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Business-to-consumers eCommerce: How companies use the Internet in

marketing products and services to consumers

Article · January 2012

DOI: 10.4018/978-1-4666-0077-5.ch014

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Business-to-Consumers eCommerce: how companies use the Internet in marketing products and

services to consumers

Fahri Karakaya

This chapter focuses on the effective use of the Internet for marketing products and services. The

chapter starts by presenting statistics about Internet usage and online sales in the U.S. and around

the world. It then examines the evolution of the web sites from a static format to an interactive

format with the start of Web 2.0. As a plus to small businesses, the chapter also briefly outlines

the steps involved in starting an online business and the advantages and disadvantages of having

one. Special emphasis is placed on developing an eMarketing strategy drawing on the marketing

mix, online marketing research, and search engine optimization, as well as social media

marketing. The chapter ends by showcasing Amazon.com web site’s marketing tools as excellent

examples of effective eBusiness.

The number of Internet users and the volume of purchases on the Internet have both

increased dramatically during the last decade. After several consecutive years of modest but

consistent growth, broadband adoption did slow; but despite of the slowdown, there was steady

increase in the use of the Internet over the past few years. The number of Internet users in the US

is forecasted to reach 205 million by the end of 2010, accounting for 66% of the total

population1. Even during a recession, online buyers spent $29 billion during the 2009 holiday

season.
 2

The Obama Administration has devoted considerable time and effort to promote

broadband adoption, expanding government efforts to bring broadband to non-user populations.

Some $7.2 billion of the $787 billion federal stimulus program approved in February, 2009 was

set aside for grants and mapping efforts designed to target underserved groups.

Internet World Stats (2010a) indicates that the increase is not just in the U.S, but around

the world. The Internet penetration (percentage of population using the Internet) is 77.4% in

North America, compared to 58.4% in Europe, translating into an overall growth of 146% over a

decade. The world average penetration rate is 28.7%, meaning Internet usage will continue to

grow around the world, especially in the developing countries. In most developed countries,

Internet usage is daily habit, and although the growth of the online population has slowed in the

US, US Internet users spend 15.3 hours a week online.

By 2012, 217 million Americans, or 71% of the projected population, will be online9.

There is also an increase in the US use of the Mobile Web. A survey conducted by Pew Internet (

www.pewinternet.org ) in 2010 suggests that 59% of the US population access the Internet from

a laptop or cell phone. The number of Internet users around the world is as follows10:

Asia 825 million

Europe 475

North America 266

Latin America 205

 3

Africa 111

Middle East 63

Australia / Oceania 21

As the number of Internet users continues to grow worldwide, so do sales. The ComScore

report3 on “State of the U.S. Online Retail Economy in Q1 2010” indicates a consistent increase

in eCommerce dollar sales. In year 2002, total eCommerce sales (including travel) were $72

billion. By the end of 2009 they had increased to $209 billion. Total retail sales for the second

quarter of 2010 were estimated at $971.4 billion, an increase of 1.1 percent (±0.5%) from the

first quarter of 2010 (U.S. Department of Commerce). According to Forrester Research Inc.’s

titled report “U.S. eCommerce Forecast: 2008 to 2012,” online retail sales will reach $204 billion

in 2008, $235.4 billion in 2009, $267.8 billion in 2010, $301 billion in 2011, and $334.7 billion

in 2012.

Business executives and academics expect that eCommerce will leave no industry or

region untouched during the next decade. The rapid growth of eCommerce has already made it

necessary for many to “unlearn” some of the basic principles that have been unique to their

business practices8 and converted many to the new ways of doing business in the Internet age14,
16
.

Companies started to exhibit a presence on the Internet around 1991, but this presence

was in the form of a static web site online that provided information, like a broschure. As the

technology evolved, web sites became more dynamic and interactive. The most important

development was securing online transactions. Businesses could now accept orders and
 4

payments online and then ship their products to customers. Although security of online

transactions is still a concern, consumers and businesses now feel more comfortable and secure

in conducting online transaction compared to ten years ago. As a result, more and more

companies have opened up their web sites to customers outside of their home countries.

