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The word 'Internet' makes a lot of sense and necessity in today's globalized world. The initiation of internet facility has given rise to 'electronic commerce or e-commerce'.
The internet is at present being twisted as universal information technology base which has several push and pull factors to reach to the extreme end users worldwide. Pyle (1996), points out that it was the internet's ultimate prospective for universal connectivity through its facility to "open new opportunity for business", which has raised boom in electronic business. The revolution in electronic commerce has highlighted its benefits not only to retailers to gain competitive advantage over its competitors but also new ways to improve commerce and make their presence in market (Amit and Zott, 2001)
According to Armstrong (2000, p.11) "the internet refers to the set of rules by which two computer networks can exchange information with one another". In words of Rosen, (1997) "the internet is the collection of computers located all over the world that anyone can access".
The WIPO report (1999), states that internet is "network of network's" with a large number of PC penetration and increased networking worldwide interlinking with existing telecommunication system.
The use of internet today is not only restricted to sending emails but also a huge platform for the global business market. The word internet and World Wide Web (WWW)is used likewise, but both are different.The distinction lies in the functions performed for instance the internet is more of globalized communication structure by sharing the same protocol, whereas the WWW is a facility given by the internet to its end users based on hypertext language (Rosen, 1997, pp. 31-34). The below table gives us an worldwide population assessment of internet use according to world region wise which shows that not only within the span of 9 years the population has increased but also the number of internet users have increased.
Internet has changed today the traditional form of doing business , though it still exist , but the benefits of it has seen today in form of "e-commerce" or "electronic commerce" thus benefitting not only to businesses but also to its end users.
Ecommerce and its Definitions:
Today ecommerce has revolutionized the way people do business in different parts of the world, in the form of electronic transactions taking place between buyers, suppliers and sellers globally. Below are few important defitions of ecommerce which describes the nature and purpose or ecommerce.
Fellenstein and Wood (2000, p.1), defines "ecommerce as the transaction , pretransaction and posttransaction set of activites that are performed by buyers and sellers through the internet(or an intranet), where there is a clear intent to buy or sell". This definition embraces an developing place of technological designs, practical implementations, and sophisticated commerce practices. According to Turban et al (2000), the success in business through electronic commerce is not new and defines ecommerce as "trading electronically by involment of buying and selling of products, services and information from network".
Kalakota & Robinson, (2002) "Ecommerce is buying and selling of products and services on the web". The German federal statistics office, Fisher (2003), defines ecommerce as "Transactions done are regarded as ecommerce, when the offers as well as the purchase or the actual availability of the product or service is carried out in an electronic form, using a computer mediated network against monetary payment". However the definition is contracted and restrictive as it do not take into account the fact that without the process value chain in addition electronic business deal can be carried out profitably.
On the other hand the US Bureau of census defines ecommerce as "any transaction completed over a computer -mediated network that involves transfer of ownership or rights to use goods or services completed". (Mesenbourg, 2001)
Another definition by Organization for Economic Co-operation and Development (OECD) "it is a method used to place or receive an order ,not the mode of payment or the channel of the delivery that determines whether a transaction is considered as an ecommerce transaction" (OECD ,2002)
Advantages and Disadvantages of Internet Marketing:
Today universally all majority of businesses want to advertise and market their products online, provide essential service and support even after sales. The major growth in internet utilization is seen in the sector of online shopping (Forsythe and Shi, 2003).
However in the competition for making their businesses online, lack in some potential aspects which the company itself fail to remember what actually their requirement is and how will they achieve them.
Benefits of Internet Marketing by Warren (2004):
- The service provided to the customers are 24 hours a day and 7 days a week, so the customers have no time limits or restrictions and can shop any time they want.
- It is faster, cheaper as it is made of "electrons" and can reach wide market geographically as compared to Brick and Mortar Business. Here a proper manageable computer is needed and with internet connection.
- With the low cost investment there is a huge market open as anyone could buy online and where a physical presence is not needed with more income potential for e.g. a proper shop or store is not required.
- The advertising and marketing on the internet, involves low storage space and cheap costs and compared to television, radio and flyers or brochures printouts.
- Important information , sensitive issue can be emailed and discussed rather than sending letters and couriers for e.g. law firms, news papers and magazines which can be directly send to the concerned person.
- Keeping up to date with the subscribers is an added advantage which can be done via email. For instance if the store is having an ongoing sales and promotional offers, the customers can buy online whenever they receive an email.
- An internet promotions or endorsement provides cost valuable means for small business entrepreneurs to improve their manufactured goods or of service provision delivery system (Lendor, 2005).
- As compared to the old traditional marketing style small business can penetrate in market with the facility of ecommerce making new trade popular. For e.g. the utilization of portals can help in expanding existing marketing channels and logistics with greater accessibility of products and services to the clientele(Lendor, 2005)
Disadvantage of Internet marketing by Smith (2009):
- Though the advantage of internet ecommerce involves low cost, but on the other end
- Armstrong, S. (2001). Advertising On The Internet (2nd ed.). London: Kogan Page Ltd.
- Mesenbourg, T.L, (2001) Measuring Electronic Business. Retrieved on November 2, 2009 from http://www.census.gov/econ/estats/papers/msrebus.pdf
- OECD (2002), Measuring the internet economy 2002. Organisation for Economic Co-operation and development. Retrieved on November 8 2009 from http://www.oecd.org/dataoecd/16/14/1835738.pdf
- Rosen, A. (1997). Looking into Intranets and the Internet Advice for Managers (1st ed.). New York: Amacom.
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- Amit, R. and Zott, C. (2001), "Value creation in e-business", Strategic Management Journal, Vol.22 No 6/7, pp.493-520 Forsythe, S. M. and Shi, B. (2003), "Consumer patronage and risk perceptions in internet shopping", Journal of Business Research, Vol. 56, pp.867-875.
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- Kalakota, R. and Robinson, M. (2002), M-Business: The Race to Mobility, McGraw-Hill, New York.