You are on page 1of 45

EFO703: Bachelor Thesis in Business Administration 300 Basic Level Mlardalen University Supervisor: Leif Sanner

Traditional Marketing vs. Internet Marketing


A comparison
2008-06-05

Group 1931: Alfa Shima 820103 Mona Varfan 820721

Abstract
Date: Level: Authors: Alfa Shima (820103-8588) Pettersbergsgatn 24,8tr 72463 Vsters 076 2740308 Supervisor: Leif Sanner Title: Problem: Traditional marketing vs. Internet marketing: A comparison Marketing is an important strategy for businesses and it contains numerous effective tools. Traditional marketing has been in use for many years and nowadays Internet has brought new ways of doing business for companies and that has affected marketing. What are the main differences between Internet marketing and traditional marketing? Which one of the two approaches contains the most used and effective marketing tools according to chosen companies in this thesis? The aim of this study is to compare traditional marketing and Internet marketing and show the differences of characteristics between them. And to find out what marketing tools are effective for some chosen companies in the fashion industry. Mona Varfan (820721-7004) Sorgatan 29, 2tr 16447 Kista 073 7336006 2008-06-05 Bachelor Thesis in Business Administration, 15 ECTS credits

Purpose:

Method:

The information gathered in this study was obtained through qualitative research from textbooks, websites, articles and interviews. Some quantitative data such as statistics were also gathered. The authors conducted interviews with few companies operating in the fashion industry to collect information needed for the analysis in this study.

Conclusion: By analysing different aspects of theory, comparison and interview answers, the authors came to a conclusion. Using the advantages of both Internet marketing and traditional marketing according to the goals of the company, is considered to be the most effective way of marketing. Comparing the two approaches, Internet seemed to be a complementary tool to traditional marketing.

Acknowledgement
We are grateful to our tutor for the helpful advice and guidance that he has given us. The feedbacks that we have received in the seminars have helped us towards the right direction. We are also thankful to those managers at Heart of Brands, Tiger of Sweden, H&M, VeroModa, Polarn & Pyret, who took time to give us interviews. We are thankful to our friends and families for their understanding and support during this process.

Table of contents :
1 INTRODUCTION .............................................................................................................. 1 1.1 Research problem ........................................................................................................ 1 1.2 Study aim ..................................................................................................................... 2 1.3 Target group ................................................................................................................ 2 1.4 Delimitations ............................................................................................................... 3 1.5 Structure of thesis ........................................................................................................ 3 METHODOLOGY ............................................................................................................. 4 2.1 Selection of research problem ..................................................................................... 4 2.2 Selection of research method ....................................................................................... 5 2.3 Qualitative research ..................................................................................................... 5 2.4 Performance of study ................................................................................................... 5 2.5 Validity & Reliability .................................................................................................. 7 2.6 Methodology critique .................................................................................................. 7 LITERATURE REVIEW ................................................................................................... 8 3.1 Traditional marketing .................................................................................................. 8 3.1.1 Product ................................................................................................................. 9 3.1.2 Price ...................................................................................................................... 9 3.1.3 Place ................................................................................................................... 10 3.1.4 Promotion ........................................................................................................... 10 3.2 Internet Marketing ..................................................................................................... 13 3.2.1 Product ............................................................................................................... 14 3.2.2 Price .................................................................................................................... 14 3.2.3 Place ................................................................................................................... 15 3.2.4 Promotion ........................................................................................................... 15 3.3 Traditional Marketing VS Internet Marketing........................................................... 16 3.3.1 Product ............................................................................................................... 16 3.3.2 Price .................................................................................................................... 17 3.3.3 Place ................................................................................................................... 18 3.3.4 Promotion ........................................................................................................... 18 3.3.5 Comparison model ............................................................................................. 20 EMPIRICAL DATA ........................................................................................................ 22 4.1 Vero Moda ................................................................................................................. 22 4.1.1 Company background ........................................................................................ 22 4.1.2 Interview answers ............................................................................................... 22 4.2 Heart of Brands .......................................................................................................... 23 4.2.1 Company background ........................................................................................ 23 4.2.2 Interview answers ............................................................................................... 23 4.3 Tiger of Sweden......................................................................................................... 24 4.3.1 Company background ........................................................................................ 24 4.3.2 Interview answers ............................................................................................... 24 4.4 Polarn & Pyret ........................................................................................................... 25 4.4.1 Company background ........................................................................................ 25 4.4.2 Interview answers ............................................................................................... 25 4.5 H & M ........................................................................................................................ 25 4.5.1 Company background ........................................................................................ 26 4.5.2 Interview answers ............................................................................................... 26 STATISTICAL DATA .................................................................................................... 26 ANALYSIS ...................................................................................................................... 27

5 6

6.1 Analysis of empirical data relative theory ................................................................. 27 6.1.1 Internet marketing .............................................................................................. 28 6.1.2 Traditional marketing ......................................................................................... 29 6.1.3 Reflection on the comparison model .................................................................. 32 6.2 Discussion .................................................................................................................. 33 7 CONCLUSION ................................................................................................................ 35 7.1 Suggestions for further research ................................................................................ 36 REFERENCES ......................................................................................................................... 37 APPENDIX .............................................................................................................................. 39 Appendix A .......................................................................................................................... 39 Appendix B .......................................................................................................................... 39

List of figures:
Figur 1 Research plan ................................................................................................................ 4 Figur 2 Promotion mix model ................................................................................................. 11 Figur 3 The Comparison Model ............................................................................................... 21

1 INTRODUCTION
When companies start business, their main goal is to make profit and accomplish a successful growth. Therefore different strategies are used to sell products or services that they offer. Companies try to create, promote and sell products or services that could satisfy their target customers. Marketing is a strategy that can make a business grow and thereby become more powerful. It is crucial to know what kind of marketing to use in every area to achieve high sales rate, market share and the wanted image. Marketing is considered to be a process of exploring, creating, and delivering value to satisfy the needs and wants of a target market at a profit.1 When Neil Borden introduced the concept of the "4 P's" of the marketing mix (Product, Price, Place, and Promotion), marketers were offered opportunities to exploit each aspect of those elements and thereby satisfy their customers needs and wants. Marketing has to some extent stayed the same in many years but as technology has developed, it has had its affects on marketing. Entrance of Internet into our lives has brought many possibilities and that has also affected marketing. Since the evolution of Internet, the Internet selling or e-selling has become ever more established in every day life in the society and is even replacing the traditional medium, to some degree. It is a new channel for communication which brings along new opportunities for marketing. The concept of marketing is extensive and there is high number of studies done on this subject. These studies discuss different tools of marketing and how to use them to guide businesses to success.

1.1 Research problem


Different tools of traditional marketing have been used by marketers for a long time. The marketers have been using the traditional channels such as face to face communication, TV, radio and magazines etc. to communicate to the customers. Nowadays there is a new communication channel, Internet, added to these traditional channels, which have brought lots of opportunities for marketers. Internet has affected marketing process by providing opportunities that were not available by using traditional marketing tools. All of the communication channels have an important function of their own but Internet is a channel that has developed and is continuously developing which has got a lot of attention from everyone. Knowing the differences advantages and disadvantages between traditional and Internet marketing, a marketer can be more capable to make the right decision when choosing the marketing strategy.
1

Philip Kotler 2003, Marketing Management

Some interesting questions related to Internet marketing and traditional marketing are: What is the most beneficial marketing approach comparing traditional and Internet marketing? Which marketing tools are the most used ones in practice and which are preferred by real life companies? Is Internet marketing a contemporary version of traditional marketing and are the two kinds of marketing independent of or complementary to each other? These issues are considered interesting by the authors of this thesis since choosing a specific marketing method can be a difficult decision for a new company entering the market. The results of this thesis might help that company to successfully prioritize their marketing tools. There also might be some indistinctness about different marketing tools and their benefits or drawbacks for others interested in the subject, such as students studying marketing. The information provided in this thesis can create an understanding of the subject in focus, by presenting and analysing the theory of 4 Ps of marketing mix, both in traditional and Internet marketing, comparing them and giving examples.

1.2 Study aim


The aim of this study is to: Compare traditional marketing and Internet marketing and show the differences of characteristics between them. Find out what marketing tools are effective for some chosen companies in the fashion industry.

