- Introduction:
The internet today is a powerful source of information and an incredible marketing tool exploited by many a company in reaching out to their various clients and customers across continents. It has become a source of gathering prompt and reliable information and converting raw statistics and data into advantageous results much quicker for many firms and corporations. It is not just the big multinationals that have found the internet age useful to their business strategies, but even small companies, starting up in garages have found a means through which they could reach out to a demographically wider audience. Through the internet, companies now have the freedom of even pricing their products in a way they seem fit for profit. Telecom, banking, electric and other similar companies have realized that a loyal customer is the one who is the most happy, satisfied and content with the services offered by the company. Ever since the onset of the internet and the e-commerce boom, these companies have gone ‘online’, setting up their entire company on the ‘net’. Be it for products and services or even billing, customers can now do away with mile long queues and get their work done online, saving them their much valuable time. Thus, we see that it is not just the retail sector that has benefited from the internet, but so has the service industry.
Over the past few decades there has been a complete revamp and remodeling of conventional business strategies. Product based companies today aim at effective marketing which means in order to keep their business strong, they need to move their products faster off the shelves. To achieve that, getting more people introduced to and made aware of their products is imperative. Keeping businesses thriving as well as delivering to consumer needs impeccably are what makes online marketing such an effective tool.
A thorough research is what customers prefer before buying any product. Online marketing facilitates customers to dig in to the minutest of detail of any product, compare prices with different vendors and make faster decisions by just sitting behind their desks. They can do away with the arduous procedure of hopping between stores just to ensure they get the right deal. Certain websites such as eBay or letsbuyit allow customers to bargain with sellers by placing bids on products with prices they see fit. Thus, a direct confrontation, more often an uncomfortable one, can be avoided. In a nutshell, the internet paves way for customers to research a product thoroughly, understand their needs comprehensively and use the ocean of information available to them to make an educated decision whether to proceed with a purchase or not.
In this essay, the different advantages and disadvantages as well as a few strategies adopted by businesses in online marketing will be discussed. Statistics pertaining to the use of internet in different business strategies and model will also be covered. The influence of the internet on simple commercial activities and its effect on our daily lives will also be discussed in this essay.
- Business and the Internet
Technology today has come a long way over the last few decades and is now immensely inventive and beneficial to those who know how to handle it. Anybody can log into their computers and take care of their finances, buy and sell products and services, collaborative with prospective partners etc. all from the comfort of their homes. All this can be traced back to the early 90s when the World Wide Web took shape and companies began rushing in to put themselves up on the ‘web’ to cater to the more tech-savvy people. Internet based companies have to develop unorthodox business models compared to conventional businesses due to their unusual methods of attracting customers. Many successful product based companies have both a real store as well as a virtual one where customers have the advantage of ‘handling’ a product, getting a complete look and feel, before buying eventually buying it.
However, companies relying solely on the internet have to rely on the trust and faith a customer has in them. Additional tactics are required in terms of advertising and promotions. Different kinds of businesses have to adopt different measures to ensure they run effectively. For instance a company dealing with business to customer (B2C) transactions will have a different business model compared to a business to business (B2B) company.
Companies such as Amazon, Bestbuy.com etc. are B2C companies directly touching base with a customer. These companies often rely on a customer’s knowledge on a particular product or a particular brand they want to buy. These companies target customers with a bank account or credit card and access to an internet connection to run their business. However, there are instances, especially during the Holiday season, where there is a dramatic decline in the number of purchases made online as can be seen from the figure below:
This trend could be attributed to many customers feeling the need of staying with tradition and doing most of their holiday shopping in the ‘real world’ rather than the ‘virtual world’.
It is not just the buying and selling of commodities that makes the virtual world such a hot marketplace. With the onset of the internet phenomenon, companies have an option of putting their stocks up online and individuals can buy, sell and trade their stocks online. Investors can get instant status updates on their stocks and trade on world markets anytime during the day within a matter of seconds without waiting for brokers to put their transactions across. All this, at their fingertips from the comfort of their homes and workplaces. Faster and effective trading and e-commerce implies faster monetary movement and this directly influences the economy.
- How online marketing works
An online marketing company’s internet homepage is like a virtual store and like any ‘real’ store, the easier the customers are able to navigate through, the more successful is the store. Having a user friendly website, where customers can stroll through without bumping into unnecessary hurdles is crucial for a company to thrive online. Companies should also ensure customers are directed to their sites through the easiest of modes possible. They should be able to target customers who know exactly what they are looking for and at the same time cater to those who are still trying to make up their minds. Thus optimizing their websites with target specific keywords becomes crucial. This is where Search Engine Optimization or SEO comes into play.
Today, no successful internet marketing company would start up without a clear SEO strategy chalked out. Statistics show that there was an average of three billion searches made everyday in 2012 (Fig 2) and with such an explosion in the number of searches. Customers usually use search engines to search for products and services they would like to use and it has been shown from research (1) that customers view just about 3 to 5 results on the first page of the search engine’s results. This implies that good results turning up in subsequent pages are usually filtered off. Thus it becomes vital to a company’s prospects to feature in the high ranking search results and hence SEO becomes crucial in directing as much traffic as possible to it.
Fig 2: Increase in the number of daily searches over the years (courtesy hubspot.com)
Social media is another tool widely exploited by many online marketing companies to sell their products. For a product or service company, getting their products out in the open is the only way they are going to prosper. To get this underway and start moving their products, getting noticed, gaining attention and networking becomes essential. This is usually achieved through various social networking sites such as Facebook, Twitter, LinkedIn etc. Blogging is another powerful technique of getting noticed. Companies have dedicated ‘bloggers’ posting reviews, discussing other products etc. on different sites and forums. These blogs usually have links that directly connects customers to the dedicated company thereby directing more traffic to the website in discussion. Figure 3 shows the number of people using different social networking sites from February 2005 to December 2012. As can be seen, though there is a dramatic rise in the number of social networkers across all age groups, the steepest rise is the age group 18-29. Many companies targeting a younger audience, makes use of this statistic to portray them and get seen online.
