Marketing On The Net Essay, Research Paper
INTERNET BASICS The Internet is a worldwide network of computer networks. It is comprised of thousands of separately administered networks of many sizes and types. Each of these networks is comprised of as many as tens of thousands of computers; the total number of individual users of the Internet is in the millions. This high level of connectivity fosters an unparalleled degree of communication, collaboration, resource sharing, and information access. History The Internet was evolved from the ARPAnet originally designed in the late 60s by the U.S. military as a means of ensuring a workable communications system in the event of a strike by enemy missiles or forces. The National Science Foundation eventually took over the Internet in the 80s and the 1991 US High Performance Computing Act established the basis for the National Research and Education Network (NREN), the goals of which are to maintain high speed, high capacity research and education networks while helping to develop commercial interest on the Internet as well. This has accelerated a change in the use of the Internet as a predominantly academic and research tool to a popular one, so much so that in the first half of 1994, the number of domanin names for commercial organizations (the “com” domain) overtook those for educational institutions (the “edu” domain) for the first time. Internet Topology For the Internet to exist, there must be connections between computers and agreements on how they are to communicate. Connections can consist of any of a variety of communication media or methods: metal wires, microwave links, packet radio or fiber optic cables. These connections are usually established within areas or regions by the particular networking organization with authority or economic interest in that area. For example, a university academic department may lay Ethernet cable to connect its personal computers and workstations into a local area network (LAN), which is then connected to the cables the campus laid to connect its buildings together, which is then linked to cables laid by a regional network, which itself ties into the NSFNet backbone, the infrastructure for which was funded by the U.S. government. Therefore the path between any two points on the Internet often traverses physical connections that are administered by a variety of independent authorities.For disparate computers (from personal computers to mainframes) to communicate with other computers over a network, there must be agreements on how that should occur. These agreements are called communication protocols. At present, the Transmission Control Protocol/Internet Protocol (TCP/IP) suite of protocols defines how Internet computers are to communicate. In the future, the Open Systems Interconnection (OSI) suite of protocols promulgated by the International Standards Organization (ISO) may be supported on the Internet as well. These protocols define how certain applications are to be accomplished: electronic messaging, online connections, and the transfer of files. Electronic Mail Electronic mail, or e-mail, is a fast, easy, and inexpensive way to communicate with other Internet users around the world. In addition, it is possible for Internet users to exchange e-mail with users of Internet users often find that the expanded capability to communicate with colleagues around the world leads to important new sources of information, collaboration, and professional development.Besides basic correspondence between two network users, e-mail presents additional opportunities for communication. Through various methods for distributing e-mail messages to lists of “subscribers,” e-mail supports electronic discussions on a wide range of topics. These discussions bring together like-minded individuals who use such forums for discussing common problems, sharing solutions, and arguing issues. Remote Login Remote login is the ability of a computer user in one location to establish an online connection with another computer elsewhere. Once a connection is established with a remote computer, the user can use that remote system as if their computer were a hard-wired terminal of that system. Within the TCP/IP protocol suite, this facility is called Telnet. Utilizing Telnet, an Internet user can establish connections with a multitude of bibliographic databases (primarily library catalogs), campus information systems of various universities, full-text databases, data files (e.g., statistics, oceanographic data, meteorological data, geographic data, etc.), and other online services. Many of these systems are available for any Internet user to access and use without an account.What makes this application truly remarkable is that ease and speed of access are not dependent upon proximity. An Internet user can connect to a system on the other side of the globe as easily as (and generally not much slower than) he or she can connect to a system in the next building. In addition, since many Internet users are not at present charged for their network use by their institutions, or at least are not charged by the level of their use, cost is often not a significant inhibitor of usage. Therefore the barriers of distance, time and cost, which are often significant when using other forms of electronic communication, can be reduced in the Internet environment. A compensating disadvantage is that initial costs for Internet connection can be high, and accesscan be technically demanding. File Transfer Another application of the Internet is the ability to transfer files from one Internet-connected computer to another. This function is provided by the File Transfer Protocol (FTP) of the TCP/IP protocol suite. In a method similar to using Telnet, network users initiate an online connection with another Internet computer via FTP. But unlike Telnet, this online connection can perform only functions related to locating and transferring