Impact of the Internet in the International Marketing - Essay Example

Impact of the Internet in the International Marketing Executive Summary The development of operational activities in the global market is a common priority for firms in various industries. The terms under which this target is achieved can be different. Certain organizations emphasize on the satisfaction of their employees, so that employee performance is kept at high levels. There are also organizations that use technology for establishing a competitive advantage in their industry. Current paper focuses on the potential use of Internet as a tool supporting the needs of international marketing. The involvement of Internet in international marketing cannot be doubted. Still, the exact role of Internet in the promotion of international marketing schemes has not been adequately explored in the literature. Table of contents Executive Summary 2 Contents 3 Introduction 4 Literature Review 4 Insert Table 8 Synopsis 11 Conclusion and recommendation 11 References 14 Introduction The involvement of technology in the development of organizational plans can have various forms. Identifying the modes of technology that would be most appropriate for enhance organizational performance would be critical for organizations of different characteristics. In fact, technology has been involved in the operations of organizations of all sizes. Large firms are, of course, more capable of identifying technological features that can respond to all organizational needs; for small and medium size firms such prospect is difficult to be guaranteed. Internet has introduced the following advantage: it has allowed small and medium firms that are of limited financial power, to reach consumers worldwide almost for free. This characteristic of Internet has affected marketing plans in all markets. In addition, Internet offers a series of additional benefits, as explained below, that are highly valuable for international marketing. In this paper the value of Internet as a tool for supporting international marketing plans is analyzed using existing literature. Empirical evidence is also used, where available, for verifying the findings of the literature. The assumptions developed through the literature review and the empirical studies are compared in the Synopsis section of this paper. Literature Review Internet, as a tool of communication, is a rather recent technological feature. In fact, it was just in 1990 that Internet appeared in the global market, initially only ‘for commercial purposes’ (Fletcher, Bell and McNaughton 2004, p.22). The Internet can be characterized as ‘a worldwide network of computers operating under the same protocol’ (Fletcher, Bell and McNaughton 2004, p.22). One of the key characteristics of Internet is its openness. Anyone can access a website using a computer or, today, a device offering such potentials, such as a mobile phone (Lamb et al. 2011). During the early days of Internet, i.e. in 1990s, the use of Internet in marketing was aligned with the potentials of Internet in terms of technology (Fletcher, Bell and McNaughton 2004). For example, at those days marketing could be developed through Internet only ‘through plain-text messages’ (Fletcher, Bell and McNaughton 2004, p.22). As the Internet has been developed, being influenced by the rapid progress of technology, marketing has followed the same route. More specifically, in 1993 the introduction of the WWW, as a platform for sharing information worldwide, has resulted to the appearance of ‘direct global marketing’ (Fletcher, Bell and McNaughton 2004, p.23). The communication between consumers and organizations become direct. This fact significantly enhanced the performance of retail industry globally (Fletcher, Bell and McNaughton 2004). The benefits of Internet for international marketing have been extensively analyzed in the literature. In this context, emphasis has been given on the potential of Internet to enhance the ‘improvement of communication between businesses and their customers’ (Stonehouse et al 2007, p.332). Also, it seems that Internet has contributed in the promotion of communication in general, both in regard to the external organizational environment, meaning the communication of the organization ‘with its customers and with other businesses’ (Stonehouse et al 2007, p.332) but also the communication in the internal organizational environment (Stonehouse et al, 2007). Moreover, Internet has helped businesses to identify customers in new markets internationally (Stonehouse et al 2007). In the past, such perspective could not be feasible, taking into consideration the extremely long distance separating markets globally (Stonehouse et al 2007). The ability of Internet to eliminate barriers in communication has helped businesses not only to increase their communication skills but also to enter new markets worldwide in just a few minutes and, even, at no cost (Stonehouse et al 2007). Another important aspect of Internet, as a tool used in International Marketing, is the following one: Internet is really valuable for conducting marketing research worldwide (Stonehouse et al. 2007). In the past, before the introduction of the Internet, conducting such research would be impossible. In this way, it was not possible to introduce a marketing scheme aligned with the trends of global market (Stonehouse et al. 2007). Other benefits of Internet in regard to international marketing are the following: a. Internet can be used for developing effective marketing plans (Jones 2008), 2. Internet can be also used for supporting innovation in regard to a firm’s products/ services (Lancaster and Massingham 2010). The effectiveness of Internet in promoting international marketing has been checked in practice by using data released from 123 businesses: it has been proved that the involvement of Internet in international marketing has resulted to ‘the increase of B2B marketing efficiency’ (Kotabe and Helsen 2009, p.457). In any case, the introduction of Internet in business operations has helped firms to expand globally (Muhlbacher, Leihs and Dahringer 2006). Reference should be made especially to the use of Internet for the establishment of e-commerce, a totally unique way in developing business activities (Muhlbacher, Leihs and Dahringer 2006). Because of e-commerce the need for physical presence of a business within a market has been extinguished (Muhlbacher, Leihs