E-marketing -- A New Concept

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1 International Journal of scientific research and management (IJSRM) Special Issue On e-marketing Road Ahead Of India Pages Website: ISSN (e): E-marketing -- A New Concept * Dr. N.Makesh * Assistant Professor, Department of Commerce, Pasumpon Muthuramalinga Thevar College, Usilampatti, Madurai, Tamilnadu. Id : makeshpmt2007@gmail.com Abstract In most general terms, any marketing in the Internet should be considered electronic marketing. As it has been mentioned, due to the technical peculiarities of the Internet, almost all forms of electronic marketing have certain features of direct marketing. It should be noted that marketing by is not a predominant form of electronic marketing. Marketing by has the notably expressed advantages of electronic marketing, i.e. apart from businessmen s own websites; marketing by is the cheapest and the most accessible Very often marketing by is identified with a socially undesirable or even negative marketing, spam, since social challenges raised by electronic marketing manifest themselves in its form rather dislikes. Due to the abovementioned reasons, in this article marketing by is regarded as the fair representative of all types of direct electronic marketing. Cases when marketing by is implemented by addressing it to a particular user are extremely controversial. As mentioned before, other forms of electronic marketing (e.g. search marketing) are also very often realized as direct marketing (addressed to a particular user. At the macroeconomic level, the attractiveness of electronic marketing (and, in particular, direct electronic marketing) is determined by the following two basic macro factors (Arens, 2006): Firstly, in the present-day business the use of mass marketing is constantly decreasing, in general. In small, clearly defined markets more and more special marketing means are used to establish and maintain close contacts with consumers. Secondly, the development of information technologies and the Internet stimulates orientation towards marketing segmentation. Mass marketing is replaced by marketing orientated to a particular user or a group of users. Micro-level factors are even more significant in determining the attractiveness of electronic marketing: Introduction Electronic marketing offers a significant economy of business resources in comparison with the traditional marketing channels. Most of the small and medium enterprises cannot afford a big marketing budget (especially at the time of economic recession), human resources and their time resources are limited too. Electronic marketing is significantly cheaper; besides, fixed costs related to it are also minimum: several or even several tens of times lower than, for example, those of TV marketing. Electronic marketing may be subject to an extremely precise dosing in terms of the marketing resources available in the company at a particular time, i.e. it is scalable and its overhead costs (costs incurred in increasing the audience of marketing) are rather low. Electronic marketing and, in particular, direct electronic marketing provides unique segmentation opportunities; electronic marketing allows an easy and rather cheap (or even free of charge) segmentation of consumers according to the geographical criteria, interests, sales history, etc. Electronic marketing allows fixing its efficiency, i.e. conversion into sales; in most cases it is necessary to pay for electronic marketing only if a consumer responses to the marketing communication (e.g. reads the marketing message, clicks on the link of the marketing client, etc.). Electronic marketing allows establishing a direct contact with a client or a potential client; present-day technical possibilities allow immediate interactive communication with a consumer responding to the marketing. Electronic marketing, in essence, is global, i.e. it allows reaching a global consumer with minimum efforts and costs; most marketing means are global, suppliers of marketing services (e.g. Google or Face book) offer substantially unified and universal marketing instruments for any market or consumer segment. Dr. N.Makesh, Special Issue On e-marketing Road Ahead Of India Page 50

2 Every company, irrespective of its size, may take advantage of the majority of the abovementioned factors; therefore, electronic marketing is especially attractive to SMEs. All the abovementioned advantages can also be observed while analyzing electronic marketing (marketing by ) or direct electronic marketing, as it referred to in this article. The efficiency of direct electronic communication by , i.e. the reaction of consumers to a marketing message, is below 1%; however, due to significantly low costs of such marketing, its economic efficiency (determined through the evaluation of investments or return on investment) is almost twice or even thrice higher than that of such traditional marketing means as television or radio. The cost of direct electronic marketing (electronic marketing by ) does not comprise a large share of the marketing budget of business companies; however, it generates a rather significant income. Moreover, a considerably high return on investment of direct electronic marketing determines its increasing attractiveness at the time of economic recession, This paper also