Evaluation of the use of Internet Marketing in the Home Appliances Sector in India - Research Paper Example

? Evaluation of the use of Internet Marketing in the Home Appliances Sector in India Introduction: The Internet is an innovative technological advancement in the field of information and communication technology. It offers distinct advantages over conventional media to interact with customers and Internet marketing is making huge strides as a part of the marketing activities in business organizations. Aim: The aim of the study is evaluate the extent to which Internet marketing is used in the home appliances sector in India and manner in which Internet Marketing is used in the home appliances sector in India. Literature Review: Internet marketing is well entrenched in the marketing activities of business organizations in the developed. Business organizations in the developed world have understood the benefits of Internet marketing and Internet marketing is growing in use in the developed world. Pervasion of information and communication technology in the Indian environment was limited till the recent past. Improvement in telecommunication infrastructure has caused greater penetration of information and communication in the Indian environment making it more suited to internet marketing. Methodology: The study will use a literature review as the means of collection secondary qualitative data and questionnaires as the data collection tools for collecting primary quantitative data. Limitations: Small sample size and the use of basic statistical tools for analysis of the quantitative data are the limitations. Introduction Computers and Information Technology (IT) have brought about a sea change in most of the domains of human activity The manner in which business enterprises conduct many of their business activities has also been hugely impacted on by computers and information technology, because of the benefits that business enterprises have found in incorporating computers and information technology into the various business activities. The Internet is one of the major developments in information technology. The spread of the use of Internet has been dramatic since its advent a little over five decades ago, such that there is hardly any sphere of human activity that it has not penetrated into. Marketing is a key functional area of a business enterprise and the Internet offers high potential for marketing to be more effective in all its areas of functionality. There is a growing body of knowledge to support the use of Internet in marketing efforts to make it more efficient and effective. The customer is the focus of any business enterprise and the Internet assists marketing in restating and emphasizing this focus India along with China is considered to be the growing and dynamic economic forces in Asia. Furthermore, India is known to have a strong base for software developments increasing the application of computers and the Internet in different fields. This strength has the potential to benefit the marketing efforts of Indian business organizations, as these business organizations attempt to spread their imprint around different places of the world. Understanding the depth to which the Internet is used by the business enterprises in their interaction with consumers and evaluating how it is used will add to the body of knowledge of the use of internet by business enterprises around the world. A feature of this increased understanding will lie in its ability to show how the business enterprises in an emerging economy can use the Internet for their marketing efforts and open out new lines of study to provide a comprehensive body of knowledge on it. From a personal perspective, I was born in India and my early education was completed in India. I am keen to understand the characteristics of the business environment in India and this study helps me in that direction. Aim of the Study The aim of the study is evaluate the extent to which Internet marketing is used in the home appliances sector in India and manner in which Internet Marketing is used in the home appliances sector in India. Objectives of the Study The study has three objectives: 1. Conduct a Literature Review on how business organizations use Internet marketing for their interaction with customers, which will form the secondary data. 2. Conduct primary research in selected business enterprises engaged in the manufacture and sale of home appliances. 3. Compare and contrast the findings of the primary data with that of the secondary data to arrive at an understanding of the use of Internet Marketing in the Home Appliances Sector in India Significance of the Study Internet marketing is the result of the developments in the modern digital age we live in. Business enterprises in the developed world were quick to latch on to the edge that the Internet provided to their marketing effort, with the spread in the use of the Internet in their targeted markets Use of the Internet has risen dramatically in the emerging economies like India in the recent past. This study will provide a picture of how Internet marketing is used by the home appliances sector in India to interact with customers. The author believes this is the first such study on the topic and believes through its findings new directions for further research will found. Literature Review According to Smith and Chaffey 2005, p.15, the terms internet marketing, digital marketing and e-marketing are used interchangeably and are the same. In their opinion internet marketing consists of the application of digital technologies that give pathways to the market for the purpose of getting profitable “acquisition and retention of customers”, by recognizing that internet marketing with its use of digital technologies offers a strategic advance for the development and use of a planned approach for enhancing the knowledge of the customers and then providing integrated communications and online services to satisfy the individual needs of customers (Smith & Chaffey, 2005). The Internet has unique technological characteristics that are responsible for the upheaval in the manner in which business enterprises market their goods and services in the modern world. The basic difference