A Shopping Medium


The new media


The Internet is not just one medium. In fact, it is a collection of various different media, and a number of them are useful for marketing purposes. At first, the Internet was used to transmit mainly textual data. However, in 1993, a rapid development began toward multimedia with the introduction of the World Wide Web. Today, the WWW is the most commonly used medium to distribute public marketing information (Benjamin, 1995).


1. World Wide Web (WWW)




Using the WWW, the user can get information from all over the world, including text, pictures, video, voice, computer programs, i.e. any kind of digital data. A certain degree of interactivity between the shop and the customer is also possible. The WWW is mostly a public service.
Electronic product catalogs can be implemented using the WWW. These catalogs are in many ways similar to their paper counterparts. The WWW can be used to send order forms, or to distribute digital products to the customer.



2. Electronic mail (email)


Email is a personal, interactive medium between two or more people. It is usually text-only, and it is often considered a very private form of communication. Email can be used as a direct mailing channel - although certain restrictions apply. Another way is to be in touch with the customer like in conventional telephone selling. Many of us rely heavily on email everyday for simple communication purposes and within the decade, practically every person on the planet will have this capability.


3. Newsgroups (news)


Newsgroups are a version of public bulletin boards. They are usually used for textual conversation and announcements among a group of users. The membership of these groups is open for everyone. If used with taste, newsgroups can be used to distribute targeted marketing information. Most of the groups consist of people who are interested in one particular issue, thus making them an effective segmentation tool.


4. Mailing lists


Mailing lists share the properties of email and newsgroups. They are like clubs. From the marketing point of view, mailing lists are quite similar to newsgroups, except that they are often considered a more private medium than newsgroups.


5. Telnet and rlogin


Telnet and rlogin are methods to use another computer over the Internet. They can be used to implement various complex text based applications. Banks have used them to implement systems where the customer can make basic bank transactions, view the balance, etc.


6. File transfer protocol (FTP)


FTP is a method of transferring files between computers. A large number of so called anonymous FTP servers exists where anyone can visit and get various files. From the marketer's point of view, FTP is useful to distribute sample files, like free demonstration versions of computer programs. The commercial importance of FTP as a separate Internet service has diminished because WWW includes more versatile features to distribute files.


7. New services


In the near future, one can expect the coming of various new services. Today, the following media are limited because of hardware and data transfer capabilities. However, systems with more capabilities will most certainly be on the market in the future.

1. Internet television and video-on-demand
Broadcast Internet television and video-on-demand are services that can have a huge popularity among Internet users in the future. The benefits of broadcasting via the Internet include reduced costs and lack of regulation. Moreover, the Internet makes it possible to rent videos without a physical outlet. One scenario is that a company could establish its own global TV channel or video-on-demand service with exclusive commercials (O'Conner, 1996).

2. Internet radio
As well as video, the Internet can transmit radio programs. The benefits are similar as with video, but hardware and data transfer requirements are much lower, as well as the costs involved in creating the radio programs.

3. Internet phone
The Internet can be used to make phone calls all over the world. The benefit of this is that the cost of an Internet connection is usually lower than the cost of an international telephone call.

The next section of this presentation will look deeper into the properties of the new media, from a customer's and a marketer's point of view. Three Internet channels (WWW, email and newsgroups) will be compared to a few conventional channels, namely mail-order catalogs, direct mail, TV shopping, telephone shopping and newspaper and magazine ads.


Media properties



Catalog
Direct Mail
TV Shop
Telephone
Magazine ads
WWW
Email
Newsgroup ads
1. Type
Text
+
+
+
 
+
+
+
+
Pictures
+
+
+
 
+
+
   
Video   
+
  
+
  
Voice   
+
+
 
+
  
Principal type of medium
Text, pictures
Text, pictures
Video
Voice
Text, pictures
Text, pictures
Text
Text
2. Interactivity
Interactive    
+
 
+
+
+
Vendor and customer in contact simultaneously    
+
     
3. The payer
Recipient pays   
(+)
(+)
(+)
+
+
+
4. Must the customer be active?
Customer gets without requesting
+
+
+
+
+
 
(+)
+

Media properties (the + sign means the medium has that property) (Network Wizards, 1996)

1. Type

Email and newsgroups are simpler media than the others in the sense that they are normally used only for textual communication. The WWW can be used to distribute text, pictures, video, and voice. In practice, however, hardware capacity limits the transmission of video and voice, and the Web consist mostly of text and pictures, like conventional catalogs, direct mail and ads (Rissa, 1995).

