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Impact of technology in development of hybrid marketing models with reference to Amazon & E-bay Sumit Samtani M.Com(International Business),M.

phil Dayalbagh Educational Institute, Agra (U.P) E.mail: sumit_samtani007@yahoo.co.in Contact no: 09897121544 Ishan Shanker M.Com(International Business) Dayalbagh Educational Institute, Agra (U.P) E.mail: ishanshanker@gmail.com Contact no: 09219990900 Abstract The study deals with marketing models of Amazon & E-bay, the most famous international companies who deal in marketing their products and services via internet. The purpose of study was to identify the impact of use of technology in hybrid marketing models of Amazon and E-bay and demonstrate such impact on the sales expenditure and sales revenue for a year 2010 has been taken. The study reveals that there is perfect Correlation between sales revenue and sales expenditure of Amazon & E-bay which indicates that as the sales revenue increases the sales expenditure may also increase at the same rate .The study also spotlighted the various channels through which the marketing is carried out via internet .It also describes the strategic reasons, pull & push factors for utilization of technology which makes a simple marketing model as a hybrid model of marketing. However, in todays digital age there is no survival for MNCs without entering in digital world because these are the practices which enhance the companys sales, expansions plans, meet with consumer requirements, helps to cope up with rivals, meet with consumer requirements. Above all it provides an easy reach to consumer and leaded by consumer satisfaction. So there is still a need to invest in development & usage of technology in marketing models owing to development of communication networks are still on growth stage especially a developing countries like India.

Information technology I.T is basically acquisition, processing, storage & dissemination of vocal, pictorial, textual & numerical information by a microelectronics based combination of computing & telecommunications. When marketing concepts, marketing mix are merged with information technology the present operating status of marketing services enhance like, in product designing, promotion (advertising planning & formation, designing) pricing (pricing strategies, providing useful information of rivals) place (place strategies, providing data geographically etc.) and a better services may came up which ultimately led to customer satisfaction & quality product , gradually the companys sales revenue may rise which ultimately lead to profitable for a company& the other dimension are like mass reaches to the required class, so it is helpful in segmentation and forming other marketing strategies. Channels of international marketing with specific reference to information technology 1. E-commerce 2. M-commerce 3. Viral marketing 4. Digital marketing 5. Miscellaneous 6. SMS marketing 7. Marketing through mass media E-commerce E-Commerce involves the sale or purchase of goods and services over computer networks by businesses, individuals, governments or other organizations. E-commerce builds on traditional commerce by adding the flexibility and speed offered by electronic communications. This can facilitate improvement in operations leading to substantial cost savings as well as increased competitiveness and efficiency through the redesign of traditional business methods.

M-commerce

M-Commerce involves the sale or purchase of goods and services over computer networks by businesses, individuals, governments or other organizations with mobile itself. However it is further extension on E-commerce. Viral marketing Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, analogous to the spread of viruses or computer viruses. It can be delivered by word of mouth or enhanced by the network effects of the Internet. Viral marketing may take the form of video clips, interactive Flash games, e-books, software, images, or text messages. Digital marketing Digital marketing encompasses all digital channels for communicating or receiving information, and is not limited just to Internet vehicles. This includes the Internet, mobile phones, SMS messaging, digital outdoor displays (Times Square billboards), and other digital forms of media. Each tool can be classified into either Paid Media or Earned/Buzz Media. Paid Media is publicity gained through advertisements that the brand/product undertakes and controls to communicate information or appeal to consumers. Earned/Buzz Media, one of the most powerful tools, refers to favorable publicity gained through promotion efforts from others outside of the brand and advertising team (i.e. the brand and advertising team does not have direct control). A component of Earned Media, Social Media encompasses publicity gained through grassroots efforts specifically on the Internet. Simply put, Earned/Buzz Media is your content or message, shared by your customers through email, blogs, social networking sites, and other word-of-mouth tools. Additionally, these tools are broken into the five most commonly discussed categories of Word-of-Mouth (WOM), User Generated Content, Search Optimization, Owned Content, and Communication. Information technology& international marketing

