CHAPTER 1

INTRODUCTION
EVOLUTION OF MARKETING
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.

Philip 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 today’s technology driven world, a new fast paced digital economy is emerging.
Tomorrow there will be companies that will 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.

THE ADVENT OF THE INTERNET

Marketing is at the core of all business activities. Without marketing, organizations
cannot sell and without sales there is no revenue and without revenue people
cannot run businesses. The world wide web is a very diverse marketing platform
used by most businesses for marketing all types of products and services. Online
marketing includes social marketing, word ads, banner ads, video Advertisement
etc. Like other forms of market, internet marketing has its benefits and pitfalls. The
ability to precisely target consumers and to measure the effectiveness of marketing
strategies are the major advantages of online marketing. On the internet the level of
consumer exposure varies greatly unlike traditional media like billboards,
newspaper and television. Visibility is the primary prerequisite for online
marketing, traffic cannot increase if people don’t know about the company and its
products or services. Website marketing services increase website visibility by
optimizing and promoting the website.

The new millennium has brought us on the brink of the I.T. Revolution. This
revolution has been aided by the advent of the Internet in a big way. Internet is fast
changing the way people used to do things. Naturally, the same would have an
impact on the advertisers. The Internet has been accepted as the most powerful
media for advertising due to the absence of geographical barriers. The advent of
the Internet and its subsequent acceptance has once again challenged the traditional
forms of advertising. Advertisers are trying to use the 'net' to advertise their
products and hence 'net' their customers. Thus, with the Internet gaining
prominence, advertising equations are fast changing.

EXPONENTIAL GROWTH OF INTERNET MARKETING

GLOBALLY
All around the world, the internet continues to transform how we connect with
others, organize the flow of things, and share information. With its growing
influence on individual consumers and large economies alike, the internet has
become an increasingly vital part of our day-to-day lives. In 2019, the number of
internet users worldwide stood at 4.13 billion, which means that more than half of
the global population is currently connected to the internet. But while the digital
population is visibly growing in many parts of the world, internet access and
availability can differ significantly depending on the region.
  There are 4.66 billion internet users in the world today.

 The total number of internet users around the world grew by 321 million in
the past 12 months – more than 875,000 new users each day.

 Globally, internet user numbers are growing at an annual rate of more than
7 percent, but year-on-year growth is much higher in many developing
economies.

 The average global internet user spends almost 7 hours online each day.

 Added together, the world’s internet users will spend more than 1.3 billion
years of human time online in 2020 alone.

7 P'S OF INTERNET MARKETING

The four P's - Product, Price, Place and Promotion have long been associated with
marketing, but things have changed on the Internet. So along with a change in the
nature of the four P’s there are three new P’s which are relevant to the internet
marketer: Presentation, Processes and Personalization.

1. Product
Product on the Internet usually changes form online, and the user experiences it
electronically, in the form of text, images and multimedia. Physical goods are
usually presented in the form of a detailed online catalogue that the customer can
browse through. Technology allows the user to virtually touch and feel the product
on the Internet - rotate it, zoom in or zoom out and even visualize the product in
different configurations and combination. Content and software are two avatars of
digitized products that can be even distributed over the Internet. On the Internet, E-
marketing will be based more on the product qualities rather than on the price.
Every company will be able to bring down the cost of its products and hence
competition will not be on price. It will rather be on the uniqueness of the product.
To be able to attract the customers and retain them, the company will have to
provide nouvelle and distinct products that forces the net users to purchase and
come back for more.

2. Price

Price has been drastically changed over the Internet. It lets the buyer decides the
price. Also, it gives the buyers information about multiple sellers selling the same
product. It leads to best possible deal for the buyers in terms of price. Pricing is
dynamic over the Internet.

3. Place

Place revolves around setting up of a marketing channel to reach the customer.

