Internet Marketing Is Transforming The Business World Marketing Essay

In the industrial society, strategic resource is the capital while in the twenty-first century information society, it is information. In the past, many enterprises did not notice its value and thus overlooked the information-based virtual market. They also rarely take advantage of information to achieve faster and better development. Market becomes more competitive as the information communication more frequently. In the condition of market economy, especially of the information economy, enterprise marketing activities step into the times of strategic management and strategic management. Creativity has always been the core (Amabile, 2010). With the rapid development of network technology as well as the rapid increase in Internet users, the network market has drawn increasing attention. It is gradually becoming the indispensable media of communication between manufacturers and consumers and transactions. As the network marketing out of the control of the time and space, to a large extent, it has changed the traditional marketing patterns and formats. In terms of enterprise, Internet marketing increases efficiency, reduces costs and expands market, enhances the firm sustainable competitive advantage. E-business, based on computer networks, which as the important content of the network economy and means, is playing increasingly more important role in marketing. Based on the available literature and previous researches, this article attempts to systematically show the importance of new media for marketing.

Keywords: marketing strategy, sustainable competitive advantage, creativity, e-business

1. Introduction

As the society entered the 21st century, the new technological revolution with the guide of information technology swept the whole world. Ever-changing computer technology, electronic technology, communication technology and network technology are all developing at an unprecedented pace. The arrival of the new economy era which marked by e-commerce will profoundly affect human existence and development. Marketing is a link to affiliate enterprises and consumers. With constantly improving science and technology as well as modernization of social production today, the key to business marketing, is the market. That is, the success of business depends on its market development and marketing capability. With the rapidly emerging force of globalization, the difference between domestic marketing and external marketing is disappearing quickly. With this reality, firms need to reorient their marketing strategies to meet the challenges of the global marketplace, in addition to sustaining their competitiveness within home markets (Rakesh, 2005).

Business marketing is experiencing a transformation from a traditional marketing which is production-centered, on the basis of Sovereignty of producer, with characteristics of measure-to-problem management to a modern marketing which is market-oriented, on the basis of consumer sovereignty, characterized by strategic management. This is an evolution of business marketing. As firms, they have begun to change their mind, in order to find opportunities in the information-based virtual market. Network marketing represents the development direction of the future business. People have become increasingly clear awareness of the importance of strategic planning to business success. Internet marketing, this new business model not only initiated a serious challenge to the traditional mode of operation on the parts of organizational structure, product management, market information, product marketing, and many other areas of micro-business, but also brought revolutionary change to macro-economic operation and management.

2 Brief Overview of Traditional Marketing

2.1 Development of marketing and some key concepts

Marketing is the process by which companies determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development (Philip, 2008). The further definition is defined by the American Marketing Association (AMA) as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (2009). The term original meaning referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering views marketing as “a set of processes that are interconnected and interdependent with other functions whose methods can be improved using a variety of relatively new approaches (H, 1997).”

An orientation, in the marketing context, relates to a perception or attitude a firm holds towards its product or service, essentially concerning consumers and end-users. Throughout history marketing has changed considerably as consumer tastes are changing faster (Philip, 2009). According to orientation, the three phase evolution of marketing respectively is: the production orientation, the product orientation and the selling orientation (Dennis, 2001).

? The production orientation phase. This phase lasted until 1950. In this stage, a firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale, until the minimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes do not rapidly alter. This phases profit driver was production methods.

? The product orientation phase. This phase lasted until 1960. In this stage, a firm employing a product orientation is chiefly concerned with the quality of its own product. A firm would also assume that people would buy and consume the product as long as its product was of a high standard. So the profit driver was quality of the product.

? The selling orientation phase. This phase lasted from 1950 to 1960. In this stage, a firm focuses primarily on the selling/promotion of a particular product using a sales orientation, and not determining new consumer desires as such. As a result, this entails simply selling an already existing product as well as using promotion techniques to obtain the possible of highest sales. Such an orientation may suit situation in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little possibility of changes in consumer tastes declining demand. The profit driver was selling methods.

Approximately in 1970, the marketing conception came up (Mangrum, 2008), until present day. The marketing orientation is perhaps the most common orientation used in contemporary marketing. It emphasizes the company’s marketing activities should be based on needs of the customer as its center, that only through effective to meet the needs of customers in order to attain the company’s survival, growth and profit goals. This marketing philosophy based on the respect of correct understanding of consumer choice and consumer sovereignty. It has been verified its validation in many enterprises practices. It involves supplying products to suit new consumer tastes. As people known that, R&D is the department of a firm to develop a product attuned to the revealed information, and then use promotion techniques to make customers know the product exists.