The adoption of various digital tools has led to a seismic shift in the methods of marketing. Although the Internet has presented marketers with many new tools for reaching consumers, it has not replaced the overall objectives of marketing and advertising: to generate sales through influence and cultivate brand loyalty. The Internet has, however, caused a change in the way consumers make purchasing decisions, thus requiring marketers to rethink the way they approach marketing their brands. No longer able to push messages onto consumers, brands and marketers are now challenged to remain relevant and engage with consumers in a two-way conversation. Consumers now drive their marketing experience by pulling information they find relevant and filtering those messages pushed at them. Increasingly, consumers want to connect with brands on a personal level. Consumers are quickly becoming de-facto collaborators in brand building and product development as transparence between marketers and consumers increases through deeper engagement between the two parties. Additionally, consumers have become channel indifferent. They choose how and when they want to interact with a brand. The reasons for digital marketing are many. Not only has modern consumer behavior come to make it a necessity, but digital marketing offers brand managers the ability to gain stronger consumer insights through data on actual consumer behavior, relevant and accurate information on cost effective methods for broad reach, and the ability to create highly targeted/individual marketing messages, which in turn lead to more effective campaigns.

Strategic reasons for utilizing and investing in digital marketing initiatives There are many strategic reasons for investing in digital marketing initiatives. First and foremost, changes in the way consumers are influenced have made digital marketing a strategic necessity. Second, digital marketing offers companies the ability to gain superior consumer insights through data gathered on actual, observed consumer behavior rather than on consumer reported behaviors. This in turn allows marketers to create tailored messages for individual consumers, while also offering companies the opportunity to adjust products based on observed needs. Additionally, marketers can make

real-time decisions and changes to campaign based on consumer feedback and performance results. Finally, Digital marketing also presents a cost effective method to reach the broadest audience. Changes in the way consumers are influenced can be directly attributed to the Internet, enabling a significant amount of information sharing. Todays consumers are in the drivers seat of the marketing experience. While consumers were once regarded as recipients of a marketing message, consumers now directly interact with brands and companies in a dialogue. This interaction allows deeper insights into actual consumer behavior (instead of what consumers say they do), as well as a method for marketers to gain immediate insight into consumer needs, wants and opinions. Given the trend of consumers wanting authentic relationships with brands, digital marketing offers tools that allow marketers to cost effectively connect their brands with individual consumers. To understand the power of this transformation, it is imperative to first understand the preInternet relationship between consumers and marketers. Historically, pushed messages to targeted consumer groups. Examples are Push Marketing include 30-second TV spots, radio ads, billboards, and print ads, all strategically placed in various media outlets. The messages were generally formed by the marketers based on self-reported consumer preferences, as well as available demographic information. Upon receiving these messages, consumers would decide whether there was sufficient information to make a purchase decision. Since the messages were well-crafted statements conveyed through television, print, or radio advertisements, consumers would seek additional information if they considered the marketing message biased, after all these were generally well crafted company-sponsored statements conveyed through television, print, or radio advertisements. Consumers would look to experts or authority figures in their network, including not only friends and family, but also ratings by publications like Consumer Reports. In this ecosystem, the influencers were limited to mostly the company messages and immediate networks. In todays pull environment of digital marketing, not only do consumers have access to the traditional push marketing ecosystem, but also to an endless number of online information hubs. Consumers are able to seek out information, broaden their consideration set (the product options available to them), and prioritize which sources are most relevant and