According to Erdem and Karakaya6, eCommerce has followed an evolutionary process

that is composed of three stages. First, web sites were used to publish standardized information

for all consumers when they clicked on the provided links. In the second stage, firms and

consumers began to use the Internet as an outlet to actually buy and sell products and services. In

the current stage, eCommerce has become the ultimate manifestation of the marketing concept

through the customization and personalization of products and services to satisfy individual

customer needs1,12. This means more sophisticated applications and use of eCommerce

employing both advanced software and technology. We are now seeing more and more use of

social media marketing that employs sophisticated software in identifying target markets and

market segments. For example, Facebook can easily tailor advertisements for certain geographic

locations and demographics. The business world is following suit. In 2011, 80% of US

businesses with 100 or more employees will use social media marketing5. Many business

executives also think that advertising in social media will someday replace the traditional

advertising mediums.

Business executives and academics expect that during the next decade, almost all

industries and countries around the globe will have utilized eCommerce. Just using the Internet
 5

does not guarantee success. There have been many failures since the Internet opened its doors for

business, mainly the result of poor choice of product (e.g., furniture.com, pets.com, see

http://www.docstoc.com for more failed products) or lack of sound Internet marketing strategies.

The many well-documented failures, however, have not discouraged the new Internet businesses

that have cropped up in an attempt to diversify and earn more profits12.

B2C eCommerce

It is important to remember that not all products can be marketed online. For example,

products with high shipping cost and products that customers like to examine before purchasing

have not proven successful. The following product categories and services or business types

online have shown to be successful. Music retailers (e.g., iTunes), electronic books, online

banking, stock trading, auctions, publishing and book resellers, airlines, package delivery

services, search engines, and travel web sites (priceline.com, expedia.com). The advances in

Internet technology (e.g., web 2.0) that allow Internet users to be more interactive with web sites

(e.g., Facebook.com, Amazon.com) will likely widen the list of businesses that could be

successful. For example, clothing retailers now provide more choices by letting consumers

customize their purchases.

Most business started their eCommerce operations as static web sites in the early 90s.

The static web sites provided information about products and services or simply established a

presence on the web. As the technology and interactive software applications were improved,
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companies realized they could conduct online transactions using credit cards or other means

(e.g., single use purchasing number for a specific amount). The ability of Internet users to submit

information and then receive responses in just seconds allowed current businesses to start

marketing their products online, creating entirely new businesses models in the process.

Simplicity of Starting an eBusiness

Starting an eBusiness is much easier than most people think. The most important ingredients are

management commitment and resources. The steps involved in starting an eBusiness (an

eCommerce web sites to market products and services) are briefly described here.

1- Select and register a domain name that best represents your company name. In fact, if the

company names are not long, they can use their names and add just .com, .biz, .net, .org,

etc. The cost of registering domain names varies between $10-35 (see for example,

http://www.networksolutions.com). The domain names must be registered annually to

avoid losing them.

2- Have a web development company develop a web site. The cost will depend on the size

of the web site (number of pages) and the interactivity of the web site. If credit cards will

be accepted, it is necessary to have a merchant account (see for example,

http://ww.mivamerchant.com) and a credit card firm or a bank that will process the credit
 7

card transactions (see for example, http://www.cardservice.com). It is important to have a

professional looking web site with full business contact information to build trust.

3- Select an Internet provider if you do not have one. Dialup, Cable, DSL, ADSL and T1

lines as well as wireless Internet services are among the options. The selection should

depend on the speed needed for connecting to the Internet. The cost will vary depending

on the speed of connection. Most companies now utilize DSL or ADSL. Of course, the

large companies with heavy traffic to their web sites often choose a T1 line which is a

dedicated fiber optic cable line directly connected to Internet Service Providers.

