The internet’s first role is the delivery and collection of timely information about products and services. We will have a look at the realistic role that the internet might play in assisting firms to reach their international marketing objectives. There are two types of impediments to the internet’s adoption and growth in international marketing: structural and functional. Structural issues are likely to have greater impact on consumer internet marketing than on business-to-business marketing. Functional issues are likely to have a greater influence on consumer marketing because businesses are easier to identify, segment, and reach.
A distinction can be made in the use of the internet: a passive use and an active use. The passive mode is used when the company recognizes the importance of having a presence on the web. The company will offer products, services, contact opportunity and other information that can be used by the consumer. Much more complex is the active use of the internet. It demands the identification of its appropriate role in the firm’s global strategic marketing plan. One functional issue is the market segmentation that should be chosen by the company.
At this moment the mass marketing via the internet can not be pursued yet since there are still some limitations at this moment. A limitation is that the public access to the internet is still limited. Prospects are declaring that, when correctly applied, the internet is quickly adopted by the target audience and grows rapidly. Another limitation is that there is no programming per se to attract the individual surfer on the internet. However, the internet is well-suited for relatively homogeneous products that enjoy a broad appeal.
Second, advertising has been the most natural and perhaps best developed use of the internet to date. The internet can be viewed as a mulitmedium, so it should be treated with the same principles as other advertising media. Promotion is a very important issue in this whole concept since with promotion brand recognition can be reached. Pricing is a third issue that should be mentioned. Pricing on the internet at the manufacturer level makes it easier for the competition to accumulate relevant price data and modify its current marketing program.
Even a new strategy can be developed to compete for a bigger share of the market. Strategic and managerial aspects or pricing on the internet are also important. Technology permits vendors to price in accordance to host market conditions. However, having competitors’prices on the internet is likely to soften price discrimination between different markets and buyers. The firm’s international marketing strategy should be in accordance to the pricing of the company on the internet.
Fourth, the use of distribution of products and services via the internet must remain consistent with the firm’s international marketing strategy. The internet is an ideal distribution channel for any product that can be digitized and sold over the computer network. Chosing a final distribution channel will cost the company a lot of effort since a good distribution channel is required when a company want to offer the consumer quality and service. One thing that will absolutely not change due to the appearance of the internet are the traditional distribution channels.
It will always be that products that are ordered on the internet have to be delivered to the consumer since the product, at least most products, cannot be transferred digitally. A manufacturer wishing to sell directly to consumers must be willing to deal with the idiosyncrasies of consumer markets, including quick delivery, after sales service, and so on. Information management is the fifth issue in the use of the internet. As new purchasing management software is developed, tested, and implemented, a broader distribution of requests for proposals among approved vendors has become a reality.
Customers’ preferences data that are very important for the companies can be gathered via the internet. Finally, several aspects of internet-based marketing have the potential to create customer discontent. These problems can be avoided with a well-managed policy for the site. In other words, when the site is well-structured, nice colours are used, and everything is clear the problems of customer dicontent are eliminated. Furthermore, most manufacturers’ web sites provide distributor and retailer access information to inform the customers.
Sometimes customers using web sites to gather information are likely to get confused by the large amount of detailed data on such sites. It is necessary to provide information about a certain product, however, the amount of data should be limited in a way that the data is clear. There are many issues involved in using the internet in marketing. Only companies that can identify and implement appropriate internet roles and related marketing strategies combined with some competitive advantage, will become profitable. Nowadays, a presence on the internet is a must, however, a firm should first look at the costs involved.
A mere internet presence offers competitive survival rather than a competitive advantage in the global market. International marketing may become more convenient and faster through the internet, but it is not automatically cheaper when the total cost of all phases are taken into account. Like already mentioned before, the structural issues have most influence on consumer internet marketing. Companies face several challenges in reaching global marketing through the internet. The challenges can be divided in four segments – economic, technological, social and legal.
The challenges facing global e-commerce, Bingi, P. , Mir, A. , Khamalah, J. ) First of all the costs of developing an internet project are rather high. Because of a lack of experience in developing internet projects and due a shortage of information technology personnel these costs will increase even more. On the other hand it is also difficult to get a grasp of the potential revenues the internet can deliver. Estimations are based upon intangible factors, like improved customer service or increased competitive advantage.
These two problems make it difficult for a company to justify such a project. Another challenge that belongs in the economic dimension are the costs of internet access. There is a great differences in access prices all over the world. Developed countries, like the United States, charge an amount of $15 a month, whereas an underdeveloped country like Kenya charges its citizens an amount of $100 a month to get access to the internet. To accomplish global marketing this is one of the problems that needs to be solved first.
A final challenge that should be mentioned here is the fact that the telecommunications industry has run into some problems. Due to the massive growth of the internet, the telecommunications infrastructure has not got enough capacity to support this growth. The solution to this problem, adapting their networks and equipment, requires massive funding. This problem can be overcome in capitalist countries, but in underdeveloped countries or countries where the government has always led the way this multi-billion dollar investment will be a very difficult one to overcome.
There simply is no capital available to invest in these networks and equipment. One of the technical challenges concerning Internet commerce is the issue of security. Research revealed that many companies, in their rush to implement I-commerce solutions, did not pay enough attention to security. Hackers could get access to credit card information very easily. For this reason consumers have no faith in the safety of the information they give out on the internet and this will stop them from using the internet for buying purposes when they have to give out personal information.
Not until consumers have restored their trust in the internet, will a global marketing strategy be an option. Another issue is the reliability of the internet. In cases of heavy use of certain sites, many times the sites experience system failures. The Internet user can not have access to these sites when there is a system failure and this results in financial losses for companies. Many sites are also not resistent against virus attacks; this also results in financial losses for these companies. The vulnerability of websites does not increase confidence in I-commerce and will not foster global marketing.
A third problem is the telecomm bandwidth that should support the rapid expansion of I-commerce. The current bandwidth is not sufficient to use high-demand applications, like video-on-demand. Although new technologies like ISDN and ADSL have been introduced, availability is still low and costs are high. An alternative technology is wireless transmission through air and space, but this is more expensive than wired connections and safety and privacy issues are even more difficult to maintain in these applications.
The fourth technical challenge is the difficulty to integrate Internet and I-commerce software with existing applications and databases. The integration software is difficult to maintain and companies spend large amounts of money in trying to maintain them. All of these technical problems will not foster the development of a global marketing strategy. If these problems are dealt with, it will give a global marketing strategy a better chance for succes.
