Business Issues and Analysis: Advantages and Disadvantages of E-marketing - Research Paper Example

Business Research Issues and Analysis "Advantages and Disadvantages of E-marketing" By: Fanos Theodoulou Executive Summary This research tried to look into the advantages and limitations of eMarketing. Much has been said about these aspects of emarketing but a few so far had looked into the benefits and limitations derived from it. Specifically, it attempted to answer the following questions: 1. What is eMarketing 2. What are the advantages of eMarketing 3. What are the limitations/disadvantages of eMarketing The findings of the study showed that e-Marketing or electronic marketing refers to the application of marketing principles and techniques via electronic media and more specifically the Internet. The advantages of eMarketing are as follows: reduction in costs through automation and use of electronic media ;faster response to both marketers and the end user ;Increased ability to measure and collect data; opens the possibility to a market of one through personalization; and Increased interactivity . On the other hand , following are some disadvantages of e-Marketing: lack of personal approach; dependability on technology; security, privacy issues ;maintenance costs due to a constantly evolving environment; higher transparency of pricing and increased price competition; and worldwide competition through globalization Introduction Perhaps nothing is more conducive to the success of a firm than the image that it conveys of itself to the public. The marketing activities of a company, because they act directly on the consumer, do most to shape this image and thus must be developed with great care. As marketing has become increasingly complex, a need has arisen for executives trained in the social sciences who also possess statistical, mathematical, and computer backgrounds. Marketing, since time immemorial, has pretty much been around. It has taken its form in one way or another, but it had always been there and forever it will be. Ordinarily, marketing is considered an activity or function performed by business firms. However, marketing can also be carried out by other organizations and even by individuals. Whenever you try to persuade somebody to buy something, you are performing a marketing activity. Broadly viewed, the essence of marketing is a transaction - an exchange. Marketing occurs any time one social unit strives to exchange something of value with another social unit. Thus, marketing consists of all activities designed to generate and facilitate any exchange intended to satisfy human needs or wants ( Stanton, 1991). The methods of marketing have changed and improved. From the primitive method of barter, to use of currency, marketing has now become more sophisticated . This process is now called eMarketing. eMarketing is the "product of the meeting between modern communication technologies and the age-old marketing principles that humans have always applied E-marketing or electronic marketing refers to the application of marketing principles and techniques via electronic media and more specifically the Internet. The terms eMarketing, Internet marketing and online marketing, are frequently interchanged, and can often be considered synonymous." eMarketing is the process of marketing a brand using the Internet. It includes both direct response marketing and indirect marketing elements and uses a range of technologies to help connect businesses to their customers. By such a definition, eMarketing encompasses all the activities a business conducts via the worldwide web with the aim of attracting new business, retaining current business and developing its brand identity. E-marketing involves marketing planning within the context of the e-business e-environment. So not surprisingly, the successful e-marketing plan is based on traditional marketing disciplines and planning techniques, adapted for the digital media environment and then mixed with new digital marketing communications techniques This research looked into the advantages and limitations/disadvantages of eMarketing in an attempt to guide prospective marketers in the sale of their products. The Research Problem This research tried to look into the advantages and limitations of eMarketing. Much has been said about these aspects of emarketing but a few so far had looked into the benefits and limitations derived from it. Specifically, it attempted to answer the following questions: 1. What is eMarketing 2. What are the advantages of eMarketing 3. What are the limitations/disadvantages of eMarketing Related Literature This part describes and discusses important concepts, ideas, judgments and opinions of experts and authorities on topics which have bearing on the present study. The studies and literature have been reviewed to provide insights and to help the researcher in formulating problems and hypothesis and aid in the analysis and interpretation of data. What is eMarketing eMarketing is essentially part of marketing. The American Marketing Association (AMA) definition (2004) is as follows: "Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders." Therefore eMarketing by its very nature is one aspect of an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. As such an aspect, eMarketing has its own approaches and tools that contribute to the achievement of marketing goals and objectives. What is Marketing Marketing, is the"processbywhich a product or service originates and is then priced, promoted, and distributed to consumers. In