CA PRJCT READY.docx

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INTERNET MARKETING VS TRADITIONAL MARKETING

METAS COLLEGE OF MBA Page 1

INTRODUCTION

Small Business Enterprises (SBE's) do play a major role in the world economy,

and they are recognized as one of the main contributors to economic, development andemployment growth. According to Mulhern (1995) 99% of all European companies are

small and medium sized (SME) and from 1985-1995 it provided 66% of the employment

in Europe. That is also true in Less Developing Countries (LDCs) since small businesses

do represent a high percentage of the total number of enterprises.

On the other hand, the revolution in information

technology (IT) and communications changed the way people conduct business today. In

recent years, increasing numbers of businesses have been using the Internet and other

electronic media in their marketing efforts, giving the chance for Electronic marketing (as

a new marketing phenomenon and philosophy) to grow in a very dramatic and dynamic

way.

From the researcher point of view, implementing E-marketing by small business

enterprise can change the shape and nature of SBEs business all over the world. Because

the rapid proliferation of the Internet, the World Wide Web (WWW) and electronic

communication has created a fast growing new electronic channels for marketing. For

that, the internet and other electronic media are playing now a very important role inconducting marketing activities due to its unique characteristics as a market and as a

medium.

Depending on that the researcher is seeking to add to the body of knowledge by

investigating and understanding the practices and activities of small business enterprises

through conducting a research about the effect of implementing E-marketing on

marketing performance of industrial and trade SBE's, it is a comparative study between

the Egyptian and British SBE s to gain a better understanding of the SBEs role in

developing countries since they are less well represented in the literature.


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1.BACKGROUND:-

SMALL BUSINESS ENTERPRISES:-

Despite of the powerful position held by small businesses, defining it has always

been difficult and there is a little agreement on what defines a small business because the

term covers a variety of firms. As a result small businesses have been defined in a

perplexing number of different ways in different parts of the world according to national

and local needs (Theng and Boon 1996; Watson and Everrett 1996). Table 1 summarizes

the official or most common definitions of SBE's used in some countries around the

world.

Table 1: Criteria of defining SBEs adapted by some countries

Country No. of employees Other criteria

USA Under 100 Less than $ 5 million annual sales

European

Union

Under 50 Annual turnover or global balance less than 10 million

euros

+

IndependenceAustralia Under 20 None

Canada Under 500 in mfg

and 50 in services

Less than $ 5 million annual sales

India None Total investment(not exceeding 10 million Indian

Rupees in industrial enterprises and 1 million in

service enterprises)

Mexico Under 50 None

Thailand Under 200 in

labour intensive

None

Turkey 10 to 49 None

Source: El-Gohary (2006)


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From table 1 it is noticed that the number of employees is the most often used

element in determining the category of SBE's in most countries. Furthermore,. It also

noticed that there is a lack of agreement on what defines a small business, for that a

standard definition for Small Business Enterprises is needed. Accordingly and due to the

absence of an Egyptian official definition for SBEs, the researcher will depend on the

following definition for SBEs for the purpose of conducting the research study: a small

business enterprise is that enterprise that employs from ten to forty-nine employees .

E-MARKETING:-

Electronic marketing (E-marketing) can be viewed as a new modern business

practice associated with buying and selling goods, services, information and ideas via the

Internet and other electronic means. A review of relevant literature revealed that

definitions of electronic marketing vary according to each author's point of view,

background and specialization. While Smith and Chaffey (2005) defines it as: Achieving

marketing objectives through applying digital technologies , Strauss and Frost (2001)

define it as: The use of electronic data and applications for planning and executing the

conception, distribution and pricing of ideas, goods and services to create exchanges that

satisfy individual and orga nizational objectives.The researcher will depend on Strauss and Frost definition in conducting the

current research because: it takes into consideration all the element of E-marketing, all

types of products, it illustrate the main objective of E-marking which is creating the

exchanges that satisfy individual and organizational needs. Moreover it is the official

definition for E-marketing adopted by the E-Marketing Association.

MARKETING PERFORMANCE:-

Given the fact that a firm survival depends on its capacity to create value, and

value is defined by customers (Day, 1990), marketing makes a fundamental contribution

to long-term business success. But despite of the importance of measuring business

performance there is a little research on the measures used to evaluate marketing


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performance and effectiveness. On the other hand, when looking to the marketing

performance and success measures it is noticed that there are many measures. Recently,

in an attempt to organize performance measures Kokkinaki and Ambler (1999) have

summarized it and established six categories for marketing performance and success

measures which are: Financial measures / Competitive market measures / Consumer

behaviour measures / Consumer intermediate measures / Direct costumer measures /

Innovativeness measures.

E-MARKETING PERFORMANCE MEASURES:-

Standardised measures for E-marketing performance are both needed and

necessary. The discussion of most of the researchers has centred on the followingmeasures (beside the traditional marketing performance measures): Traffic/ Visit duration

/ Conversion rate (visit to purchase) / Catalogue size / Sales value / Number of

transactions / Number of users (as measured by the number of registered user accounts).

In conducting the proposed research the researcher will depend on both traditional

marketing and E-marketing performance measures. Namely: Financial measures /

Competitive market measures / Consumer behaviour measures /E-marketing measures

(such as: Conversion rate / Traffic / Visit duration / Number of transactions / Number of

users).

