INTERNET MARKETING

Defining the Internet

The internet is basically the global network of computers storing and transporting information as well as presenting it generally on-screen for use when invoked.

Internet marketing may be defined as:

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Using the world-wide web to perform marketing functions.

In the last three decades, the internet has perhaps been the most revolutionary addition to the traditional marketing communication tools like television, newspapers, magazines and radio. 

Internet marketing occurs when digital media collaborates with conventional communication tools like radio, television and newspapers in marketing activities.

Benefits and weaknesses of Internet Marketing

What are some of the potential benefits the internet brings to the African global business player? Well, it brings a number of unique marketing possibilities which include:

·           Wider, versatile communication at relatively low cost.  

A small business with limited resources can reach the same global audience accessed by bigger, more financially capable firms.

A wide array of marketing communication is possible. It includes advertising, sales promotion, direct marketing relationship-building and product updates.

Advertising is non-personal, paid marketing communication by an identified promoter of goods, services or other types of product, normally using media like radio and newspaper that reach a wide audience.

Sales promotion is short-term marketing communication frequently aimed at immediately raising sales and rejuvenating interest in a product.

Direct marketing is communication in which a prospective buyer is reached with a taylor-made message and prompted to act in a certain way, such as placing an order.

Relationship-marketing is the cultivation of long-term partnerships with customers.

 The two-way communication capability of the internet (via email, for example) improves the pace of business and helps prevent or keep minimal cost-escalation caused by passage of time.

Older media like newspapers, billboards, television and radio do not give the combination of flexibilities and cost-savings available in internet marketing. 

·           Stock-ordering and selling. 
Businesses can use the internet to ‘window-shop’ and order inputs from their suppliers, and sell to their own customers. 

In the case of products like books, newspapers, movies, news and music, the actual product can be sent to the client as a digital copy. This way, the internet serves as a global distribution medium. Distribution, as we saw earlier in this chapter, is one of the four key marketing mix variables.

·           Increasing sales volume. 
The wider exposure made possible by the internet means greater sales figures are also possible – from across the globe. Using traditional media, this level of exposure would have big cost implications, and be a real limitation for small businesses.

·           Holding onto mobile customers. 
The internet minimises distance-sensitivity of business. It creates greater capacity to maintain communication with customers who have moved farther away, and therefore increasing the possibility of continued loyalty.

·           Spreading information. 
Companies can use the internet to disseminate general information including staff movement, share value and policy changes.

·           Web analytics.  
 Web analytics enable instant collection of statistics on the market and market behaviour. The information enables (quicker) decision-making by business people. 

·           ‘Beating night’. 
 Both ordering of production inputs and selling can take place round the clock, making it possible to accomplish more in a day than when human beings (who have to rest, for instance) are used. 

  

The internet as a marketing tool also has weaknesses. For example, some potential customers might still not be excited enough by an internet advertisement until they see the actual offering or get middleman assistance. Naturally, the fear is that a product may not live up to the hype on the internet.

Another challenge is that competition can increase, as the products of across-the-globe marketers who may otherwise prefer to concentrate on their local markets also have increased visibility: customers, understandably, normally go for the best package of offers. 

 

Despite challenges like the above, African entrepreneurships, many with not enough resources to reach the world using the customary (but indeed still very useful) communication means like television, newspaper and radio, or opening physical subsidiaries abroad, perhaps have an indispensable means of competing with gigantic firms on the world stage. Besides, even if the internet can increase competition, the larger exposure can also have the effect of bringing more potential buyers. 

The challenge, quite clearly, is how to take advantage of the revolutionary capabilities of the internet.

General Marketing Strategy on the Internet

The internet is basically a communications channel. So, internet marketing must be seen as use of an additional communications tool to further promote business. 

The fundamental aspirations of business people are the same irrespective of marketing instrument used. For example, profit remains the main focal point. The marketer only takes advantage of the possibilities and opportunities presented by the internet to do their job better.

The internet has to work in conjunction with other information channels like magazine, billboard, radio, mobile advertising, newspaper and television. What the internet must achieve, and how, (taking into account its capabilities like interactivity, wide reach, video, sound, general inexpensiveness, two-way communication, text and memory) must be clearly defined, just as with other communication media like television.  

