a study on online marketing - karnataka university

7/27/2019 A Study on Online Marketing - Karnataka University

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A STUDY ON ONLINE MARKETING

1. INTRODUCTION

Over the past few years, there has been an explosion in the online world - an explosion

that is also a harbinger of how business will operate in the future. Supply chains are being

rethought, products and services reconfigured, and business models revamped. As such, the

Internet is having a profound impact on the way business is being conducted in ways that are

often disruptive to traditional methods. This is creating new challenges and opportunities. The

Internet provides the opportunity for companies to reach a wider audience and create compelling

value propositions never before possible (e.g. Amazon.com range of 4.5 million book titles),

while providing new tools for promotion, interaction and relationship building. It is empowering

customers with more options and more information to make informed decisions. The Internet

also represents a fundamental shift in how buyers and sellers interact, as they face each other

through an electronic connection, and its interactivity provides the opportunity for brands to

establish a dialogue with customers in a one-on-one setting. As such, the Internet is changing

fundamentals about customers, relationships, service and brands, and is triggering the need fornew brand-building strategies and tools.

In the midst of this, aggressive Internet start-ups have emerged, creating strong brands

that are putting established brands at risk. Internet companies such as Yahoo!, Amazon.com,

America Online (AOL) and eBay have been able to build powerful brands in a few years,

whereas it has taken decades for traditional companies to achieve the client base, customer

affiliation and level of sales, which these Internet start-ups have achieved.

As a result, harnessing the reach and interactivity of the Internet to build and maintain

brands has become extremely important. For pure online players, who are essentially intangible,

brands are even more critical as customers have little to go on other than a recognised brand.

Given the tremendous clutter in today's e-commerce marketplace, and the high cost of acquiring

online customers, the most successful sites will be those that can attract customers and build


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brand loyalty and enthusiasm that extends the brand-customer relationship beyond a single

transaction. A Business Week survey found out that 57% of Internet users go to the same sites

over and over again, rather than drifting from site to site1. Therefore, building awareness,

attracting traffic or eyeballs, turning browsers into buyers, and turning first-time buyers into

loyal repeat customers has become the Holy Grail of online marketing strategies. However, as

the need to build brand loyalty online is reaching a peak, there is a growing recognition that

traditional methods are no longer suited to this new interactive environment. As such, companies

lack a coherent framework and concrete methods to build an online brand. In light of this, this

dissertation seeks to explore how companies should go about building a successful Internet brand

and to identify the critical factors that must be considered.

During the last 3 years, there has been a rupture on the bubbles of the Dotcom industry.

The disruption of the global Dotcom industry, the loss of investors confidence, the assai lance

from hackers and code-breakers, the bankruptcy of many start-up giants (including Boo.com and

Goodsonline.com) made many pessimistic souls believe at the doomsday of the industry in a not-

too-distant future. But according to experts, Dotcom industry is still a fledging and promising

one. According to Hoffman, the online purchase will occupy up to 35% of the total figure in the

next 30 years. By the way, the competition between the start-ups will be more fiercely than ever.

In the era of digital technology, companies compete not only in price and quality, but also in

brand name. Therefore, building a successful brand name on Internet is a vital task, especially to

cyber companies.

ANALYSIS DONE BY KALAM SOFTWARE TECHNOLOGY

This chapter provides an analysis of six companies. Each case is presented in the same format

including, a company overview, its value proposition, the sources of added value (using the 7Cs

Framework), its brand-building strategy (how it generates traffic), and other key factors that havecontributed to its success (or failure).


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COMPANY OVERVIEW

In April 1994, Yahoo! was founded by David Filo and Jerry Yang, two PhD students at

Stanford University, who started an online guide as a way to keep track of their personal interests

on the Internet. The concept exploded (through word-of-mouth) and in less than six months, the

site was receiving 1 million hits per day. Yahoo! has since promoted from an ordinary search

service into a global Internet communications, commerce and media company that offers a

comprehensive branded network of services and information to more than 145 million

individuals each month world-wide, and is one of the few Internet companies to turn a profit

early in the development of the Internet.

As the first online navigational guide to the web, Yahoo! is a leading guide in terms of

traffic, advertising, household and business user reach. Yahoo! is one of the most recognised

brands on the Internet and is the 53rd most valuable brand in the world. The company's global

web network includes 23 world properties outside the US.

VALUE PROPOSITION

At the core of Yahoos value proposition, lies the directory - a hand tailored and easy-to-

use guide to the Internet that becomes more useful each day as Internet penetration, the amount

of information, and the number of websites continues to explode. According to CEO of Yahoo!,

We've set out to make Yahoo! the only place anyone needs to go to get connected to anything.

There's nothing in the real world to compare to that1. As such, Yahoo! offers a range of

supporting services that add value, from e-mail services to stock quotes and much more, all in a

single location.


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SOURCES OF VALUETHE 7Cs FRAMEWORK

Convenience

Central to Yahoos success, is the way it has structured and displayed information. Their

goal is not to list everything under the sun, but instead to be selective and to display the best the

web has to offer in a hierarchical framework that makes sense to customers. They have kept the

design of the site simple and clean to appeal to customers and avoid slow-to-load graphics. More

recently, Yahoo! extended its convenience through its Yahoo! Everywhere service, to allow

access, regardless of platform (i.e. mobiles, TVs, Palm computers).

Content

Yahoo! has pursued a broad range of deals with content and commerce companies. These

have helped Yahoo! become the place to track down a broad range of valuable information and

resources, ranging from daily news and weather reports to road maps and books, and have been

at the heart of Yahoos growth and development. They have formed multiple alliances and

partnerships with leading online companies such as Amazon.com and CD-now. Their thrust has

been to provide valuable content to customers, while providing partners access to a large

customer base. This creates a win-win situation as it satisfies Yahoo!, the partner, and more

importantly, the end-user.