2.2Traditional marketing strategies

Marketing strategy encompasses the strategy involved in the management of a given product. Generally speaking, marketing strategies include: Price strategy, Product strategy, Place strategy and Promotion strategy. We refer to it the most classic 4Ps (McCarthy, 1960). Price strategy mainly refers to the price of products which relates to cost, market, competition and so on. When pricing their products, a firm should consider all of these elements. Product strategy mainly refers to the product package, design, color, style and trademark. A firm should give characteristics to the product, so that impressed the consumers deeply. Place strategy is to choose channels which can make sure an enterprise product flow to the hands of customers. It can be divided into many kinds, such as direct and indirect channels (distribution, agency, etc.). Companies can use different channels under different circumstances. Promotion strategy is a firm with some incentive activities to attain purpose of highest sales possibility. This strategy includes discount, cash back, lucky draw, free trial and other means. With regard to different questions, each scenario a firm confronting requires a unique marketing strategy.

3. Brief Overview of internet Marketing

3.1 Definition of internet marketing

Internet marketing also referred to as i-marketing, web-marketing, online-marketing, Search Engine Marketing (SEM) or e-Marketing (2010). To speak more detailed, it is an Internet-based new marketing approach, which by using digital information and interactive online media to attain marketing objectives. Simply speaking, internet marketing is the marketing of products or services over the Internet, for some certain purposes.

Firstly, it can be categorized in term of scope into three categories:

? Broad internet marketing. Generally speaking, a broad internet marketing is views internet as the main mean to carry out marketing activities, which including intranet, EDI, and internet.

? Narrow web marketing. Narrow internet marketing refers to whole process of organization or individual who bases on open and convenient Internet (Rakesh, 2005), makes a series of operations on products and service to meet the needs of the organization or individual.

? Integration internet marketing. In 2002, senior marketing practitioners Chunhua As proposed concept of integrated internet marketing (2006): internet marketing is an integral part of the overall business marketing, it is conducted with the objective of realize the business sale goal, and to create online business environment through a series of activities. This definitions core is creating business on-line environment, which can be understood as a process of proposed integrated marketing to create brand value. That is, integrating all kinds of effective internet marketing measures for businesses to make better marketing environment.

Secondly, It can be divided in term of standard construction of network marketing. They are primary type internet marketing, show type potential type, income-based internet marketing and perfect type.

Thirdly, with the degree of old and new forms of network marketing, it can be divided into: the traditional type of internet marketing , the combination of the traditional marketing and internet marketing, and the type of incorporating mobile phone into network marketing

3.2 Generation of internet marketing

The generation of internet marketing is fostered by a combination of factors, which relate to the development of science and technology, changes in consumer values and business competition. The 21st century is the century of information. Technology, economic and social development is in the arrival of the era. The development of computer networks contributes to the content of information society a further change. In the Information Age, Internet technology changed the way information is distributed and received, and also change the way people live, work and learning, moreover, the cooperation and communication environment. Enterprises are also using the Internet fast wagon of new technology, to promote the rapid development of enterprises. Internet marketing utilizes internet as its propagate media, gonging on with new ways, methods and ideas to implement marketing campaigns. This way more effectively promote the trading activities achievements of individuals and organization.

How does enterprises launching their sales in such a huge potential market and occupying new market? So, it is both an opportunity and a challenge. Changes of consumers value in different phases also contribute to Internet marketing production (Phrombutr, 2006). To meet consumer demand, is the eternal core of business marketing. Take the advantage of network technology to provide consumers with all types of services is made an important way to attain future competitive advantage. As it is spoken to the market economy today, the majority of products not only in quantity but also in variety are extremely rich. Consumers realized basing on individual psychological desire to select and purchase goods and services. The more they need, the more quickly the changes are.

Now, initiative consumers will take all possible measures to get corresponding information of goods and will make a comparison between the goods. They do this in order to increase confidence in the products and for psychological satisfaction. Internet marketing also produced in commercial competition. With the increasingly fierce market competition, as firms, in order to make sure the advantage in competition, they have employed every possible means to find ways to attract customers. It is difficult to say which mean is newer or more distinctive to guarantee victory in competition campaign. By developing internet marketing, firms can save a lot of expensive store rental, can reduce the amount of funds used on stock products, can expand firm scale from space constraint, and can easily collect customer information and so on. All of these can help companies reduce operating costs and expenses as well as make the operating period becomes much shorter. In a word, the internet marketing fundamentally enhances the firms competitive advantage and increases its profit.

