Internet Marketing

Since its release in 1991, Internet revolution has changed the way companies do business and customers & consumers buy products. Chaffey et. al. (2003) defines Internet Marketing as the use of Internet to achieve marketing objectives and support the modern marketing concept. Internet opens a world of opportunities to the organizations as well as customers. It gives customers a much wider choice of products, services and prices from various suppliers. For organizations, it gives opportunity to widen horizons by entering new markets and offering new services thereby competing with larger business. Internet marketing may be used for business to business or business to consumer environment (Chaffey et al., 2003).

Location-free and lower cost of retailing on Internet has encouraged many retailers to have an online presence. This has given rise to two types of retail brands, entirely new and internet dependent, �Cyber Brands’ and other which are supported by market based presence called �Extension Brands’. Physical absence from the market and lack of consumer exposure is a serious marketing challenge for cyber brands. Whereas extension brands have the advantage previous customer experience and brand image which makes them more competitive. However few cyber brands such as Amazon, Expedia and CDNow have captured a significant market share posing a threat to existing players. Internet shoppers expect much more than lower prices. Cyber brands should focus on building brand awareness and develop a trust-based relationship. Extension brands should take advantage of their brand image and use cross promotional strategies such as giving coupons which can be redeemed online or advertise in store campaigns on their website (Saasksjarvi & Saimee, 2007).

A webpage can be used to promote products & services, provide information about various products, create new revenue streams, Brand building, communication, recruitment, customer service & technical assistance and cost containment. Internal and external communication can take place by uploading newsletters for marketing and company reports to convey the progress of an organization. Many organizations offer technical support and customer services. HP support line page for example, provides problem solving database, look at information provided by other users, information about site offerings, news about new products, technical tips and feedback. This in turn can present a good public image as consumers come across company’s webpage. Company can thus make a global move from a local market. By using internet, data can be changed frequently unlike catalogues and other media which are expensive to be replaced. Marketing research functions such as customer surveys and product interest can be found using web. Online advertising is important so that the website gets noticed by different users. Some commonly used forms of advertising include banners, click through ads or images containing tempting information inviting users to click for more information (Ellsworth J. & Ellsworth M., 1997). Presales support is another tool which is highly valued by a consumer. Online shoppers are often reluctant to buy clothes online because they can’t try it on. Lands’ End attempts to overcome this limitation by letting consumers create a virtual model representing them and then trying it (Mohammed et al., 2003).

A five year study examining the extent of Internet use in UK by Ellis-Chadwick et al. (2002) suggests that retailers are increasingly likely to have a website and offer online shopping, a trend which has been set by the success of Tesco.com, which is now world’s largest grocer online. Certain products in UK increased their online sales more rapidly as compared to others. For instance, alcohol retailers increased their sales by 38% in four years. Similar rates have also been experienced for toys and books. This may be due to the suitability of their products for an internet format. As per statistics gathered by CyberAtlas.com, 58.3% of population use internet in the UK and ranks second in terms of percentage of users (Chaffey et al., 2003).

Retailers in UK must take advantage of increasing number of internet users. Since the location is no more important, products can be provided at lower prices. New entrants can take advantage of financial freedom by developing organization as per logistical demands for a new format. Niche Markets can reach more new customers due to global presence. Hamleys toy shop in London for example, gets majority of its sales on website from US customers. By use of website a retailer can display any number of products. Also firms can collect rich data from customers and personalize service for them. Advantages to consumers include 24 hour shopping. Thus they can shop anytime and no longer have to wait in the queues. Moreover, some goods like music and software can be received instantaneously (Afuah & Tucci, 2003).

Although there are many advantages of online shopping, there are a few disadvantages as well. Online shopping cannot provide the social experience. Most of the consumers like to see, touch and test products before buying. Online distribution doesn’t allow good display of products. Bad quality images and slower downloading time induce consumer to end site. But with ever improving technology, this problem would be eradicated soon. Manufacturers may face conflicts with existing distribution channels if they sell products directly online (Web 1).

Security is one of the major concerns in use of internet for online transactions. From a random sample of 500 people in UK carried out by the Hanley centre found that 69% of the sample had security concern. They further found that 59% use internet for getting information, 36% for communication, 10%