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This is to certify that this project work done on project entitled “Consumer
Behaviour towards Digital Marketing” is a bonafide work carried out by

This project report is submitted for the requirement of the degree of the
award of This work has not been submitted anywhere else for any other
degree / diploma.

Date: _____


I, , hereby declare that this project report entitled “Consumer Behaviour
towards digital Marketing” is written and submitted by me.
The findings and interpretations in the report are based on both primary and
secondary data collection. This project is not copied from any source or
other project submitted for similar purpose.


4 .ACKNOWLEDGEMENT I am thankful to all the for their valuable guidance and support at all time and providing me the proper guidance to carry out summer internship effectively and efficiently. I would like to thanks to all those people who provided me all the necessary information directly or indirectly throughout this project report completed at time.

In the near Consumer Behaviour towards digital Marketing. bypassing the supply chain. Most business transactions will be made electronically. In today’s technology driven world. Rediff. and Fabmart. a new fast paced online economy is emerging.PREFACE The project titled. directly from the producer to the consumer. it wouldn’t be surprising to see that there are companies that exist only inside computer networks. The project thus aims to provide an insight on the modes of online transactions and changing trends in online marketing. aims to find out the behaviour of consumers for online transactions towards three websites via. 5 . C2W&Hungama.  C2W & Hungama  Fabmart SUGGESTIONS & RECCOMENDATIONS CONCLUSION BIBILIOGRAPHY 6 .2. Black box model 2. Understanding the Internet Consumer Building Brands Online 2.14. The Evolving Value Propositions 2. The Channel Strategies for delivering Digital Value to customers 2. Online Constraints 2.21.16. Overview of the Indian Internet Users 2.28. Digital MARKETING 2. The challenge in managing multiple channels of experience Evolution of Marketing 2.15.18. Growth of Internet usage and E-commerce 2.24. Internet Marketing Tactics 2.26.19. Advertising on the Internet: emerging issues 2.1. Consumer Behaviour 2. Changing patterns of Marketing 2. 7 P's of Marketing on the Internet 2. Factors affecting consumer behavior 2. Critical Success factors in E-Marketing 2.23.TABLE OF CONTENTS CHAPTER I: INTRODUCTION CHAPTER II: LITERATURE REVIEW 2. ONLINE CONSUMER BEHAVIOUR 2. Targeting imperatives 2. Building consumer trust CHAPTER III: CHAPTER IV: RESEARCH METHODOLOGY ANALYSIS OF DATA  Rediff.

In the pre-industrial era. this medium went from being an advanced. Although the Internet users click through-rate of this marketing method went from 30 % in 1994 to 0. the average computer user might not have been able to use the Internet as we use it today. gaining millions of consumers worldwide as their customers. and specialized application into a massive multimedia tool on a global scale. Ever since the creation of the Internet. Some early speculators like Hein and Rich (1997) quoted in Goldsmith and Lafferty (2002) suggested that advertising on this medium would be more effective due to its interactive nature. marketers still spent many billions of dollars each year on internet advertising with banners. when the World Wide Web (WWW) protocol was invented. 2008). text-oriented. the most used marketing channels were banner advertisements. While the less developed countries show a very low percentage. The growth of the internet eventually lead to hundreds of thousands of companies setting up shops online. This medium opened up the doors for the conditions of conducting business through electronic methods. With the arrival of easy-to. In relation to the world’s population.3 % in 2002.QUESTIONNAIRE INTRODUCTION The internet as we know it took off during the early 1990s. At that time. In the early days. this process was achieved through 7 .3 billion people were estimated to use the Internet at the end of 2007 (Internetworldstats. Around 1.use web browsers. the world of business has changed greatly with a redefinition in areas like marketing and customer relations. Kotler et al (2005) point out Marketing as a process in understanding and satisfying customer needs. and has since then become incorporated as the backbone of advanced economies such as North America and major parts of Europe and Asia. this gives 20 % as a total amount of the world’s Internet users. the developed countries have shown a 120 % annual growth in Internet use during the past seven years.

A great knowledge of the clients is of essential use for a firm’s success. a company that is interested in selling products 8 . with the introduction of the industrial age. and at the same time more effective. Through the use of various customer databases and the location of surfing not the online way of reaching out to the customers.Relationship Marketing. The customers made their everyday purchases locally and a natural bond was created between the seller and the buyer. However. companies have learned this procedure to be difficult without information about the consumers. By keeping the information flow of their products and service available online. Online marketing is just like its regular offline counterpart about sales promotion. Due to the rapid development of the technologies surrounding the mass marketing. the focus on marketing went from individual. during which a close relationship was created between the customer and the company. As a result. This sort of marketing method is considered to be more acceptable. mainly through advertising. but with the birth of the commercial Internet. SIGNIFICANCE OF STUDY At any given time there are millions of people online and each of them is a potential customer for a company providing online sales. This method was dominant during the past decades. companies have discovered the possibilities of recreating relationship marketing. The company’s attention turned to reaching out to as many consumers as possible.g. However. 2002). During the past decade. firms have been able to evolve their marketing strategy. preferences and purchases (Maclaran and Catterall. a web site purely presenting the business will not add any value for the potential consumer. they are adapting products and messages through the study and analysis of each user’s demographics. Online advertising has the crucial role of persuading and informing consumers of the available selection of products and services (Goldsmith and Lafferty. traditional marketing e. 2002). public relations and direct marketing to customers. sending out raw advertisements through e-mail accounts. According to Cronin (1994). becoming more customized and personalized for each user. companies can create suited offerings to customers while satisfying their needs.

Blogs and communities are mostly created by private consumers. Moreover. These theories have been used for many years not only to understand the consumer. SCOPE OF STUDY As companies are trying to make their advertising more effective in terms of acceptance among consumers. The importance of analysing and identifying factors that influence the consumer when he or she decides to purchase on the Internet is vital. but also create a marketing strategy that will attract the consumer efficiently. Since there are so many potential consumers. However. it is of the out most importance to be able to understand what the consumer wants and needs. there has been no consensus in previous research concerning the difference between men and women in these cases. we consider it important to find out if consumers have a greater acceptance towards marketing in familiar or liked sites such as blogs and communities compared to non-focused web sites. While some sites have a majority of male visitors. some distinctions must still be made when considering traditional consumer behavior and online consumer behavior. That is why it is crucial for the online retailers to know what influences the online consumer. understanding and identifying the consumer is closely related to the directions a company will take with their marketing strategy. Hence. These theories can also be applied to identify the online consumer and to create certain consumer segments. Since the Internet is a new medium for there have been new demands set by the consumer. for specific causes. 9 . In addition. and we will examine this issue in relation to user’s attitudes towards customized ads. Analyzing consumer behavior is not a new phenomenon. The renowned marketing expert Philip Kotler has published several works on the topic of consumer behavior theories.from its web site will constantly has to search for an edge in the fierce competition. some companies are using more tailored ads to achieve their goals. others are more popular among women.

it reinforces the new marketing emphasis . the consumer becomes an integral player in the development of the product. Marketing is especially tied to communication and transportation revolution.which in many ways is a return to business at the turn of the century. Most business transactions will be made electronically. a new fast paced digital economy is emerging. In the digital marketing environment. it allows vast coverage and helps in serving the customer better. the job and responsibilities of marketers have evolved with them. At the end of the century. Technological change has moved steadily back focusing on the individual. it wouldn’t be surprising to see that there are companies that exist only inside computer networks. It is e-commerce that is changing the way products and services are conceived.LITERATURE REVIEW EVOLUTION OF MARKETING At the beginning of the century. distributed and sold. priced. As the new technology of the Internet develops. Each of these is strongly motivated by technological opportunities. bypassing the supply chain. The reason being that it is much cheaper." His key stages are production. manufactured. As the tools and reach of marketing increase. social life was mostly local. 10 . directly from the producer to the consumer. is also important. In today’s technology driven world. promoted. In fact. It was followed by a period in which commodities were produced on a mass scale. A fourth stage. a consumer might build the product himself from a wide array of parts provided by the company. The major driver of these changes is technology. which permit new methods and new opportunities. Consumer Marketing operated on mass marketing principles and business primarily concerned itself with how to build the best sales force. sales and brand management. These changes shape the possibility and conduct of business. In the near future. there is an emerging global culture. a focus on the individual customer. Kotler formalized this evolution with his book "Marketing Management.

ZIMA were the first to try it out and the Internet advertising has come a long way since then.  Space is not a restricting factor  The proportion of advertising to editorial is high sometimes 50:50.  Advertisements are passively received. Volvo. 11 .  Does not evoke immediate action. advertising paradigms have been constantly changing. I would attempt to compare Internet Advertising with Traditional Advertising: Let’s have a look: Traditional Advertising:  Traditional advertising is static. Club Med.supporting text and graphics video sound all together. Sprint.  Advertisements are ubiquitous. The first Web advertisement was placed on the Hot Wired web site in October 1994. Here. Whereas Internet Advertising :  It is dynamic with multimedia. Now since the explosion of the internet.  Advertising does not always target a much focused audience. AT&T. MCI.  Response to the action is not immediate.CHANGING PATTERNS OF MARKETING Traditional Marketing V/s digital Marketing Marketing over the years more so recently has started being used interchangeably with advertising.

