I agree with this statement. Consumers now have the power to look at a number of similar products and prices in a short time frame, and therefor can choose the better deal. This I beleive will ultimately lead to a decrease in prices as businesses compete for the competitive advantage.
2) Disintermediation will ultimately lead to channel conflict. Discuss.
Disintermediation is "cutting out the middle man". In economics, disintermediation is the removal of intermediaries in a supply chain. Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet. One important factor is a drop in the cost of servicing customers directly. Disintermediation initiated by consumers is often the result of high market transparency, in that buyers are aware of supply prices direct from the manufacturer. Buyers bypass the middlemen (wholesalers and retailers) in order to buy directly from the manufacturer and thereby pay less.
Channel conflict occurs when manufacturers (brands) disintermediate their channel partners, such as distributors, retailers, dealers, and sales representatives, by selling their products direct to consumers through general marketing methods and/or over the internet through eCommerce.
Some manufacturers want their brands to capture the power of the internet but do not want to create conflict with their other distribution channels, as these partners are necessary and viable for any manufacturer to maintain and gain success.
According to Forrester Research and Gartner, despite the rapid growth of online commerce, an estimated 90 percent of manufacturers do not sell online and 66 percent identified channel conflict as their single biggest issue hindering online sales efforts. Nowadays, E-commerce wins in popularity as second distribution channel, because of the low overhead expenses and communication costs. Their advantage is at the same time their disadvantage, since consumers can communicate less expensive and more easily with each other too. Therefore, price and product differentiation is getting tougher than ever.
(http://en.wikipedia.org/wiki/Disintermediation & http://en.wikipedia.org/wiki/channelconflict)
3) What are the five elements of promotion and what are some examples of combining online/offline promotion?
The five elements of promotion are:
Advertising - Any paid presentation and promotion of ideas, goods, or services by an identified sponsor. Some examples of advertising are radio, television, emails, web pages and catalogs.
Personal Selling - A process of helping and persuading one or more customers to purchase a good or service. Examples of personal selling are telematketing and sales presentations.
Promotions - Are incentives designed to stimulate the purchase or sale of a product. Some examples of promotions include, coupons, samples, and exhibitions.
Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples of public relations include newspaper and magazine articles/reports and TVs and radio presentations.
Direct Marketing - The aim of direct marketing is to create one to one relationships with the organisations target market. Direct marketing can come in the form of post, email, telephone calls and mail order.
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