Internet Marketing

Internet marketing refers to marketing activities using electronic media and the internet. It leverages communications networks, software such as email and mobile applications, and hardware (computers and mobile phones) to reach consumers. Sometimes we call it internet marketing, electronic marketing (e-marketing), online marketing, or digital marketing.

Internet marketing offers several benefits, such as:

• Relatively inexpensive than marketing using conventional media
• Extensive coverage by connecting customers worldwide
• Rich with data, which can be used to design marketing strategies
• Convenient for consumers because they can shop anywhere and anytime
• More customized marketing and advertising formats can be via text, images, or video

However, internet marketing has some limitations. For example, it requires us to be connected to the internet, which may not be available in remote areas. Other problems with internet marketing are:

• Riskier. Consumers may be dealing with someone they don’t know.
• Unable to try the product directly. Consumers cannot touch, smell, or try on goods before buying.
• Privacy issues. Data embedded in the internet – such as personal and credit card information – can be hacked and misused.

Viral marketing

Viral marketing is a strategy to promote products or build brand awareness using social networks to achieve exponential growth. In simple terms, it is actually similar to word-of-mouth marketing. But, now, it’s evolved to the internet and involves not only verbal communication but via text, images, or videos. As a result, messages quickly spread from person to person and grow exponentially.

Viral marketing utilizes:

• Social media to start a campaign
• Discounts or special offers to entice and encourage sharing
• Content with attractive formats, such as videos
• Interactive activities to stimulate interest and engagement

Companies create marketing messages with attractive formats on social media and encourage individuals to convey messages to others. The message will usually be forwarded to influencers who will share messages about the products they like with people.

The people who receive the message will also share it with their friends through their social media pages, allowing followers to view it and, if interested, share it again via social media or digital communication channels such as Whatsapp. So, finally, messages grow exponentially.

E-commerce

Electronic commerce, abbreviated as e-commerce, is about doing business and conducting commercial transactions electronically. Also known as digital commerce (digital commerce).

E-commerce has the following features:

• Global reach
• Price transparency
• Integrated shopping solutions (from shopping baskets to online payment)
• Accessibility 24 hours a day
• Sales customization
• Attractive formats – audio, text, visuals, and video
• Access to information
• Consumer reviews
• Impersonal interaction

E-commerce impacts

E-commerce has a significant impact on the way of doing business, strategy, competition, and marketing mix.

Higher customization. Companies can gather helpful information to develop products and meet specific customer needs.

More intense competition. Competition comes not only from local competitors but also from global competitors. Even though they don’t operate domestically, they can sell products to domestic consumers, for example, through e-commerce sites.

More convenient access. Consumers have more access to products, not only local but also foreign products. They find it easier to shop without having to visit a specific store. In addition, they can shop anytime and anywhere.

More transparent selling price. Consumers can more easily compare product prices. Some websites also provide price comparison services.

Cut intermediary costs. Consumers can order directly from the company without buying products from retailers or agents. Finally, shorter distribution channels reduce operating costs.

Wider market reach. Companies reach not only local but also global consumers more easily.

Easier promotions. Companies can promote more quickly and cheaply through online channels and interactively through video formats.

Technology in the e-commerce marketing mix

Technology facilitates e-commerce to proliferate and beat conventional retail. Its progress has influenced the marketing mix, such as:

Product. Companies can display products in various formats, such as visuals and videos. In addition, they can develop interactive websites by allowing customers to customize their purchases to select different products. In addition, they also provide a comment section and product ratings to make it easier for consumers to make shopping decisions. The ratings and comments also help increase brand reliability.

Price. E-commerce offers much better price transparency. Consumers can compare prices between products and filter products based on other features such as product ratings, seller locations, and product features. Sites like Google Shopping and PriceGrabber also provide price comparisons. On the one hand, transparency makes it easier for consumers to shop. But on the other hand, it lowers switching costs, making it difficult to build loyalty beyond the price factor.

