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Branding Laws · Internet Marketing · eMarketing · Internet Advertising · Online Branding |
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Branding Laws · Internet Marketing · eMarketing · Internet Advertising · Online Branding |
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Strategic Issues in using IT & the Internet for Marketing
Strategic Issues in using IT & the Internet for Marketing
The purpose of the present study was to investigate the use of the Internet to market goods and service and what impact IT and the Internet has had and also the effect it is going to have. This paper describes the effects IT and the Internet has had upon Marketing as a whole particularly upon the growth of web based marketing. This paper also emphasises the connection between infrastructure technologies and the resulting change upon e-marketing strategies. Further the paper argues the fact that interactivity is becoming common grounds in today’s marketing and also the impact which storage of personal data can have upon the society in terms of privacy and also consumer behaviour.
Electronic access:
http://www.wlv.ac.uk/~c9913484/im.doc
In recent years it has become evermore apparent that the Internet holds great capacity for today’s corporate world and this is what has driven the heightened levels of interest into marketing on the World Wide Web. Audiences are vast, businesses of all sizes are aware of the potential marketing their brand and or product can have on the Internet. According to an e-Marketing report done by Morgan Stanley Dean Writer, Russel, M. Keith, R. (2000), the Internet is the perfect direct marketing tool. Also the Internet’s interactivity and tracking ability allows customisation of marketing tools at minimum cost especially in countries which have good telecommunications infrastructure, Thompson, s. Tan, j (2002).
According to L-SOFT. (2003), many companies have turned to more cost-effective methods such as e-mail marketing to reach their customers. Although a relatively new marketing channel, more than $6.8 billion will be invested in e-mail marketing resources by 2006. However, though methods of e-marketing are evolving as rapidly as new technologies are developed many firms are still struggling to even get started. Nelson, R. (2001).
With the drive and use of creating awareness over the Internet, comes the requirement of the marketing medium. The marketing scope needs to be adjusted within the capacity of business and development environment. Importantly the use of multimedia is also associated with marketing, when marketing is assessed its requirements revolve around the use of sound, animation along with the various text, colour, etc. as motion is the key in getting attention however too much can do the exact opposite. Further develops which have pushed the drive for web marketing is interaction, making the user more involved with a certain application on the internet will make more of an impact. Which brings the term ‘web experience’, which can be established as standing for, in terms of the user, an interactive, interesting and gleaming presentation of certain information. A lot of these web experiences are created using dynamic contents of web pages, examples of which are Flash, or rather Active X and Java contents.
Information technology advances and the Internet has played a vital role in the marketing of firms abroad and making it possible for companies reach a global market place. As according to Samji, A. Gray, S. (2002) organisational attitude towards consumer and business behaviour is changing to take into account of the flexibility e-marketing can offer in catering for a variety of consumer and business profiles, which may not of been possible in conventional forms without as not being cost effective.
Though stated by Jayawardhena, C. et al (2003), although firm do adopt the variety of online marketing communications no firm has abandoned its traditional communications in favour for an exclusive web presence and also it argues that it is widely recognised that web site traffic is largely dependant on offline marketing communications.
Adam, S. et al (2002) as also stated that many organisations have adopted the use of IT and the Internet for marketing, however they identify an inconsistency across the world of strategies and the depth of e-marketing adoption. Though it is just to state that this may be due to social and technological advances.
Figure 1.1 Internet as a Portion of Total Advertising
In figure 1.1 above, it can be seen that the advertising as a portion of total advertising is predicted to be 14% by the year 2005 compared to 3% in the year 1999, as stated by Russel, M. Keith, R. (2000).
Adam, S. et al (2002) studies further state that the levels of adoption of connectivity and online transaction levels between countries has an effect upon the economy in general. Thus making the connection between online activity levels and country economies. In essence this can be seen as the effect of marketing of online activities such as shopping and communications
Research by SMITH, P. et al. (2002), mentions that smaller businesses or rather SME’s find it cheaper and cost effective to use the Internet as their marketing medium. E-marketing has provided businesses with the advancement that businesses required for integration upon common interest
Relationships between organisations
Study by Rose, E. (2001) brings to attention the fact that organisation are coming together in storing of information based upon consumer spending and browsing. This reflects the business change with team strategies being adopted global marketing firms are teaming up and collaborating upon sharing information gathered, though this also reflects the fact that many organisations have agile structures where by firms and departments have non-permanent collaborations with external organisations.
