Framework of Internet marketing

• The Internet represents a tremendous

opportunity. For customers, it gives a much
wider choice of products, services and prices
from different suppliers and the means to
select and purchase items more readily. For
organisations marketing these products and
services it gives the opportunity to expand into
new markets, offer new services and compete
on a more equal footing with larger businesses.
 How significant is Internet marketing to
businesses today?
• The answer as always, is ‘it depends’. The relative
importance of the Internet for marketing for an
organisation still largely depends on the nature of its
products and services and the buyer behaviour of its target
audience.
• Ex: Airlines
• For
• organisations whose products are not generally
appropriate for sale online, such as energy company BP
(www.bp.com) or consumer brands such as Unilever
(www.unilever.com), the Internet is less significant.
 Common terminologies
• “Internet marketing”
• “E-marketing”
• “Digital marketing”
• “E-business”
• “E-commerce”
 Internet marketing
• Achieving marketing objectives through applying digital
technologies.
• In practice, Internet marketing will include the use of a
company web site in conjunction with online promotional
techniques described such as search engine marketing,
interactive advertising, e-mail marketing and partnership
arrangements with other web sites. These techniques are used
to support objectives of acquiring new customers and providing
services to existing customers that help develop the customer
relationship. However, for Internet marketing to be successful
there is still a necessity for integration of these techniques with
traditional media such as print, TV and direct mail.
What benefits does the Internet provide for
the marketer?
• 1 Transactional e-commerce site
• These enable purchase of products online. The
main business contribution of the site is
through sale of these products. The sites also
support the business by providing information
for consumers that prefer to purchase
products offline.
2 Services-oriented relationship-building web site

• Provides information to stimulate purchase and build

relationships. Products are not typically available for
purchase online. Information is provided through the
web site and e-newsletters to inform purchase
decisions. The main business contribution is through
encouraging offline sales and generating enquires or
leads from potential customers. Such sites also add
value to existing customers by providing them with
detailed information to help them support them in
their lives at work or at home.
 3. Brand-building site
• Provide an experience to support the brand.
Products are not typically available for online
purchase. Their main focus is to support the
brand by developing an online experience of
the brand. They are typical for low-value, high-
volume fast-moving consumer goods (FMCG)
brands for consumers.
 4 Portal or media site

• Provide information or news about a range of

topics. ‘Portal’ refers to a gateway of
information. This is information both on the
site and through links to other sites. Portals
have a diversity of options for generating
revenue including advertising, commission
based sales, sale of customer data (lists).
 And also

• Market penetration. The Internet can be used to sell more existing

products into existing markets.
• Market development. Here the Internet is used to sell into new
geographical markets, taking advantage of the low cost of
advertising internationally without the necessity for a supporting
sales infrastructure in the customers’ countries.
• Product development. New products or services are developed
which can be delivered by the Internet. These are typically digital
products.
• Diversification. In this sector, the Internet supports selling new
products which are developed and sold into new markets.
 Business model
• An architecture for product, service and
information flows, including a description of
the various business actors and their roles;
and a description of the potential benefits for
the various business actors; and a description
of the sources of revenue.
 Internet Business models
• Brokerage
Brokers are market-makers: they bring buyers and sellers together and facilitate
transactions.
• Advertising
The web advertising model is an extension of the traditional media broadcast model. The
broadcaster, in this case, a web site, provides content (usually, but not necessarily, for
free) and services (like email, blogs) mixed with advertising messages in the form of
banner ads.
• Infomediary
Independently collected data about producers and their products are useful to consumers
when considering a purchase. Some firms function as infomediaries (information
intermediaries) assisting buyers and/or sellers understand a given market.
• Merchant
Wholesalers and retailers of goods and services. Sales may be made based on list prices
or through auction.
• Manufacturer (Direct)
The manufacturer or “direct model”, it is predicated on the power of the web to allow a
manufacturer (i.e., a company that creates a product or service) to reach buyers directly
and thereby compress the distribution channel.
• Affiliate
In contrast to the generalized portal, which seeks to drive a high
volume of traffic to one site, the affiliate model, provides purchase
opportunities wherever people may be surfing. It does this by offering
financial incentives (in the form of a percentage of revenue) to
affiliated partner sites.
• Community
The viability of the community model is based on user loyalty. Users
have a high investment in both time and emotion. Revenue can be
based on the sale of ancillary products and services or voluntary
contributions; or revenue may be tied to contextual advertising and
subscriptions for premium services.
• Subscription
Users are charged a periodic – daily, monthly or annual – fee to
subscribe to a service.
• Utility
The utility or “on-demand” model is based on metering usage, or a
“pay as you go” approach.
 Different environment components

• The Internet introduces new facets to the

environment that must be considered by
marketers since strategy development is
strongly influenced by considering the
environment the business operates in.
 Macro Environment
• The macro-environment is sometimes known as ‘the remote
environment’.
• Being provided by local and international economic conditions
and legislation together with acceptable business practices.
• The Internet and electronic communications have also
introduced major changes to the macro-environment.
• Reviewing the relevance of technological innovations to an
organisation is vital in providing opportunities for superior
services to competitors and to changing the shape of the
marketplace.
• Another significant macro-environment influence is legal,
specific laws have been enacted to control online marketing and
of course the influence of new technologies.
 Micro Environment
• The micro-environment, sometimes known as ‘the operating
environment’ is the immediate marketplace of an organisation.
• For development of Internet marketing strategy, the most
significant influences are arguably those of the micro-
environment.
• This is shaped by the needs of customers and how services are
provided to them through the competitors, intermediaries and
upstream suppliers within the marketplace.
• The Internet and electronic communications have major
implications for organisations and these must inform their
Internet marketing strategy.