Internet Advantages and Disadvantages when Marketing
Doing business through the Internet -- negative press.
Embrace the Internet or Fear it?
Perceived and Real Disadvantages
Credit Card Fraud
Lack of accountability in business partners / to purchasers
Remedies to this Must acknowledge still are potential problems
Example of Napster
Other examples of lack of creative control for art sold over net
Disseminating 'buzz' nationally and internationally
Access to wider and more desirable markets
Still difficulty of loss of tactile element
Loss of royalties -- Amazon example
Advantages of segmentation given by Internet
How to design web page to maximum advantage
How to use segmentation to one's advantage
A. Greater risk
B. Potential greater profitability
Internet Advantages and Disadvantages
The disadvantages of doing business on the Internet, from the point-of-view of consumers as well as sellers, have created many popular headlines for the local news. However, although tales of fraud, dissemination of false information and shoddy products, and misperceptions may be ride, this does not mean that the Internet can be discounted by a potential ad campaign, marketing department, or indeed any business structure or service today. Although the Internet should be approached with caution in some areas, ultimately the advantages of doing business on the Internet outweigh its disadvantages in the current global climate.
The lack of accountability when accepting payment the Internet is its most obvious disadvantage. Credit card fraud and dishonesty on the World Wide Web is legion. However, the government has recently striven to take steps to raise the level of accountability for contracts signed between parties on the Internet and to stem the tide of payment fraud. Most recently, the Electronic Signatures in Global and International Commerce Act of 2000 states that electronic contracts and electronic signatures are just as legal and enforceable as traditional paper contracts signed in ink. "The law, known as the removes the uncertainty that previously plagued e-contracts." ("Doing Business Online," 2003)
Of course, the Napster controversy regarding music downloads from websites is proof positive that simply because some legal clarification regarding issues of contracts and payment for products has been provided, does not mean that purveyors will always be adequately reimbursed for the products they provide. The issue of Napster highlights that companies that provide a product that is of a highly personal nature that can be copied, like a work of art or music or a creative idea, may be an area where a business wishes to proceed with greater caution onto the web. Idea theft is difficult enough to prove in the real rather than the virtual world. In a medium were images and words are transmitted as rapidly as the Internet, businesses where ideas are the product must move with greater caution onto the web.
Businesses with a particular concern about privacy issues, such as healthcare, also have faced additional concerns regarding the Internet. One 1999 article from Healthcare Business Management noted that, compared to other industries, healthcare is "seriously underdeveloped in the area of business-to-business e-commerce, particularly in the arena of healthcare," even though the Internet is a less expensive way to store medical records. Greater privacy controls from a technological point-of-view have increased the use of the Internet in heath care in recent years. However, this demonstrates how the concern about inter-industry problems, such as patient privacy, can result in the entire industry being more reluctant to use the Internet as a marketing tool. When an entire industry is Internet-shy, it becomes more difficult for a business within that industry to gain knowledge and make maximum use of the technology, creating a kind of vicious cycle of Internet ignorance.
This rapidity of knowledge available on the Internet, however, can also be great boon to new businesses disseminating new and possibly unconventional products and ideas. Through relatively low-cost web pages, such businesses can disseminate their product in a way that is arresting and interesting. Businesses can convey a great deal of information to technologically savvy consumers by simply creating a website and publicizing the Internet address in prominent locations.
However, while the Internet offers many powerful advertising opportunities, a website is not an advertising tool. Unlike traditional advertising, the site must be visited through consumer choice. (Asplaned, 2003) Thus, a web page must be informative and desirable in a way that an advertisement on a popular television program can afford not to be. Also, in some ways, although it is easier to gain access to new markets, and to generate buzz through the Internet, it can be harder to sell tangible, touchable products on the Internet. The seller loses some of the advantages of a consumer entering a well-planned store and smelling, touching, and becoming enticed, on a tactile level by the product. It is also easier for the consumer to compare different prices on the Internet.
The greater price competition, a clear negative for sellers, can be seen on Amazon.com. Individuals seeking to buy a particular book can also access a linked web page where they have the option of buying a second-hand edition. This service highlights the difficulty of protecting ideas, particularly artistic ideas via the Web. Authors receive no royalties on these second-hand texts. Amazon.com has encouraged this phenomenon, by providing a link to consumers where they are told how much money they could make if they re-sold their Amazon.com purchases second hand. However, even a consumer buying a hammer can access every price for such a device, from Home Depo to Lowes, to even the hardware stores around his or area, before making a choice. Before such a consumer would be limited to the range of selection within a particular store, unless he or she was a particularly dedicated consumer with a great deal of time on his or her hands, with the ability to travel on car or foot to different locations.
However, a marketer selling a particular kind of style, from clothing to a new gadget can also generate a kind of instant buzz through a properly designed website, with a catchy, accessible title that can access a range of consumer's eyes in a fashion only dreamed of before the virtual revolution. The instant nature of the Internet makes it uniquely suited to youth-based consumer ventures. Young people are more open to shifting brand loyalties and trying new products and services. They are also more likely to visit a website with a catchy title they see on a bus or billboard.
Of course, this does not mean that simply because it is on the Internet, people will buy it or make use of the service. The failure of the 'dot.coms' or 'dot.bombs' of the 1990's illustrate that few, for instance, are willing to pay an extra fee to shop their supermarket, virtually online. But luxury, specialty goods, or goods individuals do not otherwise have access to near their homes or offices are a different matter. A person may not buy an ordinary box of candy online, but a box of hard-to-find candy produced only in one region of the country are a different matter.
The Internet thus can target consumers with relatively high levels of disposable income, and also increase brand loyalty by building brand websites. This enables individuals who travel to the U.S. To sample, for instance, In-and-Out Burger in California, and return home to the East Coast of the U.S.A. Or to Canada and talk about the wonders of that West Coast chain. When asked for further information, they can direct people to the chain's website. The consumer, and friends and family of that consumer can view the website and order funny t-shirts or even special sauces from the food chain and generate not only positive publicity, but a ready and available market when the chain expands into the region.
Thus, the Internet offers a potential advantage to not only new businesses, with unique ideas to purvey, but also to existing businesses with a strong brand name hoping to expand their range of consumers to a new region or to a new nation. The disadvantage of the Internet, however, from the point-of-view of an established business, is that it exponentially increases the range of competition between sellers. For instance, a consumer may be able to buy Starbucks products via the Starbucks website online, even if that product may not be available in the individuals' region or nation. However, that same consumer can also buy ground coffee from other coffee shops, with an even more luxurious image than Starbucks brand coffee, or at a greater discount than Starbucks is able to feasibly offer.
However, the Internet, both in the case of new and established businesses, allows for segmentation of market demand in an unprecedented fashion. This is not true of simply targeting the youth market, for instance. It also means that individuals who are fans of a very specific type of product, such as memorabilia from a particular era of television history, or with a particular fondness…