Study by Cox, A. et al (2002) highlights that the Internet provides businesses with opportunities to reach out to all types of organisations be they small or large corporation which is seen as a huge advantage of incorporating e-marketing into a business marketing strategy. Thus major marketing firms are not just adopting team up straegies though all sizes are taking advantage of facilities that other companies can offer upon mutual grounds that reflect integrations of business activities. This point is further expressed as Miller, J. (2001), states that relationship management has regained its significance, in terms of meeting with the use of IT and the Internet to communicate effectively with clients and amongst businesses. Though in addition to that Adam, S. et al (2002), states that the use of the Internet as a marketing channel is much lower across some countries than expected, however UK firms are more likely to use the Internet for relationship management.
STRAUSS, J. (2001) stipulates that fact that due to the fact the nature of marketing upon the Internet needs new and creative techniques to fall part of e-marketing strategies, this has lead to much investments in rich media and use of specialised e-marketing businesses. Further Gauzente, C. Ranchhod, A. (2001) state that due to the changing practices and the advantages that e-marketing has offered, and yet to offer, the commercial world has lead to many companies achieving their goals. Allowing for investments within companies and to the richness of their e-marketing techniques and deliverables.
Many changes have been adopted by companies to take into account of what the Internet has to offer in terms of marketing be they multi-national corporations (MNC) or small and medium enterprises (SME’s) Fiore, F. (2000) Studies indicate that strategies to attract customers and to relate to customers have significant positive relationships to online brand equity. Which emphasise the point that the internet provides marketers t he ability to target ads, regardless of what site a user is currently visiting, is the backbone of several Internet advertisers’ strategies. , RUSSEL, M. KEITH, R. (2000) Strategies investigated are such as, Acquisition Retention, Permission List Marketing Customer Relationship Management, and Sponsored Newsletter Corporate Newsletter etc.
Though Warden, C. Lai, M. (2000) state that although the World Wide Web provides international penetration, the international markets are still segmented by national, cultural and social factors. For which the customisation of e-marketing strategies is so important though it is just to say that they do not provide accountability for these social and cultural differences which need to be addressed by the marketing professional.
Dave, C. (2003) Attributes of products or services can be used in the advertisements to position the product in the mid of the consumer according to the attributes or to change the perception of the brand that consumers currently hold.
The Internet has provided marketing professionals with another tools, which is a digital global network that can be used for various marketing purpose. Thompson, S. Tan, J (2002) state that an important factor of the Internets is establishing an online brand early on, as there study identifies online retailer branding and trust play an important role in Internet markets, thus it is vital for companies to establish an online brand in order to differentiate themselves and gain a foothold in cyberspace. Nelson, R. (2001) Methods of e-marketing are evolving as rapidly as new technologies are developed however many firms are still struggling to even get started.
Thompson, S. Tan, J (2002) study raises the digital marketing framework introduced by Kierzkowski et al (1996) which resolves around five essential factors for success in digital marketing. Online branding potential is related also to financial growth, which highlights the benefits of e-marketing. The five elements in the framework are namely, attract users, engage users, learn about their preferences and, lastly, relate back to users to provide customised interaction. This study identifies many issues raised thus far, and further to be discussed. Though two aspects, which are rising commonly, are interactivity and customisation or rather interaction based upon user preferences.
Source: Thompson, S. Tan, J (2002)
Strauss and Frost have identified Internet advertising being consisting of two components, (1) offline traditional media advertising e.g. T.V., radio, newspapers and (2) online advertising e.g. paid for spaces on a web site or e-mail, such as banner ads, dynamic media, buttons, poups etc, Strauss and Frost (2000). The proportion of dynamic objects has been growing at a fast rate in the World Wide Web. In the e-commerce environment, these objects form the core of all web transactions. However, because of additional resource requirements and the changing nature of these objects, the performance of accessing dynamic Web contents has been observed to be poor in the current web services.
