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Table of Contents
2.7.9 Liability:........................................................................................................... 26
2.7.10 Rebirth of marketing: ...................................................................................27
2.7.11 Reasons for the popularity.............................................................................27
Is Online Marketing More Effective For Organizations Today 2
2.1. Introduction:
After an introduction to the study, in the first chapter, the current provides a review of
extant literature related to the subject. The chapter begins with a brief discussion of internet
marketing. The focus is mainly on the definitions and clarification of concepts. The literature has
been reviewed to assess the role that marketing plays for both the customers and the
organizations and how internet marketing has changed it. Use of present-day empirical studies
has been made and a wide range of researches have been reviewed on the subject matter.
2.1 Marketing:
If the firm that senses, serves and satisfies individual wants is always doing what's best
for consumers and society in the long run It find out that the pure marketing concept over
looks possible conflicts between consumer short run wants and consumer long run
welfare (Armstrong and Kotler, 2000, p. 21).
Marketing as a concept has several definitions however more or less they revolve around
customer or the stakeholders marketing is said to be The management program that aims at
maximising the returns to the stakeholders of the company by formulating and implementing
strategies for the establishment of trust with the customers along with creating a consistent
differential advantage. Through this definition we get to know about the main focus of marketing
in corporations and the policies that they use for this focus’s fulfilment (Wright, 1999; Cant,
2006). The basic purpose of marketing is to anticipate, identify and satisfy the needs and wants
The aim of marketing is to increase as much as possible the returns to the shareholders of
the business enterprise, as measured by its capital growth and long term dividend stream. The
particular contribution that marketing makes to the company lies in the construction of strategies
with the help of which one can select the right kind of consumers, establish healthy relationships
with them and thus achieve an edge over its competitors (Doyle, 2008; Wright, 1999).
Marketing needs long term associations with its selected customers because they are the
only source that makes the growth and profitability of a company faster and effective and this is
With the increased competition, companies going global, extending their product lines,
scarcity of resources, more advanced and similar products, technological changes; all these
factors and many more are creating numerous challenges for the companies (Webster, 1992) to
attain customers and capture new markets or more share or maintain even the same share in
existing markets.
The changing factors have changed the role of marketing over time. A century ago,
marketing was for promotion, later the four P’s and four C’s were developed as marketing
functions. In 19th century customer oriented marketing evolved. Following that as the
competition became fiercer the strategic marketing came into use and the existing times are
known as the relationship marketing era where the focus is on attaining and retaining customers
One major role of marketing is communication and the field is known as marketing
companies first need to make the customers aware of its existence. Then customers also need to
have some information about the company. Even if they know about the company and the
product, they might still not buy it so a little convincing and persuasion is also important. All of
the above tasks come under marketing communications and not just these any concept of
A study by Webster, (1992) is important in this regard which covers some of the major roles
played by marketing including its role in the economic and social process.
Marketing is said to be directly related to the economic and social research since the roots
of marketing are said to be in promoting the agricultural sector. Marketing was studied for
pricing and the markets in which to sell the products. The marketing further included
environmental aspects like other commodities, the institutions. Thus as said by Webster, (1992):
Marketing was traditionally seen as a set of social and economic processes rather than
as a set of managerial activities and responsibilities (till 1948).
The role of marketing was redefined in 1948 when Alexander, (1948) and later many
other authors started calling it one of the key business activities. This was when the managerial
aspect of marketing evolved. The definition and role of marketing further evolved when few
studied started calling customer satisfaction the main functions of marketing (e.g. Levitt, 1960).
The economics were already being studied by scholars in relation to marketing and one aspect
was gaining popularity related to customer satisfaction and it was the maximization of profit
(Anderson 1982; Webster, 1992). As the transactions and exchanges related to business were
studied, the role of marketing became more prominent (Johnston and Lawrence 1988). The role
became defined in this aspect further and thus was used and implemented at the corporate and
strategic level in 1970s. many companies started taking marketing as a part of the long term
planning for the organisations. However at that time, the approach to it was centralised and in till
1980s it was accepted as Strategic Business Unit. From just an economic role the marketing
function was recognised is related to other benefits for the organisations and the operational units
were open for profit and loss responsibility. With increased competition all over the world, better
Is Online Marketing More Effective For Organizations Today 7
specialised products, the I.T boom etc made customers release that more than the origin country,
the product promises (Brand, company), communication and value (satisfactions, 4Ps) etc were
more important.
In Traditional marketing, the medium allows for only one way communication. The same
marketing content is used for suppliers as well as customers mostly. On the other hand when the
medium is internet, the model allows for many to many marketing communications (Hoffman
When internet is used as a medium, the customers and companies can interact with the medium
directly as well as the other customers and companies. The customers can further add to the
medium and be a part of the marketing. The communication using such a model is not just from
The second non traditional, many to many communication marketing model has been made
possible by using a computer mediated environment. The online marketing not just focuses on
how to provide effective communication through the internet as a medium but also on how to
• Buying: To sell the products, the markets must first buy raw material or the goods and
• Selling: If the company has what the customer needs then it must also make some efforts
to sell to the customers or in other words, make the customer buy it through persuasion,
convincing etc. Selling further involves the use of various marketing communication
tools such as advertising, public relations, sponsorship, sales promotion, personal selling
etc.
• Standardising and Grading: This is both for quantity and quality control of the product.
