E-Marketing: A new approach to the new economy Jonika Kromidha Stavroula Krypotou Department of Business Administration PgD/MSc in International Marketing 250, P. Ralli &Thivon, 12244 Aigaleo E-mail: kromidha@yahoo.com E-mail: skrip@hotmail.com

Abstract

With increased globalization of the world economies, for most enterprises market

opportunities seem to be endless. Departing from the traditional marketing, innovative

managers are looking for unique ways to compete more effectively on a local,

regional and global basis. This is being shaped by advances in digital telephone

networks, interactive cable television, on line services, personal computers and

Internet. These technological advances inevitably change the face of marketing. Their

attributes may be utilized for a successful marketing presence, serving the audience

and reflecting the companies’ strategies. The fundamentally different environment for

marketing, that it is provided by Internet, requires different approach. Organizations

find more and more important to represent themselves on Internet to get more

customer, to increase the public’s awareness of the companies and their products, and

to sell more of their products. Used properly, Internet and electronic marketing can be

powerful source of competitive advantage in global markets meanwhile interactive

technologies will have become a mainstream component of shopping for most

consumers.

The paper concludes that electronic marketing has become an accepted part of

marketing concept, it should be seen as a valuable and complementary tool, and

managers should embrace new technology in order to create greater value for

customers. Marketers need to evaluate their electronic offering regularly in order to

ensure that it meets customer needs and utilizes technology to the best effect.

Electronic marketing does not yet have the potential to replace traditional marketing.

This presentation will provide a source for anyone interested in e-marketing, and will

help to stimulate not only the interest in the area but also to be the base for future

research of effects that e-marketing has on e-users.

1. Introduction

Although electronic commerce can embrace the execution of transactions using any

electronic media, the literature refers only to Internet or web marketing. According to

Harridge-March (2004) if mobile telephones, digital TV are to be used as tools with

which to access the Internet, the term “Internet marketing” is not so correct, and the

term “interactive marketing” or “electronic marketing” is more appropriate.

“E-marketing is the use of electronic data and applications for planning and

executing the conception, distribution, promotion, and pricing of ideas, goods, and

services to create exchanges that satisfy individual and organizational objectives. It

affects traditional marketing by increasing efficiency in traditional marketing

functions, and the technology of e-marketing transforms many marketing strategies”

(Strauss and Frost, 2001).

Many papers have been written, including those devoted to the use of e-marketing in

transaction and payment completion, individualized and real-time pricing issues, dis-

intermediation, data mining and manipulation, examining individual customer

behaviors, and relationship-building and some of them have gone as far as suggesting

that there is a new marketing paradigm for electronic commerce (Hoffman and

Novak, 1997).

E-marketing as a latest type of marketing has been considered in an attempt to

evaluate it, using the familiar seven Ps of promotion, price, product, place, process,

physical evidence and people (Booms and Bitner, 1981) and its potential contribution

to the marketing practice.

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2. E-marketing

2.1. Characteristics of e-marketing

E-marketing is similar to traditional marketing but it is very important to know the

characteristics that distinguish this environment form the traditional marketing

environment (Pride and Ferrell 2004):

Addressability. E-users through the Internet have the possibility to identify

themselves and provide information about their product needs and wants before

making a purchase. The ability of marketer to identify customers before they

make a purchase is called addressability. Addressability as the ultimate expression

of the marketing concept allows marketers to tailor marketing mixes more

precisely to target customers with narrow interests. (Pride and Ferrell 2004).

Interactivity. Interactivity allows customers to express their needs and wants

directly to a firm in response to its marketing communications. Of course this

interaction existed on traditional marketing but now marketers can interact with

prospective customers in real time and at lower cost. Interactivity allows

customers to communicate with other customers and non-customers so the amount

of information possessed by e-users and marketers are greater.

Memory. Another distinguishing characteristic of e-marketing is memory which

refers to a firm’s ability to access databases or data warehouses containing

individual customer profiles and past purchase histories and use these data in real

time to customize its marketing offer to a specific customer (Pride and Ferrell

2004).

Control. Control refers to e-users’ ability to regulate information they view as

well as the rate and sequence of their exposure to that information. Web site is

seen as a pull medium as e-users determine what they view at web sites whereas

TV can be characterized as a push medium because the broadcaster determines

what the viewer sees once he or she has selected a particular channel (Pride and

Ferrell 2004).

Accessibility. The ability to obtain the amount of information available on the

Internet is referred to as accessibility. E-users are much better informed about

firms and their product because they can access in-depth information through the

Internet (Pride and Ferrell 2004).

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Digitalization. Digitatization is the ability to represent a product, its benefits as

digital bits of information allowing marketers to use the Internet to distribute,

promote, and sell those features apart from the physical item itself. Digital

features are easy to mix and match to meet the demands of individual customers

(Pride and Ferrell 2004).

