Marketing and Eletronic Commerce

A January 1997 survey found:

Estimates suggest there are between 3 to 7 people per host with access to the internet.

All the major commercial online providers, such as American Online, were traditionally networks in isolation (i.e. AOL users only had access to AOL information and other AOL users), and not a part of the Internet. This changed as demand for access to the Internet from their users forced them to create access or risk losing their customers. These providers now promote access to the Internet as a primary benefit of subcribing, their proprietary information secondary.

Packet switching breaks down messages into very small chunks that are dispursed over the internet to arrive at the intended location and compiled in an efficent manner. The packets may take different routes (variable routing) if this is necessary (i.e. a node is busy or down). Thus the internet does not rely on any particular node (except for the receiver's node) and link between nodes, to deliver a message. It also allows several users to share a particular link.

The following example explains this concept.

Imagine you are part of a quartet performing in San Francisco. Your agent has been asked that you play at the Royal Albert Hall (London) the following evening at a "concert of a lifetime". As you are travelling to the airport in your limousine your agent is making your travel arrangements. Due to the short notice of departure you are unable to sit together. In fact, you have to fly American Airlines (via Chicago), the other three members have to fly US Air (via Philadelphia), Conowingo Air (via Jamaica) and Going Broke Air (via Iceland). You depart on your different airlines, taking your different routes, arriving in London the next morning. You then reassemble and prepare for the concert.

Thanks Richard Gordon :)

• Email, 1 to 1 communication (1 to few)
• TRN, Many to many communication
• Telnet, Remote login
• FTP, Transfer of files from one computer to another
• WWW, All the above and more, Primary focus of the course

Comparing www with other mass media

Media	Cont. Int.	Comm. model	Linear	Obtrusive	Control	Presentation	Reach Flex.	Scalable	Transactional
Billboard	N	1 to many	L	Y	N	P	S	N	N
Newspaper	N	1 to many	L	Y	Y	P	Q	N	N
Magazines	N	1 to many	L	Y	Y	P	Q	N	N
Direct Mail	N	1 to many	L	Y	Y	P	Q	N	N
Radio	N	1 to many	L	Y	N	A	S	N	N
T.V.	N	1 to many	L	Y	N	AV	Q	N	N
WWW	Y	1 to 1	N	N	Y	AVP	F	Y	Y

Table key:
Cont. Int.: N (no interactivity) Y (interactivity)
Refers to the interactivity of the content delivered by the medium.
Comm. Model: 1 to many (mass targeting), 1 to 1 (mass customization)
Comm. Model refers to the communications model.
Linear: L (Linear), N (Non Linear)
This refers to the method in which the user can process the information.
Obtrusive: N (unobtrusive) Y (obtrusive)
Refers to whether the media pushes (obtrusive) the message to the consumer, or the consumer pulls (unobtrusive) the information.
Control: N (no consumer control) Y (consumer control)
Refers to whether the user has control over processing the information.
Presentation: P (Print), A (Audio), V (Video), MM (Multi-media)
This refers to the media available to rpesent the information.
Reach Flex.: S (no flexiblilty) Q (moderate flexibility) F (determined by customer)
This refers to the ability to use the media to cover breadths of marketplaces (i.e., local, regional, national and/or international).
Scalable: Y (yes), N (no)
Scalable refers to the marginal cost of increasing the audience size that is exposed to the message.
Transactional: Y (yes), N (no)
This refers to the ability to use the media to execute transactions.

Traditional Media Model

------------------------->Communication flow

Marketer--------Medium----------Target Audience
   ^                                  |
   |                                  |
   |                                  |
   |          Feedback                |
   ------------------------------------

<-------------------------Communication flow

WWW Communication Model

Marketer-->---<-----WWW---->---<----Target Audience

Communication flow is from:

Marketer to WWW
Target Audience (TA) to WWW
TA to Marketer (via Email)
Marketer to TA 

WWW is also freeing up the publishing market which has traditionally been the territory of the very few (those that can afford it). Now small publishing companies are evolving and individuals have the ability to use WWW to "publish" information. The plethora of information, however, is creating an interesting dilemma: too much information creates individual processing problems. There is now a need for a market to evolve that focuses on efficient information delivery and processing.

Marketer Push (Traditional)

Marketer Information-------------> Mass Market

Demand Pull (Server host)

Marketer Information <----------- Individual customer demand

There are two considerations that one should keep in mind before evaluating media dollar comparisons:

The true value of the medium should be reflected in its ability to allow a corporate presence to perform marketing functions, not just the value of the advertising banners which are essentially there to drive browsers to the online presence. Other media do not allow for a "presence" in the same sense that WWW does, thus dollar comparisons are invalid.

1. Content
2. Browsers
3. Access

"Browsers" are software programs that are used to view WWW documents. To put the HTML and browser in simple context you can use the analogy of the television. You have programs (developed content) and TV sets (browsers). The marketplace for browsers is very competitive. The market leader (and commercial pioneer) is Netscape's Netscape Navigator. Microsoft's Internet Explorer is emerging as a competitive threat, as one would imagine once Microsoft realized the value of an internet strategy.

The third component is the access provider. To continue our TV analogy, the access provider is similar to your local cable company (assuming that you need a cable company to provide you access to the network and cable TV). An Internet user generally has access from two disctinct sources:

The marketplace for commercial internet service providers is very competitive. The types of companies involved can be broken down as follows:

• American Online
• Prodigy
• Compuserve
• Microsoft Network (bundled with Windows 95)