Page 267 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Management Information Systems

Notes Channel Conflicts

Using the Web for on-line sales and marketing may create channel conflict with the firm’s
traditional channels, especially for less information-intensive products that require physical
intermediaries to reach buyers. The firm’s sale force and distributors may fear that their revenues
will drop as customers make purchase directly from the Web or that they will be displaced by
this new channel. The Window on Management describes how several companies are detailing
with this problem. Channel conflict is an especially troublesome issue in business-to-business
electronic commerce, where customers buy directly from manufacturers via the Web instead of
through distributors with this problem.

Task What are the challenges faced by any organization while they change or add new
technology in the system.

Legal Issues

Law governing electronic commerce are still being written. Legislatures, courts, and intentional
agreements are just starting to settle such issues as the legality and force of e-mail contracts, the
role of electronic signatures, and the application of copyright laws to electronically copied
documents.

Security and Privacy

The web provides an unprecedented ability to learn about and target customers. But the same
capability can also undermine individual privacy. Through the use of Web site monitoring
software and other technology for tracking Web visitors, companies can gather detailed
information about individuals without their knowledge. Web site visitors knowingly supply
personal information, such as their name, address, e-mail address, and special interests, in
exchange for access to sites without realizing how the organization that owns the site may use
the information.

Notes Companies collecting detail customer information over the Web will need to balance
their desire to profit from such information with the need to safeguard individual privacy.
Self Assessment

Fill in the blanks:
12. Using the Web for ...................................... sales and marketing may create channel conflict
with the firm’s traditional channels.

13. The ...................................... on Management describes how several companies are detailing
with this problem.
14. ...................................... is an especially troublesome issue in business-to-business electronic
commerce, where customers buy directly from manufacturers.
15. Companies collecting detail customer information over the Web will need to balance
their desire to profit from such information with the need to safeguard individual
.................................

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