Individual paper_Internet marketing_Hellberg


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Individual paper_Internet marketing_Hellberg

  1. 1. Is Internet Marketing Really Consumer Empowering? Individual Assignment within Internet Marketing Mikaela Hellberg 820326-4109 Lund University
  2. 2. IntroductionMany are the scholars claiming that the new technology of web 2.0 has empowered thecustomers beyond the firms´ control (Rowley 2004). According to these researchers thebrand management function has become mere than a fruitless attempt of risk management in aworld where online consumers play with brand values and supportive strategies like they werepublic toys (Fournier & Avery 2011; Winer 2009). And the managerial advices and “bestpractice” guidelines given are all exclamations on how to keep all customers with a laptop onfriendly foot by tiptoeing around, offering open source forums to capriciously decide thecompany´s future logotype, brand values or even strategies (Winer, 2009).But is the internet really all in favor of the consumers? Is the “People´s Web” really that?When initially thinking about the question of how firms can become truly customer orientedby embracing new rules of Internet marketing and when reading the articles describing theconsumer empowerment one thought re-appeared. That is not the reality I live in in, howcome I do not feel empowered? Born in the 80´s I belong to the so-called generation V(Virtual), which is said to be used to handling digital settings (Lindgren et al, 2005). I haveshopped online, I do all my bank errands online (my bank doesn´t even have mortars-andbrick-offices) and I try to gather information online before hitting the stores.And it is exactly that, I browse information online but when it comes down to business I leavethe sofa and go to a “real” store. Maybe I am not the sleek up to date blog-craving druggiethat is often described, or maybe the research has missed out on something?As an unofficial pre-research I went on an asking crusade. I asked classmates, friends andfamily within a broad age span and with differing internet habits if they felt empowered asconsumers and what empowered then meant to them. Once people started to think about itthey were puzzled. The commonly adapted view is that internet is empowering us asconsumers but is that really the perception we have from our own reality? Stupid irrelevantcomments from Flashback and other “open source forums” gives us a million hits when wetry to get some information out of Google, prices that vary every time we enter a certainwebpage, pirates on E-bay and Tradera trying to fool us on money and when we finally decideon purchasing the time and effort of going through “the check out” is enough to discourage usfrom repeating that action ever again. No we do not feel particularly empowered.So how come the scholars are in a shared aw over a shift in power that none of my friends norI have ever experienced? Are we the odd opposite examples proving the rule or is somethingmissing in the equation?Since the course literature already answer the initial question of how firms can become trulycustomer oriented by embracing the new rules of Internet marketing, this study will insteadpinpoint three areas that have been commonly claimed to be key areas within the customerempowerment movement, driven and fulfilled through the technology of the internet. Theseareas are then examined and questioned by differing views.By comparing opposed views a divergence of opinions that challenge the ”accepted” reality isrevealed. It is always important to critically examine taken for granted assumptions(Howcroft, 2001). However since the idea of consumer empowerment through internet istaken for granted, the number of studies showing otherwise are limited, making it moredifficult for the researcher. Hence some of the empirical data may be a little dated. This studytries to take that into account, letting room for doubt in analysis and conclusion. However, thequestion examined here, is derived from recent personal experiences of the phenomena at
  3. 3. hand (Pettigrew, 1990); online shopping, which would speak in favor for the subject´srelevancy despite the lack of updated research supporting the findings.PurposeSearching for and examine divergent views on internet as a tool for consumer empowermentin the light of the prevailing taken for granted assumptions.Definitions usedInternet marketingTo clarify what is included when discussing internet marketing following definition byParsons et al, (1998) is used:“By digital marketing, we mean two activities: first, leveraging theunique capabilities of newinteractive media (e.g.World Wide Web, on-line services, proprietary dial-up services) tocreate new forms of interactions and transactions between consumers and marketers; andsecond, integrating interactive media with the other elements of the marketing mix.”Consumer empowermentTo clarify what is meant when discussing consumer empowerment, the author has used adefinition by Len Tiu Wright proponed in European Journal of Marketing (vol. 60 (9/10) as aguest editor in the number