Customisation

My Yahoo! allows surfers to customise their view of Yahoo! and pick favourite topics,

from stocks and sports results to weather and air fares, and is similar to a custom tailored

newspaper. By tailoring the information to users' preferences, Yahoo! has increased customer

loyalty and retention rates.


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Community

Yahoo! has developed customisable web communities called Yahoo! Clubs, where

groups of people with shared interests can communicate through chat, message boards, and e-

mail. In 1999, Yahoo! acquired Geo-Cities, (one of the largest online communities) which

provide easy-to-use and innovative tools to allow users to publish content on the site. Yahoos

recent acquisition of e-Groups (an e-mail group communication service) will provide consumers

with powerful new ways of communicating one-to-one, one-to-many, and many-to-many.

One of the most recognized Yahoo! communities is the famous Yahoo! Messenger. Built

from 1995, with more than 100,000 chat rooms and widely varying topics, from public health to

movies, from sports to politics, Yahoo! Messenger attracts more than 1 million chatters daily,

and spreads its communication through word-of-mouth faster than anything else. In some

countries like Vietnam and China, Yahoo! Messenger has become a cultural phenomenon, where

an ordinary chatter spends no less than 3 hours daily on Yahoo! Messenger to meet his or her e-

pals.

Connectivity

Connectivity is Yahoos core product, and the nature of the navigation business, and is

driving Yahoos multiple partnerships and alliances, to provide its customer base with access to

useful links and content. In addition, Yahoo! has also implemented campaigns to persuade users

to bookmark the site, or to make it their home page.

Customer Care

Yahoo! responds to customer inquiries via e-mail, fax, telephone and even traditional

mail, and plans to incorporate other features such as online chat to facilitate communications.

Yahoo! spends more on customer support than most companies, reinforcing the brand customer

relationship, and contributing to their reputation as a quality service provider.


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Communication

By positioning itself as a site that users frequently visit, and through communications via

email, Yahoo! maintains close contact with customers. Yahoo! also encourages customers to e-

mail ideas and feedback.

BRAND-BUILDING STRATEGY

Yahoo! is a marketing machine. It is often highly praised for its brand-building ability

and promotion strategies through the use of traditional (offline) media and guerrilla marketing

techniques to build awareness, and according to Intellect-quest, 82% of Internet users and 23%

of people intending to go online, recognise the name Yahoo!.

Yahoos brand-building success starts with its name, and its implications of a good time.

Given the unease with which the average consumer approaches technology, Yahoo! avoided

characterising itself as a technology-oriented company, and the company has always

communicated the utility of its service in a way that reinforces other.

Core brand attributes a sense of irreverence, an approachable nature, and an inherent

friendliness. While Internet companies were targeting existing Internet users through the use of

online promotion methods, Yahoo! extended beyond this to use traditional offline media. At the

time this was considered a breakthrough, and it formed a critical link in Yahoos brand building

strategy. Their strategy was to target near surfers - people who are not yet online but are likely

to use the Internet in the near future. These near surfers represented (and still do) a large and fast

growing group and, therefore, by building a recognised brand name, Yahoo! would be one of the

first sites that they visited. This was especially important, as experience surfers tend to be loyal

to their search engine. As a result, Yahoo! aggressively promoted the site through public

relations, TV commercials and radio spots during drive time. In 1996, they hired Black Rocket to

create a brand awareness campaign that became very successful through the development of the

tag line Do You Yahoo!? which conveyed the brand's irreverent personality.


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In addition, Yahoo! adopted guerrilla marketing techniques - with its name being

plastered on everything, from the Zamboni ice-shaving machine of the San Jose Sharks (Ice

Hockey Team) to over 120 products, including backpacks, T-shirts, breath mints, parachutes,

snowboards, sailboats, and yo-yos, as well as TV shows (Ally, ER) and Hollywood movies.

They even have a barter deal with the San Francisco 49ers, which has fans screaming Yahoo! to

cheer their team as the Yahoos logo flashes across the football stadium screen. They also

teamed up with publisher Ziff-Davis Co. to create Yahoo! Internet Life, a monthly magazine

guide to what's new on the web and it has co-branded products, services and contests with well

known brands such as Ben & Jerry's, Visa and MCI. Yahoo! has paid little for this exposure,

which has been instrumental in establishing Yahoo! as a household name. Although this seems

like a shotgun approach, it is in fact a carefully orchestrated campaign that requires each

branding opportunity to meet one strict test - it must reinforce the image of the company as a

service that is fun, a little wacky and inviting. Once customers access the site, customers

quickly discover its value and through a high quality experience (7Cs), Yahoo! has managed to

cultivate high brand loyalty. According to a recent study, 92% of Yahoo! users rate the service as

excellent or very good which is significantly higher than those of other sites, and 76% turned

to Yahoo! before visiting another search engine or navigational site. In addition, the research

shows that 73% of Yahoo! users bookmark the service - higher than all other services.

According to Karen Edwards, VP-Brand Marketing, Yahoo's ability to quickly pick up on

users interests has been a key factor contributing to their success, stating that if we wait to hear

about it in the news, it's too late. We need to be one step ahead in order to have a better service

than our competition. Their innovation, new services and customised features highlight their

ability to relate to customers' needs.

The nature of brands

Introduction

Brands are made up of many layers and dimensions. In this chapter, these layers are

unravelled to reveal the nature of brands and their reason for existence. The chapter proceeds to

describe the influence of brands on the buying process, and the importance of customer


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satisfaction and brand loyalty. The concept of brand equity is outlined, explaining the value of

brands, both to customers, and to companies. These concepts are central to brands and brand-

building, whether online or offline and they form the backbone of this dissertation.