It is obvious to state that the Internet has and still is growing at a rapid pace however elicited by Thompson, S. Tan, J (2002) the phenomenal expansion of computer networks, notably the Internet has resulted in the rapid proliferation of electronic commerce (EC). Also technological development such as stated by Russel, M. Keith, R. (2000) mention that rich media, brought on by broadband may lead to higher response rates, better branding capability, and more creative possibilities.
Along with the rapid increase of technical advances and developments Gauzente, C. Ranchhod, A. (2002) study states that marketing practices are currently seeing to be busy integrating the potential of information and communication technologies through the utilisation of databases and Internet marketing.
As stated by Fiore, F. (2001), and by the marketing term online dictionary, Rich media is an Internet advertising term for a Web page ad that uses advanced technology such as streaming video , downloaded applet s (programs) that interact instantly with the user, and ads that change when the user's mouse passes over it.
Originally when rich media started it was intended to bring some effectiveness to advertising banners with motion and more colour however according to Fiore, F. (2001), many attempts to offer Internet users a richer multimedia experience failed, due to limited bandwidth. Further the text states that many companies turned to streaming media, which gave the boost that rich media saw in the last few years.
There is a great increase of the focus applied on web based marketing, however, it is becoming apparent, with the amount of redundant and repetitive material on the web, that web marketing is becoming less and less effective. Developments in the field of web marketing have seen the introduction of multimedia and especially rich media advertising, and not only in the form of banner adverts rather in fully integrated multimedia and interactive applications for the sole purpose of promotion and further in achieving a higher level of user experience.
When defining the rich media term it can be described as a Rich Internet Application that takes advantage of interaction and client technology (dynamic contents) to offer more intuitive, responsive and effective user experiences.
Also developers of rich media web applications need to cater for all bandwidth or rather the likely bandwidth, which will be used. As at the moment there is an increase towards broadband nonetheless a fair amount of web users still use a 56k dial up connection to view contents of sites. According to Airgid, K. Reindel, S. (2002), as higher bandwidth like broadband become more prevalent the Internet media services will be able to deliver richer media.
Further it can be said, according to Airgid, K. Reindel, S. (2002) studies that animated banners are becoming ineffective and that studies have shown users ignore them and the click through rate is so low that spending huge amounts of monies on them is not justified anymore. Which reflect that Internet users are becoming more demanding in the quality of the material on the Internet.
Quality of service is also an issue as ISP’s interconnections may not be able to deliver high impact complex multimedia integrated application over the web, as home based users rely on internet service provides to provide a quality service. The future relies upon a great deal of planning and collaboration between ISP and Internet organisations and governing societies to revise the configurations of the Internet infrastructure and protocols.
Today’s consumers are very accustomed to the Internet and are beginning to use it for more and more activities as according to Jayawardhena, C. et al (2003), the Internet has become an established communication and research medium with penetration of the UK been placed at 35.6 per cent. Though also Russel, M. Keith, R. (2000) state that the penetration has yet a long way to go and also once the Internet household penetration becomes more ubiquitous, the average customer will not be shocked that there is e-commerce going on in their e-mail box.
Further, Jayawardhena, C. et al (2003) also state that e-consumers have a significant higher level of control in the purchase process and are motivated by this in using the Internet, which can be manipulate by marketing firms and departments within organisation.
A factor, which is not discussed within Jayawardhena, C. et al (2003) study is the characteristics of risk. Kim, D. et al. (2002) states that consumer intentions do not correlate with original purchase orientations rather online purchasing behaviour depends upon consumers’ perceptions of risks and benefits and consumers’ characteristic such as lifestyles that are mediated by these perceptions. It can be just to state that many people still today are not fully convinced that the internet is safe to use as a form of purchasing goods and services and that also increased change in this can be a reflection upon the marketing of cheaper goods and services than the high street.
