The Impact of Internet on the International Marketing - Research Paper Example

? The Impact of Internet on the International Marketing Introduction The emergence of self-reliant economy has made human being to experience faster communication, transportation and capital flow. Such factors are creating both opportunities as well as challenges for the marketers. Hence companies are left with a choice to either strong react to the challenges and grab the opportunities or accept the upshots (McCubbrey, 2011). Moreover with intensified competition and saturation of the domestic market, companies are experiencing complexities to sustain and survive. However, with the opening up of the global economy, marketers got the opportunity to carry out business operations in the overseas markets and they also consider it as the way forward to sustain for a longer period of time (Onkvisit and Shaw, 2004). Today more and more business houses are importing, exporting or outsourcing their manufacturing to other countries. Efficient international marketing is therefore desirable for the affluence of organizations operating in this highly competitive and globalized economy (Czinkota and Ronkainen, 2007). Moreover, it has been also observed a number of companies depend on the overseas market to sell a large portion of their goods and services which in turn helps them to survive. With the increasing international marketing activities, the use of technology for marketing purpose is also growing at a rapid pace. One of the obvious one is the use of internet in the process of international marketing. Lee et al., (2003) believes that internet lies at the heart of a business and is the global network of networks. The author also believes that internet enables heterogeneous digital workstations to transparently and directly share and communicate services with the end consumers. Moreover, the use of internet in global business is the place where information technology and economic value creation takes place and hence leads to a completely new form of economy. Discussion For the past few years, business houses are witnessing colossal changes in the use of information technology. Previous studies have shown that, business houses earlier used technology for making decision, as a communication tool or for collecting information from the customers (Poon and Swatman, 1997). According to Lymperopoulos and Chaniotakis (2005), internet in business is an area which needs further research and analysis and also believes that marketers are still not fully aware of its application thereby leaving it potentially uncovered. However, some authors deem internet is no more an area of research rather it is a research tool. According to Murray (2008), internet plays a crucial role in improving the internal business activities. The author also stated that it is not only a mere tool by which the purchase behaviour and culture of offshore customers are examined scrupulously and communication system is enhanced, but also takes the responsibility of enhancing the advertisement channels and online selling. Therefore, with the help of internet, the overall interactivity of businesses is greatly augmented. Theoretical Framework Hamill (1997) believes that the information technology revolution had a profound effect on the way international business is being carried out. The most viable and apparent one is the explosion of global marketing activity over the internet and the evolution of the global information superhighway. The author also believes that internet can act as a powerful source for gaining competitive advantage in the market place. Moreover, increasing number of companies are developing strategies that assist in the overall business development process. Internet provides an environment which is fundamentally different from the usual ones and is highly beneficial for the international marketing activities. However, it requires a radically different approach in the context of strategy development and business process development. In the meantime, it has been also observed that the mainstream academic literature has hardly provided any attention to the internet based international marketing strategies. Although there are numerous studies and articles exist that sheds light on “How to start a business”, how to do marketing” etc on the network, there are only few studies whose main thrust is role of internet in the international marketing activities. The development and commercialization of internet can be highlighted as a step towards streamlining international business. A number of authors believe that with the advent of global networking technology or the internet, there has been a drastic shift in the international marketing activities. One of the major reasons towards high acceptance of internet for international marketing is its cost effective nature and mass reach. A company can easily target its intended number of customer at a very low cost. On the other, if the same is to be carried out physically, it would have involved huge cost. Moreover, the return on investment will also remain as a cause of concern. Bennett (1997) believes that internet is a collection of networks that links organizations and people throughout the world. Moreover, the internet users are also able to directly and freely irrespective of the distance and time. The author also believes that internet by its nature is an international communication medium. The author pointed out several ways by which internet can be effective for international marketing. The biggest advantage portrayed by the author is that obtaining a presence in the market with the help of internet is cheap as well as easy. In addition, even for existing firms the internet can be highly effective. For example, suppliers may be able to upload as much information as possible or they wish to, in a web page. On the other hand if the same information is presented in a physical form i.e. with the help of catalogue the cost to be incurred will greatly rise. It will involve print expenses, distribution expenses etc. Another example, portrayed by the author is that with the help of internet a company can get feedback about its products from the overseas customers within a short span of time. Additionally, the marketing part is another aspect which can be highly benefitted (Wright, Pickton and and Callon, 2002). Although it offers a large number of benefits to the business houses, it also