A similar picture is emerging in the market structure of UK business electricity retailers as witnessed within the supermarket sector especially between the competitive practices being undertaken. Just like supermarket chains, business electricity retail is dominated by a few major players who share some 96% of the total market. However, rather than compete head-on for market share, they appear only compete for a small percentage of customers at the peripherals. They attract these new customers from each other by offering competitive ‘new customer only’ introductory rates, quickly reverting to standard rates (and sometimes more), when contracts roll-over after the first year or so. These practices are not dissimilar to the loss-leaders used by supermarkets to attract customers into the store where they are likely to spend much more on non-discounted goods.
Although showing very similar market structures now, these sectors got to this position in very different ways. The grocery sector was originally fragmented with no major players really dominating until the emergence of supermarket chains. Whereas, electricity was monopolised by regional suppliers and de-regulation simply served to reduce the number of suppliers still further, encouraging competition only amongst each other nationwide. On one hand we have a market which was previously competitive with many suppliers that have been squeezed by ever-increasing concentration. So much so that the top three supermarket chains now have over 50% of the total market, with the market leader alone claiming 30%. On the other hand you have a market where efforts to expand the number of suppliers have been stifled by the barriers to entry and the sheer power of the incumbent suppliers. The jury is out on the positive or negative effects of supermarket dominance, however, whatever the rights or wrongs of where we are now, no one can deny that those who now dominate have arrived at their position through their own efforts and ingenuity. But electricity is a different matter. Power has been bestowed upon the ‘big six’ major suppliers such as British Gas, Powergen and Npower to name a few, irrespective of who actually owns them today. And one might argue that power which has been gained in such a way reduces the drive or even the necessity to compete to win. Evidence suggests that in the 90% or so of the business that don’t switch year on year price patterns for each supplier are extremely similar. One major player makes a marginal price move and the others simply follow over time. The argument which supports the view that supermarkets actually create competition and push prices down by their huge economies of scale and purchasing power is also one which is somewhat lost in the electricity arena. Many would view the big six as inefficient legacies of the old system who are protected from real competition by the extremely tough barriers of entry.
Indeed, some of those smaller suppliers who have managed to scale these barriers have been able to demonstrate far more efficiencies aided by intelligent investment in technology. Unlike the supermarkets, there are no real efficiencies related to scale as most electricity retailers must turn to the same wholesale market for their supply. Some can cushion any market turmoil by relying on their up-stream activities when the retail market gets tough – a luxury which is simply not an option for the smaller supplier. But businesses needn’t switch to the smaller supplier out of sympathy nor from fear of what might lie around the corner should the major players succeed in driving them out completely. They should switch simply because they are now able to get a much better deal and a deal with longevity. The smaller supplier with a plan to mimic the big six in order to attract new customers would be committing commercial suicide. What would be the point of fighting so hard to win new business and then letting it slip away at renewal? Businesses can save significant amounts of money by switching to the smaller independent supplier now and can relax in the knowledge that they will continue to save money and receive an exemplary service into the bargain. Only then will the big players be forced to sit up and take note and who knows, we might just see the emergence of a truly competitive electricity sector in the future.
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By Lama Kalla © 2006 So you are starting out in Internet Marketing and are baffled by the jargon. You don’t know your SMTP from your FTP or where to put your POP3. Internet Marketing has all sorts of jargon associated with it that confuses many new and veteran marketers. So how do you decipher this jargon and translate it into a language you can understand? This article will help you to understand some of the common terms in Internet Marketing. And now some Jargon beginning with A … Ad Tracking Ad tracking is simply the process of tracking the response from your ads. Why? Because you need to know where your traffic is coming from and how it is converting.
This is particularly important if you are paying for adverts – you need to know which adverts are bringing you in business so you can keep them running whilst stopping the adverts that are not bringing in business.
How do you track your adverts? Well you could try and do it manually, but it is likely to be so time consuming that it will be a complete nightmare.
The alternative is to use some ad tracking software. There are lots of scripts and utilities available for this. Using software will make it easier for you to determine which adverts are bringing you traffic and where to spend your advertising budget for maximum effect. Affiliates Affiliates is a big thing in Internet Marketing and it can be a bit difficult to understand it at first. There are really two terms here – Affiliate Manager and Affiliate. An Affiliate Manager is someone who runs an Affiliate Program and recruits Affiliates … you following me? Everyone knows what McDonalds is – a restaurant, no ethical or nutritional debates here – it’s basically a big franchise. Mr McDonald sits in his ivory tower counting his money whilst Joe Bloggs runs a McDonalds restaurant. Mr McDonald is the Affiliate Manager – he owns the franchise and sells rights to other people (the Affiliates) to run a restaurant. In order for them to do this he gives them resources such as training, knowledge, equipment and so on. As an affiliate, you can expect your affiliate manager to give you useful tools you can use to sell his product.