3.3 Characteristics of internet marketing

With the maturity of Internet technology and low cost of networking, the Internet is like an “adhesive” to bind businesses, groups, organizations and individuals together across time and space, and making the exchange of information between them become “so easy.” Of Marketing, the most important and most essential is information dissemination and exchange between organizations and individuals. If there is no exchange of information, then the transaction has no source. For this reason, the Internet has certain features which are required in marketing to make internet marketing possesses the following characteristics:

? Not subject to the limitations of time and domain. The ultimate goal of marketing is occupy market share. Because the Internet can exchange information by transcending time and space constraints, firms have more time and more space for marketing. They could provide global marketing anytime and anywhere.

? Rich media. The Internet was designed to transmit multimedia information, such as text, sound, image and so on information. Thus making the deal of exchange of information can exist and exchange in many forms, moreover, marketing staff can fully develop their creativity and initiative.

? Interactive. With the display of merchandise image, the provision of commodity information query, internet capable to achieve interaction and communication between supply and demand. It can also conduct product testing.

? Consumer satisfaction degree feedback and other activities. Internet provides the best tools for product co-design, product information release, and the various technical services.

? Personalization. Internet marketing has features of one to one, rational, consumer-led, non-compulsory, and progressive. Besides, it brings about low-cost and personalized promotion form, which exactly avoids a salesman compulsory sale which lies in traditional promotion. Moreover, a long-term good relation with consumers would be easily built up during the special information provision and interactive chat process.

? Go on growing. Owing to the growing numbers of Internet users and throughout the world, most of these users are young, middle-class and high educational standards (Phrombutr, 2006). As this part of the group has a strong market, strong purchasing power and influence, and therefore the internet marketing has a strong populace basis and a great potential for the development of market.

? Integration. Internet marketing able to links the vital activities in marketing, commodity information collection, customer inquiries, purchase, payment, as well as after-sales service as a whole sale line, makes the marketing more convenient. On the other hand, to make use of the Internet, different marketing activities would be unified designed coordinated, in order to convey the same information to consumers, preventing the spread of various negative effects of inconsistency.

? Advancement. In my view, Internet is the most powerful marketing tool. It encompasses marketing channel, promotion, electronic transaction and interactive customer service, market information analysis and delivery of a variety of functions. Moreover, it has a one to one marketing capability, which is consistent with future trends of customized marketing and direct marketing.

? High efficiency. Computer has the ability of store vast amounts of information and inquiries automatically. The amount and accuracy of information it carries and transmits is far more than other media, so it is better to attain market demand. Through updating the product or adjusting the price promptly, they can meet customer needs more effectively.

? Economy. In virtual of present exchange of information through the Internet instead of the previous exchange ways, on the one hand, it reduces printing and mailing costs, people can enjoy rent-free, as well as free of water and labor costs. On the other hand, losses caused by multiple exchanges can be reduced.

? Technology-supportive. Network marketing is built on Internet which was supported by high-tech, a firm wants to conduct network marketing must have a certain technical investments and technical support. At the same time, it may changes the traditional organizational form, and to enhance information management function, as well as introduces talents who proficient in both IT and marketing. Therefore the firm can have sustainable competitive advantage.

Of course, it has limitations. One barrier is internet marketing requires users to grasp newer technologies rather than traditional media. Low-speed Internet connections are another barrier. In the scenario which companies build large or overly-complicated websites, delay might be caused because of long-time connections. From the buyer’s perspective, they are not allows to touch, smell, taste or try on goods before making an online purchase. However, there is an industry standard for e-commerce vendors to reassure customers by having liberal return policies as well as providing in-store pick-up services (2010). A survey of 410 marketing executives listed some barriers to entry for large companies looking to market online. They are: insufficient ability to measure impact, lack of internal capability, and difficulty convincing senior management (2008).