Internet serves as a direct marketing channel that allows the producer to reach the
customer directly. The elimination of the intermediate channel allows the producer
to pass the reduced distribution cost to the customer in the form of discounts

4. Promotion

Promotion is extremely necessary to entice the customer to its website, as there are
currently more than one billion web pages. Promoting a website includes both
online and offline strategies. Online strategies include search engine optimization,
banner ads, multiple points of entry, viral marketing, strategic partnership and
affiliate marketing. Presently, the cyberspace is already cluttered with thousands of
sites probably selling similar products. For the customers to know of the
Company’s existence and to garner information on the kind of products or services
that the company is offering, promotion has to be carried out. There can be traded
links or banner advertisements for the same. Also, the traditional mediums like
print, outdoor advertising and television can be used to spread awareness.

5. Presentation

The presentation of the online business needs to have an easy to use navigation.
The look and the feel of the web site should be based on corporate logos and
standards. About 80% of the people read only 20% of the web page. Therefore, the
web page should not be cluttered with a lot of information. Also, simple but
powerful navigational aids on all web pages like search engines make it easy for
customer to find their way around.

6. Processes

Customer supports needs to be integrated into the online web site. A sales service
that will be able to answer the questions of their customers fast and in a reliable
manner is necessary. To further enhance after sales service, customers must be able
to find out about their order status after the sale has been made

7. Personalization

Using the latest software, it is possible to customize the entire web site for every
single user, without any additional costs. The mass customization allows the
company to create web pages products and services that suit the requirement of the
user. A customized web page does not only include the preferred layout of the
customer but also a pre selection of goods the customer may be interested in.

UNDERSTANDING THE INTERNET CUSTOMERS

Now to be able to use the seven P’s effectively in order to achieve the predefined
goals of any organization it is imperative to understand the customers.
Customization will only be truly effective if we understand our customers and their
true needs. Before adapting marketing practices to the Internet, the marketer needs
to understand the characteristics of the online customers. The Net users can be
classified into five categories depending upon their intention of using the Internet.
The five categories of users are:
  Directed Information Seekers:

They require specific, timely and relevant information about the products and
services being offered.

 Undirected Information Seekers:

These users require something interesting and useful. Something that can give
them an edge, advantage, insight or even a pleasant surprise.

 Bargain Hunters:

They are of two kinds: One who look for free items on the internet and other who
are seeking better deals, higher discounts etc.

 Entertainment Seekers:

They see the Web as an entertainment medium of vast breath and potential and
want to explore the medium before the mass gets there.

 Directed Buyers:

They want to buy something now. They are sure what they require and just log on
to the Web to purchase the item.

CRITICAL SUCCESS FACTORS IN INTERNET

MARKETING
Having observed the evolving paradigms of business in the Internet era, there are
five critical success factors that the Internet Marketer has to keep in mind.

Attracting the Right Customer

Attracting the Right Customer is the first crucial step. Rising digital penetration
would mean that the number of customers visiting particular sites would inevitably
go up. While the number of eyeballs or page views has so far been conveniently
used as a satisfactory measure by most web sites, it would be foolish to cater to the
whole spectrum of digital visitors. Content has to be very target specific. The
digital company has to select its target segment by finding out which section of
customers are the most profitable in terms of revenue transactions and who are the
customers who generate the maximum number of referrals. Here again it is
important to note that the majority of online customers are not seeking the lowest
price. Rather they are seeking convenience above everything else. The power of
customer referrals has never been so enormous, since word of the mouse spreads
faster than word of the mouth. E-Bay attracts more than half of its customers
through referrals. Not only do referred customers cost less to acquire than those
brought in by advertising or other marketing tools, they also cost less to support
since they use their friends who referred them for advice rather than using the
companies’ own technical desk.

Delivering Content Value

Delivering Content Value to engage the user’s interest is the critical importance in
retaining customer participation. This is because content serves as a powerful
differentiator. Content would include Product enhancements (Software patches for
glitches), personalized interactions (through customized navigation paths as seen
on the web sites of GM and Toyota) and Problem Resolution (updates of delivery
schedules and e-mail responses). Integral to the concept of delivering proper
content value is innovation.

