Traditional Marketing vs Online Marketing for Online Shopping Sites - Case Study Example

Traditional Marketing vs. Online Marketing for Online Shopping Sites Revolution in IT and introduction of Internet have provided extra boost to thecore conception of marketing. Now days, in a broad way, marketing is classified into two categories - a) Traditional Marketing and b) Online Marketing. Traditional way of marketing we see in our everyday life that people from the corporate houses will personally come to visit us in order to sell their products or services to us. Online marketing means the same thing but all these processes will be done through Internet. In this case no executive comes to visit us. If we need to purchase certain product or wish to avail certain services, we have to visit the site selling such products or services, pay the amount and our desired thing will be delivered to us. The core concept or process of marketing a product remains same only avenues to it change. The early phase of online marketing is replete with such examples that the investors had to invest a great deal of money to start his venture and there was not enough certainty also if the venture will be successful or not. Within a very period of time this conception changed and people started to follow the rule of developing products and market them properly. It has been observed if it can be done properly customers are sure to come. Thus, it is understood that advertisement plays a great role in selling products online. During the earlier part of Internet marketing investors used to spend huge amount of money to compete with others and more money were spent in order to launch an effective advertising campaign. Both in traditional as well as online marketing, advertising play a dominant role. The main reason is until and unless the consumers can be properly informed about products, it will not be possible to attain expected results. If we judge with a bit of analytical mind, we will realize that in case of online marketing same methods like that of its traditional counterpart is used. In this context it becomes important to understand about traditional tools of marketing in a brief way. Traditional Marketing Tools: The whole idea of traditional marketing is standing over the foundation of ‘marketing mix,’ which, according to Professor E. Jerome McCarthy, is summation of four materials, namely, Product or service, Pricing of the Product, Distribution or placement of such products, and finally, promotion of such products. Selling is the final destination for marketing and the two factors a) Customer acquisition and b) Retention of those customers play the most important role. Traditional tools for marketing depend over these two factors. (Lagman, 2004) If a company is ready to go for marketing of its products at the first place it needs to categorize its target customers. The arena of traditional marketing can be classified into several parts and those are determined by various factors, including demographical, geographical, psychological as well as behavioral aspects of the consumers. Each of these small segments is homogenous in nature and if we consider them in individual groups, we will see that each of them is attached by a certain type of marketing technique. Such small groups are known as ‘specialty’ or ‘niche’ markets and the business houses launch their products only after detailed research over such niche or specialty market. The company produces those products that are required for the market. The process of searching for the target audience segment is known as the ‘depth segmentation’ and understanding of customer’s requirement through his behavioral traits is known as ‘Buyer’s Profile’. (Blackwell, 2006) These are the main sources that help the company to come up with its original marketing plan. (Steenkamp and Ter Hofstede 2002) There are certain other factors also that management of a company needs to consider carefully, while planning to come up with a proper marketing plan. Firstly, traditional marketing is completely dependent over the company and the products that the company is producing. The traditional way of marketing aims at letting the common people know about the company and its products. A company that is using traditional marketing methods for the promotion of its products, it basically focuses over the USP or Unique Selling Proposition of his products. USP is the novel characteristic of a specific product from a specific brand and if there are not many competitors in the market, then USP method of marketing is an excellent procedure to launch a product in the market. These days, the marketing appeal of USP method has deceased to a considerable extent, as in every sector of business the number of competitors have incased to a great extent and all of them are ready to offer all those features that the competitors are offering. Thus, in the current market USP is losing its importance and the companies are becoming more inclined towards the new methods of promotion and advertising. (Reeves, 1961, 46-48) Among the traditional marketing tools, advertisement receives highest attention among the management of a company. There are various methods of marketing but the final execution of all these methods happen in the form of advertisement. Advertising is such an avenue that does proper exposition of a product to the customers. Generally, the whole procedure of advertisement can be classified in two ways, the ATL (Above-the-line advertisement) and BTL (Below-the-line advertisement). All those types of advertisement that are done through media are known as ATL advertisements. Different types of promotions, such as, public relations, merchandising and sponsorships are categorized as the BTL. Though there are various traits of BTL advertising, but the traditional form of