WHAT IS A BRAND?

A mixture of tangible and intangible attributes symbolised in a trademark, which, if

properly managed, creates influence and generates value

This definition truly captures the essence of a brand, and highlights the importance of

brand management. Branding is about creating value, both for customers, and for the

company. This value stems from the products and services that companies create and bring to the

market, but extends further to encompass added values derived from factors such as the brand-

customer relationship, the brand's emotional benefits and its self-expressive benefits.

THE LAYERS OF A BRAND

Brands are made up of four layers - the core product or service, the basic brand, the

augmented brand and the potential brand.

The core Product / Service

At the most basic level, customers buy products to meet certain functional needs.

However, most products and services cannot survive on functionality alone as this is usually

matched in time. The most common barrier to competition is building a brand.

The Basic Brand

The basic brand consists of the name, term, sign, symbol, or design, or a combination of

them, intended to identify the goods and services of one seller or group of sellers and to


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differentiate them from those of competitors2. Essentially, this should support the offering's

performance and differentiate the brand from those of competitors.

The Augmented Brand

Successful companies seek a competitive edge through the enlargement of the core

product or service, with supplementary products and services (e.g. information, quick delivery)

that enhance the customers total purchasing and use experience. These products and services

add value and make the offering much more difficult for competitors to emulate.

The Potential Brand

A brand achieves its potential when added values are so great that customers will not

willingly accept substitutes, even when the alternatives are substantially cheaper or more readily

available (e.g. Coca-Cola, Kodak, Levi's).

PRODUCT AND SERVICE BRANDS

Product brands are the original brand carriers. They are the historical core of branding

because they are the most prevalent, and because they most readily come to mind when

consumers are asked to recall brands. For instance: Ford, Motorola, Coke, Honda, etc.

Service Brands (intangible) are much less numerous than their product counter parts.

Intangible services are also more challenging to package and sell to consumers who often have

difficulty conceptualising, preferring things they can see and touch. Certain service brands, such

as in retailing, actually sell products, but the brand itself is the store, not the products it sells -

The Gap stores, Southwest Airlines and Amazon.com are examples. In fact, this is the case with

all Internet companies, as they essentially perform the function of a virtual intermediary or

infomediary and are intangible.


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Need for the Study

The study concentrates on the field of global Dotcom industry, the significance of brand

name to a cyber company, and how to build up a successful brand.

The study also shows the perception and awareness of people towards some brand names,

and which brand they want to deal with most. The study reveals the dotcoms chance of viability

in the market to tap the potential customers and to increase their market share, as well as its

position in the customers mind.

The need of the study emphasises on the market research of the brands. The study helps

in analysing the viability of some brand names.

During the study, I tried to find out the potential customers and collect relevant

information, as well as to analyze the information which may help cyber companies to formulate

their brand building strategies in accordance with customers mind and perception, therefore

make contribution to their market share increase in the future.

Scope of the Study

To understand what vital role a brand name might play in contributing to the success of a

cyber company, it will be necessary to understand the context of current issues within the

Dotcom industry and to identify the main players within the Dotcom industry, their brand

building strategies, their successes and failures, and lessons from them.

The project work covers brand building strategies with special reference to six typical cyber

companies, including:

Amazon.com

Fashion mall.com

CD-now

EBay


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Conclusion: Discusses the key findings and areas for further research.

Methodology Assumption

This section outlines the procedure followed in collecting data and analyzing it.

a). Method of collection:

The survey was conducted to collect primary data both quantitative and qualitative. Data was

sought from cyber companies and e-customers.

b). Type of data used:

Both primary data and secondary data where used. Primary data was obtained from direct

interviews with e-customers, web-users, and potential purchasers. Secondary data was obtained

from sources like brochures of cyber companies, Web sites, Magazines, and Books etc.

c) Tools for data collection:

The primary data was collected with the help of questionnaire. The questionnaire was designed

to obtain necessary information that can help me to fulfill this study. The questionnaire was

administered by me through direct visit to institutes, companies, administration offices, and

residences, and by collecting them from the respondents at a later date in some cases.

d) Sample size:

Keeping in mind the budgetary, time and manpower constraints, the total sample selected was

100 all of them were conducted in Chennai,


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e) Assumption:

The information from the respondents has been treated as the correct information. Though the

sample size is limited to 100, I felt it is good enough to come to conclusion about how to build a

recognized brand name on Internet.

To analyze and interpret the primary data, I had used percentage analysis, which suits the

best.

INTRODUCTION

The Internet is transforming the business environment, creating new challenges and

opportunities. This chapter provides an overview of the Internet and its defining characteristics,

highlighting the key developments that have contributed to its explosive growth and its impact

on the business environment.

OVERVIEW OF THE INTERNET

The Internet is a world-wide network of networks. In essence, it is a common technology

platform that allows computing devices to communicate with each other. In doing so, it offers a

number of alternative channels that enable businesses and people to communicate. The three core

channels include e-mail (the most common), news groups and mailing lists, and the world wide

web (www).

The World Wide Web (www) is a large network of documents, which contain hypertext

and pictures, and provides the opportunity for dynamic interaction. Hypertext allows information

to be organised in a user-friendly way that is easily accessible. Information is becoming a major

part of the products and services that people buy, and a critical source of added value


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each other through an electronic connection. There is no need to travel to a physical location, no

order book, and no cash register. Instead there is a website.

The value of e-commerce transactions and market forecasts vary widely among research firms

and government agencies. However, they all project the value e-commerce transactions to grow

at unprecedented rates.