Ensuring E-Loyalty

Ensuring E-Loyalty is vital to the success of any online venture. This is because
acquiring customers on the Internet is enormously expensive and unless those
customers stick round and make lots of repeat purchases over the years, profits will
remain elusive. Contrary to the 20 general view that Web customers are
notoriously fickle, they in fact follow the old rules of customer loyalty. Web
customers stick to sites that they trust and with time consolidate their purchases
with one primary supplier to the extent that purchasing from the supplier’s site
becomes part of their daily routine. The issue of trust is integral to the issues of
privacy and security. Companies like Amazon.com, which command amazing
levels of consumer trust, have used a variety of encryption tools and simple ethical
decisions like not accepting money for publishers for independent book reviews to
maintain the trust of its customers.

E-Learning to facilitate personalized interactions

E-Learning to facilitate personalized interactions with customers has been the
biggest contribution of the Web to the marketing strategists. Customers in
traditional bricks-and mortar stores leave no record of their behavior unless they
buy something. In the digital marketplace, however technology has made the entire
shopping experience a transparent process. For example, if the customer exits the
web-site when the price screen appears, he is a price sensitive consumer. Such
minute tracking of customer behavior has major implications for the world of
advertising. The Internet may soon be used as a test bed for testing prototypes of
marketing and advertising campaigns. By monitoring pages selected, click
throughs, responses generated, and other indicators, the company would be able to
discover which parts of a prospective campaign would work, thus reducing the risk
of a potential flop. This would make it possible for the company to modify its
product offerings much earlier than usual in the product life cycle

Providing Digital value to the evolving consumer through his life cycle

Providing Digital value to the evolving consumer through his life cycle has
become possible because of customized interactions and emerging business
models. These models have often disturbed the traditional status quo and created
new rules of business. The sectors where new business models will emerge or have
emerged are the music industry, the financial services industry, the travel industry,
the relating segment and the publishing segment. Digital value is delivered to the
consumer by promising him convenience, allowing the customer to feel his
ownership of the Web experience, and giving the customer a sense of belonging
that traverses the physical boundaries.

BENEFITS OF INTERNET MARKETING

Online Marketing provides various benefits to both consumers and also the
marketers by way of marketing more efficiently and effectively along with greater
savings. It brings with it many benefits that are not available with traditional and
offline marketing.

BENEFITS TO CONSUMERS
1.Convenience: Customers can order products 24 hours a day wherever they are.
They don’t have to sit in traffic, and a parking space, and walk through countless
shops to find and examine goods.

2. Information: Customers can find reams of comparative information about

companies, products, competitors, and prices without leaving their office or home.

3. Fewer hassles: Customers don’t have to face salespeople or open themselves

up to persuasion and emotional factors; they also don’t have to wait in line.

BENEFITS TO MARKETERS

1.Customer Relationship Building: Companies can interact with customers to

learn more about their needs and to build customer databases.

2. Reduce Costs and Increase Efficiency: It avoids the expense of maintaining a

physical store, costs of rent, insurance, and utilities. Digital catalogs cost less to
produce than printing and mailing paper catalogs.

3 .Greater Flexibility - Make changes on the fly: Unlike offline marketing such as
placing traditional advertisements in magazines, newspapers, television, or a paper
catalogs whose products and prices are fixed until the next printing, an online
catalog can be adjusted daily or even hourly, adapting product availability, prices,
and promotions to match changing market conditions by changing a graphic or
wording and do it without any problems.

4. Access to Global Markets: The Internet is a global medium, which allows

buyers and sellers to click from one country to another in seconds.

5. Track Real - Time Results: It allows tracking real-time results using online
analytics to determine how marketing campaign is performing. There are ways to
track traditional marketing efforts, but most the time it cannot be done in real-time.

6. Target Specific Demographics in Advertising: It allows in targeting specific

demographics such as gender, age, location, specific income levels, education
levels and occupation.