This is more important in service marketing since the quality of service is what actually
makes the marketing effective or ineffective. For tangible as well as intangible products
there are often standards and quality criterion set by the governing bodies or institutions
as well.
• Transporting: this involves the physical transfer of the product to where it is easily
accessible to the customer. Distribution of the product and access for the customer is very
important factors in marketing and that is why the four P’s of marketing also has the
placement factor.
• Storing: This is again related to the physical distribution of the product. The products are
stored by the retailers, wholesalers and even in warehouses etc by the company.
• Financing: This is also a marketing function since the buyers also need to have funds in
order to have an inventory. Similarly, customers might need to buy product on credit. So
marketers need to manage all the finance related to their marketing activities.
• Risk taking: Risk is an important part of business and marketers often use research to
• Security Marketing Information: Accessing and then securing the useful information
marketing. They need this information to know about the potential customers, existing
markets and potential target markets etc (Perreault et al., 2009; Kurtz et al., 2009).
Communication is no doubted one of the most important aspects of marketing. There are
some essential elements for the purpose of communication in marketing and are known as
marketing communication mix or marketing communication tools. There are as such no agreed
upon finite number marketing tools but several studies have highlighted various important
Lancaster and Massingham (1993). and Lane Advertising, sales promotion, public relations,
and Russel (2001), Fill (2002) personal selling.
The World Wide Web is now being recognized by the advertisers as a worthwhile
addition to the ‘tool box’ of their advertisement media. The usage of internet is increasing day by
day and the web users are starting to value this medium as a valuable tool for gaining knowledge
regarding services and products (Kehoe et al., 1998). Even for branding, this medium is offering
a wide spectrum of opportunities (Ryan, 1999). The Ford Motor Company for instance, recently
upgraded its websites for its division of Lincoln Mercury since the managers of the company
observed that the car buyers were starting to rely more and more on the internet for buying
automobiles in addition to other products (Guilford, 1999). Internet users are increasingly buying
products from the online markets, since this market is so big; it provides one with ample choice
and variety. According to the Boston Consulting Group(1999), at the beginning of the 19th
century, the electronic commerce was anticipated to increase remarkably This potential of the
online market along with the huge propagation of both commercial as well as non-commercial
websites is compelling the advertising agency personnel and marketers to find new ways for
directing internet users towards their own respective websites and once they visit the website,
then offer them such strong messages that they keep on coming back (Sheehan and Doherty,
2001).
Is Online Marketing More Effective For Organizations Today 13
The process of building and maintaining customer relationships through online activities
to facilitate the exchange of ideas, products, and services that satisfy the goals of both
parties (Rafi et al., 2002, p.6).
The program of internet marketing constitutes a process. This process is further divided into
seven parts: framing the opportunities that a market holds; Formulation of an effective marketing
marketing program; controlling the customer information and evaluating the outcome of the
The present day world is a place of neck breaking competition for every company which wants
to survive in the market and continuously gain promotions. Keeping this in focus, for every
single company, the promotional trends have become a matter of serious concern. When the
trends of the market change then so do the promotional tactics of companies. With the inception
of the Internet Marketing, the strategies of promotion that were once used: hoardings and
banners have now entered the cyber world with slogans and brand marks. With the help of web
promotion, the companies promote their products’ sales and purchase and this phenomenon is
This new way of promotion is not only an easy way to promote one’s sales but it has also proved
to be cost effective. With the aid of Internet Marketing one does not need to contact ad agencies
By simply putting up a web page regarding one’s product on the official website, one can do all
sort of promotions for the company’s sales. With the easy accession of internet everywhere,
Internet Marketing has gained great success and credibility (Jensen, 2008).
From rural to urban areas, a customer sitting anywhere across the world can reach one’s
promotional page and can be influenced easily. The various processes that are carried out in an
organization have been largely affected by internet. Solely due to the versatile range of
possibilities that online communications provide, marketing has been able to flourish in the e-
world this easily (Krishnamurthy, 2006). Thus in the promotional mix of a company, the online
marketing communications has contributed a significant part (Adegoke, 2004). Even though in
the beginning, online marketing communication was mainly confined to the implementation of
official websites, but today, its success has inspired everyone to avail this wonderful facility. As
shown by the extant literature, numerous activities constitute online marketing communication
A process is involved in an online marketing program just like any other old marketing
program. There are seven stages included in the process of an internet marketing programs (Rafi
et al. 2001) and these are: setting up a business or corporate unit strategy, frame the opportunity
available in the market, design a marketing strategy, formulate the experience of the customers,
design the marketing program, graft the interface of the customers and the final step is to
evaluate the outcome of the whole marketing program. It is however mandatory to ensure the
consistency and sequence of these steps. The various stages of the process must be well co-
ordinated. Even though the online marketing program can be viewed and analysed in a simple
linear manner yet a marketing strategy maker may have to jump back and forth during the
implication of the seven stages. Till the extent of a firm’s ability to monetize this loyalty,
Is Online Marketing More Effective For Organizations Today 15
probably both the parties would be content in terms of advertisement revenue. But in case a
company is unable to meet the financial obligations to the shareholders, employees or suppliers
then there is the likeliness of the exchange going out of balance. The customers would no doubt
still be content with the services they get from the company but the revenue model of the
company would become incapable of sustaining itself. Thus in order for the exchange to
continue smoothly, both the firm and the customers must be satisfied (Rafi et al., 2001).