4- Select a web host company to house the web site. It is important to check the reliability of

the web host. Here is a link to compare and decide on web hosts:

www.comparewebhosts.com.

5- Transfer the web site files from your local computer to the web host. Often times, web

host companies link web sites to merchant accounts or they already have the merchant

accounts included in their offers to customers. The artwork to be included on company

the web pages such as company logo, product pictures etc. must be transferred to the web

host company server.

6- Configure the merchant account for shipping costs and taxes.

 8

7- Test the web site including credit card transactions in a web site development mode. If

everything is working, then go live.

8- Market your web site and your products. In order for search engines to find web sites, it

is important to register it with search engines. In addition, keywords (e.g., product names)

that are commonly used by people using search engines can be purchased at a fee. This

guarantees high ranking and the web site link shows as a sponsored link on the search

engine page. One can also place advertisements on search engines and use traditional

media for promotion. In designing web pages, it is especially important to optimize web

sites by using the rules of optimization, which are set by search engines.

9- If marketing product in foreign countries also, modify products to meet the country

specific requirements. Along with products, the web sites must also be revised according

to different country markets.

The above steps are intended as brief guidelines. The process can be rather complicated

depending on the type of web site. It is important to work with professionals who can provide

expertise in web development, and in setting up the merchant account and the credit card

transaction process. Another important issue is to decide whether or not to market the products

and services in other countries. If the decision is to market products and services in other

countries, the language used on the web site and the culture of the country should coincide. If the
 9

target countries are not English speaking countries, it may be necessary to develop mirror sites

using the local country’s language.

An easy and cost efficient way of marketing products and services online is by starting a

Yahoo! store. This can be done fairly easily by using professionally developed templates that are

already present at yahoo.com. Once a domain name is purchased and registered (can be done

through the Yahoo web site as well), the next step is to build a web site. Figure 1 displays three

easy steps in building a web site. After building a web site, one needs to select a hosting program

and publish the web site.

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Figure 1: Getting Started with Yahoo! Stores

Advantages and Disadvantages of Starting eBusiness

Advantages
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Depending on the type of products or services offered, companies can avoid many of the barriers

to market entry13. There is a very little or no capital requirement to enter domestic or global

markets. In fact, in most cases, firms with web sites do not have to do anything as long as they

are willing to accept orders from other countries. This is especially true for companies marketing

consumer products. For example, Amazon.com, with current sales of $24.5 billion, gets about

one third of its sales from France, Germany and Japan, and other countries7. Through marketing

products online, firms can also eliminate distribution channels. However, since many

manufacturers are not in positions to deal with customers individually; many continue to use

distributors and retailers. Without capital requirements and middlemen, companies can sell their

products at prices lower than brick and mortar companies. Of course, other factors such as

economies of scale will influence prices relative to competitors’ prices, but the savings to doing

business online are significant.

The cost of developing a web site is fairly reasonable. Companies can now purchase

complete web development solutions with secure online transaction for a price ranging from

$1,500 to more than a million dollars. High speed Internet service providers charge from $20 and

up per month. Merchant accounts and web hosting packages together usually start at $25 per

month. The credit card service providers charge as low as $20 per month. The low cost of

operation and the absence of barriers to entry allows companies to be competitive and enjoy

higher profits.
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Customers’ ability to compare prices online can be an advantage or disadvantage. Savvy

customers often compare prices online or use web sites that compare prices (see

www.nextag.com). Firms checking the competitors’ web sites and making adjustments or

matching competitors’ prices will benefit from price comparisons.

Disadvantages

Unless a company is well known, trust is hard to win. If companies can’t provide assurance of

the security of online transactions, that trust is harder to win. Fear of credit card theft is always a

factor. Fear of outright identity theft compounds the trust issues. Not being able to physically

examine the actual product is also an issue, but this is true for all online businesses and doesn’t

seem to have hurt sales. The cost of shipping can also hinder customers from purchasing online

(e.g., furniture).

