Advantages And Disadvantages And Growth Of Mobile & Internet Marketing

Effectiveness of Internet Marketing A Management and Consumer Perspective For more PPT’s, Notes, Project Reports visit a2zmba.blogspot.com

Content Introduction Methodology Background Literature Findings of the Study Discussion and Recommendations Conclusion Questions

Methodology

Consumer Sample 294 consumers working at a tertiary institution consisting of 1096 staff 84.7% academic staff, 15.3% non-academic 73.8% used the Internet daily Data was collected using web based questionnaire Salient feature 0.7% used the Internet for purchases

Management Sample 79 managers responded out of 180 organisations Companies that were included in the sample had an Internet presence Mail questionnaire was administered Salient feature is that the Internet made a contribution to cost saving Managers were generally satisfied with the results achieved from having an Internet presence

Background & Literature Review

The Internet

• mechanism for information dissemination • medium for collaboration and interaction

Fastest Growing Technology 54 44 35

34

30

26

22 15

13

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lp ho ne Ce l

PC

Ra di o

io n ev is Te l

ro wa ve M ic

Vi de o

ep ho ne Te l

s

Au to m ob ile

Ai r

lin es

7

Time Taken for Technology to Reach 25% Market Share

Recent Quotations from Experts There is a move from bricks and mortar to clicks and mortar There are those on the Net, those who are thinking about being on the Net and those who are out of business Radebe – businesses that are not online in three years will soon be out of business

Internet Statistics US business to business trade will amount to 6 trillion dollars by 2005 In 1999, South African consumers spent R2.7 billion online and B2B trade amounted to R3.9 billion Businesses can break geographic barriers and reach some 40 million overseas customers

Business Value of E-Commerce Revenue Generation 18%

Other 2%

Cost Saving 35%

Marketing 13% Customer Service 32%

Value Generated for America’s Top 100 Companies

Reasons for Being on the Internet To establish a presence To network To reach a highly desirable demographic market To reach specialised markets

Internet Marketing

The Marketing Equation

Need Need Satisfaction + = Identificatio n

Profit

Need Identification – Online Surveys Quicker Less intrusive Can be answered at leisure Respondent has more time to apply his/her mind More accurate Responses are returned almost immediately

Need Satisfaction The Internet provides masses of information during the buying decision process The information search is quicker due to the multitude of search engines Provides price information for price sensitive consumers Information places control in the hands of the consumer

Marketing Mix - Product Customers do not purchase the product, they purchase the benefit The Internet makes it possible to extol the benefits of their products and services at low cost Detailed specifications, instructions and alternate uses are available online The challenge is getting the consumer to the site

Marketing Mix - Price Cost recovery is still paramount The Internet may lead to price equalising rather than price cutting Pricing is more transparent Instant price comparisons are readily available Due to price transparency, sellers have to develop strong online brands to compete

Marketing Mix - Place Cybermarketing is selling in market space rather than at a market place Virtual stores are mushrooming every day The Internet brings stores and manufacturers closer to the consumer The physical distance between buyer and seller are immaterial Direct selling due to the Internet is more viable Customers save and businesses generate higher margins by cutting out the middle man

Marketing Mix - Promotion The Internet is a new channel for marketing communications Online promotions are no different from normal promotions except that taste and smell are as yet not available The Internet makes it possible to advertise large volumes of multimedia information to a select audience with instant feedback

Findings of The Study

Internet User Profile Theory suggests that Internet users are college educated, earn or have the potential to earn high salaries The typical user in this study was Asian male Aged 25-34 Held postgraduate qualification Earning in excess of R4000 per month Use the Internet Daily

Consumer Reasons for Using the Internet

Banking 10%

Other 3%

Entertainment 18%

Research 34%

Communication 35%

Reasons for Using the Internet & Gender Variable

Mean

Sd

Banking

Male Female

0.833 1.744

1.399 2.072

Communication

Male Female

3.603 3.732

1.529 1.144

Reasons for Not Shopping Online Variable

Mean

Sd

Lack knowledge and confidence Afraid of non-delivery

3.276 2.452

1.732 1.782

Afraid to use Credit Card Online Too Costly

2.356 1.353

2.202 1.272

Potential Product Purchases Food & Groceries 6% Computer & Electronics 35%

Large Appliances 10% Other 21% Cosmetics & Toiletries 28%

Other: sport equipment, books and music

Reasons for Banking Online Variable

Mean

Sd

24 Hour Convenience Quicker

4.247 4.012

0.716 1.436

Better Personal Safety Cheaper

3.383 1.048

0.582 0.463

Other

0.444

1.140

Reasons for Not Banking Online Slower 11% More Costly 14%

Unsafe 29%

Other 4%

Lack Knowledge & Confidence 42%

Business Use of the Internet Income Generation 12%

Other 4%

Cost Saving 31%

Marketing 24% Customer Service 29%

Factors Leading to Cost Saving Factor

%

Reduced Communication Costs Reduced Printing Costs

33% 22%

Advertising Overheads

17% 16%

Other

12%

Increase in Traditional Advertising Cost 48

28 19

5

0-9%

10-19%

20-29%

30-39%

Impact of Online Promotions 50

12.5

Total Failure

12.5

Poor

12.5

Average

Successful

12.5

Very Successful

Overall Impression 60.7

22.8 12.7 2.5

1.3 Extremely Dissatisfied

Dissatisfied

Acceptable

Satisfied

Extremely Satisfied

Obstacles to Optimal Use of the Internet

Untapped Niches Fear Literacy Segmentation Advertising Site Appearance

Optimisation Strategies Fear Awareness programs Promote Online Shopping/Banking Upgrade security and publicise it

Literacy Government intervention at schools

Segmentation Proper research Clearly identify target markets Free training for target market

Optimisation Strategies Niches Identify untapped niches Provide free services such as training Advertising Done offline to direct traffic online Offer incentives eg. Lower banking charges Site Appearance Attractive, free of clutter, , simple address, secure Fast loading, with useful information

Is Internet Marketing Effective? From a consumer perspective No, it is not A potential niche market of over 1000 people are being overlooked

From a management perspective Yes, it is. Organisations are seeing improvements in sales, cost cutting and customer service Managers are generally satisfied with the Internet