Services Marketing Importance of the Internet - Term Paper Example

Services Marketing Importance of the Internet Introduction: “Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchasers” (Kasper H., et. al. 1999). In the 21st century internet has come up as one of the most important services and has become an integral part of people’s lives. Internet is used for accessing information, interaction through emails and chatting, shopping, banking, etc. But there is a problem which customers or users face while using the internet and that is of internet frauds, which manifests itself in many ways. Because of this the users and customers are wary of using the internet freely. This issue could hinder the growth momentum of internet and internet based services. Executive Summary: In today’s day and age internet has become a very important part of people’s lives. From entertainment to accounting, almost all the facets of life are available on the internet and people are using it for business, banking, shopping and communicating. But the fact that this medium is vulnerable to evil designs of fraudsters namely hackers who lurk behind it with intentions of identity theft or theft of sensitive information of unsuspecting net users, makes this medium risky. But looking into the problem and its span objectively would help to provide solutions and counter measures for it. The challenge or issue: With the increased importance of the internet in people’s lives, amount of internet or online frauds have also increased. The challenge is to make sure that internet is a safe medium for services like online shopping, online banking, etc and users are not victims of misdeeds like phishing (What is phishing?, n.d.) or other online frauds. Statement of objective: To propose methods of making the internet a safer place in context of frauds, phishing or identity theft in the fields of ecommerce, net banking. Overview: The world of Internet can be as fascinating and as dangerous at the same time. It is a technological wonder through which people access news, information, communicate using emails or social networks, shop online or transact money through online banking. A t the same time internet is also fraught with dangers. Phishing- Through this method the phisher or the person who attacks through the internet and tries to gain access to important and confidential information such as passwords, credit card numbers, etc of the person who is being attacked. The victim unknowingly falls prey to the evil schemes of the phisher and end up divulging the sensitive information which are then misused. It has been reported that phishing is almost a specialised crime which involves services of many like spammers, hackers and phishers. This is done to increase the damage caused by the act and also its scope. Some of the most significant operators in this arena are: Mailer- These are people who send out huge number of fake emails which contain links to a website meant for phishing. Once the unaware users click on the links in these emails, they are taken to phishing sites or fake websites. Collector- These people set up these fake sites meant for phishing and here the users are requested to provide their confidential information like passwords, social security numbers or credit card pin numbers. Often the fake mails are so well disguised in design and functionality that users take them to be original emails correspondence from their banks and after reaching the fake sites they end up uploading sensitive data there. Catch: In this stage after the attackers have collected sensitive information from the users, they put these information in unethical uses like drawing money from the ATM or using their credit card number for purchasing online, etc. (Jakobsson M. and Myers S.,2006). Net Banking- Banking through the internet is one of the pleasures of this technology but it is also equally fraught with dangers in the present scenario. If somehow sensitive and confidential data of the user falls into the hands of fraudsters, then it would be surely misused. The user could find his bank account being fraudulently debited. Though most of the banks claim high level of security for their online banking platforms yet studies and reports have proved to the contrary. In a University of Michigan study it was found out that 75% of the online banking sites of the banks surveyed had at the minimum one flaw in design which could make the site vulnerable to hackers and online attackers. It was pointed out that these sites would sometime put their login box and other information box on unsecured third party websites. Banks were also guilty of negligence in putting up contact information box on unsecure websites. Some banking sites also did not have any password policy and allowed weak passwords to be used by the users. Some banks were also unsecure emailing paths for mailing sensitive data to their customers, which were again vulnerable to hacking attacks. All these could make the online banking customer extremely vulnerable to the attackers and their confidential data could be hacked and misused to retrieve money form their accounts. (Security flaws in online banking sites found to be widespread, July 2008). E commerce- Ecommerce stands s for business dealings over the internet between a company and an individual or between two companies and also between two users, such as in case of auctions. But the world of ecommerce presents the same dangers as does the world of internet banking. There are high chances of sensitive data and information being misused by hackers. One of the most rampant security issues in context of ecommerce is that of the misuse of credit card information. Most of the online shopping sites sue credit/debit cards for completing the transaction. If these sites are unsecure or are susceptible to hackers, confidential information like credit card numbers etc fall in the hands of the attackers who misuse them. Most of the online security issues concern the areas of identification or information theft which are then put into wrong use. Analysis: Macro and Micro factors Analysis of the macro and micro environmental factors is essential to understand and form a broad overview of the identified problem area and to come up with solutions there after. SWOT Analysis: Strength: Internet has boundary less reach. Any person having any