Developing eMarketing Strategy

The success of Amazon.com and many other online retailers is due to their excellent eCommerce

and marketing principles. The following pages will discuss the major concepts of building online

marketing strategy.

Target Market

As in traditional marketing, it is important to define and specify the target markets and market

segments clearly. This will help identify the potential customers and their online purchasing
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behavior. Simply stated, a target market is a group of people who have similar needs and wants

with ability to purchase a specific category of products. A market segment is a group of

customers within a large market with similar needs and wants. For example, customers with

different income levels are likely to be interested in different quality and brand of clothing.

Marketing Mix:

Product: Using marketing research, companies are able to offer products aimed at

different market segments. Most companies focus their attention to several product lines. For

example Landsend.com focuses on clothing, but also offers shoes, home and travel goods.

Amazon.com is the exception, having no real focus. At Amazon.com, people can purchase

practically any product that can be marketed online. Product mix decisions will depend on

market research and the ability to provide the products to customers. It is important to think of

web site design as part of the product mix offered to customers. A professionally designed web

site with web tools like the Amazon.com will build credibility and trust for customers. Online

transaction capability is also a must, but companies need to think of people who are afraid to use

their credit or debit cards online. To this end, most companies display a security sign (usually in

the form of a pad lock) on the bottom right hand corner of their web sites and also inform buyers

that their transactions are secure. Offering online customer service is also part of the product

mix. Online text and voice or video chats, and e-mail are options for many customers, but a toll

free telephone number is still most popular.

 14

Distribution: This marketing mix element applies to manufacturers aiming to find online

distributors (e.g., retailers) for their products. It is necessary to identify appropriate distributors

that will support products and provide customer service. For online retail outlets, shipping is the

key method of distribution (by FedEx, UPS, etc.,). It is important to be able to ship and deliver

products in a timely manner. For example, in 2001, online retailers received more orders that

they could handle. As a result, many companies were unable to deliver shipments before

Christmas, sparking customer outrage. Allowing customers to track their orders online is an

added feature that customers like and expect.

Pricing: Since there are many price comparison sites online (See Figure 2), it is

important to monitor competitor’s prices and price products accordingly. Consumers also expect

to pay less for products purchased from web sites. In fact, some companies have adopted this

strategy and the online prices for the same products differ from the prices in stores. Shipping and

handling costs as well as restocking fees are factors that consumers also consider when

purchasing from web sites. Therefore, to keep customers coming back, the total price of buying a

product online should not exceed the prices charged in stores. Some companies such as BestBuy

now offer customers the option of ordering and paying online then picking up the products from

the nearest store. BestBuy even has reserved parking spaces for online shoppers who choose this

method.
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Figure 2: A Price Comparison Web Site for a Variety of Products

Promotion: in addition to traditional promotional tools such as advertising on print

media, television and radio, many online companies use banner ads. They are usually rectangular

images and contain links to the advertisers' web sites. There are two types of banner ads: 1)

keyword banners which appear when a specific predetermined word is sent to a search engine; 2)

random banners which appear randomly 13. The banner ads are placed on search engines or other

web sites. Search engines charge a fee or get paid for pay for click. To make sure businesses get

what they pay for, software programs track a user to see if there has been actual purchase. If

there was, advertisers only pay a fee for each purchase. For example, if a customer clicks on a

banner ad from the Yahoo web site and completes a purchase, Yahoo gets paid a percentage of

the purchase. The keyword banner ads are more effective than random banner ads since a user of
 16

a search engine places a keyword in a search box with interest in getting information on a

product or subject. There are also banner exchange programs (e.g., www.click-4-com) where

companies exchange banner advertisements based on agreements. The banners ads can be static

or dynamic. The static banner ads are basic pictures with no motion, just a link to the advertiser's

web site. The dynamic banner ads have pictures with motion such as flashing action or

horizontal/vertical movements. Although the percentage of people clicking on banner ads is

small, their low cost makes them effective. They cost 20-50 cents per click, translating into a

CPM (cost per thousand) of $10 to $50. In most cases, the sponsors of banner ads only pay fee or

commission if there is an actual purchase.

