By Joe Abramson and Craig Hollingshead
Email: abramson@marshall.edu
Email: hollings@marshall.edu

Craig A. Hollingshead (DBA The University of Tennessee, 1985) is Associate Professor of Marketing and the Business Logistics option coordinator at Marshall University. In addition to logistics-related courses he teaches marketing research and introduction to marketing (in the classroom, on television to remote locations, and on the INTERNET). The focus of his teaching in the area of marketing is Marketing for Entrepreneurs. His research interests include military and business logistics, transportation economic history, and practical marketing applications. Dr. Hollingshead has published in The Review of Regional Studies, International Journal of Transportation Economics, and Defense Transportation Journal.

Joseph Abramson (Ph. D. Louisiana State University, 1977) is Associate Professor of Marketing at Marshall University, Huntington, WV. He joined the Marshall University faculty in 1990 after 13 years of running his own consulting agency, specializing in small businesses. He has published articles in The Journal of Business and Entrepreneurship and the Mid-Atlantic Journal of Business and is a regular contributor to conferences around the country. In addition to the introductory Marketing course, he teaches sales management and international marketing courses on a regular basis.

The Internet was originally intended to be used as a medium for defense and academic communications. Today it continues to serve that purpose but is increasingly used for recreation. In the future, it will be an important commercial channel. It has been suggested that last year there was $ 2.8 billion of commerce conducted on the Internet, by 2001 that is expected to swell to $ 240 billion. If a company is to benefit from this trend it must develop marketing techniques specifically suited to the Internet.
At present, all that is known about marketing on the Internet been learned from experience over the past few years. One of the lessons learned is that the marketing concept applies to Internet marketing. The marketing concept stresses the importance of satisfying the consumer. The purpose of this paper is discuss how traditional marketing considerations can be used to provide satisfaction to ultimate consumers.

The first task in developing a marketing mix is to define the target market. In the case of marketing to consumers via the Internet, one of the essential characteristics of the target market is that it consist of people who are connected to the Internet. Because most employers prohibit or significantly limit personal use of company machines, especially concerning shopping and recreation, a primary concern is with those connected at home.

Internet consumer demographics are probably similar to those of the Innovator and/or Early Adopter in Product Diffusion Theory. They tend to be younger, with above average education and income. They receive product information from each other or from narrowly focused publications.

Internet users may be classified as Surfers or Shoppers. Surfers use the Internet for recreation. They visit web sites as explorers, moving from site to site and not returning unless there is entertainment motivation. Shoppers use the Internet for a directed purpose, to gather information about a topic of interest, to make purchase decisions, or to conduct a purchase transaction.

At present, the most popular items purchased on the Internet are sex-related. There is an interesting parallel in the development of the Internet and that of the VCR. Initially, VCRs were slow to be accepted as a mainstream entertainment medium. Then, they became a popular vehicle for sexually oriented programming. It has been stated that pornography was the making of today's VCR industry. The same pattern has developed on the Internet. As the sex market demands better Internet technology and spurs greater Internet acceptance, other commercial enterprises will benefit. At the present time the next greatest Internet use is for business-to-business marketing. Consumer purchases of non-sex goods and services is a distant third.

The marketing literature makes much of the four P's, product, price, promotion and place, as elements of the marketing mix. This framework can be applied to developing an Internet marketing strategy. The first logical consideration is of the product being offered. Consumer products may be classified as specialty goods, shopping goods, or convenience goods. Specialty goods are ones for which the consumer has a specific preference and will go to considerable effort to obtain. Specialty goods currently offer the greatest opportunity for sale on the Internet. The customer knows the specifications of the product sought, even to the point of brand loyalty. In many cases the product has known quality and characteristics. An example would be using Amazon (an on-line book store) to buy a book or CDNow(an on-line music store) to purchase recorded music. The customer knows what to expect when the article is delivered. The Internet is also a good place to seek hard-to-find products, like out-of-print books or recordings by obscure artists.

Shopping goods are things for which buyers are willing to put considerable time and effort in the purchase process. The inherent lack of opportunity to examine or sample goods is a detriment to marketing some shopping goods on the Internet. On the other hand, the ability to easily custom tailor specifications, as in the case of buying a computer on-line, is a particular Internet advantage. Also, if the consumer is shopping for the best price, it is possible to rapidly survey a wide range of options. In some cases, brokers will facilitate shopping by presenting the offerings in order of some important characteristic, as in the case of travel services arrayed in order of price, or departure time, or airline carrier.

Convenience goods are frequently purchased items which buyers are willing to exert only minimal effort to obtain. These presently offer the least opportunity for marketing on the Internet. In the case of impulse purchases of convenience goods, the delay between purchase decision and availability for consumption or service is a serious shortcoming. There is little likelihood that consumers will observe something while surfing the Internet that would remind them that they need to replenish some category of product. Finally, the added cost of order picking and delivery cannot be borne by most classes of low-priced convenience goods.

An additional class of products that falls outside the traditional classification is goods that are of a sensitive or personal nature. The lack of personal contact offered by on-line purchasing allows consumers to maintain their privacy while receiving a high degree of customer service. This may be the reason why the Internet is such a popular vehicle for distribution of sexually-related materials.