1.3 Target group


This thesis will target the managers of start-up companies that need to make a decision about the selection of their marketing methods. The studies that are done on marketing theories, the comparisons between them, point of view of marketing managers of the companies that were interviewed and the analysis made based on these would be useful to a business entering the market. Other target group for this thesis is other students and anyone who is interested in this subject and needs the gathered information for some reason.

1.4 Delimitations
Due to the time limit and inaccessibility to all needed sources, the research for this thesis had to be limited. Therefore this study is based on the Swedish market. The marketing managers of the chosen companies are working in Sweden and their answers are related to the Swedish market as well. This study is also focused mainly on the business to individual consumers rather than business to business. Also because of the different cultures, economies and regulations in different parts of the world, the results from this thesis will mainly be valid in Sweden.

1.5 Structure of thesis


Chapter 1 Introduction In this chapter, the authors present some introduction and discuss the research problem. Chapter 2 Method In this chapter, methodology used to build up the research of this thesis is presented. Chapter 3 Literature review In this chapter, the theoretical background is described and a comparison of the different theories presented is made. Chapter 4 Empirical data In this chapter, the authors present the empirical data that is defined as data gathered on interview subjects. Chapter 5 Statistical data In this chapter, statistical data which is referred to in this thesis is presented. Chapter 6 Analysis In this chapter, analysis of all the gathered data relative the presented theories is presented. Chapter 7 Conclusion In this chapter, the authors have come to a conclusion and present suggestions for further studies.

2 METHODOLOGY
Purpose of this chapter is to present the research methods used for gathering the needed data for this thesis. The description of different research methods and reasoning of their use in this thesis will be explained in the following order.

Selection of topic/problem Selection of research method

Qualitative research
(Primary & Secondary Data) (Quantitative Secondary Data)

Analysis Conclusion

Figur 1 Research plan

2.1 Selection of research problem


Today the Internet marketing is relatively a new phenomenon; the authors of this thesis are interested in understanding its implications towards the traditional marketing. The companies chosen for research of primary data in this thesis are operating in fashion industry. Since fashion is present every day in peoples lives, the authors considered it as an interesting business field that uses different marketing tools to reach its target market. The selection of this subject as the problem for this thesis is based on the interest of authors in this problem area and the assumption that this problem is interesting to many others. Mainly the interest is to dig deeper into the evolution of marketing and the comparison between traditional marketing and Internet marketing. The authors are also interested in the versatility of the marketing in the business world.

2.2 Selection of research method


To be able to answer the research problem of this thesis, there is a need to study different method options in searching for needed data. There are different research approaches to choose from, some examples are quantitative research (a measurable data helping to explain a phenomenon), qualitative research (gathered data that can help the author to explain the phenomenon in his/her own point of view), historical research (searching for historical data) and case study (in-dept study on a case, it can be a study on an event or a firm etc.).2

2.3 Qualitative research


Qualitative research focuses on understanding the research subject by investigating the results based on direct observations, in-depth interviews and analysis of documents and materials. The researcher therefore needs a more focused small group to study rather than a large random sample base. Qualitative research is typically used to answer questions about the complex nature of phenomena, often with the purpose of describing and understanding the phenomena from the participants point of view.3 The qualitative research is inclined to be explorative and unstructured, with emphasis on understanding and gain of insights.4 Due to the aim of this research work, that is, to make a comparison between traditional marketing and Internet marketing and find the effective tools in these two approaches used by a chosen group of companies in fashion industry, a qualitative research method is used. This approach is chosen since it will enable the authors to explore all areas of the topic at hand and also give a thorough understanding and analysis.

2.4 Performance of study


There are two main approaches to data collection, namely, primary and the secondary data5 For this thesis both primary and secondary data were gathered. Primary data

2 3

Leedy, 2005 Leedy, 2005 4 Ghauri, 2005 5 Saunders et al, 2007

Primary data is first hand information gathered directly from the source and close to the truth.6 This data can be collected through experiments, observations, and interviews through mails, telephones, emails or personal interviews. 7 The primary data used in this study was collected through interviews. The interviews were done with a small focus group of five companies in fashion industry: Vero Moda, Heart of Brands, Tiger of Sweden, Polarn & Pyret and H&M. Interviews with the marketing managers of Vero Moda and Heart of Brands were done through e-mail. And the interviews with those for Tiger of Sweden, Polarn & Pyret and H&M were done through phone call. These companies were chosen based on some specific qualities they have and all five could give us different point of views on the subject because of those qualities. A study on random companies was not chosen since the desire was not to come to a general conclusion based on mass opinion. The main qualities that these companies share are that they are successful, growing and use both Internet and traditional marketing. However they all have different business concepts. H&M offers quality and latest fashion at a best price8, Tiger of Sweden offers quality and high fashion wear at high price9, Polarn & Pyret offers quality and function for children and parents10, Hearts of Brands sells and owns rights of different type of fashion brands11 and VeroModa offers quality and classic fashion at affordable price12. The authors of this thesis considered that opinions of the marketing managers of these specific companies could be helpful and interesting to the readers, since these companies are famous and successful in their industry and they could be good examples for start up companies. The authors formulated a number of questions based on the data required to be able to come a conclusion regarding the research problem. To be certain of acquiring the necessary information as effectively as possible, the interview questions were structured according to the limited time for this research and keeping in mind difficult accessibility to the specific individuals that were interviewed and their busy schedules. Secondary data Secondary data are information that already exists, collected by others. These could be in form of books, journal articles, online data sources such as web pages of companies, etc. 13

6 7

Leedy, 2005 Ghauri, 2005 8 www.hm.com 9 www.tigerofsweden.com 10 www.polarnochpyret.se 11 www.heartsofbrands.se 12 www.veromoda.com 13 Leedy, 2005

This data was collected through Internet (web pages and articles) and books. The articles used were found through databases provided by Mlardalens University such as ABI/Inform. The statistics that can be referred to as quantitative data are gathered from the website of the Statistiska Centralbyrn, SCB.

2.5 Validity & Reliability


Validity is establishing correct operational measures for the concepts being studied.14 In order to ensure the validity of this thesis, the methods and theories used to conduct this study were chosen from literatures written by authors known to be experts in this field and scientific articles from data bases recommended by Mlardalens University. Further more; the empirical data used in the analysis was collected through telephone and e-mail interviews with the marketing managers of different companies chosen by the authors. This way the primary information was gathered from those who work specifically with marketing and can give a useful and relevant point of view. Discussing with the interviewed individuals through telephone gave the authors more assurance about the answers being received from the right person. The reliability of a study can be ensured when a later researcher can follow the same procedures, such as the data collection procedures conducted in an earlier research study and come up to the same results.15 To carry out the interviews, the authors made a number of questions to follow in order to obtain relevant information. The authors attached the interview guide which can be used by other researchers if needed. In which case, the thesis can be considered as reliable.

2.6 Methodology critique


The empirical data was collected through interviews done with five companies operating in fashion industry in Sweden; therefore the authors cannot conclude that the results can be applicable for the whole fashion industry or any other industry. And also due to the short ten weeks that was available for the authors to carry out this research, a specific industry was chosen. With more time, further research could have been done in different businesses in order to provide a more general overview and comparison of marketing tools used in traditional marketing and Internet marketing. With the choice of qualitative research and the mentioned limitations, the authors of this thesis can not give a general conclusion about the subject.
14 15

Yin, 1994 Yin, 1994

3 LITERATURE REVIEW
In this chapter, authors will present the theories on the 4 Ps of marketing mix, the traditional and Internet marketing and their comparison. Theory is used to describe the relevant areas of traditional marketing and Internet marketing in depth. Also clarifying the differences of characteristics between them, showing the pros and cons related to either one.

3.1 Traditional marketing


Marketing is considered to be a collective process where individuals or groups can exchange goods or services based on their needs and wants. 16 The content of this process was presented as marketing mix by Neil Borden for the first time in 1953, representing the mixture of useful elements for marketing. This theory of marketing mix has been analysed and rewritten about by many different authors through time. One of the authors that have written about this theory and explained his point of view about the elements of marketing is Philip Kotler, whose marketing mix is presented in this thesis. He considers the marketing mix, a mixture of different tools or instruments for pursuing a marketing plan.17 In traditional marketing the wants and needs of customers are being discovered and satisfied, through traditional channels of communication such as face to face communication, magazines, catalogues etc. The aim is to create products and services which sell themselves by being what customers need and want.18 Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organizational objectives.19 The marketing mix theory of Philip Kotler, the 4Ps are presented here in the following order, Product, Price, Place and Promotion.