In assistance of the convincing of consumers to shop on the Internet is branding, consumers trust brands on these grounds studies by Goldsmith, E. Lafferty, B. (2002) state that visiting websites appeared to increase aided recall of brands seen on the Internet and to improve consumers’ view of the brands on the Internet. Though also mentioned in the study was that consumers appeared to like TV and magazine ads more than those seen on the Internet.
Marketers also have an ethical responsibility to wards consumers and clients, given the advances that have been discussed in the technology development section the study by Gauzente, C. Ranchhod, A. (2002) states that given the fact the such powerful devices will become the norm within two to five years, there study advocates that firms that wish to differentiate themselves from their competitors will have to turn to marketing ethics in order to gain and keep consumers.
Further the study identifies seven criteria statements that include such factors as Security, Access, and Intrusiveness, Notice etc and if addressed effectively can provided marketing professional with an efficient marketing prospective. Also it is tended that marketing mangers will begin to take into account ethical problems in a situation that is more likely to have an ethical intention. Hence by engaging more thought and reflecting upon their marketing practices can lead to a grater consciousness and hence to the development of more ethical intentions and practices.
Privacy has been an ongoing issue and has been emphasised further by the issues raised by the Internet. As previously discussed organisation are collating and collaborating together to store data collected about consumers a described by Rose, E. (2001) as data warehousing and data mining
The study carried out by Rose, E. (2001) state that these innovating web technologies enable Internet marketers to collect, process and analyse personal data gathered from web users, such data is focussed upon browsing and online purchase habits. Though above all the study states that this is being done by a rate that is now quicker and much more economical to do so. The study further stipulates that recent surveys indicate that consumers are not comfortable with these practices, especially when the data is collected or sold without their consent. The study goes on to propose solutions using a framework of incomplete markets, property rights and transaction costs. Though it seems that this issue requires global identification to be closer to being resolved as much as possible though privacy and the Internet do not go hand in hand.
The concerns lay with activities of web-based advertisements that track the users usage history and preferences through cookies. This privacy issue is also expressed in the studies by Jayawardhena, C. et al (2003) though an example is discussed which is concerned with the use of and transfer of private information, illustrated by the cases involving MSN (Microsoft Network) and their viewing of tracking activities of their sub-scribers.
Text produced by Ellsworth, H. Ellsworth, M. (2000) imply that as to the lack of global addressing of the privacy issue individual firms must place their own foundations of privacy rules especially when IT and the Internet is being used for Marketing Strategies, as to what extent should access be logged and how secure is the important company e-mails from prying eyes.
Kim, D. et al. (2002) elicits that consumers are often enticed for data and many organisations offer incentives and free gifts in return for personal and behavioural information. With the use of IT and especially the Internet for marketing goods and services, the environment has become much more competitive and beneficial for consumers, consumers are now taking this to their advantage by manipulating firms to compete for their custom. Study by Strader, T. Ramaswami, S. (2002), highlight the importance of Trust and that is has value in online markets and individual and company actions can improve or impair how trust worthy they are perceived in these markets. Consumer-to-consumer e-commerce is to experience a triple digit growth in the next few years, which highlights the effect, that IT and particularly the Internet has on trading and commerce that customers are confident enough to shop will each other rather than branded names though it is only amongst younger ages groups and also the price of which is considerably cheaper.
Advertising is an important marketing tool on the Internet with a range of possibilities for customer interactivity and involvement (Gauzente, C. Ranchhod, A 2001). Though banner advertising has been important form of e-marketing for many companies and attention of dedicated design at the same time marketing professionals are changing in trying to understand how individual browse web pages and consequently try to increase the CTR (click through rate).
Further, Gauzente, C. Ranchhod, A. (2001) state that as Internet software becomes more sophisticated it will be increasingly possible to tailor sites for individual ethical preferences and upon these preferences companies will be able to gain substantial competitive advantages. In general terms it is just to pronounce that the use of IT and the Internet for marketing a business can have great potential in attracting customers and clients on an international scale. Commutation amongst firms is more flexible and communication barriers are broken down.