2.THE LITERATURE REVIEW

The researcher had identified a wide range of the literature review (in its wider

broad sense which include: Journals, Academic Books, theses and dissertations, short

articles, E- databases, conference papers,). The literature time perio d starts from 1990

to presence. The research studies investigated and covered a wide rang of E-marketingareas, such as: Internet-marketing / E-mail marketing / Intranet marketing / SMS

marketing / Extranet marketing. On the other hand, it is noticed that the literature in

Internet-marketing (IM) covers five main areas which are: Internet marketing (IM)

environment, IM functions, IM applications and IM research. Regarding the literature of


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E-marketing in SBEs, it was found that it covers the following areas illustrated in figure

1.

Figure 1: The literature of e- marketing in SBEs

Source: El-Gohary (2006).

THE RESEARCH GAP

By reviewing this literature its noticed that: -

- Almost all of the researches on E- marketing in SBEs had been conducted inEurope (UK, Northern Ireland, the Republic of Ireland, Austria and Switzerland),

Australia and New Zealand. Only 2 studies were conducted in developing

countries.

- The literature was concentrated on some research areas, and (up to the knowledge

of the resea rcher) there is no single research on the SBEs E - Marketing

Performance or in SBEs marketing in Egypt.

Obviously this is a major gap in the contemporary research on SBEs E -Marketing

Therefore a contribution to the literature is needed.

The use of internet bySBEs

The literature of e-marketing in SBEs

The concept of E-Marketing inSBE s

Export

performance

The internet as a distribution

channel for SBEs

E-Bay andSBEs

SBEsCompetencies

B2B in

SBEs

E-Businessadoption by

SBEs VirtualMarket


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3. RESEARCH PROBLEM

As a conclusion of the literature survey, the fundamental problem motivating this

research study is the urgent need to understand the relationship between using E-marketing by the Egyptian and British small business enterprises and the marketing

performance of these enterprises. As well as the effect that E-marketing has on marketing

activities for small business enterprises. The study attempts to have full-scale research

that is statistically significant that could answer the following main question: what are the

relationship between using E-marketing and the marketing performance of the Egyptian

and British small business enterprises.

4. RESEARCH OBJECTIVES

The main objectives of this research is to: develop a theoretical model to

understand and interpret the use of the E-marketing by small business enterprises in the

UK and Egypt, explore and analyze the level and form of e-marketing used by the

Egyptian and British SBEs and its contribution to marketing performance as measured

by financial and operational performance measures.

To achieve these objectives a series of hypotheses have been constructed to betested during the research process.

5. RESEARCH HYPOTHESES

In the light of the previous discussion and the literature review, the following

hypotheses have been constructed. Both the conceptual framework and empirical study

are linked to test these hypotheses:-

Hypothesis (1): The level of e- marketing used by SBEs is significantly related to thefirms marketing performance .

Hypothesis (2): The form of e- marketing used by SBEs is not significantly related to the

firms marketing performance.


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Hypotheses (3): Implementing E- marketing by the SBEs is dependent on the SBE

internal related factors.

6. CONTRIBUTION TO THE CURRENT KNOWLEDGE

We make a living by what we get, but we make a life by what we give

Sir Winston Churchill

The primary benefit of this study is as a contribution to knowledge in the areas of

small business enterprises and E-marketing. The research will contributes to the limited

number of empirical researches on marketing goods, services, ideas and information

depending on the Internet and other electronic marketing means. Moreover, it contributes

to the limited number of empirical evidences to explore the effect of E-marketing on the

marketing performance of small business enterprises. Many researchers (Sheth, J. N.,

Sharma, A., 2005; Sandeep K., Singh, N., 2005; Adam, S., et al., 2002; Teo, T., Tan, J.

S., 2002; Darby, R., Jones, J., Al Madani, G., 2003 and Goldsmith, R., Lafferty, B., 2002)

had suggested the need for such kind of research. Those authors agree that a serious

marketing practitioners and academic researchers are now aware that more systematic

research is required to reveal the true nature of E-marketing.

7. RESEARCH PROCESS

The research process will be conducted through five basic stages (as illustrated in

Figure2) these stages are: Identification of the research problem and objectives, The

development of the research framework, Research methodology, Quantitative and

qualitative data analysis, and Discussion and conclusion.


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Figure 2 : The research process

I dentif ication of the:-

- Research Problem

Th e Research Questions, Model and H ypotheses

Research M ethodology

Topic Selection

Data Analysis

Data

I nterpretations and Di scussion of Key

Conclusion and Recommendations

Electronic

Marketing

Small Busin ess Enterprises

Content Anal ysis

Data, Method and

M ethodologic al

Purification

M easur es

Research

Research

Sampling

Enteri ng Data to

case study

survey

Reli abil ity/ pil ot

Questionnaire Design and

Descriptive Statistics,

Corr elati on, Chi Square,


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The researcher had done his best to arrange the organisation of the study in such a way

that it allows the readers to follow the process easily and smoothly.

RESEARCH METHODOLOGY

From the researcher point of view, generally there is no optimal research

methodology or method. Because each methodology or method have some drawbacks or

limitations, but a researcher must employ the most appropriate research methodology and

methods to his research in the light of his research questions, aims and by taking into

consideration the methodologies and methods employed in other studies in the field.

Based on that, when determining the most suitable methodology for the research

the researcher take into consideration the research questions and aims as well as the

methodologies used in the contemporary E-marketing research.

