In a world of information seekers, both consumers and businesses can use the Internet to receive important, relevant data.

Consumers can receive important data
The world is full of smarter consumers since the introduction of the Internet.  Consumers go online to research automobiles, trucks, and sporting vehicles before purchasing.  While online purchases of these durable goods do happen on the Internet, many use the Internet to research prior to venturing to a brick-and-mortar establishment where unsuspecting sales clerks are met with customers who expect them to know as much or more than they were able to find online about a given Gizmo or Widget. 

In addition, online services such as those provided by Barpoint.com, allow the consumer to enter or scan a barcode or UPC code from a product into a search box and "receive detailed product descriptions, comparative prices, links to order the product from vendor partners, product reviews, manufacturer contact information and much more."  Where else in history has information such as this been available at consumers' fingertips?

Companies can receive important data
Companies can also receive important data they seek.  While consumers want information about products, companies want to know what consumers are thirsty for. What products do they seek?  What benefits do they want?  What are they willing to pay for that a company can produce?  The rest of this lesson takes a look at Internet and traditional marketing practices for building successful companies.

 

Online Marketing Principles
Online marketing, often termed "e-marketing" or "Internet Marketing," is applying marketing principles on the Internet.  What exactly does e-marketing mean?  Is it simply traditional marketing principles applied online?  The answer to that question is "No" and "Yes".

How e-Marketing differs from Traditional Marketing
In previous lessons, you read about e-mail marketing, banner ads, search engine and directory optimization, and site publicity.  Each of these have an Internet emphasis which uniquely separates these practices from traditional marketing.  Prior to the Internet, companies didn't have the ability to generate direct real-time responses to surveys, consumer polls, the appeal of advertisements, or knowing exactly what consumers were looking for in conducting business and purchasing.  Prior to the Internet, receiving feedback from a consumer survey took months of dispensing questionnaires and gathering and tallying data.  Now companies can collect data as instantly as site guests offer it and have automated programs set up to evaluate the data and return the results instantaneously and seamlessly.  To see an example in action, visit Netscape.com.  Netscape includes a daily poll on the home page of their site where site guests can vote on an issue and see how others in the world are viewing the same issue.  Sometimes the polls ask seemingly just-for-fun data questions and at other times, the topic is more serious.  But the data is always collected, sorted, and returned to the browser where site guests know how their views compare with others.  Companies use surveys and polls to collect market segmentation data.  They are generally looking for demographic and psychographic responses. If a poll asks for a zipcode or a province or state location from visitors, the marketers are also collecting geographic data.  Never in history has marketing data been collected and evaluated in real-time. 

Viral marketing, affiliate programs, and media relations are not new to the Internet; although methods of implementation vary due to the Internet.  And if comparing e-mail marketing with direct mail, one could say that both are about sending and receiving messages and both include the word "mail," but there are distinct differences between the two.   For example, real-time knowledge and results are unheard of in traditional mail surveys.  Results from traditional mail surveys are time consuming and can be costly.  On the Internet, companies can know within 48 hours how a campaign was received and even have direct feedback from consumers. 

Compare the costs of a general survey, one conducted using traditional mail and one conducted online:

Traditional mail survey:  The survey is sent out to a gathered list of potential customers.  The lists are sent out geographically, sometimes based on, and sometimes to gather the psychographic and demographic data of the particular region.  Companies can expect a fraction of a percent in returned surveys.  To receive the fraction of a percent in returns, the company needs to offer a reward for completing the survey; generally something free.  Many thousands of surveys are printed and mailed.  Then companies wait for responses.  The wait can take months.  Then companies need to return the "free" item as a reward.  Companies are willing to pay the money for the mail outs to save money in the end from unsold  product. 
Costs:
  • Mailing list of addresses
  • Developing the questionnaire
  • Printing the questionnaire
  • Postage for mailing the questionnaire
  • Cost of time lost in waiting for responses
  • Returning the "freebie" to the respondents
  • Gathering, sorting, and analyzing the data


Internet survey:  A survey is set up in one location online, the site guests provide the input, the data collection is real-time.  The payment for the information?  Interestingly enough, often the only payment is satisfying curiosity.  Site guests are often willing to participate in a poll just to see the answer in the end.  Consumers have never had the benefit of knowing what happened to the data mailed in on a survey until the Internet.  Often just knowing how their responses compare to others is enough of a reward. 

Costs:
  • Developing the survey
  • Programming the tallying of the results on the server and routing the data to a database 
  • Adding the questionnaire/poll to the site


How e-Marketing integrates with Traditional Marketing
There are companies on the Internet participating in traditional marketing practices.  As one example, consider sampling.  Samples are a popular marketing effort.  Companies offer samples to increase demand.  Samples are sent out through the mail, with the hopes that consumers will like what they try, which will in turn influence purchasing decisions.  Traditionally, the products that have been offered as samples are consumables:  items such as toothpaste, mouthwash, shampoo, nuts, raisins, candies, deodorant, anti-perspirant, after shave, cologne, perfume, and more.  Consumables are products that are used and replaced on a regular basis.  Samples are also available in grocery stores and shopping centers.  Demo booths are set up for representatives to offer tastes to consumers.  The representatives must keep track of how many boxes of cookies or snack cakes they go through in a given day.  The number of boxes given away is compared to the number sold at the registers for that day and then the data is analyzed by the distributing company:  is enough of a product being sold to merit buying it for the store?  Did offering the item as a demo increase the number sold?

On the Internet, samples are available through FreeSamples.com and StartSampling.com.  At both sites, guests register to receive samples, provide demographic,  psychographic, and geographic information to the company, and request items from the available samples.  Before the registered participant can order again, he/she must provide feedback on the products previously received.  With this scenario, the companies know something about their target audience and then again learn more about what they like or dislike about particular products.  Companies are able to directly communicate with their target audience and know how they are responding to the products they try. 