 Invokes immediate action as you at-least need to click on the ad.  A web page would be 91% editorial and 9% advertising. So while designing or formulating any advertising strategy for a brand on the internet a manager has to take in to account factors like: 1. 12 . Thus we see that advertising is changing and so are the rules for advertising on the internet. For example the search is for travel on a search engine there are ads of travel agents on the net. the person is directed to other web page with more details. and hence they notice the ad. (please refer the chapter)  This can be much focused. 2.  Advertisements catch users when they are on the lookout for some thing.  First response is immediate as when the user clicks. as regards size of the banners etc. One more thing would be to generate 'search' specific advertising. It should be a well-planned campaign full of specific information and attention catching. 3. The Internet has made a huge impact on advertising. They should not advertise on the net just to project themselves as a techno savvy company or maybe because their competitor is doing the same thing. Therefore. The 'net' charges are on the higher side (though there has been a steep decrease in the rates in the last few months).  The user has high attention level and concentration while using the net. advertises should be designed in such a fashion that they attract attention and induce people to click on the net. the ads displayed would be related to the books. Space is a problem. Companies should be careful as regards joining the IT bandwagon. Hence people would be wary of the fact that ads consume a lot of online web time and hence they avoid clicking on average ads. This would mean that if I give a search for books on the search engine.

50 crore could comprise of retail transactions. Last but not the least. Generally. Growth of Internet usage and E-commerce: According to the research report of Goldman Sachs. 6. For Business-to-Business transactions. Care should be taken to design the ads in such a way that the information they provide or the hyperlinks they provide to a site gives adequate and specific information. The survey also revealed that EBusiness transactions in India are expected to exceed Rs.12 crore were contributed by retail Internet or Business-to-Consumer transactions. about Rs. and about Rs.4. Out of this. 13 . the total volume of E-commerce transactions in India was about Rs. the ads should be designed so as to attract attention of maximum number of people and inducing them to click. about Rs.119 crore were contributed by Business-to-Business transactions. Indian industries are expected to reach online penetration of 2% by 2003 and 8% by 2008. people perceive the ads to be time consuming and full of unwanted information.131 crore in the year 1998-99. failing to do so the advertiser ends up defeating his own purpose. It estimates that Indian Internet Users will increase by 130% compounded annual growth rate (CAGR) from 0. India has emerged as the second largest Internet market in Asia after China with 100 million users in 2005. 5.5 million users recorded at end of 1998. Also the figures of the number of Internet Service Providers (ISPs) is expected to increase by leaps and bounds and March 2006 sees at least 30 private international gateways. As per preliminary findings of the NASSCOM survey.300 crore during 1999-2000. Out of this volume. The ads and the subsequent information on the web site should be constantly updated and highlighted in the ads and thus induce repeated clicks on the ad.

Effectiveness of the Net in Reaching Out to the Masses The reach of Internet may not yet be as wide as that of other mass media. Internet is accessible though other media also and not only through telephone lines. Internet is one of the latest to join the list of such media inventions. it is undoubtedly the communication medium of the future. However. There could be several other modes to increase the reach of the Internet. the usage of internet might be dominated by telephone lines. Marketers around the world have from time to time tried to reach their target audiences through various media. the projections on Internet usage appear to be as follows: CURRENT MEDIA USAGE HABITS OF THE INDIAN AUDIENCES 14 . Government policies are aimed at broadening and strengthening the infrastructure required for Internet accessibility. Internet Fame with the Indian Audiences Let us first take a quick look at the audience that this medium is trying to reach. Scientific and technological advances have and will continue to create newer media to improve communication. the scope of the Internet as a medium to reach out to a large number of people is presently limited. and marketers will try to use the same to effectively address their audiences. In the current scenario. However. The top 8 metros of the country. Even today this medium is largely confined to only those who are literate in English. with the current limitations. some of these limitations can be addressed. Various initiatives of companies like ITC and HLL like E-choupal and i-Shakti have given a considerable boost to vernacular usage of internet 2. but broadband and cable net are coming in a huge way. but given its unique advantages. 3. 1. Internet is available in regional languages also.

there is also a high degree of flexibility in what the user is able to do. Entertainment The reach or popularity of any media is related to 1. On the basis of the above clarification. Not only are there a plethora of sites catering to every imaginable need. let us compare Internet and other traditional media. it is unlikely to yield major benefits to the marketer. Internet in the media terms is expected to make an impact and show its true caliber. print and cinema have penetrated the most. first from the customer’s point of view. All of this makes Internet a highly interactive media but also an expensive one. the reach is related to the net value perceived by the customer about that particular medium. The extent of benefits perceived to be delivered 2. If the internet is treated and used exactly like any other medium.TV. Internet has brought with it a very high degree of control to the media user. 15 . Current media options serve two broad benefits to the customer: 1. Internet appears to have a comparatively higher cost of acquisition. but also largely on the ability of the marketer to make use of the real advantages of the Net like interactivity. ability to monitor and the like. Its effectiveness is dependent not only on the target audience one is talking to. However. The cost of acquisition of the media itself In short. but is yet not taken as a serious medium. Does that mean that Internet is not an effective tool for reaching out to people? Or is it likely to work very well under certain conditions? To understand this better. Information 2. flexibility.

It offers a wide range to choose from for the user. but also in allowing him to transact — often in a seamless manner. VoIP) is almost equal to one-to-one interaction with the audience. It offers a higher level of identification of the user to the marketer.Next. one can also evaluate Internet as a media from the marketers’ point of view by way of a similar classification.g. But Internet has various other advantages over the traditional media which cannot be neglected. It gives the user the choice of content for various topics ranging from news to stock options to entertainment to sports and just about everything. It offers tremendous convenience to the user not only in delivery of information. To the marketer: The Internet offers several options to a marketer trying to target a particular community It serves not only as a channel of information. To quickly summarize the advantages of the Internet as seen from the point of view of the user as well as the marketer: TO THE USER: Internet gives more control in choosing content. It offers a variety of options for information and entertainment. The best example of giving control of content is the My Yahoo !! service offered by the Internet giant. It offers customization of the content. the way the user wants to view it. These stem mainly from the ability of this medium to allow a far more focused targeting as compared to other media. but also of product distribution It offers a highly interactive medium that sometimes (e. If evaluation as per the above classification is done. Yahoo Inc. 16 . forums. chats. the Internet does not appear to be a very advantageous option either in terms of reach or in terms of cost-effectiveness.

These include 1. Who are the people who can be reached through the Internet? 2. unlike any other media. What are the options available to the marketer to reach out more effectively to their audiences? 4. This can be elaborated a little more by answering the following questions: 1. Which are the products that can possibly benefit from marketing on the Internet? 3. Search Engines 5. and pay only on action This action could be a click on the banner or even product purchased or just a banner impression or per 1000 impressions. In this ability Internet is. the Internet offers a medium for high level of experimentation at a low cost. Are there ways for monitoring effectiveness of this medium in order to control it better? ADVERTISING OPTIONS AVAILABLE ON THE INTERNET The Internet offers a variety of options for the marketer to advertise her/his products/brands.It allows the marketer to actually link his spends to action. Sponsorships 4. in fact. Affiliate marketing 17 . Banner ads and their variations 2. E-mailers and their variations 3. Given the payment options and high interactivity.

a graphical web advertising unit. Surround Session . 2. Skyscrapper Ad. Text Ad . 8. Banner Ad . 12. Pop Under Ad . 4. smaller than a banner ad.In India. Rectangle Ad . even at the cost of being intrusive. However. 10. mainstream formats.a graphical advertising unit. Rich Media. media that offers an enhanced experience relative to older. banners still remain the most popular option. 9.advertising sequence in which a visitor receives ads from one advertiser throughout an entire site visit.a banner ad using HTML elements. 5. rectangular banner sizes suggested by the IAB. 468x60).any one of the large. typically measuring 468 pixels wide and 60 pixels tall (i. Iterstitial . instead of (or in addition to) standard graphical online ad significantly taller than the 120x240 vertical banner. 18 . Button Ad. HTML banner .advertisement using text-based hyperlinks. 3. often including interactive ad that displays in a new browser window. wider options are now available to the marketer which. advertisement that loads between two content pages. Beyond the Banner .online advertising not involving standard GIF and JPEG banner ads. serves to enhance the visibility and effectiveness of the banner The Variants of Banners include : 1.e. ad that displays in a new browser window behind the current browser window. Pop-up Ad .

