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Coursework: The Role of the Internet in Marketing



From the very its beginning in 1991, the Internet has revolutionized the way firms do business, as well as the way customers buy and use products and services. Thus, marketing being the contact between firms, their customers, has experienced important changes as well. The Internet gives extra opportunities for marketing. What possibilities can the Internet give? In what way can it be used in marketing and for what objectives?

This paper will be concentrated on the Internet phenomenon and on the spreading of the Internet. Then the consequent possibilities and implications for marketing as well as how the Internet Marketing can be examined as a danger to traditional marketing will be covered. The paper will conclude that Internet Marketing is an important supplement to traditional marketing.

The “Internet Revolution”

The Internet has quickly become a standard for navigating, advertising and selling information and executing various affairs on the Internet and Intranets. This "Internet revolution" can be valued by different factors, such as online sales, amount of Internet users, amount of host computers, and amount of domains. All these figures are unchangeable; the common feature of them is fast-paced growth. There was the growth in the amount of host computers from 1969 to 1996 (from 4 host computers in 1969 to about 10 million in 1996). The real, extraordinary growth took place in the 1990s (Kalakota, 1997, p. 45).

While examining online sales, research companies predict unprecedented growth. For instance, Jupiter Communications declared that in 1998 Internet commerce was worth $7.8 billion in the USA, and that this figure would enlarge to $108 billion in 2003.

The general value of the Internet commerce is valued unprecedentedly, for instance, hundreds of billions of dollars in 2002. Nevertheless it remains vague if figures show real online trade or just sales, which contain sending an email message or two. For example, the USA Department of Commerce's $825 million for the value of airline tickets bought in the USA in the Internet in 1998. It is a 300% growth from the 1996 figure (Clemente 1998, p. 32).

While studying the amount of Internet users, the Internet had 30 million users on 10 million computers linked to over 240,000 networks in about 100 states. The last figures indicate the fact that International Data Corp values that 40 million people are home web users in the USA in 1999, which consists of 15% of the population. “Le Monde” in 1998 published that 100 million people use the Internet all over the world. Jupiter Communications estimates that active Internet users - 4 to 5 million USA customers - shop regularly on the Internet by 2000, which represents 3% of grown-ups.

That is why, the Internet phenomenon is very significant and has already modified the way firms, and governments and individuals communicate, buy and do business. It should be stressed that this Internet revolution has changed and will continue to change the way firms sell their products. The Internet is also a marketing revolution.

The Internet as an opportunity for marketing

The Internet as a new uninvestigated field opens new possibilities to market products and invents the way firms are selling their products. The Internet gives opportunities in several of the four well-known marketing P’s (Price, Promotion, Product, Place). The Internet is a new "unpredictable" way of distribution. It is also an impressive marketing communication and promotional tool. It is finally a useful marketing research tool as it helps to find customers (Bishop 1998).

Another item concerning the Internet distribution is the kind of products that are sold well in this way. Really, according to this distribution channel it makes particular products more significant than others to be sold via the Internet.

The Internet is a good means for giving information concerning products and services, and products that the customer will probably buy due to a good advertisement on this channel. Thus, products like wines are sold well with a good advice from experts and the great choice from boost book sales. However, computers are the most usual item that is sold on the Web. Besides, in this case of sales, the Internet can fill in the information gap that takes place in present retail.

Consumers and providers appreciate the Internet as a tool to buy items via self-service lessening prices for providers in the case of some services. The airline industry can serve as the best example. In 1995, 20% of the USA airline seats were booked by customers online and by phone. This reduces the price for carriers, and enlarges the convenience for online buyers.

Moreover, products that are very likely to be sold on the Internet are not obligatory new products. The Internet distribution channel also symbolizes a new growth for full-grown industries. The best examples are evidently and Barnes and Noble that are doing better than contestants on an inactive market due to online sales. The products that make money on the Internet are: computer hardware and software; books and music; gifts, food and beverages; jewelry; sporting goods; consumer electronics; flowers and greeting cards; apparel and footwear.

The Internet as a powerful marketing tool

The Internet is a very attractive marketing tool with the possibility to customize pages, as well as new promotional systems, giving firms the possibility of communication and promotion effectively by adapting to consumers’ likings.

Interactive traits of the Internet permit asking customers their likings, and then the firm can adapt product offers and promotions to these likings. It provides the effective recruit of new customers. For instance, some car manufacturers ask Internet users for concrete information and in return give potential customers a $1,000 discount coupon or a free CD player coupon. Advancement can be targeted towards a customer’s particular interests and hobbies very easily. Besides, “web currency” assist effective advancements. Some sites like Smart suggest using web-based currency to buy online.