THE IMPACT OF THE INTERNET ON BUSINESS

The Internet has had a profound impact on the way business is being conducted - how companies

operate, how they compete and how they serve their customers - and revolutionary new business

models are emerging, which are often disruptive to traditional business models. Although the

particular impact will differ between industries, a number of sweeping impacts are identifiable:

The Development of Electronic Intermediation

The Internet is enabling companies to break through organisational and geographic boundaries to

create new structures that link businesses virtually (electronically) with customers, suppliers,

partners and other corporate constituencies.

Improved Core Business Processes

The use of Internet-based technologies as the platform, over which the organisations processes

flow, represents a level of efficiency and integration previously unattainable. For example,

CISCO e-enabled its financial systems and now has the capability to close its financial year

within one day.

Globalisation of Business

The Internet facilitates the globalisation of business by providing access to a global audience. A

virtual presence can mitigate the cost of having to invest in physical facilities. The Internet

also facilitates the development and co-ordination of global activities (e.g. through the use of

extranets).


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value through the provision of information on the products or services they buy, as well as on

topics of interest related to the brand and product characteristics.

Traditionally, brands have been developed in an environment whereby a company creates a

brand, and projects it onto a third party intermediary (the media). In response, many unnamed

customers develop a relationship with the brand. The Internet, on the ot her hand, offers

interactivity, whereby the company can establish a dialogue and interact with individual

consumers on a one-to-one basis. In doing so, a company can listen, learn, understand and relate

to customers, rather than simply speaking at customers. This creates the opportunity for

companies to build stronger relationships than previously attainable. However, this also poses a

challenge as these relationships may take on a life and character of their own.

THE IMPORTANCE OF ONLINE CUSTOMER LOYALTY

According to a recent study8, 75% of senior executives believe the success of an e-business

initiative depends entirely on its ability to build customer loyalty. In fact, it could be argued that

customer loyalty is even more critical online. Which identified the following factors?

- Companies will not break-even on one-time shoppers - often, customer acquisition costs are

high, and to recover their investment, companies need to retain customers so that they return to

the site repeatedly. Many e-retailers ('e-retailers') are averaging more than $100 to acquire a new

customer, and some are spending over $500. Therefore, it is very unlikely that an online retailer

can break even on a one-time shopper, unless they are selling high-price, high-margin items.

- Repeat purchasers spend more and generate larger transactions - due to morefrequent shopping and larger purchases.

- Repeat customers refer more people and bring in more business - word-of-mouthis the single most effective and economical way online businesses grow their

sites.


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- Loyal customers are more willing to buy other products from the company. Forexample, almost 70% of The Gap online shoppers said that they would consider

buying furniture from The Gap. Repeat purchasing not only binds trust, but also

provides more opportunities for cross-selling.

These points stress the importance of online customer loyalty, and with customers holding all the

power, companies must ensure that they provide a completely satisfying end-to-end customer

experience. This is further reinforced by the fact that, on average, a disgruntled online customer

tells 10 people about a poor experience.

CASE STUDY: GAP.COM

COMPANY OVERVIEW

Gap opened its first store in San Francisco in 1969, and today it is the 29 th most valuable

brand in the world. The Gap offers a balance of modern and seasonal styles of clothing, from

jeans and T-shirts to khakis and jackets. Its reach extends across more than 1,800 stores in the

US, Canada, UK, Germany and Japan. This success is largely due to their simple formula to

deliver style, service and value to everyone. In late 1997, Gap started selling items online - an

early convert to the then-revolutionary idea of clothes retailing on the Internet. Currently, online

sales are only available to US customers, and are still relatively small compared to Gap's $9

billion in annual sales; however, the growth prospects are enormous. Gap's online sales tripled in

1998 alone, and sales in 1999 amounted to $80 million, up from $20 million in 1998. Even the

collapse of the global Dotcom industry in middle 2000 showed a very little effect to Gap.com.

During the period of 2000-2001, Gap.com was the only cyber company who could claim profit.

Gap.com is an example of successful crossover marketing, and provides useful insight into howtraditional brands can leverage their strength online.


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Unlike the case of Boo.com, Gap's simple, standard styles are well suited to online clothes

shopping, and goods bought online get returned at the same rate as store purchases - as most Gap

online shoppers have a good idea of how Gap clothes fit. In order to integrate its offline and

online operations and logistics, Gap made a decision to charge sales tax on online sales. By

doing so, customers can return goods purchased online to their neighbourhood store, without

causing complications. This level of customer care is an important factor in making customers

feels more comfortable with online purchasing. In addition, Gap.com allows customers to track

the status of online purchases and provides contact information on the nearest store.

Gap does not provide any community features on its site. However, once customers are

registered online, Gap communicates with customers through customised e-mails, twice a month,

promoting its specials and including links directly to items on Gap's website. Gap.com also

provides a Gift Central feature which offers gift suggestion from Gap, GapKids, and BabyGap,

and customers can register to get e-mail reminders of upcoming holidays and birthdays.

The Gap site connects to other Gap online stores including GapKids and BabyGap. Gap has also

developed an affiliate programme, and had recently established marketing deals with AOL and

CDnow.

BRAND-BUILDING STRATEGYEXTENSIVE INTEGRATION

Gap.com has been able to piggy-back on The Gap's offline advertisements (in TV, Magazines,

billboards, etc.) that also promote the online store. In addition, it is fully leveraging its offline

presence to build awareness, by displaying the URL in store windows with the slogan

surf.shop.ship, on counter cards, on shopping bags and even on the cash register, which

displays Shop online at www.gap.com" on the display screens between transactions.