16
17

Philip Kotler, 2003, Marketing Management van Waterschoot Walter, Van den Bulte Christophe, Journal of marketing 1992 18 Philip Kotler, 2003, Marketing Management 19 Philip Kotler, 2003, Marketing Management, pp.9

3.1.1 Product
According to Kotler20 Product is the solution to customers wants or/and needs. There are different aspects of product that needs to be considered. Some examples of these are the design, function and quality of the product. The marketer needs to know what kind of appearance such as size, colour and generally design of product is wanted or needed. It is also important to know what kind of functions the customer is looking for in the product. To know what is required by the market, there is a need for research and studying the market. There are 5 product levels, which create the customer value hierarchy. These levels are called core benefit, basic product, expected product, augmented product and potential product. Core benefit is the benefit of the product which the customer would be buying. For example buying a spa ticket, one is buying the benefit of it which in this case would be relaxation and rest. Basic product is the benefit turned into a product, providing the needed tools to create the benefit for the customer. Expected product is what would fulfil customers expectations mainly based on what is promised by the marketer. Augmented product is a product that fulfils more than what the customer expects. Potential product is the possible wanted or needed product by customers. Service is also a part of this P. It is the intangible good that a company can offer to its customers and it is difficult good to provide, for satisfying customers needs and expectations. One reason for this is the difficulty of measuring it fitting the needs and expectations. Offering warranty is part of this P too. By providing warranty, the company is not only offering a good customer service but also showing that it believes in its own goods.

3.1.2 Price

Compared to other Ps in the marketing mix, pricing is easiest and quickest to adjust. As Kotler presents21 it is an important part of the marketing strategy and it sends out a message about the product, company and the image. The decision of pricing is dependent on what goals the company wants to achieve. Does the company want bigger market share, maximum profit or possibly a specific position in the market etc? Setting a price is a process and based on the marketing mix theory there are 6 steps in this process. These are Selection of pricing objectives, Determination of demand, Estimation of costs, Analysing competitors costs, prices and offers, Selection of pricing method and
20 21

Philip Kotler, 2003, Marketing Management Philip Kotler, 2003, Marketing Management

Selection of final price. The firm should decide on the objectives that it wants to achieve which would make the decision of price setting clearer and easier. The demand and price are depended on each other and therefore it is an important point for setting price. Different kinds of possible costs such as fixed costs, variable costs etc. should be observed and estimated when setting the price. This is one of the issues that have a large affect on price setting. Analysing competitors costs, prices and offers is also very important in order to be able to compete with them and not stay behind. Based on the different steps of the price setting process mentioned above, the company should decide on a pricing method and set the final price accordingly. Payment terms are part of this P. The different type of payments, credit terms and different payment periods are issues to decide upon in a marketing process. The marketer should consider different options and figure out the best way for different situations, depending on the wanted result and the needs and wants of the customers.

3.1.3 Place

Place in marketing can be about location in the means of store, factory and storage. Also the decisions on distribution channels and transport are part of it.22 The company should act on the goals they want to achieve by the location they choose. Some examples of the factors that have an affect on this decision are the cost of the chosen location, the amount the company can spend in this area, the profitability of it and the space needed. The choice of place can be very radical for the success of the business. For example, a company chooses a place outside the city because of the wide space needed and the cost of it or a company that opens a new store and wants to get the customers attention by situating it in a very busy and crowded area where possible customers would drop in when passing by.

3.1.4 Promotion

Promotion is one of the important Ps of 4 Ps of marketing mix. The focus is mainly on how the company could reach its targeted customers and communicate its message to them.23 The figure below demonstrates the objectives of promotion mix which will be explained further on in the text.

22 23

Philip Kotler, 2003, Marketing Management Philip Kotler, 2003, Marketing Management

10

Figur 2 Promotion mix model 24 (Kotler 2003, our modified version)

Sales promotion is a key factor in marketing campaigns, creating an incentive for customers to buy the product or service. Sales promotion contains offers such as free trials, prizes, warranties, coupons and etc. These are the offers that can attract mainly the customers that are looking for a new thing and they probably would not become loyal customers. This strategy can be used in high brand similarity markets where the seller wants to reach short term high sales response and not so high permanent gain in market share. In a low brand similarity market, this strategy can have a more permanent affect or gain on market share. The amount of existing brands has grown by time and the competition is getting tougher. Another issue rising from this is the price-oriented customers that are looking for the better offer. For companies to be not just one of the brands they have to try more and present more interesting promotion offers or better promotion tools than the competitors are using. Promotion can be used in different ways, for example by targeting the new customers or loyal customers or rewarding both in different ways. The bigger or more exceptional the offer, the more attention the company can get from the customers. Sales force is the face of company towards customers when providing or offering customers solutions in either services or products. Their working process has become from just selling to more complicated task. The sales representatives are the ones that bring the needs of customers and the company together and create the mutual satisfaction. Public relations involve creating and planning a program or event where the company can promote and in some cases protect the products or the image. Some examples of these events are presenting news or important information about the company to the press by having a press conference. Another example can be informing and advising management about the public issues and company position and image in different type on situations.
24

Philip Kotler, 2003, Marketing Management

11

The aim is to prevent bad publicity and therefore it is important that the managers are aware of what kind of practices they should avoid and what kind to get involved with to present a good will for the company. The importance or effectiveness of this tool should not be underestimated compared to the other tools in promotion mix. This tool plays a great role in presenting and keeping the company image, values and position which is very important. Advertising is any paid form of non personal presentation and promotion of ideas or good or services by an identified sponsor.25 Advertisement can be done in many ways. Advertisement is a way of communicating the offer to customers and it can be done in different ways, in different shapes and through different channels. Most companies get an outside help from the experts such as an advertising company, to make the decisions about what the best way to do their advertising would be. The company that needs the advertising should decide on the budget they have for the advertisement, what is the message they want to give to the customers, which media they want to use and how they want to measure the results. These are some important decisions to be made and it can easily happen that some companies under- or over-spend for advertisement. Direct marketing involves using different channels to reach the customers. This communication can be done through face to face meeting, mailing, telephone, catalogue and Internet. With direct marketing the company seeks for a measurable response from customers. This is one way of building long term relationship with customers; for example, by sending customers a birthday card on their birthday, information or club membership offers etc. Direct marketing creates a personal feeling communication towards the customer. Companies can be more aware of how to target which groups of customers. Face to face selling is the most original one and is still used in many companies where they send out their sales personal to meet the potential customers. The sales person communicates directly with the customer and the offers and the deals are made. Then there is direct mailing where the company sends a letter to the customer. This letter can be an offer, announcement or reminder. Direct mailing tools have developed by time and these added tools are fax, voice mail and e-mail. E-mailing is one effective tool because of the time and money that can be saved by using it instead of sending the regular mail. In catalogue marketing, companies send their catalogue to targeted potential customers where they have the opportunity to order and purchase the products or services by responding through Internet, telephone, mail or e-mail. This way of shopping has grown among customers because of the comfort of shopping while being at home. Telemarketing is another way of direct marketing where the sales personal call the customers and tries to sell a product/service making an offer and possibly a deal. Other way of telemarketing is providing a service for those who are already a customer and need support.
25

Philip Kotler, 2003, Marketing Management, (pp.590)

12

So the communication goes in both directions in this situation, depending on the purpose of either party. There are some media channels used for direct marketing such as TV, radio and magazines etc. For example there can be a number mentioned in these communications which customers can use for ordering something they might get interested in. This way they are given the opportunity to act when they are interested to purchase a good seen or heard through the media. This way of marketing gives companies the opportunity to give different kinds of offers to different kinds of possible buyers.