Some Internet Marketing Tools

The internet offers numerous technical instruments for performing marketing functions. A few of the best known are listed and explained below.

Websites and blogs

A website is an address or location on the internet where information about a particular subject is found. Creating a website therefore means giving a globally visible and accessible ‘residence’ to any or all of the following:

·           The business.

·           The enterprise’s products.

·           Purchasing point.

·           Information exchange centre.

A good website needs to be user-friendly, so that visitors are able to easily get the services they require, such as placing an order or making clarifications they consider important to them. 

Blogs, like websites, are internet ‘homes’, but are normally used as news update centres of individuals, groups or organisations, both commercial and non-commercial. Increasingly, businesses have placed their adverts on popular blogs (those that enjoy interesting content and frequent visits). Many blogs are maintain a single theme, such as gardening.

A blog is simply an internet information centre.

E-mail

Electronic mail (e-mail) enables sending and receiving of digital messages. Marketers are able to cost-effectively and quickly communicate with suppliers, customers and intermediaries such as insurers and bankers. They can, for instance, easily send customers a digital copy of the product with prices and specifications and prompt them to buy. They can also send regular news bulletins to keep customers up-to-date and loyal to their brands and company.       

Social and Professional Media

Facebook, Twitter and LinkedIn are examples of internet platforms that provide marketers an opportunity to ‘meet’ customers, through advertisements.

Extranet

The extranet is a closed internet in which a marketer is able to share information with suppliers or other parties, usually in the same business environment, to improve collaboration.

PICKING THE MOST SUITABLE INVESTMENT

Investment opportunities present themselves in all shapes and sizes. It is possible to place money in as diverse a range of commercial ventures as transport, education, hospitality, health, retailing, textiles, banking and real estate.

Investment opportunities present themselves in all shapes and sizes. It is possible to place money in as diverse a range of commercial ventures as transport, education, hospitality, health, retailing, textiles, banking and real estate. There are a few rules a person wishing to invest can observe to find the best home for their money. Here, we are talking basic approaches that can be applied across all types of asset.

Deciding on Rate of Return

The tendency in most entrepreneurs is to hope for as high a profit rate as possible. Even so, the minimum acceptable return often differs from one person, group or organisation to another. As an investor, then, you have to see, for starters, if a business gives the least profit satisfaction you would be content with.

Understanding   the Type of Business

An appreciation of the kind of scheme one is considering having an interest in is important. You do not necessarily have to be expert, but merely familiar with the general behaviour of the particular business type. What is required is such basic knowledge as would make possible forecasting of sales.

Reading the Business Environment

This is a highly complementary issue to the preceding one (understanding type of business), as business can only be fully comprehended when viewed relative to what surrounds it, or could surround it at some point in time.

The business environment includes competition and government policy. Not to be ignored, however, is what lies inside the business, such as the capacity of the employees. It all helps an investor see what fortunes or misfortunes are likely to lie ahead.

Estimating Payback Period

This is closely related to rate of return (the higher the rate the more quickly costs are covered).

There must be calculation of what length of time it will take to recover the capital outlay. Less time generally means less exposure to hazard. Allowing a long payback period means so many things could potentially happen to change the course of business from good to bad.

Considering risk or uncertainty

Risk is danger that is known and may be estimated, while uncertainty is a threat that is not predictable, and may even be difficult to measure. Examining risk or uncertainty greatly helps in getting a more complete perspective of the profitability of an investment.

Where too much risk or uncertainty exists, it is naturally wiser not to stake any assets.  

Assessing Participation Level Needed

Some investors would like to take part in giving direction to the business while others would rather be largely passive.  

Measuring Free Time Allowed

Even when one would like to be part of active management, they may wish to dedicate some time to leisure and other interests. If an investment does not permit you time for other life pursuits, it might take fullness out of your life. It therefore cannot be said to be a good enough venture to get into.

Gauging Ease of Divesting   

Once an undertaking loses attraction (profitability, essentially), it should be relatively easy to retrieve the resources put in it - or what remains of them - so that they can be used in another type of endeavour.

