INTERNET AS MARKETING TOOLS

Introduction:
At the beginning of the century, social life was mostly local. It was followed by a period
in which commodities were produced on a mass scale. Consumer Marketing operated on mass
marketing principles and business primarily concerned itself with how to build the best sales
force. At the end of the century, there is an emerging global culture. The major driver of these
changes is technology. Technological change has moved steadily back focusing on the individual.
These changes shape the possibility and conduct of business. Marketing is especially tied to
communication and transportation revolution. As the tools and reach of marketing increase, the
job and responsibilities of marketers have evolved with them.

Kotler formalized this evolution with his book "Marketing Management." His key stages are
production, sales and brand management. Each of these is strongly motivated by technological
opportunities, which permit new methods and new opportunities. A fourth stage, a focus on the
individual customer, is also important. As the new technology of the Internet develops, it
reinforces the new marketing emphasis - which in many ways is a return to business at the turn
of the century.

In todays technology driven world, a new fast paced digital economy is emerging. In the near
future, it wouldnt be surprising to see that there are companies that exist only inside computer
networks. Most business transactions will be made electronically, directly from the producer to
the consumer, bypassing the supply chain. In the digital marketing environment, the consumer
becomes an integral player in the development of the product. In fact, a consumer might build
the product himself from a wide array of parts provided by the company. It is e-commerce that is
changing the way products and services are conceived, manufactured, promoted, priced,
distributed and sold. The reason being that it is much cheaper; it allows vast coverage and helps
in serving the customer better.
Growth of Internet usage and E-commerce:
According to the research report of Goldman Sachs, India has emerged as the second largest
Internet market in Asia after China with 100 million users in 2005. It estimates that Indian
Internet Users will increase by 130% compounded annual growth rate (CAGR) from 0.5 million
users recorded at end of 1998. Also the figures of the number of Internet Service Providers

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 INTERNET AS MARKETING TOOLS
(ISPs) is expected to increase by leaps and bounds and March 2006 sees at least 30 private
international gateways. As per preliminary findings of the NASSCOM survey, the total volume
of E-commerce transactions in India was about Rs.131 crore in the year 1998-99. Out of this
volume, about Rs.12 crore were contributed by retail Internet or Business-to-Consumer
transactions, and about Rs.119 crore were contributed by Business-to-Business transactions. The
survey also revealed that E-Business transactions in India are expected to exceed Rs.300 crore
during 1999-2000. Out of this, about Rs.50 crore could comprise of retail transactions.
For Business-to-Business transactions, Indian industries are expected to reach online penetration
of 2% by 2003 and 8% by 2008.
The Figure below gives us a fairer idea of the current world internet usage.

WORLD INTERNET USAGE AND POPULATION STATISTICS

As On Sep 30, 2005.

Internet Usage World

Population Population % Population
World Regions Usage, Growth Users
( 2005 Est.) % of World ( Penetration )
Latest Data 2000-2005 %

Africa 896,721,874 14.0 % 23,867,500 428.7 % 2.7 % 2.5 %

34.2
Asia 3,622,994,130 56.4 % 327,066,713 186.1 % 9.0 %
%

28.5
Europe 731,018,523 11.4 % 273,262,955 165.1 % 37.4 %
%

Middle East 260,814,179 4.1 % 21,422,500 305.4 % 8.2 % 2.2 %

23.4
North America 328,387,059 5.1 % 223,779,183 107.0 % 68.1 %
%

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 INTERNET AS MARKETING TOOLS
Latin
546,723,509 8.5 % 70,699,084 291.31 % 12.9 % 7.4 %
America/Caribbean

Oceania / Australia 33,443,448 0.5 % 17,655,737 131.7 % 52.8 % 1.8 %

100.0
WORLD TOTAL 6,420,102,722 100.0 % 957,753,672 165.3 % 14.9 %
%

The reach of Internet may not yet be as wide as that of other mass media, but given its unique
advantages, it is undoubtedly the communication medium of the future. Marketers around the
world have from time to time tried to reach their target audiences through various media.
Scientific and technological advances have and will continue to create newer media to improve
communication, and marketers will try to use the same to effectively address their audiences.
Internet is one of the latest to join the list of such media inventions.

Internet Fame with the Indian Audiences :

Let us first take a quick look at the audience that this medium is trying to reach. The top 8
metros of the country, the scope of the Internet as a medium to reach out to a large number of
people is presently limited. However, some of these limitations can be addressed.