3.2 Internet Marketing

Internet is used as a communication channel as a part of direct marketing. It has had a large impact on marketing since it was invented and realized to be an effective marketing tool. But the meaning and usage of it has changed through the years. In the beginning it has been used mainly for communicating to customers through e-mailing and getting response from them. It has helped the companies to be able to target their potential customers more personally and knowing more about them has helped in knowing how to approach different customers to get to their needs.26 Nowadays the concept of Internet marketing has extended and opened more opportunities to companies in their marketing. The website of the companies online has got a lot of attention and has become a very common media for presenting the company, its offerings and image. Internet has become a strong marketing tool in itself which can be compared separately to other marketing tools. This growth can be seen both on a technical level and accessibility of it for customers. Today many people have access to the Internet. 65% of all male and 53% all female population of Sweden use Internet daily.27 With this large amount of possible customers, the companies have access to a larger audience. The technical development of the Internet and computers has made it possible for businesses to communicate their message and image with no limitations. Internet is a new marketing tool that can be used by companies in order to reach their customers.28 Internet marketing is defined as the application of the Internet and related digital technologies to achieve marketing objectives and support the modern marketing concept. 29
26
27

Philip Kotler, 2003, Marketing Management http://www.scb.se (Appendix B) 28 Hoffman and Novak, 1995 29 Chaffey, 2000

13

Internet marketing is often presented as a new theory of marketing however some argue that basic concepts from the traditional marketing are still valid. The basics of marketing mix are still applicable and Internet offers new opportunities to adapt them. 30

3.2.1 Product

The Internet leads to faster discovery of customer needs, greater customization of the products to the customer needs, faster product testing, and shorter product life cycles.31 Internet offers the opportunity of developing new products or services. To develop a product, there is a need for research on customers needs. Internet provides the opportunity of offering a core prodcut that satisfies the customers fundamental needs, but it also enables the companies to offer additional services such as interactivity or more information about the companys core product. On Internet, a picture or description will replace the physical product offered in the traditional marketplace or in stores. Providing a complete and relevant product information is crucial in order for the customers to get a realistic picture of the product and to make the product offered more attractive.32 Since customers can not touch, feel or try the products chosen on Internet, companies that have online shops should offer warranties for products sold.33 This practice increases customers confidence thereby their willingness to buy on Internet. Companies that have an online store should offer services of high quality to their customers. Services offered on Internet by a company should reflect the following factors in order to satisfy customers: reliability, responsiveness, competence, ease of use, security, and product portfolio.34

3.2.2

Price

Compared to the other elements of the marketing mix, Price is the most flexible element since it can be adapted quickly to the markets demand than other elements. Price on the Internet has become very competitive. There are two reasons for that ; one is price transparency on the Internet as it is much quicker and easier to compare prices by

30 31

Chaffey, 2000 Rivad Eid, 2002 32 Hoffman, Lindgren, 1999 33 Pui-Mun Lee,2002 34 Zhillin Yang, Minjoon Jun, Robin T Peterson, 2004

14

visiting companies websites or by using price comparison sites.35 The other reason is the ability to reduce costs such as store space and staff costs. In this sense, Internet is considered as the most cost-effective marketing tool.36 Internet offers new methods of payment. The online payment that uses mostly credit cards is seen as an efficient, convenient and flexible payment method for both companies and customers.37 In fact, customers are the ones who fill all the needed information such as their personal and credit card information. This helps companies to save money and time by reducing administration work. Moreover, customers have the possibility to pay their bills at any time and any place they wish if only they have access to the Internet.38. However, security and privacy issues make customers less confident when using this method.

3.2.3

Place

The Place element of the marketing mix traditionally refers to where the product is distributed to customers. Internet offers a new way for distributing products through online selling. Allen and Fjermestad argue that the Internet has the greatest implications for Place in the marketing mix because it has a large market place.39 People can make a purchase decision anywhere they are thanks to online selling.40 With Internet, companies can expand from local market to both national and international markets. Internet can also be used to exploit new markets.41 Companies can gain the advantage of the low cost of advertising internationally without the necessity of a supporting sales infrastructure in different countries.

3.2.4

Promotion

The Promotion element of the marketing mix refers to how marketing communications are used to inform customers about an organization and its products. Internet can be used to review new ways of applying each of the elements of the communications mix which are advertising, sales promotions, PR and direct marketing by using new media such as the web and e-mail.42 Internet offers a new, additional marketing communication channel to inform customers of the benefits of a product and assist in different stages of the buying process. By using
35 36

Hagel & Armstrong, 1997 D P S Verma ,2003 37 Fang He and Peter P Mykytyni, 1997 38 Fang He and Peter P Mykytyni, 1997 39 Allen and Fjermestad, 2001 40 Allen and Fjermestad, 2001 41 Chaffey,2000 42 Chaffey, 2000

15

promotional tools on the Internet such as online offers, frequently updated information and direct e-mail reminders, companies can encourage customers to visit their sites. Internet Advertising: It is a form of advertising that uses the Internet to deliver messages about a company and attract customers. It can be done in two ways: by creating a website which can help a company to deliver all information to the potential customers or by using banner advertisements which can lead the visitor to the relevant website. It is critical for a companys website to be well designed and informative in order to attract many visitors in the target group.43 Sales promotion: With Internet, marketers have a great opportunity to offer sales promotions such as competitions or price reductions to those who visit the companys website. This can encourage the customers to visit that website again and this way of interacting with the customers provides the means for the company to build a long term relationship with their customers.44 Public relations: Internet is a new medium for Public Relations (PR). Internet offers companies the opportunity to publish the news directly while in traditional marketing they would wait for periodical publications.45 They can use Blogs, Podcasts / Internet radio shows, Online newsrooms and media kits. Direct marketing: Internet provides companies with a new tool for direct marketing and advertising that may be cost effective and provide maximum delivery to targeted customers. By using e-mail addresses, the company can establish a continuous dialogue with customers.46

3.3 Traditional Marketing VS Internet Marketing

In this section the authors make a comparison between the main points of both traditional marketing and Internet marketing. Here the 4 Ps are mentioned in comparison to each other to give a clearer idea of different issues that either traditional marketing or Internet marketing carry in their tools.

3.3.1 Product

Product in traditional marketing is tangible for the customer where as through a website in Internet marketing is just a virtual image.47The customer can not experience the quality and
43 44

Rowley, 2001 Chaffey, 2004 45 Chaffey, 2000 46 Chaffey, 2004

16

size of the product by seeing it on the website in the same way as seeing the product in a physical store. Not being able to reach and feel the product physically, can create doubts for the customer and have an affect on his/her purchasing desicion. When it comes to range of products offered through Internet compared to physical stores, there is an advantage of possibility for a company to offer a wide range of products on their website.48 The issues that can appear here are cost and space for inventory and store space itself, where there is a connection between cost and space. One important issue to point out is the customer service and how it can reach the customer. It is more difficult to provide customer service through Internet compared to face to face contact when the customer visits the physical store. The customer can get a quick response and reaction from the staff when getting a service in the physical store, where as through Internet the customer is dealing with a so called fixed service. And eventhough there might be possibility for communicating through e-mail or support chat function, the response and communication of service will not be as personal and quick as it could be when communicating face to face. One issue that can affect the customers choice of purchase is the warranty of the good. This gives comfort to customers, both in traditional marketing and Internet marketng but most importantly it gives the secure feeling to those purchasing online. The customer that can not see and touch the product when purchasing it would feel more sequre knowing that there is a warranty on the product and this would make the choice of purchase easier and less risky.49

3.3.2 Price
The pricing of a product can be based on the costs of its process in reaching the market.50 When a company does Internet marketing it has a bigger opportunity to save costs and therefor possibility to have lower prices. One of the reasons for this is the cost of space for keeping the products or the cheap way of communication through inernet such as communication by e-mail. When marketing through Internet, the competition is very though which affects the pricing reasons. The competitors are a click away when a potential customer is searching for information on the Internet.51 Since payments for purchase through Internet are done by credit card mostly, there can be some security issues that create problems. For example a customer would feel more secure
47
48 49 50

Pui-Mun Lee,2002 Philip Kotler, 2003, Marketing Management

Pui-Mun Lee,2002 Philip Kotler, 2003, Marketing Management 51 Philip Kotler, 2003, Marketing Management

17

paying in the physical store where they can have more control over the payment process, where as purchasing online they would be taking a risk when giving the credit card details.