Conclusion

Experienced business people and scholars are aware that part of the game of investing well is diversification of risk. It is the old adage of not putting all one’s eggs in one basket. It is better to have an asset portfolio spread over, at the least, two ventures. These also should advisably belong to different sectors (in simpler terms, you could invest in a mine and in a tourist resort). It stabilises income flow and thus shields against sudden and total fall from riches to rags.

THE EVOLUTION OF MARKETING

The flamboyant tree in full bloom!!! Glorious!!!

The field of marketing has not always been there in its present form. Five significant periods are identifiable in the evolution of marketing as a business discipline.

The Production Stage

The production phase started at the time of the industrial revolution. The industrial revolution was the time man learned to use advanced machines, and to mass-produce. Roughly, it was the 100 years from the mid-1700’s to the mid-1800’s.

The emphasis in the production stage was on producing – making as many things as possible available. This was understandable mainly because:-     

•          It was really the first time modern clothing and processed food had a chance of being available widely. There was a big section of society ready and waiting to consume. Never mind the ability to pay.
•          There were not many mechanised producers and, therefore, not much competition.

The Product Stage

As more parties jumped onto the industrialist bandwagon, the producer field became crowded – which meant competition for buyers. This situation promoted new thinking in manufacturers, to overcome the increased difficulty in finding customers. The result was birth of the product stage.

It was believed that businesses had to aim at making better quality than the competition to be sure of finding buyers. The ‘quality race’ was not the end of the search for a more reliable business philosophy.

From the works of some scholars, it is possible to conclude that the production stage was the period from about 1850, and that the product stage may have started around 1900.

The Selling Stage

By the 1930’s, a new way to look at unlocking business success had emerged. It was selling orientation.

The selling stage probably marked the beginning of modern-day thinking on the important role played by the salesman. The new belief was that it was the effort of sales people that would make the difference between finding buyers and not finding any. And so, the search was on for high-pressure sales employees.

The Marketing Stage

In the 1950’s, the marketing concept was born, underpinned by putting customer requirements first. Marketing orientation moved focus from the producer and product to the buyer. The realisation was that businesses existed to satisfy the needs and wants of customers: that there would be no business without a desire to consume something. Producers, it was stressed, had to strive to meet the expectations of their clients better than their competitors to win more buyers.

The Societal Marketing Stage  

Societal marketing is about not only providing merchandise and services that match customer requirements but also taking care of wishes beyond product attributes. It includes, for example, ensuring that food offerings do not cause excessive weight gain that exposes consumers to the risk of heart disease, and avoiding manufacturing processes that result in environment-damaging emissions.

Promotion of societal marketing started in the early 1970’s.

In many ways, societal marketing is not a totally new and independent concept, but an enhancement of the basic philosophy of marketing. It is, in that sense, in the same bracket as customer relationship marketing (CRM), which advocates building and maintaining close understanding with each customer.

Conclusion

Not every organisation today is marketing oriented. The environment does play a part in how much a business leans toward marketing. Where shortages are common, for instance, it is normal to see efforts mainly directed at maximising production.

   
Rupert Chimfwembe, 12 March 2018.

WORK STUDY: Method Study Steps

Work study is the scientific effort to understand specific operations and propose improvements. It covers all aspects of work including the content of the each responsibility, the time taken to do any job, the environment, the worker and aids used in the execution of tasks.

The two main areas of work study are method study and work measurement. Method study deals with suggestions as to the optimal way to perform tasks. Work measurement is aimed at finding the most appropriate length of time for carrying out specific assignments.

Method Study Steps

1.     Identify the work to be done.

2.     Develop a good understanding of what the job or task is about.

3.     Use an appropriate mode of information storage - video, audio, picture, text or other – to make an accurate record of the way the job is done.

4.     Use the recorded material to do a critical analysis of every part of the method used.   

5.     In conjunction with key stakeholders (such as the person or persons who do the work) formulate the best way of performing the task under the circumstances (that is, taking into account factors like tools available and the training the employees involved have).

