Internet Marketing

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nternet mInternet Marketing: An Overview
Jianwei Houa and César Regob,†

a

Department of Marketing, School of Business Administration, University of Mississippi, University, MS 38677, USA. jhou@bus.olemiss.edu Hearin Center for Enterprise Science, School of Business Administration, University of Mississippi, University, MS 38677, USA. crego@bus.olemiss.edu

b

Latest Revision: November 2002.

Abstract — Years of Internet marketing research have yielded a set of important findings. The purpose of this paper is to review these findings and assess what has been done and what has not been done in the area. In doing so, the authors review existing findings ranging from the types of products on the Internet, the Internet as a marketing channel, the Internet as an advertising and communication medium, the Internet adoption, to the effect of the Internet on traditional markets. Based on the studies reviewed, implications are drawn for further theoretical and empirical investigations.

Keywords: Internet marketing, marketing channels, advertising and communication medium, traditional markets.



Corresponding author. This research has been supported in part by the Office of Naval Research (ONR) grant N000140110917.

1. Introduction During the past decade, the popularity of the Internet has been growing explosively. Thi s trend is manifested in several ways. First, according to Cyberatlas.com (2002), the Internet in the United States is growing at a rate of 2 million new Internet users each month; 143 million Americans (54 percent of the population) used the Internet in September 2001, a 26 percent increase over August 2000. Second, the number of companies that create web presence to communicate with customers as well as other firms has been dramatically increasing. Third, the Internet has been accepted by broad consumer segments for various purposes, such as information search and online purchasing. Also, as reported in Cyberatlas.com (2002), 36 percent of Americans use the Internet to search for products and service information, a 10 percent increase over 2000. Among Internet users, 39 percent are making online purchases and 35 percent are searching for health information. Along with the increasing popularity of the Internet, marketing researchers have given qualitative and empirical attention to this phenomenon. Some academic journals have released special issues related to the Internet marketing (e.g., Marketing Science, Journal of the Academy of Marketing Science, and Journal of Retailing). Years of research have yielded many important findings. Among those studies, the Internet has been viewed as a marketing channel, a new advertising medium, and a communication platform. The purpose of this paper is to overview existing studies regarding theories and findings of some aspects of Internet marketing and to provide directions for further investigations in the area. The remainder of this paper is organized as follows. Section 2 discusses the types of products that may be suitable for online selling. The Internet as a marketing channel is reviewed in Section 3. Section 4 reviews the issue of Internet acceptance by firms and consumers. The effect of the Internet on traditional markets is discussed in Section 5. Finally, conclusions and perspectives for further research are provided in Section 6. 2. Products on the Internet Research on the topic of Internet products attempts to answer the following questions: • • What kind of products may be suitable for online selling? What kind of marketing strategies can be used to facilitate online selling?

Any product is perceived by a buyer to be a combination of utilities (e.g., qualities, values, and/or capabilities) that is expected to provide customer satisfaction assessed in terms of expected benefits minus costs incurred (Murphy and Enis 1986). By gathering information prior to purchase, consumers can predict whether the purchased product may satisfy their needs...
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