To investigate the methodologies and methods used in contemporary E-marketing

research, the researcher constructed a representative un-probability sample from the

literature. From this sample it was found that the majority of researchers in the literature

depended on Quantitative methodology with a percentage of 33.3% of the sample size

and as illustrated in figure 3 : 27.6% of the researchers applied Qualitative methodology,

8.6% applied Triangulation methodology, 29% conducted Conceptual and theoretical

studies and 1.5% (One researcher) conducted Literature Review. ( Table 2 illustrate aclassification for this literature according to the methodology employed).

Regarding the research strategies adopted by the researchers it was found that the

majority of researchers depended on Survey strategy with a percentage of 41.7 % and as

illustrated in figure 4 : 18.8 % of the researchers applied Case Study strategy, 6 % applied

Exploratory strategy and 3 % applied Experiment strategy.

On the other hand, regarding the research methods it was found that the majority

of researchers depended on Questionnaires with a percentage of 60.4 % and as illustrated

in figure 5 : 29.6 % applied Interviews, 6 % applied observation and 4 % applied Focus

Groups.


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Quantitative Theoretical

Qualitative

Triangulation Literature review

33.3%

29% 27.6%

8.6% 1.5%

Literature review

Quantitative

Triangulation

Qualitative

Conceptual

Figure 3 : Research Methodologies used in E-marketingSource: El-Gohary (2006).

Table 2 Classification for some of the literature according to the methodology employed

M ethodology L iteratur e

Quantitative Flavin and Guinalu (2006), Lin et. al. (2006), Kuhlmeier and Knight(2005), Wong (2005), Flavin et al.(2005), Lymperopoulos andChaniotakis (2005), McCole and Ramsey (2004),Kim and Kim (2004),Lee-Kelley et al.(2004), Merisavo and Raulas (2004).

Qualitative Taylor and England (2006), Hackney et al. (2006), Park (2005), Lagrosen(2005), Ryan and Valverde (2005), Warnaby and Yip (2005), Rowley(2004 a), Smith, C. (2004), Darby et al. (2003), Martin and Matlay (2003),

Siddiqui et. al. (2003).Triangulation Weischedel et al (2005), Christodoulides and Chernatony (2004), Fillis etal (2004), Yang et al. (2003), Chaston and Mangles (2003), Adam et al(2002), Kapoulas (2002).

Conceptual and theoretical studies

De Kervenoael et al (2006), Sheth and Sharma (2005), Sandeep and Singh(2005), McCole (2004), Smith and Manna (2004), Smith, A (2004 a, b ),Kulviwat, et al (2004),Rowley (2004 b), Lindgreen et al (2004).

Source: El-Gohar 2006 .

Survey

Case study

Exploratory

Experiment

Conceptual

Literature

41.7%

18.8% 6%

3 %

29% 1.5%


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By reviewing the methodologies in the literature it was found that most of

the studies conducted have some critique points regarding the methodologies and

methods used in it, for example:-

* Among the things that can be taken against Collins, et al (2003):-- The research was conducted in 4 European countries, 2 of these countries do not

speak English and have a different culture which might affect the reliability of the study.

Especially that many of the questions were designed for academics rather to small hotels.

- Depending on the telephone in data collection have some drawbacks, one of it is

the danger that respondents might answer the question in the way that they believe the

researchers would like to hear (socially desirable answer).

- They didnt provide any valid arguments for choosing the 4 countries

investigated, especially that there are other famous tourism European countries like:

Greece, Italy and France. Not only the comparability of those countries is questionable,

but also applicability of the findings to other countries cant be guaranteed.

QuestionnaireInterviews

Observation Focus groups

60.4%29.6%

6% 4%

Figure 4: Research strategies used in E-MarketingSource: El-Gohary (2006).

Fi gure 5 : Research Methods used in E-marketing Source: El-Gohary (2006).


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The same point of critique is valid on the methodology applied by McCole and

Ramsey (2004) ; they didnt provide any valid arguments for choosing the 3 countries

investigated in their study.

* The main point of critique on the methodology applied by: Ramsey and McCole

(2005); Hinson and Sorensen (2006); Chaston and Mangles (2003); Ng (2005) is the

Lack of applicability and generalisation of the findings to the population at large.

* For Poon and Swatman (1997) the major points of critique is that they depend

on a multiple-case design, Although these designs are desirable when the intent of the

research is description, theory building, or theory testing and it allows a cross-case

analysis and the extension of theory (Benbasat et al., 1987, p. 373), BUT (from the

researcher point of view) it have the following drawbacks: lack of quantitative evidence

provided (such as the additional revenue generated by using the Internet) / there is no

guaranty that the interviewees were honest in their responses /)

* Most of the Qualitative researches in the literature depend solely on Case

studies and that could make it have some problems such as: the accusation of limited

generalisability; the question of external validity and Lack of rigour (where biased viewsof the researcher have been allowed to influence the findings) (Yin, 1994). Also it is

noticed that most of the Quantitative researches depend solely on survey strategy and it

also have some serious criticisms (Inherently positivistic, Incapable of getting at the

meaningful aspect of social behaviour, inherently atomistic ).

* Regarding conceptual studies, although it adds a lot to the field of E-marketing,

but all of it has a main point of critique which is: it lacks quantitative evidences to

support its findings.

Based on the previous discussion, a triangulation approach will be used in the

research, the researcher will make a: data, method and methodological triangulation, in

which quantitative and qualitative data will be collected depending on a combined


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research strategy based on survey and case study strategies through questionnaires and

interviews to address different levels of the study.