files. This includes the ability to change directories, list files, retrieve files, etc. Types of files that can be transferred using FTP include virtually every kind of file that can be stored on a computer: text files, software programs, graphic images, sounds, files formatted for particular software programs (e.g., files with word processing formatting instructions like Microsoft Word), and others. Many computer administrators have set aside portions of their machines (servers) to offer files for anyone on the Internet to retrieve. These archive sites support “anonymous” logins that do not require an account to access, and therefore are called anonymous FTP sites. Extended Services The three basic Internet applications of electronic mail, remote login, and file transfer are also building blocks of more sophisticated applications that usually offer increased functionality and ease of network use. Tools such as Gopher, WAIS, and World Wide Web go beyond the three basic Internet functions to make information on the network easier to locate and use. Gopher… is a project of the University of Minnesota that uses a series of menus to organize and automate access to information and other online systems wherever they reside on the Internet. The Wide Area Information Servers (WAIS)… project of Thinking Machines, Apple Computer, Dow Jones & Co., and KPMG Peat Marwick, seeks to provide a common interface to a multitude of Internet databases. USENET News… or Newsgroups are a great way to find information on any topic. With over 20,000 to choose from, there is surely one that will pique your interest. Internet Relay Chat… (IRC’s) chat rooms and private messaging make it the cheapest way to talk to people over vast distances in real-time. Telnet… is a text-based way of managing accounts on other computers. Rather than just transferring files or images, telnet lets you login to the other computers right from where you are sitting. World Wide Web… is a hypertext interface to Internet information resources that was developed at CERN (now called the European Laboratory for Participle Physics) in Switzerland through a project started by Tim Berners-Lee in 1989 forming the World Wide Web Consortium (located at http://www.w3.org). His goal was to link distant documents (hypertext) and find ways that people could work together. Then, at the National Center for Supercomputing Applications (NCSA) at the University of Illinois Champaign/Urbana, Illinois, Marc Andersen and his team of talented software developers developed the world’s first browser, Mosaic. Marc later left NCSA) to form Netscape Communications.Probably the most-famous part of the Internet, the web is one of the most efficient methods of dispersing information with its system of hyperlinks. This trend toward more powerful, user-friendly networked information resource access systems is likely to continue as the Internet grows and matures. The World Wide Web consists of computers (servers) all over the world that store information in a textual as well as a multimedia format. There are currently over 300,000 active Web servers across the world. Each of these servers has a specific Internet address which allows users to easily locate information. Files stored on a server can be accessed in two ways. The first is simply by clicking on a link in a Web document (better known as a Web page) that points to the address of another document. The second way to locate a particular Web page is by typing the Universal Resource Locator (URL) of the page in your browser (the software interface used to navigate the World Wide Web). The URL of a page is the string of characters that appears in the LocationWorld Wide Web pages are written in Hypertext Markup Language or HTML. This format allows text to appear in various colors and sizes when loaded by a Web browser such as Netscape or Internet Explorer, two software programs that navigate the World Wide Web. Most Web browsers also display graphics files which can be embedded in the HTML code of a Web page, allowing pictures to appear in various parts of a document, as well as using them as a background.The greatest advantage of producing information in this format, is that files may be linked to one another via hyperlinks (or links) within the documents. Links usually appear in a different color than the rest of the text on a Web page and are often underlined. Navigating the Web is as simple as clicking a mouse button. Clicking the mouse on a link tells the computer to go to another Internet location and display a specific file. Also, most Web browsers allow easy navigation of the Web by utilizing “Back” and “Forward” buttons that can trace your path around the Web. Links within Web pages aren’t limited to just other Web pages. They can include any type of file at all. Some of the more common types of files found on the Web are graphics files, sound files, and files containing movie clips. These files can be run by different helper applications that the Web browser associates with files of that type. INTRODUCTION: THE FUTURE OF MARKETING The evolution of the virtual experience and the promise of cyberspace have recently begun to open doors to information which were previously inaccessible. Everyone from public universities to big business is racing to cash in on what promises to be the future of information and communications.A totally paperless, highly-dynamic environment has been created in which ideas and images are exchanged free from the binds of the physical world. In this virtual space, there are no rules. There is no government regulation. What exists is the most massive amount of knowledge ever assembled on a common grid. It is for this reason that an internet connection is fast becoming the best way to reach the masses and provide input into a large percentage of the earth’s composite knowledge. The implications of a digital tomorrow on the way man conducts his day to day