7. Variety of Methods: There is various methods in online marketing such as

audio, video, blogging, email, social media and ongoing newsletters.
INFLUENCE OF INTERNET MARKETING IN CUSTOMER
CHOICE
1. Access to analytics

Before the digital world emerged, it was practically impossible to keep track of
customer preferences and trends. Now, digital marketing and analytics gives
marketing experts and professionals at PR firms access to endless amounts of data
that they can use to determine how clients search for products, make purchases,
and interact with a company.

Analytics and “big data” allow businesses to analyze their target audience and use
the insights they gather to adjust their marketing strategies to speak the right
language. This leads to stronger relationships between customers and companies,
and more opportunities for sales.

2. Social media for brand relationships

Ever since social media became an essential part of the digital marketing journey,
it’s transformed the way companies acquire their customers and influence choice.
Today’s brands know that they need to earn the respect, and trust of their audience
if they want to make a sale. After all, countless customers go online to check the
reviews on a product or service before they ever consider buying it.

Social media provides all companies with an opportunity to develop relationships

with their prospects through credible and transparent marketing that isn’t as blunt
or aggressive as “outbound” marketing techniques. Brands connect to their
customer base through influencers, social shares, and viral trends, allowing for a
more organic marketing experience.

3. SEO

Finally, despite the many ways that the digital marketing world has changed – one
thing remains the same, people still rely on search engines to help them make
decisions. When customers want to find out information about a brand, a product,
or even a problem they’re having, they turn to their search engines for help. As
such, SEO and content marketing remain crucial components of any marketing or
PR strategy.

Organizations that know how to make the most of their inbound marketing efforts,
create useful content, and attract backlinks will get the rankings they need to race
ahead of the competition. The better a company’s ranking is, the more likely they
are to generate sales. After all, customers believe in the concept of hierarchy. 
 CHAPTER 2
LITERATURE REVIEW
  J. Sridevi and K. Senthil Kumar( 2017)

The study on the emerging trends in online market point out the new digital tools
ranging from Web sites to wikis extensively for customer service, product
development and advertising online. The internet has become an essential medium
for all the companies to market their products & services. Online marketing is
becoming increasingly important to small business of all types. The studies also
explores the various phases in the online marketing mix strategies

 Joel Järvinen, Heini Taiminen. (2016)

The study on B2B content marketing offers the role of social media in B2B
content marketing and on the extent to which social media activities can be
automated using new technologies. Future research must also make a better use of
online behavioral data. Combining online behavioral data with other customer-
specific information such as purchasing histories may generate new knowledge on
long-term customer relationships and on customer profitability. Studies could also
examine how various marketing stimuli and content formats affect the online
behaviors of customer profiles.

 Shannon Cummins, James W. Peltier, John A, Alexander Nill. (2014)

Their study on consumer behavior in the online context underscores a critical role
in informing marketers’ design of Web sites and other communication platforms
for reaching, informing and developing mutually beneficial relationships with
consumers This research stream shows the the role that social media will play in
capturing the attention, motivating search, engaging consumers and enhancing
customer loyalty and how consumer behavior theory can provide a theoretical and
empirical foundation for developing effective mobile marketing strategies and
tactics.

 Dr. Simran Kaur, Ms. Nidhi Tandon, Ms. Shivani Malik( 2018)

Their study on impact on digital marketing in consumer buying behavior explores

the grab wide area of digital marketing in the highly competitive market It involve
exploring business model using digital technologies which reduces cost and
expand business globally It is very important to know the psychology of the
consumers in the dynamic environment. Ever changing buying behavior of the
consumers in the digitalized world should be understood properly to make the
business sustainable. The revolutionized economy possesses many threats and
challenges which are to be faced by the marketers today. People should be made
more aware regarding the advantages of digitalized marketing. More efforts should
be laid down to make digital marketing safe so that there is an increase in the
market size.