The survey strategy will allow the answer of the 'WHAT' question of the research,

such as: what is the relationship between using E- marketing by the SBEs a nd its

marketing performance. On the other hand, the case study strategy will give in-depth

information and answer the 'HOW' and WHY questions (for example: why the

relationship is taking one direction instead of anther direction).

WHY TRIANGULATION?

The logic of triangulation is based on the premise that: no single method ever

adequately solves the problem (Denzin, 1978: 28) and using only one method is more

vulnerable to error linked to that particular method (Patton, 1990: 188) ; for that the use of

different methods in studying the same phenomenon should lead to a greater validity and

reliability than a single methodological approach, because any bias inherent in a

particular method would be neutralised when in conjunction with other methods. Beside

that, each technique has its advantages and disadvantages, strengthens and weaknesses,

for that combining the methods will be helpful and useful to benefit from the advantages

and strengthens and avoid the disadvantages and weaknesses.

So, although triangulation entails a commitment to greater amounts of effort, time

and money, it has the advantage of removing the bias that is often associated with the use

of a single technique. For that the researcher will use triangulation to increase the validity

and credibility of the research conclusion, to be more confident about the findings, to

increase the ability of generalization, to answer the research questions and to meet the

research objectives effectively and professionally. Especially that according to the

knowledge of the researcher there is no previous studies were conducted in the field of E-

marketing practices in SBEs in Egypt, also there is lack in scientific studies in this filed

in general. For that the researcher: believes that combining of methods in this research is

indispensable, and will depend on a combined research approach based on survey and

case study analysis.


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DATA COLLECTION AND ANALYSIS:-

The backbone of this research is to establish and sustain a clear link between

conceptual framework and empirical analysis. The main importance of this consideration

comes from the belief that unless the conceptual framework and empirical study are

highly integrated, each one of them individually would present a partitioned and distorted

image of the research points. For that this study will depend on:

Conceptual framework: depending mostly on the secondary data.

Empirical study : depending mostly on the primary data.

A combined research strategy based on survey and case study strategies will be

carried out in the research by using structured mailed questionnaires and interviews as a

primary data collection methods.Then, many statistical analysis techniques will be used

to analyse the data and test the research hypotheses.

8.TRADITIONAL MARKETING

Marketing is considered to be a collective process

where individuals or groups can exchange goods or services based on their needs and

wants. 16 The content of this process was presented as marketing mix by Neil Borden for

the first time in 1953, representing the mixture of useful elements for marketing. This

theory of marketing mix has been analysed and rewritten about by many different authors

through time. One of the authors that have written about this theory and explained his

point of view about the elements of marketing is Philip Kotler, whose marketing mix is

presented in this thesis. He considers the marketing mix, a mixture of different tools or

instruments for pursuing a marketing plan.17

In traditional marketing the wants and needs of customers are being discovered andsatisfied, through traditional channels of communication such as face to face

communication, magazines, catalogues etc. The aim is to create products and services

which sell themselves by being what customers need and want.18 Marketing is the

process of planning and executing the conception, pricing, promotion and distribution of

ideas, goods and services to create exchange that satisfy individual and organizational


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objectives.The marketing mix theory of Philip Kotler, the 4Ps are presented here in the

following order, Product, Price, Place and Promotion

PRODUCT

According to Kotler20 Product is the solution to customers wants or/and needs. There are

different aspects of product that needs to be considered. Some examples of these are the

design, function and quality of the product. The marketer needs to know what kind of

appearance such as size, colour and generally design of product is wanted or needed. It is

also important to know what kind of functions the customer is looking for in the product.

To know what is required by the market, there is a need for research and studying the

market. There are 5 product levels, which create the customer value hierarchy. These

levels are called core benefit, basic product, expected product, augmented product and

potential product. Core benefit is the benefit of the product which the customer would be

buying. For example buying a spa ticket, one is buying the benefit of it which in this case

would be relaxation and rest. Basic product is the benefit turned into a product, providing

the needed tools to create the benefit for the customer. Expected product is what would

fulfil customers expectations mainly based on what is promised by the marketer.

Augmented product is a product that fulfils more than what the customer expects.

Potential product is the possible wanted or needed product by customers. Service is also a

part of this P. It is the intangible good that a company can offer to its customers and it isdifficult good to provide, for satisfying customers needs and expectations. One reason for

this is the difficulty of measuring it fitting the needs and expectations. Offering warranty

is part of this P too. By providing warranty, the company is not only offering a good

customer service but also showing that it believes in its own goods.

PRICE

Compared to other Ps in the marketing mix, pricing is easiest and quickest to adjust. As

Kotler presents21 it is an important part of the marketing strategy and it sends out a

message about the product, company and the image. The decision of pricing is dependent

on what goals the company wants to achieve. Does the company want bigger market

share, maximum profit or possibly a specific position in the market etc? Setting a price is

a process and based on the marketing mix theory there are 6 steps in this process. These

are Selection of pricing objectives, Determination of demand, Estimation of costs,


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Analysing competitors costs, prices and offers, Selection of pricing method and

Selection of final price. The firm should decide on the objectives that it wants to achieve

which would make the decision of price setting clearer and easier. The demand and price

are depended on each other and therefore it is an important point for setting price.

Different kinds of possible costs such as fixed costs, variable costs etc. should be

observed and estimated when setting the price. This is one of the issues that have a large

affect on price setting. A nalysing competitors costs, prices and offers is also very

important in order to be able to compete with them and not stay behind. Based on the

different steps of the price setting process mentioned above, the company should decide

on a pricing method and set the final price accordingly. Payment terms are part of this P.

