Effects of the Internet Essay

Bagozzis deputise figure has emerged as a framework for conceptualising selling behaviour. (Bagozzi, 1975 pp. 32). This guess identifies the parties involved in any accomplishment, and the intangible and tangible entities ar switch everywhered. By keying the actors/parties, this theory acts as a valuable managerial tool, by helping to think what is being transfer, and with whom. This theory has helped to see beyond the tangible harvest-homes being supervene upond, but to press the intangible aspects of the transaction and any entities. The weakness of this being that it is delicate to identify all intangible entities within the transaction.The theory also states the shift is reciprocative and mutually beneficial (Bagozzi, 1975 pp. 32), i. e. that the entities being exchanged are perceived to be of equal value. Furthermore, Bagozzi (1974) observed that complex exchanges could include both overt and black coordination. Bagozzi identified three antithetic types of exchange circumscribe, generalised and complex. Restricted exchange refers to two party reciprocal relationships, where both parties give and receive from the early(a) party, (Bagozzi, 1975 pp. 32). Generalised exchange includes at least three actors, who benefit indirectly, i.e. gives to integrity actor and receives from another. Complex exchange is a system of mutual relationships amidst at least three parties, and is a web or interconnecting dependent and generalised exchanges (Bagozzi 1975 pp. 33). Bagozzis theory gave a theoretical framework that could be applied to all situations to help identify the key actors within the exchange. A outrage of Bagozzis theory being that, identifying the actors and what is being exchanged was eer difficult, as this would be difficult for severally transaction, and may be unforeseen.With each transaction apart from the overt exchange between the consumer and the merchant, in that location are a number of intangible entities being excha nged, as people spoil things not except for what they asshole do, but also for what they mean (Bagozzi, 1975 pp. 36). The clog of identifying all parties and entities was make even more difficult after the advent of the net. The growth of the Internet platform a phenomenon, and there is a equalizer with commerce on this platform (Swaminathan, Lepkowska-White & Rao, 1999 pp. 1-2).In 1999 it was estimated that the online shopping would grow from $11 billion to $41 billion in 2002 (National Retail Federation, 1999). Online Christmas shopping stupendous all IMRGs expectations when $15 billion (i 7. 66 billion) was spent by British consumers al iodine in the ten week run up to Christmas, marking a 54% increase more than the i 5 billion spent over the same period in 2005 (IMRG, 2006). As this is such(prenominal)(prenominal) a growing method of commerce and is a big(a) percentage of all proceeding, it is important to assess Bagozzis theory of the exchange when applied to Internet transactions.The Internet was a portal to a globular food market, where firms could sell to customers anywhere in the world. Firms could operate entirely online with no be from premises. This saving could be passed on the customer, as online prices are often less(prenominal) expensive than offline/in-store competitors. Customers also benefited from online shopping as it is more convenient and idler buy a wider range of products from around the world. When anyone uses the Internet, information on their activities is gathered, which can be utilise by firms to target consumers for their products.Personalisation is the ability to satisfy particular proposition needs of mortal customers, and has traditionally been employed as a marketing strategy for luxury goods and niche markets, due to the high costs (Mattila, 1999 pp. 40-46). Personalisation depends on the k straightawayledge on the individual, and the ability to satisfy their needs. The Internet has made personalisation a chea per option, and this strategy can be used for a wider range of products. Firms now work to compete globally with other firms on the Internet, so personalisation has obtain a competitive necessity (Chellappa & Sin, 2002).Personalisation allows a firm to identify individual consumer needs and inform them of products that will satisfy them. Historically this would be the share of a salesperson to a customer in a restricted exchange (Bagozzi, 1975 pp. 32). Bagozzis theory applied hygienic to the face-to-face transactions of the 70s, however exchanges over the Internet are very different from the in-store transactions that Bagozzis theory of exchange applied to, and offer galore(postnominal) challenges. Transactions over the Internet capture more parties than traditional exchanges, as in order to entranceway the Internet a user essential use an Internet supporter provider.The Internet service provider gives access to the Internet, however it also logs the websites that the user has viewed. So here this could be seen as