Page 190 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 3 Marketing

CASE STUDY E-commerce in Brazil

E-commerce is booming in Brazil. Brazil’s e-commerce total revenue for 2011 was over $11 billion. In total, 32 million
consumers in Brazil bought at least once via the web in 2011.
The Brazilian start-up OLOOK is a good example of success in the fashion industry. OLOOK uses technology

to build up the profile of a client who chooses her colour and style preferences from pictures of fashion items and
celebrities. The website was launched in November 2011 and had over 400,000 users signed up in less than six months,

with more than 1,000 items sold.
Source: Adapted from www.forbes.com/sites/ricardogeromel/2012/03/23/brazils-e-commerce-is-booming-record-breaking-
fi gures-in-2011-growth-of-26-earnings-of-11-bi

TASK
a What is meant by ‘e-commerce’?
b Identify and explain one advantage and one disadvantage of e-commerce for OLOOK.

Using the internet and social networks for promotion

Apart from e-commerce, business websites have other uses. They can be used to
promote a business and its products. In addition to its own website, a business may
pay to place banner adverts, or ‘pop-ups’, on the websites of other businesses. Th is
can advertise the business especially if the ‘pop-up’ or banner is placed on a related
product’s website; for example, a mortgage provider may pay to have a banner
advert on the website of a builder of houses for private ownership.
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Recently, businesses have seen the benefit of using social networks such as

Facebook, Twitter and YouTube to promote their business. This is known as social

media marketing. This gives businesses access to a huge number of potential
customers from around the world.
ACTIVITY 13.5

Read the following article about internet advertising.

Spending on internet advertising topped Unlike with traditional TV campaigns,
$100bn for the fi rst time last year. This businesses can target online advertise-
represents 20% of the total amount ments at the right sort of people, using
sophisticated data tracking technology.
spent on all advertising.

1 Calculate the total amount spent on advertising last year.
2 What is the benefit to businesses of being able to ‘target online advertisements at the right sort of people’?
3 Apart from the advantage of online advertising mentioned in the article, identify and explain two other advantages of
using internet technology to promote business.

TEST YOURSELF
1 What is meant by the term e-commerce?
2 ‘The benefits of e-commerce outweigh the costs’. Do you agree? Justify your
answer.