Prices on the Internet (19-09-2004)

Since the mass of the Internet, most organizations have a sales channel for their products. If it is true that organizations as they develop their strategies are taking advantage of new distribution channels, it is also true that none of these is, in fact, new as the Internet.

If these new channels will companies exploring, there are other organizations using it, thus taking better advantage, the result of experience gained during its use, then we can say that in the case of the Internet, we face a new channel distribution, in which all organizations are at the same point of departure or if you will, this new channel, all companies start from scratch.

The success of channel usage Internet depend, more than the (s) product (s) / service (s) on it sold, the way of organizations are, as well as, depending on the posture that have in relation to this new channel.

This channel is so new, yet to explore and optimize. If it is true that some countries like the United States the Internet is already quite mass, it is also true that still has many gaps, not only in legislation but also the level of control, supervision and, more importantly, the level of security .

In Portugal, plus the safety factor, the factor is also suspicion and perhaps most important, the cultural factor. Therefore, there is still a long way to go in building relationships of trust between organizations and consumers, leaving this issue for another article related to this issue.

Portugal is not even the most backward countries in the European Union and on the world stage at the Internet, but these things in relation to the consumer still has a long way to go and the starting point may be exactly the price. Indeed, if we consider the importance of price in the four P's of Porter, we can even consider the price as a determining factor in the strategy to use this new channel.

Several reasons exist - the new channel, the Portuguese cultural factor, the low rate of Internet penetration in Portuguese homes - for this channel has not "started", but certainly one of them is the fact that organizations have not succeeded yet, forward the benefits to consumers.

A differentiation strategy the price will certainly be a determining factor for membership of the consumers in this new channel.

Now any one of us comes to a site of consumption, and loss of information about the products available, the limited range of choice, is still a price identical to that found in the physical store. If we add to that the fact of delivery, as a rule, be sent via the CTT , which charges about 3 euros (ie the minimum value for an order for a CD) and it takes two to three days to deliver to the consumer, and this, if not at home still has to go to the station CTT to lift the order. If we join to the fact of not having been able to visualize the product in your hand before the purchase, I do not think the channel is as attractive as this.

However, if I can avoid the final product price, a percentage on the fact that you do not need to have shop and associated costs, not having to have so many employees, etc.., I'm giving my clients the opportunity to acquire a product through the Internet with a "discount", practiced in relation to physical Store.

Certainly we are facing a real factor differentiated, with clear advantages for the consumer and consequently for my business, since I will be a new distribution channel, thus reaching many more customers leveraging much business.

It is essential that organizations practicing lower prices in the Internet Channel, after all, if we put in place the consumer, which would lead me to buy a product on the Internet at the same price in store, with all the distrust that I mentioned above, there can see the product in my hand, knowing that it will take several days to have it, and I have the job of processing the purchase, supporting the cost of connection to the Internet, print invoices / receipts?

Unless you live in a region ostracized, where competition does not exist, surely the reader would rather move to a nearby shop in order to evaluate the product and then, buy it in order to enjoy it immediately.

Portuguese organizations must be aware of this phenomenon because, in today's world dominated by globalization - when we look at the next practical examples, such as, for example, websites selling cameras ( Pixmania , Expansys , etc..) that are real world and online stores are cheaper than the order of 30% compared to prices in the shops - who does not adapt, you run the risk of "disappearing from the map."