influential to their decision (which includes push marketing messages). Consumers are no longer passive recipients, but are now active members of the information gathering and dissemination process. Increasingly, marketing messages from a company are just one input to a 24-hours, 7-days a week online conversation that occurs through various global digital forums, social networking sites, Internet videos and posts, mobile phone messages, etc. Not only are consumers receiving messages from marketers, they are also voicing and sharing their thoughts and opinions with marketers and other consumers. Consumers are now media producers, researchers, content creators, advocates, promoters and distributors. In this ecosystem, the influencers include the company messages and immediate networks, but also encompass any other consumer who decided to become a media producer or advocate him or herself. The traditional role played by the company and family and friends is still relevant, but their message has been diluted and others now fill this influencer role as well. Additionally, the ease and cost effectiveness of digital marketing has led to a deluge of new product launches and heightened level of marketing messages. Consumers have consequently become adept at ignoring or tuning-out marketing messages, as well as often multi-tasking between various communication tools that reduce his or her attention to marketing messages. Imagine a consumer watching television, surfing the Internet, and chatting with a friend on his or her mobile phone. In this environment, marketers are constantly challenged to break through the clutter to gain consumer attention. Gaining Stronger Consumer Insights based on Observed Behavior In a study conducted by Booz & Co., 80% of marketers surveyed indicated that consumer insights (pieces of information that provide marketers with data regarding consumer preferences, behaviors, demographics, etc. that they can use to better target a segment) are more important now than they were five years ago. Digital marketing enables marketers to easily listen and observe consumers: simply put, digital platforms are everywhere consumers are, from ballparks, to mobile phones, to coffee shops and gyms. This allows marketers to develop new insights into their consumers needs, not only for the immediate product experience, but also for how that product is or can be utilized as a component of consumers lives. In the past, consumer insights were derived from self-reported needs and

preferences. With digital tools, marketers are now able to balance those self-reported insights against how consumers actually behave. These behavioral insights are derived from observing simple tools such as search queries, pages viewed, and time spent in different media mix vehicles. More sophisticated companies are able to glean in-depth consumer insights from observing social networking sites, reading blogs that consumers find relevant, and interacting directly with the consumer through online product communities. Consumers observed behaviors of online, along with traditional product usage, demographics, and psychographics information; give a company more robust information regarding their consumers. The increased transparency of consumer needs and behavior is invaluable because it improves a companys ability to create relevant content and messaging, as well as strengthens the companys placement, timing and context of advertisements. Ability to Tailor Messaging and Advertising Campaigns, Instantly From the beginning, the Internet and digital marketing have presented a way for marketers to experiment over and again, constantly refining their messages to be more effective based on response. Click-thru rates, key word searches, video downloads, pages viewed, and queries are examples of how marketers can instantly measure the effectiveness of digital marketing tools. These metrics indicate how consumers are using various digital tools to learn more or interact with products and/or services. Given the usability and availability of real-time data, marketers are able to instantly adjust marketing campaign strategies to maximize returns. For example, Doves Real Beauty campaign included a video depicting the transition of an ordinary woman into a supermodel on a billboard. The video was originally meant as an internal tool, but given consumers reactions to other Real Beauty campaign material, Dove decided to post the video on YouTube. The reaction from consumers to the video was swift and immediate. Although it seems fairly easy to post a video to YouTube.com, prior to digital marketing, it would have taken substantial resources to purchase media time (TV) and would have involved a significant time lag (media purchases are on average at least one month in advance). With digital marketing tools, Dove was able to immediately release the video after the decision was made to do so. In addition, digital marketing tools allow marketers to address concerns,

misrepresentations, or in extreme cases, when warranted, to remove messages or content that elicit a negative consumer response. On a more individual consumer level, digital marketing provides companies with methods to communicate specific messages and product benefits to different consumer types. Marketers can send direct communication through email and mobile to particular users that are interested in certain benefits of their product. They are also able to utilize these digital mechanisms to incent brand loyalty or retention. For example, if a consumer is interested in purchasing a flight from Los Angeles to New York City and uses Priceline.com to compare prices, times, and availability across various airlines, Price line can target that consumer with offers for the itinerary previously searched (but not purchased) or send suggestions for future flights from the consumers indicated home airport to a region that the consumer indicated in a previous search. By utilizing observed consumer behavior, marketers are able to create content and messages that are relevant to that specific consumer, in a specific location (placement) or media type (banner ads v. blogs/interactive communities). Efficient and Cost Effective Method for Targeted Reach The advent of the Internet and digital communication space presented marketers with an immense opportunity to communicate messages and product information quickly and cost effectively. It is important to reach the right audience at the time they are most receptive to marketing messages for a specific product or service. Digital marketing allows marketers to reach consumers throughout their busy day, thus no longer restricted to traditional television, print, and radio timeslots. By including this capability in a marketing campaign, digital advertising enables marketing campaigns to leverage content and messages across various advertising vehicles (traditional and digital) in a cost effective, highly targeted manner. Prior to digital options, marketers were not able to gain national reach with a single marketing campaign. However, digital marketing allows companies to develop algorithms that make it easy to aggregate individual networks of target consumers and to plan, create, and optimize advertising to reach a national audience that transcends geography and is tied to consumer preferences and interests. For example, results have shown that an aggregated network approach can deliver more than 50 million weekly gross impressions across nearly 30,000 locations around the country all from one network.