affairs is astounding. How will the business traditions of the past fit into the binary stream of the future? The world of mass marketing is evolving at an alarming rate, and the vehicle which will bring the business of the future to the doorsteps of every one lies in the web of the internet. TRADITIONAL MARKETING: A TWITCHING DINOSAUR Mankind is currently standing on the verge of the greatest change in lifestyle which he has ever undertaken. All around the globe, businessmen and other enterpenuirs are racing to cash in on the future of marketing. Tradition is being turned on its head as all of free enterprise begins plans to phase out age-old methods of fiscal stimulation for the more powerful, more effective, and most cost-conscious world of the internet. Their logic is not too difficult to understand. Last year, American businesses spent billions of dollars advertising their products by magazine, newspaper, radio, television, and mass mailers. They flooded the homes of America, targeting every breathing carbon-based life form they could find, with countless jingles, images, song and dance in an attempt to peddle their often unwanted goods. This type of nuclear marketing (dropping a powerful load at a random percentage of the population) has been the backbone of corporate America. Times, however, are changing. With the deregulation of the Internet in 1991, the federal government opened the doors of industry to the potential of advertising twenty-four hours a day, almost free of charge to anyone in the world who accessed their link. While it is true that this new advertising is not seemingly as direct, (it does not fall onto the bathroom floor out of the pages of a Rolling Stone) it does provide a marketing tool who directly targets interested parties. The largest problem with traditional marketing stems from the fact that, in order to determine who is interested in a product, the business would have to ask everyone. Changes in information access are forcing the game to evolve. Now, businesses can enjoy presenting their product to those who seek them out. Moreover, this new media revolution costs almost nothing to set up. It is clear that traditional marketing is approaching a revolution. It is a twitching dinosaur who is awaiting his doom. As the world continues to interlink itself, business will alter the way in which it reaches its customer. Those who evolve will prosper. Those who do not shall perish. WONDERNET TO THE RESCUE: WITH A LINK AND A SMILE The internet may seem like a whole new world to many citizens, but it is, in fact, based on the promise of a more efficient existence. Within the pages of the internet, the future of marketing, commerce, and retail lies. It will soon be the key to accessing millions of people, businesses, and services in a user-friendly, interactive environment. The inevitability of the internet lies in its great appeal to change the marketing strategies of corporate world. It provides marketing specialists with a gateway to not only the United States, but to the world. Imagine the vast amount of traditional resources necessary to introduce a product around the world. The cost of conventional advertising would make such an attempt futile. In stark contrast, businesses choosing to market products and services with “cybermail” find that the internet reduces both the time and cost of traditional communications. The internet, then, offers greater accessibility, lower costs, and higher levels of efficiency than traditional marketing techniques. It better represents the interests of both the companies and those who they hope to serve. Internet advertising is more personal, more helpful, and more beneficial to society as a whole. With a simple click of a mouse, consumers can access informaiton of interest and not be subjected to useless random trajectory mailings. The improved capabilities made possible by the internet web promise to revolutionize the world of tomorrow. With the net, there is no need to purchase a newspaper to read about daily events. A TV guide is not necessary to find the listings of popular shows. There will be no more hassles of getting the monthly bills out on time as all transactions can be performed in a digital medium. Credit Card companies, public utilities, banks, libraries, and retail establishments are all poised to position themselves in the new global marketplace. Shopping for cars, homes, and appliances is already possible on the net. It is easier and more profitable for all parties involved.
If you really look at the Internet profile, it is almost “perfect market”. Most of the users are educated, can afford a computer (proving they have disposable income and money to buy what is being sold). Almost all of them have credit cards (most pay for their internet access this way), and because they are “netters”, most of them are impatient and impulsive buyers. The Future Of Marketing On The NetThe Internet network is becoming increasingly popular among businesses as an avenue for marketing their products and services. The system is growing rapidly, with twenty-five million users in ninteen-niney four and fifty million by ninteen nintety-eight; a fifty percent rise in only four years. What implications and effects are in store for the future of marketing with such a rapid advance in technology? Experts express both concerns and breathless anticipation. This computerized information boom has enormous potential to boost economies world-wide, but it also has the possibility of being exploited. Advertising and marketing on the Internet makes obtaining huge profits possible. Id Software Inc., for example, sold several thousand copies of its Doom cliff-hanging software game the first weekend that it made the game available on the Internet. The company now has sold about ten million dollars worth of software via the net, while avoiding the costs of overhead that generally consume profits. Sellers, though, are not