Internet Marketing
Business modelsInternet marketing is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies doing business with each other, whereas B2C involves selling directly to the end consumer (see Malala, 2003)[1] When Internet marketing first began, the B2C model was first to emerge. B2B transactions were more complex and came about later. A third, less common business model is peer-to-peer (P2P), where individuals exchange goods between themselves. An example of P2P is Kazaa, which is built upon individuals sharing files.
Internet marketing can also be seen in various formats. One version is name-your-price (e.g. Priceline.com). With this format, customers are able to state what price range they wish to spend and then select from items at that price range. With find-the-best-price websites (e.g. Hotwire.com), Internet users can search for the lowest prices on items. A final format is online auctions (e.g. Ebay.com) where buyers bid on listed items.
It should be noted, however; as described above, under history, that current use of the term internet marketing commonly refers to the use of direct response marketing strategies, that were traditionally used in direct mail, radio, and TV infomercials, applied to the internet business space. When professionals and entrepreneurs commonly refer to "internet marketing" it is this model that they are often referring to. ....The theory was that broadcaster would begin transmitting digital signal in this new band and then the analog signal would be discontinued when consumer penetration of the new technology was deemed sufficient...
Benefits
Some of the benefits associated with Internet marketing include the availability of information. Consumers can log onto the Internet and learn about products, as well as purchase them, at any hour. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to both national and international marketplaces. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive.
Furthermore, since exposure, response and overall efficiency of digital media is much easier to track than that of traditional "offline" media, Internet marketing offers a greater sense of accountability for advertisers.
Compared to the other media marketing(like print, radio and TV), Internet marketing is growing very fast. It's also gaining popularity among small businesses and even consumers when trying to monetize their blog or website. The measurability of the internet as a media makes it easier to experience innovative e-marketing tactics that will prove a better Cost of Acquisition than other media. However, in most developed countries, internet marketing and advertising spending is around 5% only, while TV, radio, and the print are more.
Limitations
Limitations of Internet marketing create problems for both companies and consumers. Slow Internet connections can cause difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information. Internet marketing does not allow shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. Some e-commerce vendors have implemented liberal return policies to reassure customers. Germany for example introduced a law in 2000 (Fernabsatzgesetz - later incorporated into the BGB), that allows any buyer of a new product over the internet to return the product on a no-questions-asked basis and get a full return. This is one of the main reasons why in Germany internet shopping became so popular. Another limiting factor, particularly with respect to actual buying and selling, is the adequate development (or lack thereof) of electronic payment methods like e-checks, credit cards, etc.
Security concerns
For both companies and consumers that participate in online business, security concerns are very important. Many consumers are hesitant to buy items over the Internet because they do not trust that their personal information will remain private. Recently, some companies that do business online have been caught giving away or selling information about their customers. Several of these companies have guarantees on their websites, claiming customer information will be private. By selling customer information, these companies are breaking their own, publicized policy. Some companies that buy customer information offer the option for individuals to have their information removed from the database (known as opting out). However, many customers are unaware that their information is being shared and are unable to stop the transfer of their information between companies.
Security concerns are of great importance and online companies have been working hard to create solutions. Encryption is one of the main methods for dealing with privacy and security concerns on the Internet. Encryption is defined as the conversion of data into a form called a cipher. This cipher cannot be easily intercepted unless an individual is authorized by the program or company that completed the encryption. In general, the stronger the cipher, the better protected the data is. However, the stronger the cipher, the more expensive encryption becomes.
Effects on industries
Internet marketing has had a large impact on several industries including music, banking, and flea markets - not to mention the advertising industry itself.
In the music industry, many consumers have begun buying and downloading MP3s over the Internet instead of simply buying CDs. The debate over the legality of duplicating MP3s has become a major concern for those in the music industry.
Internet marketing has also affected the banking industry. More and more banks are offering the ability to perform banking tasks online. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently, over 50 million U.S. adults now bank online. Online banking is now the fastest-growing Internet activity. The increasing speed of Internet connections is the main reason for the fast-growth. Of those individuals who use the Internet, 44% now perform banking activities over the Internet.
As Internet auctions have gained popularity, flea markets are struggling. Unique items that could previously be found at flea markets are being sold on Ebay.com instead. Ebay.com has also affected the prices in the industry. Buyers and sellers often look at prices on the website before going to flea markets and the Ebay.com price often becomes what the item is sold for. More and more flea market sellers are putting their items up for sale online and running their business out of their homes.
Source: http://en.wikipedia.org/
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