has a number of problems. In general there is a conception that companies look for customers over the internet, but the reality is the other way round. The advertising on the web pages other than the company’s website is sometimes not taken well. Indeed, Hymers (1996), also a number of reports states that majority of the internet users oppose online advertisements. This is principally because of the fact that users some time gets annoyed and might not consider using those websites which have large numbers of advertisements placed. Advantages of Internet in International Marketing Global Opportunities The access of internet provides companies with the opportunity to carry out business in a cost effective manner. It not only allow business houses to carry out activities related with marketing needs or customer supported needs, but also help companies to position themselves in the global market place. According to Paul (1996), internet is more beneficial for the companies belonging to the SME (Small and Medium Enterprise) sector and also wants to make expand their business operation in the overseas markets. Moreover, the author also pointed out, internet plays an imperative role in avoiding the rules and regulations of the host country. Accessibility Internet increases the accessibility to a great extent. Business houses using internet for the purpose of conducting business gets the opportunity to transact 24 hours a day. In the marketing context, internet allows to make the products available for the customers 24 hours a day. Moreover, it also allows markets to remain associated with the branch and head offices during the course of marketing campaigns. The author in this context believes that expansion of the accessibility also provides companies with the opportunity to increase coverage of customers (Teo and Choo, 2001). Utility With the help of internet marketing, companies have been able to provide customers with the opportunity to decide what they want, where and when (Paul, 1996, p. 30). The author deems that this approach can provide a competitive advantage to the firm. Advertisement Effectiveness The biggest advantage of marketers for using internet comes in the form of increased effectiveness of advertisements. Advertisements is considered as one of the most efficient and important form of communication between the company and its clients. However, it is also essential to promote the advertisements using proper media so as to ensure the communication messages of the company reached to the target audience. Moreover, advertisements also appear in different forms such as retail, directory, brand, institutional, political, business-to business, direct-response, and public service (Wells et al., 1995). The author thinks that internet is possibly the only media alternative that that can be used for any form of advertisements. In addition, the cost effectiveness of the medium is also an encouraging factor. Market Research and Analysis One of the most valuable tasks of international marketing is that research and analysis of the overseas market. It is necessary for a company to carry out in depth research and analysis of the market where it proposes to operate. Moreover, market research is also necessary to comply with rules and regulations of the host country and also to identify the needs and demands of the consumers. In this regards, internet can be a useful medium. This is primarily because of the fact that internet has the ability to directly connect with the audience and also has the ability to get response feedback from the customers instantly. This allows the marketers to identify any shift in the trend of customer demands. It provides marketing managers with the opportunity to recognize the need and come up with products that actually suits customer requirements (Pirolli and Card, 1999). Demonstration There are number of cases which emphasizes on the role played by internet for improving the business operation and marketing of a company. A number of cases can be also found which shows the direct impact of internet on the international marketing activities of a firm. In order to demonstrate it properly the study will now develop two case studies, each reflecting the impact of internet on the international marketing. Studies reveal that internet has a positive impact on the international marketing. In the recent past there has been an outbreak of marketing activities at the global market with the help of internet. The outburst has had a strong impact on the study and application of international marketing. With these advantages, the small and medium sized of UK got extremely benefitted. According to a study carried out by a Roger Bennett on 148 businesses, he found that a number of trade barriers are removed. In addition, physical distances have also been removed and risks pertaining to market fluctuation and resources were also removed. Therefore without any doubt internet has been able to brought new prospects in the UK market. The survey also found that the small and medium companies of UK has been able to reach out to a greater number of probable customers, create more value for the existing customers and developed new and innovative products. In the study, one of the mangers of a company belonging to the SME sector of UK stated that with the traditional advertising techniques there company were able to reach to a limited number of customers, but with the advent of internet and using it for marketing purposes, has allowed the company to reach out to millions of customers and that too in a cost effective way. In the similar manner, companies such as eBay and amazon.com were also benefitted by internet. The importance is more to these companies principally because of the fact that their business model is purely dependent on the internet (Prasad, Ramamurthy and Naidu, 2001). The case of Amazon and eBay can be the most appropriate example for depicting the importance of internet in international marketing. Amazon.com is a US based firm involve in the marketing of differ bet type of products. The company was established in the year 1994 by Jeff Bezos. The company is currently headquartered at Seattle, Washington, U.S. It started the business as an online book retailing company. But later expanded its product line and included other items such as electronic equipments, appeals, foods, toys, jewellery and several other accessories. Since its inception, the business used