Russel, M. Keith, R. (2000) Allowing for deeper penetration, considering for the clients surroundings can be used to measure the penetration of the e-marketing entity.
Further possible advantages identified by Yarom, I. Et al. (2002) are the use of Infocenters which are automated agents that have worldwide accessibility to information on consumers and clients the like. This would allow for organisations to benefit from a wide client data store collated by external sources. Which can be very cost effective for small to medium sized companies also the marketing professional would become more of an agent directing information stored with these Infocenters to organisation upon request rather than gathering the information by them selves.
Kalyanam, K. McIntyre, S. (2002) Classifying the e-Marketing tools such as the four P’s (Product, Price, Promotion, Place) can be placed within the e-marketing mix, which then can be integrated with unique tools of the organisations. Enabling development of an e-marketing mix tools which can be implemented to an organisations e-marketing strategy. The mix can have the additional elements as, site, personalisation, security, privacy, community and customer support, however there is mush more to e-marketing as these elements are considered overlapping. It is believed that customising e-marketing techniques with conventional methods would provide an advantage edge of competitors.
One of the biggest advantages of e-mail marketing is its ability to measure campaign effectiveness on the individual recipient level, unlike other advertising mediums such as print or television ads.
The future hold endless scope for development and advances an overview of which is given. Nelson, R. (2001) makes the statement that organisation websites must see a transition being identified as to not produce ‘brochure-ware’ web pages, meaning that the web page is simply a broach and does not serve true function of a website as the site must engage its visitors in an exchange of information.
It can be anticipated that the future of e-marketing will lie amongst the many organisation adopting the strategies and then striving form high levels of achievement. Further advancements in communication between consumers and clients and also organisation can be anticipated and also more interactivity and more many-to-any interaction. Further developments can be of the integration of business activities.
Jagdish S. et al (2001) study indicates that marketing on the web will become more attractive for businesses and users. Growth will push the demand for more bandwidth, which would allow the use of multimedia marketing tools, such as full motion video, interactive video, more colour, and also complex images.
As with the unprecedented growth of the Internet, marketing on the web will become more and more attractive for businesses and users. Part of this growth will push the demand for more bandwidth, which would allow the use of multimedia, such as full motion video delivered at real time, interactive video, more colour can be used on the web, and also complex images and audio also these media types can be integrated to form highly complex rich media web applications.
However with these increased amounts of multimedia elements it cannot be said that bandwidth will solve all the infrastructure issues. As with higher bandwidth comes higher amounts of usage, and more elements that take a lot of the bandwidth will be used on the web resulting in the bandwidth spreading thin, so the demand will encourage for more bandwidth.
It is inevitable that higher bandwidth will cost more so ISP’s would obviously pass on that extra cost to the consumers. Though these issues are not raised in the study of Russel , M. Keith, R. (2000) to which it states that broadband does promise to deliver rich media which provides marketers to get beyond banners and sue sound and motion for creative commercial offers that generate higher response rates though a convergence of TV/Internet and Wired/wireless applications may lead to convergence in interactive marketing plans which in its self place much scope for advancements and changes with marketing techniques. Meeker, M. Pitz, B. (2003) predicts that Improvement in the user experience is key to assisting the online share gains. In addition, related improvements in targeted marketing and data gathering also provide advertisers with an increasingly effective marketing venue to generate transactions and build brand.
Marketing is a major part of everyone lives, as we all come into contact with marketing of goods and services, which highlights the power of marketing. Marketing has been used for endless of centuries though people marketing themselves and as the process of globalisation of goods and services. The Internet has a huge potential of global penetration, which makes it a marketing medium with unlimited possibilities. The future can expect to see much more marketing going around on the internet and major corporations trying to approach potential customers in their own houses, which is very sole fact why it is very effected, as it takes the concept of the TV and PC integration further.
The marketing professionals will be striving for more dynamic forms of gathering data and information about consumers and clients. Organisational structure can be anticipated to change quite rapidly along with the changing and entity-integrating environment of the superhighway.
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