Given the highly interactive nature of the Internet. Marketers can own either popular keywords or make use of meta-tags (these are similar to the keywords which the search engines uses to catalogue various websites/products) in order to go higher on the search lists. 1. and which has possibly not been used to its optimal level yet by marketers in India. and the also fact that unlike other media it offers a higher level of identification of the and it has reaped profits so much so that it is now being viewed as a threat by the computer giant Microsoft Inc. Place and Promotion have long been associated with marketing. in the form of text. simple direct marketing tools such as email can also be used more effectively. The above is used by the search engine giant Google.a banner ad measuring 120 pixels wide and 240 pixels tall. and the user experiences it electronically. So along with a change in the nature of the four P’s there are three new P’s which are relevant to the internet marketer. Price.Product. Technology allows the user to virtually touch and feel the product on the Internet . is the search engine.rotate it. The other tool on the web with enormous where the company offers the user to virtually feel 19 . zoom in or zoom out and even visualize the product in different configurations and combination. a high-end car seller can today easily send an offer to persons earning over Rs 25000 per month at a very reasonable cost and within a very short period. Physical goods are usually presented in the form of a detailed online catalogue that the customer can browse through.13. 7 P'S OF MARKETING ON THE INTERNET The four P's . For example. The Product on the Internet usually changes form online. images and multimedia. Vertical Banner . Then again there are sponsorships. which can be effectively used to increase brand salience and even change image. The example of the above can be seen at dell. but things have changed on the Internet.

every aspect of their product before they go into a buy decision. viral now known as is extremely popular as its compares the price of many airlines and offers the least price to the buyer. Pricing is dynamic over the Internet. On the Internet. For the customers to know of the 20 . Internet serves as a direct marketing channel that allows the producer to reach the customer directly. the cyberspace is already cluttered with thousands of sites probably selling similar products. banner ads. E-marketing will be based more on the product qualities rather than on the price. The Price has been drastically changed over the Internet. multiple points of entry. Every company will be able to bring down the cost of its products and hence competition will not be on price. Dell Computers have used this strategy very effectively and hence they have been able to reduce their prices of their laptops drastically and reaped huge profits. 2. It lets the buyer decides the price. Online strategies include search engine optimization. Promoting a website includes both online and offline strategies. strategic partnership and affiliate marketing. It leads to best possible deal for the buyers in terms of follows the same principles. Content and software are two avatars of digitized products that can be even distributed over the Internet. To be able to attract the customers and retain them. A website named Priceline. The very famous bazee. It will rather be on the uniqueness of the product. as there are currently more than one billion web pages. Promotion is extremely necessary to entice the customer to its website. 4. Also it gives the buyers information about multiple sellers selling the same product. the company will have to provide nouvelle and distinct products that forces the net users to purchase and come back for more. 3. The elimination of the intermediate channel allows the producer to pass the reduced distribution cost to the customer in the form of discounts. Presently. The Place revolves around setting up of a marketing channel to reach the customer.

the web page should not be cluttered with a lot of information.g. it is possible to customize the entire web site for every single user. Also the traditional mediums like outdoor advertising and television can be used to spread awareness. customers must be able to find out about their order status after the sale has been made. Personalization Using the latest software from Broad-Vision and others. The mass customization allows the company to create web pages products and services that suit the requirement of the user. A customized web page 21 . To further enhance after sales service. 5. Similar variants have been used by the FGovt of India for its Speed post and Registered Ad services where you can keep a track of your post by entering the code that has been issued to you. Presentation The presentation of the online business needs to have an easy to use navigation. Email campaigns and spamming the Chat rooms on almost every server has been exploited to the maximum for the cause of promoting their website. the overnight Courier Company allows its customers to keep track of the parcel and they are well informed about the present whereabouts of their package. Therefore. There can be traded links or banner advertisements for the same. About 80% of the people read only 20% of the web page. A sales service that will be able to answer the questions of their customers fast and in a reliable manner is necessary. For e. Processes Customer supports needs to be integrated into the online web site. 7. without any additional costs. Also.S.Company’s existence and to garner information on the kind of products or services that the company is FedEx (www. The look and the feel of the web site should be based on corporate logos and standards. The principle of K. simple but powerful navigational aids on all web pages like search engines make it easy for customer to find their way around.S ( Keep it simple stupid ) is the most important factor that has to be considered while presenting the online business 6. promotion has to be carried out.

For e. Advertise your message. appeal to broad target groups. Web directories/search engines are information. gateways that have high traffic and are good for displaying advertisement banners. They are used to find Internet information and for this entered the Indian cyberspace and started its personalized services. Some companies have gathered the e-mail addresses of potential customers and used these lists to send out product information specific to client interests. Establishes You as an Expert 4. Some of the most common and effective tools are: Search Engines and Directories: Search engines are one of the most popular means of finding web sites. Yahoo! (www.does not only include the preferred layout of the customer but also a pre selection of goods the customer may be interested in. Allows You to Build an Opt-In Email Marketing List 7. Establishes Trust 2. second only to following links on web pages. Keeps Current & Potential Customers Up to Date on New Products & Services 5. Search engines help people find relevant information on the Seven good reasons to establish an E-zine Keeps Your Website Fresh in Visitors' Minds 22 . Major search engines maintain huge databases of web sites that users can search by typing in keywords or phrases. E-zines (Online magazines): These publications are focused on specific topics and may be a way to reach a target audience interested in that subject. INTERNET MARKETING TACTICS There are many different technologies to facilitate your Internet marketing strategy. Builds Relationships 6.g. Brings Visitors Back 3.

E-mail: Ethical methods of gathering e-mail addresses are through on-line registration
built into your corporate Web sites, or requests for information forms that request
submission to your opt-in lists.
An alternative is to purchase lists of customer e-mail addresses indexed by special
interests from a private company such as 'Postmaster Direct'.
Online customers are becoming increasingly selective about their relationships, the
brands they trust, and what they consider relevant. While most marketers are aware of
privacy issues and the risks of Spam, there is still need for improvement. Email
marketing campaign management is still fairly unsophisticated even at the largest of
Affiliate Marketing: Affiliate Marketing enables you to increase online sales by
promoting your products and services through a network of Affiliate sites on a paymentby-results basis.
It also provides the opportunity to generate additional revenue by exploiting your site's
own content to promote the products and services of other online Merchants.
A Merchant recruits content sites to partner with them as Affiliates in exchange for
commissions. A common third party provider such as Commission Junction can be used.
The Merchant provides their advertising banners and links to their Affiliates and assigns a
commission for each click-through to their site, subscription to their service, or purchase
of their products that is generated from those links.
Affiliates place the tracking code for these ads and links on their Web sites. This allows
click trough’s to be tracked online and commissions to be calculated. If a product or
service is purchased, the customer pays the Merchant directly and the Affiliate is paid a
commission for that transaction. The dating giant has used this
strategy to the maximum and has earned millions of dollars by proper implementation of
this strategy.


Banner Advertising: Banner advertising can play an extremely important role within
your website strategy. One can use banner advertising as a means of promoting it’s own
products and services, raising awareness, or as a way of generating revenue by selling
advertising space on your own website.
Purchasing Advertising: There are currently two widely recognized methods of
purchasing banner advertising. The rates for these are usually quoted on a cost per
thousand basis or (CPM). The rates you pay can vary tremendously as there is currently
no standard price model - so be prepared to negotiate!
 Pay-Per-Impression: This method of purchasing banner advertising is based on a
charge for the number of times someone sees your banner. There are no
guarantees as to how many visitors will come to your site as a result of seeing
your banner; you are simply paying for the number of times your banner is
displayed. Websites that offer such programs include and
 Pay-Per-Visitor: This method of purchasing banner advertising is based on a
charge for the number of times someone visits your site as a result of clicking on
your banner. This is a better method of purchasing banner advertising as you are
only paying for results, although expect to pay a premium.
 Pay-Per-Click: The revenue model of the Internet giant has its very
own service which offers certain share of the profit that it makes by the click-thru
that a website generates from its ad sense codes. The revenue model is known as
google adsense and almost every successful website uses this model to make
profits. The Google adsense ads can be seen on websites like Times of India,, and a lot many other reputed
 Branding. While CTR and cost per sale relate to direct marketing objectives,
another way of looking at banner ads is as "branding" tools. They create brand
awareness, and a brand image in the viewer's mind, whether or not the viewer
clicks on the ad. Branding is very difficult to measure, but can be very powerful.


There are a number of key issues that must be considered when designing a
successful banner:
 It must have an attention-grabbing headline.
 It must be simple and get your point across.
 It must invoke action (i.e.: "Click here")
 It must download quickly.
 It must be placed effectively on a web site, Location, Location, Location
Any campaign is limited by the amount of advertising you can do depending on the size
of your budget. Therefore it is important that you target your market carefully so as to
maximize advertising spend on effective banner campaigns.
Rich Media Advertising: Looking for ways to make online advertising more
compelling, and hopefully thereby more acceptable, marketers have increasingly been
turning to streaming advertising.
In effect another kind of rich media advertising, streaming advertising comes in two basic
First, it can either be part of a streaming audio or video program on the web. With many
people now listening to web radio or watching web broadcasts, this makes perfect sense.
After all, everyone is accustomed to getting commercials on their TV or car radio.
The other channel for streaming advertising is essentially an infomercial. Consumers can
download a streaming clip for a product or service from a marketer's website.
Two new studies recently released suggest that the streaming advertising market is going
to boom now and in the years to come. The giant ad selling company media turf uses this
method for providing content to advertisers
Conferences: By their nature conferences are organized for special interests. Advertising
in conference literature, print and electronic, is an excellent way to contact target


 Participate in joint sponsorship of events. If the incentive is attractive.e. informational Web sites.attracting visitors to return to a Web site.g.  Feature pricing: providing special pricing to those that order electronically.Buy a company’s product/service and get a coupon for another company’s product/service.offering additional goods or services when making single purchases (e. the customer may have the opportunity to try out more than one company’s product/service while testing another. build their awareness and prepare them for the action of purchasing. the price: value ratio is adjusted favourably enough to affect a sale.  Cross-product sampling: When a customer makes a purchase they have an opportunity to try out another company’s product/service. bulletin board systems.  Games with prizes: Useful to keep people coming back to Web sites.  Advertise . 26 . buy-one-get-one-free). provide further market information to customers. setting up links from one corporate Web site to another or offering special promotions in partnership with complementary goods or services. etc.  Bonus offers . mailing lists.offering product samples. Sales Promotion: Employing methods to stimulate sales through immediate or delayed incentives to the customer.g. This strategy should integrate with the overall marketing mix to balance extra sales with long-term profit motives. directories. initiatives. Also.  Link exchange with trade/professionals associations to support credibility of firm.  Cross-promotions with other companies’ products/services . Useful for complementary products/services.share advertising.Collaborative Marketing: Team up with other business to:  Cross-promote . electronically. Examples of sales promotion strategies are:  Sampling .  Limited time offers .