lies in the entirely different environment that the Internet presents for marketing activities. This marked difference from the conventional media that marketing has been used to has caused a transformation in the marketing activities associated with the Internet. Yet, as the end of the twentieth appeared over the horizon, most of the revolutionary changes in marketing activities through the use of the Internet were restricted to the developed world (Morris & Weir, 1997). In the new millennium Internet marketing continued to make raves in the developed world. For example in 2004, an IPA Bellwether survey in the United Kingdom showed that Internet marketing in the United Kingdom was growing at 76% outstripping any other form of marketing or its promotional tool advertising. Almost 25% of the business enterprises had also upped their Internet marketing expenditure budgets (Adegoke, 2004). In the developed world the questions related to Internet marketing no longer were about whether to use Internet technology for marketing activities, but instead were focused on how to use it to retain their competitive edge. The common experiences of the advantages of Internet marketing included improved selling processed, improved customer usage experiences and improved customer buying experiences. In addition business enterprises were facing the challenges that globalization has thrown up and Internet marketing was one of the components that were found useful in dealing with these challenges (Prashantham, 2003). The key dimensions that made Internet marketing such a valuable tool for business enterprises to sharpen their competitive edge was that it provided the capability to enhance the market reach over wide geographical areas and into vast populations at a very low cost-per head; it provided the benefit of interactivity with customers and it allowed a very high density or volume of information to be presented. Internet marketing also provided benefits for the customer that made business enterprises using Internet marketing more attractive to the customers. These benefits included reduction in transactional errors; reduction in costs of products or services; better choice through bundling in products; lessening of time spent on purchases and provided a more enjoyable buying experience (Stewart & Qin, 2000). The growth and development of Internet marketing in any national market is dependent on the availability of the necessary communication infrastructure and the pervasion of the Internet among the population of the country. In the developing economies including India the lack of adequate infrastructure made the pervasion of the Internet extremely limited and hence internet marketing was not attractive in the twentieth century. Though India joined the Internet in 1988 utilization of the Internet as a popular communication technology was extremely limited due to the poor infrastructure and the poor individual income (Press et al, 2003). In 1991 India opened out its market to by lowering its barriers to trade and foreign investment and allowing international competition in several non-strategic areas. In the latter half of the last decade of the twentieth century the reform process received a boost and along with this was the political desire to increase the communication technology infrastructure to enable enhanced and sustained growth that the economic reforms were expected to provide. The Internet was to play a significant role in this drive for improved communication technology and also be a beneficiary of the economic reforms (Wolcott & Goodman, 2003). In the year 2001 estimates by the information technology market research organizations were that the Internet user base in India was 2.1 million, but growing rapidly and this growth was expected to propel the user base to 22.5 million by 2001 (Bhushan, 2001). In 2003 the teledensity in India was one of the lowest in the world, with a mere 4.6 main lines per 100 of the population. In urban India this teledensity was 15.2 main lines per 100 of the population and rural India presented a dismal picture at 1.49 main lines per 100 of the population. Personal computers penetration was 13 per 1000 of the population and Internet penetration was 2.1 per 100 of the population (World: Telecoms and Technology, 2004). The benefits of the drive in India to improve the communication infrastructure coupled with the economic benefits derived from opening out the economy have led to forecasts that the telephone main line in thousands would increase to 154,168 or 13.5 main lines per 100 of the population by 2008. In a similar manner the penetration of computers was expected to rise in 2008 to 35 per thousand of the population and the Internet users in thousands to 96,698 or 8.5 per 100 of the population (World: Telecoms and Technology, 2004). The advent of international companies into the Indian market space brought with them their experiences in Internet marketing in the developed world. The beneficial aspects of Internet marketing as experienced by business enterprises in the developed world had not gone unnoticed by Indian business enterprises also. This observation coupled with the rapidly increasing Internet user base in India caused the business enterprises to wake up to the use of Internet marketing in the new millennium. Internet marketing was most promising to business enterprises that were involved in direct marketing activities. They were attracted because of the interactive feature of Internet marketing, as their earlier reliance on the telephone had brought about domestic fatigue on the use of that route and the postal rates made the use of normal mail expensive (Basrur, 2007). Gaur and Waheed, 2003, evaluating the factors that motivated the services sector in India to be attracted to an interactive marketing media like the Internet found several motivating factors. These factors included selling of the core product or service, providing marketing information, brand positioning, developing customer loyalty, opening new marketing opportunities, reduction in marketing costs and ability to reach targeted demographics (Gaur & Waheed, 2008). Traditional businesses are slow in the uptake and use of new technologies. Yet use of Internet marketing