Marketing and Electronic Commerce

Why the web? Unique features of WWW for marketing.

  1. Multimedia
  2. 1 to 1 Marketing
  3. Location and Target Market
  4. Product Characteristics
  5. Channel Power
  6. Information Currency
  7. Level of Involvement


WWW is a multimedia medium. Thus WWW takes advantage of graphics, text, sound and video in a hypertext environment. This allows for excellent presentation of material without consumers experiencing information overload. As consumers interact with a web-site, they can select the information they desire, without being exposed to information that is not relevant. Conversely, marketers can display an exhaustive amount of information without being concerned with creating consumer information overload. Each consumer can therefore access the information that is relevant to him/her, all from the same source of information (the marketer's web-site).

WWW also allows marketers to acquire feedback from consumers. There are five instances where this can occur:

  1. Email/WWW forms
    This can be through Email requests directly to the marketer or by completing a form (survey) which sends the information to the marketer. It is very important that if you implement an Email option for consumers to use, that there is an adequate response infrastructure in place. Improving the communication access to the organization is half a step, to complete it the organization must respond in a timely manner.
  2. Feedback directly to the site
    Marketers can develop parts of their site that allow for feedback from consumers. This can help create a community among a marketers target audience. This is the only medium that allows for a community development and there are some compelling reasons as to why this should be beneficial to the marketer. By facilitating customer interaction, the one common thread between all those interacting is your product, this will enhance brand loyalty. If the interactive experience is very good, then customers will return to the site for the interaction as well as for product information. This gives additional reasons for customers to be at your site and therefore helps you create more exposure for your brand name.
  3. Log data
    Marketers can analyze the log data of the site to see how each consumer navigates the site. Here is an example. This information can prove very valuable to the marketer in developing the site and it is unique to an interactive medium like WWW. Information that a marketer can get about those accessing the site includes the referring URL (how they came to the site, and each link within the site), the number of page a browser view, which are the most popular pages and more.
  4. Cookie files
    Marketers are also able to interact with a file on the consumers web-browser, known as a cookie file. This allows a marketer to identify each browser as an individual and record information in the cookie file such that when the browser returns the marketer can recognize this and present information appropriately.
  5. Subscriptions
    A second method of identifying individual browsers as they enter the site is to use a subscription form. By having the brower give you demographic information and selecting a unique password to access the site, you can tailor the site when the browser accesses the site and when s/he returns.

1 to 1 Marketing

Interaction allows for a 1 to 1 experience between the browser and the marketer. Traditionally, products have been marketed using a top-down 1 to many (mass marketing) strategy or more recently 1 to few (target marketing) strategy. WWW allows for a more effective 1 to 1 marketing strategy. Thus the marketer can market to the individual's needs, not to the broad needs of a target audience. This is very important in a highly competitive marketplace where the "customer is king!" There are two levels of 1 to 1 marketing that can be acheived:

  1. The individual browser is able to navigate the marketer's site to satisfy his/her informational needs. These needs are unique to the individual, and hence the indivual's path through the site is unique. Each browser is free to take control over his/her navigational path, framed around the structure of the web-site. The information the individual receives is thus unique to that individual and to that session.
  2. At a more sophisticated level, the actual site that the browser accesses can be unique to the individual browser. This is achieved by taking advantage of the browser's cookie file or using a subscription form. Once the individual browser is identified as a unique browser, and information is stores regarding the browser's previous navigational patterns (and demographic data from subscription forms) then the site can be designed for a unique experience. This is the same site that can reach the entire WWW audience.

Location and Target Market

WWW is a global medium. Thus you are able to reach someone on the other side of the globe as easily as you are able to reach someone in your geographic area. The cost of achieving this reach is also the same as reaching a local audience. This is a significant departure from traditional media where cost is strongly associated with the breadth of reach a marketer can achieve. WWW's global reach presents the following issues:
  1. The ability for a small firm to broaden its target audience(s).
    Because there are significant barriers to entry (cost) in developing a global market using traditional media, global markets are the province of large companies. WWW now gives small companies the ability to communicate with a global audience.

  2. The ability of a global firm to enhance its marketing effort.
    Firms that already compete in the global market place should be able to use WWW to enhance their communication processes. This can be done internally (using an intranet), developing better communication with channel intermediaries (using an extranet) or by using WWW to communicate with customers and potential customers worldwide.

  3. The dilemma that a global company may experience with traditional regional marketing strategies.
    Many global companies develop marketing strategies on a regional basis (since geography is a limiting factor). This can present some problems since a WWW browser can get WWW information from WWW servers around the world (no geographic limiting factor) and could access a company's U.S. marketing information when based in Europe and visa versa. This information will be different from the traditional European marketing information. The difference could be in the brand name, cost of product etc. This is an issue that extends to global internal information (intranets). Employees from around the world can access internal information that they wouldn't previously have had access to.