It should also be stressed that the use of e-mail for marketing aims allows companies to perform better-targeted advancements. An online music store, targets particular users who like jazz or hip hop fans with special suggestions. Also, email suggests a wide scope of personalized communications with consumers, and online retailers are various: e-mail based on HTML gives a more dynamic way to provide data, is cheaper than printing and mailing customary marketing material, and is easier to provide a customer with data. To make easier marketers’ lives even more, straight marketing e-mail service providers suggest specialized marketing e-mail programs.

Nevertheless, using e-mail means the threat to be taken as a spammer. In order to prevent this, firms should only give on-demand quality content that users have asked for. Besides, marketers never should send unsolicited messages, because anti-spam software that blocks unnecessary marketing messages will kill their attempts.

Advertising on the Internet

Internet advertising is a new method of advertising that involves some advantages over its traditional TV or press media equivalents. The Internet gives the chance of seeing an advertisement and ordering at once. As a result, it lessens doubt and puts off barrier to buy. Internet advertising also can be more effective due to targeted advertising: customized advertisements reach a user and offers only products he wants to buy. Additionally, Internet advertising can reach worldwide audiences cheaply and easily. For instance, in the hotel industry, 281 year-old Concord (Mass) Colonial Inn's web site gets quests from Argentina, Singapore and Japan. It has allowed the hotel to reach an audience they would not have otherwise been capable to advertise.

Internet advertising also represents a lessened risk for marketers. A greater risk is wasting hundreds of thousands of dollars to develop a national print or television campaign that will fail. A campaign can be really altered in minutes by means on-line.

Internet marketing assists to gauge the sufficiency of a present campaign by the tracking of the amount of click-throughs. The management of an advertising campaign on the Internet is going easier than in traditional media. Some firms even offer an absolutely integrated end-to-end online marketing service formed particularly for advertising agencies. In January 1999, NetGravity, market leader in online advertising and direct marketing management solutions, declared NetGravity Ad Center for Agencies. This tool manages the whole process of online promoting, including media planning and purchasing, advertisement targeting and conveyance, and detailed campaign performance examination. Internet advertising gives firms much more control. On-line content can be changed very fastly and the visibility can be investigated. Really, the exposition and rank listing of a chosen URL is easily collectable with free software displayed on the Internet. "Tracker", on, lets companies to define the visibility, exposition and rank-listing of a chosen URL based on single or combination key word search of the main search devices. Other software can investigate the amount of visitors and their location.

After all, the Internet advertising environment — marketing connections, having site declared in regular media, purchase banner advertisements on similar sites or well-known sites, highly evaluated sites on PCMeter like search engines Yahoo!, Infoseek, — is in general cheaper than advertising in traditional media. Advertising on the Internet may represent a loop: I link to your site, you link to my site.

Summarizing all the above mentioned, Internet advertising is gaining force and seems very advantageous for firms. Industries want to know if the web is about to be the following primary media on which to advertise. In 1998, Procter and Gamble organized a summit that involved top advertising administrators from Coca-Cola, Mc Donald's to discuss how they can effectively sell their products and form customer loyalty via the Internet. Unilever agreed in 1998 to put $20 million in partnerships with AOL and Microsoft to investigate methods of advertising its hundreds of branded products on the Internet.

The Internet marketing: drawbacks of online shopping

Internet marketing does not represent a danger for traditional marketing. On the Web, brand name means even more. Besides, the Web, as a distribution channel, cannot completely fulfill the demands of consumers. In general, the Internet marketing should be considered as a supplement to traditional marketing but not a replacement.

Traditional marketing continues existing, and it is not the traditional distribution channel. The Web cannot replace present channels for some reasons and it is more of a supplement to present channels than a replacement (Sterne 1999, p. 27).

Firstly, online buying does not give the social experience that is so significant when doing shopping in the real world. Going shopping is a social experience that the Web cannot give. Customers want to see, touch, and examine the products they are buying. It especially concerns some big items like houses or cars, in comparison with cheap daily products. In the case if such corporations like Peapod or NetGrocer want to sell small items without going to stores, most people (even if these consumers are short of time for grocery shopping) do not still want to buy produce without personally choosing and touching it. The ability to touch and choose product by themselves is necessary. Shops are also a place of enjoyment people do not want to refuse from. In real bookstores, authors sign their books; in real grocery shops, customers can taste new products for free while advertising.