Promotion. Promotion on the internet is more cost-effective with a broader reach. In addition, ad formats are also more varied than conventional channels such as television or newspapers. For example, internet ads can be in text, audio, image, or video format. Promotion on the internet can also go viral, quickly turning small businesses into big ones as their sales increase dramatically.

Place. The company saves costs such as rent and overhead costs. Plus, they don’t need to rent shops in multiple locations just to sell more products. Instead, they can use an e-commerce site, wait for the order, and process and ship it to the address. Meanwhile, customers can also shop anywhere and anytime without visiting the store, saving them time and expenses.

Types of e-commerce

E-commerce can take the following models:

• Business-to-business (B2B)
• Business-to-consumer (B2C)
• Consumer-to-consumer (C2C)

Business-to-business (B2B) involves transactions between businesses and other businesses. For example, one organization markets goods and services to other organizations via the internet. For instance, businesses provide companies digital services such as customer relationship management (CRM software). Or the company supplies raw materials to manufacturing companies.

B2B offers companies more efficient and effective operations. For example, they can integrate information technology systems, purchasing supply chains, stock-keeping, and distribution to make them more manageable.

Business-to-consumer (B2C) involves businesses selling directly to individual consumers and possibly, providing other necessary services. For example, when shopping, we can do all activities on the web, similar to when we come to a retail store.

We visit websites, browse product information pages, select products, add them to a virtual cart, and make payments online. If we are a new customer, we enter address details and choose one of the delivery options. Finally, we just have to wait for the goods to arrive at our doorstep.

Consumer-to-consumer (C2C) involves transactions or trading between individuals and other individuals. eBay, Etsy, and Airbnb are all good examples. Another example is the peer-to-peer lending platform, where we can lend money to other individuals.

The advantages and disadvantages of e-commerce

E-commerce offers several benefits to businesses, including:

• Increase sales potential with global coverage and viral communication
• Rich data and analytical tools (big data) to develop marketing strategies
• Longer opening hours to increase sales
• More cost-effective to operate, including less rent and overhead
• Cheaper advertising campaigns but with a broader reach

But, e-commerce also comes with some challenges for businesses, including:

• Increasingly fierce competition because it involves more competitors
• Lower switching costs because it is easier for consumers to compare products and prices
• Challenges for pricing due to greater price transparency
• Requires operating flexibility because, for example, orders can spike suddenly
• Thinner margins amid increased competition and more transparent pricing

Meanwhile, e-commerce brings several benefits to consumers, such as:

• Easier to shop can be done anywhere and anytime
• Save more without having to visit retail stores, reducing time and eliminating costs for transportation
• More product and price alternatives tailored to their budget
• More information to make purchasing decisions, such as product ratings and product reviews

But, e-commerce also comes with some risks for consumers, including:

• Difficulty in seeing and physically trying the product
• Uncredible product ratings or reviews lead to errors in decision-making.
• Frustrating and time-consuming to choose from so many alternatives
• Requires consumers to have a credit/debit card to make payments
• Poor delivery service, causing goods to be damaged during transportation
• Fraud, where the goods sent do not match what was paid for
• Stolen personal data and information, including identity cards and credit cards

Technological changes in marketing

Advances in technology are pushing businesses to change their marketing approach. They have more access to consumer information and data, including about buying behavior.

For example, they can collect data through primary research more efficiently. In the past, they may have had to interact directly with consumers to collect data. However, now, they can make it easier by utilizing technology. For example, they can collect data embedded in electronic point of sale (EPOS), social media, and their websites.

Electronic point of sale (EPOS)

Electronic point of sale (EPOS) enables businesses to process payments and interact with customers. The digital payment system can also store data and information about customer buying habits.

Retail stores, restaurants, and hotels commonly use EPOS. They collect information like regular purchases to use in marketing decisions. In addition, they can also see how price changes made affect sales. The information may also be used to target promotional campaigns to the appropriate customers.

