Cost extravagances in the airline industry had brought financial costs up decreasing profits but did not automatically mean increase in sales. Accounting problems and financial data were overlooked or neglected during the dot-com bust. First, too much money was spent on advertising which focused on selling and not marketing. Second, too much advertising money could have been saved if ads were focused on market segments. Cost extravagances in the airline industry had brought financial costs up decreasing profits but did not automatically mean increase in sales. First, too much money was spent on advertising which focused on selling and not marketing in both online and offline advertising(Churchill,1995). The prior selling attitude of companies as the strove to increase net profits had been to prioritize the seller’s aim to generate profits. The sad thing about this is that the customers’ needs and wants were put to second place or just simply not taken up. Thus, money was spent paying computer programmers large sums of money to make websites that would catch the eyes of prospective computer users. To prove that this type of strategy to increase sales was effective, the companies targeted all computers users whether they were inside the United States or in the United Kingdom or elsewhere. Unfortunately, there is no logic that increased advertising in the internet will automatically translate to increased sales.
For, man is a slow learner. This simply means that the traditional way of advertising through the usual media is more effective when compared to spending huge amounts of money on internet advertising(Etzel,2001). For one, people using the internet have installed anti -spamming and anti -advertising software. These software block unwanted spasm and advertising pop -ups. The current trend of marketing focused more on filling the needs of the customers. Thus, marketing has replaced massive costly unrewarding advertisements in many cases. Marketing is concentrated on determining what the customers' needs are. This is what the dot com companies should have done in the first place in order to avoid the bust which punished them through low sales increases.
Also, Marketing should replace selling as the corporate spending medium. This will increase sales while decreasing advertising expenses. A good marketing effort would be to make quality products at lesser cost. Also, providing after prior to, day of sale and after sales quality services by front line employees that have a heart to hear the customers' complaints, needs and suggestions. Thus, advertising money should be maximized by using media where more people can see the advertisements. These traditional media include the television, radio and the newspapers. Meaning it should be spent to market products with the corresponding accounting liability of increasing sales. Surely, too much money should not be wasted on advertising which focused on selling and not marketing(Jeffrey, 2004).
Second, too much advertising money could have been saved if ads were focused on market segments. The dot com companies spent unnecessary advertising money that tried to reach a wide area. For, the advertisements reach people from many countries around the world who were not interested to buy a product coming from the other side of the world. Economically, people find products locally made to be cheaper than products that are imported. Macro economics tells us that the currency exchange rate causes time delay from buying/selling to the receiving of money. This is true especially in third world countries where the people's per capital income could barely feed their hand to mouth existence(Pindyck,2001). Meaning, ads