3.3.3 Place

In traditional marketing, companies have the opportunities to decorate the stores in order to create a specific athmospher that can attract customers. Some attractive tools to create that atmospher can be music, colors, etc, but through Internet marketing it is almost impossile to create a real sensation since a website is just a virtual image. Eventhough many of the websites try to create an atmospher by adding the same tools for attraction, they can not create as real experience as can be created in the physical store. The atmosphere of the store is mentioned to be very important for sales of the products. For example if you see an unorganized store just filled up with some clothes you hardly feel tempted to go in and look for anything. The way the store is decorated gives a message about the company and its style.52 When one thinks about this, one can realize the importance of the physical existence of the store. Think for example how the company could offer the same atmosphere through the website. As an example we can consider H&M, based on their website their aim is to have the same atmosphere on their website that they have in their stores.53 But in the end the experience of stepping into the store is different than clicking on computer when shopping. Internet helps companies to be reachable at any time, regardeless of openings hours that phyical stores require.54 Also the possibility for the customers to reach the store location online and the range of customers that can do that is much wider compared to the physical location of the store.

3.3.4 Promotion

When it comes to promotion, one thing is clear in difference between the communication through traditional tools and Internet and that is the speed. Speed of getting the message of advertisement, news or any type of information through to customers is very quick through Internet. This is a very important issue in the competetive world of business. Another difference between promotion by Internet and promotion by traditional ways is the durability of the marketing message the marketer wants to communicate with the customers. In traditional manner, the message would receive attention during a limited amount of time,
52 53

Tony Hines & Margaret Bruce, 2007, Fashion marketing (contemporary issues) www.hm.com 54 Philip Kotler, 2003, Marketing Management

18

for example as it is aired on TV or sent out as paper advertising. Where on the Internet, the marketers message to the customers can exist constantly on the companys website for example and it is accessable by the customers 24/7.55 Through a website, a company can present itself in many ways where the customer can study different aspects of the company and get to know it well where as this is not possible in the same way through traditional tools for promotion.56 For example the complexity of wide range of information can not be easiely fitted into a magazine advertising or TV commercial etc. The tools for traditional promotion can be used mainly in communicating the message shortly and consistantly. There is of course the burden of maintaining a website or online commercials that consumes time, resources and money. But this should be weighted out by the accessability and opportunity they provide. Another issue is the damage that a failed or crashed website or other Internet service can have on a companys image.57 A good website is very important for succeeding in online marketing. According to Sunday Times, some important guidelines for a good website for a company are: * Provide clear information on contacts, delivery and refund policies. * Think "user journey" rather than individual pages. * Let shoppers browse without having to register. * Keep sites simple and easy to use. * Offer an effective search engine. * Market the site online and link it to search engines. * Provide consistency of experience. * If the Internet does not offer the full bricks-and-mortar range, say so. * Give complaints ID numbers. * Build trust.

Nowadays a large group of consumers have the problem of time but have the money to spend so therefore it can be easier for them to shop online, by saving time when spending. The image, speed, design and generally every aspect of the website of a company is very
55 56

Philip Kotler, 2003, Marketing Management Philip Kotler, 2003, Marketing Management 57 Malcolm Newbery, 2006, Trends in online apparel retailing: Online issues

19

important and in a case of failure it can have big damages to the company that cant be even compared to lost sales.58 Communicating through Internet gives an opportunity to the marketer to reach the targeted group easily and have a continues relationship with them.59 Of course there are some great advantages in communicating through traditional tools of promotion such as face to face communication with customers where the company can get straight feedback and can measure the result more quickly.60 The communication in this way is both sided where the customer has more opportunities to react on the information or offer received.

3.3.5 Comparison model

The authors of this thesis have created a list of the main advantages of both traditional and Internet marketing based on the theories presented above. The points mentioned in this model highlight the main differences between the two approaches of traditional and Internet marketing. This model presents the summary of the comparisons done earlier in this chapter based on the literature presented in the theory section. The model is created to help the reader get a clearer picture, when studying the differences in the parts of the marketing mix theory. The positive aspects of either approach pointed out in this model can be radically important for some businesses. One can see here that some points in both sides are not replaceable by marketing through the other approach.

58 59

Malcolm Newbery, 2006, Trends in online apparel retailing: Online issues Philip Kotler, 2003, Marketing Management 60 Philip Kotler, 2003, Marketing Management

20

Each point/advantage presented in the comparison model is based on the books and articles used for theories in section 3.3.61

Figur 3 The Comparison Model (created by authors of this thesis)

Some issues or disadvantages that we can see mentioned in comparison between Internet and traditional marketing might not bother some cutomers. There are only 21% males and 28% females that have never done a purchase through Internet in Sweden.62 According to a study done by Statistiska Centralbyrn, the number of customers purchasing products and services through Internet is growing continuesly. 63

Philip Kotler, 2003, Marketing Management, Malcolm Newbery, 2006, Trends in online apparel retailing: Online issues, Tony Hines & Margaret Bruce, 2007, Fashion marketing (contemporary issues), Pui-Mun Lee,2002 62 www.scb.se (Appendix B) 63 www.scb.se (Appendix B)

61

21

4 EMPIRICAL DATA
In this chapter the authors of this thesis will present the companies chosen as examples from the fashion industry. The companies were all chosen from the same industry, fashion industry, to rule out the industry differences. These companies were contacted by the authors in order to obtain information about the marketing conducted in respective companies. Some of these companies were able to answer the questions by email while others were just able to answer quickly by telephone due to lack of time. However, all these companies invited the authors to find more information on their websites; therefore some of the information presented in this part is from the companies websites. The interview questions can be found in Appendix A.

4.1

Vero Moda

4.1.1 Company background

Vero Moda is an international fashion brand launched in 1987 by Bestseller, a Danish family company. The company offers a high quality clothing line to women all around the world. The company produces different fashion clothes such as dresses, skirts, tops, trousers and accessories. The objective of the company is to give women the possibility to wear fashion clothes on affordable prices. The company has 85 stores in Sweden and more than 700 stores and large number of retailers around the world.64

4.1.2 Interview answers

The manager responsible for marketing was asked to give the marketing tools used in the company, the ones considered as most effective and how Internet marketing was perceived in Vero Moda.

64

www.veromoda.com

22

The respondent answered that the company uses mostly printed and online advertising. Other than that, the company uses the radio and local advertising to announce different fashion campaigns to their customers. About the marketing tool perceived as the most effective, the answer was that the company uses a combination of traditional marketing channels and P.R because these allow the company to be seen often at the right places in order to promote the Vero Modas brand. According to the respondent, Internet marketing is an important marketing tool for Vero Moda because it gives the company the possibility to spread information faster and globally. And also the number of customers using Internet are increasing. The respondent doesnt think that the success of the company can be dependent on Internet marketing; she believes that there is no specific recipe to success.

4.2 Heart of Brands

4.2.1 Company background

Hearts of brands was created in 2006.It is a retailer company for well known brands such as ELLE prt--porter collection, Zetterberg Collection, Nina Ricci, Pierre Cardin, Pierre Clarence, Dormeuil and Fruit of The Loom. The company has one store and a showroom in Stockholm but it is planning to open more in the future. 65 As mentioned in DN newspapers economy pages and based on the answers in the interview, it appears that Heart of Brands has bought Gul & Bl brand. 66 Gul & Bl has its own website.

4.2.2 Interview answers

The main marketing tools used by this company are according to the interviewed manager Internet, homepage, PR with events and traditional advertisement.

65 66

www.heartofbrand.se www.dn.se/DNet/jsp/polopoly.jsp?d=3130&a=748658

23

As response to what the most effective tools would be, there was no general answer given. It was stated that in different types of marketing they use different marketing tools. It depends on what they want to achieve. The point of view of the respondent about Internet marketing was positive. She considers Internet to be very important for their company. It helps them reach the right customer quickly and use different channels. It was stated that the company couldnt succeed as well without Internet nowadays. It helps them to get their message out fast and reach a wider market. She believes Internet marketing helps their business and revenues grow. Right now they have the online store for Gul & Bl. There is a plan for having more brands for online selling in the future.