3.4 Internet marketing means

The realization of the functions of network marketing needs one or more network marketing means. The common means in internet marketing besides search engines registering, there are: keywords search, online advertising, TMTW calls paid advertising, exchange links, information dissemination, integrated marketing, mailing lists, permission E-mail marketing, personalized marketing, membership marketing, viral marketing, integration internet marketing and so on. PPC auction advertising and search engine optimization are two usually used methods in Search Engine Integrated Marketing (SEM) mean (Silverstein, 2008). For example, Google rank action promotion, is a pay for click way to fulfill promotion. Search engine optimization is a promotional way through which optimizing methods that meet the standard of search engine through sites, to improve natural rank on search engines at the same time get access flow, and then attain the purpose of promoting. Research engine as an internet users¿½¿½ frequently used tool, will play a vital role in internet marketing in the future.

4. Impact of Internet Marketing

4.1 Impact on traditional marketing strategies

Traditional marketing relies on layers of tight sale places, needs a lot of manpower, material and advertising put into the market. To today¿½¿½s development of internet marketing, it may become a heavy burden to firms. In the future, which is named as ¿½¿½ Internet Age¿½¿½, personal selling, market research, advertising, promotion, distribution agents and other traditional marketing strategies would be combined with the network, and firms would make full use of the resources. The new market sales marketing will be formed which with the lowest cost and the most profit.

? Impact on standardized products. As a new media, the Internet can conduct a global market research. A firm can quickly obtain information about product concepts and advertising effectiveness testing feedback through Internet. Besides, it can be used in testing customers¿½¿½ different levels of identity so as to tracking on the consumer behavior and preference more easily. Therefore, in the case of heavy use of the Internet, provide different goods for different consumers will no longer be a fantasy. The well-known Dell Company does direct sales of computer equipment on internet. The company does not require unite internal configuration, while customers can have their own requirements to a device’s configuration. The firm conducts productivity in accordance with customer demand. Of this customer-centered means the driving force is the ultimate consumer, rather than the usual of the foreign distributors¿½¿½ interest. Meanwhile, a new type of Internet communication has accelerated this trend. Therefore, how to meet the needs of a variety of individual more effectively is a major challenge to every Internet company.

? Impact on brand globalization management as the same as deciding in a single brand or a multi-brand, a company which conduct internet marketing confronts a major challenge is the identification of global brand and the identification of the common name or logo. In practice, adopting a different approach in company’s brand management will have different situations. For example, a company only has one brand may allows its local agencies, according to the need, to develop their own regional brands with local features. Each of these brands will be significantly differ in market and image. When more than one brand with local characteristics showed up and communicated with different formats, image, information and content, may lead confusions, although brought to a certain degree of consumer convenience. On the other hand, if a multi-brand firm, who sets a unified brand image for all the brand, although can use credit of well-known brands to drive sales of related products, but may be contribute to damage to the overall company as a result of the loss of a regional brand. Such cases are many. Therefore, whether a company is to implement a single brand strategy with a unified image or a regional multi-brand strategy with variety of local features, and how to strengthen the regional brand management is the real problem the company face.

? Impact on pricing strategies. If the price standards of a company¿½¿½s product are not uniform or constantly changing, customers will aware of this difference through the Internet, and may be resentful to the company. So compared to the current range of traditional media, the Internet processes advanced web browsing capabilities to make the fluctuating price levels and differences approximately the same. This will create a major impact on distributors located in various overseas and company in different price. For example, if a company offers customers a 10% discount, then the world’s internet users are aware of the deal. This may affect those deals which have been through distributors or business do not need discount. In addition, the agency through the Internet search for specific products will also be recognized such price differences, and thus increases the company’s adverse effects of price discrimination. In short, these factors suggest that the Internet will lead to the price level to international standard or at least narrow the price difference between different countries. This is indeed a serious problem for the companies which execute differential pricing strategy.

? Impact on marketing places. In the network environment, manufacturers via the internet directly communicate with end users. Therefore, the importance of intermediaries will be reduced. This may result in the following two consequences. The first is entry barriers threat which result from traditional and international distribution network to other small competitors or new entrants will be apparently decreased. Secondly, for the present direct sales producers¿½¿½ perspective, due to sailing on the Internet, their job of after-sales service is borne by their distributor. But with the disappearance of their profits of acting as an agent, distributors will likely not take these jobs forever. In the condition of without destroying the existing marketing places, how to provide such after-sales service will be an issue to that the on-line companies have to face.

