Internet marketing consists of advertising on the internet to sell products through electronic commerce. On top of advertising, web sites of organisations allow for products to be brought online faster and simpler which is why the electronic market has developed so well. Modern Marketing
Modern marketing is simply the advancing of advertising in the world. Technology has evolved and new marketing methods have been discovered with businesses taking the opportunity to expand their business by advertising on the internet to everyone worldwide. What is marketing mix and extended marketing mix?
To effectively market a product or service there are four things you need to get right: Product, Price, Place and Promotion. These four elements are known as the marketing mix or the 4Ps. The four elements should be viewed as one unit and structured to support each other; Otherwise a firm’s marketing strategy will be confusing and uncoordinated. The original 4 P’s show as followed:
As the product is the item being sold to the customer, the thing that will bring in money, its features and design need careful consideration. Whether the firm is manufacturing the product or purchasing the product for resale, they need to determine what product features will appeal to their target market. Price
There are lots of different pricing strategies but every strategy must cover at least your costs unless the price is being used to attract customers to the business. A product is only worth as much as people are prepared to pay for it. The amount that your target market are prepared to pay for your products/services depends on product features and the target market’s budget. You will also need to consider competitor pricing and factors within your marketing environment.
The Place element of the marketing place is about where the product is made, where is it stored and how is it transported to the customer. The place for each of these things should ensure that the product gets to the right place at the right time without damage or loss. The ideal place will be: Convenient for the customer and the business
Accessible for the customer if it is the place where the product is sold Low cost or free for the customer if it is the place where the product is sold Reasonable cost to the business
Apart from the original marketing mix recently businesses have started using an extended version of marketing mix also known as the service marketing mix which contains 3 more P’s, these are:
People are an essential ingredient in service provision; recruiting and training the right staff is required to create a competitive advantage. Customers make judgments about service provision and delivery based on the people representing your organisation. This is because people are one of the few elements of the service that customers can see and interact with. The praise received by the volunteers (games makers) for the London 2012 Olympics and Paralympics demonstrates the powerful effect people can create during service delivery.
This element of the marketing mix looks at the systems used to deliver the service. Imagine you walk into McDonalds and order a meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customer’s old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. All services need to be underpinned by clearly defined and efficient processes. This will avoid confusion and promote a consistent service. In other words processes mean that everybody knows what to do and how to do it.
Physical evidence is about where the service is being delivered from. It is particularly relevant to retailers operating out of shops. This element of the marketing mix will distinguish a company from its competitors. Physical evidence can be used to charge a premium price for a service and establish a positive experience. For example all hotels provide a bed to sleep on but one of the things affecting the price charged is the condition of the room (physical evidence) containing the bed. Customers will make judgments about the organisation based on the physical evidence. For example if you walk into a restaurant you expect a clean and friendly environment, if the restaurant is smelly or dirty, customers are likely to walk out. This is before they have even received the service.
How does the internet help support businesses?
The internet can create opportunities for better customer services. The business could create a website to help its advertisement. These websites help businesses to share relevant information with the external public, such as the products and services that they offer how they can be contacted, their track record and so on. Tesco have their own website to improve their customer satisfaction and improve on their services in store and online. They sell a lot of their products online and this gives the customer an alternative way to shop and save time.
The ability to advertise your new products on the internet is a clear opportunity to give your product a boost of promotion as most people across the world now have access to the internet it gives your product a much larger marketing audience globally just through the internet saving you much more time. The launch of a new product is very important as it needs to be well developed into the market to actually be brought spreading your products brand. Tesco have their own advertisement therefore on their website they can advertise new products that have been released or special deals that are currently on to pull in sales on that product.
If Tesco set an objective that is aiming to increase sales by 15% this could be achieved through advertising their products effectively on the internet. Another may to be to earn more shareholders within the company. This makes the internet a very powerful tool to businesses that want to set objectives, release good products and achieve objectives to outcompete competitors. Does the internet offer better information about products and services?
While on the internet and purchasing goods there is most likely to be a feedback section for the product that offers the ability to give feedback on the product which can then be viewed by other customers to give them an idea if the product is ideal for them. Most if not all products advertised contain information about them and what they contain or come with. The can include anything from nutrition levels to what size a clothing product is. Other services can be recognised and understood much better as most of the time the website they’re being advertised on offers details such as the duration of the service if applicable. Overall the internet provides a better understanding of product than it normally would in stores.