attempts to contrast e-marketing with traditional brickand mortar marketing by proposing the 7 Cs of e-marketing. These 7 Cs are fundamental to understanding the intricacies of Internet marketing and to transforming a venture from being a mere web presence to a highly successful eventure. They are also instrumental in shaping the overall business strategy and the economic model that an organization needs to adopt. The value propositions of products and services offered in the physical world are essentially limited point solutions that meet only part of a consumer s need or want. In the online world, even a simple banner advertisement can be both an advertisement and a direct marketing service. The banner raises the passive consumer s awareness of a product. Yet it also encourages the consumer to pursue action by clicking on it. E-marketing must be defined to include the management of the consumer s online experience of the product, from first encounter through purchase to delivery and beyond. Digital marketers should care about the consumer s online experiences for the simple reason that all of them -- good, bad, or indifferent -- influence consumer perceptions of a product or a brand. The web offers companies ownership and control of all interactions with customers and thus creates both the ability and the need to improve their overall experience. There are two reasons for building the concept of e-marketing around consumer experiences. First, this approach forces marketers to adopt the consumer s point of view. Second, it forces managers to pay attention to all aspects of their digital brand s interactions with the consumer, from the design of the product or service to the marketing message, the sales and fulfillment processes, and the after-sales customer service effort. The 7 Cs of E-Marketing The Internet allows for the entire sales cycle to be conducted on one medium, nearly instantaneously. From making the consumer aware of the product to providing additional information to transacting the final purchase, the Internet can accomplish it all. The Internet is like one big point-of-sales display, with easy access to products and the ability for impulse shopping. Impulse shoppers have found a true friend in the Internet. Within seconds from being made aware of a product, consumers can purchase it online. Further, with the targeting techniques available to advertisers, consumers who turn down a product because of the price can be identified and served a special offer more likely to result in a purchase. In the right hands, with the right tools, the Internet really is an advertiser s dream come true. As opposed to the 4 Ps of brick-andmortar marketing, the changing outlook in the area of e-marketing can be explained on the basis of 7 Cs of e-marketing. Contract: The e-marketer s first goal is to communicate a core promise for a truly distinctive value proposition appealing to the target customers. Content: refers to whatever appears on the website itself and on hot linked websites. If chosen appropriately, it can increase both the rates at which browsers are converted into buyers and their transactions. Construction: The promises made by e-marketers are not unique to the Internet, but the medium s interactive capabilities make it easier for them to deliver on their promises quickly, reliably, and rewardingly. In practice, this means that promises must be translated into specific interactive functions and Web design features collectively giving consumers a seamless experience. Such design features as one-click ordering and automated shopping help deliver the promise of convenience. Community: Through site-to-user and user-to-user forms of interactivity (such as chat rooms), e-marketers can develop a core of dedicated customers who become avid marketers of the site too. Dr. N.Makesh, Special Issue On e-marketing Road Ahead Of India Page 51

3 Concentration: Targeting through online behavioral profiling. Advertisers have known for some time that behavioral targeting (a.k.a., profiling) is vastly superior to simple demographic targeting. Knowledge of a consumer s past purchases interests, likes/dislikes, and behavior in general allows an advertiser to target an advertisement much more effectively. Department stores have long kept track of consumers past purchases. They are thus able to project what other types of products a consumer might be interested in and then send an appropriate coupon or sale offer. Credit card companies are the ultimate gatherers of behavioral targeting information. They maintain vast databases of cardholders past transactions, and they sell lists of this data to advertisers. The same type of behavioral model is forming on the Internet. Publishers and advertisement networks monitor the items that a consumer has expressed interest in or purchased on a site (or network of sites) in the past and target advertisements based on this information. Convergence: We will soon enter the next round of the E-marketing battle as broadband reaches the masses. The Internet will become more ubiquitous and wireless; televisions will become more interactive; video/data/voice appliances will converge; brand advertising and direct marketing practices will integrate; domestic brands, commerce and marketing will become even more global; and big marketing spenders will spend more money online. Many