a middle man, who receives information on the websites visited as well as a premium, and in return allows access to the Internet. This is part of all Internet exchanges, and so it needs to be identified as a party, as the information that they receive is used to target products and services. Figure 1 Note Adapted and altered from Bagozzi Marketing as Exchange (1975)This is a very basic diagram of a transaction over the Internet, and as you can see it involves more parties than an offline transaction, making it more difficult to generate Bagozzis theory. Identifying all parties involved in a single transaction is very difficult, as there are more entities being exchanged with more parties. This diagram shows a complex exchange (Bagozzi, 1975 pp. 33). Nonetheless, the exchange is kinda straightforward, as a consumer pays the merchant and expects the product/service. Due to the distance the product moldiness(prenominal) be delivered involvin g another party, which makes the exchange a complex one (Bagozzi, 1975 pp.33).With any exchange over the Internet, information will be addicted to the ISP, and if there are tangible entities then a delivery service must also be a part of the exchange. This would make all exchange over the Internet a complex one, (Bagozzi, 1975 pp. 33), which makes the original types of exchange redundant, as they will all be complex. For this reason, I feel that Bagozzis theory of the exchange types must be updated to not include the ISP or delivery service, or to view the delivery service and merchant as a single entity. Historically a restricted exchange (Bagozzi, 1975 pp.32), could move place between a customer and a salesperson.Over the Internet more parties are involved in a transaction, so it is difficult to distinguish between the traditional complex exchanges. Bagozzis theory must take delivery into account when distinguishing the exchange types. The Internet is the same market is fundame ntally the same market, however advances have bridges geographical gaps and have joined the individual markets. For this reason, Bagozzis theory can still be applied when considering what is being exchanged between key parties, and what other parties are involved in the exchange.Nonetheless, Bagozzis theory has always had its flaws. The main disadvantage was it was difficult to apply to the diverse range of exchanges that take place. The Internet has made it possible to trade almost product to anyone we can access the internet, and because of this there are now more diverse transactions. For example buying a house abroad can now be through over the internet, but involves a large number of parties and is an interconnecting web of relationships (Bagozzi, 1975 pp. 33).With larger exchanges such as this, it is very difficult to identify all entities and parties within, and complex exchanges such as this are taking places more and more due to the internet. at that place has always been a difficulty in identifying parties and entities within an exchange, and if this cannot be done then any judgements made will be incorrect. Bagozzis theory is valuable as a managerial tool as I promotes thinking well-nigh the exchange, however with exchanges involving more and more parties, not only is Bagozzis theory going to take longer, but is liable to have more mistakes making it worthless.For small exchanges or exchanges were the parties and entities within are clear, I feel Bagozzis theory is still very important, but I feel it is not easily applied to the diverse range of exchanges brought about by the internet. The Internet was an unforeseen phenomenon that has influenced the exchange (Bagozzi, 1975 pp. 39). The theory still fits the exchange process, as it hasnt changed dramatically, however there are third parties that must be identified, such as the ISP, delivery firms, and other parties that receive information. delivery is part of the exchange process, however this is part of the service offered by the merchant. If these were identified, it would be possible to differentiate the types of exchange as being restricted, generalised or complex. If this were done, then Figure 1 would be identified as a restricted exchange (Bagozzi, 1975 pp. 32). Within the exchange there is overt and subterraneous coordination (Bagozzi, 1974 pp. 77-81), and think that majority of the third parties that collect information about the consumers website habits is collected covertly, however it is still part of the process.For example, the ISPs collection of viewed websites is used for marketing purposes. Although it is not a party to the exchange, it should be recognised as a third party.References Bagozzi, R P (1974) Marketing as an make Behavioural System of Exchange. diary of Marketing, 38 (October), 77-81. Bagozzi R. P. (1975) Marketing as Exchange, Journal of Marketing, Vol. 39, p32-39. Chellappa, R K and Sin, P (2002) Personalization versus privacy An empirical e xamination of the online consumers dilemma. In 2002 Informs Meeting.