The different type of payments, credit terms and different payment periods are issues to

decide upon in a marketing process. The marketer should consider different options and

figure out the best way for different situations, depending on the wanted result and the

needs and wants of the customers.

PLACE

Place in marketing can be about location in the means of store, factory and storage. Also

the decisions on distribution channels and transport are part of it.22 The company should

act on the goals they want to achieve by the location they choose. Some examples of the

factors that have an affect on this decision are the cost of the chosen location, the amountthe company can spend in this area, the profitability of it and the space needed. The

choice of place can be very radical for the success of the business. For example, a

company chooses a place outside the city because of the wide space needed and the cost

of it or a company that opens a new store and wants to get the customers attention by

situating it in a very busy and crowded area where possible customers would drop in

when passing by.

PROMOTION

Promotion is one of the important Ps of 4 Ps of marketing mix. The focus is mainly on

how the company could reach its targeted customers and communicate its message to

them. The figure below demonstrates the objectives of promotion mix which will be

explained further on in the text.


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Sales promotion is a key factor in marketing campaigns, creating an incentive for

customers to buy the product or service. Sales promotion contains offers such as free

trials, prizes, warranties, coupons and etc. These are the offers that can attract mainly the

customers that are looking for a new thing and they probably would not become loyal

customers. This strategy can be used in high brand similarity markets where the seller

wants to reach short term high sales response and not so high permanent gain in market

share. In a low brand similarity market, this strategy can have a more permanent affect or

gain on market share. The amount of existing brands has grown by time and the

competition is getting tougher. Another issue rising from this is the price-oriented

customers that are looking for the better offer. For companies to be not just one of the

brands they have to try more and present more interesting promotion offers or better

promotion tools than the competitors are using. Promotion can be used in different ways,

for example by targeting the new customers or loyal customers or rewarding both in

different ways. The bigger or more exceptional the offer, the more attention the company

can get from the customers.

Sales force is the face of company towards customers when providing or offering

customers solutions in either services or products. Their working process has become

from just selling to more complicated task. The sales representatives are the ones that

bring the needs of customers and the company together and create the mutual satisfaction.Public relations involve creating and planning a program or event where the company

can promote and in some cases protect the products or the image. Some examples of

these events are presenting news or important information about the company to the press

by having a press conference. Another example can be informing and advising

management about the public issues and company position and image in different type on

situations. The aim is to prevent bad publicity and therefore it is important that the

managers are aware of what kind of practices they should avoid and what kind to get

involved with to present a good will for the company. The importance or effectiveness of

this tool should not be underestimated compared to the other tools in promotion mix. This

tool plays a great role in presenting and keeping the company image, values and position

which is very important.


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Advertising is any paid form of non personal presentation an d promotion of ideas or

good or services by an identified sponsor.25 Advertis ement can be done in many ways.

Advertisement is a way of communicating the offer to customers and it can be done in

different ways, in different shapes and through different channels. Most companies get an

outside help from the experts such as an advertising company, to make the decisions

about what the best way to do their advertising would be. The company that needs the

advertising should decide on the budget they have for the advertisement, what is the

message they want to give to the customers, which media they want to use and how they

want to measure the results. These are some important decisions to be made and it can

easily happen that some companies under- or over-spend for advertisement.

Direct marketing involves using different channels to reach the customers. This

communication can be done through face to face meeting, mailing, telephone, catalogue

and Internet. With direct marketing the company seeks for a measurable response from

customers. This is one way of building long term relationship with customers; for

example, by sending customers a birthday card on their birthday, information or club

membership offers etc. Direct marketing creates a personal feeling communication

towards the customer. Companies can be more aware of how to target which groups of

customers.

Face to face selling is the most original one and is still used in many companies wherethey send out their sales personal to meet the potential customers. The sales person

communicates directly with the customer and the offers and the deals are made. Then

there is direct mailing where the company sends a letter to the customer. This letter can

be an offer, announcement or reminder. Direct mailing tools have developed by time and

these added tools are fax, voice mail and e-mail. E-mailing is one effective tool because

of the time and money that can be saved by using it instead of sending the regular mail.

In catalogue marketing, companies send their catalogue to targeted potential customers

where they have the opportunity to order and purchase the products or services by

responding through Internet, telephone, mail or e-mail. This way of shopping has grown

among customers because of the comfort of shopping while being at home.

Telemarketing is another way of direct marketing where the sales personal call the

customers and tries to sell a product/service making an offer and possibly a deal. Other


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way of telemarketing is providing a service for those who are already a customer and

need support. the communication goes in both directions in this situation, depending on

the purpose of either party. There are some media channels used for direct marketing

such as TV, radio and magazines etc. For example there can be a number mentioned in

these communications which customers can use for ordering something they might get

interested in. This way they are given the opportunity to act when they are interested to

purchase a good seen or heard through the media. This way of marketing gives

companies the opportunity to give different kinds of offers to different kinds of possible

buyers.

9.INTERNET MARKETING

Internet is used as a communication channel as a part of direct marketing. It has had a

large impact on marketing since it was invented and realized to be an effective marketing

tool. But the meaning and usage of it has changed through the years. In the beginning it

has been used mainly for communicating to customers through e-mailing and getting

response from them. It has helped the companies to be able to target their potential

customers more personally and knowing more about them has helped in knowing how to

approach different customers to get to their needs. Nowadays the concept of Internet

marketing has extended and opened more opportunities to companies in their marketing.