6.     Introduce the new standard way of performing the job.

7.     Regularly check to ensure that the standard is adhered to.    

Why Method Study?

An effective method study programme can lead to benefits like:

·        Optimisation of productivity and profit.

·        Decrease in resource waste.

·        Better long-term worker health.

·        Less equipment wear and tear.

THE COMMUNICATION PROCESS

THE COMMUNICATION PROCESS

The communication process refers to what is involved in the movement of information from one point to another. The set of logical stages describing the process is what is referred to as the communication model.

 

In this article, we put the spotlight on the normal way communication is said to take place and compare it with another that we suggest.

Figure CM is the standard communication model.  Let us briefly explain it.

Sender or transmitter. The source or originator of data, facts, figures, the idea or other matter that is to be passed to another point.

Encoding. The moulding of the material to be moved into a form (picture, language, sign, for instance) that best suits the situation.

Message. The matter or material with a meaning that is to be transmitted.

Channel. It is the medium to be used by the sender to pass the message to another point.

Receiver or audience. This is the party the other point that the sender wants to take the message.

Decoding. To decode is to interpret the message so that its meaning is understood.  

Closed Circle and Open Circle Communication Models

Figure CM is closed circle, standard communication model. The receiver encodes the message and sends feedback to the sender.

Figure CM1 is the open circle communication model. This second diagram shows the two possible directions of communication as follows:

•              the receiver gets the message and sends feedback to the sender to          restart the cycle, and/or
•        sends the same message to another recipient; which also restarts the      cycle.

Not only is figure CM1 an ‘open circle’, but is also explicit about the decisions the recipient has to make decisions concerning type of encoding, channel, and appropriate audience (CM assumes these procedures. They are quite natural after all, to state it fairly). 

Figure CM: The 'closed circle' communications model.

Figure CM 1: The 'open circle' communications model.

Perhaps the biggest achievement of what I call the open circle communication process is simply getting us to appreciate that we do not have to set a limit on our directions of thought, not whether the above proposal is right or wrong. What is your reaction? 

BENEFITS OF INNOVATION

Innovation takes place when a change is introduced that improves what is already in existence. 

Innovation in business, as elsewhere, can take a wide range of specific forms. Many of the changes ultimately concern the physical products of an organisation or its processes. For example, a modification in manufacturing plant can lead to an improvement in some characteristic of a good or alteration of the manner in which it is made, or both. A shift in management structure or philosophy can also eventually impact the product or the way certain tasks are performed.

Pursuing a creative path in business comes with a number of important possible gains.

Gaining more control over price. Innovation is one way to reduce price-reduction competition that eats away at the profit margins. New features in a product, that competing brands do not have, mean less direct comparison by customers. In other words, a newly-innovated product is effectively differentiated: it is often seen in its own light and as deserving its own price. In fact, a really revolutionary product improvement is a good passport to top-of-the-range kind of pricing and can therefore bring enormous profits.

Improving efficiency.  Higher efficiency simply means achieving the same result with less resource. Inevitably, then, improved efficiency represents cost savings. These come in such shapes as reduced raw material, waste or time. Indeed, savings in costs are rises in profit.    

Efficiency is not just about the actual process of producing goods and services. It also concerns the general way in which an organisation and its various departments or sections are administered.

Re-designing the plant or machinery used to produce; tasks and responsibilities; procedures and processes, are all examples of innovations that can lead to greater efficiency.   

Creating new consumers. It happened when double cab pick-ups were introduced. The innovation transformed purely utility vehicles to family ones as well, which meant likelihood of more users.

Extending life cycle. By continually making improvements to goods and services, marketing techniques, human skills and other relevant aspects, the life of both the products – and hence the enterprise itself – can be prolonged.

Raising profile. Strong credentials as a creative firm could bring probability to more easily attract additional capital when needed; good talent in search of an environment in which they are able to freely showcase their individual resourcefulness; and even make customers more ready to prefer their products over those of businesses less firmly associated with dynamic offerings.                 

CONCLUSION

Innovation must be part of the central business culture of an enterprise. Many big organisations that have over the years grown more and more lethargic have fallen by the wayside and their place has been taken by newer firms directing more energies toward product and operational modifications.    