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Store clerks are also trained to look for products online for their customers if the store does not

have them in stock, or to refer shoppers to Gap's website. In certain high traffic Gap and

GapKids stores, the retailer has installed Web lounges that lure buyers with comfortable

couches and terminals hooked up to Gap.com. To convert walk-in shoppers to cybershoppers,

Gap has held in-store campaigns to get customers to submit their e-mail addresses, by offering a

10% discount and free shipping on their first online purchase. These efforts doubled the size of

Gap's e-mail database, providing a useful way to directly reach customers.

Most of Gap's online traffic is generated by leveraging its physical presence, however, Gap has

also supplemented this with online promotions:

-year commerce and marketing agreement with AOL that

gives Gap more visibility on the Internet by linking to the world's largest online shopping

destination: Shop@AOL marketplace.

flooded with e-mails form customers asking how they could buy a recording of the music played

in Gap TV commercials.

ncouraging sites to establish links to

gap.com in return for a 5% commission on every sale referred through the site.

-Card, whereby for every $100

a customer spends at Gap Online, they send the customer a $20 Gap Shop-Card, which can be

used towards future purchases, either online or in stores.


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Source: Survey

Interpretation: From the above table, it is clear that the majority of respondents have surfed on

Internet to check their e-mail (91%), searched for general information (78%), and attended

recreational activities (reading, surfing, hobbies, chatting, entertainment, etc). Out of

100respondents, only 70 logged on cyber companies for purchasing, and only 36 had the real

intention to buy or sell online.

Figure 1: What are people doing online

0.00%10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

E-mail

General Information

Surfing

Reading

Hobbies

Product Information

Travel Information

Business / Work

Entertainment

Purchasing

Stock Quotes

Job Search

Chat Rooms

Homework

Auctions

Banking

Trading stocks


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Table No.2: Number of respondents who really carried out business transactions on Internet

SL. No. Particulars No. of Respondents Percentage

1 Yes 18 18%

2 No 82 82%

Total 100 100%

Source: Survey

Interpretation: It is evident from the above table that the minority 18% of the respondents has

actually bought or sold on Internet. The other majority 82% surfed on the World Wide Web for

other activities (reading, surfing, hobbies, chatting, entertainment, product searching, etc).

Advertisement should be aimed at this small potion of customers rather than pursuing the whole

vast market.

Figure 2: Number of respondents who really carried out business transactions on Internet

Real E-purchaser

Ordinary surfer


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Figure 3: Name of cyber companies that you actually dealt with

Table No.4: Number of e-purchasers who want to come back for future transactions


1 Yes 34 94.4%

2 No 2 5.6%

Total 36 100%

Source: Survey

Interpretation: Among the real e-purchaser, the majority of 94.4% wants to come back to

respective cyber companies they dealt with before. It shows the solidity of business transactions

and relations on the Internet. Once customers are satisfied, they intend to keep the nexus with the

company they know, rather than shifting from company to company. It highlights the

significance of keeping up with customers standard and perception right in the first transaction

(the moment of truth)

Amazon.com

Boo.com

Cdnow

eBay

Gap.com

Yahoo!

Others


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Figure 4: Number of e-purchasers who want to come back for future transaction.

Table No. 5: Standards for a good online company


1 Brand 30 30%

2 Cost 13 13%

3 Convenience 16 16%

4 Means of payment 5 5%

5 Variability 9 9%

6 Promotion & discount 16 16%

7 Others 11 11%

Total 100 100%

Source: Survey

Yes

No


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Table No.8: Things you want to buy online


1 Consumable 75 75%

2 Luxury 16 16%

3 Interior 26 26%

4 Garments & footwear 67 67 %

5 Vehicle 24 24%

6 Real estate 7 7%

7 Antiquities 31 31%

8 Others 40 40%

Source: Survey

Interpretation: From the above table, we can see the tendency of what people want to buy on

Internet. Out of 100 respondents, most of them (75% & 67%) chose consumable and

garments & footwear respectively. Whereas goods with high value like real estate, vehicles, and

luxury were hardly chosen.


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creating community activities and spreading public relationship, including viral effect and word-

of-mouth.

Table No. 10: Do you usually read chain mails & bulk mails?


1 Yes 19 19%

2 No 81 81%

Total 100 100%

Source: Survey

Interpretation: Chain-mails and bulk-mails are often used to get customer awareness and

attention. But as time goes by, bulk-mails do not have the same significance like before, and

customers usually refer bulk-mails as garbage and try to delete them without casting a single

glance at. It is called as self-protection reaction. Cyber companies should develop other kinds

of promotion and brand building rather than relying on chain-mails.

Key factors that contribute to building a successful online brand

There is no one-size-fits-all solution for building a successful brand on the Internet, however, the

extensive research and in-depth case studies provided in this dissertation indicate certain

common underlying characteristics which can be summarised as follows:


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A Compelling Value Proposition

Successful online brands are exploiting every capability offered by the Internet to deliver

compelling value propositions that appeal to customers, by offering more value than attainable

through traditional bricks-and-mortar establishments. They are providing greater convenience

(24x7), lower prices, wider selections, and access to more information on the products or

services being provided, and enhancing this with layers of added-value through the '7Cs' -

Convenience, Content, Customisation, Community, Connectivity, Customer Care and

Communication. Successful brands recognise that the value proposition must more than

compensate for the loss of in-person contact.

Key factors that contribute to building a successful online brand

There is no one-size-fits-all solution for building a successful brand on the Internet, however, the

extensive research and in-depth case studies provided in this dissertation indicate certain

common underlying characteristics which can be summarised as follows:

Successful online brands are exploiting every capability offered by the Internet to deliver

compelling value propositions that appeal to customers, by offering more value than attainable

through traditional bricks-and-mortar establishments. They are providing greater convenience

(24x7), lower prices, wider selections, and access to more information on the products or

services being provided, and enhancing this with layers of added-value through the '7Cs' -

Convenience, Content, Customisation, Community, Connectivity, Customer Care and

Communication. Successful brands recognise that the value proposition must more than


Compelling Value Proposition

Strong Internet brands are those that create a high quality engaging online customer experience.