These are useful in fields where the customer needs information to develop sufficient knowledge for movement through the first three stages of the sales process of awareness. Promotional Publications: Facilitate customer education. Subscriptions: Business marketers may use their Web sites to encourage visitors to subscribe to receive regular email messages from the company. and giving them a password. and are a clever way for marketers to push product news to willing customers. It can be inexpensive or even free and it may have the potential to generate far more in sales than even a well executed advertising plan. Public Forums: These are often community-based or interest-based sites that allow visitors to communicate with one another. Web based forums are advantageous for their superior display of advertising images/messages 27 . with the intention of building corporate image and even brand awareness. The company. and desire. E-mail based forums appeal to a wider audience due to the greater use of this application over Web-based forums. An opportunity for small businesses to reach to their intended target group via these forums is by posting messages or by sponsoring such a forum. customers might receive an e-mail message inviting them to visit a private Web page on the company’s intranet. interest. etc. Controlled-access Web pages: Clever business marketers may use their Web site to attract new customers. These messages are called digests or newsletters. They might publish a Web page that allows customers to download a free trial version of a software application that expires after a time if not paid for. as a way of encouraging a sale. offers customers who visit the page a prize or enticement of some sort. the small business may sponsor and/or publish its own electronic magazine on the Web.Publicity: The goal of publicity is to have others talk about the small business or its products. Or. Although time consuming. e-mail. they replace or complement the print versions of newsletters/corporate magazines/flyers.

or through tracking of areas of site they visit.Resellers: Some sites will remarket other companies’ products as intermediaries. Cookies are a type of digital identification. on-line surveys. which pages were visited) and use it to create visitor profiles.” then process this information using Web site analysis software. Virtual Malls: Web based sites that allow companies to post their products or services for sale long with other companies. E-mail Links: Visitors to a site should have the opportunity to correspond with the host of that site. time of day the site was accessed. cost-efficiencies may be realized by engaging in a reselling arrangement. By piggybacking on another company’s efforts. These may be product specific. Companies can track visitors to their site and collect information about them from their “cookies. 28 . The companies that host these sites may have invested significant resources in making them attractive to the target audience a small business is interested in attracted. Visitors can then be identified as “old” or “new” when they visit the site. may be arranged by complementary products. These are also useful for feedback on site maintenance problems. On-line Surveys: Information may be collected on the visitors to a Web site through registration forms. E-mail links may be strategically placed throughout the site to elicit response from visitors for at various points. especially if out of the telephone area or time zone. or may have products that are not related except by their companies’ desire to attract a similar target audience. which is read every time the user connects to a public Web site. These websites also offer referrals wherein if you refer someone to their site and the person becomes a member then you are paid commission on that. Measurement: The Internet has the unique ability to provide marketers with detailed information about the success of their Web marketing programs. The Web site can collect some very basic information about the user (e-mail address.

Is this because Net penetration in India is not deeper? Yes. So. Fine. however. there are quite a few issues that need to be sorted out. in partnership with the Reliance group. is working at building 1. Slow Motion However.800 cyber kiosks in Madhya Pradesh and BSES is planning to put up 1.000 community Internet centres in Tamil Nadu. how large is online advertising in India? Various estimates put the size of online advertising in India between Rs 24 crore and Rs 29 crore. advertising on the Net accounts for anything between seven and 7.ADVERTISING ON THE INTERNET: EMERGING ISSUES Internet might be a catchy advertising medium. For instance. In developed economies. initiatives are on to increase the number of Internet users. There is a question here. which is much less than one per cent of the total advertising cake. then how that Net advertising is has picked up in Hong Kong.000 cyber kiosks in Bombay. If numbers are the only factor. this might not be the case for long. a drive is on to make Internet more affordable. the company spends not more than Rs 25 lakh on online advertising. the Reliance group is planning to set up 7. Why is online advertising so small in India? Why aren't the advertisers putting their money on Net advertising? For instance. Advertising on the Net is slowly catching on. It is estimated that Internet subscribers will increase to around 35 million by 2008 from the current figure of one million. For. there are other reasons why online advertising is going through a slow motion in India.5 per cent of the total advertising cake. to an extent. which boasts of 1. Hindustan Lever’s advertising budget is upwards of Rs 700 crore and out of this.8 million Net users compared to some 3.5 million in India. Not only that. And the UK-based WorldTel. But. 29 .

targeted advertisements based on the profile of users are also possible. And there is no mechanism available for tracking viewer ship of advertisements. AC Nielsen is looking at rating Net advertisers and ORGMARG is planning to kick off its research on Net advertising. Tam (IMRB) and Intam (ORG-MARG).com offer keyword targeting. media director with the Mumbai-based FCB-Ulka Advertising: "While television has two people meter services. there is no possible mechanism to enable working out optimized schedules on the basis of ad viewer ship rather than programme viewer ship. For instance. Currently. To make this possible. Says Apurva Purohit. So. Only such a mechanism can help to track ad viewer ship patterns much more accurately and monitor television advertisements and Rediff. Satyam Online is offering customised solutions here and portals such as Indiainfo." True. Ad networks such as Rightserve are offering such services based on their continuous online reports. It is possible now to measure campaign performances on a real-time basis and make necessary changes." All these might become things of the past with quite a few studies on online advertising in the pipeline. The very reason that ad viewer ships in online advertising are not monitored and audited is making quite a few corporate advertisers go slow in latching on to the Internet medium. Says B Venkataramanan. Moreover. TARGETING IMPERATIVES Accurate targeting is another strategy to eliminate wastages in online advertising.One such reason is this: there is no official organization in India that monitors and regulates the online advertising industry. we will be going about online advertising in a planned way. such targeting based on parameters such as geographic location and search keywords is possible. group media manager of the Mumbai-based Hindustan Lever: "I am skeptical about the kind of figures most dot-coms come up with. it is essential to have lists such as registered e-mail users and such 30 . Yes.

the Coco-Cola television commercial is being aired in Zeenext. music and visual imagery and make interactions with the banner possible. 31 . Estimates are that in a couple of years online advertising could touch Rs 300 crore. In online advertising. there could be a glut soon. thanks to the fact that online advertising depends so much on technology and software programming. So. this is not possible in India. But. Sure.50 lakh users. But. efforts are also needed to eliminate the attendant constraints. ONLINE CONSTRAINTS As efforts to eliminate wastages in online advertising take off. who have found a way to use the Net to air commercials with the dial-up mode and thus overcoming the bandwidth constraint. with massive investments coming in bandwidth. Despite the bandwidth constraint.lists can offer profiles of has a base of eight lakh registered users and Jobsahead. But the question is how many sites in India have a large base of registered users? Perhaps Rediff. Anyway. However. This initiative has been taken by Mediaturf and a Bangalore-based software programmer. the days of innovative banners and convergence of real-time advertising are not far. thanks to the existing bandwidth problems. E-commerce will only help the spread of online effective online advertising calls for skills in consumer and relationship management. The prospects are of course bright for online advertising. soon bandwidth will cease to be an has a base of about 1. two per cent of the total adspend in the country. one can stream audio and video technologies together with faster bandwidths and delivery channels in a bid to present the same idea with the use of sound. India has an advantage in online advertising. And Nasscom's estimates are that online advertising could touch Rs 750 crore by 2002.

higher discounts etc.ONLINE CONSUMER BEHAVIOUR Now to be able to use the seven P’s effectively in order to achieve the predefined goals of any organization it is imperative to understand the customers. Customization will only be truly effective if we understand our customers and their true needs. both individually and in groups. the marketer needs to understand the characteristics of the online customers. why. advantage. It blends elements from psychology. insight or even a pleasant surprise. The five categories of users are:  Directed Information Seekers: They require specific. It 32 . They are sure what they require and just log on to the Web to purchase the item. Before adapting marketing practices to the Internet. It attempts to understand the buyer decision making process.  Entertainment Seekers: they see the Web as an entertainment medium of vast breath and potential and want to explore the medium before the mass gets there.  Bargain Hunters: They are of two kind. Something that can give them an edge. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. One who look for free items on the internet and other who are seeking better deals. and where people do or do not buy products. Consumer Behaviour Consumer behaviour is the study of when. how. sociology.  Directed Buyers: They want to buy something . timely and relevant information about the products and services being offered.  Undirected Information Seekers: These users require something interesting and social anthropology and economics. The Net users can be classified into five categories depending upon their intention of using the Internet.

customer relationship management. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the rediscovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. customisation and one-to-one marketing. friends. Customer behaviour study is based on consumer buying behaviour.also tries to assess influences on the consumer from groups such as family. payer and buyer. BLACK BOX MODEL ENVIRONMENTAL FACTORS BUYER'S BLACK BOX Marketing Environmental Buyer Decision Stimuli Stimuli Characteristics Process BUYER'S RESPONSE Problem recognition Economic Attitudes Information Product choice Product Technological Motivation search Brand choice Price Political Perceptions Alternative Dealer choice Place Cultural Personality evaluation Purchase timing Promotion Demographic Lifestyle Purchase Purchase Natural Knowledge decision amount Post-purchase behaviour 33 . A greater importance is also placed on consumer retention. reference groups. with the customer playing the three distinct roles of user. Social functions can be categorized into social choice and welfare functions. and society in general. personalisation.

