The internet and the marketing mix
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| The internet and the marketing mix |
McCarthy’s four Ps of marketing are Product, Price, Placement and Promotion.
Developing technology, naturally, has an effect on all of these, and the Internet in particular has seen fundamental shifts not only in the means available to promote products, but also in the placement, or distribution of products. Although tools for research, retention, distribution and product creation have changed dramatically, the fundamental principles of marketing still guide strategy.
products and services
Products and services are what a company sells. From fast moving consumer goods to digital products such as software to services such as consultancy, the Internet has allowed for a plethora of new products.
Technology allows for mass customisation of products, seen in a growing trend of letting customers customise goods online before they are created. For example, NIKEiD (www. nikeid.nike.com) and Converse (www.converse.com) both allow customers to create their own trainers based on a number of preset options, that will then be manufactured to the customer requirements. In a similar fashion, computer products can be built to specifications, as the costs of offering this type of service to customers is reduced by the Internet.
Developing technology, naturally, has an effect on all of these, and the Internet in particular has seen fundamental shifts not only in the means available to promote products, but also in the placement, or distribution of products. Although tools for research, retention, distribution and product creation have changed dramatically, the fundamental principles of marketing still guide strategy.
products and services
Products and services are what a company sells. From fast moving consumer goods to digital products such as software to services such as consultancy, the Internet has allowed for a plethora of new products.
Technology allows for mass customisation of products, seen in a growing trend of letting customers customise goods online before they are created. For example, NIKEiD (www. nikeid.nike.com) and Converse (www.converse.com) both allow customers to create their own trainers based on a number of preset options, that will then be manufactured to the customer requirements. In a similar fashion, computer products can be built to specifications, as the costs of offering this type of service to customers is reduced by the Internet.
Digital products can exist because of the Internet. The very framework of the Internet allows for products such as software and digital music to be distributed. The Internet as a distribution medium is what makes these products possible.
price
With customers able to easily access pricing information from a number of suppliers with relative ease, the Internet is growing a market of near perfect competition (Porter, 2001). The prevalence of search engines and of shopping comparison websites, such as www.pricerunner.com and www.nextag.com, make it easy for customers to compare product prices across a number of retailers. The temptation for companies to differentiate themselves on price has lead to decreased prices for many commodities, from the regularly reduced pricing of books on Amazon.com to ticket prices on low cost airlines such as EasyJet (www.easyjet.com) in Europe.
placement or distribution
Particularly for digital products and services, the Internet gives companies access to a global marketplace. Product distribution and markets no longer have to be dictated by location. With efficient delivery and shipping channels, products that are not digital can also benefit from a far wider market place. The Internet allows the basic foundations of mail order businesses to flourish online with a catalogue that is cheaper to produce and update, and cheaper to distribute: a website. In the travel industry, travel agents stopped issuing paper tickets as of 31 May 2008 (http://www.iata.org/stbsupportportal/ et/). Nearly all aeroplane tickets are now e-tickets.
Technology such as APIs, SOAP services, RSS and XML allow information and services to be distributed throughout the world. For example, the API for a hotel reservations database, Starfish Luxury Travel Distribution (http://starfishinteractive.com/), allows a diverse range of websites to offer instant online bookings for hotels in the inventory. Partners with booking engines include http://starfishinteractive.com/, http://www.spaworld.tv/ and http://www.timesonline.co.uk/. This is both a huge opportunity and a huge challenge for businesses. On the one hand, it can allow niche products and markets to flourish in a global space. On the other hand, it can be tempting for a marketer to try to reach too many markets at once. A global market place is also not yet fully supported by national banking and tax legislation.
promotion
The Internet as an information and entertainment medium naturally lends itself to be used to promote products. The online promotional mix is an extension of the offline, but with some significant differences: online promotion can be tracked, measured and targeted far more sophistically than offline. Advertising, personal sales, promotionsbased marketing and public relations can all be conducted through the online medium.
These tactics are developed further in this textbook.
price
With customers able to easily access pricing information from a number of suppliers with relative ease, the Internet is growing a market of near perfect competition (Porter, 2001). The prevalence of search engines and of shopping comparison websites, such as www.pricerunner.com and www.nextag.com, make it easy for customers to compare product prices across a number of retailers. The temptation for companies to differentiate themselves on price has lead to decreased prices for many commodities, from the regularly reduced pricing of books on Amazon.com to ticket prices on low cost airlines such as EasyJet (www.easyjet.com) in Europe.
placement or distribution
Particularly for digital products and services, the Internet gives companies access to a global marketplace. Product distribution and markets no longer have to be dictated by location. With efficient delivery and shipping channels, products that are not digital can also benefit from a far wider market place. The Internet allows the basic foundations of mail order businesses to flourish online with a catalogue that is cheaper to produce and update, and cheaper to distribute: a website. In the travel industry, travel agents stopped issuing paper tickets as of 31 May 2008 (http://www.iata.org/stbsupportportal/ et/). Nearly all aeroplane tickets are now e-tickets.
Technology such as APIs, SOAP services, RSS and XML allow information and services to be distributed throughout the world. For example, the API for a hotel reservations database, Starfish Luxury Travel Distribution (http://starfishinteractive.com/), allows a diverse range of websites to offer instant online bookings for hotels in the inventory. Partners with booking engines include http://starfishinteractive.com/, http://www.spaworld.tv/ and http://www.timesonline.co.uk/. This is both a huge opportunity and a huge challenge for businesses. On the one hand, it can allow niche products and markets to flourish in a global space. On the other hand, it can be tempting for a marketer to try to reach too many markets at once. A global market place is also not yet fully supported by national banking and tax legislation.
promotion
The Internet as an information and entertainment medium naturally lends itself to be used to promote products. The online promotional mix is an extension of the offline, but with some significant differences: online promotion can be tracked, measured and targeted far more sophistically than offline. Advertising, personal sales, promotionsbased marketing and public relations can all be conducted through the online medium.
These tactics are developed further in this textbook.