1. Internet is available in regional languages also. Even today this medium is largely
confined to only those who are literate in English. Various initiatives of companies like ITC and
HLL like E-choupal and i-Shakti have given a considerable boost to vernacular usage of internet

2. Internet is accessible though other media also and not only through telephone lines. In the
current scenario, the usage of internet might be dominated by telephone lines, but broadband and
cable net are coming in a huge way.

3. Government policies are aimed at broadening and strengthening the infrastructure required for
Internet accessibility.

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 INTERNET AS MARKETING TOOLS
There could be several other modes to increase the reach of the Internet. However, with the
current limitations, the

Current Media usage habits of the Indian audiences

projections on Internet usage appear to be as follows:

TV, print and cinema have penetrated the most. Internet in the media terms is expected to make
an impact and show its true caliber, but is yet not taken as a serious medium.

Does that mean that Internet is not an effective tool for reaching out to people? Or is it likely to
work very well under certain conditions?

To understand this better, let us compare Internet and other traditional media, first from the
customers point of view. Current media options serve two broad benefits to the customer:

. Entertainment

The reach or popularity of any media is related to

1. The extent of benefits perceived to be delivered

2. The cost of acquisition of the media itself

In short, the reach is related to the net value perceived by the customer about that particular
medium.

If the internet is treated and used exactly like any other medium, it is unlikely to yield major
benefits to the marketer. Its effectiveness is dependent not only on the target audience one is
talking to, but also largely on the ability of the marketer to make use of the real advantages of the
Net like interactivity, flexibility, ability to monitor and the like.

Next, one can also evaluate Internet as a media from the marketers point of view by way of a
similar classification. If evaluation as per the above classification is done, the Internet does not
appear to be a very advantageous option either in terms of reach or in terms of cost-effectiveness.

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 INTERNET AS MARKETING TOOLS
But Internet has various other advantages over the traditional media which cannot be neglected.
These stem mainly from the ability of this medium to allow a far more focused targeting as
compared to other media.

To quickly summarize the advantages of the Internet as seen from the point of view of the user as
S o u r c in g
well as the marketer:

O r d e r C o n s o l id a t io n

D e l iv e r y

Fabmart Fulfillment Process

To the user:

Internet gives more control in choosing content. It offers customization of the content, the way
the user wants to view it. It offers a variety of options for information and entertainment. It
offers a wide range to choose from for the user.

It offers tremendous convenience to the user not only in delivery of information, but also in
allowing him to transact often in a seamless manner.

The best example of giving control of content is the My Yahoo !! service offered by the Internet
giant, Yahoo Inc. It gives the user the choice of content for various topics ranging from news to
stock options to entertainment to sports and just about everything.

To the marketer:

The Internet offers several options to a marketer trying to target a particular community.

It serves not only as a channel of information, but also of product distribution

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 INTERNET AS MARKETING TOOLS
It offers a highly interactive medium that sometimes (e.g. chats, forums, VoIP) is almost equal to
one-to-one interaction with the audience.

It offers a higher level of identification of the user to the marketer.

It allows the marketer to actually link his spends to action, and pay only on action.

This action could be a click on the banner or even product purchased or just a banner impression
or per 1000 impressions. In this ability Internet is, in fact, unlike any other media.

Given the payment options and high interactivity, the Internet offers a medium for high level of
experimentation at a low cost.

E.g. one can change the whole look of the advertisement within hours and increase the
effectiveness of the communication on the Internet. Imagine doing the same with a television
advertisement.
Building Brands Online
Online has always taken a back seat to offline in brand building. Yet online offers the best
options for building a meaningful brand, options that didn't exist only a few years ago.
Companies without a solid digital brand strategy are literally being left behind as leaders build
new digital brands.

But if the consumer purchases that same product from Procter & Gambles Reflect.com Web site,
her wrath is more likely to be directed at P&G. Thus the on-line marketers objective shifts from
creating brandsat least as defined in the off-line worldto creating Internet businesses that
can deliver complete,
and completely
satisfying, experiences.
Yet many marketers,
particularly those whose
experience is limited to the
off-line world, lack a
coherent framework

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Consumers Turning to Digital Brands
 INTERNET AS MARKETING TOOLS
and concrete methods for achieving the broader objectives of on-line brand building. These
marketers need an approach for aligning the promises they make to consumers, the Web design
necessary to deliver those promises on-line, and the economic model required to turn a profit.
These three elementsthe promise, the design, and the economic modeltogether form the
inseparable components of a successful Internet business, or what might be called a digital brand.

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