4.3 Tiger of Sweden

4.3.1 Company background

Tiger of Sweden was originally a brand of men's wear created by Markus Schwarmann and Hjalmar Nordstrm in 1903. But since 2003, the company is owned by the Danish IC Company. The company offers a line of products that includes clothes, shoes and eyewear for both men and women. Tiger of Sweden has stores in Europe and in Canada. In additional, the company offers online shopping as an alternative channel for their customers.67

4.3.2 Interview answers


Here the same questions were asked to the marketing manager of Tiger and the answers given are following: The company uses different kinds of marketing such as advertising in magazines, having their own website and organizing different kinds of events etc. The marketing tool that is considered as the most effective for this company is different kinds of events. For example, store opening events which are organized as small parties. Other events were the fashion shows and any other Tiger happening that were planned for some reason for example announcements and news, to which the customers were invited.

67

www.tigerofsweden.com

24

These events are considered to be very effective because of the possibility to build relationship with customers and getting feedback from them. Through these events it is possible for the company to measure the results and get useful feedback. The face to face contact and communication is obviously the most important for them. The mentioned methods of marketing give them great opportunity to have that kind of contact with their customers. The marketing manager also mentioned that Internet is a helpful tool for them and it adds value to their business but it is not considered the most effective tool for marketing. Mainly because of the lack of possibility to meet the customers face to face.

4.4 Polarn & Pyret


4.4.1 Company background
Polarn o. Pyret was founded in 1976. The company produces clothes for children from 0 to12 years. The brand of this company is recognized by its beautiful designs with stripes and bright colors that make its clothes distinctive. Polarn o. Pyret has over 50 stores in Sweden and has also expended its business in 10 other Europeans countries.68

4.4.2 Interview answers

According to the marketing manager of Polarn o. Pyret, the marketing tools used are direct mailing, advertising and PR depending on their target groups. Traditional marketing tools are considered to be the most effective tools for the company. He mentioned that stores were the most important communication and sales channel because they facilitate the face to face contact with the customers and thereby make it possible to give a direct feedback to their enquiries. When questioned about the Internet marketing, the respondent answered that Internet was considered as a communication channel that complements traditional marketing channels and helps the company to reach their customers faster and become more global through online advertising and P.R.

4.5 H & M

68

www.polarnopyret.se

25

4.5.1 Company background


H&M is a Swedish company that opened its first store in Vsters in 1947. H&M offers a wide range of fashion products: clothes, shoes and accessories to men, women and children. The companys concept is to offer quality fashion items to everyone, at the best price. H&M has more than 1500 stores in 28 countries in 3 different continents: Europe, America and Asia. The company offers three different sales channels to the customers: the stores, the catalogues and Internet.69

4.5.2 Interview answers

According to the marketing manager in H&M, the company uses TV advertising, catalogues, and Internet as marketing tools to reach their customers. Each year H&M produces four large catalogues and in addition smaller seasonal catalogues. The companys website offers online catalogues and online shopping. One of the effective marketing tools for the company is catalogues. They are important in the sense that they can give inspiration to customers and provide an overview of the items available and tremendous ideas how to match different items. Another important feature is the stores. In fact, it is mentioned in the annual reports 2007 that the stores are great sales channel because they allow the customers to see, try and feel the items. Regarding the importance of Internet marketing in H&M, the respondent answered that Internet is considered to be a great information channel at the same time that it makes the company globally accessible. Through their website, the company can reach a wide range of people quickly and easily. However, both traditional marketing and Internet marketing are used because each one has its advantages and the combination of them allows the company to achieve its marketing goals.

5 STATISTICAL DATA
The statistics presented in this thesis show the amount of men and women in Sweden that use Internet on daily bases. This data gives an idea of the high level of usage of Internet nowadays which can also reflect on how easily marketers can reach high range of customers. There is also a statistical table presented which shows the amount of males and females that order goods through Internet. This data can help in understanding how well online store can be profitable even though there are some disadvantages mentioned referring to it. Based on the statistics presented, one can also notice how rapidly the number of those who purchase goods through Internet has grown in a short period of time.
69

www.hm.com

26

These statistical data can be found in appendix B.

6 ANALYSIS
Going through different aspects of both traditional marketing and Internet marketing, it becomes obvious that the marketer uses both of them to reach the same goal. This goal that is brought into attention in both theories of traditional marketing and Internet marketing is satisfying customers wants and needs. Even though all the marketing tools were affected by the changes that came with Internet and the possibilities that it brought, the main change is focused on promotion. Promotion is the tool used for communication and Internet has provided marketers with a different channel for communication to the customers. A marketer can be communicating anything possible, for example news or offers related to marketing tools such as product or place and for that, it is crucial to choose the most effective channel for communication. So mainly it is a matter of finding the best way of getting through to customers and make sure that the chosen channel for communication enables the delivering of the wanted message in most effective and profitable way. When Kotler presents the 4 Ps, he gives the impression of the simplicity of the market and how it can be dealt with by going through the steps of marketing mix. In this theory the complicated process of marketing might be too structured and simplified. This provides a good educational material for marketing students but may result in undermining the complexity of marketing in actual companies. By going through the 4 Ps mentioned in the Internet marketing theory, it is obvious that the entrance of Internet to the business world has changed the way the marketer reaches the customers. This has introduced some advantages to marketing that were not possible before. At the same time the entrance of Internet in marketing has deprived some advantages, such as face to face communication with the customers. As these theories try to create an understanding of usage and functions of each tool, they show how they all are connected to each other. In the marketing mix theory, the issues in one marketing tool can affect another marketing tool. The 4 Ps are as one chain in the marketing process. For example, the location of the store can affect the cost of the process and this can affect the pricing of the product. This can go on in any direction between the 4 Ps which can be perceived by studying them deeply. This connection becomes especially obvious when comparing different issues between Internet marketing and traditional marketing.

6.1 Analysis of empirical data relative theory

27

The interview questions were constructed to find out how the marketers see the marketing tools in use. What approaches they consider to be most effective and why. It was also important to find their point of view about Internet marketing in general. In the following sections, the analysis is done based on result of the comparison between theories presented in literature review, of Internet and traditional marketing. The main relevant aspects of the 4Ps are highlighted in the text related to interview answers.

6.1.1 Internet marketing

PROMOTION

Even though the companies interviewed have websites, not all of them seem to consider it as very important way of marketing. A reason to this might be the lack of direct feedback from the customers and thereby the lack of direct results. When they mention the effectiveness of a marketing tool, they mention the ability of seeing its results. They do believe that it is a useful tool that is added to other marketing tools but it is considered as a complimentary tool mainly. The possibility of Internet marketing being more effective than traditional marketing is not evident based on the answers of those interviewed. Marketers can reach a wide group of customers fast and easy through Internet. They can communicate their message to them either by e-mail or by announcements on their website. Website is a very powerful tool for communication from marketers to their customers. A company can present any information wanted to be communicated about their history, offers, news, future plans etc. on their website. This way they keep their customers always informed and involved. All of the interviewed managers for this thesis have referred to the importance of their website mainly mentioning that it has given them possibility to reach a wide range of customers easily and fast. They all seem to appreciate the advantages of Internet and use it. There are different advantages in both marketing in traditional ways and through Internet. One can go through the different aspects of them and weight the importance of them in different situations and depending on what the desired result is. Reviewing the answers received from the interviewed marketers, we can notice that they consider the traditional marketing tools of great importance in their marketing process. They do not imply that the traditional marketing tools would be replaced by marketing through Internet, though they all have added Internet marketing to their process.

One of the interviewed companies, Heart of Brands, considers the Internet marketing very powerful. Based on the interview answers, Internet has given them great opportunities where they can not see themselves succeeding without it. This is an interesting point of view that shows appreciation towards advantages of Internet marketing mentioned in the theory part.

28

One point that is mentioned in the interview answers and theory as an advantage of communicating through Internet is, the ability to reach the target group easily. Marketer can also have a continuous relationship with the customer.

PLACE, PRICE & PRODUCT

There are some advantages and disadvantages to Internet marketing that are mentioned in the comparison model in chapter three. There are some possibilities given to marketers by Internet that have added value to their business. Companies can provide wide range of products on Internet since keeping them in some storage instead of a store is much cheaper. This way they have two advantages connected to each other, offering lots of products to satisfy a large and versatile group of customers, at the same time cutting cost by having the products in a cheaper and larger space. Through this strategy of being able to cut cost, the prices of the products can be low. Furthermore, the competition between companies remains an issue; compared to the competition that a company faces on Internet, the competition is less tough in traditional marketing. When the customer is going through different competitive stores physically, there are many things that can limit her/his visiting and finding out more about all the stores. On the other hand, a customer searching for information and products through Internet can easily and quickly find any product, offers and any information related to prices etc.