Before there was the internet, the only ways to market a product were quite simple; TV,
print and radio. Marketing was a one-way street, mostly because there was no way for consumers
to talk back. Word did get around, but at a snail’s pace (Safko and Brake, 2009, p.4,).
In 1993, Internet Marketing served as a tool only used for data transfer and emailing and
the large business sectors had clearly declared it useless for marketing. Netscape the ISP, decided
to go public on the internet in 1995 and with this exploration of the company’s commercial
potential, it opened a whole new world for marketing and advertisement. The main reasons for
the internet to gain the title of the most convenient marketing tool is its wide accessibility, cost-
effectiveness, ability to measure and compare spending and easy reach etc. After this, the gates
to online marketing officially opened to everyone. In 1996, the total spending on online
advertisement in the U.S. was approximately $301 million. This figure, even though remarkable
if compared to the zero dollars spent the previous year, yet seemed negligible to the amount that
was spent on online marketing the whole year, which was $175 billion. In 1997, internet
marketing gained the position of an industry worth $1 billion (Mango Network, 2009).
Is Online Marketing More Effective For Organizations Today 16
According to PWC, a growth of 22 per cent was recorded in India in 2006 for the
advertisement industry which contributed Rs. 196 billion in 2007 and Rs. 161 billion in 2006. In
the four years from 2004 to 2007, a cumulative growth of 20 per cent was recorded for the
advertising industry on the overall basis. Though within the sector, the different segments of the
industry continue to grow at their respective rates, the highest of which was recorded to be of
online advertisement, which also happens to be the smallest portion of the industry. In one year
the difference of growth was recorded to be 69 per cent, albeit from Rs. 1.6 billion recorded in
1. Anonymity
3. Database Interface
5. Space.
6. Asynchronous communication.
Is Online Marketing More Effective For Organizations Today 17
The process of marketing and the customer relationship development starts as soon as a
product is launched online. Consistent feedback from the viewers and response of other people
for this feedback will start a chain process. This is a self-sufficient phenomenon, which
efficiently helps in increasing the number of customers. This also helps to develop social
marketing strategy in a better and effective way (Charlesworth and Esen, 2006). Last but not
least the website should have an email capturing mechanism, as it help to update viewers by
Source: Gay, Charlesworth and Esen, (2006), The Ten C’s of Internet Marketing, Online
The three main broad categories of activities of marketing are transaction, communication and
distribution channels (Peterson et al., 1997) When these functions are performed online; there is
• As a transaction channel, online marketing again has several benefits over the traditional
marketing. There is visibility online and online channels are more easily accessible. This
increases the potential customer base for the company (Long, 1997).
Is Online Marketing More Effective For Organizations Today 19
• Cross-selling is easier online and it can help in improving the sales and revenues (Eichhorn
• When the transactions are done online, there is less paperwork required, it is less complex
and even the transaction costs are reduced (Andrews and Trites, 1997; McKim, 1997).
• Dealing with the customers online provides the management flexibility to customize the sales
between the buyers and sellers. It is easy for them to interact, communication and organize
• It is easier for the companies to assess the needs and wants of the customers using different
• Internet marketing has also allowed for easy customization and relationship building with the
• Internet marketing greatly facilitates the distribution channel and in case of electronic goods,
the transfer of ownership is even easier. It helps by reducing storage costs, large inventories
• It reduces the commissions and costs during supply chain operations by handling major
• Functions of internet marketing to be a transaction and a distribution channel are bets for
companies that deal in financial services, online banks, online ticketing, telemedicine, digital
goods etc.
In last few years concept of marketing is entirely changed, those people who are aware of the
benefits of online marketing are using it to build trust and increase their brand popularity, which
inevitably leads to high sale rate. From the perspective of an organisation, internet marketing has
several benefits over the traditional marketing in terms of cost, capability, communication,
customer satisfaction competitive advantage etc. These have been briefly discussed as follows:
2.7.1 Cost
Internet as a marketing medium has gained popularity in last few years, now no other low
cost method of brand-promotion available, which is as reachable as it. It overall decreases the
marketing budget also offer a low travel cost, and increase collaboration between the enterprise
2.7.2. Capability
The internal characteristics of the internet marketing makes it very different from
traditional marketing (Bauer et al., 2002), e.g. the information can be transferred easily, it can be
interactivity, all these factors that are inherent for internet marketing can be used by companies
When the traditional marketing tools are used the flow of information is not so easy and
the customers as well as the companies have to follow some proper channels. Consistency,
validity and access to information is necessary in marketing (Howard, 1983) which the
in a culture. Many musical bands and movie makers have become more popular and have
Is Online Marketing More Effective For Organizations Today 22
reached to the less interested audience quickly; winning their hearts and incorporating them in
2.7.3. Communication:
Internet marketing allows businesses as well as the customers to co create a highly effective
network worldwide, and dramatically increase the client trafficking. Comparison with the other
available products is easy, and testing against another product increase the popularity of a
Some main characteristics that all OMC tools contain in common are the following:
Freedom from Spatial and Temporal Restrictions: Regardless of one’s location, the accessibility
of internet in every corner of the globe has removed the barriers of distance and thus a consumer
can access information wherever and whenever he / she want (Jensen and Jepsen, 2008).
Hypertextuality: At minimal charges one can update information very easily and often. The links
between different websites allow the consumers to surf the net seamlessly and explore and
Many-To-Many Interaction: The networking sites and online communities allow people to join
public forums, share views and gain information and the opinions of others. All this has been
Personalization: The ability to interact with others and share / transfer information with one
another has been made possible only through the efficiency and interactivity of internet. At a
very sustainable cost, it allows one to share individualised information and communicate with
others regardless of one’s own or the other party’s location (Jensen and Jepsen, 2008).