 Dr. S.Davidsoundararajan , 1 S.Harikaran ( 2016)

The study on current trends in internet marketing towards online shopping shows
the customers response towards the digitalized business models. With the updated
technologies and increase in the usage of internet engagement, interconnectivity of
consumers is increasing day by day as a result of which consumer behavior
changed and organization should understand the behavior of consumer. The study
also gain knowledge on issues such as the primary factors influencing online
shopping, buying opinion and ideas of customers about the internet marketing.

 Sanmathi Anbumani (2017)

The purpose of his study is to highlight digital marketing and its challenges. The
study seeks to provide the ability to visualize how digital marketing strategies are
formulated and perceived by consumer segments. A standardized digital marketing
strategy should be more easily produced for products in which individuals share
common consumer behaviours than for products used in culturally specific ways.

 Muhammad Umar Sultan and MD Nasir Uddin (2011)

The study on Consumer Attitude Towards Online Shopping helps to understand

about the various challenges and risks involved in the online buying.
Understanding customer’s need for online selling has become challenge for
marketers. Specially understanding the consumer’s attitudes towards online
shopping , making improvement in the factors that influence consumers to shop
online and working on factors that affect consumers to shop online will help
marketers to gain the competitive edge over others. The study also point out the
various strategies that influence the customers to shop online

 Changhao Dong& Jinaan Toaha (2014)

The purpose of this research work was to investigate the disadvantages and
difficulties that exist in each stage of customers’ online buying process. Based on
the research whether an e-customers get cheated or not, it mostly depends on the
individual IT skill and experiences. A customer with high IT skill and large
amount of online shopping experience could barely be cheated online. They could
easily tell those frauds and they could easily select which seller is trustable. On the
contrary, for those people lack of online shopping experiences and IT skills, they
might easily fall into the trap, because usually those online frauds pretend to offer
some products with incredable cheap price. Here it is suggested that e-customer
should take time to prepare relevant knowledge about those online frauds, even
though online shopping should be convenient, but it does not equal to that
everyone could shop online safely without any preparation.

 Isha Suman & Srujana G. (2011)

This paper attempts to cover different aspects of Internet Marketing strategies

employed by marketers. On different situations, different types of tools are advised
to be used in order to optimize content and increase the return on investment. It has
been shown for instance, that the ROI of email marketing is the highest. So, when
limited budgets are present, companies should migrate to this as the medium for
marketing. The display advertising is the one that must be taken into consideration
in order to influence the consumer decision making process. The presence across
all the channels ensures higher visibility of brand and helps to foster profitable
relationships with customers in the long run. With the advent of the online
marketing tools, the marketers are further challenged to make decisions in less
time. This field has also led to development of new businesses that provide online
reputation management and other tools discussed in the paper.

 Philip Kotler (2000)

His study on Marketing on 21st Century point out the reasons for the changes in
marketing and the business. The main radical reasons for these changes are the
development in the techonological advances, globalization and the deregulation.
These forces have created new behaviors and challenges. Customers increasingly
expect higher quality and service and some customization. They perceive fewer
real product differences and show less brand loyalty. They can obtain extensive
product information from the Internet and other sources, permitting them to shop
more intelligently. They are showing greater price sensitivity in their search for
value.

 Amira M. Omar1 & Nermine Atteya( 2020)

The study on the Impact of Digital Marketing on Consumer Buying Decision

analyzes the impact of e-marketing channels in customers purchase decision.
Customers make purchase decisions every day, and many variables affect any
decision made by the buyer. Various applications of the internet, social networks,
smartphone apps, and other digital communication tools have turned out to be part
of the daily life of many users around the world. Customers are becoming more
involved in the creation of the product and services they purchase, and that has
changed the control from manufacturer to customer. Web users are significantly
rising due to better access to mobile devices, which indeed occupies a majority of
their time.

