Internet as a marketing

The ultimate objective of all marketing efforts is to allow the consumer to take possession of the product or service that satisfies her/his needs. This includes the process of informing, persuading and removing all barriers for the consumer to possess the product or service. The Internet does not alter this ultimate objective.  What the Internet does alter is the specific implementation of the various elements of  the marketing mix directed toward the objective. While doing this, the Internet, as a computing network and an interactive two-way communication channel, provides marketers with new capabilities not available in traditional channels. These capabilities allow the marketers to (1) understand their consumers better, (2) communicate their message to the consumers more effectively, and (3) provide new services in fulfilling the needs of the consumers.

Having said this, it is to be noted that most organizations are still not clear of the impact of Internet strategies on their bottom line.  As the organizations struggle with the changing consumer preferences, new technology, and the inadequacies of the traditional channels in achieving their objectives, the introduction of the Internet as a potential channel has created both excitement and anxiety among the marketers. For instance, the projected Web advertisement revenues of $9 billion by 2002 represents a tiny fraction of the overall advertisement revenues.  A top executive of a leading consumer organization says that “the Web has the potential to be a dramatically more effective way for us to communicate with the people who buy and use our products” (Mand, 1998). While the same executive is concerned that the current state of the Web is not effective enough to really deliver the persuasive brand sell of other media, he also thinks that the eventual use of the Internet as an advertising medium is inevitable.

Brand building over the Internet is another area of concern of the marketers. While marketers like to capitalize on the reach and interactivity of the Internet to build online brands, the strategies that work in traditional media do not work so well on the Internet (Neuborne, 1998). According to a recent survey, banners, based on the billboard concept and the most popular Web advertising model used by marketers, are “looked at” by only 9.1% of online users (Maddox, 1998). But marketers also know that there is enormous potential on the Internet, with the current generation, which is comfortable with the technology, growing into the consumer generation.  Brand building efforts for this generation may have to consider, among other issues, consumer participation in the marketing efforts and replacement of the perception driven advertising models with experience driven interactive models. Also the Internet may be used with other marketing channels to build information flow and synergy among the product marketing efforts.

We can categorize the barriers to significant exploitation of the Internet as a marketing channel as follows:

1.   Limitations of the Internet in its current state such as limited band width, server capabilities and communication interface standards;

2.   Lack of measurement standards that can give confidence to the marketers to shift to Internet; and

3.   Absence of new business models that go beyond banner advertisement on the Web.

The communication capabilities of the Internet are being addressed by many government, research and corporate agencies. The measurement issues are also expected to be addressed and standards established to enable marketers to evaluate the benefits of the new media. But, only a few organizations have shown the willingness to develop new business models for the Internet and even here most of the efforts have been in digital products such as software and services.  We feel that marketers, while realizing that the Internet does not change their basic objective of serving the consumers, should evaluate their traditional consumer models and find new ways to establish a closer relationship with their consumers.  We attempt to provide a framework to understand some of the ways in which the Internet can serve as a marketing channel. But, much more issues have to be addressed to develop and use new Internet marketing models as electronic commerce continues to advance and impact the marketing function.