large corporations the principal marketing functions precede the manufacture of a product. They involve market research and product development, design, and testing". Marketingconcentrates primarily on the buyers, or consumers. After determining the customers' needs and desires, marketers develop strategies that are designed to educate customers about a product's most important features, persuade them to buy it, and then to enhance their satisfaction with the purchase. Where marketing once stopped with the sale, today businesses believe that it is more profitable to sell to existing customers than to new ones. As a result, marketing now also involves finding ways to turn one-time purchasers into lifelong customers. Marketingincludesplanning, organizing, directing, and controlling the decision-making regarding product lines, pricing, promotion, and servicing. In most of these areas marketing has overall authority; in others, as in product-line development, its function is primarily advisory. In addition, the marketing department of a business firm is responsible for the physical distribution of the products, determining the channels of distribution that will be used, and supervising the profitable flow of goods from the factory or warehouse.(Microsoft Encarta 2007) . Importance of eMarketing "Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives" (Dictionary of Marketing Terms,1988) . The entire system of business activities should be customer-oriented. Customers' wants must be recognized and satisfied effectively. A marketing program should start with an idea about a new product (good, service, idea, person, or place) and should not end until the customers' wants are completely satisfied, which maybe some time after sale is made. On the other hand, when implemented correctly, the return on investment from eMarketing can far exceed that of traditional marketing strategies. The Internet is a force that cannot be ignored. It can be a means to reach literally millions of people every year. It's at the forefront of a redefinition of the way businesses interact with their customers. Internet marketing, "Internet marketing is also referred to as online marketing or e-marketing. It is the marketing of products or services over the internet . The Internet has brought many unique benefits to marketing including low costs in distributing information and media to a global audience. The interactive nature of Internet marketing, both in terms of instant response, and in eliciting response, are unique qualities of the medium. Internet marketing ties together creative and technical aspects of the internet, including design, development, advertising and sales. Internet marketing methods include search engine marketing display advertising , e-mail marketing , affiliate marketing, interactive advertising , blog marketing and viral marketing. Internet marketing is the process of growing and promoting an organization using online media. Internet marketing does not simply mean 'building a website' or 'promoting a website'. Somewhere behind that website is a real organization with real goals. Internet marketing strategy includes all aspects of online advertising products, services, and websites, including market research, email marketing, and direct sales." Sales Promotion Sales promotion are those "promotional activities (other than advertising, personal selling, public relations, and publicity) that are intended to stimulate customer demand and improve the marketing performance of sellers" (Stanton,1991). Sales promotion is distinct from advertising and personal selling but are interrelated m. The major functions of sales promotion is to serve as a bridge between advertising and personal selling. Recently, sales promotion has been the fastest growing method of promotion, with dollars being shifted from advertising. Total annual expenditures for sales promotion are estimated to parallel or even exceed those for advertising. It is also being integrated into the total marketing strategy in many firms ( Stanton, 1991). Sales Promotion, is an elementofthemarketing process that can close the sale of goods or services to a potential customer by providing the incentive to make a positive purchase decision. Sales promotion, advertising, and salesmanship are the major techniques used in merchandising products to the public. Salesmanship often takes the form of a face-to-face encounter between the buyer and seller; the presentation is set up to convince customers that the product on sale is essential to their satisfaction. The lack of personal feedback between buyer and seller is sometimes considered a drawback of the advertising approach. Selling by telephone, although it is significantly less effective than personal selling, is still considered an important method of merchandising. In the 1980s, a growing promotional technique involved in-home shopping programs using cable television channels.