Internet Marketing

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Chapter 1 p. 1

CHAPTER 1

An introduction to Internet marketing

The Internet and the marketing concept..................................................................................... 4 Internet marketing defined ......................................................................................................... 8 What benefits does the Internet provide for the marketer? ...................................................... 20 A short introduction to Internet technology ............................................................................. 27 How do Internet marketing communications differ from traditional marketing communications? ..................................................................................................................... 41

Chapter 1

Chapter 1
Chapter at a glance
Main topics
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The Internet and the marketing concept Internet marketing defined What business benefits can the Internet provide? A short introduction to Internet technology How do Internet marketing communications differ from traditional marketing communications?

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Chapter 1 p. 2

Case studies
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Case study 1.1 Hamleys reaches new customers using the Internet Case study 2.2 RS Components

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Learning objectives After reading this chapter, the reader should be able to: I

evaluate the relevance of the Internet to the modern marketing concept; distinguish between Internet marketing, e-marketing, e-commerce and e-business; identify the key differences between Internet marketing and traditional marketing; assess how the Internet can be used in different marketing functions.

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Key questions for marketers Key questions for marketing managers addressed in this chapter are: I

How significant is the Internet as a marketing tool? How does Internet marketing relate to e-marketing, e-commerce and e-business? What are the key benefits of Internet marketing? What differences does the Internet introduce in relation to existing marketing communications models?

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Links to other chapters This chapter provides an introduction to Internet marketing, and the concepts introduced are covered in more detail later in the book, as follows: c Chapters 2 and 3 explain how environment analysis for Internet marketing can be

conducted.
c Chapters 4, 5 and 6 in Part 2 describe how the strategy can be developed. c Chapters 7, 8 and 9 in Part 3 describe strategy implementation. c Chapters 10 and 11 in Part 3 describe B2C and B2B applications

Chapter 1 p. 3

INTRODUCTION

How significant is Internet marketing to businesses? Today, the answer to this question varies dramatically for different products and markets. For companies such as electronics equipment manufacturer Cisco (www.cisco.com), the answer is ‘very significant’ – Cisco now gains over 90% of its multi-billion dollar global revenue online. It also conducts many of its other business processes such as new product development and customer service online. Similarly, easyJet (www.easyjet.com), the low-cost European airline gains 90% of its tickets sales online and aims to fulfill the majority of its customer service requests via the Internet. However, the picture is quite different for the manufacturers of high-involvement purchases such as cars or fast-moving consumer goods (FMCG) brands. Here the impact is less significant – the majority of their consumer sales still occur through traditional retail channels. However, the influence cannot be described as insignificant any longer since the Internet is becoming increasingly important in influencing purchase decisions - many new car purchasers will research their purchase online, so manufacturers need to invest in Internet marketing to persuade customers of the features and benefits of their brands. The FMCG manufacturer finds that consumers are spending an increasing proportion of their time on the Internet and less time using other media so the...
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