Tesco provide information about most if not all their products and services to a high level of detail. For example in their technologies section under smartphones they offer plenty of information ranging from the specifications of the phone to contract deals available. How has information and communications technology developed over time? Communication technologies have developed over the years providing more and more ways to communicate with others across the world. These can vary from simple messaging across social networks to sending videos over app on the latest smartphones.
The development and expansion of communication technologies has changed the way a simple text message can show more feelings across the message. For example a common modern way to message people would be with a video chat that allows you to add a short message and send it to multiple people. This could be used to send short messages of a piece of work which then contains text asking other members within the business their view. This adds more interest to social messaging as plain texts can be boring and this app has created a huge fan base for their original idea. Information can now be transferred around with ease as the latest smartphones offer 4G connection and allows for faster downloads and uploads which clearly speeds up communication across the world.
An example of developments across a business could be shown in Tesco’s as they require communications with other staff members. ICT has been developed to maximise the communications done within the organisation and allows the business to work at a better pace. How does Tesco use the internet to achieve their objectives? Tesco has their own website and without a doubt they have their own staff members to run the website and manage what is uploaded onto the site and what can be visible to their customer base.
The website itself allows them to reach their customers without having the physically having to be next to them. This allows for their delivery service to be possible as customers can order online and have their shopping to be delivered to their door with less hassle. Another feature that allows Tesco to achieve their objectives is the ability to advertise across other websites and expand their customer base. How does Tesco develop relationship marketing?
Relationship marketing is when a business creates a long-term relationship with their customers. This can be done through rewarding them extra deals on top of their purchases and creating bonds with customers that frequently buy from the business. For Tesco they already reward customers with each shop they make with their ClubCard that rewards customers back with any product that is purchased through their business. Another way that Tesco may reward or encourage long-term relationships with their customers may be through offering a deal / percentage off the total costs on certain products to larger businesses that buy more from the business. Tesco would want to retain these customers as they purchase more from the organisation than the average family customers therefore they are scaled to be worth more over other customers in terms of loyalty. Does a better relationship with customers allow for better service and allow Tesco to achieve their objectives?
Tesco can improve customer satisfaction by adjusting their company values through their feedback page. The feedback page offers a simple online process of filing complains or other issues arising about the companies services. This requires little management from staff members while also managing multiple people simultaneously, not to mention that the complaints can be made 24/7 which becomes much more convenient for the customer so the company can receive the most feedback as they should. Put to good use this information can then be used towards their objectives, for example improving staff manners, these objectives vary from departments across the UK but Tesco can focus down on the store that the most complaints are being made to. How does internet marketing allow companies to gather information on their market, rivals and customers? Tesco use internet marketing to gather information on other competitors in their market and to also use this information to adjust prices and issues that may cause them to lose customers due to rivalry.
They gain access to information on the current market through websites that analyse and provide access to information to businesses that are trying to develop on their current market rivals to influence their price range. Having a database system allows for the company to access trends and common purchases and uses this advantage to target and apply segmentations on advertising based off their tastes. This segmentation can be 1 of 4, demographic, psychographic, economic factors and usage of particular products.
Offering deals and promotions based off these factors companies can organise local promotions based of geographical factors. Tesco use their database to research and gather information on customer’s purchases and with this knowledge they create loyalty bonuses such as redeem codes to get 10% of your next shop. Their database can create instant send outs to the customers address if they have access to that type of information. Tesco club card can be to gain customer information while also offering benefits with their point collector card that rewards customers back for purchases.
How has internet usage increased through business to business, business to customer and customer to customer? (B2B) business to business usage has increased as contacting other businesses can be simply made with the power to also hold multiple business meetings. Buying stock or supplies has become a simpler process via the internet now; placing an order for a business’s stock to be delivered can save both businesses time by automating the process.
(B2C) Business to customer has developed massively with businesses advertising themselves over social networks and other places over the internet allow for 24/7 product purchasing while saving time for both the business and the customer. Customer satisfaction rates are improved as response times to satisfaction can be made clearly and simply causing less stress on the business and the customer. Customer purchases can be done easily while also having the ability to compare products between 2 businesses. Another benefit for the customer is the ability to have products to be delivered to your door.
(C2C) Customer to customer allows for more usage across the internet through websites such as eBay and Gum tree which specialise in the trade of products from 1 customer to another based off used or new products ranging from cars down to building tools. The variety is endless and with delivery made easier through curriers and post office deliveries. C2C sales are often carried out on goods that are no longer needed by the seller.