2.2. The 7 Ps of e-marketing

• Promotion

Telephone marketing, mobile telephony, e-mail, digital TV and the Internet have

supplemented the traditional tools of promotion. In order to maximize their

effectiveness cohesive integration is needed (Cornelisessen and Lock, 2001).

One of the characteristics of e- marketing is the control. So customers who visit a

firm’s Web site are there because they choose to be, which means that they are

interested in the firm’s products and therefore can be at least somewhat involved in

the message and dialogue provided by the firm (Pride and Ferrell 2004).

Second the interactivity characteristic allows marketers to enter into dialogs with

customers and learn more about their needs. This will help in tailoring promotional

messages to the individual e-users (Pride and Ferrell 2004).

Ghose and Dou (1998) found that the more interactive the website, the more likely it

was to be rated a “top site”.

Even minor peripheral cues such as pictures and background color could influence

consumers’ response to a site (Mandel and Johnson, 1999).

1 Advertising

Today, aided by banner advertising, pop-up boxes, and links from other sites,

communication with the target audience is made easier. Advertising is made also

possible by the purchase of banners and/or pop-up messages on sites, such as portals,

owned by other people. Customer aversion to such messages has guided some service

providers turning away advertisers, as with the announcement from America OnLine

(AOL) that pop-up ads “would be ditched from new versions of its software” (Carter,

2002) urged by the perception of these messages as being irritating or annoying

(Rettie et al., 2002)

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2 Sales promotion

Sales promotion techniques such as buy-one-get-one-free may be difficult to replicate

in the virtual environment. But e-users have the possibility to download and print

coupons.

A survey by NPD Online Research found that 49 percent of Internet users who use

coupons are aware of online coupons, and 87 percent say they plan to use online

coupons in the future. Of those who use online coupons, 55 percent are aged 25-44,

45 percent are male, and one-third have a household income greater than $75000

(CyberAtlas, 1999). Such research suggests that online coupons have a strong future

(Pride and Ferrell 2004).

3 Direct marketing

The scope of direct marketing is to gain a response. This is helped by the advantage of

Internet to draw such responses in real time interaction with potential and actual

consumers as well as enabling intra-customer communications. It may be logical to

suppose that the tailored messages and offers which are made possible via the Internet

would mean the ultimate in one-to-one marekting, as originally espoused by Peppers

and Rogers (1993), giving so the possibility for better and stronger relationship-

building.

Also addressability can make marketing efforts directed at specific customers more

effective. Direct marketing combined with effective analysis of customer databases

may become one of e-marketing’s most valuable promotional tools (Pride and Ferrell

2004).

4 Publicity

Internet news releases have been seen as one of the most effective means of getting

wanted news. Instead of pushing out information to the target audience by using press

releases, today’s PR executives have to rethink strategies and pull the audience in

towards them (Fane-Saunders, 2003).

5 Personal selling

Personal sales people are very important in traditional marekting. Internet can take

over some of the activities offered by the personal sales person (e.g. accepting

purchase orders). On the other hand some activities such as competitor research,

customer service activities pre-transaction (Porter, 2001) etc cannot be replaced by

technology. For many consumers the lack of personal interface may be detrimental

(Harris et al., 2000). On the other hand if organizations have the facility for questions

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to be answered in “real time” can help alleviate consumer concerns (Harridge-March,

2004).

• Price

One of the most important characteristics of e-marketing is accessibility allowing so

consumers to have more information about the cost and price of products than has

ever been available to them before. So e-marketing facilitates both price and nonprice

competition (Pride and Ferrell 2004).

E-users have the possibility to check, compare and negotiate prices in shorter time

scales. So customer become more empowered and the issue of pricing in electronic

markets has become a pressure point for e-marketers (Ancarani, 2002). According to

Bromage (2001) online shoppers buy online for convenience rather than for price

advantages. On the other hand Bevan and Murphy (2001) argue that as the price can

sometimes be perceived as the value that the customer puts on the product, it is

therefore essential that the customer perceives that they are getting value for money in

what is being offered, which may include convenience, efficiency and excellence.

• Product

Through e-marketing strategies companies can provide products, services, ideas

offering unique benefits and improving customers satisfaction. The online marketing

of goods such as computer hardware and software, books, videos, CDs, toys,

automobiles, and even groceries is accelerating rapidly (Pride and Ferrell 2004).

• Process

The process by which customer receives a service is discussed in marketing literature

(Shostack, 1984). Interactive media have changed the service processes

fundamentally. It assists pre-purchase searching, and it removes the personal

interaction experienced by telephone marketing or retail stores. The process of paying

remotely is still subject to consumer concerns (Evans et al., 2001). What is interesting

about the virtual market place is that the user, rather than the organization, is in

control of the process (Robins, 2000) and little thought has been given to measuring

the effectiveness of these process changes (Jones and Kayworth, 2002).