Given the consumer need for two-way conversations with marketers and communities, web applications like Facebook, blogs, and other Social Networking Sites (SNS) are cost effective tools to reach consumers (the majority of these tools are free, only requiring maintenance and observation from a company). Changes in consumer behavior and interaction with marketing messages have made digital marketing a necessity to any marketing campaign. Increased research by consumers for purchase decisions, heightened word-of-mouth among consumers, and consumer preference for pull v. push marketing have elevated the importance of digital marketing and made it a necessary component of todays competitive marketing plans. However, digital marketing also offers several strategic benefits for companies. Savvy marketers utilize digital marketing to gain deeper consumer insights and as a method to create tailored and adaptable consumer targeting. An additional appeal is that digital marketing allows companies to be more efficient and cost effective in their marketing efforts, with the ability to measure campaign effectiveness and success.

E-bay.com Sometime before September, 1995, 28-year-old software developer Pierre Omidyar, who had previously worked with Claris developing software for Apple computers, sat down to write the code that would eventually evolve into what we know as eBay today. It was from the start meant to be a marketplace for the sale of goods and services for individuals. In 1998, Pierre and his cofounder Jeff Skoll brought in Meg Whitman to sustain the success. Meg had studied at the Harvard Business School and had learned the importance of branding at companies such as Hasbro. Meg culled her senior staff from companies such as Pepsico and Disney, created an experienced management team with an average of 20 years of business experience and built a strong vision for the company -- that eBay is a company that's in the business of connecting people, not selling them things. They quickly shed the image of only auctioning collectibles and moved into an array of upscale markets where the average sale price (ASP) is higher. ASP is a key metric in determining eBay's transaction fees, so increasing the ASP became an important item. By forging partnerships with name

brands such as GM, Disney and Sun, eBay has managed to do exactly that. Sun has sold $10 million worth of equipment and it now lists between 20 and 150 items per day. The Business Model E-Bay has built an online person-to-person trading community on the Internet, using the World Wide Web. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category. eBay has both streamlined and globalize traditional person-to-person trading, which has traditionally been conducted through such forms as garage sales, collectibles shows, flea markets and more, with their web interface. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering. Browsing and bidding on auctions is free of charge, but sellers are charged two kinds of charges:

When an item is listed on eBay a non-refundable Insertion Fee is charged, which ranges between 30 cents and $3.30, depending on the seller's opening bid on the item.

A fee is charged for additional listing options to promote the item, such as highlighted or bold listing. A Final Value (final sale price) fee is charged at the end of the seller's auction. This fee generally ranges from 1.25% to 5% of the final sale price.

E-Bay notifies the buyer and seller via e-mail at the end of the auction if a bid exceeds the seller's minimum price, and the seller and buyer finish the transaction independently of eBay. The binding contract of the auction is between the winning bidder and the seller only.