The website of the companies online has got a lot of attention and has become a verycommon media for presenting the company, its offerings and image. Internet has become

a strong marketing tool in itself which can be compared separately to other marketing

tools. This growth can be seen both on a technical level and accessibility of it for

customers. Today many people have access to the Internet. 65% of all male and 53% all

female population of Sweden use Internet daily.27 With this large amount of possible

customers, the companies have access to a larger audience. The technical development of

the Internet and computers has made it possible for businesses to communicate their

message and image with no limitations. Internet is a new marketing tool that can be used

by companies in order to reach their c ustomers.28 Internet marketing is defined as the

application of the Internet and related digital technologies to achieve marketing

objectives and support the modern marketing concept Internet marketing is often

presented as a new theory of marketing however some argue that basic concepts from the


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traditional marketing are still valid. The basics of marketing mix are still applicable and

Internet offers new opportunities to adapt them.

PRODUCT

The Internet leads to faster discovery of customer need s, greater customization of the

products to the customer needs, faster product testing, and shorter product life cycles.

Internet offers the opportunity of developing new products or services. To develop a

product, there is a need for research on customers needs. Internet provides the

opportunity of offering a core prodcu t that satisfies the customers fundamental needs,

but it also enables the companies to offer additional services such as interactivity or more

information ab out the companys core product. On Internet, a picture or description will

replace the physical product offered in the traditional marketplace or in stores. Providing

a complete and relevant product information is crucial in order for the customers to get a

realistic picture of the product and to make the product offered more attractive.

Since customers can not touch, feel or try the products chosen on Internet, companies that

have online shops should offer warranties for products sold.33 This practice increases

customers confidence ther eby their willingness to buy on Internet. Companies that have

an online store should offer services of high quality to their customers. Services offered

on Internet by a company should reflect the following factors in order to satisfy

customers: reliability, responsiveness, competence, ease of use, security, and productPortfolio.

PRICE

Compared to the other elements of the marketing mix, Price is the most flexible element

since it can be adapted quickly to the marke ts demand than other elements. Price on the

Internet has become very competitive. There are two reasons for that ; one is price

transparency on the Internet as it is much quicker and easier to compare prices by visiting

companies websites or by using price comparison sites.35 The other reason is the ability

to reduce costs such as store space and staff costs. In this sense, Internet is considered as

the most cost-effective marketing tool. Internet offers new methods of payment. The

online payment that uses mostly credit cards is seen as an efficient, convenient and

flexible payment method for both companies and customers.37 In fact, customers are the

ones who fill all the needed information such as their personal and credit card


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information. This helps companies to save money and time by reducing administration

work. Moreover, customers have the possibility to pay their bills at any time and any

place they wish if only they have access to the Internet. However, security and privacy

issues make customers less confident when using this method.

PLACE

The Place element of the marketing mix traditionally refers to where the product is

distributed to customers. Internet offers a new way for distributing products through

online selling. Allen and Fjermestad argue that the Internet has the greatest implications

for Place in the marketing mix because it has a large market place.39 People can make a

purchase decision anywhere they are thanks to online selling. With Internet, companies

can expand from local market to both national and international markets. Internet can also

be used to exploit new markets.41 Companies can gain the advantage of the low cost of

advertising internationally without the necessity of a supporting sales infrastructure in

different countries.

PROMOTION

The Promotion element of the marketing mix refers to how marketing communications

are used to inform customers about an organization and its products. Internet can be used

to review new ways of applying each of the elements of the communications mix which

are advertising, sales promotions, PR and direct marketing by using new media such asthe web and e-mail.Internet offers a new, additional marketing communication channel to

inform customers of the benefits of a product and assist in different stages of the buying

process. By using promotional tools on the Internet such as online offers, frequently

updated information and direct e-mail reminders, companies can encourage customers to

visit their sites.

Internet Advertising: It is a form of advertising that uses the Internet to deliver

messages about a company and attract customers. It can be done in two ways: by creating

a website which can help a company to deliver all information to the potential customers

or by using banner advertisements which can lead the visitor to the relevant website. It is

critical for a companys website to be well designed and informative in order to attract

many visitors in the target group.


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Sales promotion: With Internet, marketers have a great opportunity to offer sales

promotions such as competitions or price reductions to those who visit the companys

website. This can encourage the customers to visit that website again and this way of

interacting with the customers provides the means for the company to build a long term

relationship with their customers.

Public relations: Internet is a new medium for Public Relations (PR). Internet offers

companies the opportunity to publish the news directly while in traditional marketing

they would wait for periodical publications.45 They can use Blogs, Podcasts / Internet

radio shows, Online newsrooms and media kits.

Direct marketing: Internet provides companies with a new tool for direct marketing and

advertising that may be cost effective and provide maximum delivery to targeted

customers. By using e-mail addresses, the company can establish a continuous dialogue

with customers.

10.TRADITIONAL MARKETING VS INTERNET MARKETING

In this section the authors make a comparison between the main points of both traditional

marketing and Internet marketing. Here the 4 Ps are mentioned in comparison to each

other to give a clearer idea of different issues that either traditional marketing or Internet

marketing carry in their tools.