The 7Cs framework allows companies to deliver a tangible customer experience. Successful

online brands meet the demands inherent in each of the 7C categories, by ingraining convenience


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to the brand community. Properly orchestrated guerrilla marketing ploys can also be effective

in building awareness and reinforcing brand image.

Unique Positioning Concept & Distinct Brand Image

Strong brands are developing unique positioning concepts, to distinguish themselves from

competitors. Yahoo's success can be largely attributed to its unique positioning strategy and

distinct image that appeals to its target market. By distinguishing their offering and focusing on

unique sources of value-added, brands are harder for competitors to emulate.

In addition, these companies must have an inherent understanding of their brand identity and

core values, to maintain consistency, as well as determine how far the brand can be meaningfully

stretched to other products and market segments, before it fractures.

Strong Partnerships and Strategic Alliances

Rather than doing everything on their own, leading brands have focused on building strong

partnerships and alliances, particularly to secure content and widen reach to new customer

segments and niches. As a result, these companies are creating even stronger value propositions,

offering customers the best in quality, variety, content, and convenience. Alliances and

partnerships play an important role in achieving speed and momentum, and by partnering with

well-known brands, a company can leverage the partner's brand and reputation to reinforce its

own. Alliances with leading portals and popular sites are important to generate traffic and brand

visibility, and exclusive alliances can lock out competitors from valuable content or online real

estate. The most successful partnerships are symbiotic matches, whereby each party benefits

from the other's expertise or skills, while ultimately benefiting the end-customers.


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Intense Customer Focus

Leading online brands have an intense customer focus, and develop a detailed understanding of

their customers' needs. These brands are accumulating knowledge about customers, through past

transactions and solicited input, and by focusing on customer needs, are leveraging this customer

knowledge (learning) to nurture relationships (relate), by providing better services, customisation

and customer care. Customer focus builds trust and credibility that is central to developing a

strong brand-customer relationship.

First-Mover & Early-Mover Advantage

Most of the successful online brand leading online brands have an intense customer focus, and

develop a detailed understanding of their customers' needs. These brands are accumulating

knowledge about customers, through past transactions and solicited input, and by focusing on

customer needs, are leveraging this customer knowledge (learning) to nurture relationships

(relate), by providing better services, customisation and customer care. Customer focus builds

trust and credibility that is central to developing a strong brand-customer relationship.

Identified a market opportunity early and moved quickly to capitalise on the potential they saw.

A first-mover advantage is an important asset for an online brand. By getting to market early, the

company benefits from the buzz, and traffic, that comes with innovation, and it can acquire

customers while it is still inexpensive to do so. It locks up important content and distribution

partnerships, and it aligns itself with the most influential venture capital sources. Getting to

market quickly can provide an Internet company with significant momentum and a valuable

boost over the competition. The challenge then lies in keeping up the momentum. Many strong

online brands were also early-movers on the internet, and benefited from additional hype, and

extensive word-of-mouth due to its novelty. As Internet penetration exploded, these well-

publicised brands also took off.


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The Emerging Brand-building Environment

Traditional Approach One-to-One Approach

Monologue Dialogue

Public Private

Mass Individual

Anonymous Named

Adversarial Collaborative

Focus primarily on one-off transaction Focused on relationship over time

Remote research Intimate learning

Manipulative, stimulus-response

approach

Genuine needs driven, service approach

Standardised Customised

Given that the commercial Internet only began to take off in 1994, there has been a limited time

horizon to evaluate the durability of Internet brands. In addition, with the emergence of wireless

access and new platforms, new opportunities and dynamics will emerge as companies develop

innovative ways of acquiring customers, building relationships and satisfying needs. Therefore,

ongoing research would be necessary to build on the findings of this dissertation. Nevertheless, it

that the core concepts and key factors identified that contributes to successful online brands is

likely to persist.


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Figure c.2: Effectiveness of methods

From the above table, it is clear that some usually used promotion methods like banners and e-

mail showed little effect towards customers. Therefore, to enhance awareness and brand image,

company should increase the use of:

- Affiliate programs: with other already-recognised online companies like Yahoo!, Amazon.com,

or AOL. It is the way has been chosen by many successful ones like Gap.com, or eBay.

- Public relation and outdoor activities.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Banners

E-mails to customers

Buttons

Public relations

Magazines

Sponsorships

NewspapersRadio

Direct mail

Television

E-mail to opt-in lists

Outdoor

Affiliate programs


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Convenience, Content, Customization, Community, Connectivity, Customer Care and

Communication. Successful brands recognize that the value proposition must more than


A High Quality Online Experience

Strong Internet brands are those that create a high quality engaging online customer experience.

The 7Cs framework allows companies to deliver a tangible customer experience. Successful

online brands meet the demands inherent in each of the 7C categories, by ingraining convenience

and making the site easy-to-use, quick-to-load and easy-to-navigate, delivering compelling

content, customizing the experience, developing a community feel, making connectivity easy,

integrating customer care, and establishing two-way communication. By placing emphasis on

different 'Cs', they are differentiating their experience from those of competitors. A well

executed customer experience that satisfies customer Strong Internet brands is those that create a

high quality engaging online customer experience. The 7Cs framework allows companies to

deliver a tangible customer experience. Successful online brands meet the demands inherent in

each of the 7C categories, by ingraining convenience and making the site easy-to-use, quick-to-

load and easy-to-navigate, delivering compelling content, customizing the experience,

developing a community feel, making connectivity easy, integrating customer care, and

establishing two-way communication. By placing emphasis on different 'Cs', they are

differentiating their experience from those of competitors. A well executed customer experience

that satisfies customers, results in higher brand equity.