Pop-up ads appear when a user launches a browser or often when leaving a web site.

They are annoying because the user has to click on the ad to close them. However, companies

continue to use pop up ads because the users have no choice unless they utilize software

programs such as pop up ad blockers. The effectiveness of the pop up ads are yet to be

determined, but since the cost is so low, having pop up ads is better than not having them at all.

Intertestials are also pop up ads that appear after a user clicks a link. These ads remain on

computer screen while a page is loading13. Annoying as they are, companies continue to use

them because of the low cost and lack of regulation. Interestingly, some computer operating

systems and Internet browsers allow intertestials more than others (e.g., Windows versus Mac

OS).
 17

Social media marketing has received a great deal of attention during the last five years.

They include a variety of web sites where consumers interact with one another. According to

Dailyblogtips.com4, the following sites are good examples of social media:

• online forums (e.g., DigitalPoint)

• blogs (e.g., WordPress)

• social networking sites (e.g., Facebook)

• social bookmarking sites (e.g., Digg)

• video sharing sites (e.g., YouTube)

• photo sharing sites (e.g. Flickr)

• streaming sites (e.g., Ustream)

• user reviews (e.g., Amazon)

• crowdsourcing (e.g., Wikipedia)

• content aggregators (e.g., FriendFeed)

Accessing social networks is now easier than several years ago. Smartphones (e.g.,

Iphone, Blackberry, etc.) allow users to access Facebook, Twitter, YouTube and other social

media sites. Many consumers share information and interact with family and friends through

these web sites. In fact, some researchers claim that consumers tend to block out and ignore

television and other forms of advertisements18. This makes it even more important to utilize

social media as a way to communicate with current and potential customers. According to

Businessinsider.com, Facebook currently has 600 million users and is valued at $50 billion. The

Facebook statistics presented on the company web site also indicate that more than two million
 18

websites have integrated with Facebook and more than 200 million active users currently access

Facebook through their mobile devices. Interestingly, these users are also more active on the

Facebook than non-mobile users.

Attracting Traffic to Web Sites

In addition to online advertising, companies utilize traditional media such as television, radio,

newspapers, magazines, and billboards to get people to visit their web sites. However, the most

important tool in getting people to visit web sites is done by utilizing search engines. Over 75%

of Internet users utilize search engines to locate web sites or to get information on products and

services. Therefore, it is essential to be indexed by search engines so that search engines will

display a few lines of information and company URL when a user inserts a keyword or a phrase

into a search box on a search engine page. Of course, companies also have the option of

purchasing spots on search engines so that they will appear on top of the page once a search

keyword matches the keywords supplied by the companies. As seen on Figure 3, the word diet

returned 208 million results. The first three entries and the entries on the right hand side are the

sponsored links, meaning companies paid for them to be there. In fact, they are three highest

bidders for the word “diet.” The fourth entry is not a paid link and is a web site listing by

diet.com.
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Figure 3: Search Engine Results Using the Keyword “Diet” on Google.com

Because of the high conversion rates for people using search engines, more and more

companies are turning to search engines to generate traffic to their web sites. A technique called

Search Engine Optimization (SEO) generates the most targeted traffic. It makes a web site

appear on the top of search engines listings when a user is searching for a particular keyword or

phrase. SEO means designing and preparing a web site with the rules of search engines in mind.

Some tips to improve search engine rankings include the following:

 20

1-Examine the rules used by search engines and design web pages accordingly. This is

the most important step and must be followed thoroughly. Note that different search

engines use different rules and the rules change over time.

2-Use Meta Tags and title on the source codes of web pages. Treat each page as if it is the

first page of a web site and include keywords that users are likely to utilize in search

engines. Note that some web-experts indicated that using Meta Tags does not improve a

web-site’s ranking on a search engine. However, there is no clear evidence to prove that

using them harms the position of a web site. Therefore, using them is a better strategy.

