Using the Internet as a direct marketing tool Marketing Management

Customers now have more products and services to choose from and more information available to them to help them make purchasing decisions. Conventional communications, principally media advertising, is not as effective as it used to be. This is partly because there is more for consumers to digest, and partly because people have learned to ignore it. The rise of the Internet means that companies can go further than conventional communications would allow them to in the past. There is a new group of products and services that relies on customers registering their interest in them with the company. Amazon.com for example, encourages customers to review books and publishes their comments on the website, so both the firm and other users can read and make use of them. A US airline invites customers to register their preferences for last-minute offers via its website, and then emails potential customers with details of weekend breaks at their preferred resorts.

These are examples of the precision that can be achieved with direct marketing. There have been some disasters as regards some of the newer Internet companies and there are still problems for the consumer in purchasing using this medium: security and non-delivery being examples.

These two companies are amongst the most spectacular failures from the dotcom boom in the late 1990s. Both companies went from nothing to multi-million pound businesses in the space of a few months. www.Boo.com specialized in selling branded fashion apparel over the Internet, but despite spending an estimated $135 million of venture capital money within 18 months, it went into receivership. Similarly, www.Webvan.com started selling grocery products on its website and in eighteen months had spent over $1 billion on expansion. After 18 months the company was liquidated with the loss of over 4,000 jobs. In both cases these companies had tried to expand too quickly giving rise to problems like slow delivery, cash flow troubles and poor customer service.

The Internet has demonstrated that it is significantly changing the way people interact with each other, particularly in the sphere of direct marketing. The Internet crosses boundaries of geography, politics, religion, time zones and culture. Some areas of marketing are totally underpinned information technology. The Internet has reduced the planet to a global village, accelerated the pace of technology, opened up possibilities for direct marketers and altered the way they think about doing business. It has started the new revolution in direct marketing which is the most important since the development of commercial advertising. The e-commerce revolution is projected to rebuild the economy and change the way marketing and business is conducted.


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