and Dahringer 2006). In the context of e-commerce, businesses can develop all their operations through their website (Muhlbacher, Leihs and Dahringer 2006). In this way, the website becomes the online shop/ branch of the business allowing all activities that can be developed in real life shops (Muhlbacher, Leihs and Dahringer 2006). Particular reference should be made to certain features of Internet that are commonly used in the context of international marketing. E-mail is one of the most popular features of Internet, in terms of marketing. In the past, the use of e-mail for marketing purposes was not welcomed, mostly because of the following fact: third persons can often have access to a user’s e-mail account, either due to rules applied locally (for instance, within organizations) or because of systems’ failures (Fletcher, Bell and McNaughton 2004). For example, in IT systems where the protection provided to e-mail account holders is problematic, the information included in these users’ accounts can be available to a high number of people (Fletcher, Bell and McNaughton 2004). However, through the years, the security problems of e-mail accounts have been decreased (Fletcher, Bell and McNaughton 2004). This target has been achieved mostly due to the introduction of the ‘digital sign’ (Fletcher, Bell and McNaughton 2004). The above feature ensures that the reader of an e-mail is the actual account holder so that any risk of violating the rights of the particular individual is eliminated (Fletcher, Bell and McNaughton 2004). Moreover, due to the continuous development of technology the promotion of a business through Internet has become quite easy. In just a few minutes, an individual can create a website, using one of the platforms available in the WWW, and promote his business worldwide (Lamb, Hair and McDaniel 2011). Also, specific tools have been introduced for allowing the development of all phases of a business transaction through the Internet (Lamb, Hair and McDaniel 2011). For example, online payment systems embedded in commercial websites allow the online payment for goods/ services (Lamb, Hair and McDaniel 2011). Also, other features, such as Online Chat through Skype, offers to consumers the chance to communicate with the seller at real time and state any concern in regard to the product/ service bought or in regard to a future purchase (Lamb, Hair and McDaniel 2011). In the last five years, an important development in regard to the relationship between Internet and international marketing needs to be analyzed: the appearance of social networking sites and their involvement in the promotion of marketing messages in regard to various industries (Lamb, Hair and McDaniel 2011). Among these social networking sites, particular emphasis should be given on LinkedIn (Schaffer 2012). It seems that the performance of LinkedIn in supporting the performance of B2B businesses is impressive: the annual profits of LinkedIn in regard to the above activity have been estimated to $100,000, an amount that it is quite high (Schaffer 2012). Insert Table As explained earlier, the literature retrieved in regard to this study’s subject has been checked using empirical evidence. More specifically, five studies focusing on this paper’s issues have been reviewed. The credibility of their findings is evaluated using the literature presented above. It should be noted that empirical evidence can, often, be differentiated, from the findings of the qualitative research mostly because of the following two reasons: a) the findings reflect the actual view of the public, i.e. of a high number of people, in regard to the issues explored and b) the responses of individuals retrieved through quantitative research can reveal certain aspects of an issue that need further research. Author Point of view Confirmed or not Cho, Byun and Sung (2003) claim that the improvement of the technology used in Internet and the following increase of the speed of the Network has been welcomed by Internet users in Korea. Cho, Byun and Sung (2003) aim to show that the quality of Internet services affects customers’ satisfaction. This means that by emphasizing on the improvement of their Internet services firms can expect to increase the effectiveness of their marketing plans. In practice, the above view seems to be confirmed. Reference could be made to the studies of Fletcher, Bell and McNaughton (2004) and that of Stonehouse et al (2007) Dixon and Marston (2005) explain that e-commerce is the key indicator of the impact of Internet on marketing Dixon and Marston (2005) try to show that effective e-commerce websites can be developed not only for businesses, as units, but also to networks of businesses. Reference is made, as an example, to the potential creation of an online shopping centre, ‘similar to the shopping centre in its physical form’ (Dixon and Marston 2005, p.97) This aspect of e-commerce can be considered as confirmed. LinkedIn is actually an online platform offering to businesses the chance to develop their activities online. The use of this platform by networks of businesses is feasible (Lamb, Hair and McDaniel 2011) Eid, Trueman and Ahmed (2006) describe the relationship between Internet and international marketing specifically from a B2B perspective. Also, they note that the impact of Internet on International marketing is depended on certain factors, described as ‘critical success factors’ (Eid, Trueman and Ahmed 2006, p.200). Eid, Trueman and Ahmed (2006) have developed a survey in order to prove that critical success factors can improve the relationship between Internet and international marketing. The view of Eid, Trueman and Ahmed (2006) can be considered as confirmed on the basis that the performance of Internet when used for international marketing schemes is not guaranteed, as proved through other studies presented above, such as Lamb, Hair and McDaniel (2011) and Fletcher, Bell and McNaughton (2004) Particular emphasis should be given on the study of Malyvanova (2010). The particular study focuses on the impact of Internet of international marketing activities. It is noted that the influence of Internet in international marketing is already high and it is expected to increase more, as the involvement of Internet in daily human activities will be increased. Malynova (2010) aims to prove that Internet is an indispensable part of international marketing. At such point, international marketing is