 Tatiana Marceda Bach , Wesley Vieira da Silva(2020)

His study on Online customer behavior: perceptions regarding the types of risks
incurred through online purchases makes four main contribution to the field: (i) it
identifies the influence of three latent constructs that might affect online purchase
behavior; (ii) it gauges the risks associated with the latent construct of trust and the
adaptation of scales of perceived risk and decision making; (iii) it highlights the
need to reassess the strategies adopted by companies that sell online to reduce risks
and consequently increase trust in decision making; and (iv) it evaluates the
demographic variables that have a significant moderating effect on the
relationships of the constructs of trust and decision making during the purchase
process.

 Kaan Varnali, I(2010)

The study on The Impact of the Internet on Marketing Strategy presented a

systematic analysis of the early predictions on how the Internet will change the
business environment and its subsequent impact on marketing strategy and
compared early conceptual claims with more recent empiric findings and market
experience. Throughout the paper the academic knowledge on the impact of the
Internet on each of the forces shaping a company’s marketing strategy is explored,
and related future research avenues were suggested.

 Soyoye Kolapo M.(2015)

In his study on Online Marketing and Consumer Purchase Behaviour the internet
is considered as the communication medium for broadening the scope of marketing
among large number of consumers. It is the application of Internet and related
digital technologies in conjunction with traditional communications to achieve
marketing objectives. It comprises not only advertising that is shown on websites,
but also other kinds of online activities like email and social networking . His
findings shows that there is a significant relationship between consumer purchase
decisions and infrastructure of the internet

 Charu Panwar (2018)

The study aims to understand the consumer buying behavior while shopping
online. The study unveils the multidimensional perceived risk in online shopping
that will be helpful for the marketers in mitigating the perceived risk. Privacy is the
most relevant factor when it comes to buying product on-line. Customers are
reluctant to share their personal data related to residential address, contact number
and email address to the online retailers. Customers fear that the retailer might
compromise their personal data to other corporations and their personal data will
be exploited by unknown entities. Marketers may exploit this data and design such
strategies and marketing communication to mitigate this consumer perceived risk

 S Yogesh , N Sharaha(2019)

His study on Digital Marketing and Its Analysis aims at understanding the
preferred emerging media options used for marketing in the current situation . The
development of information technology, followed by the advancement of digital
communication tools, has encouraged businesses to change the way of
communicating the product. Digital Marketing communications strategy is a
strategy of using digital communication media. The study point to the need of
small businesses such as start-ups to successfully adopt and implement digital
marketing as a strategy in their business plan and to recognize the usefulness of
digital marketing in the competitive market.
OBJECTIVES OF THE STUDY

• To know the role of internet marketing in the modern world

• To understand how digital marketing is influencing online buying choice

• To know the challenges and risks in online buying

SCOPE OF THE STUDY

The Internet era has thrown open a new pathway for today’s marketing. The
Internet has made all traditional modes of business outdated and generated
amazing new possibilities in business By 2025 it is expected that a majority of
companies will have an online presence. In line with this, internet marketing is
growing at a very fast pace. Internet marketing is forging ahead on account of
many reasons. It levels the playing field and is more cost-effective. It increases
conversion rates and therefore generates better revenues. Internet marketing builds
a brand reputation by increasing interaction with the target audience .As the
number of websites and web pages increases, so does the scope of internet
marketing.

RESEARCH METHODOLOGY

• RESEARCH OBJECTIVE

This research is done to know and analyze the trends going on in the arena of
internet marketing. What new and innovative tools the marketers are using with the
aid of internet and what does the customer think about the internet marketing and
future of internet marketing.

• SOURCE OF DATA

The main sources of data are primary and secondary sources.

PRIMARY DATA : Questionnaire, Personal Interview

SECONDARY DATA : Journals, Websites, Articles

• AREA OF STUDY

The study was conducted in the area of Bangalore city,

• SAMPLE SIZE

The Sample Size to be taken was 100 in order to get the more accurate result

• SAMPLING TECHNIQUE

The sampling done is Convenience Sampling, the respondents were mailed the
questionnaire and were requested to forward them to their referrals

• RESEARCH TOOL

The research tool which was used in the survey was the close ended questionnaire