Prices on the Internet (19-09-2004)

Since the popularization of the Internet, organizations have an additional sales channel for their products. While 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 explore, there are already other organizations to use 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 in the same starting point or if you will, this new channel, all companies start from scratch.

The successful use of the Internet channel will depend, more than the product (s) (s) / service (s) sold it, the way the organizations are, like, depending on the attitude they have towards 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 well massified, it is also true that still has many gaps, not only in terms of legislation but also the level of control and supervision, more importantly, the level of security .

In Portugal, along with the safety factor is also the suspicion factor and perhaps most importantly, the cultural factor. There is therefore a long way still to go in building trust relationships between organizations and consumers, leaving that issue for another article related to this theme.

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 with the consumer still has a long way to go and the starting point may be precisely the price. Moreover, if we consider the importance of price in four P's of Porter, we may even consider the price as a factor in the strategy to use this new channel.

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

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

Currently, any one of us comes to a site of consumption, beyond the information deficit about the products available, the limited range of choice, still faces a price identical to that found in the physical store. If we add to that the fact of delivery normally be consigned CTT , which charges about 3 euros (eg the minimum for an order for a CD) and it takes two to three days to deliver to consumers, and this, if not at home still has to go to the CTT post to lift the order. If we link the fact of not having had the opportunity to view the product in your hand before the purchase, I do not think the channel is as attractive as that.

However, if I can subtract from the final product price, a relative because you do not need to have the store and associated costs, not having to have so many employees, etc.. I will be giving my clients the opportunity to purchase a product through Internet with a "discount" compared to existing in physical store.

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

It is essential that organizations engaging in Internet Channel at lower prices, after all, if we put in place in the consumer, which would lead me to buy a product on the Internet at the same price as the store with all the mistrust that already pointed out, not but seeing the product in my hand, knowing it will still take some days to have it, and I have the job of the purchase process, 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 store in order to evaluate the product and then, get you to take advantage of it immediately.

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