Is Online Marketing More Effective For Organizations Today 23
It is easier for the marketer to catch a user who is freely browsing the internet rather than dealing
with a whole bunch of people. Therefore whenever a marketer comes across such a typical
situation, he / she start talking to the user about the product or service to be advertised. In this
situation, the user also listens intently since he / she feels privileged to be addressed exclusively
2.7.4 Control
In online marketing the customer do have more control over the marketing communication since
they can easily share their reviews, opinions, comments etc or forums, chat rooms, online
discussions etc. The online environment is such that it gives control to the customers even and
this again adds positively to their relationship with the companies (Bai and Chen, 2010).
The organisation has control in terms of cost, effectiveness of marketing strategy, information
sharing, getting feedback etc. The company can compare and control various online marketing
Transmitting a specific concept to a specific group of users is the basic notion of internet
so as to attract the attention of both the groups: the targeted audience as well as the uninterested
audience, by making it generally visible to everyone. But in internet marketing, the marketers
aim at the targeted audience only. In this manner the effectiveness of the marketing activities
Customer or consumer is the main entity directly affected by the product. Either the customer is
pleased or angered is his response after using a specific product. The outcome and responses
from both customer and the provider helps in development of an interdependent relationship.
Thus, it fulfils the concept of “relationship marketing” (Tracy L Tuten, 2008, p.5,). As
mentioned above, the customer has more control in online marketing, their queries and feedback
are handled easily on the internet and thus if executed properly internet marketing can help
traditional marketing:
1. Value can be added to the product more easily online (quick delivery, timely feedback,
4. Easier to place and process orders online (Andrews and Trites, 1997).
The marketing team of any organisation is always looking for new, innovative idea to grab
the attention of the public. Whenever planning out a strategy and implementing it, only the
creativity of the marketing team counts. For the personalisation and customisation of
advertisements, internet marketing is required for the construction of a specified target audience
Is Online Marketing More Effective For Organizations Today 25
on the base of personal tastes, geographical locations and contemporary trends over the internet
browsing.
marketing like the advertisements, personal selling, sponsorships, sales promotion etc are all
For promoting one’s products and sales online the OMC tools that a company can use include e-
learning, online competitions, online samples, coupons, sweepstakes and contests along with
other context-based services and affiliated programs (Jensen and Jepsen, 2008).
In associated programmes the website of the host business is connected to the website of the
marketer. Whenever this link is clicked on by a visitor the host gains commission (Papatla and
learning is gradually taking the classroom learning’s place in a large number of firms
(Schweizer, 2004).
Online sponsorships combine the effectiveness of both the sponsorship in traditional marketing
as well as the media sponsorships. This doubles the opportunities and aspects and improves the
Viral marketing is said to be the online version of word of mouth and much fast that the word of
mount so called viral in nature (Barratt, 2001). When talking in terms of online marketing, it is
usually deliberate and the companies user several agents including emails, pictures, publishing
reviews etc.
Is Online Marketing More Effective For Organizations Today 26
With the growing adoption of broadband, the marketing events online have become possible.
Companies can use these for product launch, presenting company information, increase
awareness, inform customers of latest trends, train customers etc (Duncan, 2002). An example is
the success of the Victoria Secret’s fashion show when the server broke down because of the
way higher number of actual viewers than expected (Strauss et al., 2003)
Promotion of sales online is almost the same as that of traditional marketing and includes
discount coupons, online contests, giveaways, samples etc. The aim of these promotional tools is
to increase the sales, ensure repeated access by customers and to encourage the interest and
The internet marketing was readily accepted by the customers and today internet marketing is
one of the rapidly growing marketing methods. To develop Customer relationship, trust,
satisfaction and commitment are very important rudiments (Garbarino and Johnson, 1999).
Internet has information on a number of topics and since it can help in easy transfer of
information many scholar suggest it as an excellent promotional tool (Ainscough and Luckett,
1996) and useful for developing customer relationship (Bauer et al., 2002).
In Internet Marketing the traditional concept of marketing has been preserved, just the marketing
technique has become more technological. It can be rated in the following manner:
2.7.9 Liability:
A stakeholder is always interested in the profitability only. For checking revenues, one must
keep track of the undertaking on a regular basis. Due to the technology factor, internet marketing
assists one by way of automating the generation of reports and their analytics to the admin
officers so as to check the liability of the ongoing strategy. With internet marketing, not only can
Is Online Marketing More Effective For Organizations Today 27
one concentrate on more than one project but also manage multiple tasks at the same time (Bai
use internet, so many business men and entrepreneurs us this revolutionary process to hire more
and more people and to sell their goods. In other words truly it is the rebirth of marketing
phenomenon. As people of all ages and all walks of life tend to stay on internet for longer
periods therefore, they collectively create a big audience, which substantially increase the sale of
a product, as they generate real and measurable results (Borges, 2009, p.55,).
techniques and procedures can be used to advertise a product. For instance; classified ads, ads
attached with emails, display ads etc. Moreover; videos can also be used for this purpose. As
internet helps people to search more relevant sites this will gather all the interested viewers. As
now people like to spend most of their time sitting on internet, it is easier to catch their attention
here. In addition to that, people are shifting from traditional media (television, radio) towards the
modern media so its best place to follow the audience here, (Tracy L Tuten, pp-6, 2008).