form of internet connection, whether broadband , modem or data card and wireless, have access to countless of WebPages and sites. She could be anywhere in country yet could leverage the internet for buying products, reading news or doing banking transactions. Also the fact that internet is a service which is on 24 hours a day, is one of its major scoring points. Moreover, even today most of the services on the internet like emailing, chatting, are free of cost. From students to housewives to businessmen, all find the internet useful. Weakness: The medium’s weaknesses emerge from area of security and privacy. Online data theft and information vulnerability in case of some websites would rank highest in terms of weaknesses of the medium. Major incidents of hacking of important government sites have also been reported. General users are more vulnerable as they often have lesser level of acquaintance with security measures. Another great area of weakness which is also a huge concern with the users is that of privacy. Some websites do monitoring of user behaviour for using that information in future marketing and advertising activities. This is generally not seen in a good light by users. Opportunity: The reach of internet is one of the most important factors in its popularity. An organisation can carry on business with a diverse and geographically spread base of users and consumers by leveraging the spread of internet. The internet provides an unique opportunity in to small businesses to expand and take their products and services to a much wider consumer base, which would not have been possible otherwise. Researchers or students have the unique opportunity of accessing wide range of information for their studies and reports through the internet. Also in the present day, the net is being used to distribute educational services to far flung areas where universities or colleges might not be present. Threats: Threats to the medium of internet and it functionalities occur from within. The security and privacy issues pose a great threat to the otherwise huge growth potential of this medium. If security concerns keep on plaguing the customer’s mid, the she would be wary of adopting the medium and most of all this would deter her from using the net for shopping or banking online. Identity theft or sensitive information theft online are the most crucial issues in terms of threat perception about the internet. Phishing is increasing in a perpetual basis and becoming more common ay by day. Credit card frauds o the internet are also on the rise. Hacking of email accounts or of user profiles on social networking sites are also rampant. PESTLE Analysis: Political factors: The political forces that represent people in the parliament are responsible for making legislatures and laws which are in turn crucial for tackling these frauds. Moreover the encouragement given to computer security product companies in terms of tax cuts could go a long way in solving the problem. Economic factors: The internet has transformed repository of evil minded fraudsters whose primary objective is to con general users and establishments, by their innovative technological traps through the internet itself. They want to grab sensitive information like bank account details, credit card details, social card numbers, passwords or profile information, which they would use in fraudulent activities. In the year 2006, British banks lost £33.5 million due to internet fraud and phishing. During the same period an amount of around $2 billion was lost by banks in the US through phishing. (Internet is becoming as lawless as the Wild West, report peers, August 2007). Social factors: Due to the various frauds, ultimately the society suffers. The money lost in frauds could have been otherwise spent in many judicious schemes by the government. Again the hackers or fraudster also belong to the same society who take advantage of the 21st century human civilization’s over dependence on internet and exploit it without failure through their scams. The privacy and moral aspects of online security and its monitoring also conern the society and societal factors broadly. Technological factors: Identification theft or thefts of confidential data are some of the most common areas of security breach on the internet. The hackers through their technological knowhow give shape to these scams and fraudulent practices. Phishing or stealing information through fake websites masquerading as real ones has become common across the world. Recent research on phishing suggest that hackers are innovating their technology and have taken phishing to a more enhanced and dangerous level. Under this method they send emails which seem empty at first. But when unsuspecting users open them an embedded programme infects the whole computer system. This programme is called ‘script’ and it overwrites the addresses of bank sites which are present inside the computer. Then when the user connects onto the internet and clicks on those particular bank web addresses, the ‘script’ automatically transfers the user to a fraudulent website, where the hackers lurk behind to grab sensitive financial information like bank account details or credit card numbers. (Blakely R., November 2004). Money mules (Money mules explained, April 2009) are or agents for transferring money are used in laundering the money which the hackers and fraudsters have gathered through phishing activities. These are individuals who work for the phishing groups and receive the fraud money into their own accounts and later on wire them out of the country in exchange of a commission. Recently in the year 2008 some new technologies have come up with the view of solving one of the most persistent problems i.e. the risk involved in divulging credit card details over the internet while making purchases online or doing bank transactions. These tow new innovations called eWise Systems and POLI provide the customer with the option of direct payment through her selected bank account on the ecommerce portals or sites which have prior tie-ups. Through these systems the user does not have to put in their credit card details and the firms responsible for these two systems also assert that the new systems mean huge gains for the online retailer. Experts on the other hand also doubt whether these systems have anything in them for