E-commerce as an alternative marketing channel

Information technology (IT) has become an integral part of the success and globalisation of business over the last two decades. It is hard to imagine how the efficiencies expected in today’s fast paced business world could possibly be achieved without the advancements in IT. The most significant of these advancements is arguably the advent of the Internet which has empowered businesses of all sizes by giving them the means to promote their products and services at a relatively low cost in markets that would previously have been inaccessible. The aim of this study was to assess whether e-commerce represents an alternative channel for a brick and mortar company wishing to follow a market penetration strategy. The study was based around a company, Canoa Eastern Cape, which trades in the office automation industry in the Eastern and Southern Cape of South Africa. The study investigated the history of Canoa Eastern Cape, focusing predominantly on the growth strategies followed by the business in the past. With a view to the future, growth strategies which could potentially be followed by Canoa Eastern Cape were also investigated. The result of these investigations was a recommendation that Canoa Eastern Cape should follow a market penetration strategy, which will see the business marketing its existing products within its current market by making use of a new distribution channel, more specifically e-commerce. In order to assess the suitability of e-commerce as a tool within a market penetration strategy a literature study was conducted to get a better understanding of ecommerce and its viability as business tool. The literature study focused on eight core concepts felt to be critical in the evaluation of e-commerce, namely: • the development of e-commerce over the past years; • the future of e-commerce; • whether e-commerce is a financial success or not; • requirements for e-commerce to be successful; iv • products that customers are prepared to buy online; • industries most affected by e-commerce; and • demographics of e-commerce users; and • e-commerce in the office automation industry. Using the information gained in the literature study as a basis from which to start, an empirical study was conducted. The objective of the empirical study was to obtain data which would be used to assess the level to which e-commerce has been adopted by consumers in the specific geographic area and whether these consumers are willing and able to make use of e-commerce as an alternative to conventional purchasing for the procurement of office automation consumables and office automation equipment. A quantitative research paradigm was adopted, making use of a structured questionnaire to gather information from the sample of Canoa Eastern Cape’s customers. The data collected from the empirical study were analysed using univariate and bivariate analysis. The findings of the empirical study suggested that: • demographics are a poor indicator of adoption of e-commerce; • there is a significant adoption rate within the sample: o 79.85 percent of the respondents reported to have used e-commerce before for personal use; and o 59.13 percentreported to have used e-commerce before for business use; • there is a high rate of willingness to use e-commerce again: o 91.09 percent of the respondents indicating that they would use e-commerce again for personal use; and o 80.18 percent indicating that they would use e-commerce again for business use; • there is a high likelihood that consumers will buy office automation consumables through an e-commerce channel, with 65.82 percentof the respondents indicating that they would be likely or very likely to buy consumables through an e-commerce channel; • there is no significant difference in the adoption rates between the three main areas within the targeted sample, that is, East London, Port Elizabeth and George and Knysna. Given the findings of the empirical study it is felt that an e-commerce solution does present a viable alternative channel for a brick and mortar company trading in the Office Automation Industry in the Eastern and Southern Cape wishing to follow a market penetration strateg