A Reputation for Excellence (Delivering on their e-Promises)

Fulfillment and delivering on e-promises is the acid test of online brands. The successful brands

are those who are investing heavily in logistics, distribution centers, and customer care to ensure

a completely satisfying end-to-end customer experience. In doing so, they are cultivating a

reputation for excellence, which builds confidence and trust that not only entices customers to do


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repeat business with the company, but leads them to spread positive word-of-mouth, attracting

other customers to the site.

Strong Communications Programmed & Efficient Customer Acquisition Strategy

The key Internet brands have made major commitments to building awareness and have

developed multifaceted, integrated customer acquisition strategies, ranging from online methods

to traditional offline media. They are targeting their promotions to attract quality customers and

to keep customer acquisition costs down. Quality customers who are heavy users of the brand are

important as they not only offset the cost of customer acquisition, but also provide added value

to the brand community. Properly orchestrated guerrilla marketing ploys can also be effective

in building awareness and reinforcing brand image.

Unique Positioning Concept & Distinct Brand Image

Strong brands are developing unique positioning concepts, to distinguish themselves from

competitors. Yahoos success can be largely attributed to its unique positioning strategy and

distinct image that appeals to its target market. By distinguishing their offering and focusing on

unique sources of value-added, brands are harder for competitors to emulate.

In addition, these companies must have an inherent understanding of their brand identity and

core values, to maintain consistency, as well as determine how far the brand can be meaningfully

stretched to other products and market segments, before it fractures.

Strong Partnerships and Strategic Alliances

Rather than doing everything on their own, leading brands have focused on building strong

partnerships and alliances, particularly to secure content and widen reach to new customer

segments and niches. As a result, these companies are creating even stronger value propositions,

offering customers the best in quality, variety, content, and convenience. Alliances and


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partnerships play an important role in achieving speed and momentum, and by partnering with

well-known brands, a company can leverage the partner's brand and reputation to reinforce its

own. Alliances with leading portals and popular sites are important to generate traffic and brand

visibility, and exclusive alliances can lock out competitors from valuable content or online real

estate. The most successful partnerships are symbiotic matches, whereby each party benefits

from the other's expertise or skills, while ultimately benefiting the end-customers.

Intense Customer Focus

Leading online brands have an intense customer focus, and develop a detailed understanding of

their customers' needs. These brands are accumulating knowledge about customers, through past

transactions and solicited input, and by focusing on customer needs, are leveraging this customer

knowledge (learning) to nurture relationships (relate), by providing better services, customization

and customer care. Customer focus builds trust and credibility that is central to developing a

strong brand-customer relationship.

First-Mover & Early-Mover Advantage

Most of the successful online brand leading online brands have an intense customer focus, and

develop a detailed understanding of their customers' needs. These brands are accumulating

knowledge about customers, through past transactions and solicited input, and by focusing on

customer needs, are leveraging this customer knowledge (learning) to nurture relationships

(relate), by providing better services, customization and customer care. Customer focus builds

trust and credibility that is central to developing a strong brand-customer relationship.

s identified a market opportunity early and moved quickly to capitalize on the potential they saw.

A first-mover advantage is an important asset for an online brand. By getting to market early, the

company benefits from the buzz, and traffic, that comes with innovation, and it can acquire

customers while it is still inexpensive to do so. It locks up important content and distributionpartnerships, and it aligns itself with the most influential venture capital sources. Getting to

market quickly can provide an Internet company with significant momentum and a valuable

boost over the competition. The challenge then lies in keeping up the momentum. Many strong

online brands were also early-movers on the Internet, and benefited from additional hype, and


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Focus primarily on one-off transaction Focused on relationship over time

Remote research Intimate learning

Manipulative, stimulus-response

approach

Genuine needs driven, service approach

Standardized Customized

Given that the commercial Internet only began to take off in 1994, there has been a

limited time horizon to evaluate the durability of Internet brands. In addition, with the emergence

of wireless access and new platforms, new opportunities and dynamics will emerge as companies

develop innovative ways of acquiring customers, building relationships and satisfying needs.

Therefore, ongoing research would be necessary to build on the findings of this dissertation.

Nevertheless, it that the core concepts and key factors identified that contributes to successful

online brands is likely to persist.

Brands and brand-building tools tend to be associated with consumer markets; however,

they are equally important in business markets. As such, the concepts, tools and key factors

outlined in this dissertation are also applicable to business markets. Nevertheless, an in-depthanalysis, drawing on several case studies from business markets, would represent an exciting

opportunity for further research.

Having established a strategic perspective on building online brands, this dissertation

would benefit from complementary in-depth research in the social and psychological dynamics

of the Internet and its impact on consumer behavior.

Based on my own research and survey, I had recognized the often used brand promotion

method, their popularity, and their respective effectiveness.