marketing is basically dependent over ATL type. (“Advertising”, 2009) In the advertising and promotional context of a product, both traditional and online marketing merge together though their methods are different. In case of promotion of a product through traditional marketing management of a company depends over the ATL type. In this case the management basically depends over print media that is inclusive of magazines, newspapers, yellow pages billboards and such methods. Television and magazines are also strong mediums of marketing and companies in these days have become more interested about promotion through television. The main reason is that this method helps the market to receive a complete overview of the product from audio visual perspective. In case of promotion of a product over Internet, advertisement policies are adopted so that people come to know about it. Main advantage of product promotion through Internet is that it opens the product to a global market. Hence, if there is demand of the product in market and if people can be made aware about the product, online business will flourish within a very short span of time. Due to this reason, business owners try to promote the product in such a way that customers find all information about it in the website. In order to increase web traffic for the website various methods are adopted. All these methods are directed towards one thing, that is, proper promotion and advertising of the product. Hence, advertising is the only method both in traditional and online method of marketing and it has been provided with special emphasis in both cases. Internet Marketing Tools Internet marketing has opened up new avenues in case of online business and has emerged as an effective source for the promotion of products. While citing for the impact of Internet marketing, the Yankelovich Partners has made a thorough analysis, which has provided an astonishing result that a person who is an average rate Internet user, comes across at least 3000 advertisement everyday and on the annual basis the total number of advertisements messages amounts to more than a million. (Hempel, 2005) Among this huge number of marketing messages a great part comes from Internet business sources. The reason is simple. It is not possible an individual, who wishes to start his own business to complete with the highest level corporate houses that spend huge amount of money for promotion of their products in the market. This is one of the main reasons that a huge number of people, who start entrepreneurship ventures these days, take their first step through Internet business only. There is a common conception that marketing is a highly expensive process. On the contrary, when it comes to Internet marketing, promotion of the products to the market is not at all an expensive process. Modern day Internet marketing gurus repeatedly stress over the fact that if marketing plans of an individual is clearly executed, precise and well planned then either he has to spend a very little or no money for marketing. The basic concept of Internet marketing is based over two factors, advertising and selling. In the earlier section of the paper we have already discussed about the importance of advertisement in traditional and internet marketing. The sole aim of marketing is to “successfully and effectively reach the largest number of people for the least amount of money.” (Michie, 2007, 9) The greatest advantage of Internet marketing is that it opens the access of a product to the global market. Thus it is a matter of primary importance that an entrepreneur chalks his plans out properly and if he can do it properly marketing of his product will be done accordingly and at a very high profit rate. In this context single information will encourage people who are related or panning to come for Internet marketing business that by 2010, only in the United States total amount of online sales will be more than $329 billion. (Business Wire, 2005) There are no such conventional tools to internet marketing. The whole system of internet marketing is founded over advertising and letting people know about the product that has already been or about to be launched. It is the factor of primary importance that a person interested in Internet marketing comes up with a website of his own that will contain complete information about range of products or services that he is going to launch in the market. At the same time it needs to be kept in mind that such only promotion of a website is not enough. Presentation of the site plays an important role to attract more number of customers. It is highly expected that the customer or client, as he visits the site receives complete details of the product and services. At the same time he appreciates the aesthetic appeal of the site. Due to this reason, Internet marketers design their websites accordingly with various applications. New software and flash designing are frequently applied to produce attractive view of the website and at the same time those applications are also targeted to provide the visitor with all sorts of easy access or search facilities. Use of proper content is very essential for success of the website. It must be highly considered that the visitor does not face any kind of hesitation as he attempts to understand the purpose of the website. Proper product and service description is mandatory but at the same time presentation must also be is such a way that he never suffers from the feeling of monotony. Language of the content has to be essentially charming so that it can make the visitor feel he is at the right place to search for the desired product. Finally the distribution of keywords factor in the content comes. If a person creates an excellent website but it is not detected by the search engine, ultimate purpose of the website