Marketing Management in the 21st Century - Essay Example

THE INTERNET AND BUSINESS STRATEGY (Student Name) (Course No.) (Lecturer) (University) (Date) Introduction Efficiency in the management of any company requires a strategy, which is a set of clearly defined ways through which a company strives to achieve its set objectives. The concept of strategic management, therefore, involves ensuring that the aims and goals of companies are met through careful planning, observation, analysis and assessment of all the requirements. Due to the varied nature and complexity of information required in strategic management, the contribution of the Internet is a priority and cannot be ignored. The massive growth in the information and communication industries over the years has provided new insights to the business sector by changing the ways in which people and companies conduct their day to day activities. The internet allows connection of millions of computers around the globe, enabling sharing of information as well as data exchange (Zettelmeyer, 2000, p.16-24). This paper conducts a thorough scrutiny of the traditional methods of competition in companies, providing concrete reasons why the Internet should be integrated with such systems. It provides a distinct relationship between the internet and business strategy, offering solutions to the incompetent nature of traditional businesses. The paper also evaluates the different changes that have occurred in the business plans since the entry of the internet, showing ways in which the internet has complemented the business strategy. Discussion Business strategies fall into two broad categories; these are the traditional and Internet strategies. Traditional strategies involve the sale of goods and services within a particular geographical area. Such businesses are characterised by the official working hours and depend on the physical interactions between the producer or the service providers and the clients. The businesses must operate in a building and have good relationships with the local communities to engage them in their activities. The traditional business strategies employ several techniques to survive in the competitive market structures. These include print media which conveys information about a product or company in a paper format. Such advertisements are found in the newspapers, magazines and even newsletters. Broadcast marketing strategies are those that are made on radios or televised; others involve direct mails such as the use of letters, brochures, flyers and postal cards with the aim of attracting customers. Traditional strategies also employ the use of telephones to convince customers to buy products, a technique commonly known as telemarketing. The traditional methods are especially significant in the event of targeting a specific group of consumers such as those who cannot access the internet. The physical interaction of staff with the consumers also help in boosting their confidence in the product and the company at large. However, these methods also portray a number of demerits such as increased costs incurred by advertisements on the radios or television and the costs which are often reflected in the product prices, following up the qualitative results is also a major challenge. The Internet, which is an information channel, provides different services to business institutions. Among these services is the email which is cheap, efficient and affordable but is not used mainly in commerce because of security concerns. The World Wide Web is user- friendly and enables businesses to design their web pages where they can communicate with their customers about their products and offer solutions to their problems. The other avenues include social media such as facebook and twitter which have made the Internet a commercial network. The Internet also offers different tools that can be used in developing efficient websites for marketing purposes such as the search combination, keyword analysis and comparison tools for effective web management. In an attempt to explain the relationship between the Internet and business strategy, Michael Porter (2008) argues that there is the need for competing companies within an established industry framework to attain a competitive position. However, they also share in avoiding substitution of their products with other new products in the market, reducing the consumers’ negotiation powers through increased internal competition and avoiding entrance of a new firm into the industry framework. This competitive advantage is controlled by a number of factors such as the negotiating power of the suppliers where the main clients have suppliers computer terminal systems installed in their computer, alternatively, computer aided design files can be used to share information concerning a product between the clients and suppliers (Porter 2008, p. 201). These files allow modification and examination of the product throughout its manufacturing. Others are the competition between different companies within the same industry, the negotiating power of the consumers and substrates. There are three ways by which a company can attain superiority in any given industry. These include: differentiation where a company seeks peculiarity along the dimensions of value to the customers, the company attempts to achieve these needs. A second one is focus where a company focuses on service to specific groups and cost leadership where a company seeks to produce at low costs through proprietary technology, selective access to raw materials and the pursuit of economies of scale. The Internet, therefore, relates to business strategies in different ways. First, the internet has direct effects on the pricing strategies of businesses. Primary to this is the provision of information on the internet resulting in increased competition between industries and reduced prices. For instance, customers who purchase goods and services over the internet pay less compared to their counterparts that purchase in retail shops. The existence of shopping agents that are available at the click of a button offers customers very interactive shopping, enabling them to find information about the prices and availability of the desired products (Capon, Noel and Hulbert, 2001, p.51). The negotiating power of the consumers is also enhanced by the increased number of Internet users and electronic retailers thus giving them a wide range of options. It also enables the marketers to perform efficient pricing research at affordable costs. Secondly, the internet also provides better ways for goods and services to reach the desired groups of people. Through the Internet, customers can book flights or buy equipment from online sites and pay through credit cards without necessarily having to there in person, hence increasing convenience. It also allows data sharing among different companies through the electronic data interchange (Zettelmeyer, 2000, p.300-305). Unlike the traditional distribution that