E-Bays Position in the Industry

Because access to the online trade channel (i.e. Internet) is universal, and the physical assets required to setup an auctioning site are all commercially available, barriers to entry in the auctioning industry are minimal. What comes stronger into play is the network externalities effect, as was mentioned before. Being in a market with huge network externalities makes it extremely difficult for a competitor to get a large share of the user base, since most users tend to gravitate towards the service which already offers the most users (since it will presumable have the greatest number of offerings.) This tremendous switching cost has the effect of locking in customers to a single auction service provider in this case eBay. Given network externalities and the relative ease one company can mimick and duplicate another company's innovations online, the main tact rivals can deploy is to lower the price of their service, which is exactly what Amazon and Yahoo have done. Currently eBay is extending to markets overseas; it is now operating in eight of the top ten countries by online market size outside of the United States. In Asia eBay is in 80% of its largest e-commerce markets. eBay is gaining users 50% faster in Europe than in the United States, and gross merchandise sales are growing 135% faster. The faster it grows, the more securely will it hold its top position in the auctioning service market. In a very open market, where anyone can enter, the threat of substitute service is greater. An example of which, Half.com, was mentioned before. In fact, the management of eBay believes that fixed-priced trading as is done on Half.com has as much, or even more, potential than eBays core auctioning service.

Amazone.com

The story of the formation of Amazon.com is often repeated and is now an urban legend. The company was founded by Jeff Bezos, a computer science and electrical engineering graduate from Princeton University. Bezos had moved to Seattle after resigning as the senior vice-president at D.E.Shaw, a Wall Street investment bank. He did not know much about the Internet. But, he came across a statistic that the Internet was growing at 2,300%, which convinced him that this was a large growth opportunity. Not knowing much more, he plunged into the world of e-commerce with no prior retailing experience. He chose to locate the company in Seattle because it had a large pool of technical talent and since it was close to one of the largest book wholesalers located in Roseburg, Oregon. Clearly, he was thinking of the company as a bookseller at the beginning. Moreover, the sales tax laws for online retailers state that one has to charge sales tax in the state in which one is incorporated. This means that for all transactions from that state the price would be increased by the sales tax rate leading to a competitive disadvantage. Therefore, it was logical to locate in a small state and be uncompetitive on a smaller number of transactions rather than in a big state such as California or New York. The company went online in July 1995. The company went public in May 1997. As a symbol of the companys frugality, Jeff and the first team built desks out of doors and fourby-fours. The company was started in a garage. Ironically, initial business meetings were conducted at a local Barnes & Noble store. Bezos first choice for the company name was Cadabra. He quickly dropped this name when a lawyer he contacted mistook it for cadaver. He picked Amazon because it started with the letter A, signified something big and it was easy to spell. For his contribution, Jeff Bezos was picked as the 1999 Time person of the year at the age of 35 making him the fourth-youngest person of the year. Describing why it chose Bezos, Time magazine said, Bezos vision of the online retailing universe was so complete, his Amazon.com site so elegant and appealing that it became from Day One the point of reference for anyone who had anything to sell online. Analysis

Impact of Expenditure on I.T. Enable Services on Sales Revenue S.No Name Of the Company Sales Revenue ($) 1 2 AMAZONE E-BAY 34204000 91500000 Exp. On I.T.E.S. ($) 6237000 27500000

INTERPETATION So Correlation is 1 which states that as the sales revenue increases at a same time the expenditure may also increases but at the same rate hence they are highly co related however, the study shows there is a large impact of IT on international marketing by taking 2 core companies who only deals threw ITES. Pull factors of using ITES in International marketing Pull factors of using ITES in International marketing International marketing is no longer an option, but a strategic imperative. Businesses that Focus primarily on their domestic markets will be left behind as their competition gains first mover advantage in the international marketplace. When we consider that the Unites States only represents 4 percent of the worlds population, opportunities to sell our products and services worldwide become clearly evident. The growth of the Internet has increased competition tremendously and opened up the doors to international business. Companies have developed a web presence to keep themselves ahead or in line with their competitors internationally. In addition to gaining a competitive advantage, there are a number of additional reasons why a companys web presence is becoming an increasingly important tool to reach global markets.

Internet Population - Internet access is increasing in regions throughout the world. According to Computer Industry Almanac, 533 million people have access to the Internet, which represents approximately 8 percent of the worlds population. Aberdeen Group predicts that by the end of 2005, 17 percent of worldwide population will have Internet access.