differentiated from traditional marketing that was not depended on Internet. The views of Malynova (2010) can be considered as confirmed, referring to the studies of Lamb, Hair and McDaniel (2011), of Kozak and Baloglu (2010) but also those of Eid, Trueman and Ahmed (2006) and Dixon and Marston (2005) Nezamabad (2011) explores the relationship between Internet and marketing, especially in regard to a particular aspect: the impact of Internet on marketing mix. After reviewing the involvement of Internet in marketing mix Nezamabad (2011) notes that Internet can highly benefit businesses. For this reason, it is suggested to marketers to pay attention to Internet as a tool for enhancing organizational growth. Particular reference is made to e-commerce, as an aspect of the relationship between Internet and marketing mix. The views of Nezamabad (2011) can be characterized as confirmed, based on the similar findings of Kotabe and Helsen (2009), Muhlbacher, Leihs and Dahringer (2006) and Lamb, Hair and McDaniel (2011) Examples of the use of Internet in International Marketing are the following: the popular hotel chains, ‘Hilton and Sheraton’ (Kozak and Baloglu 2010, p.197) has used their website for improving their communication with their customers. In the airline industry, particular emphasis should be given on the efforts of American Airlines to increase its performance by improving its website (Kozak and Baloglu 2010, p.197). Moreover, British Airways has tried to increase its profitability by emphasizing on Internet sales but the strong conflicts in its internal environment have not allowed the achievement of this target. Synopsis The review of the literature related to the relationship between Internet and international marketing has led to certain important findings. First, the use of Internet in international marketing has been unavoidable for increasing the effectiveness of international marketing schemes. Moreover, the level at which a firm chooses to use Internet in promoting its products/ services is not clearly defined. There are firms that operate solely through the Internet while other businesses use the Internet only as a supplementary tool for enhancing business growth. Also, the performance of Internet as a marketing tool is not guaranteed. In certain cases, Internet has not helped to improve organizational performance, meaning especially the case of British Airways mentioned above. Another issue related to Internet and its impact on international marketing is the following one: the benefits of Internet on international marketing may take a significant period of time in order to become clear (Jones 2008). Such phenomenon can be identified in businesses where internal organizational problems set obstacles in the achievement of organizational goals (Jones 2008). Conclusion and recommendation The use of Internet in international marketing has been expanded in markets globally. However, the strategies used for employing Internet, as a marketing tool, are highly differentiated. Reference is made not only to the different Internet features for promoting marketing plans but also to the different resources engaged in such initiatives. More specifically, the promotion of marketing plans through the Internet has been assigned not only to appropriately trained staff but also to employees working in irrelevant organizational sectors. This strategy has been used for eliminating costs but has led to another implication: public is often given a false impression in regard to the actual potentials of a specific organization. Also, misleading the public has become a key problem in regard to international marketing. In this context, the involvement of Internet in supporting international marketing schemes needs to be carefully reviewed. Suggestions can be made for ensuring that the use of international Internet in marketing does not violate ethics. Primarily, the marketing schemes promoted through the Internet would be checked in advance, as of their alignment with ethics. Then, the feature of Internet used for promoting these schemes should be chosen taking into consideration the following facts: 1. The target group should be carefully identified. Certain groups of the population, such as children and teens, should be possibly avoided, depending on the content of marketing messages involved, 2. Checking the violation of ethics through the Internet is extremely difficult. However, if a firm is found to violate ethics in regard to its marketing plan, the effects could be severe. The damage of the firm’s public image would be the most important consequence of such practice, 3. The marketing schemes promoted through the Internet should present the actual characteristics and quality of the product/ service involved. Misleading consumers can have severe effects, either in the short or the long term, as noted earlier, 4. The rules of the Social networking site employed in the relevant plan, if such site is used, should be respected. For example, violating the rules for confidence in regard to the personal details of the members of a social networking site would be against the law. The persons that would be harmed could seek for the protection of their rights through the courts. The consequences for the organization involved in this practice can be severe. The above issues do not eliminate the value of Internet as a key means for promoting international marketing schemes. Still, the involvement of Internet in international marketing projects should be aligned with certain rules and principles, so that the interests of all parties are secured. References Cho, S., Byun, J. and Sung, M., 2003. “Impact of the high-speed Internet on users behaviors: case study in Korea.” Internet Research: Electronic Networking Applications and Policy, Vol.13, No.1, pp.49-60 Dixon, T. and Marston, A., 2005. “Taking the shopping centre online: new models in e-commerce.” Property Management, Vol. 23, No.2, pp.97-109 Eid, R., Trueman, M. and Ahmed, A., 2006. “B2B international internet marketing. A benchmarking experience.” Benchmarking: an international journal. Vol.13, No.1-2, pp.200-213 Fletcher, R., Bell, J. and McNaughton, R., 2004. International E-Business Marketing. Belmont: Cengage Learning. Jones, S., 2008. Business-To-Business Internet Marketing: Seven Proven Strategies for Increasing Profits Through Internet Direct Marketing. 5th ed. Maximum Press. 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