Internet Marketing Management - Essay Example

Market is a place where buyer and sellers interact and buying and selling takes place. This place need not be a tangible place but it can be over thephone or via any means which brings the buyer and the seller together. When the buyer and sellers interact on internet and engage in transaction then this process is known as internet marketing or eMarketing. The scope of Marketing Management is not limited to just buying and selling of good but it also includes: Communicate a company's message about itself, its products, or its services online. Conduct research as to the nature (demographics, preferences, and needs) of existing and potential customers. Sell goods, services, or advertising space over the Internet. The main components of Internet Marketing: Components of Internet marketing (or online marketing) may include: Setting up a website , consisting of text, images and possibly audio and video elements used to convey the company's message online, to inform existing and potential customers of the features and benefits of the company's products and services. A good website is made-up on AIDA model. "A" means, it attracts the consumer. "I" means it creates interest. "D" means it buoys the consumer's desire for the product. Finally the "A" means that it leads to consumer into an action i-e buying the product. Search Engine Marketing (SEM), which is marketing a website online via search engines, either by improving the site's natural (organic) ranking through search engine optimization (SEO), buying pay-per-click (PPC) ads or purchasing pay-for-inclusion (PFI) listings in website directories, which are similar to offline yellow page listings. Email marketing, which is a method of distributing information about a product or service or for soliciting feedback from customers about a product or service through Email. Email addresses of customers and prospective customers may be collected or purchased. Various methods are used, such as the regular distribution of newsletters or mass mailing of offers related to the company's product or services. Email marketing is essentially the online equivalent of direct mail marketing. Banner advertising, which is the placement of ads on a website for a fee. The offline equivalent of this form of online marketing would be traditional ads in newspapers or magazines. Online press releases, which involve placing a newsworthy story about a company, its website, its people, and/or its products/services with on online wire service. Blog marketing, which is the act of posting comments, expressing opinions or making announcements in a discussion forum and can be accomplished either by hosting your own blog or by posting comments and/or URLs in other blogs related to your product or service online Article marketing, which involves writing articles related to your business and having them published online on syndicated article sites. These articles then have a tendency to spread around the Internet since the article services permit re-publication provided that all of the links in the article are maintained. Article marketing can result in a traffic boost for your website, and the distribution of syndicated articles can promote your brand to a wide audience. With the passing of time internet marketing is gaining a lot of popularity day-by-day due to its unique feature: Cost-Effective: It's very cheap to set up a site and very little money is needed to maintain it once it has been set up Nowadays every business is going global. The first step to go global is showing your product to the World and internet is the cheapest and reliable way to advertise your product. Ecommerce has resulted in increase in sales for various businesses due to online sales. This encourages the businesses to develop their websites. Internet is a way of obtaining market research data. Websites are used for marketing research and stuff that help businesses develop new products. Websites for comparisons and evaluations: Let's look at the marketing management techniques adopted by Amazon.com and eBay and use their techniques for comparisons and evaluations. Amazon.com Inc. AMZN supposed is the Web's leading store. With 16 million items for sale, Amazon has 'Earth's biggest selection. Amazon.com sells music, videos, pet supplies, drugs etc. You name it and Amazon.com has it. eBay has also risen out of nowhere to give good competition to amazon.com due to changes in it's marketing strategies and techniques. In order to give competition to each other both Amazon and eBay have developed new products in the form of: Amazon has begun holding daily auctions. (Previously it was running on fixed prices of sales and this auction is new addition to Amazon.com's selling techniques. eBay which was an auction site has been opened a retail store offering fixed prices. Thus this increase in their products is to hand out heavy competition to each other and increase the market share and to diversify their business. Thus, Amazon.com started auctions on their website to attract eBay's clientele whereas eBay started fixed price shops to have its own share in the big market that Amazon.com was gaining. The new approach that eBay is following has given new horizon to the company. But Amazon.com's motivating mission statement and appeal to customer might also play big part in giving out tough competition to eBay's growth. Amazon.com's mission statement says: "To build a place where people can come to find and discover anything they might want to buy online" Thus Amazon.com will leave no stone unturned to attract customers whether it be adopting new techniques to sell the products or whether it involves new means of advertising and most importantly adding new products to their inventories which customers would like to buy. Whereas eBay's mission statement says: eBay's mission is to provide a global trading platform where practically anyone can trade practically anything." This mission statement also wants more and more people to trade on their website and so is the amazon's mission statement. Thus both sites want more and more customer as a primary objective i-e high market share. The way they achive this is by their own techniques which is more commonly known as marketing mix: Products: As discussed above both sites have developed new products to attract more and more customer. For e-g Amazon.com has introduced auction area whereas eBay has introduced fixed price retail shops. Marketing: It involves advertising for the product, gathering market research and making new innovations in the product to encourage people to buy the product. Amazon.com. advertising policies of both Amazon and eBay is the same. They don't give TV ads. Instead they advertise on the nets and search engines which put their web search on the top place whenever someone searches for online web purchases. Prices: Amazon.com follows a fixed fee structure whereas eBay's fee structure is