3-Use search engines and enter the keywords in to the search boxes that customers are

likely to utilize. After conducting a search, examine the non-sponsored web sites. They

are likely to be competitors. View the source codes of their web pages. It is possible to

identify some keywords and page design techniques that help in search engine rankings.

4-Use web page titles that contain keywords customers are likely to use in search

engines.

5- Use the keywords that customers are likely to use in search engines in the body of the

pages (i.e., in product descriptions).

 21

6- Submit your web site information to search engines. This can be done in two ways: a)

Submitting to search engines individually; b) submitting to multiple search engines by

using paid third parties (e.g., www.wpromote.com and www.submitexpress.com).

7- Purchase keywords from search engines to be ranked higher. Note that use of this

option results in showing in search engines as sponsored links.

8- Have link exchange strategy and program that is evaluated periodically

Search Engines

There are many search engines on the web. Of course, some are more frequently visited than

others. Here is a listing of the top 10 search engines and their rankings15:

Top 10 Search Providers for March 2010, Ranked by Searches (U.S.)

Rank Provider Searches (000) Share of Searches
All Search 9,716,488 100.0%
1 Google Search 6,387,932 65.7%
2 Yahoo! Search 1,304,427 13.4%
MSN/Windows Live/Bing
3 1,183,268 12.2%
Search
4 AOL Search 245,810 2.5%
5 Ask.com Search 183,975 1.9%
6 My Web Search Search 120,713 1.2%
7 Comcast Search 52,011 0.5%
WhitePages.com Network
8 29,868 0.3%
Search
9 NexTag Search 28,633 0.3%
10 Yellow Pages Search 23,857 0.2%
Source: The Nielsen Company (2011)
 22

The most widely visited search engines are Google, Yahoo and MSN. According to

Nielsen NetRatings MegaView Search of March 2010, Google has 65.7% of the share of search

engines followed by yahoo with 13.4% and MSN with 12.2%.

The Amazon.com Experience

One can truly comprehend the capability of the Internet by visiting Amazon.com and becoming a

customer. Here is what happens if one goes to the Amazon.com web site:

1-One sees numerous categories of products and informational areas on the web site (See Figure

4). As seen on the screen picture of the web site, visitors have the opportunity to register, contact

customer service, chat online with a customer service representative or click on a product of

interest and go to the check out page. On the check out page, Amazon and other web sites

provide the opportunity to register or complete a purchase without registering.

As seen on Figure 4, the Amazon.com home page welcomes me by displaying the

customer’s name on the top of the page. The message might read, “Hello [customer]. We have

recommendations for you.” A tab at the top of the page will read “[customer’s] Amazon.com,”

for example, “John’s Amazon.com.” Upon clicking on the tab, the customer sees a list of

products that he or she might might be interested in purchasing given past purchasing history.

Five products are shown side-by-side. Also shown are the customer ratings, list price and sales
 23

price of those products. Amazon’s attempt to predict what a customer might want to purchase

next has clearly paid off. They are the biggest online retailer in the world.

Figure 4: Amazon.com Home Page: Welcoming a Returning Customer

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Figure 5: Amozon.com Recommendations for Customers Page

Web sites similar to Amazon.com use software programs to remember visitors' IP

(Internet Protocol) addresses and match the IP addresses with the databases already created. The

database is also checked against the new products and the products that are on sale that a visitor

may be interested in purchasing. For example, if one clicks on a product to get more information

and does not buy the product, this information is stored in a database. The IP address is

examined and linked to the historical database and the current database. Therefore, when a

visitor goes back to the same web site, the visitor is reminded that a specific product, he or she

had looked at is now on sale or that the visitor may find some new products of interest. Of

course, this process requires the use of expensive and complicated software programs. Figure 6
 25

shows information related to my most recent search and says "Customers with Similar

Searches Purchased," and then shows the pictures of products. At the bottom of the web page

(Figure 6), there is a link "See more in your browsing history," When a customer clicks on the

hyperlink, he or she sees recently viewed books (shown in Figure 7). Interestingly, the page also

shows some other books that the customer may like. There is also "see more recommendations"

hyperlink if the customer wants to explore those books.