(Microsoft Encarta 2007. ) In emarketing, you promote your product but you don't do it the traditional way. You advertise, connect to people to promote the product, but you make use of the internet. Because of this development in modern technology, many people can be reached in the promotion of the product being endorsed. Marketing is then made global. Business Models Internet marketing is associated with several business models . The model is typically defined by the goal. These include e-commerce where goods are sold directly to consumers or businesses; publishing, or the sale of advertising; and lead-based sites, where an organization generates value by getting sales leads from their site. There are many other models based on the specific needs of each person or business that launches an internet marketing campaign. Internet marketing refers to the placement of media along different stages of the Customer Engagement Cycle , through Search Engine Marketing , Search Engine Optimization , Banner Ads on specific sites, email marketing and Web 2.0 strategies. The Difference Between eMarketing and Internet Marketing There is no real difference between eMarketing and Internet Marketing. However, with the arrival of mobile technologies such as PDA's and 3G mobile phones, as well as Interactive Television, both terms tend to be stretched to include these new media technologies. On the other hand, others would see eMarketing and Internet marketing as subtly different, for example Chaffey (below): "Internet marketing is achieving marketing objectives through applying digital technologies." (Chaffey 2006) "eMarketing is achieving marketing objectives through use of electronic communications technology." (Chaffey 2006) While this distinction is wholly acceptable, it is difficult to see where the distinction lies between digital technologies and electronic communications technologies, especially with the convergence of technologies such as mobile devices. What are the eMarketing tools The Internet has a number of tools to offer to the marketer. A company can distribute via the Internet e.g. Amazon.com. A company can use the Internet as a way of building and maintaining a customer relationship e.g. Dell.com. The money collection part of a transaction could be done online e.g. electricity and telephone bills. Leads can be generated by attracting potential customers to sign-up for short periods of time, before signing up for the long-term e.g. which.co.uk. The Internet could be used for advertising e.g. Google Adwords. Finally, the web can be used as a way of collecting direct responses e.g. as part of a voting system for a game show. The Marketing Profession Perhaps nothing is more conducive to the success of a firm than the image that it conveys of itself to the public. The marketing activities of a company, because they act directly on the consumer, do most to shape this image and thus must be developed with great care. As marketing has become increasingly complex, a need has arisen for executives trained in the social sciences who also possess statistical, mathematical, and computer backgrounds. Many colleges and universities now have programmes designed to train marketing executives. Courses are offered at undergraduate and graduate levels in such specialized fields as advertising, administrative practices, financial management, production, human relations, retailing, and personnel administration. The Benefits of eMarketing Over Traditional Marketing Reach.The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, eMarketing opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world. Scope. Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. eMarketing includes, among other things, information management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow. Interactivity. Whereas traditional marketing is largely about getting a brand's message out there, eMarketing facilitates conversations between companies and consumers. With a two-way-communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive.Chapter 01 - Page 3 - Nov 2006 Immediacy. Internet Marketing is able to, in ways never before imagined, provide an immediate impact. Imagine you're reading your favorite magazine. You see a double-page advert for some new product or service, maybe BMW's latest luxury sedan or Apple's latest iPod offering. With this kind of traditional media, it's not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With eMarketing, it's easy to make that step as simple as possible, meaning that within a few short clicks you could have booked a test drive or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively, Internet marketing makes business hours 24 hours per day, 7 days per week for every week of the year. By closing the gap between providing information and eliciting a consumer reaction, the consumer's buying cycle is speeded up and advertising spend can go much further in creating immediate leads. Demographics and Targeting Generally speaking, the demographics of the Internet are a marketer's dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middle-classes. Buying power is not all though. The nature of the Internet is such that its users will tend to organize themselves into far more focused groupings. Savvy marketers who know where to look can quite easily find access to the niche markets they wish to target. Marketing messages are most effective when they are presented directly to the audience most likely to be interested. The Internet creates the perfect environment for niche marketing to targeted groups. These related literature and studies have given the researcher insights and clearer perspective regarding the case or situation being studied. Chapter 01 - Page 04 - Nov 2006ha Research Method Research method includes the important elements and processes adopted in order to conduct the study such as the participants, data-gathering instruments, data-gathering procedure and data analysis procedure. The Respondents The respondents of the study were the 50 students enrolled at . They were categorized according to gender wherein 20 were males and 30 were females. Random sampling was used in choosing the population. Using the fish