Cultural Factor : Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class o Culture: The set of basic values perceptions. However. Culture is the most basic cause of a person’s wants and behaviour. Social Factor 3. wants.The black box model considers the buyers response as a result of a conscious. in reality many decisions are not made in awareness of a determined problem by the consumer. Every group or society has a culture. and behaviours learned by a member of society from family and other important institutions. rational decision process. 1. in which it is assumed that the buyer has recognized the problem. o Sub Culture : A group of people with shared value systems based on common life experiences and situations. Psychological Factor. Cultural Factor 2. Personal Factor 4. 34 . Consumer purchases are influenced strongly by following four factors: 1. and cultural influences on buying behaviour may vary greatly from country to country.

neighbours and coworkers. which are more formal and have less regular interaction. interests and behaviour. religions. Social Factors : A consumer’s behaviour also is influenced by social factors. Some are secondary groups. Groups that have a direct influence and to which a person belongs are called membership groups. Sub culture includes nationalities. such as the (i) Groups (ii) Family (iii) Roles and status o Groups : Two or more people who interact to accomplish individual or mutual goals. racial group and geographic regions. social classes are society’s relatively permanent and ordered divisions whose members share similar values. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. o Family:- 35 . o Social Class: Almost every society has some form of social structure. These includes organizations like religious groups.  A person’s behavious is influenced by many small groups. Many sub culture make up important market segments and marketers often design products.  Some are primary groups includes family. 2. friends. professional association and trade unions.

The family is the most important consumer buying organization society and it has been researched extensively. 3. o Roles and Status : A person belongs to many groups. organizations. o Age and Life cycle Stage: People changes the goods and services they buy over their lifetimes. in his family he plays the role of husband. furniture. o Occupation : A person’s occupation affects the goods and services bought. Family members can strongly influence buyer behaviour. Tastes in food. he plays the role of manager. and recreation are often age related. etc. family. Marketers are interested in the roles. A Role consists of the activities people are expected to perform according to the persons around them. clothes. Blue collar workers tend to buy more rugged work clothes. and influence of the husband. clubs.  For example. in his company. whereas 36 . Personal Factors : It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept. Buying is also shaped by the stage of the family life cycle.  The person’s position in each group can be defined in terms of both role and status. wife and children on the purchase of different products and services. M & “X” plays the role of father.

Business. lawyers. support etc) interest (Food. engineers.  i. family recreation) and opinions (about themselves. activities (Work. shopping. hobbies.e. and doctors. Thus. A Co. accountants. understanding these forces involves measuring consumer’s major AIO dimensions. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Psychological Factors : It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes  Motivation :- 37 . can even specialize in making products needed by a given occupational group.white-collar workers buy more business suits. o Economic situation : o A person’s economic situation will affect product choice Life Style : Life Style is a person’s Pattern of living. fashion. computer software companies will design different products for brand managers. 4. Products) o Personality and Self concept : Each person’s distinct personality influence his or her buying behaviour.

Here again it is important to note that the majority of online customers are not seeking the lowest price. a Person’s consistently favorable or unfavorable evaluations. Rising digital penetration would mean that the number of customer visiting particular sites would inevitably go up. Organize. and tendencies towards an object or idea CRITICAL SUCCESS FACTORS IN E-MARKETING Having observed the evolving paradigms of business in the Internet era. since word of the mouse spreads 38 . The power of customer referrals has never been so enormous. Beliefs and attitudes :o Belief is a descriptive thought that a person holds about something o Attitude. feelings. there are five critical success factors that the E-Marketer has to keep in mind. Rather they are seeking convenience above everything else. While the number of eyeballs or page views has so far been conveniently used as a satisfactory measure by most web sites.  Attracting the Right Customer is the first crucial step. Content has to be very target specific.  Learning:o  Changes in an individuals behaviour arising from experience. it would be foolish to cater to the whole spectrum of digital visitors.o Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need  Perception :o The process by which people select. The digital company has to select its target segment by finding out which section of customers are the most profitable in terms of revenue transactions and who are the customers who generate the maximum number of referrals. and interpret information to form a meaningful picture of the world.

 E-Learning to facilitate personalized interactions with customers has been the biggest contribution of the Web to the marketing strategists. they in fact follow the old rules of customer loyalty.  Delivering Content Value to engage the user’s interest is the critical importance in retaining customer participation. Product innovation serves as a key tool to attract new customers. is changing rapidly with multiple players jockeying for position.  Ensuring E-Loyalty is vital to the success of any online venture. This is because content serves as a powerful Customers in 39 . Companies like Amazon.faster than word of the mouth. This is because acquiring customers on the Internet is enormously expensive and unless those customers stick round and make lots of repeat purchases over the years. Not only do referred customers cost less to acquire than those brought in by advertising or other marketing tools. have used a variety of encryption tools ad simple ethical decisions like not accepting money for publishers for independent book reviews to maintain the trust of its customers. The retail financial services industry. which command amazing levels of consumer trust. profits will remain elusive. Integral to the concept of delivering proper content value is innovation. Contrary to the general view that Web customers are notoriously fickle. personalized interactions (through customized navigation paths as seen on the web sites of GM and Toyota) and Problem Resolution (updates of delivery schedules and e-mail responses). for example. The issue of trust is integral to the issues of privacy and security. they also cost less to support since they use their friends who referred them for advice rather than using the companies’ own technical desk. Web customers stick to sites that they trust and with time consolidate their purchases with one primary supplier to the extent that purchasing from the supplier’s site becomes part of their daily routine. E-Bay attracts more than half of its customers through referrals. Content would include Product enhancements (Software patches for glitches).

click throughs. These models have often disturbed the traditional status quo and created new rules of business. if the customer exits the web-site when the price screen appears. the relating segment and the publishing segment. For example. and other indicators.  Providing Digital value to the evolving consumer through his life cycle has become possible because of customized interactions and emerging business models. In the digital marketplace. thus reducing the risk of a potential flop.traditional bricks-and-mortar stores leave no record of their behavior unless they buy something—and even then the date might be sketchy. The Internet may soon be used as a test bed for testing prototypes of marketing and advertising campaigns. 40 . The sectors where new business models will emerge or have emerged are the music industry. he is a price sensitive consumer. responses generated. This would make it possible for the company to modify its product offerings much earlier than usual in the product life cycle. allowing the customer to feel his ownership of the Web experience. By monitoring pages selected. and giving the customer a sense of belonging that traverses the physical boundaries. the financial services industry. the travel industry. however technology has made the entire shopping experience a transparent process. the company would be able to discover which parts of a prospective campaign would work. Digital value is delivered to the consumer by promising him convenience. Such minute tracking of customer behavior has major implications for the world of advertising.

Can an Internet bookseller allow its customers to experience the same ambience on the net as it does in the bookstore or vice-versa? If it cannot then companies will face friction among the alternative distribution channels and the already established physical channel might complain about its profitability being affected by digital purchases. This may be typified by friction between vehicle dealers and the company over orders trough an auto company’s Web site. The emerging economic structure of Electronic Commerce would mean that profits would lie in the intermediate transactions rather than in the final sale of the good. has meant that companies have usurped the role of other value providers in the value chain to gain competitive advantage. The challenge will lie in managing these multiple channels of experience: It is likely that most companies will find that they will have to integrate several distribution channels to provide the customer with a seamless purchase process. The billing system and pricing strategies have to be properly frames and executed 41 . The key challenge is thus to ensure that the personalized nature of the experience is not much different across channels. In retailing profitability is primarily.The Channel Strategies for delivering Digital Value to customers: The Internet era has shown that companies have risked damaging relationships in their physical chain to compete in the electronic channel. Complementary to the problem of managing multiple channels of distribution is the development of infrastructure needed to support such a distribution network. However pirating the value chain does not mean that the number of intermediaries in the whole process would necessarily decrease. The ubiquity of the Internet the fact that cross-linkages are possible to any degree. When companies pirate the value chain of the industry they are essentially eliminating layers of costs that are build into the current distribution system. Companies would aim at cutting down their traditional margins (give up the cost plus pricing structure) and aim at high inventory turnover.