? Elimination of barriers to traditional advertising. Enterprises mainly use some on-line advertisements to propagate their products through distribution function of network. Internet advertising will eliminate the barriers of traditional advertising. First of all, compared to traditional media, because of cyberspace¿½¿½s infinite extensibility, so advertising on the network would be less influenced by the length of space limitation. Individuals can set the necessary information as much as possible. Second, on-line advertisements can rapidly increase efficiency advertising business and create favorable conditions for firms on-line. For example, some firms can change advertisements which are going to send to the visitors quickly according to purchase of their registered users. Some companies may according to the characteristics of visitors, such as the hardware platform, domain name or search topics in visiting and so on, to display their ads selectively.

4.2 Impact on traditional marketing means

With the rapid development of internet, users can more conveniently realize certain functions. Of which are, multi-dimensional information (sounds, images, animations, etc.) share function and interaction of human and computer. It was because of this development, traditional marketing methods has experienced a revolutionary change. The results of change could lead to the gradual end of the mass market, and gradually reflect the personality of the market, and eventually organize the production and sales according to the needs of each user.

? To re-build a customer relationship. Network marketing business competition is a customer-focused type of competition. How to attract new customers, how to retain old customers, how to expand customer base, how to establish close relationships with customers and analyze customer needs and create customer demand, are the most critical marketing issues. Thus, in a network environment, maintaining the close relationship with customers who spread around the global and proper charging of customer characteristics, and through customer education and corporate image building, set up customers¿½¿½ trust for the virtual enterprise network marketing, are the key to the success of network marketing. In that target market, customer type and product type of the network era are so different from of all the previous tradition era. How to conduct re-building the relationship between enterprises and customers, which needs to transcend geographical, cultural and temporal gap, would need a number of innovative and creative marketing activities.

? Impact on marketing tactics. As the Internet has the equality, freedom and openness features, makes the transparent market competition in this network era. Everybody can master the competitor’s product information and marketing activities. Therefore, the key to victory is how to obtain timely from the network, and then to analyze and use these information, in order to take advantage of competitive strategy. From this analysis, some small enterprises can participate in global competition more easily. This reality cannot be ignored by the multinationals. In any case, the network will reduce the multinational companies¿½¿½ competitive advantage of large scale sales strategy as they had in traditional marketing environment.

Nowadays, in this internet era, strategic alliance between enterprises is the main competition type. How to use the network to form the company’s corporate union and to create competitive advantages of scale resource which is formed by alliance will be an important tool to present enterprises.

? Impact on transnational business. In the Internet era, it is essential to enterprises to conduct international business. In the past, companies just focused on related industry and the local market, its markets abroad are entrusted to agents or traders to operate. But nowadays, the Internet connects the global market across time and space, making the cost of global marketing lower than that of the regional marketing. So a company will have to enter the era of transnational business. Network companies are not only to familiar with characteristics of the customers of different country’s market, to gain their trust and meet their needs, but also to arrange for cross-border production, transportation and after-sales service and so on jobs (Mangrum, 2008). These cross-border operations are linked and conducted via the network. It can be seen from the aforesaid that, despite the Internet provides greater benefits for existing and new-built multinational companies (or their customers), the impact and challenges of business is daunting. Any firm desire to use the Internet for multinational management, must choose an appropriate business model for its management, and know clearly what influences the new media will create on their existing patterns during process of transaction and information dissemination.

? Organizational reengineering. The development of Internet led the rapid development of the Intranet. Thus consequence making firms¿½¿½ internal and external communications and management rely on the network as its main channels and information sources. As a result, the impact on the business including: reduction of business personnel and direct sale staff, decrement of organizational layers, reduction of distribution agents and the number of branch outlets, short of marketing channel and prevalence of the virtual enterprise organizations such as virtual dealer, virtual stores, virtual departments and so on. These effects and changes in the organization will encourage businesses¿½¿½ need of reengineering to become more urgent. Intranet has changed the business practices and internal way of learning and growth, thus personal independence and professional workers will be further enhanced. Therefore, such working forms as the personal studio, working at home, flexible working, and share of business resources will be very popular in the future. According to this, the enterprise wants to adapt to network environment must adjust company’s organizational structure. This is an organizational challenge to global business during transformation to Internet marketing.

5. Conclusion

As stated above in this article, internet marketing as a new marketing concept and strategy is actually a global tendency, since it has the internet as its basis and is still generating significant impact on the traditional marketing. Learning from the discussion given in this article about an overview of internet marketing, it can be seen that internet marketing mainly influences traditional marketing st

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