the online consumers, moreover banks also have not shown much enthusiasm regarding these. (Hargrave S., March 2008). Again when banks have put in place extra measures for security checks specially in case of login ids and password, some experts claim these accentuated security measures might scare away customers from net banking (Ward M., November 2007). Legal factors: The UK government is serious about tackling the issue of online fraud and scams overall in the country. The government has come up with a National Fraud Strategy under the National Fraud Strategic Authority or the NFSA which is an executive agency under the UK Attorney General’s office. A police force was also set up called the National Lead Police Force to look into online and other fraud cases. The UK treasury will spend £29 million on the NFSA between 2008 to 2011.This is being developed in close consultation with 28 public and private organisations of repute. (The National Fraud Strategy A new approach to combating fraud 2009-2011). Besides this there are various other government organisations and agencies who are working on the legal side of the tackling online frauds and theft. For example SOCA or the Serious Organised Crime Agency is an ‘Executive Non-Departmental Public Body’ which is being sponsored by UK’s Home office but has its own operational independence. (About Us, 2006). Environmental factors: These do not apply to the topic directly and so are left out of its purview. 7 Ps of marketing: Product, pricing, promotion and placement are the 4 Ps of marketing which is extended to 7 Ps in case of services by adding 3 Ps further and they are process, people and physical evidence. Product: The product, in this case the various services offered through the net. The design of the service delivery mechanism should be that, it appeals to the common users and they feel comfortable using them, specially in context of security. Pricing: Pricing of the security solutions should be that it is accessible to the common internet and PC users. It is not the responsibility only of the companies or banks to spend on security but also duty of the general consumer to be alert and use firewalls and virus canners in their home PCs and laptops. So a pricing policy which makes this security software accessible to the normal public is essential for the success of the whole online security environment. Promotion: It has been seen that many users do not even bother to take care of security measures while on the internet nor do they put in place anti virus or anti malware firewalls in their PCs. Promotional activities focusing on making the user know about the security software and also what to look out for in terms of security features in a ecommerce or banking site, is extremely crucial. Placement: Placement again deals with availability of the security measures at the right junctures i.e. when and where the online transactions happen. People: At the crux of the security issue are people, whether the perpetrator of the fraud or the person who is being cheated. So it is important for to have laws, regulations and methods to deter the former from taking advantage of the vulnerability of the later. If general people are not educated in terms of security measures and best practices, it would be difficult for government agencies alone to tackle the menace. Process: The process of delivering the services, in this case putting up the security measures, is crucial to the success of the plan. All the loopholes should be taken care of and consumers should be educated about the method or process of using the internet securely. The process of delivery has to be simple enough for the user to be comfortable at the same time it should also be prudent in terms of security measures. Physical evidence: Since there is no physical evidence in the delivery of these services and also of the security measures, therefore it becomes even more important to focus on the highest level of security to compensate for the lack of trust which might crop up in the consumer’s mind due to the absence of physical evidence. Contents Services Marketing Importance of the Internet 1 Introduction: 1 The challenge or issue: 2 Statement of objective: 2 Overview: 2 Analysis: Macro and Micro factors 5 SWOT Analysis: 5 PESTLE Analysis: 6 7 Ps of marketing: 10 Contents 12 References: 13 Bibliography: 16 References: What is phishing?, no date, Office of information Technology, Princeton University, [Online], available: http://www.princeton.edu/itsecurity/basics/idtheft/what-is-phishing/ [April 21, 2009] Security flaws in online banking sites found to be widespread, July 2008, University of Michigan News Service, [Online], available: http://www.ns.umich.edu/htdocs/releases/story.php?id=6652 [April 21, 2009] Internet is becoming as lawless as the Wild West, report peers, August 2007, Times Online, [Online], available: http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article2231564.ece [April 21, 2009] Blakely R., November 2004, Internet fraud 'phishers' widen their net, Times Online, [Online], available: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article502867.ece [April 21, 2009] Hargrave S., March 2008, Experts cast a wary eye over new online payment system, The Guardian, [Online], available: http://www.guardian.co.uk/technology/2008/mar/20/hacking.security [April 21, 2009] Ward M., November 2007, Fears over Online banking checks, BBC, [Online], available: http://news.bbc.co.uk/2/hi/technology/7091206.stm [April 21, 2009] Money mules explained, April 2009, Banksafeonline, [Online], available: http://www.banksafeonline.org.uk/moneymule_explained.html [April 21, 2009] The National Fraud Strategy A new approach to combating fraud 2009-2011, 2009, National Fraud Strategic Authority, [Online], available: http://www.attorneygeneral.gov.uk/attachments/NFSA_STRATEGY_AW_Web.pdf [April 21, 2009] About Us, 2006, Serious Organised Crime Agency, [Online], available: http://www.soca.gov.uk/aboutUs/index.html [April 21, 2009] Bibliography: Kasper H., Helsdingen V. P., Vries D. W. Jr., 1999, Services Marketing Management: An International Perspective, John Wiley & Sons Jakobsson M. and Myers S., 2006, Phishing and Countermeasures: Understanding the Increasing Problem of Electronic Identity Theft, Wiley-Interscience Nargundkar R.,2006, Services Marketing 2E,Tata McGraw-Hill Read More