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The present report is evaluating the online business strategy of Cochin stock exchange (www.cochinstockexchange.com). A stock exchange provides services for store brokers and traders to trade in stocks, bonds and other securities. The Cochin stock exchange is one of the regional exchanges in India where the National stock exchange (NSE) and the Bombay stock exchange (BSE), are the prominent ones. It was established in the year 1970 and currently has more than 508 members and 240 listed companies. The Cochin stock exchange was one of the initial stock exchanges in India to provide online trading facility and other related online services to the members. During the 1970s and 80s, a number of regional stock exchanges were set up for organisations to enter the capital market and source finances from small-scale and large-scale investors. During this period, the lack of online or computer-based trading meant that regional stock exchanges had an increasing role to play in the development of the economic as many small-scale local organisations in different regions wanted to raise cash for their growth, and they could not go to the financial capital of India, where the Bombay stock exchange was situated. One of the reasons for the emergence of regional stock exchanges was that the organisations were able to raise money from investors and individuals only from their own regions, because these companies were often small-scale and working on a regional basis. Their presence was limited to certain regions and information about their prospects and opportunities were limited across a national level. This was the period when there were no websites or information was not available to investors located in far-off places about the growth opportunities of regional companies. Moreover, investors were willing to invest their money in organisations which were located in their own regions, because the information about these companies was easily available.
But with the growth of online trading facility and the availability of information about organisations which were working only on a regional basis and the expansion of such small-scale organisations into nationwide companies provided the investors with a platform to invest in different companies with different potential opportunities. Although the company was one of the initial stock exchanges in India to provide services such as computer trading, online listing, online trading during the 1980s the centralisation of the financial market in Mumbai, with the emergence of the National stock exchange (NSE) and the ensuing competition between the NSE and the BSE marginalised the company. There has not been any significant growth for the Cochin stock exchange from 2000 onwards, with almost all the companies in the region moving to the financial capital of India, and either the National stock exchange or the Bombay stock exchange to source finance and get listed. An important characteristics of the Cochin stock exchange is that it itself is a member of the National stock exchange, which means that the members and the traders can trade in the organisations listed in the National stock exchange. The National stock exchange is the leading stock exchange in India, and almost all the brokerages and investors are trading through either the National stock exchange or the Bombay stock exchange. With the development of online trading systems, the relevance of regional stock exchanges have diminished, but there is still possibilities for regional stock exchanges to cater to the needs and requirements of small regional companies in assisting them to raise capital from regional investors who are interested in small regional companies and have specific information about them and their growth opportunities.
The present report is evaluating the online business strategy of Cochin stock exchange and whether the company was able to develop its brand through various methods, the characteristics of social networking in line with the online business model and the customisation it has done for the customers.
In the context of online business, a brand can be considered as a differentiator from competition, can be used as a competitive tool in distancing, an organisation from that of the competition and establishing an identity (Kidd, 2007). The brand value of a website or an organisation can be evaluated based on the recognition of the name, profitability, revenues, and even customer perception (Heinemann, 2000). Branding is often considered based on a narrow representation of names or Rhino associated with an organisation’s products or services, but according to de Chernatony (2003), a brand can be considered as “an identifiable product or service act amended in such a way that the buyer or user receives relevant unique added value is which match the needs most closely. Its success results from being able to sustain the added values in the face of competition”. This definition indicates that the brand is dependent on customer perception and is influenced by the value addition, provided by the organisation on a sustainable basis.
It is necessary to understand the propositions that an organisation can develop in order to position their brands in the online world. According to Chaffey (2008), the promise of convenience which provides a convenient experience, the promise of achievement, which provides assistance to customers in achieving their goals and the promise of self-expression and recognition in providing personalised services is important characteristics to be represented by online business organisations.
When analysing the aspect of convenience factor provided by Cochin stock exchange, it can be seen that there is an online system of trading, which the organisation has developed and is provided as a link within the website and in the homepage. Online trading is the most important aspect of convenience, which a website or a stock exchange can provide to the investors even though the direct customers of a stock exchange are organisations and members who are listed on the company. The services provided by the stock exchange are for the organisations to list their companies, with the stock exchange in order to raise money. The stock exchange itself can be considered as a link between the organisations who would like to collect investors’ money and that of the individual investors. Hence it can be considered as an agent between the organisations and the investors and the service to the organisations is in connecting the individuals with that of the companies for them to invest in those organisations. In this respect, providing convenience to the investors by allowing them to make investment decisions is an important service to be provided by a stock exchange. When analysing the service provisions of and the necessity of developing a brand, it can be seen that there are different actions which an organisation can take in order to provide convenience, achievement and personalisation of services to the customers.