bowl method, all names of the students enrolled in the course were placed in a box, mixed thoroughly, and then the names of 50 individuals were picked to answer the questionnaire. Data-Gathering Instrument and its Validation The data-gathering instrument used in this study was a questionnaire checklist constructed and validated by the researcher. The questionnaire checklist underwent validation by five jury members who are experts in the field of marketing and electronic specialists. Only items which had an agreement ratio of 80% and above were considered and included in the checklist. Those items which had below 80% agreement ratio were rejected. On the other hand, items which were suggested to be improved were likewise revised and modified by the researcher based on the suggestion of the validator. The formula for agreement ratio is as follows: AR = No. of jury members who chose the accepted options x 100% Total number of jury members Where: AR= Agreement ratio The instrument consisted of two parts. Part I contained questions which asked for the personal information about the subject such as name and age while Part 2 consisted of options which the respondent would check as to perceived advantages or disadvantages of emarketing. Perceived Difficulties This study on advantages and limitations of e-marketing did not seem to be much of a problem. In the first place, most people nowadays are fast becoming aware of what it is. Today's generation most especially , is often described as a generation "with computer mouse in one hand and remote control in another." Basically, when the study was conducted, there were ready references available. Explaining what emarketing is did not pose a problem. Oftentimes, it is associated with internet, making it a real experience for the respondents of the study and to the researcher himself. Findings This part discloses the findings or the result of the study/research. 1. e-Marketing or electronic marketing refers to the application of marketing principles and techniques via electronic media and more specifically the Internet. 2. The advantages of eMarketing are as follows: One of the benefits associated with Internet marketing is the availability of great amounts of information. Consumers can access the Internet and research products, as well as purchase them, at any hour, any day. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to national and international market places. Compared to traditional media, such as print, radio and TV, Internet marketing can have a relatively low cost of entry. Following are some of the advantages of e-Marketing: Reduction in costs through automation and use of electronic media Faster response to both marketers and the end user Increased ability to measure and collect data Opens the possibility to a market of one through personalization Increased interactivity 3. Limitations/Disadvantages Because Internet marketing requires customers to use newer technologies than traditional media, not all people may get the message. Low speed Internet connections are one barrier. If companies build overly large or complicated web pages, some Internet users struggle to download the information on dial up connections or mobile devices. From the buyer's perspective, another limitation is the inability of shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. However, it is an industry standard for e-commerce vendors to have liberal return policies and in store pick up services to reassure customers. Following are some disadvantages of e-Marketing: Lack of personal approach Dependability on technology Security, privacy issues Maintenance costs due to a constantly evolving environment Higher transparency of pricing and increased price competition Worldwide competition through globalization Appendix A The Instrument Part I: Personal Data Direction: Please supply the correct information by placing a check mark ( ) inside the appropriate box. Name:________________________________________ School:______________ Gender:_________________ Part II: Questionnaire Checklist Proper Direction: THIS IS NOT A TEST. This is not a questionnaire rating which seeks to gather data about e-marketing. Please give your answer to each of the following items, by placing a check mark ( ) on the space provided which describes your perceived advantages or disadvantages of emarketing. Advantages/Disadvantages YES NO 1. Reduction in costs through automation and use of electronic media 2. Faster response to both marketers and the end user 3. Increased ability to measure and collect data 4. Opens the possibility to a market of one through personalization 5. Increased interactivity 6. Lack of personal approach 7.Dependability on technology 8. Security, privacy issues 9. Maintenance costs due to a constantly evolving environment 10. Higher transparency of pricing] and increased price competition 11. Worldwide competition through globalization Reference List Book Stanton, William, et.al., Fundamentals of marketing,9th ed. McGraw-Hill Inc. 1991 Fraenkel,J.R. & Wallen,N.,How to design and evaluate research in education(5th edition) , McGraw-Hill,2003 Dictionary Dictionary of Marketing Terms, American Marketing Association, Chicago, 1988 Electronic Sources: www.businesslink.gov.uk/bdotg/action/layertopicId=107538497 www.marketingtoday.com/emarketing/index.htm www.marketingtoday.com/emarketing/index.htm analogik.com/article_principles_of_emarketing.asp www.davechaffey.com/E-marketing/c10-e-marketing-planning Microsoft Encarta Encyclopedia 2003 Tel: +27 749 Microsoft Encarta 2007 Read More