E-commerce Growth:-According to International Data Corporation (IDC), the U.S. Accounts for approximately 40 percent of all money spent online, but that percentage is Expected to decrease as Western Europe and Asia increase their online spending. According to Aberdeen Group, by 2003, 66 percent of E-commerce spending will originate outside the United States.

Demand for Products and Services - Regions throughout the world are realizing the enormous information resource the Web is and are interested in content, and products and services that their own regions do not provide. Online Payment - A barrier that blocked E-commerce growth throughout the world, particularly in Europe, was different currencies. However, adoption of the Euro is completed, phasing out local currencies and blurring borders between countries in the European Union. By enabling better price comparisons, increasing competition and improving deals for online buyers, the Euro is making it easier to conduct business in the European online market and providing better entry by non-European companies. Marketing and Advertising - Online marketing is a popular method to gain international audiences. For example, Email has become one of the most successful channels for marketers in Europe, which means that companies interested in selling to the European online market should take advantage of this popular medium. Increased Sales and Reduced Costs - A web site provides an avenue through which to gain access to a large audience without spending a lot of money. For example, it cuts down on paper costs associated with direct marketing and magazine or newspaper advertising.

Challenges in International Marketing Before marketing yourself globally, it is important to ensure your business is ready to deal with challenges presented by the international environment including language and cultural barriers, foreign laws, order fulfillment, and pre/post sales support.

Language and Culture - Neither technical accuracy nor perfect translation is sufficient when considering the language you will communicate through. It is important to really understand how a language is used by the people in your target market. Many of us have heard about the marketing blunders of respected multinational corporations - showing us those that do not do their research, no matter how large, are capable of making mistakes in the global environment. Consider the following examples: When the Pepsi slogan "Come alive with the Pepsi Generation" was translated in Taiwanese, it came out as "Pepsi will bring your ancestors back from the dead." General Motors realized why it wasnt selling any Chevy Novas in South America, When it figured out that "nova" meant "it wont go." After the company figured out Why it wasnt selling any cars, it renamed the car in its Spanish markets to the Caribe. Regional Laws - All phases of product development are affected by regulations. For example, the product itself, such as its physical and chemical aspects, is subject to laws designed to protect consumers with respect to purity, safety or performance. Local laws also affect product features such as packaging and warranties. Advertising regulations also takes various forms. For example, in Germany it is difficult to use comparative advertising and the words better or best. In some regions, advertising for pharmaceuticals must have prior approval from Health Ministries. Sales promotion techniques are also subject to regulations. For instance, some countries put constraints on contests, deals, premiums and other sales promotion gimmicks.

Order Fulfillment - When you market and sell through a web site you are opening the door to an international audience potentially bringing increased demand for your products or services. How will you meet this demand? How will you deliver your products? What will you do if a market you did not intend to reach is interested in buying your products?

What business partners will you need to ensure smooth logistics of your product? Can you handle your shipment costs? If you cannot meet demand or ensure smooth delivery of your product, you are at risk of negatively affecting your business and its image. It is important to find and qualify potential distributors, and pay particular attention to contract negotiation and distribution management. Pre and Post-Sales Support - Communication with your customers as well as your business partners is an important consideration when marketing and selling internationally. When a customer in an international market has a problem or would like to communicate with your company, they will most likely want to speak in their own language. They will also be interested in attaining a level of customer service that is in-line with their culture and expectations. Many businesses are able to meet customer expectations through strategic alliances or foreign distributors who deal with the local customer base on their behalf.

Conclusion In todays digital age there is no survival for MNCs without entering in digital world because these are the practices which are earlier discussed in this paper which enhance the companys sales, help in expansions plans, meet with consumer requirements , helps to cope up with rivals, meet with consumer requirements above all a easy reach to consumer& most of all consumer satisfaction is delivered .hence we can say that there is an impact of I.T on international marketing as well as domestic marketing.

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Subbarao,p InternationalBusiness,Himalaya publishing house,2010,p64

libid;p65 www.marketwatch.com www.financialyahoo.com Gopal arti, A practical guide to digital marketing,p1-29