has percolated even to this segment over a brief period of time since Internet marketing reared its head in India. Ganguly 2001, p.34 sums up the vast strides Internet marketing is making among the business enterprises in India including the traditional businesses in his comments “the Internet is just the latest tool to do business incredibly efficiently and quickly. The Internet, in other words, is an extremely powerful weapon in the competitive struggle that lies ahead for every type of business. Exploiting the Internet effectively is becoming a necessary condition for success”. Research Methodology Universe of the Study The study is concentrated and limited to the business enterprises involved in the manufactures and sale of home appliances in India. Sample Size The size of the sample will be ten companies (N=10). The companies expected to be involved in the study are the four large home appliance companies consisting of Videocon, Voltas, Godrej and Bluestar, two smaller home appliance companies of Butterfly Home Appliances and Maharaja Whiteline, and the international home appliances companies of Samsung, LG, IFB and Whirlpool. Research Methods The study will employ a mixed methodology by collecting both qualitative and quantitative data. The qualitative data will be secondary data as compiled through a literature review. The quantitative data will be from primary sources employing a close-ended questionnaire on the selected ten companies applied on the head of marketing of marketing or an equivalent in the business organization. Where possible the questionnaire will be applied directly and in other cases it will be sent and received through e-mail or normal postal mail. The returned questionnaires will be the data sheets and the data from these sheets will be collated for statistical analysis. According to Kumar 2005, p.84, “a research design is a procedural plan that is adopted by the researcher to answer questions validly, objectively, accurately and economically”. This definition of the research design implies that there are two functions that are the key factors to any research design. The first of these factors pertain to the identification and development of the procedures that will be used in the study and logistics involved in the study. The second factor pertains to maintaining quality in the standard of the study, to ensure that the study follows validity, objectivity and accuracy norms that are required to make the study acceptable (Kumar, 2005). This study will hence use a combination of the inductive and deductive framework. The study will use a literature review as part of the inductive approach to understand the current status in the body of knowledge in work motivation and evaluate the problems with respect to work motivation that are likely to be faced in motivating employees in the workplace. Nunes and Al-Mamari, 2008, p.67, argue in favor of such an approach in the use of the inductive method to formulate early theories and problems in research. According to Nunes and Al-Mamari, 2008, p.67, “the literature review process should therefore produce a priori theory that reflects the cumulative knowledge in the field on the phenomenon being studied, i.e., generic a priori categories that are strongly expected to be relevant in the discussion, explanation and understanding of that phenomenon”. Such an approach however does not imply that the subsequent findings need to be in keeping with these initial theories that arise from the literature review, for they only constitute the initial framework, which the subsequent part of the study may uphold or be denied, based on the results obtained from the deductive process (Nunes & Al-Mamari, 2008). This is the justification of the use of the understanding generated from the literature review, as the basis for the subsequent deductive approach for the study purposes. The subsequent deductive approach in the study will be based on the understanding derived from the literature review. Table – 3 shows the typical deductive model in a quantitative study. Table -3 Typical Deductive Model in Quantitative Studies Test or Verification of a Theory Test hypothesis or questions arising from theory Define variables derived from theory Define sample population Measure or observe variables using an instrument to obtain scores Use scores to verify hypothesis or questions The quantitative research approach will be used by the study, as it provides the means to provide answers to the questions related to the study. It allows drawing conclusions on a group of individuals being studied and then even extending the results of the studies beyond this group. The main attraction lies in the advantage that a quantitative approach provides in limiting the size of the sample in providing answers to the research question. This results in the benefits of reducing the time and cost on the study. This is particularly useful, when the sample population is located at great distance from the study team (Holton & Burnett, 2005). The importance of data and data collection lies in the need for data to provide answers to research problems. To provide the correct answers to these problems utmost attention needs to be paid to the data that is being collected, as also the sources from where the data is obtained. Inadequate attention to these factors could lead to inaccurate and insufficient data that no amount or depth used in the subsequent analysis can make up for. “Statistics is a subject which stands on two legs: one is data collection and analysis, and the other is probability” (Gibson, 1997, p.163). There are four main methods by which quantitative data is collected. These methods are interviews, tests/measures, observation, and questionnaires. Interviews are more useful when the objectives are oriented to collecting quantitative data when doing market research and opinion polls. Tests/ Measures are more suited to experimental research, like when evaluating the personality of an individual. Collection of data through observation is well suited to understanding behaviour of individuals in different situations, but requires the observer to be embedded into the environment in such a manner that the observer is unobtrusive to the subject. Furthermore