is not served. People will not come know about the products and services and finally the whole venture will drown into futility. Thus, before the process of writing content is commenced, it is important that to plan about distribution of the keywords. Keywords orientation needs to be in such a way that the site is easily detected by search engine. When a person searches with related keywords, the site will appear on the top. Today’s world of Internet marketing has become so competitive that it sometimes becomes really tough to be on top. Strategies regarding websites are known to most of the people, those who are already into the business or planning to come up with their venture. In such a condition it becomes really important to create a niche for the business that someone is planning to launch. The best way for great performance is to look into the whole matter from the perspective of the client. It is important to perceive the kind of keywords that a common man will generally use if he searches for his desired product or service from the Internet. Specialist Internet marketers recommend beginners to plan out first those keywords that most commonly come to the mind of the common customers and then produce content that will orient around those keywords only. It is also very important that the website is regularly undated. Consequently, content and use of keywords in it must change accordingly. (Vassos, 1996) Viral Online Marketing: The viral marketing is often elucidated as, “any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence.” (Wilson, 2005) Principle of viral marketing is simple, just like viruses the marketing strategies metastasize or multiply and finally the ultimate message reach huge number of people. Generally the viral marketing strategy is based on six ideas, a) free service or product supply, b) effortless transfer to people, c) easy yielding from small to large dimension, d) capitalize over general behaviorist aspects, e) make optimum use of available communication system, and f) receive advantage of different resources. These are six principles over which the whole idea of viral marketing is founded. If all these points are judged carefully, we will understand that Internet marketers have mainly concentrated over psychological and behavioral approaches of common consumers. In order to capitalize over these aspects help of certain easy resources are also taken. Finally, the best result that comes out, adds to the benefit of the business. (Sweeny, 2006, 6-15) Podcasting, email marketing, banners, affiliate marketing, blogs, communities and online magazines are widely used for the purpose of prospering in the field of online marketing. Affiliate marketing, among all these sources, is, perhaps, the most powerful technique, very frequently used by the online marketers. This marketing process not only helps one person to receive the total profit but every time a customer is brought to a website, it offers more affiliates and in this way the whole process grows. Online magazines, email marketing and banners are also considered as highly effective sources of internet marketing. The online magazines are regularly visited by a lot of people and among those are a considerable number of people who search for services of their requirement. Hence, internet marketers consider these sources as great platform to market their products. Email marketing, including dedicated email service, is also quite good method of enhancing the number of customers. The emails provide the right information to the right person, who is under requirement but this method has been used so frequently these days that it has lost its effectiveness to a great extent. Receptors of such emails most of the time ignore them or report them as spam. (Vassos, 1996; McKenna, 1988) Comparison between online marketing and traditional marketing: There is a common trend these days that traditional way of marketing is of no use at all and internet marketing is the most effective way for achieving success in business. Main argument against traditional marketing is that brand recall is very low as customers enjoy the facility of reaching different brands. It is said that the 21st century marketing is completely focused over 360 degree marketing. The modern marketers say that the secret of today’s marketing is that it covers all the aspects related to brand recall. The traditional way of marketing does not have this sort of flexibility consequently it is losing the utility. On the contrary, it is quite clear that till date a huge number of people depend over the traditional way of marketing and most of the business houses have their separate marketing department. Till date, every year those companies are expending millions of dollar. The main advantage of traditional way of marketing is the authenticity. There are several such examples that though customers have paid the proper amount but they either have not received the products or quality of the product was not up to the mark as it was proposed. (Pine, 1993) In this regard, the traditional market is more authentic and there is always less chance of fraud. Apart from that, it is easier to receive customer care service from the company if something is wrong with the product. Perhaps these are the main reasons that in 2005 traditional marketing was adjudicated as the best method for sale of products and services. In this context a famous marketer commented, “Traditional marketing helps because people still view them.” (Blackwell, 2006) Irrespective of all these supports over traditional marketing, there is no denial that Internet marketing is ruling today’s world. It is not that traditional form of marketing does not have any value at all and is simply waiting for its eradication. It will always exist but in comparison with the way Internet market