companies that are well positioned today will need to continue to evolve to take advantage of the opportunities. The success of Internet advertising companies will largely be driven by how they maneuver among the coming developments. Rich media, brought on by broadband, will allow advertisers much greater creativity by bringing in new types of advertising to the Internet, as well as enhancing some of the more traditional forms. Broadband technology will allow the convergence of television and the Internet. Dubbed interactive TV, in its simplest form, will consist of a television with some interactive capabilities. Basically, a user will see a television screen that is three-quarters traditional television, but with a frame that has Internet capabilities. This frame will allow users to access up-to-the-minute sports scores or news on the Web, for example. More importantly for E- marketers, it would allow viewers to immediately leap to the website of an advertiser whose ad was being shown. The user could find out more information or order the product right there. Commerce: The last emerging fundamental of e-marketing is commerce, whether it includes offering goods and services directly, or marketing those of another company for a fee, thus helping to cover the fixed costs of site operations and to offset customer acquisition costs. To be successful on the Internet, e-marketers will have to do more than reproduce their off-line business models on line because these business models work only at considerable scale. Interestingly, It is possible for online marketers to be profitable even at lower sales volume if they exploit efficiencies in e-marketing and synergies with the off-line business, with examples as follows. Exploiting more than one channel to close the transaction: Although early winners on the web might belong to an exclusive club of Internet start-up companies, established players in the off-line industry can catch them and even overtake them by offering a choice of channels. Leveraging low customer acquisition costs: Traditional brick-and mortar companies can bring their existing customers online at a much lesser cost than Internet start-up companies who must lay out a hefty amount per head to acquire customers. Exploiting alternative revenue streams: An online presence offers an E-marketer a wider variety of sales opportunities. For web-based retailers, acting as an agent on behalf of the customer can become a revenue source in the future. Purchasing scale at low volumes: E-marketers can cut down on their purchasing cost and shorten their procurement cycle by replacing EDI tools with Internet based ones that facilitate product comparison, streamline logistics, and help B2B vendors aggregate their retailer s back office purchases. Reducing customer churn: Given the high cost of replacing established customers, losing them is expensive. A web presence supplies the personalized attention that could keep customers loyal. Maximizing the pricing potential: It has been reported by consumer researchers that buyers shop online more for convenience than for cost. In view of this relative indifference to price, e-marketers can capture some margin premium, at least in the early days of their sites Challenges:There are five challenges that almost every company involved in e-marketing is facing right now: Dr. N.Makesh, Special Issue On e-marketing Road Ahead Of India Page 52

4 (i)a bad reputation: A lot of money spent on Internet marketing over the past few years was wasted. Why? One big reason is that the stock market distorted company valuations and rewarded (or at least failed to penalize) profligate attempts to drive traffic or acquire customers -- even if only temporarily. Now e-marketing has a bad reputation. And half-baked metrics such as click-through rates (CTRs) still paint a picture of inefficacy and failure. Plenty of evidence shows that the Web is the most cost-effective branding medium available, but the Net's reputation will need to be rebuilt one success at a time. (ii)marketing integration: Most major marketing efforts utilize multiple channels, on- and offline. , Web advertising, and viral Internet marketing should serve concrete, measurable objectives as part of an integrated campaign. But coordinating e-marketing with other marketing efforts is an underdeveloped art. Some companies have successfully linked the Net to under-the-cap promotions or to teaser campaigns for new product launches. But all too often the Internet is tacked on at the end of a marketing plan. Determining the strengths (and weaknesses) of the Net relative to other channels is a project we all should be working on. (iii)e-crm.: Imagine recognizing the needs of customers as they enter your site. Over time, through implicit and explicit data, you learn about the preferences of each and can serve customers based on their habits, needs, and purchase drivers. You build deep loyalty, and you increase your share of your customers' wallets.you've probably heard that vision pitched dozens of times. So have your clients. Expectations that the Web will be able to deliver e-crm are extremely high, but many Web sites are barely usable, let alone optimized for each customer. Successfully managing customer relationships on the Web is harder than many have made it out to be. The industry has a lot of work to do