The Web cannot display attractive visuals and sounds. Such factors as the bad quality pictures and slow downloading decrease sales and prevent the online distribution channel. There can be found some solutions: high resolution imaging software for Web-based pictures and other particular software tools give better quality photos and giving ability examining details. The Hewlett-Packard OpenPix Program gives a possibility for customers to choose a particular field of a high-resolution image and examine it in detail. Live Picture software decreases downloading times and gives in addition video, audio and animation for a greater consumer experience. Companies will probably invest in these software, as they enlarge online display quality and, thus, sales (O’Brien, 2004). For instance, PhotoDisc in Seattle, which sells stock photography, understood that suggesting quality pictures was important to its online business. In 1997, the cataloger cooperated with $43 billion HP on OpenPix prototype software for use on PhotoDisc's PowerPics website, a Web-based set of high quality, and full color pictures for use by small firms. This software also lets firms to investigate which part is zoomed or printed. This also lets PhotoDisc to get know more about customers' likings.

Despite of this kind of software existing, it does not fully resolve the problem, and traditional distribution channels are still much better at showing products.

Internet marketing as a supplement to traditional marketing

It is obvious from the above mentioned that Internet marketing is a supplement to traditional marketing. A Web site does not replace the traditional marketing, but improves the marketing program just in place. Advertising, personal purchase, sales advancement are all supported by Internet marketing attempts. For instance, in the hotel industry, Frank Passanante, manager of sales and marketing, states that Web marketing supports other collaterals to inform consumers of the product, and online reservations are a great supplementary sales tool (Wilson, 2001).

The Internet can be viewed a supplement to traditional data marketing materials, books. For instance, consumers go online to find data about the product. This is especially true for technical products, demanding advice and time for making the decision. For instance, a Nikon digital camera received 60,000 mouse clicks in three months for a month 1998, on the Imaging Resources web site, an independent Internet marketing firm that supplies product data and sample pictures for consumers examining digital cameras and scanners (Sterne, 1999, p. 21).

Marketers promote their web site on their usual supports, which means that traditional marketing supports can also supplement online marketing. This is a virtual trap (Hanson, 2000).

As mentioned above, for products with less data, the Web cannot substitute mass promotion. Nevertheless, large consumer goods firms have the need for presence on the Web. The Anglo-Dutch group has created more than 40 web sites worldwide for its products involving Faberge Cosmetics, Bird's Eye Frozen Food. Several decades ago the firms could reach almost 80% of their target audience with 30-second off peak television commercial. Nowadays to reach the same number, they would require 250 prime time slots. On the same grounds, big players in the consumer goods industry are troubling about the future of their primary media: TV versus the development of the Internet. In August 1998, in Ohio, at Procter and Gamble headquarters, an unusual two-day summit took place to discuss these problems. Thus, the Internet marketing is an additional chance for marketers, and surely it changes the rules of the game, but does not danger traditional marketing (Whinston, Stahl and Choi 1997).


Having examined the importance of the Internet phenomenon and the possibilities and dangers it represents in marketing, it is clear that traditional marketing and Internet marketing should continue developing, though used as supplementary tools. Marketers also should avoid some mistakes and consider some "Internet-specific" problems when going into Internet marketing. Presently, companies use Internet marketing at various levels and for various purposes. Some marketers simply put marketing books online while others use fully the interactive and customization possibilities of the World Wide Web.

In the future, the World Wide Web multimedia traits will become faster and easier for usage. Marketers should study the way of using the abilities and characteristics of the Internet in order to use them later on when technologies become even more complicated. Finally, successful marketers are those who follow technological changes and completely use the interaction, customization and multimedia characteristics of the World Wide Web.


Bishop, B. (1998). Strategic Marketing for the Digital Age. American Marketing Association, 252 pp. ISBN 0844234419, 9780844234410

Clemente P. C. (1998). State of the Net, The new frontier. McGraw Hill, 179 pp. ISBN 0070119791, 9780070119796

Hanson, W. A. (2000). Principles of Internet Marketing. South-Western College Pub, 467 pp. ISBN 0538875739, 9780538875738

Kalakota, R. (1997). Electronic Commerce, A Manager’s Guide. Addison-Wesley Professional, 2nd edition, 431 pp. ISBN0201880679, 9780201880670

O’Brien, J. A. (2004). Introduction to Information Systems. McGraw-Hill/Irwin, 12th edition, 536 pp. ISBN 0072890428, 9780072890426

Sterne, J. (1999). World Wide Web Marketing, Integrating the Web into your marketing strategy. Wiley, 2nd edition, 392 pp. ISBN 0471315613, 9780471315612

Wilson, R. F. (2001). Planning Your Internet Marketing Strategy: A Doctor Ebiz Guide. Wiley, 256 pp. ISBN 0471441090, 9780471441090

Whinston, A. B., Stahl, D. O. and Choi, S. Y. (1997). The economics of Electronic Commerce. Macmillan Technical Pub., 626 pp. ISBN 1578700140, 9781578700141


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