has emerged or it is still growing, presence of traditional marketing will be negligible. Principles of Internet marketing has been greatly influenced by the traditional marketing but at the same time it needs to be kept in mind that these principles were never proved to be so vastly effective till the very factor Internet has been merged with them. It is widely known that basic foundation of the traditional marketing is over the foundation of 4 P’s and each of the factors is very much interdependent. Promotion of sales is the basic factor of similarity between these two forms of marketing. In case of traditional marketing, sales promotion is the main factor that so many promotional campaigns are arranged. Free trails, coupons, warranties, these are the main ingredients of the sales promotion that a company focuses over. According to the theories of marketing, a customer is always looking for new things and such offers through a sales promotion campaign attract a huge number of customers for a company. It is not that the customers who are coming, all of them will be loyal customers but mainly this strategy is used by those companies that are looking for “high brand similarity markets where the seller wants to reach short term high sales response and not so high permanent gain in market share.” (Shima and Varfan, 2008) While it comes to low brand similarity market, such sales promotional strategy is expected to have a better effect of permanent gain in the total share of market. These days, in the field of traditional market, total number of brand names has increased to a higher rate and the competition has also become tougher among the companies to survive in the market. Total number of customers in case of price oriented products has also increased and they are always keen on searching for more appreciable offer than the existing product brands in the market. Thus, companies that are newcomers of the market and have not received the status of brand yet are trying their level best to capitalize over this factor. These companies are organizing such sales promotional programs that are capable of drawing more number of customers. As a growing tendency has also been observed among loyal customers of a company towards changing into price oriented customers, thus the brand companies are also trying to compete with these new comers in terms of better sales promotion of the products. It has become the mantra of earning customer loyalty. The attention of the customers depends on the size and attraction of the offer. Sales force and public relations, these two are also integral parts of the traditional marketing methods. Sales force refers to the countenance of a company towards the customers during transactions. It is function of sales representatives of a company that act as a bridge between customer needs and the company potential and finally produces mutual satisfaction. Public relation is such an important factor, without which it is not possible to give a fulfillment to the process of traditional marketing. In a very general way, the public relations can said to be the process to involve “creating and planning a program or event where the company can promote and in some cases protect the products or the image”. (Shima and Varfan, 2008) On several occasions certain instances of such events are presented to common people through press conference. The main intention is to make people aware about the company and its affairs. More people will come to know about it, bonds of public relation with the company will grow stronger. In the earlier part of the paper, contribution and importance of advertisement has already been discussed. Apart from all the already mentioned issues, direct selling and face to face selling methods also play a vital role in traditional marketing of a company. Through the process of direct marketing, the company rather its representatives search out different paths that would lead them straight to the customers. Face to face meeting, mailing, distribution of catalogue, conversation over telephone, all these methods are considered as important parts of the direct marketing process. The main purpose of direct marketing is to create a personal feeling communication towards the customer. Face to face selling is sometime considered as a separate form of marketing but actually that is very much related to the direct marketing process. In this process the companies send the people in the sales team to meet their potential customers and in such cases effective communication is very important. In case of Internet marketing, the basic principles are always same but most of the times the forms are different. Most of time people, who are engaged in the home based business, use the methods of Internet marketing as the main source for flourishing their business. It is not that the small business ventures, organization or home based businesses that use Internet as the main instrument for reaching huge number of customers. The branded companies are also using the Internet marketing process for the same purpose and they are also trying to expand their customer range. Shortly Internet marketing can be defined as the “application of the Internet and related digital technologies to achieve marketing objectives and support the modern marketing concept”. (“An introduction to Internet marketing”, n.d.) If we look into matter of Internet marketing closely and compare it with the traditional marketing form, we understand that the principle of 4P’s is also applicable in this case also. It is often said, when it comes to products from Internet marketing system that “The Internet leads to faster discovery of customer needs, greater customization of the products to the customer needs, faster product testing and shorter product life cycles.” (Shima and Varfan, 2008) Internet opens