Fig 3: The rise in the number of people using social networking sites such as Facebook, Twitter, etc. across different age groups.
Thus, social networking now isn’t just used by people to touch base with their friends and family who might be miles away, but also by smart internet marketers who want to spread their product awareness over a wider demographic. Dedicated pages and profiles pertaining to a specific product or a range of products or even a company as a whole have come up in the more prominent social networking sites. Companies hire specialists in the fields to monitor and track the status and progress of these company profiles online, make whatever changes they seem fit and ensure they have a wider audience and viewership. Social media marketing has become such a powerful and important instrument in online marketing that many business schools teach this as a part of their curriculum.
- Pros and Cons of Online Marketing
- Benefits to Customers
Internet marketing has opened up access to a wide spectrum of products and services online and has even presented many opportunities that benefit customers. Customers now have the opportunity of thoroughly researching a product or a service from multiple sources. There is now a transparency for customers when it comes to pricing of a particular product. This means that customers can compare prices with different vendors online and fall back on a price or a vendor they deem fit. All this can be done without the customer physically having to hurdle between stores just to compare prices and quality of a product. Online marketing overcomes traditional marketing since customers can sit at home, watch product demonstrations and simulations, compare prices, value each product and make an educated decision with just a click of a button.
Allowing a customer to bargain in the virtual world is a major advantage of internet marketing. Customers can do away with uncomfortable personal confrontations when it comes to bargaining in traditional business practices. Instead of a company setting a price on a product, the internet allows customers to set their own prices for a product they want to sell and allowing buyers to bid. This allows customers to make a profit they seem suitable for their products as well as allows buyers to get their desired product at rates cheaper than the market rates. The internet allows customers to conduct impromptu transactions online and having the satisfaction of knowing that their product has been booked. Many general queries a customer might have are usually addressed in the FAQs page in every website, giving instant solutions to typical doubts a customer can have, instead of visiting a store personally and asking the staff present there. There are always customer service representatives available online by virtue of chats or emails or toll free telephone numbers who cater to the finer questions a customer might have.
- Disadvantages
Despite appearing lucrative to customers there are chances where online marketing might turn prejudicial. In turbulent economic times, companies might find it difficult keeping a fixed price on products and services. Contrary to what is seen in stores, where a product listed at a particular price, sells for the same, in online marketing, marketers and businesses find it easier to revise prices to acclimatize with the economy. This kind of abrupt price swings might affect a customer to an extent of losing loyalty to a particular company or business. Even though inevitable, businesses must take necessary care to hike prices in a pocket friendly way, giving adequate time to a customer to adjust.
In online marketing there is always a delay before customers eventually get their hands on the product. Thus it becomes critical for these businesses to have an effective delivery system drawn out so as to deliver the goods at the soonest. During the waiting period, businesses have to ensure that customers do not find a product more lucrative than the one ordered and cancel the product in the process. This competition ensures that businesses keep their prices competitive and attractive. As mentioned earlier, in online marketing, customers have to rely on their prior knowledge of a particular product that they are about to order. Be it in terms of quality or quantity, they must depend on their trust to the company and what they know about the product. Thus it becomes important for companies selling goods online, to make this decision making as easy as possible. It can be in terms of posting photographs of the product from all possible angles, attractive offers, posting testimonials and user reviews and allowing customers to have a healthy discussion with those who have already used the product. This would ensure that the customer eventually bought the product online rather than visiting a store and procuring it.
- Conclusions
According to the UD Department of Commerce, there has been a constant rise in the number online transactions since 2000. The following figure 4 confirms this statement.
Fig 4: Online Marketing forecast between 2012 and2017
This shows that there’s a constant rise in online marketing revenues over the years which means that there is immense potential among online marketing companies to grow their revenues exponentially in this period. To add solidarity to the statement, the following figure 5, shows how Amazon.com has evolved in about a decade since its inception. From what is expected, these figures are about to rise further with countries such as India, China, Philippines etc. joining in this in this race to outbid each other. Many young entrepreneurs in emerging countries are making use of the internet to reach out to a wider demographic and making their products and services available in first world countries without having to move around too much, thereby conducting a more effective and efficient method of business.
Fig 5: Graph depicting the exponential growth of Amazon.com
Economists, experts in the field and those working in the accounting industry corroborate that online marketing and e-commerce have established themselves substantially enough to find a permanent place in the economy. It is evident that ever since its inception, the economy has thrived and flourished. Despite minor turbulences along the way, business establishments and individuals have learnt indisposable lessons on how to manipulate this vastness of information to their advantage. Businessmen running multi- million dollar enterprises and fresh start ups alike have begun to realize the potency of the age of information. Those who embrace this ideology with revolutionary ideas and visions are the ones who are going to race ahead of the others in the pack.
- References:
"e-commerce." 123HelpMe.com. 12 Feb 2014
"How Internet Marketing Builds Upon Marketing Principles and Offers Customers Greater Freedom."123HelpMe.com. 12 Feb 2014
“The State of SEO and Internet Marketing in 2012 – Aug 20, 2012”http://www.slideshare.net/HubSpot/the-state-of-seo-and-internet-marketing-in-2012
“The Importance of SEO in Internet Marketing”, Sept 2012, Advanced SEO