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Table No. 12: Popularity and effectiveness of brand building methods

Method Popularity Effectiveness (rank from 0.0 to 5.0)

Banners 89% 2.8

E-mails to customers 77% 2.3

Buttons 55% 3.2

Public relations 45% 4.1

Magazines 34% 3.4

Sponsorships 34% 3.3

Newspapers 32% 2.6

Radio 32% 3.4

Direct mail 30% 3.4

Television 30% 4.0

E-mail to opt-in lists 23% 3.5

Outdoor 17% 3.7

Affiliate programs 17% 4.3


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Figure c.1: Popularity of methods

0%

10%

20%

30%

40%

50%

60%

70%80%

90%Banners


Buttons

Public relations

Magazines

Sponsorships

Newspapers

Radio

Direct mail

Television

E-mail to opt-in lists

Outdoor

Affiliate programs

Figure c.2: Effectiveness of methods

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5 Banners


Buttons

Public relations

Magazines

Sponsorships

Newspapers

Radio

Direct mail

TelevisionE-mail to opt-in lists

Outdoor

Affiliate programs


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From the above table, it is clear that some usually used promotion methods like banners and e-

mail showed little effect towards customers. Therefore, to enhance awareness and brand image,

company should increase the use of:

- Affiliate programs: with other already-recognised online companies like Yahoo!, Amazon.com,

or AOL. It is the way has been chosen by many successful ones like Gap.com, or eBay.

- Public relation and outdoor activities.

- E-mail to op-in list: bulk-mails are sent to an interested group of customers only, instead of

viral chain-mails and bulk-mails. For instance: sending e-mails to a regular patron informing

about goods available in which he or she may be interested.

Supply relevant and accurate info.

When a customer posts Further, there are some more suggestions from this study to cyber

companies regarding how to create a strong brand name on Internet:

Have a credible logistics with acceptable quality of goods and service. Make sure that the

availability of goods and variability of categories are ensured.

Build a simple website with humble graphic and accessible info. Site must be easily used

and navigated. Avoid the mistake by Boo.com of building a website that requires a powerful

computer configuration and a wide Internet runway. The result is website is too slow to load, and

leads to nothing but frustration of customers.

His or her mail to ask some question with regard to product info search, feedback must be

given within 48 hours.

When using credit card as the most popular means of payment, company must ensure the

privacy of customer. Beware o hackers at the top most level.


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SUGGESTION

In this way, the advertisers obtain useful leads and take them into sales process or lead

conversion process. The newly launched brands get an edge in the industry after these effective

services.

The climate of the current economic environment is forcing franchised hotels to become

more involved in their brands marketing strategies and seek untapped, low-cost Internet revenue

opportunities. In the first half of 2008, occupancy rates in North America fell by 2.4%; in Europe

by 1.3% and in the Asia Pacific by 3.9%, compared to the same period a year ago Franchisees

are starting to realize that the hotel chains e-Commerce departments cannot possibly capture all

available online revenue opportunities for their property, especially on the local level, and are

looking for new and innovative ways to generate incremental online revenues. Hubs believes that

launching a robust Local Internet Marketing Strategy, as described here, will help weather the

economic storm and complement their traditional revenue sources and brand contributions.

Internet Marketing Strategies

Surveys show that up to 84% of travel research and planning in the U.S. is conducted via

the Web (e-Marketer/TIA). The Internet has become the single most important travel planning

and distribution channel in hospitality. In 2009, over 40% of all revenues in hospitality will be

generated by the Internet, and another third of hotel bookings will be influenced by the Internet

but done offline. Each year since 2004, Internet bookings have surpassed GDS hotel bookings.

So how does this apply to major hotel chains? Over the past 5-6 years, most of the

leading hotel brands have become proficient national and international e-Marketers, and have

learned how to build brand equity on the Web.

This CRS distribution ratio shows rapid growth in the Internet channel, a flat GDS

channel, and a declining voice channel. There was a further acceleration of these trends in Q1

2008: Internet bookings comprised 47% of CRS bookings (41.8% in Q1 2007); GDS was 32.2%

(34.1% in Q1) and voice 20.8% (24.1%).


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www.interbrand.com

www.mckinseyquarterly.com

www.nua.com

www.pwcglobal.com

www.yahoo.com

Magazines

Monthly business magazines in Chennai:

The Economist

The Wall Street Journal

The Week

The Financial Times

Forbes

Business Week

Sales and Marketing Management

Computer World

Far Eastern Economic Review

Advertising Age


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Books

Kotler, P., Marketing Management the Millennium Edition

Aaker, D Managing Brand Equity: Capitalizing on the Value of a Brand Name.

Aaker, D. Building Strong Brands

Clifton, R. & Maugham, E., The Future of Brands


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SECTION B

1. What are you usually doing on Internet?

Reading and writing email

Searching for general information

Surfing

Reading

Hobbies

Searching for product information

Travel information

Doing your business / work

Entertainment

Purchasing

Stock quotes

Job search

Chatting

Doing your homework / assignment

Auctions

Banking

Trading stocks


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2. How long you usually spend on Internet

Less than 7 hours per week

8-14 hours per week

15-28 hours per week

3. Have you ever carried out your business transaction(s) on Internet?

Yes

No

4. If yes, name the company that you dealt with

Amazon.com

Boo.com

CDnow.com

eBay.com

Gap.com

Yahoo.com

Others

5. Do you want to come back to those companies for further transactions?

Yes

No


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6. According to you, what is/are the most important element(s) for a good online company?

Brand

Cost

Convenience

Means of payment

Variability of items

Promotion & discount

Others

7. According to you, what is the key to Web brand loyalty?

Ease of use and navigation

Fast response time

Familiarity

Relevant and accurate information

8. According to you, what is the killer of Web brand loyalty?

Outdated information

Slow response time

Site downtime

Poor customer service


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9. Things you want to buy online

Consumable

Luxury

Interior

Garments & footwear

Vehicles

Real estate

Antiquities

Others

10. Rank six below companies from 1 to 6 in order of the most to the least recognized brand

Yahoo!com

Amazon.com

Gap.com

Boo.com

CDnow

eBay.com

11. Do you usually read chain mail or bulk-mail?

Yes

No


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a study on online marketing - karnataka university

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