PRODUCTProduct in traditional marketing is tangible for the customer where as through a website

in Internet marketing is just a virtual image.47The customer can not experience the

quality and size of the product by seeing it on the website in the same way as seeing the

product in a physical store. Not being able to reach and feel the product physically, can

create doubts for the customer and have an affect on his/her purchasing desicion. When it

comes to range of products offered through Internet compared to physical stores, there is

an advantage of possibility for a company to offer a wide range of products on their

website.48 The issues that can appear here are cost and space for inventory and store

space itself, where there is a connection between cost and space. One important issue to

point out is the customer service and how it can reach the customer. It is more difficult to

provide customer service through Internet compared to face to face contact when the

customer visits the physical store. The customer can get a quick response and reaction


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from the staff when getting a service in the physical store, where as through Internet the

customer is dealing with a so called fixed service. And eventhough there might be

possibility for communicating through e-mail or support chat function, the response and

communication of service will not be as personal and quick as it could be when

communicating face to face. One issue that can affect the customers choice of purchase is

the warranty of the good. This gives comfort to customers, both in traditional marketing

and Internet marketng but most importantly it gives the secure feeling to those purchasing

online. The customer that can not see and touch the product when purchasing it would

feel more sequre knowing that there is a warranty on the product and this would make the

choice of purchase easier and less risky.

PRICE

The pricing of a product can be based on the costs of its process in reaching the market.

When a company does Internet marketing it has a bigger opportunity to save costs and

therefor possibility to have lower prices. One of the reasons for this is the cost of space

for keeping the products or the cheap way of communication through inernet such as

communication by e-mail. When marketing through Internet, the competition is very

though which affects the pricing reasons. The competitors are a click away when a

potential customer is searching for information on the Internet. Since payments for

purchase through Internet are done by credit card mostly, there can be some securityissues that create problems. For example a customer would feel more secure paying in

the physical store where they can have more control over the payment process, where as

purchasing online they would be taking a risk when giving the credit card details.

PLACE

In traditional marketing, companies have the opportunities to decorate the stores in order

to create a specific athmospher that can attract customers. Some attractive tools to create

that atmospher can be music, colors, etc, but through Internet marketing it is almost

impossile to create a real sensation since a website is just a virtual image. Eventhough

many of the websites try to create an atmospher by adding the same tools for attraction,

they can not create as real experience as can be created in the physical store. The

atmosphere of the store is mentioned to be very important for sales of the products. For

example if you see an unorganized store just filled up with some clothes you hardly feel


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tempted to go in and look for anything. The way the store is decorated gives a message

about the company and its style.52 When one thinks about this, one can realize the

importance of the physical existence of the store. Think for example how the company

could offer the same atmosphere through the website. As an example we can consider

H&M, based on their website their aim is to have the same atmosphere on their website

that they have in their stores.53 But in the end the experience of stepping into the store is

different than clicking on computer when shopping. Internet helps companies to be

reachable at any time, regardeless of openings hours that phyical stores require.54 Also

the possibility for the customers to reach the store location online and the range of

customers that can do that is much wider compared to the physical location of the store.

PROMOTION

When it comes to promotion, one thing is clear in difference between the communication

through traditional tools and Internet and that is the speed. Speed of getting the message

of advertisement, news or any type of information through to customers is very quick

through Internet. This is a very important issue in the competetive world of business.

Another difference between promotion by Internet and promotion by traditional ways is

the durability of the marketing message the marketer wants to communicate with the

customers. In traditional manner, the message would receive attention during a limited

amount of time, for example as it is aired on TV or sent out as paper advertising. Whereon the Internet, the marketers message to the customers can exist const antly on the

companys website for example and it is accessable by the customers 24/7.55 Through a

website, a company can present itself in many ways where the customer can study

different aspects of the company and get to know it well where as this is not possible in

the same way through traditional tools for promotion.56 For example the complexity of

wide range of information can not be easiely fitted into a magazine advertising or TV

commercial etc. The tools for traditional promotion can be used mainly in

communicating the message shortly and consistantly. There is of course the burden of

maintaining a website or online commercials that consumes time, resources and money.

But this should be weighted out by the accessability and opportunity they provide.

Another issue is the damage that a failed or crashed website or other Internet service can

have on a companys image. A good website is very important for succeeding in online


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marketing. According to Sunday Times, some important guidelines for a good website for

a company are:

* Provide clear information on contacts, delivery and refund policies.

* Think "user journey" rather than individual pages.

* Let shoppers browse without having to register.

* Keep sites simple and easy to use.

* Offer an effective search engine.

* Market the site online and link it to search engines.

* Provide consistency of experience.

* If the Internet does not offer the full bricks -and- mortar range, say so.

* Give complaints ID numbers.

* Build trust.

Nowadays a large group of consumers have the problem of time but have the money to

spend so therefore it can be easier for them to shop online, by saving time when

spending. The image, speed, design and generally every aspect of the website of a

company is very important and in a case of failure it can have big damages to the

company that cant be even compared to lost sales. Communicating through Internet

gives an opportunity to the marketer to reach the targeted group easily and have a

continues relationship with them.59 Of course there are some great advantages incommunicating through traditional tools of promotion such as face to face

communication with customers where the company can get straight feedback and can

measure the result more quickly.60 The communication in this way is both sided where

the customer has more opportunities to react on the information or offer received.