Autoresponder An autoresponder does exactly what it says on the tin – it responds automatically! To what you may ask – to email! This is how those crafty Internet Marketers fill up your inbox whilst sitting on the beach drinking cocktails! An autoresponder allows you to set up a series of messages to be delivered to a recipient over a time period determined by you.
It is a fantastic tool and one you should definitely invest in – remember, you are in Internet Marketing to make money and to have more time – an autoresponder will save you lots of time. These are just a few of the many definitions and the useful links and information you will find in Lama Kalla’s Internet Marketing Jargon Buster. You can download your copy free from http://www.StopInternetMarketing.com/downloadIMG.htm
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If you’re old enough, think back two or three decades. Everyone owned one of these and you wanted one even if you deny it today. You could just imagine yourself twisting and turning the item trying to unravel its mysteries. It was both mind numbing and time consuming, but always left you with the urge to come back and try it again. Some would get frustrated with the square shaped toy and simply remove the stickers and place them where they wanted. The Rubik’s Cube was a phenomenon that captured the world’s attention. Children and adults spent hours on this low cost entertainment. It became a part of a pop culture phenomenon. I would wager that many of you still have a Rubik’s cube somewhere in your belongings, perhaps in a box in storage or maybe sitting on the desk in your office. Maybe your cube even sports stickers that curl on the end from too many ‘replacements’. Site promotion tools may be described as the Rubik’s Cube of online marketing. Most of the tools you can use to promote your site may not cost much, but like the Rubik’s Cube may take some time to learn.
Site promotion tools can seem like a six-sided cube with multiplied thousands of possible combinations that could lead to the successful completion of your promotional endeavors.
Site promotion can seem a bit intimidating because it appears complicated.
Sometimes you have to be willing to settle for small victories like three greens in a row or better yet one side of the cube that is all the same color. However, once this victory is achieved you will want to keep working the combinations to find an even greater level of success in your business. Even the Rubik’s Cube had manuals available that could help the serious Cube student learn how to find the right combination for success. As a cyber store owner your online visitor will not see your proverbial site promotion cube, they are simply drawn to the success you’ve been able to achieve as you twist, turn and think about what site promotion tools will help you best achieve your objectives. Perhaps this is why when it comes to site promotion there have been so many different success stories and none of them take the exact same path to success. They simply twisted the site promotion cube until they found a combination that worked for their business. I suppose the owner of the site promotion cube could leave it fully intact with no twisting and turning, but the game doesn’t actually begin until that first twist is taken – then there is no looking back. As a business owner you want your site to succeed and you can’t do that if you can’t generate traffic to your site. To get to this place of success you must work toward marketing and site promotion strategies.
So if that site promotion cube has been sitting on your desk gathering dust perhaps it’s time to do the twist.
If you are the owner of a business enterprise with operations on the Internet and World Wide Web, you likely are interested in finding the most effective methods of marketing your business enterprise on the Net. Obviously, the better your business is marketed and promoted, the more customer or client traffic that you will have entering and visiting your website. In the end, high traffic generally translates into more sales and more profit for your business enterprise. One method that you might want to consider employing when it comes to the promotion of your Internet based business enterprise is the utilization of what is known in the field of Internet marketing as directory submission. Directory submission is the process through which a website is placed on a listing of similarly situated Internet venues.
Directory submission is a process that will aid consumers seeking the goods or services that you offer through your web based business in finding your online operation. More often than not there is a charge associated with directory submission. That is if you are to use a directory submission service that will actually reach a significant number of consumers, you are going to need to pay for the service. When it comes to directory submission services, there is something to be said for the saying that you don’t get something for nothing. Many of the major companies that are involved in Internet marketing, many of the major players, offer directory submission services. By connecting with these reputable companies, you will be able to work to develop a positive and meaningful marketing program that will include directory submission in the entire, overall mix. In the end, even though there are costs associated with directory submission in most cases, you should consider such costs associated with directory submission campaigns to be an investment in your business. By linking up with a reputable and reliable directory submission service, you will be able to increase the traffic to your Internet based business enterprise. And, as has been mentioned previously, you will be able to increase your client or customer base, increase your revenue and increase your profits, both in the near and distant future. In other words, through the proper, integrated use of directory submissions, you will be able to set your business on a course towards true and lasting success.
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