up excellent opportunity for a company to come up with idea to develop such products that are in need of the customers. As the customer cannot experience the product physically, the business owners provide picture of the product in the website so that the customer can have an impression of the product that he is planning top purchase. Such small aspects actually give the customer a confidence that help him to purchase the product. As there is no real communication between the company and the customer, it is the onus of the company to persuade the customer with reliability, competence and responsiveness. Concluding remarks Like traditional way of marketing, in Internet marketing also determination of price plays a big role. As the Internet market is really competitive thus it is also important to determine such price for the product that customers feel attracted. It is not a very tough to do. As most of the company websites provide the total range of price of the products, it is easy to have an overview from the sites of the competitors and finally settle the price. It is also easy for customers to pay the price. The online payment through credit cards is fast and advantageous for both customers and the businesses especially since it serves against time. Such payment system is also helpful for the companies to save more amount of money. A great deal of time is also saved due to reduction in the pressure of administrative formalities regarding management of such money. In this context it needs mentioning, customers are not that confident while using this service owing to security and privacy related problems In case of product promotion via Internet, the same principles like that of traditional marketing that includes Internet advertising, sales promotion of products, direct selling methods and public relationship factors are also used. Internet advertising is done mainly in two ways. First, to develop a website that would deliver all necessary information to the potential customers. The second process is to take help of the Internet for promotion of products. Internet marketers are greatly benefited through Internet to offer wide range of sales promotion to customers, such as, to reduce product price to a certain percentage for those customers, who will visit website of the company. Such promotional offer encourages the customers to visit company website repeatedly. Through this method the company receives enough opportunity to trace the regular visitors and by offering them, later on, with more benefits, attempts to go for establishing a long term relationship. In case of maintaining and increasing public relationship, the company uses blogs, podcasts and online magazines. It helps a huge number of people to know about the company, its products and services and at the same time it gets one step ahead in the process of creating a potential customer circle of its own. Direct marketing also becomes an easier process for the companies in terms of cost effectiveness and targeting a larger customer base. It is clear from the discussion that traditional marketing and Internet marketing both are complementary and supplementary to each other. In the 21st century, tough the Internet marketing process has emerged at a dynamic rate but principles are mainly derived from the traditional method of marketing only. All the processes that have been adopted in case of traditional marketing, they are also applicable in the internet counterpart. Only the forms are different. In both cases we see that there are certain limitations and if a company can successfully merge up both the methods, will be highly benefited in terms of product promotion and sales. References 1. “Advertising” 2009, Marking Teacher, available at: http://marketingteacher.com/Lessons/lesson_advertising.htm (accessed on February 21, 2009) 2. “An introduction to Internet marketing”, n.d. available at: http://www.marketing-online.co.uk/ch1.pdf (accessed on February 21, 2009) 3. Blackwell, J. 2006. Overview of Traditional Marketing. Available at: http://ezinearticles.com/?Overview-of-Traditional-Marketing&id=374128 (accessed on February 21, 2009) 4. 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Pine, J. 1993, "Mass customizing products and services", Planning Review, vol 22, July-August 10. Reeves, R.1961, Reality in Advertising, New York: Alfred A. Knopf 11. Steenkamp, J. – B.E.M. and Ter Hofstede, F. 2002, "International market segmentation: issues and perspectives", Intern. J. of Market Research, vol 19, 185-213 12. Shima, A. and M. Varfan, 2008, Traditional Marketing vs. Internet Marketing: A Comparison, available at: http://72.14.235.132/search?q=cache:SZtLZIcbhowJ:www.diva-portal.org/diva/getDocument%3Furn_nbn_se_mdh_diva-777-2__fulltext.pdf+high+brand+similarity+markets+where+the+seller+wants+to+reach+short+term+high+sales+response+and+not+so+high+permanent+gain+in+market+share&hl=en&ct=clnk&cd=2&gl=in (accessed on February 21, 2009) 13. Sweeny, S. 2006, 101 Ways to Promote Your Web Site, Maximum Press 14. Vassos, T. 1996, Strategic Internet Marketing, Que 15. Wilson, R.F. 2005. The Six Simple Principles of Viral Marketing, Web Marketing Today, available at: http://www.wilsonweb.com/wmt5/viral-principles.htm (accessed on February 21, 2009) Works cited: 1. Traditional Marketing vs. Internet Marketing (www.diva-portal.org/diva/getDocument?urn_nbn_se_mdh_diva-777-2__fulltext.pdf -), 2008 2. Overview of Traditional Marketing (http://ezinearticles.com/?Overview-of-Traditional-Marketing&id=374128) 3. The Six Simple Principles of Viral Marketing (http://www.wilsonweb.com/wmt5/viral-principles.htm) 4. Sweeny, Susan, 101 Ways to Promote Your Web Site, 2006 5. Michie, Justin, Street Smart Internet Marketing: Tips, Tools, Tactics & Techniques to Market, 2007 6. Vassos, Tom, Strategic Internet Marketing, 1996 Read More