As indicated before the convenience to the customers can be developed by creating a platform of online trading, which the Cochin stock exchange has done. Although there is an online trading facility, the convenience and the personalisation provided by this facility could not be directly verified from the website as there is no further information provided. Whereas when comparing this with the competitors such as the National stock exchange on the Bombay stock exchange, it can be seen that much more relevant information and data is available in those websites, which attract the customers and investors. One important aspect that any stock exchange needs to provide is the information about the companies listed in the stock exchange, the movement of stock prices, the advantages in investing in those companies through the stock exchange, etc. But from a mere glance of the website, it can be seen that it is only providing a fraction of the information about the organisation, the companies listed in the stock exchange and the advantages of investing in them. When comparing with that of the competition. One of the important parameters of building a brand through the site is by providing information to the customers about the convenience, personalisation and the ability of providing services to the customers so that their goals can be achieved (Chaffey, 2008).
Figure 2 – Screen shot of NSE
Figure 3 – screen shot of Cochin Stock exchange
A comparison of the website of Cochin stock exchange and the National stock exchange indicates the wide differences between the philosophies of branding adopted by both the organisation. In the above two figures, the homepages of the National stock exchange and that of Cochin stock exchange is provided which indicates the wide difference between the two organisations. While the website of the National stock exchange provides much more relevant information, easily available links, indicates that convenience and personalisation for the investors and the members, the website of Cochin stock exchange is only acting as a platform of information delivery but at a very insignificant level.
Figure 1 – Cog wheel model of building and sustaining brands
(Source – de Chernatony et. al., 2003, page 220)
The above model was developed by de Chernatony et. al., (2003), for building sustainable service brands and is often utilised in the analysis of online brands. The above model is also utilised in developing a brand, where the important aspects are an analysis of the external and internal opportunities and capabilities, definition of the brand and development of the concept, feasibility of the brand, ensuring internal commitment, positioning and differentiation, developing internal and external resources, and finally the operationalisation.
A social networking service is an online service, platform or site that focuses on building and reflecting of social networks of social relationships among people who share interest or activities (Columbus, 2000). The utilisation of social networking platform which bring together individuals who share a common interest and are able to promote their advantages by integrating them with the services provided by the organisation is a common thing. Many organisations are marketing themselves on the back of social networking platform such as Facebook and twitter as these are the platforms through which the individuals who share a common interest are connecting with each other. The introduction of social networking platforms in marketing in marketing the organisation’s products and services have become increasingly commonplace. The social networking platforms, not only provides the individuals who are utilising the services and products of an organisation to connect with each other but also for the organisation to connect with that individuals (Chaffey, 2008). The social networking platforms are viewed by the individuals as a platform for them to connect with other like-minded individuals and do not truly represent a marketing based platform. This characteristic of the social networking platforms are utilised by organisations in furthering their branding and marketing.
Analysing the website of Cochin stock exchange, it can be seen that it is not integrated with any kind of social networking platform such as Facebook, twitter, or even providing feeds to their customers. But when comparing it with the competition, the National stock exchange has integrated with the social networking channel of Facebook, and the members of the companies are able to connect with each other through this channel. The social networking channel provides the organisation with a connectivity based on social relationship and the development of the relationship, which is changed from that of the marketing based relationship. In order to attract the customers and develop a relationship, it is necessary for the Cochin stock exchange to integrate with social networking platforms. But one important aspect of the regional characteristic where the stock exchange operates is that many of the individuals and organisations may not be members of any kind of social networking platform. Social networking is still a developing trend in India and is not yet become a platform or a channel through which organisations are able to directly connect with the customers and develop a relationship. Although the participation of individuals and the customers in social networking channels may be minimal at the present moment, it is increasing at a rapid rate and in order to connect with more and more customers than individual investors, it is necessary for the organisation to integrate a social networking platform with the website. Through this social networking platform, the organisation is able to connect with the individuals and develop a relationship, provide information through the particular platform and develop the customer base.
Mass customisation is the customisation and personalisation of products and services for individual customers at a mass production prize. The concept was introduced by Stan Davis and developed by Joseph Pine. One of the benefits of online shopping is that the individuals are able to enjoy personalised offers through a website tailored to suit their individual preferences, which is the customisation for personalisation (Harwood, Goncalves and Pemble, 2010). Anything that is customised has been altered to suit the specific set of requirements and through the development of the online systems, it is now possible to customise or personalise the services provided by an organisation. The purpose of customisation is to tailor the content, structure and services of a website to match each visitor’s interest than individual needs (Heinemann, 2000). The personalisation of a website can be based on the structure, content, online recommendations, advertising and promotion (Chaffey, 2008). Customers are able to select standardised components and products and services that can match with their requirements (Heinemann, 2000).