6.1.2 Traditional marketing

PROMOTION

Going through the comparison model presented in the theory part in chapter three the different aspects that differentiate traditional from Internet marketing become clearer. The advantages pointed out about traditional marketing are to some extent irreplaceable by any way of marketing through Internet. A face to face contact with the customer is one important advantage that can not be performed through Internet and can have a large impact on the customers experience. It is a way of communication and providing personal service that can create a relationship between the customer and the marketer. Face to face communication creates an active marketing situation where both customer and marketer have an opportunity to give and receive information and feedback in person. This way the measurement of the result and feedback from customers is easier and quicker. As it comes to attention, the advantages of traditional marketing such as personal service, quick feedback, quick and easy way of measurement of results and responses are connected to face to face communication.

29

Most of the interviewed companies in this thesis seem to believe that meeting the customer face to face is one of the most important and effective ways of marketing where they can receive direct respond, feedback and have a more personal relationship with the customers. Here we can realise how face to face marketing is separated from what direct marketing through Internet is. The lack of face to face communication and advantages followed by it are obvious, when we consider marketing through Internet. The only company that did not put much emphasis on this matter of the face to face communication was Heart of Brands. They do not consider this to be a big issue when it comes to Internet marketing and it doesnt affect their decisions. It seems that by considering the advantages of Internet marketing, they have found a balance between the two marketing approaches. They seem to believe that the benefits of Internet marketing are radical for their success. Events seem to be a common marketing tool used by these companies. Events such as store openings are mentioned to be very important for Tiger of Sweden because of the atmosphere, feeling and generally the experience that it creates both for the marketer and the customers. This is one clear point that separates traditional marketing from Internet marketing. The communication in Internet marketing lacks the personal relationship, personal service, direct response and sense of reality which are the points that seem very important for these companies interviewed. The events are said to be a great tool for building a personal relationship with customers. Especially one advantage is mentioned to be very important, which is the possibility of measuring the responses when communicating and getting sales results. When a company can easily measure results and is able to connect it to the work done and the channel of communication used, it creates appreciation of that marketing tool used for it. So the connection between a marketing tool that is considered effective and the simplicity of the measurement of its results can be noticed here. The easier to measure the respond of a used marketing tool, the more convincing marketing tool it seems. Those companies interviewed that do not have online store have been succeeding well by their sales through their physical stores. Some have a plan for opening an online store in the future and consider it as an expansion of their sales possibilities. What is considered most effective point in Internet marketing is the possibility of giving the message out to a large group of people very effectively.

PLACE, PRICE & PRODUCT

Another advantage mentioned in the comparison model is the physical access to products. This is an experience that can not be replaced by marketing through Internet, since it is impossible to feel the material, try it on and see the size, material and colour fitted on you, through Internet.

30

The other advantage connected to this matter is the physical existence of the store itself which can affect the customers by creating a pleasant shopping atmosphere for them. There is a strong statement of opinion from the interviewed managers that the face to face contact and communication, and physical existence of products and place is very important for their marketing. As most of the interviewed marketing managers of the chosen companies imply, and according to the annual report of H & M, the physical stores are very important for their business. It is important that customers can feel the products and try them on and also get direct service at the store. In this way, the focus is on Product and Place and these market themselves. The atmosphere and existence of the physical store were pointed out by the interviewed managers to be very important matters. The atmosphere can strongly affect the customers in their decision of entering the store and purchasing of products. The atmosphere of the store can also communicate the firms image to its customers. The message and experience that the store provides for the customers can not be replaced by other means such as Internet. These are some important points brought up by the interviewed managers, which emphasis the differences between the physical location of the store and the store on Internet. When it comes to payment of the purchase, the issue of security is raised. The customer feels more secure when paying in the physical store where he/she has more control over the situation. When the payment is done through Internet, the customer can not be as sure about the process after giving her/his credit card number through a public web page. There are of course different payment methods for purchases made on the Internet that provide a higher security, such as paying after receiving the products or paying through the Internet banks secure solutions. Based on the statistical data presented in this thesis one can see that purchase of goods through Internet is growing and the more common it becomes, the more customers feel secure about it and they gain more trust in this way of purchase.

VIEWS ON INTERNET MARKETING VS TRADITIONAL MARKETING

As mentioned earlier the main focus in this subject appears to be promotion and the channels used to communicate to customers. As it seems, the part of marketing that has been put mostly emphasis on is events, public relations, magazines, catalogues, TV advertisement and being in face to face contact with customers. All of these companies have a website and some have also online stores. The impression given by the interviewed people implies that they all put a lot of emphasis on traditional marketing. There is though a comment from Heart of Brands which has a good point. The interviewed person mentions that what tool is considered most effective depends on the goals that the marketer wants to achieve. Based on her answer, different tools have different purposes and are effective if used according to that purpose. The channels mentioned to be used for promotion are both from traditional marketing and Internet marketing. TV, magazines, catalogues, PR and e-mailing are used for some direct marketing and websites are used as well. These are the direct way of marketing to customers,

31

communicating any message. It seems that websites are nowadays a part of the marketing tools used but also treated just as one additional complementary tool. It is though obvious for the marketers that websites can give good opportunities in reaching customers anywhere and as appears in answers received from H & M, the extra sales that can be made through the Internet is positive but not at a comparable level with the sales in physical stores. Those companies interviewed that do not have online store have been succeeding well by their sales through their physical stores. Some have a plan for opening an online store in the future and consider it as an expansion of their sales possibilities. What is considered most effective point in Internet marketing is the possibility of giving the message out to a large group of people very effectively. By getting some answers from those who work with different marketing tools everyday and see the results of them, the connection between the two different approaches, traditional and Internet marketing, and their comparison becomes clearer. The advantages or lack of them found earlier among the theory of either one seems to be matching with comments received from interviewed people. There are different comments on what is considered a successful way of marketing based on these interview answers. As H & M marketing manager believes that the combination of both Internet marketing and traditional marketing is helping them towards success, even though their most effective tools are their catalogues and physical stores. The comment from Vero Modas marketing manager is that there is no specific way to success but until now as it seems they have relied mainly on the tools of traditional marketing even though they do use Internet marketing. The manager of Heart of Brands has a strong faith on Internet marketing and seems to believe that it has radically added value to their business and affected their success. When it comes to face to face marketing, it is clear that Tiger of Sweden relies a lot on it and believes that it is an irreplaceable way of marketing when it comes to its effectiveness. Polarn & Pyret seems to put great emphasis on their physical store as their marketing channel.

6.1.3 Reflection on the comparison model

Reflecting on the answers given by the interviewee, there are some references made to the advantages stated in the comparison model presented earlier in the theory part. The comparison model was not presented to the marketing managers in order to avoid leading them to the authors understandings of the theory of traditional and Internet marketing management. Instead, the authors present a reflection on the model based on the interview answers here.

Referring to advantages of traditional marketing;

32

-Face to face communication was referred to by Polarn & Pyret and Tiger of Sweden -Quick feedback was referred to by Polarn & pyret and Tiger of Sweden -Quicker and easier measurement of results/responds was referred to by Tiger of Sweden. -Physical access to products and atmosphere of physical store was referred to by H&M and Polarn & Pyret.

Referring to advantages of Internet marketing; Following advantages were referred to by VeroModa, Polarn & Pyret, H&M and Heart of Brands: -Fast speed of communication, -Possibility to present the company -Easier to reach more customers -Communicating with target group

6.2

Discussion

As mentioned and discussed in theories presented in this thesis we can acknowledge that marketing is a journey or a process in which the marketer finds out customers needs and wants and tries to satisfy them. There are different tools and using any of them or the mix of them can take the marketer closer to their goal. There is no specific way of marketing that would guarantee a success for any company. Every marketer searches for the best way to reach their customers and to get the message crossed. Since Internet has become a part of our lives, it raises the question of if it will one day take over all the traditional activities that human beings have operated with until now. This issue has affected the business world too and there are different opinions on the subject. There are some, who keep operating in the traditional ways and there are those who see an opportunity in trying new things. As the authors of this thesis see this matter, the opportunity to use more useful tools for marketing is just a positive thing. There is a need for a balance between all marketing tools in use, in order to create a successful marketing plan.