Online surveys and feedback

In the past, surveys had to be face-to-face with respondents. Now, technology makes it easier and cheaper to take online surveys. For example, a company could ask customers to take an online survey when they visit its website. In other cases, they may rely on social media or email.

Companies can also develop online feedback forms for some issues. This can be done through a website, social media, or mobile app like a survey.

Then, the company can use the software to analyze the survey results. The results can be used to monitor customer buying habits or develop effective marketing tactics.

Big data

The company develops big data for decision-making and marketing customization. Data and information about customers from various sources are stored in a centralized database, then processed using analytic software.

Big data increases personalization. Companies tailor target marketing or promotional campaigns to targeted customers. Thus, success is higher.

E-commerce

E-commerce allows businesses to sell products without renting or owning a physical store. Instead, companies can serve customers by relying on popular e-commerce sites. Or they develop their own e-commerce website.

E-commerce can reach global consumers. For this reason, e-commerce can facilitate a small business to grow into a large business by rapidly increasing sales.

In addition, e-commerce also allows companies to collect more data and information about buying behavior. Companies can use this data to personalize offers or advertising campaigns.

Internet advertising

Internet advertising or online advertising is cheaper to reach a broad audience. In addition, companies can target specific market segments by using the customer’s browser history. In other words, they can personalize advertising messages with customer characteristics. Thus, more opportunities for campaigns to succeed.

Internet advertising can also be developed to create viral content. Combining text, visuals, audio, and video can make the format more attractive. Advertising messages are sent by leveraging influencers or internet users without direct efforts by companies to spread them.

Email

Companies can use email for several purposes. For example, they can use it for surveys. They send emails to customers with a link to the survey page.

In addition, companies can use email to promote or sell products. For example, they send emails about new offers and encourage consumers to click links to e-commerce pages or the company’s website.

Social media

Various social media are available such as Twitter, Facebook, Instagram, LinkedIn, and Snapchat. They facilitate companies to interact with customers. They have also become a vehicle for creating viral marketing.

Social media also offers companies flexibility. They can distribute ads anytime in several formats, from visuals to videos. Advertising messages can spread to multiple users without the company’s immediate efforts after sending them.

Desktop publishing

Desktop publishing software combines text and graphics to produce documents such as newsletters and brochures. It provides more control over the design, layout, and typography. So, companies can use it to create attractive-looking advertisements to encourage customers to buy products.

Text alerts

Text alerts allow companies to automatically send messages to cell phones. For example, companies send urgent texts and notifications to consumers about new products, special offers, or promotions. This method is considered better than email marketing.

However, because it is personalized, companies must pay attention to applicable regulations. Some countries may specify rules related to that, for example, the Telephone Consumer Protection Act (TCPA) in the United States, which prohibits using telephone facsimile machines or other electronic devices to send unsolicited advertisements.

Mobile application

Many companies have used mobile applications to serve their customers, especially service companies such as banks and insurance companies. They make it easier for customers to access certain services, such as transfers and bill payments.

E-commerce sites also operate with mobile applications, making it easier for consumers to transact anytime and anywhere. In addition, mobile applications create convenience and comfort for customers, helping companies to establish them as regular and loyal users.

Apart from giving customers easier access to products, mobile applications such as game applications can also be used to advertise products.

Quick response codes (QR codes)

QR codes are machine-readable optical labels providing easy access to information online. They are often used to track data about products or for marketing and advertising campaigns.

Companies display QR codes on billboards and advertising campaigns. When consumers scan the code with their smartphone, they are directed instantly to the company’s website, allowing them to quickly and easily access the product. In addition, QR codes can also be used for:

• Online payments because the code can be used to store bank account information and credit card information or work with certain payment provider applications.
• Login to the website where the code will appear on the login page on the computer screen, and registered users scan it with their smartphone and will be logged in automatically.
• The entry ticket where the code will appear on the smartphone, and the officer will scan it to verify whether the visitor is registered.
• Accessing a service, for example, a restaurant displays a QR code by the door to allow guests to view or order online and pay for their meals without using a cashier or waiter.