ways can e-marketing reinforce existing marketing channels?
- What are the methods used to maximize the efficiency of distribution channels in e-marketing? - In what ways can the potential of e-marketing as a distribution channel be maximized?
1.5 Research significance
Information provided in this study is up to date regarding the use of e-marketing in Japan. The result of the research reveals the advantages and drawbacks linked to the use of e-marketing as a distribution channel.
2. Chapter two: Literature Review
This chapter explores the meaning and key concepts of e-marketing.by looking back through the history of e-marketing and reviewing marketing principals and theories, a clear definition and understanding of e-marketing can be obtained (McDonald and Wilson 1999).
2.2 Distribution channels
According to the 2010 e-Commerce market survey, 19.1% of consumers who purchased an item via online shopping had first seen the item in a bricks-and-mortar store (Figure 2.21).
In addition, a 2017 PwC survey (PricewaterhouseCoopers 2017) revealed that 39% of Japanese Amazon users answered that their purchasing frequency of merchandise at bricks-and-mortar stores decreased (Figure 2.2.2). This is thought to result from a bricks-and-mortar store inevitably failing to attract more shoppers. As a result, High-end brands in the cosmetic industry are therefore compelled to compete for customers in tough conditions
2.3 E-marketing as a distribution channel
Using e-marketing in distribution plays an increasingly significant role in marketing activities. E-marketing can be defined as the processes of utilizing online solutions to communicate, create, distribute and exchange output/products that add value to consumers. Adopting e-marketing solutions into a business ultimately increases profit gains to a company as it is flexible and attracts more customers (Strauss and Frost, 2016). In multichannel environments, customers have more choices than before in terms of obtaining information on products, consumers can switch among different channels with ease (Chiu et al. 2011).
This situation has the potential of eroding profits for retailers because consumers access information about products or scrutinize information provided through one retail avenue and then choose to purchase the product from a different retail channel or avenue.
2.4 Business performance
In particular, two key factors have influenced upmarket cosmetics brands. The first factor is influenced by the trend of negative sales from the total cosmetics market and the second one is due to the reduction in the number or sizes of department stores. For the last 14 years, slow economic growth in Japan has perpetually led to reduced sales in departmental stores (Japan Department Store Association 2017). This has led to many unsuccessful or unproductive stores being shut down.
2.5 use of e-marketing to achieve business performance
Since cosmetics were admitted as a tax-free item from October 2014 for foreign tourists, drugstore revenues have grown on the back of expanded inbound demand (Figure 2.6.1). Increasing numbers of foreign tourists are expected until the Tokyo Olympic Games in 2020, and further market expansion through inbound demand is expected after 2017.
By channel, the mail-order/online category, including e-commerce and drug stores, is growing. In the mail order/online category, the skincare category is strong and in the makeup category, drug stores are strong. Department stores are the main channel for upmarket cosmetics brands, including Bobbi Brown Japan, and have maintained their market share (Figure 2.5.2).
2.6 Internal Analysis
An internal analysis mainly focuses on internal factors in marketing that gives the company an edge or how to gain an edge in gaining more customers and in ensuring they meet the consumer needs. The analysis evaluates general performance and operations of the company. Through an internal analysis, all the weaknesses and strengths in a business can be noted and ways to improve productivity determined (Jobber 2012).
3. Chapter three: Research Methodology
3.1 Type of investigation
The type of study is an exploratory research in this investigation. Research must be conducted in Management projects to determine key concepts and highlight them in an orderly manner. (Jankowicz, 2004).this section indicates the methodology used in the research and verification of the e-marketing strategy. The two main reasons for research methodology as noted by Saunders et al (2012) are data collection and selecting a research design (strategy). These research methodologyis based on the two reasons as its focal points. To answer the research questions, this research is undertaken by interview, questionnaire, and literature review. The research strategy/design used in this study are clarified below.
3.2 Characteristics, Benefits and Concerns of E-marketing. (Chapter 2)
The main features of E-marketing are addressed in the literature review. The prime focus of this research study is based on the contrasting characteristics of online marketing (e-marketing) and normal, standard marketing. For example, Online marketing has 5 core characteristics: it is highly interactive, wider choices/variations in commodity, interest-driven sales, independence of time and location, and flexible access globally (Dann and Dann 2003). Furthermore, aside from e-marketing features, its benefits, setbacks, and concerns from the consumers and organizations perspective are discussed citing relevant solutions.
3.3 Business Environment of Bobbi Brown Japan (Chapter 3)
This chapter serves to access the work environment at Bobbi Brown Japan. To device an effective marketing strategy, it is crucial to review and understand the working environment (internal and external environments) of an enterprise (Globis Management Institute, 1999). Frameworks such as Five Forces and PESTEL ( political, economic, social, technological, environmental, and legal) can be used to monitor macro(external)-environmental elements. Furthermore, information provided by marketing companies and the Japanese government regarding commerce can be used as secondary sources in analyzing external factors. The SWOT (strengths, weakness, opportunities, threats) matrix can be applied to determine the internal factors that may boost business output.
3.4 Trends of Internet Usage and Shopping Behavior (Chapter 4)
For Bobbi brown japan to integrate an e-commerce system into their business, they must conduct a consumer behavior survey .the survey wil...
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