• Physical evidence

The physical evidence element of the marketing mix refers to the tangible expression

of a product and how it is purchased and used. In an online context, physical evidence

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refers to customers’ site ease of use or navigation, availability and performance

(Smith and Chaffey, 2001).

• People

In online marketing, there is no personal interaction between a customer and the

provider, or between other customers. Lack of the personal interface may result in

customer distrust of first-time interaction with electronic channels. It is also more

difficult for providers to build a relationship with customers whom they never see

(Dobie et al., 2001). According to Lennon and Harris, (2002) customers who try to

access customer service from online firms may encounter more problems than

customers accessing customer service from an non-online provider. Some companies

instead to enhance customer service activities through web enabled call centres

discourage customers to call them. Customers need fast service recovery actions in

order to prevent them defecting and to prevent subsequent negative word of mouth

(Ahmad, 2002).

• Place

According to Lockett and Blackman, 2001 an implication for marketers is the

potential to shift from a non-virtual marketplace to a market-space instead,

incorporating virtual transaction/distribution spaces. Some organizations offer goods

and services exclusively and only through the virtual distribution channel. Some

retailers offer both a physical retail outlet and the opportunity to buy from an oline

facility. Research by Balabanis and Vassileiou (1999) determined that consumers

from the higher income rates were likely candidates for purchase through the Internet,

but only form retailers with recognized brands.

2.3. The adoption to the E-marketing

Understanding which demographic segment is using the Internet is important. Firms

have to know the demographic characteristics of e-users in order to design effective

and proper marketing strategies for their target markets.

Research has shown that psychographic variables, such as novelty seeking, need for

social interaction, product involvement, and perceived behavioral control have an

effect on consumers’decision on whether or not to purchase online (Kokkinaki 1999;

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Sin an Tse 2002). Consumers’ attitudinal characteristics also influence their adoption

of the Internet. Szymanski and Hise (2000) find that “convenience” is the most

important predictor of e-satisfaction and measure it in terms of time and browsing

ease. According to Zeithaml et al. (2002) online security and privacy is of consumers’

major concern when they decide whether or not to engage in electronic transactions.

Internet is changing the rules by which marketing is conducted and new consumer

market structures emerge (Peterson, Balasubramanian and Bronnenberg 1997). Levy

(1996) believes the Internet would ultimately become “the medium by which we keep

in constant contact with our families, watch television, dash off a note to a friend,

check the traffic, read the news paper, prepare a report for work, make a phone call,

buy a book”.

The volume and tendency of the Internet transactions reflect a more and more

important role the Internet is playing. According to Cyberatlas.com (2001c),

consumers spent $59.7 billion on line in 2000, and at the end of 2004, worldwide B2B

Internet sales transaction are forecast to reach $6 trillion (Cyberatlas.com 2001d).

Varadarajan and Yadav (2002) indicate that Internet enhance the effectiveness and

efficiency of marketing mix element (4P) except the actual distribution of nondigital

products focusing on the shift of the traditional physical marketplace to the hybrid one

that encompass both physical and electronic marketplace non considering the

competitive strategy of pure-Internet firms. On the other hand Kalyananam and

McIntyre (2002) present the e-marketing mix as compared to the conventional

marketing mix. Their e-marketing mix contains seven extra element thought to be

essential for e-marketing, including personalization, customer service, privacy, site,

community, security and sales promotion. According to Kalyananam and McIntyre

(2002) e-marketing mix has more overlapping element and the integration of those

elements is more common as compared to the traditional one. Also it is important that

Internet diversifies the pricing mechanism online (Hou and Rego, 2002).

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3. Methodology Doing business on the Internet will become even more important in the future. A

continuous connection to the Internet will become a common feature in households of

the future and customers will be able to do more and more interactively. So after this

e-marketing review questions that need to be answered arise, such as:

• How the content and format of information provided online, using e-marketing

tools, can affect the Greek e-users willingness to purchase without

experiencing the product?

• How the inability to control Spam or unsolicited commercial e-mail affects the

Greek e-users adoption to the e-marketing environment?

• How banner ads, coupons, price incentives world of mouth and the lack of

social interactivity affect the decision making of the Greek e-users?

The research that will be conducted will give response to the above questions.

The sample will be people 18-25 years old as the population with the greater

percentage of the use of Internet.

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USE OF INTERNET 2001-2002

0102030405060708090

100

2001 2002

YESNO

USE OF INTERNET BY SEX

0

5

10

15

20

25

30

2001 2002 2003

MENWOMEN

9

USE OF INTERNET BY AGE

0

500

1000

1500

2000

2500

15-17 18-24 25-34 35-44 45-54 55-64 65andover

200120022003

10

0 5 10 15 20 25

e-mail

Information for goods and services

Information

Entertainment-games

Entertainment-music

Education

Information for public sector

Chat rooms

Purchases of goods/services

Entertainment-TV, Video

Looking for job

Bank transactions

Free services

Use of public services

Information for health

20032002

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