eases transactions 42 . aggressive Internet upstarts are putting established brands at risk. Advertisers are fighting tooth and nail to produce the world's worst advertising. though essential for content. Reflecting on the current state of online advertising. the ratings that buyers offer sellers on eBay. the Lands’ End "shop with a friend" feature. are underutilized. Raging Bull’s discussion boards. actually destroying their existing offline brands in the digital realm. creating very strong brand recognition and enjoying explosive visitor growth The reason may have less to do with the established brands themselves than with their managers. the majority of online marketers are doing a terrible job of building their digital brands. Yet online offers the best options for building a meaningful brand. and Pert’s viral marketing (which encourages consumers to e-mail their friends instructions for obtaining free Pert Plus samples). Collaborative Tools They facilitate word of mouth. for example. creating very strong brand recognition and enjoying explosive visitor growth. Purchase-process Streamlining Tools They eliminate such physical-world constraints as the need to walk into a store to purchase a product. The reason may have less to do with the established brands themselves than with their managers. In one industry after another. or what might be called "branded person-to-person communications"—for instance. aggressive Internet upstarts are putting established brands at risk.and community-oriented digital brands. Companies without a solid digital brand strategy are literally being left behind as leaders build new digital brands. In one industry after another. Amazon’s one-click ordering system. Collaborative tools such as consumer ratings.Building Brands Online Online has always taken a back seat to offline in brand building. options that didn't exist only a few years ago.

Such tools." Dynamic pricing. Dell Computer. lets customers design their own systems on-line by choosing from a range of options. could permit customers to make a wider variety of trade-offs between price and value than is possible in the current world. Dynamic-pricing tools They overthrow the tyranny of the fixed retail price. are not based on information. a potential "killer application" in many sparing repeat customers the inconvenience of inputting transaction data. either with the help of configuration options or from scratch. Although incumbents often have difficulty integrating these Webbased tools with legacy systems. But the need to create manufacture-to-order systems to capture the potential of these tools may make them uneconomical in industries that. and other e-businesses that handle large volumes of transactions. and changing Addresses on-line. unlike software and music. the tools are indispensable for banks. include eBay’s and uBid’s auctions and Priceline’s offer to "name your own price. Do-it-yourself product design tools They allow consumers to customize products and services. preparing and Listen. Peapod’s shopping lists save consumers time by recording the products they purchased previously. Self-service Tools They allow customers to obtain answers and results without the delays and inconsistencies that more often than not characterize human efforts to provide assistance. customers of Music. retailers. The fact that most e-shoppers drop out of the buying process during the last clicks suggests that improvements along these lines might be very worthwhile. Such tools include software for tracking orders. where most sellers offer a single fixed price to all buyers. for example. Can a marketer be trusted with sensitive personal and financial information? Consumers increasingly expect their identity and personal information to remain confidential when 43 . allowing prices to fit the particular circumstances of individual transactions. which come in many can download the music of various artists onto a single compact disc.

CD-now customers can personalize their home pages with favorite artists and wish lists. But what the consumer is giving the marketer is something quite valuable: time and attention. though. For example. trusting relationships. Each time the consumer volunteers some personal information.they go on-line to shop. The research has identified four stages of trust building: Attraction At the first stage. The average consumer on Ralston Purina’s Dog Chow Web site. without demanding any in return. along with a view of how the site is traversed. the marketer rewards the consumer with a more personalized service. and none may be warranted. spends more than six minutes per session learning how to care for pets. does not automatically lead to deep. No real relationship exists between the marketer and the consumer. User-Driven Personalization At the second stage. This mutual give-and-take eventually leads to an advanced collaboration based on trust. the consumer browses the site and even makes a transaction. is what stops many consumers from even considering digital transactions. coupled with fear of on-line fraud. this may seem like an imbalance between what marketers give and what they get back. which offers no product for sale. That comes through a step-by-step process in which the consumer and marketer exchange value. and that. The best strategy is to provide the consumer with information. Building Trust Bringing the six elements of trust to your Internet value proposition. The time and attention translates into the "mind share" needed to create a brand preference. That’s far more time—and concentration—than consumers devote to a 30-second TV ad. consumers start shaping Web pages to their specific tastes. At first blush. The company shows that it is willing to deliver some value to the consumer 44 .

Thus. 45 . and even cartoons. consumers were more likely to buy when the message was personalized and based on information they had volunteered.before gaining financially. We suggest a gradual approach. According to "Is Your Web Site Socially Savvy?" a May–June 1999 Harvard Business Review article. CD-now learns consumers’ preferences and zeroes in on what they really like. as nothing aggravates many Internet users more than unsolicited e-mail. This approach takes patience. It is worth emphasizing that marketers should rein in their urge to make immediate use of data and personalization technologies. User-driven personalization should precede marketer-driven offers. As the process continues. weather information. Marketer-Driven Personalization In the third stage. a trait lacking at many marketing organizations. Too often they bombard consumers with promotional offers as soon as they get their hands on an email address. A best practice is to let the user set the pace of personalization and contact from marketers. CD-now uses its knowledge of consumers—developed at the earlier stages of trust—to suggest products they might like which consumers then rate as either on.or off-target. Users aren’t required to open a Schwab account to do so. Moon found that consumers were less likely to buy products pitched to them through messages if the messages were based on information they had not given to the marketer themselves. Charles Schwab now invites users to set up a personal page through the My Schwab service. marketers begin using insights provided by consumers to beam information back to them. where users can not only track stocks but also get customized sports news. Recent research by Professor Youngme Moon of the Harvard Business School has shown that premature personalization can backfire.

Survey based secondary data is the data that is collected through the survey and is available as data table forms. It is the data that can be collected from sources such as journals. The primary data is after all the raw effort which is put by an individual to get the opinion.RESEARCH METHODOLOGY In this chapter we will present how we will conduct our research in order to collect primary data and reach the objective of the dissertation. Research design It is a exploratory research study.. We come up with a questionnaire to understand the on line consumer behavior. This form of data is dependent on the access the researcher has to it. Sample size=50 SOURCES OF DATA Primary data: Questionnaire to study the behavior regarding online marketing. We will also be discussing which different types of methodologies that were used. transcripts etc. 46 . databases. Secondary data: Secondary data can be classified into three different subgroups: documentary. and survey. behavior and attitude from a sample population by filling up questionnaires and which gradually accumulates to become the backbone of the data of online marketing. multiple source. Multiple source secondary data is data that has been compiled into documentary or survey form. Documentary second hand data comes in both written and non written form.

Field observation: I did extensive study of various blogs. Documentary observation: Books. published and unpublished materials. It gives useful insight of my project report. annual report. 47 .ANALYTICAL TOOLS: Here I collected case studies of three different companies which can represent my whole report in the real life scenario. communities and online consumer to observe the online marketing operation performed by the organization. website.

Known for being one of the first with news and providing accurate and trustworthy information. Rediff. information. India Abroad. India with offices in New Delhi and New York. They provide original and third-party branded content through interest-specific provides an ideal platform for Indians worldwide to connect with one another online fast. is the leading online network targeting India and Indians worldwide. Rediff.CHAPTER IV: ANALYSIS OF DATA We have the interpretation and analysis f data collected from the questionnaires. 48 . entertainment and shopping services for Indians. Founded in 1996. Rediff. CASE STUDIES  additionally offers the Indian American community one of the oldest and largest Indian weekly  C2W & Hungama  Fabmart Case Study Rediff. USA Rediff. is one of the premier worldwide online providers of is committed to offering a personalized and a secure surfing and shopping is headquartered in Mumbai.

constantly updated by their in-house editorial staff. 49 . Focus on India & Indians Worldwide: They serve the online needs for Indian Internet users and people of Indian origin worldwide and have developed their product offerings based on the demands and the requirements of their user base. They believe that their success to date is attributable to the following key success factors: 1. with technology from Inktomi. and the largest e-commerce platform in India. and celebrities.extensive Web-based community features such as free e-mail. movie stars. Indian finance. and hence have a large archive of Indian focused content. Rediff provides their users with: · Broad range of community offerings such as. as well as created a highly desirable advertising and ecommerce platform for advertisers and merchants respectively. thereby eliminating the need for Indian users to queue up in airport and train stations. · Channels that are relevant to Indian interest. They have been in business since 1996. that has been customized to provide India relevant content as top searches for queries by users. Cricket. featuring interviews with several leading Indian politicians. They have designed their Web-site offerings by keeping the slow access speed available to most Indian Internet users in mind. · Airline and train schedule and availability. · Search engine. chat. Singles. e g Horoscope. singles channel and personal homepages that allows users to interact with other Indians with similar interests. personal home pages and an India adapted search engine. chat. Rediff believes that it has created the online network of choice for Indian Internet users. · Up-to-date news focused on India. Indian music and Indian movies. · An easy to understand interface that strikes the right balance between an attractive visual appearance and fast down-load times for people accessing the site with low speed modems.