complicated as it is based on percentages. As a result we see that due to this price difference the market share of Amazon.com is greater despite having same advertising strategy and having the same marketing budget. Place: Both serve the customer on the same place i-e Internet. Despite having some similarities we can clearly say that Amazon.com is the market leader due to it's better marketing mix. As we can see there is a difference in Price structure and Products these websites offer. However, For the time being, the explosive growth of E-commerce will likely keep cybershoppers coming in droves to both types of emporiums. That's one thing Amazon and eBay agree on. What they try to do is create a better marketing mix to see that more customers flock to them and not their competitors via marketing mix methods discussed above. Here's a marketing research technique adopted by eBay recently: eBay recently polled members on whether they'd like to see ''fixed-price auctions'' (many said yes) and dealer storefronts. These would look a lot like retail stores to consumers. Already, some 20% of eBay sellers account for 80% of transaction volume. Relying on the result of the above market research, a fixed price area was opened and results of the operation were massive. eBay is now growing faster than ever and it is challenging Amazon.com as a market leader. And another marketing technique used by eBay was to initiate a gift program. In this program they gave out a gift to a buyer on purchasing certain amount of good. This was not offered by Amazon.com and many customers deserted it. Amazon.com on the other hand wants to be a company which focuses on customers more and more. It spent heavily recently to build customer collection centres around the world. . It invented one-click ordering, which lets buyers store credit cards and addresses after the first purchase, and it installed software that assesses what people have bought and suggests other purchases. The result: Repeat purchasers account for 66% of sales. These strategies helped the company gained most of the customers lost to eBay. Now eBay started working on another model to get more and more customers. Since eBay costs are less than Amazon.com which has 3000 employees and eBay only has 198 employees. eBay doesn't have to distribute or store the goods like eBay has to do. As a result profits of eBay were around 85% much higher than Amazon.com. It started out transferring these costs to the customers in the form of less prices. As a result it was again able to get a good percentage of customers back. Now these two gorillas were fighting a war and shooting out attacks directly at each other. Due to good reputation of the company, the suppliers were ready to give a 45-day credit period to the company. All amazon.com's sales are on credit cards which mean that they get the money immediately. As a result they started building more infrastructures for the customers to make it more convenient for them to purchase goods online from Amazon.com. Amazon was was once again able become the market leader due to this marketing strategy. Amazon's move into auctions provides several boosts to its retail business. As its inventory grows, auctions offer a way to get the most from overstocks and returns. And because auctions provide high gross margins, even a relatively small portion of auction sales should give an outsize boost to the bottom line. And Amazon's willingness to encourage business-to-consumer auctions could give it a leg up on eBay. Such auctions are expected to become 66% of total auction sales of $13 billion. Similarly, Amazon's marketing management policy was much more aggressive and its management bench was much shrewder than eBay to invest in infrastructure needed in the future and thus eBay was not thinking on the same level as Amazon.com. As result marketing techniques in the recent years used by Amazon.com are much better than eBay and hence it rightly holds the top position in eCommerce. Thus, eCommerce has become a battlefield for the two giants of eMarketing and eCommerce. As far as the public relations of the two countries are concerned one can easily assumer and say that Amazon.com's PR is much higher than eBay. Amazon.com has been much more close to the customers. It has worked for the ease of customer much more frequently than eBay. It has developed collection facilities and infrastructure facilities to ease out the problems that customer were facing despit the fact that they had to spend heavily. Furthermore, Amazon.com has introduced "Holiday Customer Review Team." These are six Amazon customers who are particularly active in writing product reviews that it has offered to reporters to discuss gift picks. The purpose of these members is to advice customers about the product. These members are not employed by Amazon or are associated with them in any way. Even to get the neutral view about what customers think about Amazon.com, These customer gave interviews on behalf of Amazon.com and this greatly increased the goodwill of the company. In order to encourage rational purchasing, top reviewers are given free products for writing review on them. Another thing good about Amazon.com is that it never weeds out the negative comments and let the customer's see all the pros and cons about a product and thus eliminating any biases. eBay didn't give much importance to public relation but now they are seriously worried about this aspect and taking actions to increase their PR. The actions that they took according to eBaymainstreet.com are: eBay understands the priorities of Internet users. That's why we wrote to Congress and asked them to reject discriminatory stolen goods legislation that would raise prices for consumers and jeopardize the safety of their personal information Read eBay's full statement on the online sale of stolen goods legislation. This legislation, just introduced in Congress and backed by the National Retail Federation, doesn't have much to do with shoplifting, despite the NRF's protestations to the contrary. eBay opposes raising taxes on the Internet or its users, as well as any attempt to impose remote sales tax collection burdens on the small businesses who can least afford it. This is certainly not the time to impose a major new tax burden on Internet vendors working to implement successful new business models, nor is it wise macro-economic policy to impose what is effectively a tax increase on American consumers. One can easily point out the difference in the PR policies of two companies. Amazon.com's PR policies are for their customer and for increasing the value of goods for the customers who shop at Amazon.com whereas policies of eBay are more general and it is for the protection of not just the people who shop at their site but for the all parties of eCommerce not matter where they shop. As a result eBay has recently give the PR rating of 8 whereas Amazon.com is just lagging behind. Read More