entitled “ Consumer Empowerment”). since it is easy to grasp andappears in other articles used in this study: "A mental state usually accompanied by a physical act which enables a consumer or a groupof consumers to put into effect their own choices through demonstrating their needs, wantsand demands in their decision-making with other individuals or organizational bodies in themarketplace."Three Key Areas Central to Consumer Empowerment1. ConvenienceIt is often claimed that e-tailing gives us the convenience of around the clock shoppingwithout leaving home. However many consumers witness about delivery delays causingproblems and horror stories about the troublesome work of trying to file a complaint to theright department and right person within the narrow time limit proposed by the companiesthemselves are circulating in media (Fournier & Avery, 2011). The delivery issue wasaccentuated in US during Christmas 1999 when the often promised next-day delivery was notkept and many customers ended up with no Christmas presents until January (Reynolds,2000). Even if much has been approved during the last years, stories about delivery delaysand unsatisfying out-of-stock handling pop up on regular basis (Enos, 2001, Cooke, 2000).And all in all, do we really want around-the-clock access to shopping. Does it really empowerthe consumer more than the company? Communication and information technologies, such asinternet and mobile devices, are argued to be the means through which consumption andconsumerism is spread into the private lives and homes of individuals (Lyon, 1993). E-tailingallows people the convenience to shop without leaving their home but it does also permit thecompanies around-the-clock access to its target consumers.2. Price and Information TransparencyThe increased access of information from different discourses is said to be one of the mostimportant aspects of consumer empowerment (Pitt et al. 2002 Krishnamurthy et al, 2009;
  4. 4. Rowley, 2004). It is argued that the access to information would increase the ability to make amore informed purchase choice leading to a greater transparency (Rowley, 2004), anddecreased online prices.This has been challenged by many scholars. Information access in itself does not empower,according to Harrison (2002) the consumers must also being able to evaluate and comprehendthe accessed information in order for it to be empowering. Many consumers today areoverwhelmed with the great amount of information available. It could be argued that if beingwithout the means to scrutinize all of the information could rather lead to a weakened positionfor these consumers.Online, much of the concern of making an informed choice and gathering the necessaryinformation is assigned to the customer (Pitt et al, 2002), which seems to be an advantage forthe companies instead of the consumers (Gilliatt et al. 2000; Macey, 2002). The process ofinformation searching can be a timely activity; the cost of this activity is now placed on thecustomers instead of the companies which can cut down the costs of informed staff forinstance (Bakos, 1991). Even if scholars like Rowley (2004) claims that “customer timebecomes an asset that both parties need to learn to value..” the truth is that this is not reflectedin the online pricing.In terms of pricing, the internet technology has rather given e-companies the means to chargepremium prices instead of leading to lowered prices (Bakos, 2001; Baker et al, 2001). Bakeret al (2001) argue that transparency serves not only consumers but companies as well. Even ifinternet facilitates price comparison it also helps companies to monitor consumer behaviorand fine-tune the prices accordingly.Even if the possibility for bargain hunting is available, very few use it, the majority of internetshoppers turn out to be faithful and return to a few sites when purchasing online Baker et al,2001). Price does not seem to be the most convincing criterion for online purchases. However,companies are not getting away with everything, if the price changes are not justified properlythis could damage the trust and brand of that company (Baker et al, 2001).But internet serves the companies in optimizing the prices to their advantages. The ability toquickly adjust prices to fluctuations in demand are rarely questioned by customers and allowsthe companies to look around for and find customer segments willing to pay even a higherprice (Baker et al, 2001). The willing buyers are found by analyzing the information of theconsumers´ internet habits, buying history, clickstream etc. Information gathered fromcookies on the consumers´ own and private computers (Baker et al, 2001). This is anotherproof of what has been discussed above about around the clock access and who really gainsfrom it.Even if increased transparency indeed has led to cheaper alternatives which in theory isdetectable from price comparison sites it is seldom the cheapest e-tailer that is most frequentlybought from (Brynjolfsson & Smith, 2000). Baker et al (2001) found that the majority ofonline shoppers actually returned to already proven sites even if the purchased item could befound cheaper elsewhere.This implies that internet maybe not is the praised equalizer between consumers andcompanies. If price transparency is not the most important criterion for online purchasechoice then what is. It turns out that, exactly as in the bricks-and-mortar retail setting, brand