As mentioned, traditionally consumables have been the products of choice for sampling.  In early 2000, rumors started that the car industry was considering attempting the sampling model.  In the Fall of 2001, GM started advertising on television and on one of their web sites, Pontiac.com for the "Pass it On" marketing program.  Users log on to their web site, complete the online registration form, and tell GM in 75 words or less what they would do if given a Pontiac for a week.  The registrant also selects the Pontiac model he/she would select if chosen as the winner.  In this marketing model, General Motors is utilizing television to bring site guests to Pontiac.com for an opportunity to win a week-long sampling opportunity.  At the end of the week, the recipient passes on the keys to the next winner.


Offline Marketing Principles

Offline marketing is marketing a company away from the Internet.  Most consumers still receive most of their marketing messages away from the Internet.  Both Internet dotcom-only companies and brick-and-mortar companies with an online presence can advertise away from the Internet.  Advertising for web business needs to include the  web site address.  There are four basic rules to follow in implementing offline strategies:
  1. Any piece of paper that walks out of a brick-and-mortar store with a customer should have the web site address on it: receipts, wrappers, shopping bags, and more.
  2. In-store brochures should be available for consumers to pick up, informing them of the web site where they could alternatively visit and shop if they can't make it in to the store.
  3. Do not advertise the web site until it is ready for visitors.
  4. Continue to evaluate your target audience: where they shop, what they read, and where they go, then market to them where they are.  Include the web site address on the messages.  Give them a reason to visit the site as Mars Corporation did in their Fall 2001 campaign.

  5. In the Fall of 2001, Mars Corp began a marketing plan that incorporated offline and online methods.  Printed on the inside of Mars candy bars wrappers:  M&Ms, SNICKERS, MARS and TWIX, consumers could find a computer-generated number that they were instructed to go to the web site and enter in a field to see if they were a winner.  The result could be winning a variety of products, all totaling $1,000,000.00.

Traditional and Internet Marketing for All Companies

Embrace Traditional Marketing Online
E-business practices need to embrace traditional marketing and business-handling procedures.  Corporate strategy should be a unique mixture of both traditional and online activities.  Business marketers need to be actively engaged in discovering how to use the Internet to reach corporate goals.  Company marketers need to study every online and offline interaction people have with the company, or they desire consumers to have with the company, and then implement methods of personalizing communications with customers. 

Companies need to then look closely at their value chain. The value chain is the set of circumstances or the process of activities through which a product or service is created and delivered to consumers.  All companies in one form or another have a value chain as a backbone that connects all interrelated activities between operations, sales team members, and rendering of services. Each of these have points of contacts with conduits, suppliers, and customers.  By breaking down the process of a value chain into smaller pieces, company marketers can understand the cost associated with the value given to the buyers.  Every link in the value chain of a company should utilize the Internet to increase the efficiency of  communications.

The key point to remember is online and conventional marketing need to be combined to help a company excel financially and professionally.  Marketers of online companies need to realize and understand the dynamic nature of the Internet industry.  They must develop a genuine strategy that creates economic value, which can be done through focusing on the customer and creating a service that people will pay to have.
 

SWOT Analysis
One traditional marketing practice that has application to the Internet economy is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis.  SWOTs are conducted to objectively evaluate the strengths, weaknesses, opportunities, and threats of an organization in relation to the competition and the environment.  Strengths can be used as an advantage in gaining competitive edge and as a defense against weaknesses or threats.  Items or events that are potential threats to a company image or financial progression need to be looked at seriously and a combative plan set in motion.  Companies should never ignore company threats.  By conducting a SWOT analysis, company managers must be willing to look at the company from all angles to embrace and utilize the strengths and opportunities, and acknowledge and confront the weaknesses and threats.

If a company understands their competition and is willing to honestly look at their position in the market in relation to the competition, they are more apt to gain a competitive edge.

Unified Approach
Brick and mortar companies with an e-commerce presence should strive for unity in all levels of management and operations.  The goals of the online store and the brick-and-mortar store need to mirror each other and need to work together as seamlessly as possible to develop a certain level of consistency so customers are equally comfortable doing business in the store or online. 

 

Marketing Trends
Cycles are a natural process for the economy with ups, downs, and some stability in the middle. Cycles are brought by the economy, generated by consumer perceptions and resulting market fluctuations.  The newer the industry the more fluctuations, but even proven industries ride the cycles brought by the economy.  The first cycle of new and emerging industries often begins with optimum sales and consumer demand.   Toward the end of the first cycle, companies begin to be weeded out as the market sways.  The industry we call the Internet is coming out of the first cycle and headed into the second cycle.  The Gartner Group predicted a "dot-com shakeout" between the years 2000-2003.  So far, their prediction is accurate.  They also predicted company mergers, and by the year 2008 to have an industry standard for establishing online business.  We'll need to wait a few years to see if their accuracy continues.

Evaluating these cycles leads to the conclusion that businesses who have shied away from the Internet due to the economy or lack of faith in the Internet economy need to enter the industry now while it is still new enough and affordable.


Activities

Activity 1:  Gallup International, Inc., the leader in consumer polls, can be found at www.Gallup.com.  Gallup survey results are featured in CNN and USA Today World Reports.  Visit Gallup.com and locate the results of a recent consumer poll.  Write about the following:

  1. What topic is the survey centered around?
  2. Who was polled?
  3. What were the results?
Activity 2:  Sign up for the Gallup weekly e-Zine to receive data regarding consumer responses to weekly polls.

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