Is Online Marketing More Effective For Organizations Today 28
because of the ease of communication and access to information. The customers can
communicate with not just the company but also the other customers and companies. The
customers have access to wide range of tools online to know about the company e.g. they can
research, ask companies, read articles, visits websites etc. They can contact a number of related
bodies e.g. through email, forums, and discussions, chat etc. Also the internet stores everything
so they can easily access the data and views online (Gurau, 2008).
Is Online Marketing More Effective For Organizations Today 29
Internet Marketing
One to many • List based email, websites, web pages, articles directory.
Through internet marketing the companies can acquire, store and process the feedback and data
related to the customers. The data and feedback can be used and analysed more easily in internet
marketing and can help in the customisation and develop highly targeted marketing campaigns
e.g. targeted newsletters, automatic email responses, promotional news, online event marketing
1. Online Advertisements:
For the purpose of advertising online, the main tools used are micro-sites, display advertisings
and search engine optimization. With internet marketing, the companies can display their
advertisements online in the form of banners, interstitials, pop ups etc. According to many
studies such online advertisements have proved to be much more effective and competitive as
compared to the traditional offline ones (Kitchen and de Pelsmacker, 2004; Roberts, 2003;
Briggs, 2002). A research by Smith (2005) on online advertisements revealed that recently they
have become the most popular way of online marketing and one if the preferable advertising
In the online virtual world, by publicity and public relations refer to management, monitoring,
control and support of the media relations of the companies and brands online. Viral marketing,
online sponsorships, online media relations and online events are the tools used for online
publicity and better public relations.
The key to management of public relation online is to provide important information, using a
more internet friendly tone rather than the usual corporate one, also give importance to non
corporate issues online and monitor the communities to learn and control the view online
(Macleod, 2000).
According to Belch and Belch (2004), internet sales promotion is either consumer or trade
oriented. Online activities that are meant to induce a purchase constitute of online coupons,
contests and rebates along with other similar programmes whereas e-learning training programs
are most of the time trade oriented. According to Pickton and Broderick (2004), these activities
One of the marketing tools that has also increased the interest of the customers as well the sales
for the companies is the online auction system. Jupiter communications have predicted that in the
next four coming years the online customers would be spending around seven billion in these
online auctions (Collett, 2000). Some research organizations even predict a higher growth to
An online auction system, just like public relations vastly has an impact on the brand image and
sales of the company (Porter, 2001). For customers, the genuine information regarding the
delivery options and pricing can be particularly helpful while making a purchase decision. In
comparison to the traditional style of websites of companies, auction sites offer an edge to the
companies for their promotional opportunities. Irrespective of the objective of the provision,
however, a major part of the sales promotion is in the form of reduced pricing or special pricing
for a particular product which is always possible due to an online auction (Porter, 2001) The
potential of sales promotion of the online auctions are deeply affected by the overall promotional
offering of a firm in the excitement of the bidding procedure, the special deal of reduced pricings
that are offered during the bidding process can serve as an accelerator in the selling of goods. In
in an online auction the customer gets to be actively involved in the brand activities and actually
Another popular tool in online marketing is the direct email marketing. This is also one of the
most used methods by the marketers online. One can call it an alternative form for the online
world for personal selling since it allows for customisation and targeting of particular segments
and niches. The method however is found to be much more effective, cheaper, flexible, fast and
A common direct marketing tool is e-mail but other possibilities such as text based services and
micro-sites are also available (Kitchen and de Pelsmacker, 2004). The conjunction of a micro-
site along with e-mail marketing is called “landing pages” whereas content based services deal
with time and location based services such as content customised direct messages that are
situation specific too. For instance, when a person receives a message of promotion on one’s cell
phone while passing by one’s favourite restaurant (Strauss et al., 2003). Except personal selling
which was an aspect of the traditional marketing, online marketing covers and enhances all
functions of marketing. Instead of commercials, there is direct mail system in online marketing
Online games, online communities and personalization are the three main tools of online
stagnant capacity of humans to digitize content. Several advanced means of personalization are
available yet another way is to use the manual decision making system based on user
demographics gathered with registration. The advanced methods include filtering systems that
are collaborative. Such systems are also known as recommended systems(Jensen and Jepsen,
2008).
associations of people with common purposes or interests”. According to Jepsen (2006), online
communities are also marketer-driven along with being user-driven (Jensen and Jepsen, 2008).
Online games that serve as OMC are also known as advergames. Online games are implemented
in three ways: media partner sponsorships where a part of a game or the existent game is sold;
embedded where advertisements are embedded in the game and custom where the game has been
customized to meet the needs of the customers (Jensen and Jepsen, 2008).
Another important tool other than the company websites for their products is the micro sites.
These are smaller sites that are specifically made for a particular brand or product of the
company and only show the relevant information. These sites are helpful in campaigns such as
competitions, new product strategies and new product launches etc. The aim of this site sis to
increase the interaction with the targeted customers (Kitchen and de Pelsmacker, 2004).
For the establishment of strong and long lasting customer-brand associations online
communities, direct e-mailing, online games and web personalization option are the most
effective OMC tools (Jensen and Jepsen, 2008).
Is Online Marketing More Effective For Organizations Today 34
A lot of customers are suspicious about electronic commerce and its functional mechanisms, its
non-transparent procedures and impacts, and also the quality of the various products and services
offered in an online market (Kraeuter, 2002). However, the online auction systems like that of
eBay and now various other online businesses help customers better evaluate the products online.