On the other hand they have created the necessary facilities to allow their site visitors to easily search and provide the right goods and services in the Rediff Marketplace. create their own store and transact business on the web. 3. To demonstrate the value of this proposition they created a Rediff Book Store and Music Store online and the initial positive results from them has allowed them to sign up more merchants. 50 . they help them build their sites.2. Till date they have put online several dozen merchants in India and are now completing development of software that will allow merchants to automatically sign-up. community functionality. They believe that their extensive offerings coupled with their aggressive branding program have made them the most recognized Internet brand in India. Comprehensive online offering: Rediff believes that it is "one-stop-shop" for Indian Internet users by satisfying all their online requirements. and ability to shop online. it has been able to attract and retain users on its site for extended periods. Leading e-commerce platform: Rediff has created the Rediff Marketplace which provides Indian merchants a guide and effective way to move from being merely advertisers/sponsors on their site to selling their goods and services online. To help advertisers reach the Rediff audiences. By providing them with locally relevant content. design their banners and sponsorships and lead them through a comprehensive service to assist their marketing efforts on the net.

com. 51 . links. For E. Rediff offers ‘Rediff Blogs’ a service that allows a user to publish their thoughts and ideas directly on the web. news about a company. a person or an idea and even fiction. Apart from these general means of advertising it also believes in promoting the site through web promotion. to everyone. poetry. This could comprise of links and commentary from other websites on topics of interest such as writing diaries. be heard and make friends on Rediff. more the number of people visiting their site more is the awareness made by them to other people. ecommerce start-ups use shotgun marketing. This service enables the user to express his opinions. too often. in the hope that a fraction of a percent of those who see the ads will respond. an offline strategy. AltaVista and others. Rediff. making sure that their site shows up high in the list of search results and ensuring that their site is listed for specific keywords which is a science in itself. simply advertising everywhere. Rediff also believes in Word of Mouth policy. Majority of the Rediff customers come through search engines.PROMOTIONAL STRATEGIES Rediff generally believes advertising in mass media like Television. So they see to it that they are getting their site is the first Indian website to offer Blogs to Indians worldwide using the latest in the internet technologies. providing project updates. uploading photos. Newspaper etc. A Blog or a web log is a personal or conversational website updated frequently with views. But. The best e-commerce site in the world is worthless if no one can find it. such as Yahoo. commentary and such other information relevant to a particular topic.g. This can be done only if they provide innovative products and services to its customers and to see that what the made by them is being fulfilled. Google.

Hungama. Alok Rohit Varma. On its website they have got a Rediff Marketplace option wherein a customer can buy the products online. With enthusiasm that ran deep. and attractive promotions in prominent net-savvy community hangouts like night clubs and cyber cafes in Bombay. did not spend on the traditional advertising and PR channels from the time they went live in November took the other route. Chief Marketing Officer said that it is these small things that one has to take into consideration and which can create a sense of trust in the minds of the customers. keeping in mind the impatience levels of users online. Rediff has got this system whereby if a customer after shopping is not satisfied with the product purchased from Rediff. C2W & Hungama The first full-fledged website in the Indian market to start broadcasting to cater to this need was Contest2Win (www. Building Trust Online users expect certain things from the service provider i. CEO. easy to use and trouble free procedures like while creating a new Rediffmail account. the information asked by Rediff to the online user is very specific and up to the point. now simply c2w. All a user needs is a Rediff. professional PR. Bangalore and Delhi all went towards literally raising a Hungama about this new website in almost no time at all! 52 . living upto its name when it launched in March 99. On the other hand.contest2win.e. but pockets that didn't. at no point can they afford to loose a valuable customer. starting with entering a According to them trust is an ongoing job. choosing a template and making an entry into the blog. C2W edged its way slowly but steadily into the minds and onto the fingertips of Indian users by striking barter deals which involved their URL (Internet address) being mentioned in traditional media in exchange for hosting contests and promotions on their site.The process of setting up and updating a blog is very simple. they can return the goods back to Rediff even if they have used the product. Online advertising. Thereafter a blog can be set up in three simple account.

by the hour. content for them is not news and features.into the minds of current and potential members by cross promotion in traditional media like outdoor. print. HLL.The business model of sites like C2W and Hungama is simple . Of course.their URL . television. Contests and promotions are either created exclusively for the Net. with over 100 prizes being distributed daily from their office! 53 . C2W and Hungama ensure that their visitors keep coming back. Hungama. And they keep that content fresh. with hundred of big brands like Philips. Hungama chose to storm the market and create an identity and brand through physical contact in the real world where their target audience cannot miss them. or are online adaptations of existing traditional world contests. and even on product packaging. but has even gone to the extent of giving away prizes every hour. UDV and Sony already enticed by what the medium has to offer.they believe in the Internet maxim: "content is king". Keeping Users By constantly adding new contests and promotions to their sites. promotions and incentives rewarding users for spending time on their sites. Attracting Users C2W has emblazoned its brand . And there are four steps involved in making this business model pay off for them: Creating Content Both Hungama and C2W have aggressive teams that interact with various brand and marketing managers to get more brands on their sites. Special incentives to cyber cafe owners also ensure prominent display and rewards for getting their members to sign up.

But shoppers kept trickling in. Hungama. contests. with the average transaction amount hovering at around Rs 200. What followed were days of struggle when the store survived on minimal transactions. all with authentic registration details . The Future C2W has already finalised plans for Pan Asian reach. though a recent entrant. C2W has a database who emphatically states that his site is not a contest freebie site . or brand-building exercises in cyberspace. incentives. these eyeballs will attract advertisers to the sites. and processed 12 transactions in its very first day of operation. is fast catching up. "Free" seems to be a four lettered f-word for Neeraj it freebies. Whatever tag you put on them . and there was no day when Fabmart failed to attract at least one request. So.after all fake details means that your prize may never reach you.a one-stop site for contests and promotions. to become the world's contest portal .Selling Eyeballs Today. The store now registers about 250 transactions a day. 54 . either for banners or for paid promotions. Fabmart Fabmart is one e-tailer. bringing in advertising revenue.000 strong (growing at 35% per month). and are looking for strategic partners for the American and European is e-promotions sites that will continue helping brands get their message to online customers through incentives. more brands being attracted by these eyeballs. and slowly but steadily. there are more eyeballs being attracted. as well as for reports that say that Rupert Murdoch and Dhirubhai Ambani have looked at equity stakes in the e-tailer. which keeps hitting the headlines often. C2W already has Intel advertising on their pages. while the Hungama pages are still banner-free. CEO. as much for its new initiatives. As these numbers grow. what makes this 10-month-old online store click? Fabmart went online on September 29 last year. and Hungama. promotions.

And the e-tailer just cannot disappoint the customer in service or delivery. The store is still able to meet the delivery commitment within 72 hours typically. Fabmart’s fulfillment process can be broadly classified into: S o u r c in g O r d e r C o n s o l id a t io n D e l iv e r y Fabmart – Fulfillment Process Sourcing involves collecting various customer orders from wholesaler/distributor/ production agencies on an ongoing basis.asked return policy under which customers can return any 55 . Fabmart claims to ship about 95 per cent of its orders within 48 hours. Fabmart also has a seven-day. In fact. no questions. For him to prefer an online store to a neighborhood shop would have been a difficult decision involving a fundamental behavioral change.FULFILLMENT PROCESS It’s easy to lose an online customer. Fabmart is to shortly introduce an online call center (live chat) where a customer can get instant feedback on his/her queries. a feat it can achieve because of its rapport with the big book and music companies in India.

The jewellery store.items. the customer needs to key in the PIN to ensure that no misuse of the card is possible. with the ultimate aim to emerge as a focused virtual superstore. the store is confident about revenue flow. the online store recently mopped up another Rs 25 crore with second round funding from venture capitalist With a registered customer base that is likely to grow. Fabmart’s aim is to 56 . the card number is not provided to the online store but given directly to the bank. which went online in June with about 5. except those relating to books and music. And jewelers transactions are expected to drive up the average value of an online transaction. while a grocery shop is on the anvil. A jewelers store was launched recently. and Vaitheeswaran says Fabmart hopes to break even by its third year when it expects business turnover to touch Rs 45 crore. With initial VC funding of about Rs 5. Any available virtual real estate is used for in-shop promos. And since this is done on an SSL (Secure Socket Layer) encrypted link. The Payment Mechanism The Retailer has put in place two kinds of security mechanisms – one for debit/credit card transactions and the other for confidentiality of personal details.5 crore. The grocery shop will attract online customers for need-based purchases. targets the impulsive buyer.000 items. In this mechanism.President and above and not to all employees. Fabmart’s privacy policy clearly states that customer details are not sold. and Fabmart bears all shipping expenses. Fabmart’s Long Term Viability Fabmart’s advantage may be that it is a pure e-commerce venture. Fabmart and Citibank launched what they thought as ‘the world’s most secure’ payment process on the Internet in December 1999. In addition. In fact. accessing the card number while it is in transit is not possible. with a small note stating the reason for dissatisfaction. advertisement revenues are not counted upon. Sensitive customer details are accessible only to officials in the rank of Vice. the store does not welcome ads. rented or leased out to third parties.

Fabmart hopes not too many will switch loyalties. Fabmart would also need to gear up for competition from players such as With a customer base of over 25.achieve a mix in customer demographic profile – with both impulsive and need-based consumers. Says Vaitheeswaran: “There’s nothing like time gained. The e-tailer hopes to consolidate further in the time that competitors will take to adapt to the dynamics of the Net business.” 57 .000.