Rupert Chimfwembe  30                          January 2017

MARKET SEGMENTATION

Market segmentation is the practice of breaking down buyers or users of a product into smaller, more homogeneous divisions that can be satisfied with one marketing mix.

Marketing segmentation is at the very heart of the entire discipline of marketing, itself described basically as:

The set of activities in which the supplier first determines what is needed or wanted and then tries to provide the requirement at a profit.  

As can be seen, both segmentation and marketing clearly address the issue of customer satisfaction.

Marketing practitioners are expected to do market segmentation because it is their recognition that greater sales, and thus a more predictable, secure future in the ultimately belongs to the organisation that is able to meet customer desires.

Rather than assume that anyone that needs transport, for example, is ready to accept any vehicle, wise business people try to understand if there are any specific types of automobile that are preferred above others by some groups within the market for transport products. They do indeed come up with such classifications as utility vehicle and executive car.  

Main Benefit of Segmentation

Segmentation enables the marketer to raise chances of good performance, as they can devote energies to addressing special requirements. This contrasts with trying to present one product for all sub-classes in the market, as competitors who concentrate on the unique needs of smaller groups might out-do them.   

What determines segments?

The degree of importance to a particular market, of each possible criterion, is what makes it necessary or unnecessary to consider a classification candidate for market segment. There are other factors, next, to look at, which include:

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     Profitability. Does the grouping represent a return that makes business sense.

   Reachability. Is the segment easy to connect with physically and by way of other marketing communications tools like advertising and sales promotion?

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            Definability and measurability. If it is not distinguishable, it might be difficult to reach. And if it cannot be quantified, its commercial value might be impossible to establish.

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     Uniformity. The segment members must respond the same way to different offerings.

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Stability. Over the long term, the segment must remain basically undiminished in key elements like potential size of business.

Lines of Segmentation

There is no limit to how a market can be segmented. If your market were cyclists, lines of segmentation might include pursuit racers and mountain climbers. If you sold fire-fighting equipment, divisions might be, obviously among others, single-storey fighters and those who need facilities for between one and three floors.

For many consumer (non-business) products, broad bases of segmentation have often been demographic (for example, age, gender, income and education); geographic (describing where different customers are found); psychographic (profiling personal mental make-up in areas like attitudes, norms and values); and behavioural (dealing with activity patterns like when people sit down to watch TV).

Two Marketing Challenges in Segmentation

1)    Needs/wants versus product attributes. Segmentation is not a preserve of any single business. So, there is likely to be competition already, or sooner rather than later, in any market segment. It means a marketer has to aim at satisfying customers better than the others. One way is to match product attributes with segment characteristics more closely than the competition does.

    

2)    One niche or more? Segmentation does not imply a firm concentrating on only one sub-group of customer. It can go after two or more. However, it has to possess the capacity to be competitive, or develop it. The more the segments picked, the more the resources to be committed. However, there would be gains like greater revenue, diversification of risk and stability of income (for instance, if some segments are highly vulnerable to seasonal sales fluctuations).

Occurrence of Segments

Market segments present themselves in different ways. We share with you only two simplistic examples. In figure WC, the market for winter coats in country C has 100 customers, of whom 30 prefer the product in green colour and 33 in blue. The segments are totally independent of each other.

Figure WC: Market segments for green and blue winter coats in country C.

The second example, figure WC1, shows the same information as figure WC, but with the addition of a new segment, for purple winter coats. Its membership consists of 10 who also like green; 12 who also can wear blue and 11 who exclusively prefer purple. The total size of the purple colour segment is 33. In this representation, of course, the blue and green segments have a connection via their members who also like purple.

 

Figure WC1: Market segments for green, blue and purple winter coats in country C.

 

The two illustrations are intended only to free the mind of any restrictions in looking at how segments configure themselves.

Conclusion

Paying attention to special, uniform requirements of smaller parts of a market can be the first step to delivering better customer satisfaction. The approach is applicable to both profit and not-for-profit bodies.

                Rupert Chimfwembe 3                               February 2017.