  4. Global niche markets.
    Markets will begin to evolve for products where the common thread in the market is the desire for the product, regardless of geographic location. Specialty products that may not have been efficiently marketed before because the demand in limited (geographic) areas was small, can now have access to a market that has sufficient demand, worldwide.
Refer to session 2 for detailed analysis of those accessing the web.

Product Type

There are certain types of products that make "more" sense to have a WWW presence than others. The characteristics of these products are:
  1. Information rich products
    Products that require a consumer to undergo significant research before making a purchasing decision can be considered information rich products. WWW allows marketers to present detailed information about products that the consumer can interact with in his/her own time. Examples of such products are electronic (Sony) cars (Volvo) and mortgages. Consumers feel very uncomfortable walking into a car show room with no real knowledge as to the value of a car, new design features available etc., especially if they feel that they will experience a sales person who is very persistant in his or her selling effort. It has been suggested that consumers would rather visit the dentist than a car show room!! By allowing consumers to become more informed about the product, they can then go to the showroom to make a purchasing decision on their own terms.

    WWW is not a useful medium for generating awareness with your product, but is very useful for educating a potential customer who is deciding which brand to buy.

  2. High-priced products
    The demographics of the WWW audience make it attractive for expensive items to be marketed using WWW. This is also similar, however, to information rich products since most expensive products are information rich and high risk purchases.

  3. New Products
    WWW is a useful medium for marketing new products. There are a couple of reasons for this. Because consumers will need a certain amount of education before purchasing a new product WWW allows consumers to interact and receive a lot of information. More importantly, WWW is effective for pioneering products (those new to the marketplace) because the type of person that uses WWW is an innovator (or perhaps early adopter). These types of consumers tend to purchase new products (and take more risks doing so) sooner than other target markets who tend to like to see others purchase the product first and then make a decision (less risk oriented).

  4. Technical products
    Since WWW is an emerging "high tech" medium then those that access it are more likely to be technically literate and therefore more likely to purchase technology products.

  5. Lifestyle products
    Products that offer convenience to demanding lifestyles will also appeal to the type of consumer that accesses WWW.

Channel Power

There are two key issues that are of concern with channel power.
  1. Disintermediation
    Channels of distribution are becoming shorter and shorter. A typical channel that may have had three levels (distributor, wholesaler and retailer) may perhaps only have one. The reason for the shorter channels is that companies are able to take on tasks that were traditionally performed more efficiently by specialists. WWW is allowing for more efficient communication from large marketers to individual customers (one to one marketing) thus making intermediaries whose strength often times is their customer base, redundant, and an added expense to the marketing effort. Marketers also have an incentive to reach directly to their customers as they can then get detailed information about those that purchase the product (usually information that intermediaries could gather and use as collateral in bargaining with manufacturers).

  2. From the marketer to the consumer
    The consumer interacts with WWW giving them control over processing information. Since consumers can control what they see, when they want to see it, and spend as much time viewing the information as they wish, this changes the balance from the marketer to the consumer. Traditional media "pushes" information to consumers when it is appropriate to satisfy the goals of a marketing program. Consumers have little choice regarding when they are going to experience a marketing message from a particular company (although they can zap it when it appears!!)

    Consumers interaction with WWW can go as far as "voicing" their opinions regarding a marketer's product either at the marketer's site, or more significantly at the consumer's site (marketers do not have sole right to publish information on WWW, an upset WWW consumer can be a pretty interesting foe!).

Information Currency

WWW is an effective medium if there is a need to change the marketing information on a regular basis. Because the information is "hosted" with the marketer, the marketer has access to change the information when it is appropriate and when the consumer accesses the information, s/he will always be accessing the most current set of information. Thus not only is it simple to update the information, the information is available globally as soon as it is updated (no distribution costs and time delays). If you are a manufacturer of products that are distributed worldwide and require current documentation at all time, WWW is more efficient than traditional methods of distribution (mail).

It is important that WWW marketers do keep their information current. Outdated information is not acceptable practise if you want to create a positive affinity with your customers and potential customers.

Level of involvement

Reports that marketers only invested $360 million in 1996 on WWW advertising can be misleading. WWW is the first medium that allows marketers to move beyond simple advertising and retailing and allows them to get more involved with the medium itself and offer a much richer marketing program. Levels of involvement in WWW as a medium can be classified as followed:
  1. Minimum presence: advertising medium (banners only)
    Developing an advertising banner only campaign on WWW would be similar to developing an advertising campaign on more traditional media. It takes no advantage of the interactive nature of the medium and is poor use of WWW.

  2. Web-site only
    Many marketers have developed web-sites on WWW. This is their central information point on WWW. The focal point of a WWW advertising campaign.

  3. Web-site and ad banner campaign
    This is the most involved level of a WWW presence. A web-site that serves as the focal point, with banner ads strategically placed on other sites that are used as gateways to the web-site or to target sites that link between the banner advertisment and the web-sites. Target sites are particularly useful if the banner advertisement is pushing a particular promotion and the target details the promotion and links to the marketer's web-site.
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