the only ones to reap benefits from the internet. Purchasing products over the net is also beneficial. It is faster than the traditional process of mail ordering, and the on-line support forums provide advice that is not found in manuals, catalogs, or brochures . To have marketing success on the internet does not require the abandonment of traditional marketing methods; innovation and placement are the prime components in the formula for acquiring internet revenues. Those businesses who devise a successful marketing plan are guaranteed a large profit for their efforts: commercial trade on the net is currently estimated at $200,000 per day, and is expected to substantially increase over the years. To make the network work to their advantage, direct marketers have more to consider than just developing a sound financial plan of action. Internet experts lay out several suggestions to generate profit and be a net success. Marketers should avoid being intrusive or sending unwanted messages, for practically noting else annoys internet users more. Instead, an affective approach is to use the internet for building higher levels of relationships with consumers through diaglog. Furthermore, Oglivy & Mather Direct has developed six rules for advertising on the Internet: consumers should only be given information which they have requested, data derived from a consumer interaction should never be resold, advertising should be limited to pre-specified newsgroups and list servers, promotion and direct selling must be preceded by full disclosure, consumers must be informed of end uses of market research, and communications software must not contain hidden functions. What does all of this mean for the future of marketing? The internet, as of now, is a free enterprise network. Neither government nor big business owns or regulates its content or procedures, thus allowing for a liberal dissemination of information. The costs for marketers or purchasers to use the net is very low, thus enabling both groups to make or save money. There are, however, problems to consider in this cyberspace wonderland. Commercial interests are flocking to the internet, and are directing their aims to the distribution of services and information to mainstream commercial audiences. Marketers should, experts of the net worn, be more cautious before starting internet sites and pages. Rather than automatically assuming the benefits of the medium, they should realize that many Internet sites offer poor data. They are much less accessible than interactive TV services, and they often include outdated information. Marketers should experiment with the medium but not blindly embrace it for the sake of their image. Rushing to set up shop on the web could be disastrous without the proper research and attitude, because the technology lacks such mission critical features as management, backup, security, and performance management. Some businesses, such as Pizza Hut, simply may not have internet-using customers; however, the low cost of setting up on the internet still remains a good argument in favor of doing so anyway. A good guage of what advertisers should focus upon comes from what type of audience they are playing to on the internet. Net users want advertising to be informative. A reason for this advertising approach focuses upon an internet user profile with notes that internet users are predominantly educated, discerning individuals. A survey of internet users by a commercial marketing firm found that eighty-seven percent possess a college degree and sixty-seven percent earn more that 50,000$ per year What are the best ways for business to market goods and services on a computer network occupied by such individuals? Experts on the use of the internet, some of whom have played major roles in linking its twenty-five million users, are uncertain. Some experts stress the unique cultural norms which are evolving among internet users as the best way for business to develop an internet customer base. Among the major barriers to successful marketing are security concerns and the absence of a definitive look and feel that will appeal to consumers . While the net is viewed as more user friendly than interactive TV, transactions are, as yet, few because of technology hurdles. For one, the net is not a closed system, which raises concerns of security. In addition, the differing computers and networks that comprise the net makes developing transactions difficult. The internet also requires increased competitive effort from entrepreneurs because government bureaucrats and their associated tax payer-supported groups will not provide the best information superhighway. This leads to widespread concerns that the internet will become a breedingground for monopolies as groups struggle to gain the most control and profit from the net. ADVERTISING ON THE NET NO one will make books 40 years from now, as no one today makes horse carriages.”– (Dan Okrent, Editor, New Media, Time Inc. On the Internet.) Exciting, interesting, the future of communication … these are some of the adjectives used to describe the Internet. But this new medium is hardly setting Indian advertising ablaze.To say that the Internet is gaining popularity as an advertising medium here would be a gross exaggeration. Fact being that this medium is just about beginning to get talked about; but it is not yet a part of the media planners’ staple diet.