E-commerce and Digital Marketing for Business
E-commerce is buying and selling goods and services online, through a business's own website or a third-party platform, rather than in a physical shop.
Method
- Identify whether the question is about e-commerce (selling online) or digital marketing (promoting online), since they are related but different.
- For e-commerce questions, identify the specific benefit relevant to the case, e.g. wider customer reach, lower costs than a physical shop, or being open to customers at any time.
- For e-commerce drawbacks, identify issues such as delivery and returns costs, the need for a well-designed and secure website, or losing the personal, in-person service a shop can offer.
- For digital marketing questions, name the specific channel used in the case, e.g. social media, SEO, pay-per-click, or email marketing, and explain how it works.
- Link the digital marketing channel to a business outcome, e.g. more website visitors, a higher click-through rate, the proportion of people who see an advert or link and click on it, or more sales.
- For evaluate questions on whether a business should move online or invest more in digital marketing, weigh the cost of setting up or running it, website development, delivery, advertising spend, against the likely benefit, reach, cost savings, sales growth, using case detail such as the business's current customer base or budget.
- Remember these are applications of the wider effect of technology on business; where a question is about production or HR technology rather than selling or marketing, apply technology and business instead.
Worked example
Miller's Hardware is a small hardware shop that currently only sells in-store. The owner is considering building an online store and running social media adverts to attract new customers outside the local area. Explain one benefit to Miller's Hardware of building an online store.
- Identify the change: moving from an in-store-only business to also selling through e-commerce.
- Identify the specific benefit relevant here: reaching customers beyond the shop's local area, who could not previously buy from Miller's at all.
- Identify a supporting benefit: the online store can take orders at any time, not just during the shop's opening hours.
- Link this to a business outcome: a larger potential customer base and more hours in which sales can be made are both likely to increase total sales revenue.
- Write the explained answer: building an online store lets Miller's Hardware sell to customers outside its local area and take orders around the clock rather than only during shop opening hours, both of which increase its potential sales revenue beyond what the physical shop alone could achieve.
Practice questions
Try each question, then tap to reveal the answer.
Q1Define e-commerce.Show answer
Answer: Buying and selling goods or services online rather than in a physical shop.
Q2State one benefit of e-commerce over selling in a physical shop.Show answer
Answer: For example, a wider or global customer base, lower overhead costs, or being able to sell 24 hours a day.
Q3Define search engine optimisation (SEO).Show answer
Answer: Improving a website's design and content so that it ranks higher in search engine results without paying for adverts.
Q4State what pay-per-click (PPC) advertising means.Show answer
Answer: Online advertising where the business only pays when a user clicks on its advert.
Q5Give one drawback of e-commerce for a business.Show answer
Answer: For example, the cost of delivery and processing returns, or the need for a secure, well-designed website.
Q6Explain what click-through rate measures.Show answer
Answer: The proportion of people who see an online advert or link who then click on it, used to measure how effective the advert is.
Q7Give one reason e-commerce might exclude some customers.Show answer
Answer: For example, customers who are not confident using computers or the internet, or who do not have reliable internet access.
Exam-style questions
Written in the style of a GCSE Business exam paper, with a full mark scheme.
Explain two ways social media marketing could benefit a small business.
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Bramblewood Bakery currently sells only from one shop, with sales that have been flat for two years. The owner is considering spending 4,000 pounds building an online store with local delivery, and running pay-per-click adverts on social media targeted at nearby postcodes. Evaluate whether Bramblewood Bakery should make this investment.
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See real GCSE Business past-paper questions, with official mark schemes →
Free printable worksheet
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