The internet marketing gives the customers because they can easily share their evaluation and
their experience with particular products very easily online (Avery, Resnick and Zeckhauser
1999).A research by Forrester that almost half of the online buyers see these ratings and
evaluations before shopping from a particular retailer or trying a specific brand (Chen and Xie,
2004). The establishment and maintenance of customer relationships is the sole purpose of
marketing. The focal view of the company is likely to shift from gaining the attraction of the
customers to the acquisition of loyal customers with long term customer-brand associations. For
this purpose, the strategy of marketing involves three steps: awareness of the customers; their
exploration of the products and services and then their commitment to the brand.
Online Market:
Internet marketing means dealing with the levers of the cyber world. But one must also bring
into account the fact that the success of internet marketing has a possibility of resting with the
old fashioned offline vehicles of marketing. Such as the ads that are run on the TV or radio etc.
Exchange:
The phenomenon of exchange comes in between offline and online marketing programs. In the
online markets, brands have to be very particular about their cross-channel exchanges. An online
marketing plan is to be evaluated on the basis of its general exchange impact and not merely its
Is Online Marketing More Effective For Organizations Today 35
online exchange impact. These cross-channel exchanges are making the firms more and more
sensitive about the independent effects of offline and online marketing programs.
When a customer uses a particular service or product of a company is satisfied with the results he
is getting then in such a situation one can say that as a result of the establishment of the
customer-brand relationship, both the parties are satisfied. The customer is satisfied by the
facilities he / she is getting and the firm is satisfied with the loyalty the customers are providing
Marketer User
Monitoring:
As discussed before, with internet marketing, the companies can get the feedback
instantaneously. Through the number of hits on a website, the leads, the number of
participations, increase in sales etc all are various methods to monitor the internet campaigns of
the company. The companies can even monitor the sales cycles and easily know when there is a
Management:
The company can management its online marketing campaigns through lead scores. Due
to the automated nature of internet the companies can manage a number of campaigns at a time.
Depending on what sort of online promotion tool would be appropriate for the targeted market,
the company can also easily know if it is spending its marketing budget wisely. The handling and
management of customer queries, receiving theirs as well as providing them feedback is also
Measuring:
The impact of various marketing campaigns can easily be measured through online sales,
number of clicks/visits on the company’s sites, the followers and fans, customer ratings, online
marketing insights, customer feedback etc. The company can also measure its parallel campaigns
and know which one is better suited to the particular product promotion.
Is Online Marketing More Effective For Organizations Today 37
Even though the hype that was created with the advent of internet marketing has died down yet it
is a common belief that internet marking is here to stay since it has become a downright
necessity for the survival of companies. Internet marketing forms a remarkably significant
component of the arsenal of marketing of any company or organization (Rafi et al., 2002).
Not only has internet provided the other advertisement media with a tough competition but also,
it has opened an ever bigger window for marketers. For the users who work, internet
consumption has become the most consumable medium as compared to the other marketing
spectra. For some types of product, the internet has become a downright necessity for its
marketing. For instance it has been reported in a survey conducted by a research firm, J.D Power
and Associates that while buying a car, more than 62 per cent buyers first consult the online
It took almost eighty years for telephone to become a common phenomenon in the world
whereas internet did so in a time span of only four years. This became possible because the
digital technology has provided the consumers and business interactions transactions with such
In a very short time span, the internet has become the mainstream tool of marketing and business
operations. There are a large number of firms and organizations today, for whom it would
become impossible to continue their affairs if the internet went out of order (Rafi et al., 2002).
Is Online Marketing More Effective For Organizations Today 38
Today it has been seen that if a company ignores the interactive medium of internet, then there is
a chance that their demise would knock at their door soon. A number of large breakdowns have
though undermined the technology driven, customer focused and innovative marketing practices
of organizations private and public, large and small. Yet in ways unimaginable, this new medium
has changed the interactions of buyers and sellers. According to Bandyo-padhay (2002), today’s
organizations focus more on consumers rather than their own products, and this is a consequence
of the consumer power drive which is the ultimate root of the changes that have occurred in the
business world. Technology has allowed the consumers to become more in-control of their lives
but not always has it lead to consumer-driven marketing applications. The companies and firms
that resist the urge to take their products and services online must face any potential or real
technology gap that will come with the target market (Rafi et al., 2002).
The business plans of new companies have compelled the already established firms to reconsider
their business models and strategies. Thus one may conclude that internet is imposing a new
corporate culture, which everyone will have to follow in order to stay in league with the world.
This culture is purely energized by the perceived and existing benefits of the internet technology.
Now the marketers deal with tasks such as how to utilize the log files of customers in a way that
would benefit their products or services. They have to be careful of the fact that what is the
nature of the general customer and what is important for him / her. Nowadays a successful
business is always particular about staying close to the needs of its customers by using
appropriate means in which neither the customer feels exposed nor do they feel being probed. If
one knows how to use the technology, then this technology can make his / her life very easy.
Marketing practices are increasingly being modified by internet and technology. It seeks to stay
Is Online Marketing More Effective For Organizations Today 39
engaged with the current, the past and the potential customers. Digital technology is present in
all those sectors where ‘e’ is involved such as ecommerce, e-marketing, e-market, e-business etc.