to be carried out over the online platforms; however the business range was limited as it only catered to clients from USA. With further growth of internet and diminution of several trade barriers, Amazon was able to make its presence in the international arena. The internet has not only helped them to sell products, but has also allowed them to create awareness about their products and service. The company with its online store has been able to cater to customers from different parts of the world and moreover internet has also increased the catchment area of the company to a large extent. The concept of geographical boundaries and trade restriction were also expunged. With such benefits, the company soon became one of the world’s largest retailers in terms of sales and yearly turnover. Hence, the case further clarifies the importance or the impact of internet on the international marketing process of a company. With the international presence the revenue of the company sky rocketed and allowed the company to invest more on the development of technology (Collier, 2011). eBay.com is another company which carry out its business over the online platforms. eBay is also another US based consumer to consumer (C2C) business corporation. The business model of eBay is slightly different from the amazon.com. eBay sales second hand products to the end customers. This is the reason why eBay is considered as medium where buyers and sellers meet to exchange their products or services and is therefore known to as a C2C business model. The company was founded in the year 1995 by Pierre Omidyar and is currently headquartered at San Jose, California, U.S. Internet played a major role to the success of the company. The business is entirely carried out over the internet and as a result of that, the company has been able to embrace customers from every part of the world. The internet has also streamlined the marketing activities of the firm. Another interesting finding about the company is that most of the products are not sold on the home country. In addition, the company has also been able to cater to customers from every part of the world and simultaneously can create awareness about their offerings at a low cost. Apart from that, international marketing with the help of internet also allowed the company to create a new revenue generation stream for them (Bausch, 2003). The online advertisements placed on their home screen accounts to a large share of the earned revenue. This clearly portrays the importance of internet in the international marketing process of ebay.com. The real life examples and cases clearly suggested that internet indeed plays a crucial role in the international marketing activities. Hence, it is evident that the literature above is confirmed by the real life practices of the organizations around the world. Although, it has been found that internet has been providing major advantages to the marketer, but sometimes also it becomes a cause of concern. One of them is the security threat. Major Themes The review of literature carried out above clearly reflects the significance of internet for international marketing. The study clearly pointed out that the efficiency of marketing campaigns increases greatly with the help of internet. Moreover, it also emphasized on the different advantages provided by the internet to international marketing. The encouraging factors are that the use of internet is growing at a rapid pace. In order to cite an example, Singapore is promoting itself as a country which promotes itself as a Intelligent Island with IT2000 that is supported by National Computer Board. In the similar way, internet has also been able to provide benefits to the countries such as UK and Japan. PIPEX is the imitative taken by UK, where the country is working towards promoting the use of internet. Hence, such initiative not only helps in developing a country but also provide marketers with the opportunity to carry out business promotion as well as operation in an effective manner (C. Lages, L. Lages and C. Lages, 2005). The literature study has been able to shed light on different aspects of the international marketing. It has been able to demonstrate a particular theme or a trend on the usage of internet for the purpose of carrying out international marketing. The cases discussed above as well as the real life examples put emphasis on the fact that internet is being mainly used as a tool that facilitates marketing activities. Most of the companies involved in international business either uses internet as a tool of promotion or as a medium of advertisement. However, there are few companies which used internet for the purpose of selling products to the overseas clients or conducts any kind of activities pertaining to market research and analysis. Hence, the theme which comes out of the study is the use of internet for the purpose of promotional activities and the reason behind it is the cost effectiveness and mass reach (Knight and Cavusgil, 2004) Conclusion From the above study it is evident that internet plays a crucial role in the process of international marketing. It not only acts as a driver of international marketing, but has rather changed the way of doing international marketing. There can be little doubt about the fact that internet has actually transformed the way of doing business and has been able to clutch new market segment and bring new opportunities for a business. The study also revealed that most of the business houses around the world uses internet for the purpose of promoting their products to the international market. In addition, companies also uses internet as a channel of sales and distribution. Thus, it can be concluded that internet positively impacts the process of international marketing. References Bausch, P., 2003. Amazon Hacks: 100 Industrial-Strength Tips and Tools. California: O'Reilly Media, Inc. Bennett, R., 1997. Export marketing and the Internet: Experiences of Web site use and perceptions of export barriers among UK businesses. International Marketing Review, 14 (5), pp. 324-344. Collier, M., 2011. eBay For Dummies. 7th ed. New Jersey: John Wiley & Sons. Czinkota, M. R. and Ronkainen, I. A., 2007. International Marketing. Mason: Thomson South-Western. Hamill, J., 1997. The Internet and international marketing. International Marketing Review, 14 (5), pp. 300-323. Hymers, J., 1996. 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