collection of observational is time consuming both in terms of the collection of the data and the using the data for the creation of quantitative data (Easterby-Smith, Thorpe & Lowe, 2004). The study has chosen to use the questionnaire method to acquire the required quantitative data for the purposes of the study. Questionnaire are one of the effective means to get quantitative data and is popularly used in many management research studies, because of the limited constraints it puts the research team in and the utility of the data received through it. Questionnaires can be used to generate factual data or it can be used to generate opinions as is required in this research study. The next differentiation present in questionnaires pertains to the questionnaire being a close one or an open one. In a closed questionnaire answers are only yes and no and the participant needs to choose one. The advantage with the closed questionnaire is the ease and the speed with which it can be applied. The disadvantage lies in the strong likelihood of it generating superficial data, which reduces the reliability and validity of the data. The other option is an open questionnaire where there is greater structure, which allows for probing in depth to remove the disadvantage of receiving superficial data, as in the case of a closed questionnaire. Furthermore, the closed questionnaire can give rise to unexpected perspectives on a particular topic or issue. The application of the open questionnaire however, is more painstaking and requires much more time than a closed questionnaire (Easterby-Smith, Thorpe & Lowe, 2004). Statistical Analysis The study acknowledges that there is a limitation in the knowledge and skills in the use of advanced statistical tools like SPSS. This limitation will mean that simple statistical tools like classification, tabulation, averages, percentages, graphs, bar charts and pie diagrams will be employed for the statistical analysis of the data. Limitations of the Study The study acknowledges the small size of the sample in terms of the many household appliance companies that operate in India. The small sample size has implications on the reliability of the findings of the study. However, such a small sample size has been selected taking into consideration the limited time resources and financial resources at the disposal of the study. Furthermore, the authors take refuge in that this is an exploratory study that will point the direction for larger and well analyzed studies to confirm or refute the findings study. There is another limitation to the study and that is the use of basic statistical tools for the analysis of the quantitative data. This limitation is imposed on the study, because of the limited knowledge and skills in the use of advanced statistical software like SPSS for data analysis. Organization of the Report Chapter -1 : Introduction Chapter -2 : Literature Review Chapter -3 : Research Design and Methods Chapter -4 : Data Collection and Analysis Chapter -5 : Results Chapter -6 : Discussion Chapter -7 : Conclusion Chapter -8 : Ethical Considerations, Limitations and Acknowledgements. Ethical Considerations 1. Administrative sanction from the institution and permission from the organizations will be received before starting the study and applying the questionnaire respectively. 2. The business organizations will be clearly informed about the nature and purpose of the study, while taking the permission. 3. Professional ethics as a researcher will be maintained at all times during the study. 4. Data collected will be for academic purposes only. 5. Data will be collected in such a manner as to ensure confidentiality of the business organizations (Data sheets will be coded). 6. At the end of the study the data sheets will be handed over to the administrative authorities for safe keeping or destruction. Literary References Adegoke, Y. 2004, ‘Internet marketing continues to grow faster than any other form’, New Media Age 21/10/04, pp.12. Basrur, L. 2007, ‘Indian market wakes up to the digital age’, Precision Marketing, vol.19, no.13, pp.9-9. Bhushan, N. 2001, ‘Indian Industry Remains Optimistic About Internet Ventures’, Billboard, vol.113, no.11, pp.51-52. Easterby-Smith, M., Thorpe, R. & Lowe, A. 2004, Management Research: An Introduction, Sage, California. Gaur, S. S. & Waheed, A. K. 2008, ‘MOTIVATIONS TO USE INTERACTIVE TECHNOLOGIES IN MARKETING: A STUDY IN INDIAN SERVICE BUSINESSES’, Journal of Service Research, vol.3, no.1, pp. 45-60. Gibson, W. 1997, Commercial and Industrial Statistics, Hodder Headline Plc, London. Holton, E. F. & Burnett, M. F. 2005, ‘The Basics of Quantitative Research’ in Research in Organizations: Foundations and Methods of Enquiry, eds. Richard A. Swanson & Elwood F. Holton, Berrett-Koehler Publishers, California. Kumar, R. 2005, Research Methodology: A Step-by-Step Guide for Beginners. Sage, California. Morris, M. H. & Weir, J. 1997, ‘Is the Web world wide? Marketing effects in an emerging market’, Journal of Strategic Marketing, vol.5, no.4, pp. 211-231. Nunes, M. B. & Al-Mamari, S. H. 2008, ‘Inductive Approaches Using a Priori Coding in Information Systems Research: A Discussion’, in Seventh European Conference on Research Methodology for Business and Management Studies, Regent’s College, London, UK, 19-20 June 2008, ed. Ann Brown, Academic Publishing Limited, Reading. Prashantham, S. (2003), ‘The Internet and International Marketing: A Review’, Marketing Review, vol.3, no.4, pp. 403-418. Press, L., Foster, W., Wolcott, P. & McHenry, W. 2003, ‘The Internet in India and China’, Information Technologies and International Development, vol.1, no.1, pp.41-60. Smith, P. R. & Chaffey, D. 2005, e-Marketing excellence: The Heart of eBusiness, Second Edition, Elsevier: Oxford. Stewart, D. W. & Qin, Z. 2000, ‘Internet Marketing, Business Models, and Public Policy’, Journal of Public Policy & Marketing, vol.19, no.2, pp.287-296. Wolcott, P. & Goodman, S. 2003, ‘GLOBAL DIFFUSION OF THE INTERNET I: INDIA: IS THE ELEPHANT LEARNING TO DANCE? Communications of the Association for Information Systems, vol.11, pp.560-646. World: Telecoms and Technology. 2004, ‘India: Forecast’, Telecoms & Technology Forecast World, Nov 2004, pp. 176-180. Read More