But there still are many marketers and policies who do not realize the benefits that internet holds
and they lack the vision to comprehend the optimum potential of internet (Rafi et al., 2002).
The B2B relations (business to business), the B2C relations (business to customer) sectors as
well as the supply and manufacture chains between the distributors and partners have been
while driving down the costs and similarly, customer interactions have become more relevant as
the phenomenon in which the customers and companies can interact one-on-one and this
phenomenon became common only with the assistance of internet (Rafi et al., 2002).
The online medium provides one with ample opportunities for the promotion and marketing of
their products and services across the purchase cycle. A few companies such as BP and easy jet
have shown the applications of online marketing since they illustrate how firms can use the
internet communications like websites, email marketing and third party websites for their causes
as:
It can be used as an advertisement medium, for instance, BP and its subsidiaries like
Castrol Limited use interactive ads and large format displays on media sites for brand awareness
and the awareness of products such as their lubricants and fuel etc.
Is Online Marketing More Effective For Organizations Today 40
Internet can be used as a platform for sales transactions. For instance, flights are sold online to
The internet can largely be used as a direct correspondence medium. Sponsored links are used by
easy jet when a user is looking for a flight on a search engine to prompt them to visit the website
of easy jet directly. And similarly a news letter sent to the customers would encourage them to
The online market is the lead generation method. For example when content about selecting the
best available fuel for corporate cars is offered to business car management by BP, internet can
come in use for the identification of interest from a manager of a car fleet.
The internet is a useful customer service mechanism. For instance, on the website of easyjet.com,
The online market is an eminent distribution channel. For the distribution of digital products,
internet is often used specially for companies who have to sell digital products like online music
firm can interact with its customers. This way the customers can get to know about the products
and services the company has to offer and the company in turn gets to know about the needs and
The scope of internet marketing is increasing day by day. The number of internet users is
increasing at a very fast pace which make it one of the mainstream communication medium
(Figure 8: Growing Internet Users). According to one of the studies by EIAA (2008), that 33% of
Is Online Marketing More Effective For Organizations Today 41
the people cannot live without using internet. The normal use of internet for people in Europe is
12.1 hours in a usual week. About 55% of the people do online research before deciding to buy a
brand.
The early 1990s was the time when internet’s ‘big bang’ occurred. During that time almost 15
million dollars per year were being used by the subsidy offered by NSF. The government of U.S.
announced that it was eliminating the subsidy along with the acceptable use policy. The next
year the internet backbone provided the commercial operations to become operational.
After this, another fundamental breakthrough was occurred in the form of the World Wide Web.
Web servers and Web browsers were also amongst the important breakthroughs of software,
back in 1990s. The usage of multimedia and internet was made easier with these remarkable
innovations. These wonderful innovations allowed one to very easily mix up sound, pictures and
even video or text all together. For every individual, it was very easy to use internet while it also
Firms and organizations found it a very significant communication source. The further
advancements of internet formed a whole new mechanism for establishing relations with the
customers. All the marketers of the world readily seized up this innovative tool for their work.
Companies could find themselves capable of creating great marketing material at cost-effective
rates and that too, without putting in a lot of effort. The spectrum of competition has widened
with the opening of this new window, where now any and every company can compete with the
others on an equal footing. For customers too, the internet served as a great blessing since it
allowed them to find their desired products very easily. And then the customer-brand association
was concerned, which flourished till a level, never achieved before; all because of internet. A
Is Online Marketing More Effective For Organizations Today 42
whole new revolution thus came in the name of internet. The internet today is thriving on
extremely strong trends f technology along with powerful marketing strategies and principles.
In 1995, websites still did not have all those features that one may take for granted in a site
today.
All websites constituted little dynamic content customised for everyone’s use and some pioneer
websites contained database retrieval abilities. But features like video streaming, sound
streaming, security mechanisms, tables, frames, styles, encryptions etc were absent. But even in
the absence of many features, the internet still proved to be very fascinating. Providers, users,
investors and everyone else could see a lot of doors opening in the near future, and the internet
kept its promise. Search engines, social networking websites and business cycles were soon
introduced.
A virtuous web cycle was introduced, in which users as well as firms participated equally. The
sheer desire to know that what the next great thing would be, everyone was making contributions
to this cycle, regardless to the existence or non-existence of a proper business plan. This virtuous
web cycle then lead to the fast growth of consumer usage, access and content online. From
January 1994 till January 1999 the growth rate of internet hosts was reported to have increased
from 2.2 million users to 43 million. $6 per cent of these people joined the internet in 1986. The
internet usage growth was ultra dramatic in the developed countries and today the number of
users from all over the world is only 4 per cent lesser than the world adult population.
More than fifty per cent users regard internet as a necessity of life today. Even amongst children,
the usage growth of internet has been very rapid. Considering all these facts, the marketers are
taking advantages of this large consumer access for the promotion of their products and services.