  5. 5. recognition and trust are crucial criterion for choosing whom to buy from (Brynjolfsson &Smith, 2000).4. Personalization and choiceInternet and consequently, e-tailing, is claimed to lead to a greater personal choice andpersonalized marketing and offers (Montgomery & Smith, 2009). “No longer does themarketer need to speculate about customer needs; they actually know customer-purchasingprofiles” (Rowley, 2004), which was promised to lead to the death of mass marketing and itsreplacement of tailored and relevant marketing, when and if permission was given by theconsumers (Peppers & Rogers, 1996; Godin, 1999; Parsons et al, 1998).Well, many can witness about offending Viagra ads on private Facebook accounts and“spam” flooding the mail box. Not exactly what was promised or excepted given that themarketers now know our purchasing profiles as stated by Rowley (2004). Most of themarketing efforts appear without the consumers´ permission which cannot be defined as“choice”. This reality stands in sharp contrast to what Parsons et al, (1998) promised; arguingthat the new two-way interactivity was going to be the consumers´ choice of deciding who tocommunicate to and when. Parsons et al, (1998) even saw it as a “right” that marketers had tofight to earn. However, the personal information gathered about consumers, that were said togive personalization, is sometimes even used as commodities. Robins & Webster (1988) evenargue that the information gathered, and used by companies in marketing purposes, could bemistreated and used to exert power over the consumer instead of vice versa.Neither the choice aspect has turned out the way that was expected from some scholars.Internet was said to enable the consumers to choose from a variety of products and companiesall around the world. Companies, big as small, would now compete on equal grounds whichwould benefit the consumers (Howcroft, 2001). However smaller companies still have lessresources to engage in web presence, develop/buy consumer information analytics and as aconsequence still has an disadvantage to the bigger players (Howcroft, 2001).As pointed out in the section above (Price and information transparency) trust and brandrecognition are important determinants for whom to buy from. According to Brynjolfsson &Smith (2000) this behavior is a consequence of “heterogenity of trust”. Brand recognitionsimplifies the consumers´choice which could be the explanation to Baker et al´s (2004)findings on repeating purchase with already tried company-sites. Ernst & Young (2001) alsodetected the same pattern; finding that “the majority of [internet] searches for televisions,irrespective of country, are undertaken a small portfolio of brands (two, or at the most, three),largely related to the market share of established brands in each country” (In McGoldrick,2002). Hence brand awareness seems to lessen the available “candidates” for consumers toput their trust in. Basu (2000) says that despite a compelling offer trust in an internet settingis hard to achieve if the customer has none or little prior experience of it. This lack ofconsumer trust can be traced to the many frauds taking place on the internet and furtherreported in mass media. Even if consumer fear is addressed through security logos, themistrust still prevails due to the existence of so many of them and they also have to be viewedas trustworthy in consumers´eyes in order to function as a “fear-calmer” on other sites (Bakos,2001). Hence consumers tend to stick with the already known and experienced brands whichin turn would lead to a decreased range of supply in the minds of the consumer and limitingthe choice. This in turn diminishes the consumer choice instead of extending it.
  6. 6. Conclusion and Further StudiesThe author has in this paper, searched for and examined divergent views on the prevailingtaken for granted assumption that internet serves a tool for consumer empowerment.The study has marked out three key areas where the assumption of internet as consumerempowering has been focused around; Convenience, Price and information transparency andPersonalization and choice. Within these three areas the author has tried to show that theprevailing assumption may not yet be entirely applicable.With that said, the author of this paper does not disaffirm the ability of e-commerce to becomeentirely customer empowered through the opportunities and potential the internet actuallyprovide in terms of information access, price transparency and communication abilities.However for the common consumer today, that is not yet the reality.For future research it would be interesting to monitor the development of internet as a tool forcustomer empowerment, to see how, when and if it will truly become the Public´s Web thathas been claimed by Fournier & Avery, (2011).