COMPARISON MODEL

The authors of this thesis have created a list of the main advantages of both traditional

and Internet marketing based on the theories presented above. The points mentioned in

this model highlight the main differences between the two approaches of traditional and

Internet marketing. This model presents the summary of the comparisons done earlier in

this chapter based on the literature presented in the theory section. The model is created

to help the reader get a clearer picture, when studying the differences in the parts of the

marketing mix theory. The positive aspects of either approach pointed out in this model


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can be radically important for some businesses. One can see here that some points in both

sides are not replaceable by marketing through the other approach.Each point/advantage

presented in the comparison model is based on the books and articles used for theories

Some issues or disadvantages that we can see mentioned in comparison between Internet

and traditional marketing might not bother some cutomers. There are only 21% males and

28% females that have never done a purchase through Internet in Sweden.62 According

to a study done by Statistiska Centralbyrn, the number of customers purchasing products

and services Traditional Marketing vs. Internet Marketing Comparison Table

Internet Marketing Traditional Marketing

Targeted Marketing Non- Targeted Marketing

Economical and fast way to promote product.

Expensive and takes more time to promote product.

Cost-Effective for promoting product

globally

Expensive and time consuming process

for traditional marketing.

Your product or service is 24 X 7

advertising

That is not possible in traditional

marketing.

Effective mode of tracking investment Not Possible


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11.WHY SEARCH ENGINE MARKETING?

ADVANTAGES OF INTERNET MARKETING ON TRADITIONAL MARKETING

Ten years ago we saw the .com boom break through from Silicon Valley to around the

world. In the year 2000, there were 200 million internet users. Since then, 10 years later,

there is a reported 1.4 Billion internet users worldwide. Marketing is all about telling

your story to the right audience. Never before could you target your specific audience

like you can today. If you are considering jumping into internet marketing , here are 4

advantages of marketing online vs traditional methods.

Highly Measurable- Just about every aspect of internet usage is traceable. You can

track how many people view and ad, to what that person did once they clicked on the ad.

You can view how much time someone spent on your site, and how they got there.Trace

what patterns people follow once they get to your website. Are they finding your

shopping cart? Or are they more interested in browsing specific merchandise.This is all

very important to know what is working, and most importantly what is not working so

that you can tweak it.

Make Changes On The Run- Imagine running an add in a phone book with theWRONG phone number?! Yes, it happens. In this case your are SOL. With internet

ads, you always can control the add visibility, run time, click through location and

content. This can prove to be very effective when testing a new product launch or a new

demographic of customers.

Visible 24/7- The internet is visible 24/7, which means you are able to market your

product or service ALL the time. Let your website be your best sales rep even while you

are sleeping. Let your FAQ page answer important questions your clients are looking for after business hours to give them confidence in your company.

Cost Effective - ROI is important with any marketing campaign, why not make sure to

market with the method that has the highest ROI than any other means. Jim Spanfeller,
http://localworkmarketing.com/tag/internet-marketinghttp://localworkmarketing.com/tag/internet-marketinghttp://localworkmarketing.com/tag/internet-marketinghttp://localworkmarketing.com/tag/internet-marketing


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CEO of Forbes.com, said, Internet marketing provides the lowest cost per lead of any

direct marketing technique available today.

With the cost of online marketing so low, your potential so high, you would be throwing

money away by not taking advantage of such an opportunity.

CONCLUSION

Comparing both type of marketing, Internet Marketing is more economical and faster

way to reach out to your buyer directly. And is the ideal ways for business to advertise

locally or internationally.

BIBLIOGRAPHY:-

en.wikipedia.org/wiki/ Marketing

www.impliedbydesign.com/.../the-advantages-of- internet -advertising

www.answers.com Library Business & Finance

www.articledestination.com/Article/New... Marketing

marketing teacher.com/swot/itc-swot

www.questia.com/library/...and.../ marketing /marketing -research

www.1000ventures.com/business_guide/ marketing _relationship
http://localworkmarketing.com/tag/internet-marketinghttp://localworkmarketing.com/tag/internet-marketinghttp://localworkmarketing.com/tag/internet-marketinghttp://www.google.co.in/url?url=http://www.answers.com/main/what_content.jsp&rct=j&sa=X&ei=FSp_TrFZr5CIB8Dv_OAO&ved=0CGUQ6QUoADAJ&q=bibliography+for+internet+marketing+vs+traditional+marketing&usg=AFQjCNFWM_oInFvUQnOAUVoP96uJU2Zrnghttp://www.google.co.in/url?url=http://www.answers.com/main/business.jsp&rct=j&sa=X&ei=FSp_TrFZr5CIB8Dv_OAO&ved=0CGYQ6QUoATAJ&q=bibliography+for+internet+marketing+vs+traditional+marketing&usg=AFQjCNGrwi26op46Z9JVkqkM0vrCbOH8Xwhttp://www.articledestination.com/Article/New...Marketinghttp://www.articledestination.com/Article/New...Marketinghttp://www.articledestination.com/Article/New...Marketinghttp://www.articledestination.com/Article/New...Marketinghttp://www.google.co.in/url?url=http://www.answers.com/main/business.jsp&rct=j&sa=X&ei=FSp_TrFZr5CIB8Dv_OAO&ved=0CGYQ6QUoATAJ&q=bibliography+for+internet+marketing+vs+traditional+marketing&usg=AFQjCNGrwi26op46Z9JVkqkM0vrCbOH8Xwhttp://www.google.co.in/url?url=http://www.answers.com/main/what_content.jsp&rct=j&sa=X&ei=FSp_TrFZr5CIB8Dv_OAO&ved=0CGUQ6QUoADAJ&q=bibliography+for+internet+marketing+vs+traditional+marketing&usg=AFQjCNFWM_oInFvUQnOAUVoP96uJU2Zrnghttp://localworkmarketing.com/tag/internet-marketing

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