to meet its promises. (iv)privacy: Things have quieted down somewhat since backed away from its plans to merge its online data with offline Abacus data. But the industry's privacy issues have not been sufficiently resolved. Most consumers don't completely trust Web companies and shy away from offering information bout themselves. Companies that collect data responsibly are exposed to misguided regulation that spammers and scammers invite. Sound policy, adopted industry wide, is imperative. (v) Traditional advertising dollars: The discrepancy between the amount of time people spends online and the amount top advertisers spend there is enormous. According to a recent Morgan Stanley Dean Witter report, the top six advertisers spend less than one percent of their advertising dollars on the Web. With dotcom ad spending in decline, attracting traditional advertisers (mainly by addressing the four issues above) is the key to the industry's growth. A final note: Many of the members of the organization I addressed last week had over the past year found jobs in e-marketing and subsequently been laid off. Yet despite the lack of security, shifting organizational structures, inexperienced and chaotic management, and long, grueling hours, nobody wanted to return to traditional marketing. There is just too much opportunity in e-marketing to ever want to go Channel supporter: E-marketers can use the Internet more to support their existing channels than to generate additional sales. Beyond cross-channel promotions, many brick-and-mortar companies can use the web to increase their customers understanding of their products and services. Others can harness the web s interactivity to improve their product development and product mixes by inviting customer responses on their web sites. Advisory and information service providers: An expert (such as an investment adviser or a personal shopper) can offer consumers unbiased advice for a fee. A business can also collect, process, and sell information through the Internet. Retail model: Vendors or products can be aggregated to facilitate transactions for buyers. Many companies can also achieve success as online auctioneers. Sellers of goods and services can provide the content; community may come from matching sellers with buyers and setting bidder against bidder; and commissions on sales and advertising revenue can generate the commerce. Vertical model: The business model that may take the greatest advantage of the Internet is the vertical model, which specializes, in a particular category or a product. It might provide specialized information and advise as well as access to a community with common interests. Creating winning e-marketing strategies would require managers to reconsider how they view both Internet and marketing. Off-line Marketers have long thrived by delivering narrow solutions to limited customer needs. Online, however, customers have learned to expect that the companies they patronize will meet a much fuller spectrum of their needs and desires. To succeed online, those companies will have to create full-fledged Internet businesses, or digital experience, that can fulfill this expectation. Dr. N.Makesh, Special Issue On e-marketing Road Ahead Of India Page 53

5 Conclusions It seems that for the time being opinions that marketing has already entered the new era are obviously premature. In fact it is rather on its threshold. As it can be commonly observed, relatively low number of marketers perceive specificity of the new medium and the whole opportunities it provides, while majority of them follows stereotypical mass marketing approach. Instead of utilization new tools and techniques for building long-term relationships with customers, which is undoubtedly difficult and arduous process, they prefer to use them in the manner characteristic for.interruptive marketing. Now both: on-line and off-line. It is very short-sighted policy and undoubtedly this is not the right way to achieve success in the new reality. Only those of them who will understand peculiarity of the new business environment and redesign their marketing processes can succeed. Best practice principles for acceptable direct electronic marketing focusing on consumer interests and convenience may both increase the benefit of such marketing to consumers and overcome negative perceptions and minimize social risks. References [1]Cyveillance: Entangled on the Web. [ Entangled_on_Web.pdf] December, [2]eMarketer: UK Leads Euro E-Marketers _doubleclick.html] December 18th, Marketing in eworld Era: Opportunities, Challenges and Dilemmas 135 [3]eMarketer: When Will E-Retail Get it Right. [ p.html] January 4th, [4] Federal Trade Commission: Privacy Online: A Report to Congress. [ [5] Gauzente C., Ranchhod A.: Ethical Marketing for Competitive Advantage on the Internet. Academy of Marketing Science Review. [ html] [6] Godin S. Permission Marketing. New York: Simon & Schuster, [7] IAB: Interactive Advertising Bureau / Dynamic Logic: Ad Unit Effectiveness Study. [ March-June [8] Kelly E.: Ethical and Online Privacy Issues in Electronic Commerce.(Industry Overview)..Business Horizons., May [9] Komenar M.: Electronic Marketing. New York: John Wiley & Sons, Inc [10] Nua Internet Surveys: SMS marketing here to stay. [ January 28th, Dr. N.Makesh, Special Issue On e-marketing Road Ahead Of India Page 54