Is Online Marketing More Effective For Organizations Today 43
On August 23, 1999, Blogger launched as one of the earliest blog-publishing tools. At that time,
social media was considered a niche activity on the fringes of the Internet but today, breaking all
boundaries, Blogger is the 16th most popular site on the internet, playing host to millions of
blogs, and still growing. Within 3 years, Facebook has grown to over 200 million users, and
Wikipedia has replaced Britannica as an encyclopaedia. Few would consider the Seattle-based
company Starbucks that has forever changed the way people look at a cup of coffee, to be
paranoid but they actually are, thanks to their employees and a blog that enables their customers
form, where people can communicate; share their experiences, perceptions and opinions with
other people. Examples are boards, blog posts, some famous social networking sites, for
instance; YouTube, twitter, Facebook etc. Once people visit a website with the advertisement of
a product or a service they share it on the other famous websites, and hence this chain process
increase the number of viewers of that product ( Kabani, pp-30 to 38, 2010). Social Media
marketing is one of the fastest growing methods of marketing today. Social media marketing has
changed the way companies market online. Anything launched by the company or brand can get
evaluation and consideration from a number of customers in matter of seconds. According to one
study by Anderson Analytics, (2009), 12% users of social media sites promote their own
businesses online, 18% promote other companies, 46% evaluate and post a review about a brand
Is Online Marketing More Effective For Organizations Today 44
or a company while 52% started following a company or a brand by becoming its fan (Appendix
1. Six Degrees:
The first social media site was launched in 1997 by the name of Six degrees. It allowed
users to build contact lists, create profiles, and list their friends. By1998 an additional feature of
surfing friend lists was added. These features attracted millions of users. However, by the year
2000 Six degrees was closed down due to failure of it becoming a sustainable business.
From 1997 to 2001 a number of social media sites emerged namely Friends, Asian Avenue,
BlackPlanet, and MiGente. All these social networking sites had common features; personal
profiles, friend lists and diary pages. The launch of Ryze in 2001 allowed people to help leverage
their business networks. Along with Ryze arose three other social media sites; Tribe, LinkedIn
and Friendster. These social media sites believed that they would be able to prosper side by side
without having to compete with each other (Festa, 2003). This proved to be a wrong assumption;
Ryze was unable to achieve mass popularity, Tribe gained a passionate niche user data base,
LinkedIn became a powerful business service and Friendster was a considered as a failure.
Over the years many social networking spaces emerged but majority of them succumbed
to the grips of failure. There however were exceptions. The three significant social arenas that
2 Facebook:
Facebook remains one of the most successful social media sites present. As of July 2010
the number of its active users amounted to more than 500 million (Facebook Statistics, 2010).
Facebook was not a wonder from the beginning. Like all other social media sites it had to
Is Online Marketing More Effective For Organizations Today 45
struggle. Facebook started as an intra Harvard social networking site in 2004. It linked together
different colleges within Harvard. It then expanded to include different schools. The users of
Facebook were required to have an email address that associated them to their respective
institutions. This meant that Facebook remained as a private and somewhat secure online
community. By 2005, Facebook had expanded to include high school students, professionals
within corporate organizations and then virtually anyone who had access to the internet.
The factors that have contributed to Facebook’s success as a social media site are trusted
identity, clearly defined networks, its exclusiveness and presence of continual engagement to its
users (Shih, 2009). Facebook users were required to have email addresses that identified them to
their respective institutions. This measure insured the identity of users and allowed them to be
These email addresses also enabled users to distinguish each other on the basis of the
networks they belonged to. The incorporation of institutional email addresses prevented
Facebook to be diluted by strangers and allowed it users to connect with each other on the base
Unlike other social media sites Facebook grew slowly and included institutions one at a time into
its networks. This meant that Facebook servers did not become overloaded and neither did its
users experience any technical difficulties. This slow implementation of Facebook into
institutions made Facebook become more desirable and exclusive. Now Facebook is open to
users from all over the world, its early exclusiveness helped it achieve its worldwide recognition.
The third factor is the continual engagement it provides to its users. The system of news feed,
controlled privacy, uploading and sharing of photos and videos, ability to comment friend’s
profiles have given it the edge over its predecessors. The most important development in terms
Is Online Marketing More Effective For Organizations Today 46
of user’s continual engagement was the inclusion of external applications with consent of the
users.
The concept of Internet Marketing is almost the same as the traditional marketing; the only
difference comes in the medium of conduction of its activities. Customer relationships, when
built and maintained through internet and the goals of both the firm as well as the customers are
satisfied then this phenomenon is termed as internet marketing. Further, five aspects of internet
2.11 Summary:
The chapter presented an overview of the concepts, theoretical views and studies that
have been conducted on the subject of Internet marketing. The function of marketing was
reviewed as a whole in this chapter along with an explanation of various traditional marketing
methods’ and tools. The tools of marketing such as advertisements, personal selling, sales
promotion, direct marketing etc all have been discussed when modified to be used in internet
marketing. Overall the study of literature revealed that for any online operating organization, the
internet and some of its particular characteristics have made the implementation of OMC very
efficient and inevitable. The vast storage capacities, interactivity options and the transparency of
internet has enabled organizations to take up a positive attitude in their online communication
activities along with combining fluency and consistency with customization and
flexibility(Gurau, 2008). The inherent characteristics of internet make it the perfect channel for
transaction, distribution and communication (Peterson et al., 1997). Recently the online
marketing has advanced from static to dynamic in the form of social media marketing. The
Is Online Marketing More Effective For Organizations Today 47
increased use of social media sites such as Facebook, twitter, Dig and BlogSpot etc and all have
greatly increased the scope of internet marketing. The increasing number of internet users and
social media sites users has made internet and especially social media marketing a mainstream
communication and a preferred marketing method. The next chapter of the study.....
Is Online Marketing More Effective For Organizations Today 48
Appendix-A
Source: WSI, (2010), Internet Marketing Trends Report 2010 United States.
Is Online Marketing More Effective For Organizations Today 49
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