2. Interactivity

The Internet is interactive. Of the conventional media, only telephone, door-to-door and party selling offer interactivity. Utilizing the interactivity is quite easy because email makes it possible to communicate asynchronously, yet personally.

3. The payer

Very often the user pays for the Internet connection. Thus the recipient pays to get some marketing information, as opposed to conventional direct marketing. A number of people think Internet marketing is not desirable because of this fact.

4. Must the customer be active?

Some media can be used to send messages to the customer without request. All the conventional channels can be used this way, although catalogs, for example, are often subscribed to. On the contrary, the WWW needs that the customer be active in getting the needed information.

Consumer's point of view


Catalog
Direct Mail
TV Shop
Telephone
Magazine ads
WWW
Email
Newsgroup ads
1. Comparison
Easy to compare between competitors      
+
+
 
+
Easy to share experiences with other customers      
(+)
  
+
2. Product
Extensive assortment
+
      
+
+
+
Extensive product information
+
+
  
+
+
+
+
Samples can be distributed  
+
    
+
  
3. Time
Immediate delivery       
+
(+)
(+)
Available 24h/day
+
+
  
+
+
+
+
Time pressure when buying   
+
+
 
+ ?
+ ?
+ ?
4. Recipient's attitude
Getting the information may be a social event
+
(+)
+
 
(+)
+
 
+
Browsing for fun
+
 
+
 
+
+
 
+
Receiving a marketing message can be particularly annoying   
+
+
  
+
+

Consumer's point of view (Network Wizards, 1996)

1. Comparison

The Internet has a couple of advantages compared with the conventional in-home shopping channels. It's often possible to compare products between competitors. Some companies even list their competitors on their WWW page and encourage comparison. Newsgroups, in particular, give the opportunity to share experiences with other customers.

2. Product

The Internet is especially useful for selling digital products, like information, records, video, computer software, etc. Samples and even the genuine product can be delivered immediately to the customer. A Web catalog is like its paper counterpart in many ways. Both can have an extensive assortment and product information. A Web catalog can be even more extensive in these aspects.

3. Time

The Internet is especially beneficial what comes to time factors. The customer can do Internet shopping at any time of day regardless of what time zone the customer is in, like conventional mail order shopping too. As mentioned, the Internet facilitates rapid delivery too. This is because the time an order spends going from the customer to the vendor is typically a few seconds, the order can be handled automatically and the product - provided it is a digital one - can be delivered right away. However, this makes requirements for the method of payment (Mehta, 1995).

Customers can feel time pressure with various shopping methods. For example, in the case of telephone selling, the customer has to make a decision while on the phone. Subhash, Bearden and Teel (1983) found that a hypothetical electronic shopping system caused the users to feel pressured. This study is discussed more in paragraph, and the effect of time pressure is examined in the empirical survey of this study.

4. Recipient's attitude

Getting marketing information may have recreational and social elements. In the case of newsgroups, for example, people can discuss their experiences along with other things, like hobbies. Or one can browse a paper or an Internet catalog for fun without a specific need.

Email and newsgroup ads are similar to TV commercials and telephone sales calls with regard to the reactions of the recipient. These methods can be intrusive and annoying. It is worth a special note that untargeted marketing by email and in newsgroups has a very bad reputation among Internet users, and many people are hostile toward it (Mehta, 1995).


Marketer's point of view



Catalog
Direct Mail
TV Shop
Telephone
Magazine ads
WWW
Email
Newsgroup ads
1. Cost
Cheap       
+
+
+
Marginal cost per recipient near zero   
+
  
+
+
+
2. Targeting
Can be targeted to a certain segment level
+
+
+
+
+
+
+
+
Can be targeted to a certain person
+
+
 
+
 
+
+
 
Supports personal offers  
+
 
+
 
+
+
 
Marketer knows who received the message
+
+
 
+
 
+ +
+
 

Marketer's point of view (Network Wizards, 1996)

1. Cost

Internet marketing is cheap in comparison to conventional channels. One can reach millions of consumers with a reasonable investment. Moreover, most of the costs are fixed, like the cost of creating some WWW pages. Once an initial investment has been made, it is relatively cheap to distribute the same message for even millions of people. This is not the case with sending paper catalogs, for example.

2. Targeting

Internet marketing can be targeted just like traditional direct marketing, even better. One can contact a target segment via a special newsgroup. One can monitor a consumer's behavior to collect a variety of data for use with personalized campaigns. The gathering of information can be automatic. For example, a WWW store can register which products a customer has been interested in but not yet ordered, and display a customized offer for every visitor (O'Conner, 1996).




Let us move on



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