33

Internet has given us a great opportunity to develop marketing. As the authors of this thesis perceive its role in marketing mix, it is a great channel for reaching out to the customers. It can be used as an option given to customers. Using this channel they can be aware of what companies have to offer, be in contact with them and purchase from distance, if they want and choose to. The authors believe that Internet is a tool that takes marketing to another level by offering more than was possible before. But there are some aspects of traditional way of marketing that can not be completely replaced by marketing through Internet. These aspects have been mentioned earlier in the text, and these are face to face communication and physical existence of Product or Place. But no one knows what the future brings when technology develops more and more. One day it might be possible to feel and see the products or step into a store from your own home through Internet, for example by 3D special effects etc. But the authors believe that it takes more than what is possible to do through Internet today in order for Internet marketing to compete with traditional marketing. There are though companies that operate only through Internet. They can certainly not use all possible marketing tools and probably loose some customers due to disadvantages of Internet marketing. So the designated goals of the company and its business intentions have a role in choosing the proper marketing tool. Even though the authors of this thesis have created a comparison model to show clearly the advantages of Internet marketing compared to traditional marketing, it does not mean that this model can be used simply to choose the right approach for marketing and necessarily choose only one of the approaches. As one can see, there are advantages to both traditional marketing and marketing through Internet. If a company would want to be versatile, they could consider taking advantage of using any valuable marketing tool and not limit themselves. That is of course if they have the possibility or resources to market through different tools available.

34

7 CONCLUSION

Based on our study, we can not generalize and suggest which approach is better than the other after comparing Internet marketing with traditional marketing. Depending on companies goals, products and target group etc. the right choice of marketing tools can differ. For getting result from empirical data to help us in our conclusion, the main focus has been on companies in fashion industry and the answers of marketing managers of these 5 companies. The companies interviewed have mainly referred to the traditional marketing tools when mentioning the most effective ones in their opinion. They highlighted the advantages of traditional marketing pointed out in the comparison model of this thesis. Only based on these interviews done with the chosen companies, one might consider traditional marketing to be more important for these marketers and some aspects of it such as face to face communication, irreplaceable by Internet marketing. As the authors of this thesis have realized through this study, there is no one correct way of marketing when comparing traditional marketing with Internet marketing. Both of these approaches have different positive qualities that can help a company reach its target group and gain revenue. As mentioned in the theory presented in this thesis, Internet is a channel for communication. It still seems to have kept its main purpose but it has developed and is more versatile now. It is to some degree considered a marketing tool that can not be taken away without negative consequences. It seems to be a developing and more opportunity giving part of promotion which has added value to traditional marketing. This conclusion is though based on the information gathered in this thesis and the way this information was perceived by the authors. One point to keep in mind is that the empirical data was received from companies operating in fashion industry and what works well for their products and their customers might not be the same for other industries. There are many sides to different ways of marketing, the advantages and disadvantages that they can have. There can also be different goals to achieve and different types of target groups to reach, which can affect on the right choice of marketing tools. Even though it can seem confusing but it appears as all aspects in the marketing process depends on each other and affect the decisions made about marketing approaches used. There is no meter to measure the efficiency of either way of marketing to give a 100% correct answer that we are looking for. All that is available is theories that support specific ideas about this subject, some marketers experience and point of views. In the frame of this thesis with the possibilities available keeping in mind the limitations, there has been some relevant

35

data gathered that has helped the authors and hopefully the readers of this thesis to come to a conclusion. It has become more and more clear that the combination of both traditional marketing and Internet marketing would be the most effective approach but if there is a need of making a choice between the two, a company should consider what is to be achieved and which approach would be appropriate specifically for reaching that goal and target group. Placing both traditional marketing and Internet marketing against each other to figure out the more effective one was difficult because they complement each other. There are different kinds of benefits in using either one which makes it difficult to weight them against one another. The question stated earlier is the new marketing a contemporary version of traditional marketing and are the two kinds of marketing independent or complementary to each other? can be answered now. Based on the gathered information in this thesis, Internet marketing does not seem to be a contemporary version of traditional marketing but it appears to be complementary to traditional marketing. Internet as marketing tool has added value to the marketing concept in general which makes the process of marketing more complete together with the traditional tool.

7.1 Suggestions for further research


It would be interesting to dig deeper into Internet marketing. There could be researches done to find out the impacts that Internet has had on marketing. How Internet has affected marketing in general with focus on Internet marketing. Researching wide range of companies to get a wide view of how Internet marketing is used in practice, how valuable it is and why. One interesting area to research on would be Internet marketing in different industries and finding out if there are differences between the affect of Internet marketing in different industries. Does the affect of Internet marketing depend on the products to be sold? Since technology is developing all the time, it would be interesting to follow up the development of marketing in general, it being affected by high technology. The comparison model created by the authors in this thesis could be developed further. It could contain more details about the advantages on both sides (traditional marketing and Internet marketing). This could result in a more general comparison model that covers more aspects on both approaches and that can be applied to all industries.

36

REFERENCES
Books: Dave Chaffey et al. (2000), Internet Marketing: Strategy, Implementation and Practice, Pearson Education Limited Hagel, J. & Armstrong, A.G. (1997), Net Gain - Expanding Markets through Virtual Communities, Boston, MA: Harvard Business School Press Leedy, Paul D. and Ormrod, Jeanne Ellis, (2005) Practical research planning and design, 8th edition, Pearson Merrill Prentice Hall, New Jersey Philip Kotler (2003), Marketing Management, Eleventh edition Pervez Ghauri& Kjell Gronhaug (2005), Research Methods in Business Studies, third edition, Pearson Education Limited Robert K. Yin (1994), Case study research: Design and Methods, Second Edition, Sage Publications Tony Hines & Margaret Bruce, (2007), Fashion Marketing, Contemporary Issues

Articles: Allen, E. and Fjermestad, J, E-commerce marketing strategies: a framework and case analysis, Logistics information Management, Vol.14, number , 2001, pp14-23 Donna L. Hoffman, Thomas P. Novak, Marketing in Hypermedia Computer-Mediated Environments: Conceptual Foundations, Working Paper No. 1 (Revised July 11, 1995) D P S Verma, Gaytri Varma, on-line pricing:concept, methods and current practices, Journal of Services Research, Gurgaon, Apr-Sep 2003, Vol. 3,Iss. 1,pg. 135-156 Fang He, Peter P Mykytyn, Decision Factors for the Adoption of an Online Payment System by Customers, International Journal of E-Business Research, Hershey:Oct-Dec 2007. Vol. 3, Iss. 4, pp. 1-11,13,15-16,18-32 Jennifer Rowley, Remodeling marketing communications in an Internet environment, Internet Research, Bradford, 2001, Vol. 11, Iss. 3, pp. 203(10 pp) Malcolm Newbery, Trends in online apparel retailing: Online issues, 2006

37

Pui-Mun Lee, Behavioral Model of Online Purchasers in E-Commerce Environment Electronic Commerce Research, Boston, Jan-Apr 2002,Vol. 2, Iss. 1-2, pg. 75-86 Riyad Eid, Myfanwy Trueman, The Internet: New international marketing issues, Management Research News, Patrington: 2002, Vol. 25, Iss. 12, pp. 54-67 Ulrika Hoffman,Ulrika Lindgren, Marketing on Internet, Lule, June 1999 Van Waterschoot Walter, Van den Bulte Christophe, The 4P classification of the marketing mix revisited, Journal of marketing 1992

Websites: www.scb.se www.dn.se/DNet/jsp/polopoly.jsp?d=3130&a=748658 www.veromoda.com www.tigerofsweden.com www.polarnopyret.se www.heartsofbrands.se www.hm.com

38

APPENDIX
Appendix A
Interview questions: 1. What marketing tools does your company mainly use? 2. Which marketing tool does your company consider most effective? Why? 3. What is your point of view on Internet marketing and its importance for your company?

Appendix B

Tabell 1 Daily usage of Internet in Sweden

39

Tabell 2 Ordering of products or services through Internet in Sweden

40