“For heaven’s sake nobody is in a hurry to set aside ad budgets for the Net, we are far too busy getting clients to agree on accepted spends as things stand,” says Suhel Seth, Managing Director, Equus Advertising. Is that a wrong stand? “No, not really because people are facing bonafide infrastructural setbacks and do not know this medium too well in India. The little exposure is limited to corporates and is spread thin among individual users,” feels Gopinath Menon, Media Director, Chaitra Leo Burnett.Let’s face it. There are only 50,000 direct Net users in India, which is a pathetic number compared with what the print medium and television command. But that is no reason for complacency to set in. Considering what some media heavyweights have to say: “It is all going to be new clients in new industries working in new ways, in new media, presenting challenges for communications,” opines Chris Jacques, Chairman, BBDO Asia Pacific, Hong Kong.Martin Sorrell — Chief Executive of the world’s largest advertising and marketing services group, the USD10 billion WPP Plc – feels that the emergence of interactive media will extend advertising. What is perhaps more critical for the business at large, according to him, is the new alliances that are leading to the creation of huge media majors.Simply put, this means that this medium is gaining new found potency in its ability to converge the various media. So while current usership may be spread thin, the future does not look so bleak. According to an industry analyst, the number of Indian users will increase to 3,00,000 by the year 2000. As Internet growth is relative to the size of telephone and personal computer markets, these too will show a corresponding rise.Presently, there are only 1.3 telephones per hundred people in India as against the world average of 10. PC penetration is one per thousand as against the world average of 25. If India keeps up the current 20 per cent growth rate in the telecom network, it would have the sixth largest network in the world by 2001. Says David Crothers, Director – Asia Pacific Region, Grey Interactive, this will really happen “when e-commerce takes off. That is, business-to-business transactions will give the necessary push for the medium. Unfortunately, that has not happened for India.”Even so, some data indicates what the medium holds: + The virtual market has brought almost 1,00,000 corporate sites on the Web, covering over 10 million separate sub-sites between them. (global) + Over 65 per cent of the traffic is originating from business- related sites. Consequently, reason demands that advertising on the Net should also pick up. + This in turn means that designing agencies will also catch on. Site-designing agencies are estimated to be growing at the rate of 30 per cent, and developing 1200 web sites per day worldwide. So what is Internet advertising all about? The most popular advertising on the Net is in the form of small, rectangular banners that appear either at the top or at the bottom of Web pages. Banners which appear at the top usually command a premium. Like their roadside counterparts, these electronic hoardings are designed to attract the attention of passers-by on the info-highway. Given the limited space, these banners usually contain only a brief message from the advertiser. However, unlike their physical counterparts, which at best provide the contact addresses or telephone numbers of the advertisers, interested viewers can obtain much more information from electronic banners by just clicking on them. Upon clicking on banners, Net users are usually led to the advertiser’s own web site, which provide loads of information.Putting up banners on other web sites — preferably the more popular ones — is among the best ways to attract traffic to one’s own web site. Here, advertising on the Net can take two forms: Direct through banner ads on popular web sites, which in turn can be linked to respective web sites on home pages; or as individual web sites. Direct advertising has not really caught on and there is little effort at marketing. Most corporates, instead, are busy creating their own web sites, mostly to keep up with competition.Companies such as Hindustan Lever Ltd, Gujarat Milk Marketing Cooperative Federation Ltd’s Amul brand, Nokia, IBM, the Surya Group, Vedika Software and Raja Guruha Estates, to name a few, are on the Net with their banner or panel advertisements on a number of web sites. While some of these sites have been created by agencies, others have been created in-house.For advertising agencies therefore, even creating home sites and web sites has failed to emerge as a source of big bucks. For, a number of these are made in-house by corporates. Tata Consultancy is one example. And what’s more, few agencies are equipped in any way to handle this medium.And creating web sites for the companies are few agencies such as Rediff-On-the-Net, an offshoot of Rediffusion DY&R Advertising and Trikaya Grey Interactive. Rediff, promoted by Ajit Balakrishnan, started with HLL in October 1996 and now has 45 clients including Citibank, Max Touch, Asian Pains, Johnson & Johnson and McDowell among others. owever, not many advertising agencies are equipped to handle this.The advantages of advertising on the Internet, however, are truly many. For one, being an interactive medium, it is, perhaps, the only medium where the consumer makes the first move. Moreover, Internet has a negligible spill-over rate since a consumer onlyaccesses the communication package if he requires it.In addition, advertising on this medium is fine-tuned to the customers’ need and is more specific in the information it provides.“This is in fact a very direct medium where the information is highly personalised. In fact, the latest buzzword in the US is `dynamic website’ which is database driven and allows for mass customisation of information,” points out Crothers.Most web-site designing agencies are also putting out ads on other sites for their client depending on the web crawler or net surfer’s demographics which match the client’s need. Generally, information on demographics can be accessed directly from the server (whichloads the pages on the web) or by visiting various web-sites which provide information on the audience visiting the site. For instance, before accessing the Filmfare site, the visitor has to fill in some personal details. Therefore, the marketers knows who they are dealing with.That apart, poss