37%*50=18. 37% Interpretation – From the chart it is clear that 39% respondents use internet occasionally. 24%*50=12 respondents use internet daily. Analysis – 39%*50=19. 39% Frequently. 58 .24% of respondents use internet daily. finally 37% of respondents use internet frequently.5~19 respondents use internet occasionally. 24% occasionaly.5~18 respondents use internet frequently.I How frequently the consumers use the internet? Daily.GRAPHICAL DATA INTERPRETATIONS Illustration .

Analysis – 51%*50=25.5~25 respondents use for professional purpose. 49% Illustration – 51% of respondents use internet for professional use and 49% of consumer use for personal use. Column1 Professional. 59 .Illustration -2 For which purpose consumers use the internet.5~24 respondents use for personal use. 49%*50=24. 51% Personal.

Analysis – 30% 0f 50=15 respondents for Fabmart.Illustration-3 What among these websites the consumers visit the most? Fabmart. 40% c2w& 30% Illustration – 30% of respondents are in favour of Fabmart. 60 .while 40% suggested and 30% for C2W& 40% of 50=20 respondents go in favor of Rediff. 30% Rediff.while 30%of50 -15 in favor of C2W&Hungama.

and 26%*50=13 respondent go for C2W&Hungama. and 42% customer considers that Rediff. and 26% customer considers that C2W&Hungama is userfriendly. and 42%*50=21 respondent go for 40% c2W&Hungama. 30% Illustration – 32% customer considers that Fabmart is is user friendly. 30% Rediff. 61 .Illustration-4 Which website is most user-friendly? Fabmart. Analysis – 32%*50=16 respondent go for

62 . 30%0f 50=15 respondents for Fabmart. 30%of 50=15 respondents forC2W&Hungama. 40% c2W& provide speedy 30% Rediff.Illustration – 5 Which web site provide speedy transaction? Fabmart. 30% Illustration – 40% respondents suggest that Rediff.while 30% each for Fabmart and C2W&Hungama Analysis40%of 50=20 respondents for Rediff.

25% of 50 i.5~12 for very good.20% rate it good.15%of 50 =7.5~17 respondents for excellent.10 for good.15 % rate it satisfactory and 5% rate it poor.Illustration – 6 What is satisfaction level of Rediff.20% of 50 i.e. Illustration – 7 63 .5~2 for poor category. 12.5%of 50=2.5~7 for satisfactory.e.25% rate it verygood. Analysis35 % of 50= 35% 30% 25% 20% 15% 10% 5% 0% Excellent Very Good Good Satisfactory Poor Interpretation35% rate it excellent.

25%of 50=12.15%of 50=7.30% rate it satisfactory.15% rate it good.10% rate it poor.25%rate it verygood.30%of 50=15 respondents. 64 .What is the satisfaction level of Fabmart? 30% 25% 20% 15% 10% 5% 0% Excellent Very Good Good Satisfactory Poor Illustration20% rate it excellent.5~7respondents.5 ~12 respondents. Analysis20%of 50=10 respondents.10%of 50=5 respondents.

65 .Illustration – 8 What is the satisfaction level of C2W&Hungama? 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% excellent very good good satisfactory poor Illustration – 15% of respondents rate it excellent .5~7 respondents for excellence. 20%*50=10 respondents for good. 20% rate it good . 15%*50=7. 40% rate it Very good .5~7 respondents for poor. while 15% rate it poor. Analysis – 15%*50=7. 10% rate it satisfactory . 40%*50=20 respondents for very good. 10%*50=5 respondents for satisfactory.

the sheer volume of information can be one of the weaknesses of web-based CRM design. With this password he can continue surfing on password protected web pages within the website. Email. Postal Address. the visitor can add his/her email address to a list to receive automated emails. This page contains information about “How to use the site most efficiently” 66 .  Mailing List – To receive more information. Sites that offer customization features allow user to filter the content they see. site index. for instance. Unfortunately.  Local Search Engine – Allows the visitor to search on key words to quickly locate specific answers on the website. the customer on a next entry can choose to see only his/her own preferences. The future of truly web-based CRM will be the completely “one-to-one” web sites.  Site Customization: . Call back button and Voice over IP. who enter the site for the first time. can surf to an introduction page.  Introduction for First-Time Users – Visitors. my yahoo)  Alternative Channels – Different ways to contact the company are offered.SUGGESTIONS & RECCOMENDATIONS RECOMMENDATIONS The following are a few things an internet marketer can do to maximize the potential of his website:  Domain Fault Repair – This function directs the web visitor to the right site after she/he potentially may have typed in the wrong Internet address.  Membership – The visitor can request a password. When properly customizable on the first visit. (Example: also called a site overview. Fax toll-free numbers.One of the web-based CRM most important advantages is the volume of information available to the browsing customer.  Site Map – This is a hierarchical diagram of the pages on the website. or site map. Site tour – The visitor can follow a tour through the website.

67 . Internet has opened up new avenues for reaching the consumer. All this will help build a relationship with the customer and it will ultimately help the marketer to achieve his objectives. they create content for the site. It is the same. Chat – A main advantage of the Internet is its self-generating advantage. Thus we can say that marketing has not changed its shape. By allowing visitors to interact with each other and with the site. unpredictable. unusual and creative field that needs constant change and open inputs that can work wonders for the company. It is true that there is never a fixed way or strategy that a marketer can use to market its products and services on the internet but it is still very much an arena where creative thinking can take the company reach new heights.

Relationship building: On-line marketers can dialogue with consumers and learn from them. 4. 68 .ADVANTAGES OF INTERNET MARKETING Internet Marketing is a hot topic especially in these days of instant results. 2. 3. they also don’t have to wait in line. The reason why i-marketing has become so popular is because they provide three major benefits to potential buyers: 1. Fewer hassles: Customers don’t have to face salespeople or open themselves up to persuasion and emotional factors. Information: Customers can find reams of comparative information about companies. 3. They can produce digital catalogs for much less than the cost of printing and mailing paper catalogs. and utilities. and walk through countless shops to find and examine goods. products. Quick adjustments to market conditions: Companies can quickly add products to their offering and change prices and descriptions. and a parking space. Convenience: Customers can order products 24 hours a day wherever they are. Audience sizing: Marketers can learn how many people visited their on-line site and how many stopped at particular places on the site. They don’t have to sit in traffic. Lower costs: On-line marketers avoid the expense of maintaining a store and the costs of rent. and prices without leaving their office or home. insurance. This information can help improve offers and ads. competitors. Internet Marketing also provides a number of benefits to marketers: 1. 2.

Ultimately here also the marketer has to realize that nothing sells as well as a good product. Notice how Linux distributed free on the Net has been able to build up a faithful customer base.CONCLUSION It is concluded that the marketers are adding on-line channels to find. both small and large firms can afford it. 69 . Second. the site can be visited by anyone from any place in the world. The greatest feature of the digital economy is that it enables the E-Marketer to eradicate man traditional barriers before entering new markets. The innate strength of an E-Market comes not from the seamless flows of goods and services from the producer to the customer but in the geometrically increasing returns from converging ideas and technological change the strength of online communities has never been so great. and companies have used them to develop new markets. The Internet is a powerful tool for strengthening relationships. Fifth. information access and retrieval are fast. E-Marketing has opened new vistas for marketers. there is no real limit on advertising space. First. Companies who have tuned their business processes to incorporate these customer responses have been able to leverage the power of the Web to gain competitive advantage. But the beauty of the Internet is that it offers constant opportunities for product enhancement based on continuous customer feedback. Third. By offering customers content and time value. communicate. compared to overnight mail and even fax. shopping can be done privately and swiftly. These barriers include economies of scale and geographic positioning. Fourth. in contrast to print and broadcast media. and sell. reach. I-marketing has at least five great advantages.  www. Charlesworth & Rita Esen. WEBSITES   www.R.fabmart.  Marketing Research .com  www.By Yinghui Yang.ticworks.By     www.   www.onlineconsumers.BIBLIOGRAPHY BOOKS  Marketing Management – Philip Kotler  Online Marketing  www.N. Kothari.A Customer Lead Approach Vikas Publications.  The Online Customers: New Data Mining and Marketing Approaches .com 70  www. Richard Gay /  www.

Which among these websites do you visit the most for online transactions? A.QUESTIONNAIRE 1. B. Rediff. Fabmart 5. Fabmart B. C2W&Hungama C. Daily B. How frequently you use the internet? A. Personal use B. C2W&Hungama C. Which website is most user friendly? A. Fabmart 71 . C2W&Hungama C. Official purpose 3. Which website provides speedy transactions? A. Rediff. Occasionally 2. Frequently B. For which purpose you use internet more? A.

How do you rate C2W&Hungama as far as satisfaction is concerned? A. E. C. as far as satisfaction is concerned? A. How do you rate the Rediff. E. E. Excellent Very good Good Satisfactory Poor 7. Excellent Very good Good Satisfactory Poor 8. How do you rate Fabmart as far as satisfaction is concerned? A. D. C.6. D. B. C. Excellent Very good Good Satisfactory Poor 72 . B. D.