Price is one of the most important elements in the marketing mix. It certainly provides the most obvious basis for comparison. Consumers shopping on the Internet can easily access prices from a great many possible suppliers. Also, prices for goods on the Internet may be relatively low because the overhead cost of maintaining a web site is much less than a regular retail outlet. It must be remembered, however, that many Internet suppliers have dual operations, one regular retail store and one on-line. These operators would not enjoy the benefit of low overhead. Another price advantage enjoyed by Internet shoppers, at present, is the absence of state sales tax for purchases delivered out-of-state. That situation is currently being studied as state legislatures see growing on-line markets as an additional source of tax revenue. A final consideration, the delivered price of goods purchased on the Internet may be increased due to handling and shipping charges.

One of the weaknesses of Internet shopping from the perspective of the consumer is security. There is the risk that the supplier may not satisfactorily deliver the goods ordered. The merchandise may be inferior, incorrectly selected, may never arrive. Two possible actions that can reduce consumer concern are to have a clearly articulated and fair return policy and the point out consumer protection assurances made by credit card companies. If the goods are mis-represented the card company can issue a credit to relieve the consumer of the debt. A final consumer concern is with transaction security. Sometimes credit card information is improperly accessed and the consumer is charged for a large number of improper purchases. These risks are reduced by improved electronic transmission security and a broader protection policy from the credit card issuer.

Originally intended as a means of communication, the Internet offers an additional advertising medium to deliver promotional messages to consumers. The problem from the consumers' perspective is in finding the appropriate sellers' web sites. The situation is similar to trying to find a Chinese restaurant in a strange city. One approach would be to travel around the city, looking for a Chinese restaurant, hoping to find a good place to eat. That undirected strategy is similar to that of the Internet Surfer who goes from web page to web page, searching for something interesting.

A more productive strategy is that of the Shopper, who checks some sort of index or directory to make a selection of the desired destination, then navigates to the desired location by use of a map. Internet Shoppers refer to a search engine or classified directory to identify possible vendors. It is important for Internet marketing success that web sites be listed in as many search engines as possible. Also, hyper links in related material and banner ads on popular web sites can provide easy access to the vendor's location and build traffic of potential customers. Finally, ads in traditional media can be used to direct people to Internet sites.

One of the issues of web site design is the conflict between creativity and profit. The creative people want to produce expressive ads and web sites with artistic merit, the sales manager wants ads that sell. Sometimes these two objectives conflict. The purpose of advertising and web sites is to make the consumers' tasks easy; easy to find, easy to download the information, easy to understand, and easy to use.

The Internet is more than a communications medium. It also serves to facilitate the transaction. Consumers can make their selection of alternative vendors and alternative products, place an order, and arrange payment without moving from the computer. Ease of use is probably the strongest argument in favor of consumers' use of the Internet for shopping. As the level of technology advances in the short-term future, that ease of use will increase.

The primary advantage enjoyed by Internet shoppers is the convenience of the place they shop -- it is from home. The Internet has a world-wide reach and any location is accessible from the shoppers' computers. There is the added convenience of 24-hour a day shopping and the avoidance of crowds, traffic and parking. And, as previously noted, a number of sites may be comparison shopped in rapid succession. About the only disadvantage is the shipping delay that exists between making a selection and receipt of the goods.

Most of the items of conventional wisdom concerning retailing apply to achieving customer satisfaction on the Internet. The physical design of the site; routing, layout, atmospherics, appearance, or image, whether it be physical or virtual, must be keyed to customer convenience. The customer forms an impression about the "store" from first exposure. If the impression is not favorable, the customer will not shop and will not return.

Many retailers run dual operations, a physical store and a virtual store. It is desirable that these two operations be mutually reinforcing and present a congruent market offering. If customers are familiar with your physical operation, and like it, they will be comfortable buying through the web site. For other shoppers whose only contact is through the Internet, the purchase poses a greater degree of risk. Satisfactory Internet purchases, on the other hand, may increase patronage of corresponding retail stores.

Consumers' use of the Internet for shopping is partly a function of benefits received. These benefits are

1) convenience in terms of being quick and easy to shop and make comparisons without traffic, crowds, or parking;

2) access to a broader and deeper product selection and to a greater variety of stores;

3) possibly lower prices as a result of lower overhead and wider competition;

4) it's fun to shop on the Internet.

Shopping on the Internet is also a function of the detriments. Benefits must outweigh the detriments which are:

1) the time lag between purchase decision / selection and delivery of the goods;

2) the inability to examine or sample the product;

3) the risk of dealing with an unknown, possibly unreliable merchant.

More consumers are going to be using the Internet in the future for shopping. Although the Internet is a new marketing channel, most of the traditional principles will apply, including the marketing concept. Application of the marketing concept means that merchants must look at things from the perspective of the consumer to be successful. Consumers will patronize suppliers who provide more benefits in the shopping experience than detriments. This article has suggested ideas about how that can be put into practice.