Figure 6: Amazon.com Providing a Reminder to a Returning Customer

 26

Figure 7: Amazon.com's See More in Your Browsing History page

An important function and benefit of interactive web sites such as Amazon.com is to

compare products. Here is an example of the two books checked for comparison (Figure 8). Price

and ratings as well as hyperlinks are provided on this page. Another important area on this page

is the on the left hand side as a customer is looking at the page which reads "Customers who

viewed your compare items also viewed…" In this area, four more related books are listed and

can be added for comparison.

 27

Figure 8: Comparison of Two Products on Amazon.com Web Site

As seen on the examples presented, the Amazon.com and many other interactive web

sites act like intelligent salespersons. Remembering the customers and greeting them on the first

page of a web site, providing a special space for the customer, and making recommendations

again on the first page is just the beginning. Using sophisticated software to determine possible

products a customer may buy is indeed an advanced function and may, in fact, outperform a real

salesperson. Allowing comparisons of products and providing other customers' ratings also help

customer make easier decisions.

 28

Another area provided for customers under the "Your Account" heading on the first page

of Amazon.com allows users to manage their accounts and purchases in many ways as described

below (note: since some of the items are self explanatory, they are not described):

• Track packages: allows customers to track the status of shipments such as when a

purchased product will arrive or where the purchased product is while in transit.

• Cancel items or orders: This option allows customers to cancel their orders before they

are shipped.

• Change shipping address: simply allows customers to change their shipping addresses

they had previously provided.

• Change billing address

• Print invoices: allows customers to print invoices for products purchased in the past. This

is especially useful if customers lose their invoices they received earlier. Since the full

history of orders are presented on the web site, customer no longer need to keep paper

copies of invoices in their files.

• View used item pre-orders

 29

• Leave seller feedback: allows customers to rate their purchases as positive or negative

using stars (from 0 to 5 stars) and qualitative statements.

• Change payment method: allows users to change their credit cards used for payments and

payment method (e.g., credit card versus billing customers for purchases).

• Combine orders: allows customers to combine orders (purchases made separately during

the same day or before the orders are shipped). This is a very useful function since it does

save money in shipping costs for customers.

• Add items: allows customers to add more purchases to their purchases made during the

same day or before the products are shipped. The benefit is reduced shipping cost and

only a single invoice.

• Return items: This option provides useful information for customer to return products

including the rules and procedures and option to print the return address.

• Edit gift options: Allows users to edit gifts they have purchased.

• View Your Media Library: allows customers to build a library of digitally available

products (e.g., books, music, etc.,) and purchase them.

• View your digital orders

 30

• Change your name, e-mail address, or password

• Update your communication preferences

• Forgot your password?

• Manage your address book

• View or change your 1-Click settings

• Your Amazon.com Delivers E-mail Subscriptions

• Special Occasion Reminders

• CDNOW Preferred Buyer's Club

• Amazon Alerts E-mails

Shopping Lists & Gift Registries: allows customers to register themselves to receive gifts for

weddings or other special occasions very much like registering with department stores.

• Baby Registry

• Wedding Registry

• Wish Lists

• Gift Idea Lists / Gift Organizer

Amazon Partnership Program

There are thousands of products available at the Amazon web site. However, it is almost

impossible for Amazon to carry all of these products in their inventory. Therefore, Amazon has

agreements with many companies that sell products. Once a customer clicks on a product that

Amazon does not own, the customer is notified immediately before purchase. Sometimes the
 31

customer is directed to the partner web site and sometimes the customer is allowed to purchase

directly from the Amazon web site. This process assures confidence that the Amozon.com is

behind the purchase. The rating of purchases is also a process used by Amazon to check if the

partner is satisfactory or not.