When considering the business proposition of Cochin stock exchange it is acting as an intermediary between the organisations and investors. Hence there are two types of individuals who utilise the services of the company and the requirements of these customers would be totally different. An organisation who is a member and is listed on the stock exchange would like to utilise the services available through the online system such as tracking of the stock prices, uploading new information to the investors and able to manage their listing within the stock exchange. The whole range of such services required by an organisation who is a member of the stock exchange can be varied and could not be easily identified. One of the important aspects of the stock exchange is that any organisation who would like to be a member or list its organisation through the stock exchange would like to get necessary information. The Cochin stock exchange provides this information on the website through the link of membership requirements. It is also necessary for the organisations to properly connect with the company through the online channel and a grievance redress platform is also provided by the website. Because in stock exchange provides a list of those organisations which are listed with and are members of the stock exchange, and also provides the organisational structure of the stock exchange. One of the important functions of the Cochin stock exchange is that it acts as a depository participant for the customers and the customers are able to convert their shares into online deposits through the stock exchange. But when comparing this level of services with that of the competition and the services provided by the National stock exchange and the Bombay stock exchange it can be seen at these companies are offering much more integrated platforms for the organisations through the website. The National stock exchange provides a platform for the organisations which are listed on it to provide tailored news services, messages etc. to the customers or the investors, which is a necessity in order to have adequate communication between the organisation and its investors.
When considering the services provided to the investors, the main aspect is the services provided in terms of online trading and the messages from the securities and exchange board of India (SEBI) about trading and investing. Significantly, the Cochin stock exchange is also providing education and training to investors and has set up an institute for small-scale traders and investors. This is an important characteristic, which although is provided by other stock exchanges and is relevant, based on the fact that financial literacy in India is very poor. Many of the investors look upon trading in stocks and securities as a risky investment option and educating them on the possibilities of profit-making from trading and investing is an important aspect when developing new customers. From the point of view of Mass customisation, this kind of education services is providing a new platform for individuals who would like to get training related to investing in the stock market. But some of the serious disadvantages of the company is that, the design of the website is conducted in a poor manner were in the store prices are not directly provided on the website, but the investors needs to log into the account in order to get the information. An investor who has come to the website for the first time will not be able to see the stock prices of the companies listed in the exchange and would not be able to identify the potential investment opportunities. The competitor websites provides the movement of the stock prices of the companies listed in those exchanges in an easy manner.
The analysis provided that with respect to branding, the organisation has not developed an adequate branding philosophy, where it is providing significantly lesser services to the customers in terms of providing convenience and personalisation. The Cog wheel model of developing a brand can be utilised in developing the brand personality and identity of the website as indicated. With respect to social networking, no social networking platforms are integrated with the website and this is a serious disadvantage from the point that social networking is catching up as a system of committing between individuals and for the organisations to market their services and products to the customers. In terms of Mass customisation, even though the company is providing some form of customised services to its two sets of customers such as the organisations and individual investors, serious deficiencies exist when comparing it with the competition.
The cog wheel model developed by de Chernatony et. al., (2003), for building sustainable service brands can be utilised in developing a brand, where the important aspects are an analysis of the external and internal opportunities and capabilities, definition of the brand and development of the concept, feasibility of the brand, ensuring internal commitment, positioning and differentiation, developing internal and external resources, and finally the operationalisation. With respect to Cochin stock exchange, the external and internal opportunities and capabilities are in the areas of providing services to small scale regional organisations which are not present on a nationwide level and provide them an opportunity to raise cash from regional investors who are aware of the opportunities of the companies. Hence the main customers of the regional stock exchange such as Cochin stock exchange would be the small scale regional organisations and investors. The development of the concept and the identity of the brand should be in line with the potential capabilities and the resources. The Cochin stock exchange needs to evaluate the internal commitment within the organisation in developing its brand as at the present moment it has stagnated without any growth momentum. It is essential that the Cochin stock exchange has to position itself as a regional stock exchange, catering to the needs and requirements of the companies and investors in the specific region without going in foreign direct competition with that of the larger national players. From the perspective of developing a brand identity, it is necessary to redesign the website taking into consideration an introduction of a social networking platform and providing much more customised opportunities to the different sets of customers. Although the two main sections of customers would be the organisations listed in the company and the individual investors, the opportunity available in terms of educating and training potential individual investors is also significantly high. With the training and development of such individual investors, the company can add more customers, who are the investors in the companies listed in the stock exchange.
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