  7. 7. ReferencesPrice Smarter on the Net (2001). Baker, W., Marn, M. & Zawada, C. Harvard BusinessReview, Feb2001, vol. 79 (2): 122-127Bakos, J.Y. (1991) A Strategic Analysis of Electronic Marketplaces. MIS Quarterly, vol. 15(3): 295-310Bakos, Y. (2001). The Emerging Landscape for Retail E-commerce. Journal of EconomicPerspectives, vol. 15 (1): 69-80Basu, K.(2000). E-branding or Re-branding?. Moving to eBusiness, L Willcocks et al (eds),Random House: London. In McGoldrick, P. (2002). Retail Marketing (2nd ed.). Berkshire:McGraw HillBrynjolfsson, E. & Smith, M. (2000). Frictionless Commerce? A Comparison of Internet andConventional Retailers. Management Science, vol. 46, No. 4, pp. 563-585Cooke, J. A.(2000). Clicks and Mortar. Logistics Management, January (39). In McGoldrick,P.(2002). Retail Marketing (2nd ed.). Berkshire: McGraw HillEnos, L. (2001). Internet Flower Sites Fail Mother´s Day Test., May15thErnst & Young (2001). Kelkoo and Ernst & Young Launches Europe´s First E-commerce“Brandometer”, press release, July. In McGoldrick, P. (2002). Retail Marketing (2nd ed.).Berkshire: McGraw HillFournier, S. & Avery, J. (2011). The Uninvited Brand. Business Horizons, (54): 193-207Gilliatt, S., Fenwick J. and , A.D. (2000) Public Services and the Consumer: Empowerment orControl? SocialPolicy and Administration, vol. 34 (3): 333-349Godin, S. (1999) Permission Marketing , London : Simon & SchusterHowcroft, D. (2001) After the Goldrush: Deconstructing the Myths of the Market.Journal ofInformation Technology, vol. 16, 195-204Krishnamurthy, S. & Umit Kucuk, S. (2009).Anti-Branding on the Internet. Journal ofBusiness Research, vol. 62: 1119–1126Lindgren, M., Lüthi, B., Fürth, T. (2005). MeWe Generation - What Business and PoliticsMust Know About the Next Generation, Stowmarket : Bookhouse PublishingLyon, D. (1993). An Electronic Panopticon? A Sociological Critique of Surveillance Theory.The SociologicalReview, nr. 4, 653-678
  8. 8. Macey, D. (2002) The Penguin Dictionary of Critical Theory. London: PenguinMontgomery, A. L & Smith, M. D. (2009) Prospects for Personalization on the Internet.Journal of Interactive Marketing, vol. 23: 130–137Parsons, W., Zeisser, M. & Waitman, R. (1998). Organizing Today for the Digital Marketingof Tomorrow. Journal of Interactive Marketing, Vol. 12 (1)Peppers, D. and Rogers, M. (1996). The One-to-One Future: Building Business RelationshipsOne Customer at aTime. London: Piatkus BooksPettigrew, T.F. (1990). How to Think Like a Social Scientist. London: LongmanPitt, L.F., Berthon, P.R., Watson, R.T. and Zinkhan, G.M. (2002) The Internet and the Birthof Real ConsumerPower. Business Horizons, July-August: 7-14Reynolds, J. (2000). Retailing on the Net: I´m Dreaming of an e-Christmas. InternationalJournal of Retail & Distribution Management, nr, 28 (2/3): 107-108Robins K. and Webster, F. (1988) Cybernetic Capitalism: Information, Technology, EverydayLife. Mosco, V. and Wasko, J., (Eds.) Madison: University of Wisconsin PressRowley, J. (2004). Just Another Channel? Marketing Communications in e-Business.Marketing Intelligence & Planning, vol. 22, (1): 24-41Winer, R. S. (2009). New Communications Approaches in Marketing: Issues and ResearchDirections. Journal of Interactive Marketing, vol. 23: 108–117Wright, L. T (2006) Guest Editorial. European Journal of Marketing, vol. 60 (9/10)