Marketing Research and Tracking Web site visitors

While online companies conduct traditional marketing research including surveys and focus

group interviews, many of them also utilize web site visitor tracking software. Depending on the

software, companies are able to view the number of people visiting their web sites and when.

They can generate a variety of reports about their web site traffic, hourly, daily, monthly, etc.,

They can also view time of the day visitors come to their web site and what pages they visit as

well as what web sites they come from and where they go. In addition, the web pages visited and

the visitor’s location can also be tracked (what country, city or town even the name of the street).

In general the location of web site visitors can be useful in determining the geographic locations

of customers. However, the maps provided by tracking software must be analyzed with caution

since a street shown on a map is most likely to be the point of connection (central station), which

might be 2-5 miles away from the actual connection of the visitor. Nevertheless, the tracking

tools can be very helpful if used extensively and properly. For example, a visitor my click on a

product name or picture and spend 3-5 minutes in viewing the details compared to another

product for only 10 seconds. Another example is a product may get 3000 hits in a single day with

only a few or no sales transactions. These examples suggest reexamination of product prices
 32

compared to competitors and other factors that may be important in influencing customer

decision-making. Therefore, the data gathered through tracking software can be useful for

strategy development.

Another method of marketing research is using “online customer reviews” either on

company web sites or on other web sites. Indeed, there are a variety of Internet-based

information sources such as online rating sites, blogs, and social networking sites. These include

eopinion.com, consumerreview.com, YouTube.com, Facebook.com, Twitter.com, company web

sites (e.g., Amazon.com), and government / consumer advocacy sites all of which offer opinions,

reviews and ratings for products or services11. Previous research indicates that online rating

systems are important in consumer decision making and building trust2. Consumer opinions

about customer care in socially based web sites also impact consumer opinions and consumer

engagement and consequently consumer choice of brand or company when purchasing. Previous

research suggests that companies pay attention to the voices of customers on socially based web

sites and respond appropriately in order to keep customers brand loyal11. A study conducted in

2009 found that the information gained from the electronic word of mouth forum is more

influential in decision-making than speaking with friends in person17. However, one should

interpret the finding of this study with caution since subjects were heavy users of electronic

forums.
 33

Summary and Conclusions

While it is easy to start marketing products and services online, it does require investment of

time and resources. Depending on the level of sophistication of a web site the resources required

can be high or low. Merely having a presence for information purposes, a static web site,

requires very little time and money to invest. However, a web site like Amazon.com or eBay

requires a great deal of money to invest to get started and maintain. Of course, most businesses

do not need a web site similar to Amazon.com or eBay. In fact a great majority would only need

a web site with a shopping cart. This type of site can be done by a third party such as web

development firms at a reasonable cost. As mentioned earlier, it is the level of commitment and

strategy development that determine the success of an online business. In addition, understanding

how successful online businesses operate is a key factor for those interested in starting or

improving an online business. The Amazon.com story is quintessential. Needless to say,

conducting traditional and online marketing research are also key ingredients of being

successful. This means learning how customers make online purchases and the important factors

influencing decision-making. In summary, conduct marketing research about potential and

current customers (who are they? what they buy? why? how much money they spend for their

purchases? how do they find your web site?). The information gathered from eCommerce web

sites on a company’s current and potential customers (their location, purchasing behavior, etc)

can be used to create databases. These databases can then be used to analyze and generate

knowledge that managers can utilize to dynamically update their Internet marketing strategy.

Start your online business using the steps mentioned earlier in this chapter, design and

implement an online marketing strategy including promoting your web site to increase traffic,
 34

revise your marketing strategy, monitor your competitors, and conduct in-depth web site traffic

analysis.
 35

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KEYWORDS: eCommerce, E-Business, Internet Marketing, Digital Marketing, Internet

Advertising, Search Engines, Internet Marketing Research, Increasing web site traffic, Social

Media Marketing, Facebook, Amazon.com

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