is designed to take place only during the day, the Internet is not time specific, and purchase can be done round the clock hence efficient. The compression of time has resulted in homogeneity of time across continents, rendering the time zones obsolete (Karakaya and Steven, 2000, p. 353). For internet purchases and distribution, the aspect of distance becomes obsolete resulting in a reduction in the number of intermediaries required to deliver goods. The Internet promotes the marketing strategies of companies. It can be used to communicate the product characteristics as well as a company’s message to the desired audience. Integrated marketing incorporates the use of the internet to advertise the products of a company as well as communication with the customers. Most of the customers who buy appliances from stores, for example, obtain information from the company websites. Designing company websites helps companies to obtain a good public image especially with first- time visitors to such sites. This enables the users to access relevant information such as the mission and vision of the company, the kind of goods they deal with as well as the services offered. Companies also register with search engines such as Google and Yahoo to promote their products as well as providing links to their websites. The introduction of the Internet has revolutionized business strategies. The incorporation of the internet in the management of many businesses today ensures efficiency in product quality as well as service delivery (Hoffman, Donna, 2000, p. 1-3). First, the Internet allows proper coordination between business partners. Through the internet, businesses partners such as producers, distributors as well as the retailers can interact freely and share information regarding product modification and shipment issues. Globalization phenomenon has also been made possible with the introduction of the Internet. The Internet enables both large and small scale businesses to be carried out regardless of the geographical locations or time, thus converting the world into a small village where there is the free exchange of information (Zettelmeyer, 2000, p35). The Internet serves as a tool in the improvement of economic activities through transaction cost reduction. The amount of money used in carrying out transactions differs online, in the automated teller machines and over the counter with the latter being the most expensive. Booking an airline ticket from the internet, for example, is cheaper compared to travelling to the airport or incorporating an airline booking agent to perform the same task (Porter, 2008, p 163). The introduction of the Internet into businesses also provides the consumers with vast information about the companies and the products that they may be interested, encouraging the shifting of gears from the producers and sellers to the buyers, giving them more confidence in the products. The vastness and robustness of the information provided enable the consumers to make very well thought of judgements about the products to purchase. The fastness of information access over the Internet makes it more convenient, thus enabling the development of new business opportunities. Many companies, with the help of their marketing departments, are able to gather the relevant information, modify it and finally disseminate it to their different target groups. Integrated marketing involves the use of information to attract buyers or customers and learning more about their preferences in the course of transactions. The introduction of the Internet in businesses creates an opportunity for companies to monitor their competitors. With the increasing market competition, there is the need for enterprises to keep track with each other in their respective industries (Porter, 2008, p.37). As a result, they are not rendered outdated by the introduction of substitutes to their products at relatively cheap prices or entrance of a new competitor into the market. The business strategies, therefore, must be flexible. The Internet enhances competition within and between companies through creation of new services that would otherwise not be achieved by the complimentary offline services. A suitable example is the Google Map service, which offers the users information that could help them find directions as well as addresses. Its importance for both customers and the producers and even governments ranks it as the ton communication channel. Such services are complex and cannot be provided by the ordinary paper maps. Through these, the internet offers very peculiar services that cannot be given offline. Some of the Internet services such as video conferencing are effective economic contributors to businesses. Research proves that people understand more from the facial expressions and body languages of speakers rather than listening to an audio form. Through video conferencing, information concerning products can reach the desired audience in a more understandable format, thus increasing sales in the long run. Web conferencing also allows users to share presentations, ask and answer questions, thereby boosting business competition. The Internet also allows customers to recommend the desired product quality as well as delivery strategies on a company’s web page, enabling the company to improve on its production, pricing and distribution strategies thus remaining relevant in the market. These services increase the competitive advantage of enterprises through reduced costs and increased customer benefits. Conclusion From the above discussion, it is evident that the Internet is a primary contributor to increased competition in many businesses. Currently, there has been an increased use of internet sites to boost the competitive requirements of companies. However, the Internet should not serve as a substitute for the traditional methods of competing to ensure the success of any business Zettelmeyer, 2000, 271). The traditional methods and the Internet should complement each other for the businesses to reach all segments of consumers regardless of their knowledge if information technology. References Capon, Noel and James M. Hulbert, 2001, Marketing Management in the 21st Century, Upper Saddle River, New Jersey: Prentice-Hall. Hoffman, Donna L., 2000, The Revolution Will not be Televised: Introduction to Special Issue on Marketing and the Internet, Marketing Science. Berlin: Springer Karakaya, Fahri and D. Steven White, 2000, E-Commerce and Marketing Strategy, Academy of Business Administration, 353-358. Pitt, Leyland, Pierre Berthon, and Jean-Paul Berthon, 1999, Changing Channels: The Impact of the Internet on the Distribution Strategy, Business Horizons, March-April, 19-25. Porter, M.E., 2008, "The Five Competitive Forces That Shape Strategy", Harvard Business Review, January 2008. Zettelmeyer, Florian, 2000, Expanding to the Internet: Pricing and Communications Strategy When Firms Compete on Multiple Channels, Journal of Marketing Research, August, 2000. Read More